GT Draft No. 4 04/01/15 TENTH SUPPLEMENTAL INDENTURE between CITIZENS PROPERTY INSURANCE CORPORATION (successor to Florida Windstorm Underwriting Association) and REGIONS BANK (successor to U.S. Bank National Association, Wachovia Bank, National Association, and The Bank of New York), as Indenture Trustee dated as of June 1, 2015 supplementing that certain TRUST INDENTURE dated as of August 6, 1997, as supplemented and amended by a Series 1999A Supplemental Indenture dated as of March 31, 1999; a Second Supplemental Indenture dated as of August 1, 2002; a Third Supplemental Indenture dated as of May 1, 2004; a Fourth Supplemental Indenture dated as of June 1, 2006; a Fifth Supplemental Indenture dated as of February 1, 2007; a Sixth Supplemental Indenture dated as of June 1, 2008; a Seventh Supplemental Indenture dated as of May 1, 2009; an Eighth Supplemental Indenture dated as of April 1, 2010; and a Ninth Supplemental Indenture dated as of July 1, 2011 $ Citizens Property Insurance Corporation Coastal Account Senior Secured Bonds, Series 2015A-1 and $ Citizens Property Insurance Corporation Coastal Account Senior Secured Bonds, Series 2015A-2 (SIFMA Floating Rate Notes)
TABLE OF CONTENTS Page Article I DEFINITIONS...4 Section 101. Section 102. Definitions...4 Timing of Actions; Required Consents; Article and Section References...10 Article II THE SERIES 2015A BONDS...11 Section 201. Issuance of Series 2015A Bonds; Purpose; Form; Terms...11 Section 202. Authentication and Delivery...13 Section 203. Execution; Authentication...14 Section 204. Nature of Obligation; Security for Series 2015A Bonds...15 Section 205. Exchange and Transfer; Book Entry System...15 Section 206. Disposition of Proceeds...17 Section 207. Method and Place of Payment...18 Article III REDEMPTION OF SERIES 2015A BONDS...19 Section 301. Redemption of Series 2015A Bonds Before Maturity...19 Article IV FUNDS AND ACCOUNTS...20 Section 401. Series 2015A Bonds Proceeds Subaccount; Investments...20 Section 402. Creation of Series 2015A Bonds Sub-subaccounts in Subaccounts of Debt Service Account; Application of Moneys...20 Section 403. [Reserve Account...22 Section 404. Tax Covenants...22 Section 405. Investment of Moneys in Funds and Accounts Under Tenth Supplemental Indenture...23 Section 406. Disposition of Moneys on Conversion Date....23 Article V [BOND INSURER PROVISIONS] [TO BE INCLUDED ONLY IF HAVE INSURED BONDS]...24 Section 501. Bond Insurer Provisions...24 Article VI AMENDMENT OF INDENTURE...30 Section 601. Amendment and Restatement of Indenture in its Entirety...30 Section 602. Issuance of Additional Indenture Obligations prior to the Conversion Date...30 Article VII MISCELLANEOUS...31 i
TABLE OF CONTENTS (continued) Section 701. Ratification and Confirmation of Original Indenture...31 Section 702. Counterparts...31 Section 703. Governing Law...31 Section 704. Defeasance of Series 2015A Bonds...31 Section 705. Treatment of Citizens Policyholder Surcharges...31 EXHIBIT A - Form of Series 2015A Bond... A-1 EXHIBIT B - Form of Master Trust Indenture...B-1 ii
TENTH SUPPLEMENTAL INDENTURE This TENTH SUPPLEMENTAL INDENTURE dated as of June 1, 2015 (the Tenth Supplemental Indenture ), is entered into by and between CITIZENS PROPERTY INSURANCE CORPORATION (successor to Florida Windstorm Underwriting Association), a statutorily created corporation organized under the laws of the State of Florida (the Issuer or Citizens ) and REGIONS BANK (successor to U.S. Bank National Association, Wachovia Bank, National Association and The Bank of New York), a banking corporation organized under the laws of the State of Alabama and qualified to exercise trust powers under the laws of the State of Florida, with its designated place of business located in Jacksonville, Florida (the Indenture Trustee ). W I T N E S S E T H: WHEREAS, the Florida Windstorm Underwriting Association ( FWUA ) was originally established as an unincorporated association under Section 627.351(2), Florida Statutes, as amended, to function as a residual market mechanism to provide residential and commercial windstorm insurance for those who cannot procure such insurance through the voluntary market; WHEREAS, pursuant to Section 627.351(6), Florida Statutes, as amended (the Act ), all policies, obligations, rights, assets, and liabilities of FWUA, including bonds, notes and other debt obligations thereof, and the financing documents pertaining to them, were transferred to the High-Risk Account of the Issuer; WHEREAS, as a result of the aforementioned transfer, the Issuer and the Indenture Trustee are parties to that certain Trust Indenture, dated as of August 6, 1997 (the Original Indenture ), as supplemented and amended by a Series 1999A Supplemental Indenture dated as of March 31, 1999, a Second Supplemental Indenture dated as of August 1, 2002, a Third Supplemental Indenture dated as of May 1, 2004, a Fourth Supplemental Indenture dated as of June 1, 2006, a Fifth Supplemental Indenture dated as of February 1, 2007, a Sixth Supplemental Indenture dated as of June 1, 2008, as amended, a Seventh Supplemental Indenture dated as of May 1, 2009, an Eighth Supplemental Indenture dated as of April 1, 2010 and a Ninth Supplemental Indenture dated as of July 1, 2011 (collectively, and as the same may be amended or supplemented from time to time, including pursuant to this Tenth Supplemental Indenture, the Indenture ), for the benefit of the High-Risk Account of the Issuer; WHEREAS, in its 2011 Regular Session, the Florida Legislature passed S.B. 408 ( S.B. 408 ) which, among other things, amended the Act to change the name of Citizens High- Risk Account to the Coastal Account and S.B. 408 was subsequently signed into law by the Governor of the State; WHEREAS, pursuant to the Indenture as amended and supplemented to date, there have heretofore been issued for the Coastal Account of the Issuer, Senior Secured Bonds, Series 2009A-1, in the aggregate principal amount of $1,021,000,000, of which $746,585,000 is currently outstanding (the Series 2009A-1 Bonds ), Senior Secured Bonds, Series 2010A-1 in the aggregate principal amount of $1,550,000,000, of which $1,240,000,000 is currently outstanding (the Series 2010A-1 Bonds ) and Senior Secured Bonds, Series 2011A-1, in the
aggregate principal amount of $645,000,000, all of which are currently outstanding (the Series 2011A-1 Bonds, and, together with the Series 2009A-1 Bonds and the Series 2010A-1 Bonds, the Outstanding Parity Bonds ); WHEREAS, Section 2.04 of the Original Indenture provides, among other things, that the Issuer and the Indenture Trustee may enter into an indenture supplemental to the Original Indenture for the purpose of authorizing one or more series of Additional Indenture Obligations and to specify the terms of such series of Additional Indenture Obligations; WHEREAS, on, 2015, the Board of Governors of the Issuer duly adopted a resolution (the Bond Resolution ) authorizing the issuance from time to time by the Issuer of its Coastal Account Senior Secured Bonds, Series 2015A, in one or more series, in the aggregate principal amount of not exceeding $1,000,000,000, for the purposes set forth in Section 201(a) hereof; WHEREAS, the Issuer has determined that it is in its best interests to issue the Series 2015A Bonds in a single series consisting of two subseries, as follows: Coastal Account Senior Secured Bonds, Series 2015A-1, in the aggregate principal amount of $ (the Series 2015A-1 Bonds ) and Coastal Account Senior Secured Bonds, Series 2015A-2 (SIFMA Floating Rate Notes), in the aggregate principal amount of $ (the Series 2015A-2 Bonds and, together with the Series 2015A-1 Bonds, the Series 2015A Bonds ); [WHEREAS, the scheduled payment of principal of and interest on $ principal amount of the Series 2015A-1 Bonds maturing on June 1, and initially being identified by CUSIP No., June 1, and initially being identified by CUSIP No., June 1, and initially being identified by CUSIP No., June 1, and initially being identified by CUSIP No., and June 1, and initially being identified by CUSIP No. (collectively, the Insured Series 2015A Bonds ) is being guaranteed by Assured Guaranty Municipal Corp. (the Bond Insurer ) and the Issuer must make certain covenants for the benefit of the Bond Insurer;] WHEREAS, the Issuer and the Indenture Trustee are executing and delivering this Tenth Supplemental Indenture in order to provide for the issuance of the Series 2015A Bonds as Additional Indenture Obligations under and in accordance with the Indenture and the terms and conditions set forth herein; WHEREAS, in connection with the issuance of the Series 2015A Bonds, the Issuer desires to amend and restate in its entirety the Original Indenture as previously amended to date, as more specifically set forth in Article VI hereof and as reflected in the Master Trust Indenture set forth in Exhibit B hereto, with such amendments and the Master Trust Indenture to be effective not earlier than the Conversion Date (as defined herein), as set forth in Section 601 hereof; WHEREAS, by virtue of their purchase of the Series 2015A Bonds, the purchasers thereof will have consented to and approved (i) the amendment and restatement of the Indenture in its entirety, (ii) the execution and delivery of the Master Trust Indenture, and (iii) the conversion of the Series 2015A Bonds that mature after the Conversion Date from obligations 2
issued and secured under the provisions of the Indenture to obligations issued and secured under the provisions of the Master Trust Indenture; WHEREAS, this Tenth Supplemental Indenture shall, upon execution and delivery hereof, become an effective, valid, binding and legal instrument, in accordance with its terms and for the purposes herein expressed; and WHEREAS, all acts and proceedings required by law to make this Tenth Supplemental Indenture in the form hereof a valid, binding and legal instrument, in accordance with its terms and for the purposes herein expressed, have been done and performed, and the execution and delivery hereof have been in all respects duly authorized; NOW, THEREFORE, in consideration of the foregoing recitals and for other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the Issuer represents, covenants and agrees with the Indenture Trustee and its successors-in-trust under the Indenture, for the equal and proportionate benefit of the Registered Owners of the Series 2015A Bonds, as follows: [Balance of Page Intentionally Left Blank] 3
ARTICLE I DEFINITIONS Section 101. Definitions. Capitalized terms used in this Tenth Supplemental Indenture that are defined in the recitals hereto shall have the meanings ascribed thereto in such recitals, unless the context or use clearly indicates another meaning or intent. Capitalized terms used herein without definitions shall have the meanings ascribed thereto in the Original Indenture as amended to date, unless the context or use clearly indicates another meaning or intent. In addition to the words and terms defined in the recitals to this Tenth Supplemental Indenture or by reference to the Original Indenture, the following words and terms shall have the meanings set forth below, unless the context or use clearly indicates another meaning or intent: Adjusted SIFMA Rate means the sum of the SIFMA Rate plus % ( basis points). Adjustment Date means, with respect to the Series 2015A-2 Bonds, Wednesday of each week or if such day is not a U.S. Government Securities Business Day, the next succeeding U.S. Government Securities Business Day. Authorized Citizens Representative and Authorized Issuer Representative means the Person or Persons designated at the time, pursuant to a certificate of the Issuer delivered to the Indenture Trustee and which certificate has not been revoked or superseded, to act on behalf of the Issuer under the Indenture. Authorized Denominations means $5,000 or any integral multiple thereof. Bank of America Merrill Lynch means Merrill Lynch, Pierce, Fenner & Smith Incorporated. Beneficial Owner means any Person which (i) has the power, directly or indirectly, to vote or consent with respect to, or to dispose of ownership of, any Bond (including any Person holding a Bond through nominees, depositories or other intermediaries), or (ii) is treated as the owner of any Bond for federal income tax purposes. Bond Counsel means any firm of attorneys selected by the Issuer of nationally recognized standing in matters pertaining to the validity of and the tax status of interest on obligations issued by states and their political subdivisions, duly admitted to the practice of law before the highest court of any state of the United States of America. For purposes of this Tenth Supplemental Indenture, the term Bond Counsel and Indenture Counsel (as defined in the Original Indenture) may be used interchangeably. [ Bond Insurance Policy means the financial guaranty insurance policy issued by the Bond Insurer for the benefit of the Insured Series 2015A Bonds. The Bond Insurance Policy shall constitute a Credit Enhancement Facility for all purposes of the Indenture.] 4
[ Bond Insurer means Assured Guaranty Municipal Corp. The Bond Insurer shall constitute a Credit Enhancement Facility Issuer for all purposes of the Indenture.] Bondholder or Holder means, as of any time, the registered owner of any Series 2015A Bond, as shown in the register kept by the Indenture Trustee as bond registrar. Business Day means, unless otherwise provided in this Tenth Supplemental Indenture, any day other than a Saturday, Sunday or other day on which the New York Stock Exchange is closed or on which banks are authorized or required to be closed in any of the City of Jacksonville, Florida, the City of New York, New York, or any other city in which the principal offices of any successor Indenture Trustee are located. Calculation Agent means the Indenture Trustee, or any successor thereto duly appointed by the Issuer, in its capacity as calculation agent to perform the duties thereof required by Section 201(d) of this Tenth Supplemental Indenture in connection with the Series 2015A-2 Bonds. Citi means Citigroup Global Markets Inc. Closing Date means the date of delivery of the Series 2015A Bonds to the Underwriters thereof against payment therefor. Code means the Internal Revenue Code of 1986, as from time to time amended, and any regulations promulgated thereunder which are applicable to the Series 2015A Bonds, or any portion thereof, including, without limitation, any Treasury Regulations or Temporary or Proposed Regulations, as the same shall from time to time be amended including (until modified, amended or superseded) Treasury Regulations or Temporary or Proposed Regulations under the Internal Revenue Code of 1954, as amended, as applicable to the Series 2015A Bonds. Conversion Date means the earlier to occur of (a) the Scheduled Conversion Date or (b) the Business Day immediately after the date on which none of the Outstanding Parity Bonds are Outstanding under the Indenture as a result of the Issuer s legal defeasance of the Outstanding Parity Bonds prior to their stated maturity dates; provided, however, that notwithstanding anything to the contrary contained in this Tenth Supplemental Indenture or in any future Supplemental Indenture, the Conversion Date shall not occur or be deemed to have occurred for so long as there are any Outstanding Parity Bonds that remain Outstanding under the Indenture. Fitch means Fitch Ratings, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Fitch shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer by notice to the Indenture Trustee. [ Insured Series 2015A Bonds means collectively, $ principal amount maturing on June 1,, initially being identified by CUSIP No. ; $ principal amount maturing on June 1,, initially being identified by CUSIP No., $ principal amount maturing on June 1,, initially being identified by CUSIP No. ; $ principal amount maturing on June 1,, initially being identified 5
by CUSIP No. ; and $ principal amount maturing on June 1,, initially being identified by CUSIP No., the scheduled payment of the principal of and interest on which is guaranteed by the Bond Insurer through the Bond Insurance Policy.] Interest Payment Date means, (a) with respect to the Series 2015A-1 Bonds, each June 1 and December 1, commencing December 1, 2015, and (b) with respect to the Series 2015A-2 Bonds, the first day of each calendar month, commencing July 1, 2015. Issuer means Citizens Property Insurance Corporation and its successors and assigns. Issuer Representative has the same meaning as the term Authorized Association Representative, as defined in the Original Indenture. J.P. Morgan means J.P. Morgan Securities LLC. Jefferies means Jefferies & Company, Inc. Master Trust Indenture means that certain Master Trust Indenture to be entered into (and become effective) not earlier than the Conversion Date by and between the Issuer and a Master Trustee to be named therein, substantially in the form of the Master Trust Indenture set forth in Exhibit B hereto. Master Trustee means the entity appointed by the Issuer to serve in the capacity of Master Trustee under the Master Trust Indenture. Maturity Date means, for any Series 2015A Bond, the date for the scheduled payment of principal of such Series 2015A Bond as set forth in Section 201 hereof. Maximum Rate means an interest rate per annum equal to the lesser of the maximum rate permitted by law and 8%; provided that, the Calculation Agent may assume that the maximum rate permitted by law exceeds 8% unless and until it receives written notice from the Issuer to the contrary. Moody s means Moody s Investors Service, Inc., a corporation organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such corporation shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, Moody s shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer by notice to the Indenture Trustee. Morgan Stanley means Morgan Stanley & Co. LLC. Non-AMT Tax-Exempt Bonds means (a) any municipal obligation meeting both of the following requirements: (i) the interest on such obligation is excluded from gross income for federal income tax purposes under Section 103 of the Code, and (ii) such obligation is not a specified private activity bond under Section 57(a)(5)(c) of the Code for purposes of the federal alternative minimum tax; (b) an interest in a regulated investment company, as defined in Section 851 of the Code, if at least 95 percent of the assets of the regulated investment company are, at all times that proceeds of the Series 2015A Bonds are invested in shares of the 6
regulated investment company, invested in, and 95 percent of the income to the holder is derived from, municipal obligations meeting the requirements set forth in clause (a); and (c) any other specified investment property the inclusion of which in this definition will not, in the opinion of Bond Counsel, adversely affect the exclusion from gross income for federal income tax purposes of interest on the Series 2015A Bonds. Notice Address means: (a) As to the Issuer: (b) As to the Indenture Trustee: [(c) As to the Bond Insurer: Citizens Property Insurance Corporation 2312 Killearn Center Blvd. Tallahassee, Florida 32309 Attention: Executive Director Regions Bank 10245 Centurion Parkway, 2nd Floor Jacksonville, Florida 32256 Attention: Corporate Trust Services Assured Guaranty Municipal Corp. 31 West 52nd Street New York, New York 10019 Attention: Risk Management Department - Public Finance - Surveillance, Re: Policy No. 231594-N] Outstanding Bonds or Bonds outstanding has the same meaning as the word Outstanding in the Original Indenture; [provided that Insured Series 2015A Bonds paid by payments made under the Bond Insurance Policy shall be deemed to be Outstanding Bonds until the Bond Insurer is reimbursed in full.] Participant means, with respect to DTC or another Securities Depository, a member of or participant in DTC or such other Securities Depository, respectively. Payment Date means each Interest Payment Date or any other date on which any principal of, premium, if any, or interest on any Series 2015A Bond is due and payable for any reason. Person means a corporation, association, partnership, limited liability company, joint venture, trust, organization, business, individual or government or any governmental agency or political subdivision thereof. Pledged Revenues means (a) with respect to the Series 2015A Bonds with a stated maturity date prior to the Conversion Date, the Pledged Revenues as defined in Section 1.01 of the Indenture, and (b) with respect to the Series 2015A Bonds with a stated maturity date after the Conversion Date, (i) for the period of time from their date of issuance to the date of execution and delivery of the Master Trust Indenture, the Pledged Revenues as defined in Section 1.01 of the Indenture and (ii) on and after the date of execution and delivery of the Master Trust Indenture, the Pledged Revenues as defined in the Master Trust Indenture. 7
Principal Office means, with respect to the Indenture Trustee, the address of such Person identified as its Notice Address in or pursuant to this Tenth Supplemental Indenture or otherwise notified in writing by such Person to the Issuer [and the Bond Insurer.] RBC means RBC Capital Markets, LLC. Ramirez & Co. means Samuel A. Ramirez & Co., Inc. Rating Agency means, as of any date, each of: Moody s, if the Series 2015A Bonds or any portion thereof are then rated by Moody s at the request of the Issuer; S&P, if the Series 2015A Bonds or any portion thereof are then rated by S&P at the request of the Issuer; and Fitch, if the Series 2015A Bonds or any portion thereof are then rated by Fitch at the request of the Issuer. Record Date means the fifteenth day immediately preceding the relevant Interest Payment Date. [ Reserve Account Requirement means (a) with respect to the Series 2015A-1 Bonds, an amount equal to 100% of the Maximum Annual Interest on the Series 2015A-1 Bonds Outstanding and (b) with respect to the Series 2015A-2 Bonds, an amount equal to 100% of the Maximum Annual Interest on the Series 2015A-2 Bonds Outstanding; provided, however, that the Reserve Account Requirement for the Series 2015A Bonds shall not exceed the amount that may be funded in a reasonably required reserve under the provisions of the Code. For purposes of determining the Reserve Account Requirement for the Series 2015A-2 Bonds, the Maximum Annual Interest for the Series 2015A-2 Bonds shall be computed based on an assumed interest rate equal to the lesser of (i) the sum of the average SIFMA Rate for the two year period immediately preceding June 1, 2015, plus the spread over the SIFMA Rate for the Series 2015A-2 Bonds specified in the definition of Adjusted SIFMA Rate and (ii) the hypothetical interest rate per annum for a corresponding maturity of the Series 2015A-2 Bonds had such Series 2015A-2 Bonds instead been issued as Series 2015A-1 Bonds (i.e., long-term, fixed rate tax-exempt obligations).] S&P means Standard & Poor s, a business of Standard & Poor s Financial Services LLC, a limited liability company organized and existing under the laws of the State of Delaware, its successors and assigns, and, if such entity shall be dissolved or liquidated or shall no longer perform the functions of a securities rating agency, S&P shall be deemed to refer to any other nationally recognized securities rating agency designated by the Issuer by notice to the Indenture Trustee. Scheduled Conversion Date means June 2, 2020, which is the day after the last Outstanding Parity Bonds are scheduled to mature in accordance with their stated maturity dates. Securities Depository means DTC or, if applicable, any successor securities depository appointed pursuant to the last paragraph of Section 205 of this Tenth Supplemental Indenture. Serial Bonds means Series 2015A Bonds which shall be stated to mature in sequential years and any other Series 2015A Bonds that are designated as Serial Bonds by the Issuer. 8
Series 2015A Bonds Proceeds Subaccount means the subaccount established in the Proceeds Account pursuant to Section 401(a) of this Tenth Supplemental Indenture. Series 2015A Bonds means, collectively, the Series 2015A-1 Bonds and the Series 2015A-2 Bonds. Series 2015A-1 Bonds means any or all of the Issuer s Coastal Account Senior Secured Bonds, Series 2015A-1 issued hereunder in the initial aggregate principal amount of $ ; provided, however, that on and as of the date of execution and delivery of the Master Trust Indenture, the Series 2015A-1 Bonds with a stated maturity date after the Conversion Date shall be deemed to be issued and secured under the Master Trust Indenture. Series 2015A Bonds Interest Sub-subaccount means the sub-subaccount established in the Interest Subaccount of the Debt Service Account pursuant to Section 402(a)(i) of this Tenth Supplemental Indenture. Series 2015A Bonds Principal Sub-subaccount means the sub-subaccount established in the Principal Subaccount of the Debt Service Account pursuant to Section 402(a)(ii) of this Tenth Supplemental Indenture. [ Series 2015A Bonds Reserve Subaccount means the subaccount so designated and established as a subaccount within the Reserve Account pursuant to Section 403(a) of this Tenth Supplemental Indenture.] Series 2015A-2 Bonds means any or all of the Issuer s Coastal Account Senior Secured Bonds, Series 2015A-2 (SIFMA Floating Rate Notes) issued in the initial aggregate principal amount of $. SIFMA Rate means for any day the level of the most recently effective index rate which is compiled from the weekly interest rate resets of tax-exempt variable rate issues included in a database maintained by Municipal Market Data which meets specific criteria established from time to time by the Securities Industry and Financial Markets Association (SIFMA) and is issued on Wednesday of each week, or if any Wednesday is not a U.S. Government Securities Business Day, the next succeeding U.S. Government Securities Business Day. If such index is no longer published or otherwise not available, the SIFMA Rate for any day will mean the level of the S&P Weekly High Grade Index (formerly the J.J. Kenny Index) maintained by Standard & Poor s Securities Evaluations Inc. for a 7-day maturity as published on the Adjustment Date or most recently published prior to the Adjustment Date. If both such indices are no longer available, the SIFMA Rate will be the prevailing rate of such index as determined by the Calculation Agent, in consultation with the Issuer, for tax-exempt state and local government bonds meeting the then-current Securities Industry and Financial Markets Association criteria. Special Record Date means a special date fixed to determine the names and addresses of Holders of Series 2015A Bonds for purposes of paying interest on a special interest payment date for the payment of defaulted interest. State means the State of Florida. 9
Stifel means Stifel, Nicolaus & Company, Incorporated. Tax-Exempt Bonds means obligations the interest on which is excludable from the gross income of the Holders thereof for federal income tax purposes. Underwriters means, collectively, Bank of America Merrill Lynch, Citi, J.P. Morgan, Jefferies, Morgan Stanley, RBC, Ramirez & Co., Stifel and Wells Fargo. U.S. Government Securities Business Day means any day other than (a) a Saturday, a Sunday, or (b) a day on which the Securities Industry and Financial Markets Association (SIFMA) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in U.S. government securities, or (c) a day on which the Calculation Agent is required or permitted by law to close. Wells Fargo means Wells Fargo Bank, National Association. Section 102. Timing of Actions; Required Consents; Article and Section References. Whenever in the Indenture there is specified a time of day at or by which a certain action must be taken, such time shall be local time in Tallahassee, Florida, except as otherwise specifically provided in the Indenture. If the date for making any payment or the last day for the performance of any act or the exercise of any right provided in the Indenture shall not be a Business Day, such payment may be made or act performed or right exercised on the next succeeding Business Day with the same force and effect as if done on the nominal date provided in the Indenture, except as otherwise specifically provided herein. Notwithstanding anything to the contrary contained in the Indenture, whenever in the Indenture there is required the consent of another party (other than the Bondholders) to the taking or omission of any action, the party from whom the consent is required shall be under the obligation to act reasonably and in good faith in determining whether or not to grant such consent and such consent shall not be unreasonably withheld. Any reference to an article or section of the Original Indenture shall mean the referenced article or section of the Original Indenture as amended from time to time, except as otherwise specifically provided herein. [END OF ARTICLE I] 10
ARTICLE II THE SERIES 2015A BONDS Section 201. Issuance of Series 2015A Bonds; Purpose; Form; Terms. (a) The Issuer hereby authorizes the issuance of the Series 2015A Bonds hereunder in an aggregate principal amount of $ for the purpose of providing funds to (i) make a deposit to the Series 2015A Bonds Proceeds Subaccount in the Proceeds Account to provide funds to pay policy claims and other liabilities and expenses related to such claims resulting in one or more Plan Year Deficits (calculated in accordance with the provisions of the Plan of Operation applicable to the making of Draws from the Proceeds Account) within the Coastal Account, as the same may occur from time to time; provided, however, that amounts on deposit to the credit of the Series 2015A Bonds Proceeds Subaccount may, at the election of Citizens, be applied to pay principal of and/or interest on the corresponding subseries of Series 2015A Bonds, or withdrawn and applied to any lawful purpose of the Coastal Account in accordance with the provisions of the Indenture, [(ii) make a cash deposit to the corresponding subaccount of the Reserve Account in an amount equal to the Reserve Account Requirement (calculated as of the Closing Date) for each subseries of the Series 2015A Bonds,] and (iii) pay the costs of issuance of the Series 2015A Bonds. (b) The Series 2015A Bonds shall be issued in two separate subseries as follows: the Series 2015A-1 Bonds shall be designated as Citizens Property Insurance Corporation Coastal Account Senior Secured Bonds, Series 2015A-1, with the additional designations, if any, permitted by the Indenture and shall be issued in the initial aggregate principal amount of $ ; and the Series 2015A-2 Bonds shall be designated Citizens Property Insurance Corporation Coastal Account Senior Secured Bonds, Series 2015A-2 (SIFMA Floating Rate Notes), with the additional designations, if any, permitted by the Indenture and shall be issued in the aggregate principal amount of $. [Simultaneously with the issuance of the Series 2015A Bonds, the Bond Insurer is issuing the Bond Insurance Policy guaranteeing the scheduled payment of the principal of and interest on the Insured Series 2015A Bonds.] All Series 2015A Bonds shall be in substantially the form thereof attached hereto as Exhibit A. (c) The Series 2015A Bonds shall be issued in fully registered form, without coupons, in Authorized Denominations. The Series 2015A Bonds will be issued as Tax-Exempt Bonds and will be dated their date of initial delivery. Unless the Issuer shall otherwise direct, the Series 2015A-1 Bonds shall be numbered from RA1-1 upwards and the Series 2015A-2 Bonds shall be numbered from RA2-1 upwards. The Series 2015A-1 Bonds shall mature on June 1 of the years set forth below, in the following principal amounts and shall bear interest while Outstanding at the following fixed rates per annum, payable on each Interest Payment Date (commencing on December 1, 2015) and computed on the basis of a 360-day year consisting of twelve 30-day months: 11
Maturity Date (June 1,) Principal Amount Interest Rate Yield CUSIP [*Insured Series 2015A-1 Bonds.] $ % % 176553 176553 176553 176553 176553 176553 176553 176553 176553 176553 176553 176553 176553 176553 176553 (d) The Series 2015A-2 Bonds shall mature on June 1,, in the following principal amount and shall bear interest while Outstanding at the Adjusted SIFMA Rate, payable monthly in arrears on each Interest Payment Date (commencing on July 1, 2015) and computed on the basis of the actual number of days elapsed over a year of 365 or 366 days, as the case may be: Maturity Date (June 1,) Principal Amount Interest Rate CUSIP $ Adjusted SIFMA Rate 176553 Except for the initial Adjusted SIFMA Rate applicable to the Series 2015A-2 Bonds upon their issuance, which shall be determined by J.P. Morgan, as representative of the Underwriters on or prior to the date of issuance of the Series 2015A-2 Bonds, the Adjusted SIFMA Rate will be determined by the Calculation Agent; provided however, the Adjusted SIFMA Rate shall not exceed the Maximum Rate. The Adjusted SIFMA Rate shall be adjusted on each Adjustment Date, based upon the SIFMA Rate published for such week, with the effective date for each adjustment of the Adjusted SIFMA Rate to be each Thursday. Upon determining the Adjusted SIFMA Rate for a given week, the Calculation Agent shall notify the Issuer of such rate by electronic mail (e-mail) or by telephone or in such other manner as may be appropriate on the date of such determination, which notice, if provided by telephone, shall be promptly confirmed in writing. Such notice shall be provided by not later than 11:00 A.M. New York City time on the Business Day immediately following the Adjustment Date. Upon the request of the Holder of any Series 2015A-2 Bond, the Calculation Agent will provide the applicable Adjusted SIFMA Rate then in effect. 12
The determination of the Adjusted SIFMA Rate (absent manifest error) shall be conclusive and binding upon the Issuer and the Owners of the Series 2015A-2 Bonds. If for any reason the Adjusted SIFMA Rate shall not be established, the Series 2015A-2 Bonds shall bear interest at the Adjusted SIFMA Rate last in effect until such time as a new Adjusted SIFMA Rate shall be established pursuant to the terms of this Tenth Supplemental Indenture. Interest on the Series 2015A-2 Bonds shall be payable monthly in arrears on July 1, 2015 and on each Interest Payment Date thereafter to the persons in whose names the Series 2015A-2 Bonds are registered at the close of business on the Regular Record Date. Interest on the maturity date of the Series 2015A-2 Bonds shall be payable to the persons to whom principal is payable. Interest payments on the Series 2015A-2 Bonds shall be the amount of interest accrued from and including the date of issuance or the most recent Interest Payment Date on which interest has been paid to but excluding the Interest Payment Date. If any Interest Payment Date, other than the maturity date, falls on a day that is not a Business Day, the Interest Payment Date shall be postponed to the next succeeding Business Day. If the maturity date falls on a day that is not a Business Day, the payment of interest and principal due on the maturity date shall be made on the next succeeding Business Day with the same force and effect as if made on the day such payment was due, and no interest shall accrue for the period from and after such maturity date for such Series 2015A-2 Bonds. (e) The Series 2015A Bonds shall not be secured by or payable from moneys in the Coverage Account. The Indenture Trustee shall not transfer, or be required to transfer, any amounts from the Revenue Account into the Coverage Account in respect of the Series 2015A Bonds. The Coverage Account Requirement shall be calculated without regard to the Series 2015A Bonds. Section 202. Authentication and Delivery. Upon execution and delivery of this Tenth Supplemental Indenture and satisfaction of the conditions set forth below for delivery of the Series 2015A Bonds, the Issuer shall execute the Series 2015A Bonds and deliver such Series 2015A Bonds to the Indenture Trustee. Thereupon, the Indenture Trustee shall authenticate the Series 2015A Bonds and deliver them to the Underwriters, as directed by the Issuer in accordance with this Section 202. Before the Indenture Trustee shall authenticate and deliver the Series 2015A Bonds, the Indenture Trustee shall receive the following items: (a) Original executed counterparts of this Tenth Supplemental Indenture, including, without limitation, the unexecuted form of the Master Trust Indenture to become effective as of its execution and delivery not earlier than the Conversion Date. (b) A copy of the Authorizing Resolution, certified by an Authorized Issuer Representative. (c) A request and authorization to the Indenture Trustee on behalf of the Issuer, signed by an Authorized Issuer Representative, to authenticate and deliver the Series 2015A Bonds to the Underwriters upon payment to the Indenture Trustee of the amount specified 13
therein, which amount shall be deposited upon receipt by the Indenture Trustee to the credit of the Series 2015A Bonds Proceeds Subaccount [and the Series 2015A Bonds Reserve Subaccount] and the Costs of Issuance Subaccount, as provided in Section 206 hereof. (d) The written opinion of Indenture Counsel, to the effect that: (i) the documents submitted to the Indenture Trustee in connection with the authentication and delivery request then being made comply with the requirements of the Original Indenture and this Tenth Supplemental Indenture; (ii) the issuance of the Series 2015A Bonds has been duly authorized; (iii) all filings and/ or recordings required to be made under Section 11.10 of the Original Indenture have been made; and (iv) all conditions precedent to the delivery of the Series 2015A Bonds have been fulfilled. (e) A written opinion of Indenture Counsel, to the effect that when executed for and in the name and on behalf of the Issuer and when authenticated and delivered by the Indenture Trustee, the Series 2015A Bonds will be valid and legal obligations of the Issuer, enforceable in accordance with their terms and will be secured under the Indenture equally and on a parity with all other Indenture Obligations at the time outstanding under the Indenture as to the pledge of and lien on the Pledged Revenues. (f) A certificate of the Issuer, signed by an Authorized Issuer Representative, which shall state that (i) there does not then exist an Event of Default (or an event that with the giving of notice or passage of time, or both, would result in such Event of Default) and (ii) the Pledge and Security Agreement and the DOI Agreement have not been supplemented or amended (except as permitted by the respective terms thereof) and each such agreement remains in full force and effect. When (i) the documents listed above have been received by the Indenture Trustee, and (ii) the Series 2015A Bonds have been executed and authenticated, the Indenture Trustee shall deliver the Series 2015A Bonds to the Underwriters, but only upon payment from the Underwriters to the Indenture Trustee of the specified amount set forth in the request and authorization to which reference is made in paragraph (c) above, which amount shall be deposited as provided in Section 206 hereof. The proceeds of the Series 2015A Bonds shall be applied as set forth in Section 206 hereof. Section 203. Execution; Authentication. The Series 2015A Bonds shall be executed in the form and manner set forth in Section 3.03 of the Original Indenture and shall be deposited with the Indenture Trustee for authentication. Prior to the authentication and delivery of the Series 2015A Bonds by the Indenture Trustee, there shall be filed with the Indenture Trustee the documents, certifications, opinions and other items required under Section 202 of this Tenth Supplemental Indenture and Section 2.04 of the Original Indenture. No Series 2015A Bonds shall be valid until the certification of authentication shall have been duly executed by the Indenture Trustee in the manner provided by the Indenture, and such authentication shall be proof that the holder is entitled to the benefit of the trust created by the Indenture. 14
Section 204. Nature of Obligation; Security for Series 2015A Bonds. (a) The Series 2015A Bonds and all other obligations arising under this Tenth Supplemental Indenture shall be direct and general obligations of the Issuer attributable to the Coastal Account (subject to paragraph (b) 2.a., b., c. and d. of the Act), secured solely by the Pledged Revenues as provided in the Indenture (and subject to the proviso expressed in subsection (b) below); provided, however, that on and after the date of execution and delivery of the Master Trust Indenture, the Series 2015A-1 Bonds with a stated maturity date after the Conversion Date will be secured solely by the Pledged Revenues as shall be provided in the Master Trust Indenture. No Person, including, without limitation, the holders of the Series 2015A Bonds, the Indenture Trustee [and the Bond Insurer] shall have a claim against, or recourse to, the Personal Lines Account or the Commercial Lines Account (including the revenues and assets allocated and allocable or required to be allocated to the Personal Lines Account or the Commercial Lines Account) in respect of the Series 2015A Bonds or any other obligation arising under, directly or indirectly, this Tenth Supplemental Indenture or the Indenture. Notwithstanding anything to the contrary in the Series 2015A Bonds or the Indenture, the Series 2015A Bonds, do not and shall not represent or constitute a debt or pledge of the faith and credit or the taxing power of the State or of any political subdivision, municipality or other local agency thereof or of any Assessable Insurer or Assessable Insured. (b) The Series 2015A Bonds shall be secured and payable from the Pledged Revenues, as provided in the Indenture, on a parity with the Outstanding Parity Bonds and any Additional Indenture Obligations that may be issued from time to time under the Indenture; provided, however, that the Series 2015A Bonds shall not be secured by or payable from (i) any moneys or investments in the Coverage Account or (ii) moneys or investments in the Defeasance Subaccount (or any sub-subaccount therein) of the Debt Service Account deposited therein in respect of a Series of Indenture Obligations other than the Series 2015A Bonds. Section 205. Exchange and Transfer; Book Entry System. The provisions of Sections 3.06 and 3.10 of the Original Indenture shall not apply to the Series 2015A Bonds. The registration of the Series 2015A Bonds, the registration of transfer thereof and the exchange of Series 2015A Bonds shall be subject to and governed by the provisions of this Section 205. Upon surrender of a Series 2015A Bond at the Principal Office of the Indenture Trustee, as bond registrar, together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form and with such guaranty of signature as shall be satisfactory to the Indenture Trustee, such Series 2015A Bond may be exchanged for fully registered Series 2015A Bonds of the same subseries and maturity, aggregating in amount the then unpaid principal amount of the Series 2015A Bond or Bonds surrendered, of Authorized Denominations. As to any Series 2015A Bonds the Bondholder shall be deemed and regarded as the absolute owner thereof for all purposes and neither of the Issuer or the Indenture Trustee shall be affected by any notice, actual or constructive, to the contrary. 15
Any Series 2015A Bonds may be registered as transferred upon the books kept for the registration and transfer of Series 2015A Bonds only upon surrender thereof to the Indenture Trustee, as bond registrar, together with an assignment duly executed by the Bondholder or his attorney or legal representative in such form and with such guaranty of signature as shall be satisfactory to the Indenture Trustee; provided, however, that the Indenture Trustee shall not be obligated to make any exchange or registration of transfer during the period between a Record Date and the corresponding Interest Payment Date. Upon the registration of transfer of any such Series 2015A Bonds and on request of the Indenture Trustee, the Issuer shall execute, and the Indenture Trustee shall authenticate and deliver, a new Series 2015A Bond or Bonds registered in the name of the transferee or transferees, of the same subseries and maturity, aggregating in amount the then unpaid principal amount of the Series 2015A Bond or Bonds surrendered, of Authorized Denominations. In all cases in which Series 2015A Bonds shall be issued in exchange for or in replacement of other Series 2015A Bonds, the Series 2015A Bonds to be issued shall be signed and sealed on behalf of the Issuer and authenticated by the Indenture Trustee, all as provided in Section 3.03 of the Original Indenture. The obligation of the Issuer and the rights of the Bondholders with respect to such Series 2015A Bonds shall be the same as with respect to the Series 2015A Bonds being exchanged or replaced. Such registrations of transfers or exchanges shall be without charge to the Bondholders, except that any taxes or other governmental charges required to be paid with respect to the same shall be paid by the Bondholder requesting such registration of transfer or exchange as a condition precedent to the exercise of such privilege. Any service charge made by the Indenture Trustee for any such registration of transfer or exchange shall be paid by the Issuer. Whenever any Outstanding Bond shall be delivered to the Indenture Trustee for cancellation pursuant to this Tenth Supplemental Indenture, or for exchange or registration of transfer pursuant to this Section 205, such Bonds shall be promptly canceled and destroyed by the Indenture Trustee (subject to applicable record retention requirements) and counterparts of a certificate of destruction evidencing such destruction shall be retained by the Indenture Trustee and, if requested by the Issuer, shall be furnished by the Indenture Trustee to the Issuer. The foregoing provisions of this Section 205 to the contrary notwithstanding, the Series 2015A Bonds will be issued initially as one fully registered bond for each maturity of each subseries of the Series 2015A Bonds (subject to any DTC restrictions on the maximum principal amount of a bond certificate [and provided that separate bond certificates shall be issued representing the Insured Series 2015A-1 Bonds]) in the name of Cede & Co., as nominee of The Depository Trust Company, New York, New York ( DTC ), and deposited in the custody of DTC. The Beneficial Owners will not receive physical delivery of the Series 2015A Bonds. Individual purchases of the Series 2015A Bonds may be made in book-entry form only in principal amounts equal to Authorized Denominations thereof. Payments of principal of and premium, if any, and interest on the Series 2015A Bonds will be made to DTC or its nominee as Bondholder. DTC shall pay interest to the Beneficial Owners of record through its Participants as of the close of business on the Record Date. DTC shall pay the redemption price of the 16
Series 2015A Bonds called for redemption to the Beneficial Owners of record through its Participants in accordance with its customary procedures. Transfer of ownership interests in the Series 2015A Bonds shall be made by DTC and its Participants, acting as nominees of the Beneficial Owners, in accordance with rules specified by DTC and its Participants. Series 2015A Bond certificates will be issued directly to owners of such Series 2015A Bonds other than DTC, or its nominee, upon the occurrence of the following events (subject, however, to operation of the two sentences following clause (c) below): (a) DTC determines not to continue to act as securities depository for the Series 2015A Bonds; or (b) the Issuer has advised DTC of its determination that DTC is incapable of discharging its duties; or (c) the Issuer has determined that it is in the best interest of the Bondholders not to continue the book-entry system of transfer or that interests of the Beneficial Owners of the Series 2015A Bonds might be adversely affected if the book-entry system of transfer is continued. Upon occurrence of an event described in (a) or (b) above, the Issuer shall attempt to locate another qualified Securities Depository. If the Issuer fails to locate another qualified Securities Depository to replace DTC, the Indenture Trustee shall authenticate and deliver Series 2015A Bonds in certificated form. In the event the Issuer makes the determination noted in (b) or (c) above (as to which the Issuer undertakes no obligation to make any investigation to determine the occurrence of any events that would permit the Issuer to make any such determination), and has made provisions to notify the Beneficial Owners of the Series 2015A Bonds of the availability of Series 2015A Bonds certificates by mailing an appropriate notice to DTC, the Issuer shall cause the Indenture Trustee to authenticate and deliver Series 2015A Bonds in certificated form pursuant to Exhibit A hereof, to DTC s Participants (as requested by DTC) in appropriate amounts. Principal of and interest on the Series 2015A Bonds shall be payable as otherwise provided in the Indenture. Section 206. Disposition of Proceeds. (a) Simultaneously with the delivery of the Series 2015A-1 Bonds, the Indenture Trustee shall apply the net proceeds of the Series 2015A-1 Bonds as follows: [(i) $ (which is an amount equal to the Reserve Account Requirement for the Series 2015A-1 Bonds) shall be deposited in the Series 2015A Bonds Reserve Subaccount of the Reserve Account;] (ii) $ shall be deposited in the Costs of Issuance Subaccount of the Proceeds Account, for the payment of the costs of issuance of the Series 2015A-1 Bonds [(such amount excludes the insurance premium of $ paid directly by the Underwriters to the Bond Insurer)]; and 17