Exhibit 10.2



 


Second
Amendment

to

Revolving Facility B Agreement


 


This SECOND AMENDMENT TO
REVOLVING FACILITY B AGREEMENT (this “Second Amendment”), dated as of December 20, 2017 (effective as provided
herein), is between HALLMARK FINANCIAL SERVICES, INC., a Nevada corporation (“Borrower”), and FROST BANK, a
Texas state bank (“Lender”).


 


RECITALS:


 


Borrower and Lender are
parties to the Revolving Facility B Agreement dated as of December 17, 2015 (such agreement, together with all amendments
and restatements thereto, the “Facility B Agreement”). Borrower, American Hallmark Insurance Company of
Texas, a Texas insurance corporation, Hallmark Insurance Company, an Arizona insurance corporation, and Lender are parties to the
Credit Agreement dated as of June 30, 2015 (such agreement, together with all amendments and restatements thereto, the “Credit
Agreement”).


 


Borrower has requested
an amendment to the Facility B Agreement to extend the Facility B Termination Date and the Facility B Maturity Date.


 


Lender has agreed to extend
the Facility B Termination Date and the Facility B Maturity Date, subject to the terms of this Second Amendment.


 


AGREEMENT:


 


NOW, THEREFORE, in consideration
of the premises and mutual covenants herein contained, the parties hereto agree as follows:


 


ARTICLE I


 


Definitions


 


1.1           Definitions.
All capitalized terms not otherwise defined herein have the same meanings as in the Facility B Agreement and the Credit Agreement.


 


ARTICLE II


 


Amendments to Facility B
Agreement


 


2.1           Amendments
to Facility B Agreement Section 1.1.


 


(a)          The
definition of “Facility B Maturity Date” is amended by deleting “December 17, 2023” and substituting
“December 17, 2024” in lieu thereof.


 


(b)          The
definition of “Facility B Termination Date” is amended by deleting “December 17, 2018” and substituting
“December 17, 2019” in lieu thereof.


 


2.2           Amendment
to Facility B Agreement Section 2.3. Facility B Agreement Section 2.3 is amended by deleting “April 1,
2019” and substituting “April 1, 2020” in lieu thereof.


 




    
Second Amendment to Revolving Facility B Agreement – Page 1


     


    

 


ARTICLE III


 


Conditions Precedent


 


3.1           Conditions.
The effectiveness of this Second Amendment is subject to the satisfaction of the following conditions precedent:


 


(a)          Documents.
Lender shall have received all of the following, each dated (unless otherwise indicated) the date of this Second Amendment and
the following shall have occurred, in form and substance satisfactory to Lender:


 


(i) Second Amendment.
This Second Amendment executed by Borrower and Lender.


 


(ii) Second Restated
Facility B Note. The duly executed Second Restated Facility B Note in the form of Exhibit A, payable
to the order of Lender, and in the amount of the Facility B Commitment.


 


(iii) Other Documents.
In form and substance satisfactory to Lender and Special Counsel, such other documents, instruments and certificates as Lender
may reasonably require in connection with the transactions contemplated hereby.


 


(b)          Fee. Lender
shall have received an amendment fee in an amount equal to $30,000.00, due and payable as of the date hereof, which fee is
fully earned and non-refundable (subject to Credit Agreement Section 10.11).


 


(c)          Interest.
Lender shall have received all accrued, unpaid interest on the Facility B Loan, accrued through December 20, 2017.


 


(d)          Expenses.
Lender shall have received reimbursement from Borrower for Attorney Costs incurred through the date hereof.


 


(e)          No
Default. No Default or Event of Default shall exist prior to giving effect to this Second Amendment or immediately after giving
effect to this Second Amendment.


 


(f)          Representations
and Warranties.


 


(i) All of the representations
and warranties contained in Article VIII of the Credit Agreement and in Article V of the Facility B Agreement,
as amended hereby, and in the other Loan Documents shall be true and correct on and as of the date of this Second Amendment with
the same force and effect as if such representations and warranties had been made on and as of such date, except to the extent
such representations and warranties speak to a specific date.


 


(ii) All of the representations
and warranties contained in Article V of this Second Amendment shall be true and correct, both before and after giving
effect to this Second Amendment.


 


3.2           Effectiveness.
Upon satisfaction of the conditions precedent in Section 3.1, this Second Amendment shall be effective as of date hereof.


 




    
Second Amendment to Revolving Facility B Agreement – Page 2


     


    

 


ARTICLE IV


 


Ratification and Acknowledgement


 


4.1           Ratification.
The terms and provisions set forth in this Second Amendment shall modify and supersede all inconsistent terms and provisions set
forth in the Facility B Agreement and except as expressly modified and superseded by this Second Amendment, the terms and
provisions of the Facility B Agreement, the Credit Agreement and the other Loan Documents are ratified and confirmed and shall
continue in full force and effect. Borrower agrees that the Facility B Agreement, as amended hereby, the Credit Agreement
and the other Loan Documents to which it is a party or subject shall continue to be legal, valid, binding and enforceable in accordance
with their respective terms.


 


ARTICLE V


 


Representations and Warranties


 


5.1           Loan
Documents. Borrower hereby represents and warrants to Lender that (a) the execution, delivery and performance of this
Second Amendment and any and all other Loan Documents executed and/or delivered in connection herewith have been authorized by
all requisite action on the part of Borrower and will not violate any organization or governance document of Borrower or any agreement
to which Borrower is a party or its property is subject, (b) this Second Amendment constitutes a valid and legally binding
agreement enforceable against Borrower, (c) the representations and warranties contained in the Facility B Agreement,
as amended hereby, and in the Credit Agreement made by or as to Borrower, AHIC and HIC and in each other Loan Document are true
and correct on and as of the date hereof (both before and immediately after giving effect to this Second Amendment), as though
made on and as of the date hereof, except to the extent such representations and warranties speak to a specific date, and (d) no
Default or Event of Default exists prior to giving effect to this Second Amendment or will exist immediately after giving effect
to this Second Amendment.


 


ARTICLE VI


 


Miscellaneous


 


6.1           Reference
to Facility B Agreement. Each of the Loan Documents, including the Facility B Agreement and any and all other agreements,
documents, or instruments now or hereafter executed and delivered pursuant to the terms hereof or pursuant to the terms of the
Facility B Agreement as amended hereby, are hereby amended so that any reference in such Loan Documents to the Facility B
Agreement shall mean a reference to the Facility B Agreement as amended hereby. This Second Amendment is a Loan Document.


 


6.2           Severability.
The provisions of this Second Amendment are intended to be severable. If for any reason any provision of this Second Amendment
shall be held invalid or unenforceable in whole or in part in any jurisdiction, such provision shall, as to such jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without in any manner affecting the validity or enforceability
thereof in any other jurisdiction or the remaining provisions hereof in any jurisdiction.


 


6.3           Counterparts.
This Second Amendment may be executed in any number of counterparts, all of which taken together shall constitute one and the same
instrument, and any party hereto may execute this Second Amendment by signing any such counterpart.


 




    
Second Amendment to Revolving Facility B Agreement – Page 3


     


    

 


6.4           GOVERNING
LAW. THIS SECOND AMENDMENT AND THE OTHER LOAN DOCUMENTS SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE
STATE OF TEXAS. THE LOAN DOCUMENTS ARE PERFORMABLE IN SAN ANTONIO, BEXAR COUNTY, TEXAS, AND BORROWER WAIVES THE RIGHT TO BE SUED
ELSEWHERE. BORROWER AND LENDER AGREE THAT THE STATE AND FEDERAL COURTS OF TEXAS LOCATED IN SAN ANTONIO, TEXAS SHALL HAVE JURISDICTION
OVER PROCEEDINGS IN CONNECTION WITH THIS SECOND AMENDMENT AND THE OTHER LOAN DOCUMENTS.


 


6.5           WAIVER
OF JURY TRIAL. BORROWER AND LENDER HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT
PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS SECOND AMENDMENT
OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO LENDER ENTERING
INTO THIS SECOND AMENDMENT AND EXTENDING THE REVOLVING LOAN MATURITY DATE.


 


6.6           ENTIRE
AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES
AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.


 


	The Remainder of This Page Is Intentionally Left Blank.


 




    
Second Amendment to Revolving Facility B Agreement – Page 4


     


    

 


Executed as of the date
first written above.


 


	BORROWER:	HALLMARK FINANCIAL SERVICES, INC.,
	 	a Nevada corporation


 


	 	By:	 
	 	 	Jeffrey R. Passmore
	 	 	Senior Vice President 


 




    
Second Amendment to Revolving Facility B Agreement (Hallmark) – Signature Page



     


    

 


	LENDER:	FROST BANK, a Texas state bank 


 


	 	By:	 
	 	 	Jerry Colwell
	 	 	Senior Vice President


 




    
Second Amendment to Revolving Facility B Agreement (Hallmark) – Signature Page



     


    

 


EXHIBIT A


 


Facility B Note


 




    
Second Amendment to Revolving Facility B Agreement – Exhibit A