Document:

Exhibit 10.1

 

Execution Version

 

American
Hallmark Insurance Company of Texas

 

Hallmark
Specialty Insurance Company

 

Hallmark
Insurance Company

 

Hallmark
National Insurance Company

 

Hallmark
County Mutual Insurance Company

 

and

 

DARAG BERMUDA LTD 

 

DARAG INSURANCE (GUERNSEY) LIMITED 

 

LOSS PORTFOLIO
TRANSFER

REINSURANCE
CONTRACT

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract		 

     

    

 

	PREAMBLE	3
	ARTICLE I Definitions	3
	ARTICLE II Business Reinsured	9
	ARTICLE III Reinsurance Premium	9
	ARTICLE IV Term	12
	ARTICLE V Special Termination	12
	ARTICLE VI Territory	15
	ARTICLE VII Exclusions	15
	ARTICLE VIII Coverage	15
	ARTICLE IX Loss Settlements	17
	ARTICLE X Salvage and Subrogation	17
	ARTICLE XI Reports and Remittances	17
	ARTICLE XII Late Payments	19
	ARTICLE XIII Offset	19
	ARTICLE XIV Access to Records	20
	ARTICLE XV Third-Party Rights	21
	ARTICLE XVI Delays, Errors and Omissions	21
	ARTICLE XVII Currency	21
	ARTICLE XVIII Federal Excise Tax	21
	ARTICLE XIX Foreign Account Tax Compliance
    Act	22
	ARTICLE XX Credit for Reinsurance	23
	ARTICLE XXI Third-Party Reinsurance	24
	ARTICLE XXII Trust Account	24
	ARTICLE XXIII Insolvency	28
	ARTICLE XXIV CONFIRMATION AND EQUITABLE
    RELIEF FROM COURT	29
	ARTICLE XXV Governing Law	30
	ARTICLE XXVI Enforceability	30
	ARTICLE XXVII Agency Agreement	30
	ARTICLE XXVIII Confidentiality	31
	ARTICLE XXIX Representations and Warranties	32
	ARTICLE XXX Closing Conditions	36
	ARTICLE XXXI Arbitration	38

 

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 Loss Portfolio Transfer Contract	Page 1 	 

     

    

 

	ARTICLE XXXII Liability
    of the Reinsurer	40
	ARTICLE XXXIII Non-Avoidance	40
	ARTICLE XXXIV Entire Agreement	40
	ARTICLE XXXV Mode of Execution	40
	ARTICLE XXXVI Sanctions	41
	ARTICLE XXXVII Non-Assignability and
    Non-Delegation	41
	ARTICLE XXXVIII Notices	41
	ARTICLE XXXIX Duty of Cooperation and
    Furnishing of Relevant Information	43
	ARTICLE XL Severability	43
	ARTICLE XLI Non-Waiver	43
	ARTICLE XLII Survival	43
	ARTICLE XLIII Counterparts	43
	ARTICLE XLIV Administrative Services	44
	ARTICLE XLV Waiver of Duty of Utmost
    Good Faith	44
	ARTICLE XLVI Intermediary	44

Exhibits

 

	Exhibit A	-	Form of Trust Agreement
	Exhibit B	-	Form of Services Agreement
	Exhibit C	-	Schedule of Third-Party Reinsurance

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 2 	 

     

    

 

LOSS PORTFOLIO
TRANSFER

REINSURANCE CONTRACT

(the “Contract”)

 

between

 

American
Hallmark Insurance Company of Texas

Hallmark
Specialty Insurance Company

Hallmark
Insurance Company

Hallmark
National Insurance Company

Hallmark
County Mutual Insurance Company

(hereinafter referred to collectively as
the “Company”)

 

and

 

DARAG BERMUDA LTD (“DARAG Bermuda”)

DARAG INSURANCE (GUERNSEY) LIMITED
(“DARAG Guernsey”)

(hereinafter collectively referred to as
the “Reinsurer”)

 

PREAMBLE

 

This Contract is made and entered into by and between the Company
and the Reinsurer (collectively, the “Parties” and each, a “Party”).

 

Reinsurance Allocation 

 

Payments of Ultimate Net Loss under this Contract shall be allocated
to each of the entities comprising the Company in the order in which claims for payment are presented, regardless of which entity
comprising the Company experiences the loss.

 

ARTICLE
I

 

Definitions

 

The terms set forth below, wherever they appear in this Contract
and regardless of whether they appear in a singular or plural form, shall have the meanings given herein:

 

		A.	Actuarial Standards

 

“Actuarial Standards” means standards
consistent with Applicable Law and best practice actuarial methodologies, consistently applied.

 

		B.	Aggregate Limit

 

“Aggregate Limit”
means an amount equal to $240,000,000.

 

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 Loss Portfolio Transfer Contract	Page 3 	 

     

    

 

		C.	Applicable Laws

 

“Applicable Laws” means all applicable
foreign, federal, state or local laws, rules, regulations, ordinances, directives, statutes, treaties, conventions and other agreements
between states, rules of common law, and all other laws of, or having effect in, any jurisdiction from time to time, authorizations,
permits, licenses, any rules of any stock exchange on which the shares of any Party (or any affiliate thereof) are listed and any
binding order, decree or ruling of any regulatory authority having jurisdiction with respect to the Subject Business and any formal
guidance or measures of any regulatory authority directed at the business of the type that comprises the Subject Business.

 

		D.	Business Days

 

“Business Day” means
any day (other than a Saturday or Sunday) on which banks are open for business in New York, New York and Hamilton, Bermuda.

 

		E.	Closing and Closing Date

 

“Closing” means the consummation, on the
Closing Date, of the transactions contemplated hereby.

 

“Closing Date” means a date to be mutually
agreed by the Parties, such date to be no later than August 31, 2020.

 

		F.	Company Escrow Account

 

“Company Escrow Account” means an escrow
account established by the Company within 30 calendar days of the Company’s receipt of the Corridor Layer Trigger notice
from the Reinsurer for the deposit of the Company Escrow Account Required Amount by the Company on a quarterly basis during the
Corridor Period, which account is accessible by the claims service administrator or other party contracted to handle claims payments
related to the Subject Business.

 

“Company Escrow Account Required Amount”
means an amount equal to (a) during the remainder of the quarter in which the Corridor Layer Trigger occurs, $3,000,000 and (b)
for each calendar quarter thereafter during the Corridor Period, the lesser of (i) $3,000,000 or (ii) an amount equal to the difference
of (x) the Corridor Layer Limit less (y) the aggregate amount of Ultimate Net Loss applicable to the Corridor Layer actually paid
by the Company as of such calendar quarter.

 

“Company Escrow Account Shortfall” means
at any time, an amount equal to the difference of (a) the Company Escrow Account Required Amount less (b) the balance of the Company
Escrow Account as of such time.

 

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 Loss Portfolio Transfer Contract	Page 4 	 

     

    

 

		G.	Declaratory Judgment Expense

 

“Declaratory Judgment
Expense” means all expenses incurred in connection with a declaratory judgment action brought to determine the Company’s
defense and/or indemnification obligations that are allocable to a specific claim subject to this Contract. Declaratory Judgment
Expense shall be deemed to have been incurred on the date of the original loss giving rise to the declaratory judgment action.

 

		H.	Effective Date

 

“Effective Date” means
January 1, 2020.

 

		I.	Extra Contractual Obligations/Loss in Excess of Policy Limits

 

		1.	Extra Contractual Obligations

 

“Extra Contractual Obligations” means those
liabilities not covered under any provision of a Policy, including any punitive, exemplary, compensatory, or consequential damages,
which arise from the handling of the Subject Business, including, but not limited to, the following: failure to settle within the
Policy limit, or by reason of alleged or actual negligence, fraud or bad faith in rejecting an offer of settlement, in preparation
of the defense, in the trial of any action against an insured, reinsured, an insured’s or reinsured’s assignee or a
third-party claimant, or in the preparation or prosecution of an appeal consequent upon such action, improper declination of coverage,
or the failure to defend a potentially covered loss.

 

		2.	Loss in Excess of Policy Limits

 

“Loss in Excess of Policy Limits” means
amounts paid or damages payable by the Company in excess of a Policy limit as a result of alleged or actual negligence, fraud,
or bad faith in failing to settle, and/or rejecting a settlement within the Policy limit, in the preparation of the defense, in
the trial of any action against an insured, reinsured, an insured’s or reinsured’s assignee or a third-party claimant,
or in the preparation or prosecution of an appeal consequent upon such action, improper declination of coverage, or the failure
to defend a potentially covered loss. Loss in Excess of Policy Limits is any amount for which the Company would have been contractually
liable to pay had it not been for the limits of the reinsured Policy.

 

		3.	Any Extra Contractual Obligations and/or Loss in Excess of Policy Limits shall be deemed to have occurred on the same date
as the loss covered or alleged to be covered under the Policy.

 

		J.	Gross Reinsurance Premium

 

“Gross Reinsurance Premium” is an amount
calculated as $172,900,000 minus the Rollforward Amount (of which $169,650,000 minus the Rollforward Amount shall
be paid to DARAG Bermuda and $3,250,000 shall be paid to DARAG Guernsey).

 

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 Loss Portfolio Transfer Contract	Page 5 	 

     

    

 

		K.	Loss Adjustment Expense

 

“Loss Adjustment Expense”
means expenses paid or payable after the Effective Date in connection with the appraisal, adjustment, settlement, litigation, arbitration,
investigation, defense and/or appeal of specific claims made with respect to the Subject Business, regardless of how such expenses
are classified for statutory reporting purposes. Loss Adjustment Expense shall include, but not be limited to, interest on judgments,
expenses of outside adjusters, subrogation, salvage and recovery expenses, legal expenses and costs incurred in connection with
coverage questions and legal actions connected thereto (e.g. Declaratory Judgment Expenses).

 

		L.	Loss Escrow Account Required Amount

 

“Loss Escrow Account Required Amount”
means an amount equal to (a) during the first calendar quarter following the Closing Date, an amount to be agreed between the Parties
prior to the Closing Date and (b) for each calendar quarter (or, at the option of the applicable funding Party, each month) thereafter,
a reasonable estimate to be agreed between the Company and the Reinsurer of the gross amount needed to pay Ultimate Net Loss during
such quarter (or, at the option of the applicable funding Party, such month), in each case, to be allocated to each Loss Escrow
Account as mutually agreed by the Parties.

 

		M.	Minimum Funding Requirement

 

“Minimum Funding Requirement”
means, as of any date of determination, 120% of the Net Subject Reserves as of such date less any undisputed amounts in respect
of any claims attributable to Third-Party Reinsurance that have been paid by the Reinsurer but not yet reimbursed to the Reinsurer
by the Company.

 

		N.	Net Reinsurance Premium

 

“Net Reinsurance Premium”
means the Gross Reinsurance Premium less any Federal Excise Tax or Withholding under FATCA, applicable under this Contract.

 

		O.	Net Subject Reserves

 

“Net Subject Reserves”
means all of the Company’s reserves for the Subject Business, including reserves for incurred but not reported losses and
Loss Adjustment Expense, reserves for losses, Loss Adjustment Expense and other liabilities paid but not recovered from the Reinsurer,
reserves for losses and other liabilities reported and outstanding, and any other reserves for Loss Adjustment Expense or other
liabilities, in each case, to the extent related to Ultimate Net Loss (excluding the Ultimate Net Loss retained by the Company
under the Corridor Layer).

 

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 Loss Portfolio Transfer Contract	Page 6 	 

     

    

 

		P.	Policy

 

“Policy” or “Policies”
means the Company’s policies, contracts, agreements and binders of insurance or reinsurance (including any endorsements,
modifications or amendments thereto) on the Subject Business.

 

		Q.	Reinsurer ECO/XPL

 

“Reinsurer ECO/XPL” means Extra Contractual
Obligations and/or Loss in Excess of Policy Limits, other than Retained ECO/XPL, that arise from the handling of claims in connection
with the Subject Business by the Reinsurer or any of its subcontractors or third-party administrators after the Closing Date (regardless
of the date of the original loss covered or alleged to be covered under the Policy).

 

		R.	Retained ECO/XPL

 

“Retained ECO/XPL” means Extra Contractual
Obligations and/or Loss in Excess of Policy Limits solely attributable to the conduct of the Company (other than any such conduct
approved by the Reinsurer) under the Subject Business. Without limiting the generality of the foregoing, Retained ECO/XPL shall
include the Extra Contractual Obligations related to the following claims: 164816TG, 165763TG, 121707TG, 182273TG and 190080TG.

 

		S.	Rollforward Amount

 

“Rollforward Amount” means an amount equal
to Ultimate Net Loss paid by the Company during the Rollforward Period (which, for the avoidance of doubt, shall be net of the
deductions set forth in the definition of “Ultimate Net Loss”).

 

		T.	Rollforward Period

 

“Rollforward Period” means the period
between the Effective Date and the Closing Date.

 

		U.	Services Agreement

 

		V.	“Services Agreement” means the services agreement dated as of the Closing Date, which shall be substantially in
the form attached hereto as Exhibit B, subject to such changes as the Parties may reasonably agree.

 

		W.	Subject Business

 

“Subject Business” means
all existing and future claims for losses occurring on or prior to December 31, 2019 with respect to Policies issued by the Company
providing coverage for commercial auto liability and classified by the Company as: (a) Binding Primary Auto and (b) Brokerage Primary
Auto (such obligations, subject to applicable exclusions).

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 7 	 

     

    

 

		X.	Third-Party Reinsurance

 

“Third-Party Reinsurance”
means that part or all of any contracts (other than this Contract) of reinsurance pursuant to which the Company has ceded any portion
of the Subject Business.

 

		Y.	Transaction Documents

 

“Transaction Documents” means this Contract,
the Trust Agreement, the Services Agreement, the Security Agreement and such other agreements, documents and instruments that are
executed and delivered in connection with the transactions contemplated by this Contract.

 

		Z.	Transition End Date

 

“Transition End Date” means the date on
which the Company shall no longer be obligated to provided transition services pursuant to the Services Agreement, which date shall
be reasonably acceptable to the Parties and set forth in the Services Agreement; provided that such date shall be no later than
the date falling three (3) months after the Closing Date.

 

		AA.	Ultimate Net Loss

 

“Ultimate Net Loss”
means all amounts paid or payable in respect of the Subject Business to settle losses or satisfy judgments, verdicts or awards,
including but not limited to the following: (a) any pre-judgment interest that is included as part of an award or judgment,
(b) Reinsurer ECO/XPL and (c) Loss Adjustment Expense; net of any (i) recoveries, salvages, and subrogations, which are
actually recovered and (ii) Third-Party Reinsurance (whether or not the applicable Third-Party Reinsurance has actually been collected
by the Company). Ultimate Net Loss shall not include any Excluded Liabilities.

 

Nothing herein shall be construed
to mean that losses under this Contract are not recoverable until the Company’s Ultimate Net Loss has been ascertained.

 

		BB.	Unallocated Loss Adjustment Expense

 

“Unallocated Loss Adjustment Expense”
means those costs and expenses incurred by a Party that are associated with the service and management of the Subject Business
and that are not Loss Adjustment Expenses, such as personnel costs, overhead or similar internal costs. For the avoidance of doubt,
whether or not the Company or the Reinsurer reflects an expense as an Unallocated Loss Adjustment Expense on its financial statements
or other books and records shall not affect whether such expense qualifies as Unallocated Loss Adjustment Expense for purposes
of this Contract.

 

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 Loss Portfolio Transfer Contract	Page 8 	 

     

    

 

ARTICLE
II

 

Business Reinsured

 

		A.	Subject to the terms of this Contract and upon receipt of the Net Reinsurance Premium in accordance with the REINSURANCE PREMIUM
ARTICLE, the Reinsurer agrees to reinsure the Ultimate Net Loss of the Company for the Subject Business, up to the Aggregate Limit.

 

The Reinsurer’s liability
under this Contract shall commence on the Effective Date, and all reinsurance with respect to which the Reinsurer shall be liable
by virtue of this Contract will be subject in all respects to the same terms, conditions, interpretations, waivers, modifications,
alterations, and cancellations as in the Subject Business, the true intent of this Contract being that the Reinsurer will follow
the fortunes of the Company, and shall be bound, without limitation, by all payments and settlements entered into by or on behalf
of the Company, subject to the terms, conditions and limits of this Contract.

 

		B.	Subject to the terms of the Services Agreement, the Reinsurer also agrees to assume, or to procure an affiliate thereof to
assume, claims handling and certain other administrative functions in respect of the Policies relating to the Subject Business,
such assumption to commence on the Closing Date. The administrative responsibilities in respect of the Subject Business are set
forth in the ADMINISTRATIVE SERVICES ARTICLE.

 

ARTICLE
III

 

Reinsurance Premium

 

		A.	Subject to the remainder of this REINSURANCE PREMIUM ARTICLE, as consideration for the reinsurance provided under this Contract,
the Company shall pay the Reinsurer premium in an amount equal to the Net Reinsurance Premium.

 

		B.	Notwithstanding any other provision to the contrary, the Parties acknowledge and agree that all premiums payable to or received
by the Company in respect of the Subject Business are for the sole and exclusive benefit of the Company, and the Reinsurer shall
not be entitled pursuant to this Contract to any such premiums.

 

		C.	At least three (3) Business Days prior to the Closing Date, the Company shall deliver to the Reinsurer a statement (the “Closing
Statement”) setting forth the Company’s good faith estimate of the Rollforward Amount, the Estimated Initial Minimum
Funding Amount and the Estimated Reinsurance Premium.

 

		D.	Subject to the payment of the fee of Willis Re Inc. pursuant to the INTERMEDIARY ARTICLE, on the Closing Date, the Company
shall pay the Estimated Reinsurance Premium as follows:

 

		1.	first, deposit an aggregate amount equal to the Loss Escrow Account Required Amount into the Loss Escrow Accounts,

 

		2.	second, deposit the remainder of the Estimated Reinsurance Premium, up to an amount equal to the difference of the Estimated
Initial Minimum Funding Amount minus the aggregate balance of the Loss Escrow
Accounts, into the Trust Account, and

 

		3.	third, pay the balance (if any) to the Reinsurer.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 9 	 

     

    

 

		E.	On the Closing Date, the Reinsurer shall deposit into the Trust Account an amount equal to the amount by which the Estimated
Initial Minimum Funding Amount exceeds the amount to be deposited into the Trust Account and the Loss Escrow Accounts by the Company
pursuant to the immediately preceding paragraph.

 

		F.	Post-Closing Adjustment.

 

		1.	No later than sixty (60) days following the Closing Date, the Company shall deliver to the Reinsurer a statement (the “Final
Closing Statement”) setting forth the Company’s calculation of the Rollforward Amount, the Net Reinsurance Premium
and the Initial Minimum Funding Amount.

 

		2.	If the Reinsurer disagrees with the Company’s determination of any item on the Final Closing Statement, the Reinsurer
may, within thirty (30) days after receipt of the Final Closing Statement, deliver a notice of disagreement (a “Notice of
Disagreement”) to the Company disagreeing with the Final Closing Statement and specifying in reasonable detail each item
that the Reinsurer in good faith disputes (each, a “Disputed Item”) and the amount in dispute for each such Disputed
Item. If the Reinsurer does not deliver a Notice of Disagreement within such thirty (30) day period, then the Rollforward Amount,
the Net Reinsurance Premium and the Initial Minimum Funding Amount shall be deemed to equal the amounts provided in the Final Closing
Statement and such amounts shall be final, binding and conclusive on the Reinsurer and the Company.

 

		3.	If a Notice of Disagreement is timely delivered pursuant to the foregoing paragraph, the Reinsurer and the Company shall, during
the fifteen (15) days following the receipt of such Notice of Disagreement (the “Resolution Period”), use their commercially
reasonable efforts to reach agreement on the Disputed Items. If, by the end of the Resolution Period, the Reinsurer and the Company
are unable to reach such agreement with respect to all of the Disputed Items, they shall promptly thereafter engage and submit
the unresolved Disputed Items (the “Unresolved Items”) to an internationally-recognized, independent actuarial firm
(the “Actuarial Firm”), which shall promptly review this Contract and the Unresolved Items. The Actuarial Firm shall
issue its written determination with respect to each Unresolved Item within thirty (30) days after the Unresolved Items are submitted
for its review. The Actuarial Firm shall determine each of the Unresolved Items and, giving effect to such determination, calculate
the Rollforward Amount, the Net Reinsurance Premium and the Initial Minimum Funding Amount. Each Party shall use commercially reasonable
efforts to furnish to the Actuarial Firm such work papers, books, records and documents and other information pertaining to the
Unresolved Items as the Actuarial Firm may request.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 10 	 

     

    

 

The determination of the Actuarial Firm shall be final,
binding and conclusive on the Reinsurer and the Company. The fees, expenses and costs of the Actuarial Firm incurred in rendering
any determination pursuant to this paragraph shall be split equally between the Reinsurer and the Company.

 

		4.	Promptly following final resolution of the Rollforward Amount, the Net Reinsurance Premium and the Initial Minimum Funding
Amount, whether by the absence of timely delivery of Notice of Disagreement or pursuant to the foregoing paragraph, if the Net
Reinsurance Premium exceeds the Estimated Reinsurance Premium, the Company shall deposit an amount equal to such excess into the
Trust Account. If the Estimated Reinsurance Premium exceeds the Net Reinsurance Premium, then the Company shall withdraw from the
Trust Account and retain an amount equal to such excess.

 

		5.	Following the deposit into or withdrawal from the Trust Account pursuant to the prior paragraph:

 

		(a)	if the market value of the assets held in the Funded Accounts is less than the Initial Minimum Funding Amount, the Reinsurer
shall promptly deposit an amount equal to such shortfall into the Trust Account, and

 

		(b)	if the market value of the assets held in the Funded Accounts is greater than the Initial Minimum Funding Amount, the Company
shall promptly instruct the trustee of the Trust Account to remit an amount equal to such excess from the Trust Account to the
Reinsurer.

 

		G.	As used herein:

 

		1.	“Estimated Initial Minimum Funding Amount” means the Company’s good faith estimate of the Initial Minimum
Funding Amount, as set forth in the Closing Statement.

 

		2.	“Estimated Reinsurance Premium” means an amount equal to the Company’s good faith estimate of the Net Reinsurance
Premium, as set forth in the Closing Statement.

 

		3.	“Initial Minimum Funding Amount” means an amount equal to the difference of $179,000,000 minus the Rollforward
Amount, such difference representing the Minimum Funding Requirement as of the Closing Date.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 11 	 

     

    

 

ARTICLE
IV

 

Term

 

At Closing, this Contract shall become effective as of 12:00 a.m.
Eastern Time on the Effective Date and shall continue in effect until the earliest of the following circumstances:

 

		1.	Exhaustion of the Aggregate Limit;

 

		2.	All obligations hereunder are discharged; and

 

		3.	The Contract is terminated pursuant to the SPECIAL TERMINATION ARTICLE.

 

ARTICLE
V

 

Special Termination

 

		A.	The Company may terminate this Contract at any time during the term of this Contract, upon the Reinsurer experiencing one or
more Reinsurer Special Termination Event(s).

A “Reinsurer Special Termination Event” shall be deemed to have occurred in the event of any of the following circumstances:

 

		1.	A State Insurance Department or other legal authority of competent jurisdiction orders the Reinsurer to cease writing business;

 

		2.	The Reinsurer has become insolvent or has been placed into liquidation or receivership (whether voluntary or involuntary),
or there have been instituted against the Reinsurer proceedings for the appointment of a receiver, liquidator, rehabilitator, conservator,
or trustee in bankruptcy, or other agent known by whatever name, to take possession of its assets or control of its operations;

 

		3.	For any period not exceeding 12 months, which commences no earlier than 12 months prior to the inception of this Contract,
DARAG Guernsey’s policyholders’ surplus, as reported in the financial statements of DARAG Guernsey, has been reduced
by 20% or more, and the Layer Three Liability has not been novated (which novation shall be subject to the Company’s consent,
which consent shall not be unreasonably withheld) from DARAG Guernsey to DARAG Bermuda;

 

		4.	For any period not exceeding 12 months, which commences no earlier than 12 months prior to the inception of this Contract,
the equity of DARAG Guernsey Ltd. (the “Guernsey Parent”), as reported in the financial statements of the Guernsey
Parent, has been reduced by 20% or more;

 

		5.	The Reinsurer has reinsured its entire liability under this Contract with an unaffiliated entity or entities without the Company’s
prior written consent (which shall not be unreasonably withheld, conditioned or delayed);

 

		6.	The Reinsurer breaches any of its representations, warranties or covenants in this Contract in a manner that does, or would
reasonably be expected to, materially and adversely affect the ability of the Reinsurer to perform its obligations under this Contract
and has not cured such breach within 30 days of receiving written notice thereof from the Company; provided, however, that the
Reinsurer’s non-payment of any amounts purported to be due hereunder while such amounts are subject to a good faith dispute shall not constitute
a breach of any representation, warranty or covenant in this Contract;

 

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 Loss Portfolio Transfer Contract	Page 12 	 

     

    

 

		7.	The Reinsurer has failed to comply with the funding requirements set forth in the TRUST ACCOUNT ARTICLE and has not cured such
failure to comply within five (5) days of receiving written notice thereof from the Company;

 

		8.	The Reinsurer breaches any of its obligations under the Services Agreement in any material respect and has not cured such breach
within 30 days of receiving written notice thereof from the Company;

 

		9.	Guernsey Parent ceases to control each of the Reinsurer, where “control” means the possession, directly or indirectly,
of the power to direct or cause the direction of the management policies of a person, whether through the ownership of voting securities,
by contract or otherwise; or

 

		10.	DARAG Bermuda, DARAG Guernsey and the Guernsey Parent cease to be affiliates.

 

Unless it is prohibited by law from
doing so, promptly following the Reinsurer’s knowledge of a Reinsurer Special Termination Event, the Reinsurer must promptly
notify the Company of such event in writing, by electronic mail, certified mail, or a nationally or internationally recognized
delivery service.

 

	B.	The Reinsurer may terminate this Contract at any time during the term of this Contract, upon the occurrence of the following
(such event, a “Company Special Termination Event”, and together with the Reinsurer Special Termination Events, each,
a “Special Termination Event”):

 

		1.	The Company has failed to pay any amounts finally determined by arbitration proceedings in accordance with the ARBITRATION
ARTICLE to be payable with respect to its obligation to reimburse the Reinsurer pursuant to the THIRD-PARTY REINSURANCE ARTICLE,
which failure remains uncured 30 days after the date on which such amount was finally determined by the arbitration Panel.

 

		2.	Following receipt of the First Delinquent Notice and the Second Delinquent Notice by the Company from the Reinsurer, the Company
fails to deposit into the Company Escrow Account an amount at least equal to the Company Escrow Account Shortfall specified in
the First Delinquent Notice, and such failure remains uncured thirty (30) calendar days after the date on which the Company receives
the Second Delinquent Notice from the Reinsurer.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 13 	 

     

    

 

		C.	Where a Special Termination Event has taken place, the Company or the Reinsurer, as applicable, may, without prejudice to
                                                          any other rights it may have under this Contract, commute all present and future liabilities under this Contract in return
                                                          for a full and final release of all such liabilities by delivering 30 days’ prior written notice to the other Party by electronic mail, certified mail, or by a nationally
or internationally recognized delivery service, which notice shall state the effective date and time of the commutation (the “Commutation
Effective Time”). Where the Company seeks to commute as provided herein, the Reinsurer shall pay the Company the Commutation
Amount at the Commutation Effective Time. In furtherance of the foregoing, if the Company seeks to commute following the occurrence
of a Reinsurer Special Termination Event, the Company may withdraw all collateral deposited in the Funded Accounts (including any
interest gained thereupon) and apply the proceeds thereof towards payment of the Commutation Amount, collecting any deficiency
of the funds to cover the Commutation Amount from the Reinsurer or paying any amounts in excess of the Commutation Amount to the
Reinsurer. In no event shall the Reinsurer be liable for payment of the full Commutation Amount if its total liability would exceed
the Aggregate Limit. Where the Reinsurer seeks to commute as provided herein, it will not be obligated to pay the Commutation Amount
and shall be entitled to withdraw and retain all amounts held in the Funded Accounts, including any such amounts in excess of the
Net Subject Reserves as of the Commutation Effective Time, and the Company shall pay any offset, credit or receivable owed by it
to the Reinsurer for Third-Party Reinsurance and any Ultimate Net Loss payments made by the Reinsurer with respect to the Corridor
Layer.

 

If the Company and the Reinsurer
cannot agree on the Commutation Amount, the Parties shall appoint an independent actuary. If the Company and the Reinsurer cannot
agree on an actuary, the Company and the Reinsurer shall each nominate three individuals, of whom the other shall decline two,
and the final decision shall be made by drawing lots. All the actuaries selected shall be disinterested in the outcome of the commutation
and shall be Fellows of the Casualty Actuarial Society meeting its qualification standards to provide statements of actuarial opinion
in the United States. The decision in writing of the appointed actuary, when filed with the Parties, shall be final and binding
on both Parties. The expense of the actuary and of the actuarial calculation shall be equally divided between the two Parties.

 

		1.	“Commutation Amount” means an amount equal to the lesser of (a) the sum of (i) all amounts due as of the Commutation
Effective Time from the Reinsurer to the Company under this Contract but not yet paid plus (ii) an amount equal to 105% of the
Net Subject Reserves as of the Commutation Effective Time and (b) the Remaining Limit.

 

		2.	“Remaining Limit” means, at any time, an amount equal to the difference of (a) the Aggregate Limit less (b) the
aggregate amount of Ultimate Net Loss actually paid by the Reinsurer to the Company as of such time.

 

		D.	The Company may revoke its notice hereunder, during the aforementioned 15-day period, without prejudice to reinstitute such
notice later if it so chooses.

 

		E.	The Company’s waiver of any rights provided in this Article is not a waiver of that right or other rights at a later
date.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 14 	 

     

    

  

ARTICLE
VI

 

Territory

 

The territorial limits of this Contract shall follow the Policies.

 

ARTICLE
VII

 

Exclusions

 

		A.	This Contract shall not cover the following (the “Excluded Liabilities”):

 

		1.	Unallocated Loss Adjustment Expenses of the Company;

 

		2.	Any sum paid prior to the Effective Date in settlement or payment of any obligation arising from the Subject Business (for
the avoidance of doubt, without prejudice to the calculation of the Rollforward Amount);

 

		3.	Ex gratia payments by the Company on or after January 1, 2020, unless the Reinsurer has given its prior written consent to
such payments;

 

		4.	Business classified by the Company as Excess Auto;

 

		5.	Business produced for the Company by Triad Insurance Services, a third-party program administrator;

 

		6.	Retained ECO/XPL; and

 

		7.	Commissions under the Subject Business, including but not limited to profit sharing.

 

For the avoidance of doubt, in no event shall a Party be responsible
for any Unallocated Loss Adjustment Expenses of the other Party.

 

ARTICLE
VIII

 

Coverage

 

		A.	The Reinsurer hereby agrees to indemnify the Company for the Ultimate Net Loss as respects the Subject Business as follows:

 

		1.	LAYER ONE: DARAG Bermuda will pay 100% of the Ultimate Net Loss from the ground up, subject to a layer one limit of
$151,200,000 of Ultimate Net Loss (the “Layer One Limit”).

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 15 	 

     

    

 

		2.	CORRIDOR LAYER: The Company shall retain net for its own account 100% of the Ultimate Net Loss of the Company (excluding
any Reinsurer ECO/XPL, for which the Reinsurer shall continue to be liable) in
excess of the Layer One Limit, subject to a corridor layer limit of $24,900,000 (the “Corridor Layer Limit”) of Ultimate
Net Loss (the “Corridor Layer”). The liability of the Company for Retained ECO/XPL shall not apply toward the Corridor
Layer Limit.

  

		3.	LAYER TWO: DARAG Bermuda will pay 100% of the Ultimate Net Loss in excess of the sum of (a) the Layer One Limit ($151,200,000),
and (b) the Corridor Layer Limit ($24,900,000), subject to a layer two limit of $27,800,000 (the “Layer Two Limit”).

 

		4.	LAYER THREE: DARAG Guernsey will pay 100% of the Ultimate Net Loss in excess of the sum of (a) the Layer One Limit ($151,200,000),
(b) the Corridor Layer Limit ($24,900,000) and (c) the Layer Two Limit ($27,800,000), subject to a layer three limit of $36,100,000
of Ultimate Net Loss (the “Layer Three Liability”);

 

provided that the aggregate liability
of the Reinsurer (including through providing collateral hereunder, but excluding, for the avoidance of doubt, its liability with
respect to Reinsurer ECO/XPL), together with the liability retained by the Company (but excluding Retained ECO/XPL) under the Corridor
Layer, shall not exceed the Aggregate Limit.

 

		B.	Notwithstanding the foregoing and any other provision to the contrary, (a) the Reinsurer shall be liable for all Reinsurer
ECO/XPL; (b) the liability of the Reinsurer with respect to Reinsurer ECO/XPL shall not apply towards the limits of liability of
the Reinsurer under paragraph A.1 of this Article, paragraph A.3 of this Article, paragraph A.4 of this Article and the Aggregate
Limit; and (3) the Reinsurer shall not be liable for Retained ECO/XPL. The liability retained by the Company pursuant to the Corridor
Layer under paragraph A.2 of this Article shall exclude any Reinsurer ECO/XPL.

 

		C.	The Reinsurer or the claims service administrator under the Services Agreement shall provide the Company written notice, in
accordance with the NOTICES ARTICLE, (i) when the Ultimate Net Loss paid by or on behalf of the Reinsurer has reached 95% of the
Layer One Limit (the “Corridor Layer Trigger”), (ii) if, as of the end of any calendar quarter during the Corridor
Period, the balance of the Company Escrow Account is less than the Company Escrow Account Required Amount and the Company fails
to deposit the Company Escrow Account Shortfall and such failure remains uncured ten (10) Business Days following the end of such
calendar quarter (such notice, the “First Delinquent Notice”, which shall specify the Company Escrow Account Shortfall
as of the end of the applicable calendar quarter) or (iii) when, following the Company’s receipt of the First Delinquent
Notice, the Company has failed to deposit an amount at least equal to the Company Escrow Account Shortfall specified in the First
Delinquent Notice for a period of thirty (30) calendar days, if applicable (the “Second Delinquent Notice”).

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 16 	 

     

    

 

		D.	Within 30 calendar days of receiving notice of the Corridor Layer Trigger, the Company shall deposit into the Loss Escrow
                                                          Accounts an aggregate amount equal to the Loss Escrow Account Required Amount applicable to the Corridor Layer during the
                                                          remainder of the quarter (or the month, at the option of the
Company) in which the Corridor Layer Trigger occurs, and for each quarter (or each month, at the option of the Company) thereafter,
the Company shall deposit an amount equal to the Loss Escrow Account Required Amount applicable to the Corridor Layer until the
Corridor Layer Limit is exhausted.

  

ARTICLE
IX

 

Loss Settlements

 

Subject to the terms of this Contract and the Services Agreement,
all loss settlements made by the Company or any claims services administrator on behalf of the Company in accordance with the terms
and conditions of this Contract shall be binding upon the Reinsurer, and the Reinsurer agrees to pay all amounts for which it is
liable in accordance with this Contract.

 

ARTICLE
X

 

Salvage and Subrogation

 

As respects to the Subject Business, from
the Effective Date until the expiration or termination of this Contract:

 

		A.	With respect to closed claims as of the Effective Date and which have not subsequently reopened and generated an additional
payment obligation, the Company, at its sole discretion, may enforce its right to deductibles, salvage and/or subrogation and may
prosecute all claims arising out of such right, and any recoveries and refunds relating thereto shall be for the sole and exclusive
benefit of the Company. The costs and expense of obtaining such salvage and/or subrogation shall be borne exclusively by the Company.

 

		B.	With respect to open claims and claims that proceed to settlement and/or closure on or after the Effective Date, the Reinsurer
may enforce its (and the Company’s) right to deductibles, salvage and/or subrogation and may prosecute all claims arising
out of such right, and any recoveries and refunds relating thereto shall be for the sole and exclusive benefit of the Reinsurer.

 

ARTICLE
XI

 

Reports and Remittances

 

		A.	Within 45 calendar days after the end of each month, a claims bordereau shall be produced showing the following:

 

		1.	Claim number;

 

		2.	Paid loss;

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 17 	 

     

    

 

		3.	Paid Loss Adjustment Expense;

 

		4.	Reserves for outstanding loss; and

 

		5.	Reserves for outstanding Loss Adjustment Expense.

 

In addition to the foregoing,
within 45 calendar days after the end of each month, a report of aggregate Ultimate Net Loss shall be provided showing the
following, calculated on a cumulative basis from the inception of this Contract through the end of the month:

 

		1.	Paid Ultimate Net Loss;

 

		2.	Reserves for outstanding loss;

 

		3.	Reserves for outstanding Loss Adjustment Expense;

 

		4.	Reserves for IBNR; and

 

		5.	Any other information reasonably requested by the Reinsurer.

 

		B.	As respects the Subject Business, the Company shall produce the claims bordereau and report of aggregate Ultimate Net Loss,
as set forth in paragraph A above, and provide it to the Reinsurer during the period from the inception of this Contract until
the Transition End Date. Following the Transition End Date, the Reinsurer shall, or shall cause the claims service administrator
to, produce the claims bordereau and report of aggregate Ultimate Net Loss, as set forth in paragraph A above, and provide it to
the Company during the period from the Transition End Date until the expiration or termination of this Contract.

 

		C.	Each Party shall notify the other Party, as applicable, as soon as reasonably practicable in writing if it becomes aware of
any material error in the information provided pursuant to this Article and promptly issue a claims bordereau or report with such
error corrected.

 

		D.	The Reinsurer shall deliver to the Company: (a) within fifteen (15) Business Days of each of DARAG Bermuda, DARAG Guernsey,
the Guernsey Parent and any claims service administrator or other party contracted to handle claims payments related to the Subject
Business (each such entity, a “Financial Reporting Entity”) filing its audited annual financial statements with the
Bermuda Monetary Authority, Guernsey Financial Services Commission or any other applicable governmental entity, as the case may
be, but in any event no later than one hundred eighty (180) calendar days following the end of each calendar year, a copy of such
audited annual financial statements and (b) within fifteen (15) Business Days of each Financial Reporting Entity filing its unaudited
quarterly financial statements with the Bermuda Monetary Authority, Guernsey Financial Services Commission or any other applicable
governmental entity, as the case may be, but in any event no later than sixty (60) calendar days following the end of each calendar
quarter (other than the fourth quarter of each fiscal year), a copy of such unaudited quarterly financial statements.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 18 	 

     

    

 

ARTICLE
XII

 

Late
Payments

 

		A.	In the event that any amount due to a Party is not received by such Party by the payment due date, such Party may, by written
notice to the other Party, require the other Party to pay, and the other Party agrees to pay, penalty interest 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 is lesser; multiplied
by

 

		2.	1/365th of a rate equal to the sum of the U.S Prime Rate, as published in The Wall Street Journal on the first Business
Day following the date a remittance becomes due, plus 3.0%; multiplied by

 

		3.	The amount past due.

 

It is agreed that interest shall
accumulate until payment of the original amount due plus interest penalties has been received by the Party owed such payment.

 

		B.	The establishment of the payment due date shall, for purposes of this Article, be determined in accordance with the applicable
Article of this Contract.

 

		C.	For purposes of interest calculation only, amounts due hereunder shall be deemed paid upon receipt by the Party or the intended
recipient owed such amounts. The validity of any claim or payment may be contested under the provisions of this Contract. Furthermore,
if a Party pays any claim hereunder that it is contesting and prevails in such action, the non-prevailing Party shall return such
payment plus pay interest on same, at a rate calculated as per the provisions of paragraph A, above; however, such calculation
is to begin from the actual date of remittance of funds from the prevailing Party through the date the funds are returned.

 

		D.	If the interest rate provided under this Article exceeds the maximum interest rate allowed by Applicable Law, such interest
rate shall be modified to the highest rate permitted by the Applicable Law.

 

ARTICLE
XIII

 

Offset

 

		A.	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. In the event of the insolvency of a Party, however, offsets shall only be allowed in
accordance with Applicable Law.

 

		B.	Notwithstanding the provisions of paragraph A above, if the Reinsurer has experienced a Reinsurer Special Termination Event
set forth in the SPECIAL TERMINATION ARTICLE, it shall not offset balances as outlined above without the prior consent of the Company.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 19 	 

     

    

 

ARTICLE
XIV

 

Access to Records

 

		A.	The Reinsurer or its designated representative(s) approved by the Company, upon providing reasonable advance notice to the
Company, shall have access at the offices of the Company or at a location to be mutually agreed, at a time to be mutually agreed,
to inspect the Company’s underwriting, accounting, or claim files pertaining to the Subject Business (the “Audit”).
The Company shall determine the manner in which files shall be accessed by the Reinsurer. The Reinsurer may, at its own expense,
reasonably request copies of such files and agrees to pay the Company’s reasonable costs (including staff expense and other
overhead costs) incurred in procuring such copies.

 

		B.	The Reinsurer or its designated representative(s) shall not have access to Proprietary or Privileged Records related to a claim
ceded under this Contract prior to the Company’s final settlement or final adjudication of such underlying claim. If Proprietary
or Privileged Records are withheld, the Company shall advise the Reinsurer accordingly and the Company shall take reasonable steps
to provide the Reinsurer with sufficient information to determine its liability hereunder. Further, the Reinsurer or its designated
representative(s) shall not have access to any communications with any other reinsurer supporting the Company in respect of the
Subject Business.

 

		C.	At the conclusion of the inspection the inspecting party will meet with and discuss the review with the Company. If the Reinsurer
makes any inspection of the Company’s files under this Contract and, as a result of the inspection any loss is denied, contested
or disputed, the Reinsurer will provide the Company a summary of any such reports completed by the Reinsurer’s personnel
or by any third party on behalf of the Reinsurer outlining the findings of the inspection and identifying the reasons for denying,
contesting or disputing the subject claim. The Reinsurer shall provide the Company with a copy of the summary of any such report(s)
within 30 days of its completion.

 

		D.	Notwithstanding the above, a loss will only be considered disputed if the Reinsurer has contested the loss in writing to the
Company.

 

		E.	Nothing in this Article requires the Company to maintain or to make available any document for longer than the period required
by the Company’s document retention policies and procedures or the period required by applicable statute or regulation, whichever
is greater.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 20 	 

     

    

 

	 	F.	“Proprietary or Privileged Records” are defined as communications, files, records, documents or books (1) deemed
by the Company to concern Trade Secrets of the Company (Trade Secrets shall have the meaning provided in Section 1839 of
the United States Economic Espionage Act of 1996); or (2) deemed by the Company to be subject to attorney-client privilege
or work product rule protection; or (3) concerning individual private information that as a matter of law cannot be disclosed
by the Company.

 

		G.	This Article shall not limit any rights that the Reinsurer or any of its affiliates have pursuant to the Services Agreement.

 

ARTICLE
XV

 

Third-Party Rights

 

This Contract is solely between the Company and the Reinsurer,
and in no instance shall any other party have any rights under this Contract except as expressly provided otherwise in the INSOLVENCY
ARTICLE.

 

ARTICLE
XVI

 

Delays, Errors and Omissions

 

Inadvertent delays, errors or omissions made in connection 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
XVII

 

Currency

 

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.

 

ARTICLE
XVIII

 

Federal Excise Tax

 

		A.	This Article is applicable to the Reinsurer if it is domiciled outside of the United States of America, except where the Reinsurer
is exempt from Federal Excise Tax. Should the Reinsurer claim exempt status from Federal Excise Tax, it shall provide to the Company,
upon its request, proof that the exempt status adequately satisfies the rules as imposed under the Internal Revenue Code and/or
other applicable U.S. government authority.

 

		B.	The Reinsurer has agreed to allow the deduction of the applicable rate of tax (as imposed under the Internal Revenue Code)
from the premium payable hereunder for the purpose of paying Federal Excise Tax to the extent such premium is subject to such tax.
The Company shall file the relevant tax return and pay such Federal Excise Tax.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 21 	 

     

    

 

		C.	In the event of any return premium becoming due hereunder, the Reinsurer shall deduct the applicable rate of tax from the return
premium payable hereon and the Company or its agent shall recover such tax from the United States Government.

 

		D.	As respects premiums ceded to Reinsurer under this Contract, the Reinsurer agrees to indemnify the Company for any Federal
Excise Tax liability (including interest and penalties) that the Company may incur for Federal Excise Taxes in excess of the amounts
deducted from the premium payable hereunder as specified in this Article, less any refunds actually obtained by the Reinsurer on
any return premium.

 

ARTICLE
XIX

 

Foreign Account Tax Compliance Act

 

		A.	The Reinsurer hereby acknowledges the requirements of Sections 1471-1474 U.S. Internal Revenue Code of 1986, as amended,
and the Treasury regulations and other guidance issued from time to time thereunder (“FATCA”) and the obligation to
provide to the Company at the Closing a valid Internal Revenue Service (“IRS”) Form W8-BEN-E, W-9 or other documentation
meeting the requirements of the FATCA regulations to establish they are not subject to any withholding requirement pursuant to
FATCA (the “Required Documentation”).

 

		B.	The Reinsurer shall notify the Company in writing (by electronic mail, certified mail or overnight mail using a nationally
recognized overnight delivery service) in the event the Reinsurer is not compliant with FATCA. If the Reinsurer has not provided
the Company with the Required Documentation thirty (30) days prior to any premium due date, or becomes non-compliant with FATCA
at any later date, the Withholding Agent as defined in U.S. Treasury Regulation Section 1.1471-1(b) (147)shall withhold thirty
percent (30%) of any premium payment to the Reinsurer under this Contract and shall promptly notify the Reinsurer of such withholding
(“Withholding”). The Reinsurer hereby agrees to such Withholding.

 

		C.	In the event the Reinsurer is subject to Withholding as set forth under FATCA, the Reinsurer continues to remain fully liable
for all of its obligations under this Contract. The Withholding under paragraph B above does not constitute a breach of contract,
any premium payment condition, warranty or other clause of this Contract. Reinsurer(s) subject to Withholding may not terminate,
cancel, revoke or restrict this Contract, may not terminate, cancel, revoke or restrict coverage under this Contract in any manner
and may not deny, refuse, restrict or delay payment of any claim under this Contract or invoke any interest, penalty or other late
payment provision hereunder, based on the Withholding. Reinsurer(s) subject to Withholding shall be liable under this Contract
as if no Withholding had been made.

 

		D.	Amounts deducted or withheld as Withholding are not subject to offset. Offset rights, if any, under this Contract are hereby
amended in accordance with the terms of this Article.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 22 	 

     

    

 

		E.	The Reinsurer shall indemnify the Company and its agents for any and all liability, expense, interest or penalty the Company
and its agents incur, based upon, arising from or in connection with (a) any inaccurate or invalid Required Documentation or (b)
any violation by the Reinsurer of FATCA. Such indemnity shall survive the expiration or termination of this Contract.

 

ARTICLE
XX

 

Credit for Reinsurance

 

		A.	Reinsurer shall, at its own expense, be required to take all steps (including the posting of letters of credit or other acceptable
security) necessary to comply with all Applicable Laws in any applicable United States jurisdiction so as to permit the Company
to obtain full credit on its statutory financial statements (including those financial statements or portions thereof required
in connection with maintaining the Company’s status as an accredited reinsurer or eligible surplus lines insurer) for the
reinsurance provided by this Contract in all applicable United States jurisdictions throughout the entire term of this Contract
to the extent credit is not otherwise available under such Applicable Law. Any event that results in the Company being unable to
obtain full statutory financial statement credit for the reinsurance provided under this Contract in any applicable United States
jurisdiction at any point in time during the term of this Contract shall be referenced herein as a “Reinsurance Credit Event.”
Reinsurer shall promptly notify the Company of any event or change or condition that will reasonably likely result in a Reinsurance
Credit Event.

 

		B.	In the event a provision of this Contract, the Trust Agreement, the Trust Account, or Loss Escrow Accounts jeopardizes the
Company’s ability to obtain full credit for reinsurance, such provision shall be void and shall be amended to comply with
applicable credit for reinsurance requirements. The Reinsurer shall provide funding and/or any adjustments thereto in time for
the Company to meet the requirements of each applicable insurance regulatory authority having jurisdiction over the Company’s
reserves, provided that the Company sends the report detailing the amount of required funding at least 15 days prior to the
date such funding is required.

 

		C.	Should the Reinsurer be in breach of its obligations under this Article, notwithstanding anything to the contrary elsewhere
in this Contract, the Company may seek relief in respect of said breach from any court having competent jurisdiction over the Parties.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 23 	 

     

    

 

ARTICLE
XXI

 

Third-Party
Reinsurance

 

The Company shall retain responsibility for all administration
and collection of all Third-Party Reinsurance. Subject to the provisions of this Article and the ADMINISTRATIVE SERVICES ARTICLE
and pursuant to the Services Agreement, the Reinsurer shall assist and cooperate with the Company in connection with the administration
and collection of all Third-Party Reinsurance, including without limitation providing such information as the Company may request
on a timely basis. To the extent applicable, the Reinsurer shall reasonably cooperate with the reinsurer(s) under the Third-Party
Reinsurance in connection with the administration and collection of such Third-Party Reinsurance, and permit such reinsurer(s)
to exercise their rights under such Third-Party Reinsurance.

 

The Reinsurer shall not have the right to terminate, commute
or modify any Third-Party Reinsurance.

 

A listing of the Third-Party Reinsurance applicable to the Subject
Business and the amounts expected to be collectible thereunder is attached hereto as Exhibit C. All Third-Party Reinsurance
applicable to a claim (disregarding any termination, commutation or modification thereof after the date hereof) shall be deemed
to be collected, and the Company shall reimburse the Reinsurer within sixty (60) calendar days after the end of each calendar quarter
by depositing into the Trust Account an amount equal to the amount payable by the reinsurers under such Third-Party Reinsurance
during such calendar quarter, regardless of whether such amount is actually collected by the Company or not.

 

ARTICLE
XXII

 

Trust Account

 

		A.	On the Closing Date, the Reinsurer will establish trust accounts (collectively, the “Trust Account”) with a trustee
reasonably satisfactory to the Parties in order to provide collateral for each of the entities comprising the Company, to the extent
such entity retains any liabilities under the Subject Business prior to giving effect to the transactions contemplated by this
Contract, under the terms of a trust agreement, substantially in the form attached hereto as Exhibit A, subject to such
changes as the Parties may reasonably agree (the “Trust Agreement”), and such other loss escrow accounts as are consented
to by the Company to make any and all claim payments (such accounts, “Loss Escrow Accounts”, and together with the
Trust Account, the “Funded Accounts”). For the avoidance of doubt, the Reinsurer will not establish a separate trust
account for the benefit of Hallmark County Mutual Insurance Company (“HCM”), as HCM has ceded all of the liabilities
under the Subject Business to American Hallmark Insurance Company of Texas. The quality and types of the assets held in the Funded
Accounts must be acceptable to the Company and also meet the requirements of each applicable insurance regulatory authority having
jurisdiction over the Company’s reserves; provided that the Funded Accounts will be permitted to hold either cash or Eligible
Securities.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 24 	 

     

    

 

Ultimate Net Loss payments will
be made first with funds from the Loss Escrow Accounts. On the Closing Date, the Company, the Reinsurer and a claims service administrator
or other party contracted to handle claims payments related to the Subject Business shall enter into a security agreement (the
 “Security Agreement”) pursuant to which a first priority security interest in favor of the Company in the Loss Escrow
Accounts and all assets credited thereto, including the residual interest therein, shall be granted and perfected. In the event
that the Loss Escrow Accounts are exhausted, then the Reinsurer, along with the Company, shall jointly require transfer of funds
from the Trust Account to provide for interim funding of the Loss Escrow Accounts from the Trust Account in accordance with paragraph
G below. To the extent that the Trust Account is exhausted, the Reinsurer shall fund the Loss Escrow Accounts directly or, if amounts
are not payable from the Loss Escrow Accounts but the Trust Account is exhausted, shall pay the Company directly.

 

On the Closing Date and following
the final resolution of the Rollforward Amount, the Net Reinsurance Premium and the Initial Minimum Funding Amount, the Company
and the Reinsurer shall each deposit in the Trust Account assets with an aggregate fair market value equal to the amounts to be
deposited by the Company and the Reinsurer, respectively, pursuant to the REINSURANCE PREMIUM ARTICLE.

 

		B.	Subject to paragraph D below:

 

		1.	on December 31, 2020, the Reinsurer shall deposit assets in the Funded Accounts to the extent required to maintain an aggregate
balance (on the basis of a marked to market basis determined in accordance with the terms of the Trust Agreement) that is at least
equal to the greater of (i) the Minimum Funding Requirement or (ii) $179,000,000 less Ultimate Net Loss paid since the Effective
Date; and

 

		2.	beginning on June 30, 2021, within 45 days of the end of each calendar quarter (other than the fourth calendar quarter
of each calendar year), the Company will determine the Minimum Funding Requirement and provide written notice thereof to the Reinsurer.
If the fair market value (on the basis of a marked to market basis determined in accordance with the terms of the Trust Agreement)
of the assets held in the Funded Accounts is less than the Minimum Funding Requirement, DARAG Bermuda and/or DARAG Guernsey, as
applicable, shall deposit in the Funded Accounts additional assets with a fair market value (on the basis of a marked to market
basis determined in accordance with the terms of the Trust Agreement) equal to such deficiency, on a pro rata basis, where applicable,
within 15 calendar days of receipt of the Company’s determination of the Minimum Funding Requirement.

 

Under no circumstances shall
DARAG Bermuda be responsible to pay amounts in excess of the aggregate of the Layer One Limit and the Layer Two Limit.
Provided the Reinsurer is not in default of any of its obligations under this Contract or the Trust Agreement, within 15
calendar days of the Reinsurer’s receipt of the Company’s determination of the Minimum Funding Requirement, but
no earlier than June 30, 2021, any excess funds will be withdrawn and returned to the Reinsurer, subject to the
Reinsurer’s obligation to maintain at all times in the Funded Accounts the Minimum Funding Requirement.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 25 	 

     

    

 

		C.	“Eligible Securities” shall have the meaning given to it in the Trust Agreement.

 

		D.	The determination of the Minimum Funding Requirement shall be in accordance with Actuarial Standards. Notwithstanding the foregoing,
the Parties acknowledge and agree that the determination of the Minimum Funding Requirement (other than as of the end of a calendar
year) (a) may be made by referring to the calculations for the prior quarter (or as of the Closing Date, if applicable) and accounting
for Ultimate Net Loss paid (which, for the avoidance of doubt, shall be net of the deductions set forth in the definition of “Ultimate
Net Loss”) during the applicable quarter relative to the calculations and (b) may not involve an independent assessment or
review of reserves relating to the Subject Business.

 

The determination of the Minimum
Funding Requirement as of the end of each calendar year shall be made within sixty (60) days of the end of each such year and prepared
in accordance with the Company’s assessment and review of reserves relating to the Subject Business.

 

If the Company and the Reinsurer
cannot agree on the Minimum Funding Requirement, the Parties shall appoint an independent actuary. If the Company and the Reinsurer
cannot agree on an actuary, the Company and the Reinsurer shall each nominate three individuals, of whom the other shall decline
two, and the final decision shall be made by drawing lots. All the actuaries selected shall be disinterested in the outcome of
the Minimum Funding Requirement and shall be Fellows of the Casualty Actuarial Society meeting its qualification standards to provide
statements of actuarial opinion in the United States. The decision in writing of the appointed actuary, when filed with the Parties,
shall be final and binding on both Parties. The expense of the actuary and of the actuarial calculation shall be equally shared
by the Parties.

 

	 	E.	The Trust Account will be used to fund the Loss Escrow Accounts to pay Ultimate Net Loss until Layer One Limit is exhausted. Within
30 calendar days of receiving notice of the Corridor Layer Trigger, the Company shall deposit into the Loss Escrow Accounts an
aggregate amount equal to the Loss Escrow Account Required Amount applicable to the Corridor Layer during the remainder of the
quarter (or the month, at the option of the Company) in which the Corridor Layer Trigger occurs, and for each quarter (or each
month, at the option of the Company) thereafter, the Company shall deposit an amount equal to the Loss Escrow Account Required
Amount applicable to the Corridor Layer until the Corridor Layer Limit is exhausted (the period from the date on which the Layer
One Limit is exhausted until the date on which the Corridor Layer Limit is exhausted, the “Corridor Period”). Notwithstanding
any other provision to the contrary, any amounts held in the Company Escrow Account shall be applied towards satisfaction of the
Company’s obligation to deposit the Loss Escrow Account Required Amount into the Loss Escrow Accounts during the Corridor
Period. To the extent the Reinsurer has paid any amounts of Ultimate Net Loss during the Corridor Period, the Minimum Funding
Requirement will decrease by such amounts paid by the Reinsurer that have not been reimbursed by the Company to the Reinsurer.
The Trust Account will be used to fund the Loss Escrow Accounts to pay Ultimate Net Loss after the Corridor Layer has been exhausted
and until both of the Layer Two Limit and the Layer Three Liability are exhausted.

  

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 26 	 

     

    

 

		F.	In addition to the right to withdraw funds from the Trust Account to fund the Loss Escrow Accounts in accordance with the terms
hereof, the Company or its affiliates may withdraw assets from the Trust Account at any time, or from time to time, only for one
or more of the following purposes:

 

		1.	to pay for the Reinsurer’s share of Ultimate Net Loss not otherwise paid by the Reinsurer when due; and

 

		2.	where the Company has received notification of the termination of the Trust Account and where the Reinsurer’s entire
obligations under this Contract remain unliquidated and undischarged ten (10) days before the termination date, to withdraw amounts
equal to such obligations and deposit those amounts in a separate account, in the name of the Company in any United States bank
or trust company apart from its general assets, in trust for the uses and purposes specified in the foregoing clause (1) that remain
executory after the withdrawal and for any period after such termination date; and

 

		3.	to return excess funds to the Reinsurer pursuant to paragraph B of this Article; and

 

		4.	to pay any other amounts due under this Contract.

 

	 	G.	 Subject to paragraph E above, no later than 45 days following the end of each calendar quarter (or, at the option of the Reinsurer,
following the end of each month), the Company and the Reinsurer shall jointly instruct the trustee of the Trust Account in writing
to transfer funds to the Loss Escrow Accounts equal to the amount necessary to cause the aggregate balance of the Loss Escrow
Accounts to equal the Loss Escrow Account Required Amount. In addition, the Company and the Reinsurer may jointly instruct the
trustee in writing to transfer amounts from the Trust Account to the Loss Escrow Accounts from time to time to provide interim
funding due to shortfalls in the Loss Escrow Accounts within three (3) Business Days upon receipt of any reasonable request from
the Reinsurer. At any time other than during the Corridor Period, in the event that the aggregate balance of the Loss Escrow Accounts
exceeds the Loss Escrow Account Required Amount, the Company and the Reinsurer shall, at the option of either Party, cause such
excess funds to be withdrawn and deposited directly into the Trust Account. In no event shall the Parties be required to maintain
in the Loss Escrow Accounts at any given time an aggregate amount in excess of the greater of (i) 10% of the Minimum Funding Requirement
or (ii) $3,000,000 (such amount or such other amount as the Parties may mutually agree, the “Loss Escrow Cap”). If
the amount of funds in the aggregate in the Loss Escrow Accounts at any time exceeds the Loss Escrow Cap, the Company and the
Reinsurer shall jointly instruct the Trustee in writing to transfer amounts in excess of the Loss Escrow Cap to the Trust Account.
If for a period of two consecutive months, the amount of funds transferred to the Loss Escrow Accounts pursuant to this paragraph
G exceeds the gross amount needed to pay claims required to be paid therefrom under this Contract or the Services Agreement, then
the Company and the Reinsurer jointly may permanently reduce the Loss Escrow Cap upon mutual agreement.

  

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 27 	 

     

    

 

		H.	Notwithstanding any other provision to the contrary, the Company shall promptly return to the Reinsurer any amount drawn down
on collateral provided by the Reinsurer pursuant to this Contract that is subsequently determined to be in excess of the amounts
required or permitted to be drawn down under this Contract. The Company shall hold such amounts in trust for the sole and exclusive
benefit of the Reinsurer in a segregated account, separate and apart from the assets of the Company until such amounts are returned
to the Reinsurer.

 

		I.	Upon termination of this Contract and payment of all amounts due thereupon under this Contract, the Reinsurer shall be entitled
to release by the Company of all collateral provided pursuant to this Contract (whether in the Trust Account, the Loss Escrow Accounts
or otherwise) and the Company shall take such action as is necessary or reasonably appropriate to effect such release.

 

ARTICLE
XXIII

 

Insolvency

 

		A.	This Article shall apply severally to each company referenced within the definition of “Company”. Further, this
Article and the laws of the domiciliary state shall apply in the event of the insolvency of any company covered hereunder. In the
event of a conflict between any provision of this Article and the laws of the domiciliary state of any company covered hereunder,
that domiciliary state’s laws shall prevail.

 

	 	B.	 In the event of the insolvency of the Company, this reinsurance (or the portion of any risk or obligation assumed by the Reinsurer,
if required by Applicable Law) shall be payable directly to the Company, or to its liquidator, receiver, conservator or statutory
successor, either: (1) on the basis of the liability of the Company to the extent such liability is covered by the reinsurance
hereunder, or (2) on the basis of claims filed and allowed in the liquidation proceeding, whichever may be required by applicable
statute, 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 that may accrue to the Company solely as a result of the defense undertaken by the Reinsurer.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 28 	 

     

    

  

		C.	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.

 

		D.	As to all reinsurance made, ceded, renewed or otherwise becoming effective under this Contract, the reinsurance shall be payable
as set forth above by the Reinsurer to the Company or to its liquidator, receiver, conservator or statutory successor, except (1) where
the Contract specifically provides another payee 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; in each
case, other than as required by the laws of the applicable domiciliary state(s). In the case of sub-clause (2) above, and in that
event only, the Company, with the prior approval of all applicable regulatory authorities, shall be entirely released from its
obligations under such Policy and the Reinsurer shall pay any loss directly to payees thereunder.

 

ARTICLE
XXIV

 

CONFIRMATION AND EQUITABLE RELIEF FROM COURT

 

Notwithstanding the ARBITRATION
ARTICLE:

 

		A.	Either Party may apply to a court of competent jurisdiction, and any court where a Party or its assets are located (to whose
jurisdiction the Parties consent for the purposes of enforcing and executing upon the award) for an order confirming any award
of the Panel, or executing upon any such award.

 

	 	B.	Either Party may apply to a court of competent jurisdiction to issue a restraining order or other equitable relief pending the
decision and award by the arbitration Panel. In any such action, (i) each of the Parties irrevocably and unconditionally consents
and submits to the exclusive jurisdiction and venue of the Federal Courts of the United States and State Courts of the State of
Texas located in Plano, Texas (the “Texas Courts”); (ii) each Party irrevocably waives, to the fullest
extent it may effectively do so, any objection, including any objection to the laying of venue or based on the grounds of forum
non conveniens or any right of objection to jurisdiction on account of its place of incorporation or domicile, which it may now
or hereafter have to the bringing of any such action or proceeding in any Texas Court; (iii) each of the Parties irrevocably consents
to service of process in the manner set forth in the NOTICES ARTICLE, or in any other manner permitted by applicable Law; and
(iv) EACH OF THE PARTIES WAIVES ANY RIGHT TO TRIAL BY JURY.

  

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 29 	 

     

    

 

ARTICLE
XXV

 

Governing Law

 

This Contract shall be governed as to performance, administration
and interpretation by the laws of the State of Texas, exclusive of that state’s rules with respect to conflicts of law, except
as to rules with respect to credit for reinsurance in which case the applicable rules of all applicable states shall apply.

 

ARTICLE
XXVI

 

Enforceability

 

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
XXVII

 

Agency Agreement

 

American Hallmark Insurance Company of Texas shall be deemed
the agent of the other reinsured companies hereunder, including for purposes of sending or receiving notices required by the terms
and conditions of this Contract. In no event, however, shall any reinsured Company be deemed the agent of another with respect
to the terms of the INSOLVENCY ARTICLE or for any other purpose.

 

DARAG Bermuda shall be deemed the agent of the other Reinsurer
hereunder, including for purposes of sending or receiving notices required by the terms and conditions of this Contract.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 30 	 

     

    

 

ARTICLE
XXVIII

 

Confidentiality

 

		A.	Each of the Parties (a “Disclosing Party”) hereby acknowledges that the documents, information, and data provided
to the other Party (the “Receiving Party”), whether directly or through an authorized agent, in connection with the
placement and execution of this Contract or inspections pursuant to the ACCESS TO RECORDS ARTICLE and any other information relating
to this Contract (collectively, “Confidential Information”) are proprietary and confidential to the Disclosing Party.

 

		B.	Absent the written consent of the Disclosing Party, the Receiving Party shall not disclose any Confidential Information to
any third parties except when:

 

		1.	The disclosure is to an authorized agent of the Receiving Party performing underwriting, claim handling, pricing, placement,
and/or evaluation services for the Receiving Party; or

 

		2.	The Confidential Information is publicly known or has become publicly known through no unauthorized act of the Receiving Party;
or

 

		3.	Required by retrocessionaires subject to the business ceded to this Contract; or

 

		4.	Required by state regulators performing an audit of the Receiving Party’s records and/or financial condition; or

 

		5.	Required by external auditors performing an audit of the Receiving Party’s records in the normal course of business;
or

 

		6.	The disclosure is to an affiliate of the Receiving Party.

 

With respect to paragraphs B.1,
B.3, B.5 and B.6 above, such parties to which the Receiving Party discloses Confidential Information must be instructed to treat
such information in a confidential manner as provided herein (it being understood that the Receiving Party will be responsible
for any breach of the terms of this Contract by any of the parties to which it has disclosed such Confidential Information).

 

		C.	Further, the Receiving Party agrees not to use any Confidential Information for any purpose not permitted by this Contract
or any other Transaction Document or not related to the performance of its obligations or enforcement of its rights under this
Contract or any other Transaction Document.

 

	 	D.	 Notwithstanding the above, in the event that the Receiving Party is required by court order, other legal process, or any regulatory
authority to release or disclose any Confidential Information, the Receiving Party agrees to provide, to the extent legally permissible,
the Disclosing Party written notice of same prior to such release or disclosure and to use its reasonable best efforts to assist
the Disclosing Party in maintaining the confidentiality provided for in this Article.

  

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 31 	 

     

    

 

		E.	The provisions of this Article shall extend to the officers, directors, and employees of the Receiving Party and its affiliates,
who have received Confidential Information in accordance with this Contract, and shall be binding upon their successors and assigns.

 

		F.	The Receiving Party acknowledges that any unauthorized disclosure of Confidential Information may cause irreparable harm to
the Disclosing Party. If Confidential Information is acquired by or made available to an unauthorized third party due to the Receiving
Party’s breach of this Article, the Receiving Party shall notify the Disclosing Party promptly following its knowledge thereof
and the Disclosing Party shall be entitled to seek specific performance, including immediate issuance of a temporary restraining
order or preliminary injunction. The Disclosing Party shall be entitled to seek damages, attorney’s fees and costs, and any
other remedies available under the law due to the Receiving Party’s breach of this Article. The Disclosing Party may concurrently
or alternatively seek legal relief by way of arbitration as provided for in this Contract.

 

		G.	Except as required by Applicable Law or stock exchange rules or regulations, none of the Parties shall issue any press release
or public announcement concerning this Contract, or the transactions contemplated hereby, without obtaining the prior written notice
and consent of the other Party, which approval shall not be unreasonably withheld, conditioned or delayed. The Parties shall cooperate
with each other in making any release or announcement.

 

ARTICLE
XXIX

 

Representations and Warranties

 

		A.	The Company hereby represents and warrants to the Reinsurer as of the date hereof and as of the Closing Date as follows:

 

		1.	The Company is an insurance company duly organized, validly existing and in good standing under the laws of its domiciliary
state and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry on the
operations of its business as they are now being conducted.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 32 	 

     

    

 

	 	2.	The Company has full power and authority to execute and to deliver this Contract and each other Transaction Document to which
it is a party, and to consummate the transactions contemplated hereby and thereby. The Company has taken all necessary action
to authorize the execution and performance of this Contract and each other Transaction Document to which it is a party. This Contract
and each other Transaction Document to which it is a party have been, or will be at Closing (as applicable), duly executed and
delivered by the Company and, assuming due authorization, execution, and delivery of this Contract and such other Transaction
Documents by the other parties hereto and thereto, are or will be the valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, except as such enforceability may be limited by bankruptcy, insolvency, reorganization,
fraudulent transfer, moratorium and other similar laws of general application now or hereafter in effect relating to or affecting
the rights and remedies of creditors of insurance companies or creditors’ rights generally and general principles of equity,
whether considered in a proceeding at law or in equity (the “Enforceability Exceptions”). Except for any required
regulatory approval from or filing with the Arizona Department of Insurance, no consent, approval or authorization of, or filing
with, any governmental authority or other person, is required to be made or obtained by the Company or any of its affiliates in
connection with the execution, delivery and performance of this Contract or the other Transaction Documents or the consummation
of the transactions contemplated hereby and thereby.

  

		3.	The execution, delivery and performance of this Contract and the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby will not (a) violate any provision of the organizational document applicable to it, (b) violate
any order, judgment, injunction, award or decree of any court, arbitrator or governmental authority against, or binding upon it,
or any agreement with, or condition imposed by, any governmental authority binding upon it, or (c) conflict with, result in a breach
of or a default (with or without notice or lapse of time or both) under, give rise to, or result in a right of, acceleration, amendment
or termination under, or result in the creation of any lien on any of its property or assets under, any contract or agreement to
which it is a party or by which it or its property or assets is bound or subject.

 

		4.	It has all licenses, certificates of authority or other similar certificates, registrations, franchises, permits, approvals
or other similar authorizations issued by governmental authorities (collectively, “Permits”) necessary to conduct its
business as currently conducted, except in such cases where the failure to have a Permit has not had and would not reasonably be
expected to have a material adverse effect on its business. All Permits that are material to the conduct of its business are valid
and in full force and effect. It is not subject to any pending action or, to its knowledge, any threatened action that seeks the
revocation, suspension, termination, modification or impairment of any Permit that, if successful, would reasonably be expected
to have, or with the passage of time become, a material adverse effect on its business.

 

		5.	To the knowledge of the Company, the Policies are in full force and effect with respect to the coverage periods stated therein
and are valid and enforceable by the Company in accordance with their terms, subject to the Enforceability Exceptions. The Company
is not in violation or breach of or default under any Policy or in violation of any Applicable Laws in any material respect.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 33 	 

     

    

 

	 	6.	Except as is not material to the Subject Business, and except for this Contract, there are no other contracts between the Company
or any of its affiliates, on the one hand, and any other person, on the other hand, that would reasonably be expected to increase,
reduce, limit, mitigate or otherwise affect any actual or potential loss to the parties under the Policies, except such contracts
of reinsurance and facultative reinsurance certificates which have been disclosed to the Reinsurer in writing prior to the date
of this Contract.

  

		7.	Other than as disclosed in the Company’s filings with the U.S. Securities and Exchange Commission, (a) the Subject Business
has been conducted and carried on in the ordinary course since January 1, 2020 in accordance with Applicable Laws, and there has
been no material change in the Company’s claims handling or actuarial practices since such date and (b) since January 1,
2020, there has not been any adverse event, change or circumstance that, individually or in the aggregate, has had or would reasonably
be expected to have a material adverse effect on the Subject Business or the ability of the Company to timely perform its obligations
under this Contract or any of the other Transaction Documents.

 

		8.	The historical claims data made available to the Reinsurer by the Company as regards the Subject Business is accurate in all
material respects as of the date indicated. The reserves and other provisions made for claims, benefits, and any other liabilities
with respect to the Policies, as established or reflected on the Company’s statutory annual statement for calendar year ending
2019 and the Company’s statutory quarterly statement for the period ended December 31, 2019 were calculated in all material
respects in accordance with (a) statutory accounting principles and generally accepted actuarial principles, in each case consistently
applied, (b) Applicable Law and (c) otherwise in accordance with the terms of the Policies.

 

		9.	As of the Closing Date, consistent with past practice, the Company has paid all undisputed claims and undisputed loss with
respect to the Subject Business since the Effective Date in the ordinary course of business, without regard to the reinsurance
effected hereunder.

 

		B.	The Reinsurer hereby represents and warrants to the Company as of the date hereof and as of the Closing Date as follows:

 

		1.	The Reinsurer is an insurance company duly organized, validly existing and in good standing under the laws of its domiciliary
jurisdiction and has all requisite corporate power and authority to own, lease and operate its properties and assets and to carry
on the operations of its business as they are now being conducted.

 

	 	2.	 The Reinsurer has full power and authority to execute and to deliver this Contract and each other Transaction Document to which
it is a party, and to consummate the transactions contemplated hereby and thereby. The Reinsurer has taken all necessary action
to authorize the execution and performance of this Contract and each other Transaction Document to which it is a party. This Contract
and each other Transaction Document to which it is a party have been, or will be at Closing (as applicable), duly executed and
delivered by the Reinsurer and, assuming due authorization, execution, and delivery of this Contract and such other Transaction
Documents by the other parties hereto and thereto, are or will be the valid and binding obligations of the Reinsurer, enforceable
against the Reinsurer in accordance with their terms, except as such enforceability may be limited by the Enforceability Exceptions.
Except for any required regulatory approval from the insurance authorities or regulators of the domiciliary jurisdiction of the
Reinsurer, no consent, approval or authorization of, or filing with, any governmental authority or other person is required to
be made or obtained by the Reinsurer or any of its affiliates in connection with the execution, delivery and performance of this
Contract or the other Transaction Documents or the consummation of the transactions contemplated hereby and thereby.

  

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 34 	 

     

    

 

		3.	The execution, delivery and performance of this Contract and the other Transaction Documents and the consummation of the transactions
contemplated hereby and thereby will not (a) violate any provision of the organizational document applicable to it, (b) violate
any order, judgment, injunction, award or decree of any court, arbitrator or governmental authority against, or binding upon it,
or any agreement with, or condition imposed by, any governmental authority binding upon it, or (c) conflict with, result in a breach
of or a default (with or without notice or lapse of time or both) under, give rise to, or result in a right of, acceleration, amendment
or termination under, or result in the creation of any lien on any of its property or assets under, any contract or agreement to
which it is a party or by which it or its property or assets is bound or subject.

 

		4.	It has all Permits necessary to conduct its business as currently conducted, except in such cases where the failure to have
a Permit has not had and would not reasonably be expected to have a material adverse effect on its business. All Permits that are
material to the conduct of its business are valid and in full force and effect. It is not subject to any pending action or, to
its knowledge, any threatened action that seeks the revocation, suspension, termination, modification or impairment of any Permit
that, if successful, would reasonably be expected to have, or with the passage of time become, a material adverse effect on its
business.

 

		5.	The Reinsurer has such knowledge and experience in financial, business and insurance matters that it is capable of evaluating
the merits and risks of the transactions contemplated by this Contract.  The Reinsurer has conducted its own independent review
and analysis of the Subject Business and acknowledges that it (a) has made its own inquiry and investigation into and, based thereon,
has formed an independent judgment concerning the Subject Business, (b) has been provided adequate access to such information as
it has deemed necessary to enable it to form such independent judgment, (c) has had such time as it deems necessary and appropriate
to fully and completely review and analyze such information, documents, and other materials, and (d) has been provided an opportunity
to ask questions of the Company with respect to such information, documents, and other materials and has received answers
to such questions that it considers satisfactory.  In entering into this Contract, the Reinsurer has relied solely upon the
historical claims data provided by the Company and its own investigation and analysis, and the Reinsurer acknowledges and agrees
in respect of the transactions contemplated under this Contract that, except as to the veracity of the historical claims data as
set out in paragraph A(8) above, none of the Company, its affiliates or their respective representatives makes or has made any
representation or warranty, either express or implied, with respect to the Subject Business.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 35 	 

     

    

 

ARTICLE
XXX

 

Closing
Conditions

 

		A.	The Reinsurer’s obligation to consummate the transactions contemplated by this Contract and the other Transaction Documents
is subject to the satisfaction (or waiver, if permissible under Applicable Law) on or prior to the Closing Date of the following
conditions:

 

		1.	The representations and warranties of the Company contained in this Contract shall be true and correct on the Closing Date
(except to the extent that any such representations and warranties are given as of a particular date or relate solely to a particular
date or period, in which case such representations and warranties shall be true and correct as of such date or period) except as
would not have a material adverse effect on the liabilities reinsured hereunder or the ability of the Company to perform its obligations
under this Contract or the other Transaction Documents.

 

		2.	The Company shall have performed and complied in all material respects with all covenants and agreements required by this Contract
to be performed or complied with by the Company at or prior to the Closing.

 

		3.	The Reinsurer shall have received a certificate, dated as of the Closing Date and signed by a duly authorized officer of the
Company, that each of the conditions set forth in the foregoing clauses (1) and (2) have been satisfied.

 

		4.	The Reinsurer shall have received:

 

		(a)	the following Transaction Documents, duly executed and delivered by the Company:

 

		i.	the Services Agreement;

 

		ii.	the Trust Agreement; and

 

		iii.	the Security Agreement; and

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 36 	 

     

    

 

		(b)	such other agreements, documents or instruments as the Reinsurer shall reasonably request from the Company in connection with
the transactions contemplated by this Contract.

 

		B.	The Company’s obligation to consummate the transactions contemplated by this Contract and the other Transaction Documents
is subject to the satisfaction (or waiver, if permissible under Applicable Law) on or prior to the Closing Date of the following
conditions:

 

		1.	The representations and warranties of the Reinsurer contained in this Contract shall be true and correct on the Closing Date
(except to the extent that any such representations and warranties are given as of a particular date or relate solely to a particular
date or period, in which case such representations and warranties shall be true and correct as of such date or period) except as
would not have a material adverse effect on the ability of the Reinsurer to perform its obligations under this Contract or the
other Transaction Documents.

 

		2.	The Reinsurer shall have performed and complied in all material respects with all covenants and agreements required by this
Contract to be performed or complied with by the Reinsurer at or prior to the Closing.

 

		3.	The Company shall have received a certificate, dated as of the Closing Date and signed by a duly authorized officer of the
Reinsurer, that each of the conditions set forth in the foregoing clauses (1) and (2) have been satisfied.

 

		4.	The Company shall have received:

 

		(a)	the following Transaction Documents, duly executed and delivered by the Reinsurer:

 

		i.	the Services Agreement;

 

		ii.	the Trust Agreement; and

 

		iii.	the Security Agreement; and

 

		(b)	such other agreements, documents or instruments as the Company shall reasonably request from the Reinsurer in connection with
the transactions contemplated by this Contract.

 

		C.	The obligations of each Party to consummate the transactions contemplated by this Contract and the other Transaction Documents
is subject to this Contract, the other Transaction Documents and the transactions contemplated hereby and thereby being consented
to, approved or authorized by all governmental authorities whose consent, approval or authorization is required under Applicable
Law, including the Bermuda Monetary Authority.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 37 	 

     

    

 

		D.	The Company and the Reinsurer shall, and shall use reasonable best efforts to cause their respective affiliates to, use their
respective reasonable best efforts to take all reasonable actions to consummate the transactions contemplated by this Contract
and the other Transactions Documents, including, without limitation, using reasonable best efforts to obtain all consents, approvals
and authorizations required in connection with this Contract and the other Transaction Documents and the transactions contemplated
hereby and thereby from the relevant governmental authorities as promptly as practical. Notwithstanding the foregoing, the Company
and the Reinsurer shall not be obligated to accept any condition sought to be imposed by a governmental authority that would adversely
affect the economic benefits reasonably expected to be derived by the Parties under this Contract or in connection with the consummation
of the transactions contemplated hereunder. No Party may rely on the failure of any condition set forth in this Article to be satisfied
if such failure was caused by such Party’s failure to discharge its obligations set forth in this paragraph.

 

ARTICLE
XXXI

 

Arbitration

 

		A.	Subject to the CONFIRMATION AND EQUITABLE RELIEF FROM COURT ARTICLE, any dispute arising out of the interpretation, performance
or breach of this Contract, including the formation or validity hereof, shall be submitted for decision to a panel of three arbitrators
(the “Panel”). Notice requesting arbitration shall be in writing and sent certified or registered mail, return receipt
requested.

 

		B.	One arbitrator shall be chosen by each Party and the two arbitrators shall then choose an impartial third arbitrator who shall
preside at the hearing. If either Party fails to appoint its arbitrator within 30 days after being requested to do so by the
other Party, the latter, after 10 days’ prior notice by certified or registered mail of its intention to do so, may
appoint the second arbitrator.

 

		C.	If the two arbitrators do not agree on a third arbitrator within 60 days of their appointment, the third arbitrator shall
be chosen in accordance with the procedures for selecting the third arbitrator in force on the date the arbitration is demanded,
established by the AIDA Reinsurance and Insurance Arbitration Society – U.S. (ARIAS). The arbitrators shall be persons holding,
or previously holding, the position of or equivalent to Vice President or higher at an insurance or reinsurance company and who
have no personal or financial interest in the result of the arbitration. If a member of the Panel dies, becomes disabled or is
otherwise unwilling or unable to serve, a substitute shall be selected in the same manner as the departing member was chosen and
the arbitration shall continue.

 

		D.	Within 30 days after all arbitrators have been appointed, the Panel shall meet and determine time periods for briefs,
discovery procedures and schedules of hearings.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 38 	 

     

    

 

		E.	The Panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence.
Notwithstanding any other provision to the contrary, the arbitrators may, at their discretion, request and consider underwriting
and placement information provided by the Company to the Reinsurer, as well as any correspondence exchanged by the Parties that
is related to this Contract. The arbitration shall take place in Dallas, Texas, or at such other place as the Parties shall agree.
The decision of any two arbitrators shall be in writing and shall be final and binding. The Panel is empowered to grant interim
relief as it may deem appropriate.

 

		F.	The Panel shall interpret this Contract as an honorable engagement rather than as merely a legal obligation and shall make
its decision considering the custom and practice of the applicable insurance and reinsurance business as promptly as possible after
the hearings. Judgment upon an award may be entered in any court having jurisdiction thereof.

 

		G.	Arbitration proceedings are subject to consolidation as follows:

 

		1.	Multiple contracts, common issue: If the Reinsurer has subscribed to other reinsurance contracts with the Company, under which
a dispute has arisen where there are common questions of law or fact with the dispute being arbitrated under this Contract and
a possibility of conflicting awards or inconsistent results, the Reinsurer, at the Company’s request, shall arbitrate all
such reinsurance disputes involving the same loss or common questions of law or fact in one consolidated proceeding, subject to
the provisions of this Article.

 

		2.	Multiple contracts: If the Reinsurer has subscribed to other reinsurance contracts with the Company and various disputes have
arisen under such contracts, regardless of whether or not there are common questions of law or fact, if mutually agreed to by the
Parties, the Parties shall arbitrate all reinsurance disputes in one consolidated proceeding, subject to the provisions of this
Article.

 

The agreement to consolidate disputes
under this Contract and one or more other reinsurance contracts will supersede all other reinsurance contracts entered into between
the Company and the Reinsurer, regardless of whether any such other reinsurance contract may require or address consolidation.

 

		H.	Each Party shall bear the expense of the arbitrator selected by or for it and shall jointly and equally bear with the other
Party the cost of the third arbitrator. The remaining costs of the arbitration shall be allocated by the Panel. The Panel may,
at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to attorneys’
fees, to the extent permitted by law, excluding any award for exemplary or punitive damages.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 39 	 

     

    

 

ARTICLE
XXXII

 

Liability
of the Reinsurer

 

		A.	All reinsurances for which the Reinsurer shall be liable by virtue of this Contract shall be subject in all respects to the
same terms, conditions, interpretations, and waivers and to the same modifications, alterations, and cancellations, as the respective
Policies to which such reinsurances relate. The Reinsurer shall, in every case to which liability under this Contract attaches,
follow the fortunes of the Company, and the Reinsurer shall be bound, without limitation, by all payments and settlements entered
into by or on behalf of the Company, subject to the terms and conditions of this Contract and the Services Agreement.

 

		B.	DARAG Bermuda and DARAG Guernsey shall be jointly and severally liable for the obligations of the Reinsurer hereunder except
for their respective obligations to indemnify the Company for Ultimate Net Loss under the Subject Business pursuant to the COVERAGE
ARTICLE, for which obligations they shall be severally liable.

 

ARTICLE
XXXIII

 

Non-Avoidance

 

This Contract is a composite reinsurance covering a number of
separate legal entities within the Company. In the event of a dispute, or disputes, arising between the Reinsurer and one or more
of the entities comprising the Company with respect to a loss or claim under the Subject Business, it is agreed hereon that such
dispute or disputes will not affect the rights or liabilities of the other such entities. In the event of a claim dispute, or disputes,
arising between the Reinsurer and one or more of the entities comprising the Company, this Contract shall operate without prejudice
to the reinsured entities which are not in dispute and shall not affect the rights of such entities to recover under this Contract.

 

ARTICLE
XXXIV

 

Entire
Agreement

 

This Contract, the Trust Agreement, the Services Agreement,
the Security Agreement and the other Transaction Documents constitute the entire agreement between the Parties with respect to
the Subject Business and there are no understandings between the Parties other than as expressed in this Contract, the Trust Agreement,
the Services Agreement, the Security Agreement and the other Transaction Documents. Any change or modification to this Contract
shall be made by amendment to this Contract and signed by the Parties. This Article shall not be construed as limiting in any way
the admissibility of evidence regarding the formation, interpretation, purpose, or intent of this Contract.

 

ARTICLE
XXXV

 

Mode
of Execution

 

		A.	This Contract may be executed by:

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 40 	 

     

    

 

		1.	an original written ink signature of paper documents;

 

		2.	an exchange of facsimile or digital copies showing the original written ink signature of paper documents; or

 

		3.	electronic signature by either Party employing appropriate software technology as to satisfy the Parties at the time of execution
that the version of the document agreed to by each Party shall always be capable of authentication and satisfy the same rules of
evidence as written signatures.

 

		B.	The use of any one or a combination of these methods of execution shall constitute a legally binding and valid signing of this
Contract.

 

ARTICLE
XXXVI

 

Sanctions

 

Notwithstanding any other provision to the contrary, if at any
time should any receipt or payment of funds or any other contemplated transaction under this Contract constitute an actual or potential
violation of any economic sanction or money laundering statute, regulation or order which is applicable to either the Company or
the Reinsurer, the Party who becomes aware of the existence of an actual or potential violation shall immediately notify the other
Party of the existence of an actual or potential violation and the reasons therefor. Solely with respect to such receipt or payment
of funds or other transaction, the obligations of the Parties under this Contract shall be suspended until such time as the Company
and the Reinsurer are authorized by Applicable Law, regulation and license to perform their respective obligations under this Contract.
For the avoidance of doubt, the obligations of the Parties under this Contract shall remain in effect with respect to the receipt
or payment of funds or any other contemplated transaction which would not constitute an actual or potential violation of any economic
sanction or money laundering law, regulation or order.

 

ARTICLE
XXXVII

 

Non-Assignability
and Non-Delegation

 

Except as contemplated by any Transaction Document, the obligations
and duties of either Party under this Contract shall not be assigned or delegated to or assumed by any another party, in whole
or in part, without the other Party’s prior written consent, such consent not to be unreasonably withheld, conditioned or
delayed.

 

ARTICLE
XXXVIII

 

Notices

 

		A.	Notices or other communications under or in connection with this Contract (each, a “Notice”) shall be:

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 41 	 

     

    

 

		1.	In writing; and

 

		2.	Delivered personally or sent by overnight courier company or fax or email to the Party due to receive the Notice to the address
set out in paragraph C below or to an alternative address, person or fax number specified by that Party by not less than seven
Business Days written Notice to the other Party received before the Notice was dispatched.

 

		B.	Unless there is evidence that it was received earlier, a Notice is deemed given if:

 

		1.	Delivered personally or by courier, when left at the address referred to in paragraph C below or, where left other than on
a Business Day or outside normal business hours, on the next Business Day;

 

		2.	Sent by fax; when confirmation of the fax transmission has been recorded by the sender's fax machine and where transmitted
other than on a Business Day or outside normal business hours, on the next Business Day; or

 

		3.	Sent by email; when it is confirmed by the recipient that the email has been received.

 

		C.	The addresses referred to in this Article are:

 

	If to the Company:	
        American Hallmark Insurance Company of Texas

        5420 Lyndon B. Johnson Freeway, Suite 1100

        Dallas, TX 75240-2345

        USA

        

        Attention: Naveen Anand, President

        Phone: 1-817-348-1801

        Email: nanand@hallmarkgrp.com

         

	If to the Reinsurer:	
        Darag Bermuda, Ltd.

        Attention: General Counsel

        The Maxwell Roberts Building, 5th Fl

        One Church Street

        Hamilton HM11

        Bermuda

         

        Phone: 1-441-542-3905

        Email: Daniel.Linden@sobcdarag.com

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 42 	 

     

    

 

ARTICLE
XXXIX

 

Duty
of Cooperation and Furnishing of Relevant Information

 

The Parties shall cooperate in a commercially reasonable manner
in order to accomplish the objectives of this Contract including furnishing any additional assistance, information and documentation,
or taking any necessary action as may reasonably requested by the other Party from time to time.

 

ARTICLE
XL

 

Severability

 

In the event any provision of this Contract is declared illegal,
invalid or unenforceable by any regulatory body, tribunal or court having jurisdiction in the matter, such provision shall be considered
void in such jurisdiction, but this shall not affect the legality, validity or enforceability of any other provision of this Contract
in that jurisdiction or the legality, validity or enforceability of the entirety of this Contract in any other jurisdictions.

 

ARTICLE
XLI

 

Non-Waiver

 

The failure of a Party to insist on strict compliance with any
provision of this Contract or to exercise any right or remedy hereunder shall not constitute a waiver of any rights contained in
this Contract nor estop such Party from demanding full and complete compliance nor prevent such Party from exercising a remedy
in the future.

 

ARTICLE
XLII

 

Survival

 

All obligations, representations and warranties made in this
Contract which are binding upon the Parties subsequent to termination of this Contract shall survive such termination and shall
continue in full force and effect until all obligations of the Parties hereunder have been discharged in full.

 

ARTICLE
XLIII

 

Counterparts

 

This Contract may be executed in counterparts, each of which
shall be deemed an original, but all counterparts shall constitute one contract. A copy of a signed original of this Contract may
be used for all purposes for which a signed original can be used. Facsimile or scanned signatures have the same force and effect
as originals.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 43 	 

     

    

 

ARTICLE
XLIV

 

Administrative
Services

 

From the Closing Date, the Reinsurer or an affiliate thereof
shall have authority and responsibility for claims handling and certain other administrative functions in respect of the claims
relating to the Subject Business (the “Services”) pursuant to and subject to the terms of the Services Agreement. The
Reinsurer shall bear all the expenses in connection with the Services provided on or after the Transition End Date until the expiration
or termination of this Contract, including in the event the Services Agreement is terminated prior to the expiration or termination
of this Contract.

 

ARTICLE
XLV

 

Waiver
of Duty of Utmost Good Faith

 

Each Party absolutely and irrevocably waives resort to the duty
of “utmost good faith” or any similar principle in connection with the negotiation or execution of this Contract. The
Reinsurer acknowledges and agrees that it is entering into this Contract notwithstanding the existence or substance of any information
not disclosed to it by the Company and that, except to the extent covered by an express representation or warranty contained in
this Contract, the Reinsurer is assuming the risk of the existence and substance of any such information. Notwithstanding any other
provision to the contrary, each Party agrees that it does not waive the duty of “utmost good faith” or any similar
principle relating to the conduct of the Parties after the Closing Date.

 

ARTICLE
XLVI

 

Intermediary

 

Willis Re Inc. is hereby recognized as the intermediary negotiating
this Contract and its fee of $1,208,153 in connection therewith shall be deducted from the Net Reinsurance Premium prior to giving
effect to the distributions described in paragraph D of the REINSURANCE PREMIUM ARTICLE.

 

    	Hallmark Financial 
 Loss Portfolio Transfer Contract	Page 44 	 

     

    

 

IN WITNESS WHEREOF, the Company by its duly authorized
representative and the Reinsurer by its duly authorized representative hereby execute this Contract as of the date specified below:

 

Signed this 16th day of July, 2020.

 

American Hallmark
Insurance Company of Texas

 

By/s/ Naveen Anand

 

Printed Name Naveen Anand

 

Title President & CEO

 

Hallmark Specialty
Insurance Company

 

By/s/ Naveen Anand

 

Printed Name Naveen Anand

 

Title President & CEO

 

[Signature Page
to Loss Portfolio Transfer Reinsurance Contract]

 

    Hallmark Financial 
 Loss Portfolio Transfer Contract

     

    

 

Hallmark Insurance
Company

 

By/s/ Naveen Anand

 

Printed Name Naveen Anand

 

Title President & CEO

 

Hallmark National
Insurance Company

 

By/s/ Naveen Anand

 

Printed Name Naveen Anand

 

Title President & CEO

 

Hallmark County Mutual
Insurance Company

 

By/s/ Naveen Anand

 

Printed Name Naveen Anand

 

Title President & CEO

 

[Signature Page
to Loss Portfolio Transfer Reinsurance Contract]

 

    Hallmark Financial 
 Loss Portfolio Transfer Contract

     

    

 

DARAG BERMUDA LTD 

 

By/s/ Daniel Linden

 

Printed Name Daniel Linden

 

Title Director

 

DARAG INSURANCE (GUERNSEY) LIMITED 

 

By/s/ Granville de CRUZ

 

Printed Name Granville de CRUZ 16 July 2020

 

Title Director

 

[Signature Page
to Loss Portfolio Transfer Reinsurance Contract]

 

    Hallmark Financial 
 Loss Portfolio Transfer Contract

     

    

 

EXHIBIT A

 

Form of Trust Agreement

 

(See attached)

 

    Hallmark Financial 
 Loss Portfolio Transfer Contract

     

    

 

TRUST AGREEMENT

 

Dated as of [●], 2020

 

among

 

DARAG BERMUDA LTD.

DARAG INSURANCE GUERNSEY LTD.

as Grantors,

 

AMERICAN HALLMARK INSURANCE COMPANY OF
TEXAS

HALLMARK SPECIALTY INSURANCE COMPANY

HALLMARK INSURANCE COMPANY

HALLMARK NATIONAL INSURANCE COMPANY

 

as Beneficiaries

 

and

 

THE BANK OF NEW YORK MELLON,

 

as Trustee

 

    

     

    

 

TABLE OF CONTENTS

 

	 	 	PAGE
	1.	Representations and Warranties	1
	2.	Deposit of Assets to the Trust Accounts	2
	3.	Withdrawal of Assets from the Trust Accounts	3
	4.	Application of Assets	3
	5.	Redemption, Investment and Substitution of Assets	4
	6.	The Income Account	5
	7.	Corporate Actions	5
	8.	Additional Rights and Duties of the Trustee	6
	9.	The Trustee's Compensation, Expenses, etc.	11
	10.	Resignation or Removal of the Trustee	11
	11.	Termination of the Trust Accounts	12
	12.	Definitions	12
	13.	Governing Law; Etc.	13
	14.	Successors and Assigns	14
	15.	Severability	14
	16.	Entire Agreement	14
	17.	Amendments	14
	18.	Notices, etc.	14
	19.	Headings	15
	20.	Counterparts	15
	21.	USA Patriot Act	16
	22.	Required Disclosure	16
	23.	Representations	16
	24.	Successors and Assigns of Trustee	16
	25.	Shareholders Communications Act, Etc.	16
	26.	Information Sharing	17
	27.	Agency Agreement	18
	28.	Specific Performance	18

 

    

     

    

 

	29.	Arbitration; Waiver of Trial by Jury.	19

 

EXHIBIT A List of Assets Deposited to the Trust Account

 

EXHIBIT B Form of Withdrawal Notice

 

EXHIBIT C Form of Incumbency and Specimen signature

 

EXHIBIT D Investment Guidelines

 

SCHEDULE I List of Trust Accounts

 

    

     

    

 

TRUST AGREEMENT

 

This TRUST AGREEMENT, dated as of [●], 2020 (this “Agreement”),
is entered into by and among (i) DARAG Bermuda Ltd. (“DARAG Bermuda”) and DARAG Insurance Guernsey Ltd. (“DARAG
Guernsey”) (collectively, the “Grantors”), (ii) American Hallmark Insurance Company of Texas, Hallmark
Specialty Insurance Company, Hallmark Insurance Company and Hallmark National Insurance Company (collectively, the “Beneficiaries”
and each individually, a “Beneficiary”), and (iii) The Bank of New York Mellon, a New York banking corporation
(the “Trustee”) (the Grantors, the Beneficiaries and the Trustee are hereinafter each sometimes referred to
individually as a “Party” and collectively as the “Parties”).

 

WITNESSETH:

 

WHEREAS, the
Beneficiaries have entered into that certain Loss Portfolio Transfer Reinsurance Contract with the Grantors, dated as of [●],
2020 (the “Reinsurance Agreement”);

 

WHEREAS, the
Beneficiaries desire the Grantors to secure payments of all amounts at any time and from time to time owing by the Grantors to
the Beneficiaries under or in connection with the Reinsurance Agreement;

 

WHEREAS, the
Grantors desire to transfer or cause to be transferred to the Trustee, to be held in separate trust accounts as agreed by the Parties
and identified on SCHEDULE I attached hereto (each such account, a “Trust Account” and collectively,
the “Trust Accounts”), such assets as it may desire subject to this Agreement in order to secure payments under
or in connection with the Reinsurance Agreement;

 

WHEREAS, the
Trustee has agreed to act as Trustee hereunder, and to hold such assets in trust in Trust Accounts that have been segregated on
its books and records for the sole use and benefit of each Beneficiary; and

 

WHEREAS, this
Agreement is made for the sole use and benefit of each Beneficiary and for the purpose of setting forth the duties and powers of
the Trustee with respect to the Trust Accounts;

 

NOW, THEREFORE,
for and in consideration of the premises and for other good and valuable consideration, the receipt of which is hereby acknowledged,
the Parties hereby agree as follows:

 

		1.	Representations and Warranties.

 

The Grantors and the Beneficiaries each
hereby represents and warrants with respect to itself, which representations and warranties shall be continuing and shall be deemed
to be reaffirmed upon each day this Agreement remains in effect, that:

 

		(a)	It is duly organized and existing under the laws of the jurisdiction of its organization, with
full power to carry on its business as now conducted, to enter into this Agreement and to perform its obligations hereunder; and

 

    1 

     

    

 

		(b)	This Agreement has been duly authorized, executed and delivered by it, constitutes a valid and
legally binding obligation of it, enforceable in accordance with its terms, and no statute, regulation, rule, order, judgment or
contract binding on it prohibits its execution or performance of this Agreement.

 

		2.	Deposit of Assets to the Trust Accounts.

 

		(a)	DARAG Bermuda, for itself and on behalf of DARAG Guernsey, shall establish the Trust Accounts and
the Trustee shall administer each Trust Account in its name as Trustee for the benefit of the applicable Beneficiary. Each Trust
Account shall be subject to withdrawal by the applicable Beneficiary solely as provided herein.

 

		(b)	The Grantors shall transfer or cause to be transferred to the Trustee, for deposit to the Trust
Accounts, the assets listed in EXHIBIT A hereto, and may transfer to the Trustee, for deposit to the Trust Accounts, such
other assets as it may from time to time desire (all such assets, together with the proceeds thereof, all investments of such assets
and proceeds in other assets, and all substitutions of such assets and proceeds for other assets, are herein referred to individually
as an “Asset” and collectively as the “Assets”). The Assets shall consist only of cash (United
States legal tender) and Eligible Securities (as hereinafter defined). The Trustee shall deposit such Assets into each Trust Account
in accordance with the instructions provided by the Grantors in writing at the time that such Assets are delivered to the Trustee.
Except as provided in Section 5(c), the Trustee shall ensure that Assets in each of the Trust Accounts for the benefit of the applicable
Beneficiary will be kept separate from Assets in the other Trust Accounts and will not be commingled.

 

		(c)	The Grantors hereby represent and warrant that all Assets transferred by the Grantors to the Trustee
for deposit to the Trust Accounts and all Assets invested and substituted at the direction of the Grantors hereunder will (i) be
in such form that the applicable Beneficiary whenever necessary may, and the Trustee upon direction by the applicable Beneficiary
will, negotiate any such Assets without consent or signature from any Grantor or any other person other than the Trustee in accordance
with the terms of this Agreement and (ii) consist only of cash and Eligible Securities. Prior to depositing the Assets in the Trust
Accounts, the Grantors shall execute or cause to be executed assignments and endorsements in blank, or otherwise transfer all of
their right, title and interest in such Assets, and from time to time thereafter as required, execute and deliver and keep current,
all such instruments or other documents and take all such further actions as the Trustee may reasonably request in order that the
applicable Beneficiary, or the Trustee upon direction by the applicable Beneficiary, may negotiate such Assets without consent
or signature from any Grantor or any other person other than the Trustee in accordance with the terms of this Agreement.

 

		(d)	The Trustee shall receive and hold the Assets in the Trust Accounts, separate and distinct from
all other assets on the books and records of the Trustee, and shall be continuously kept in a safe place at the Trustee’s
office(s) in the United States, or otherwise in accordance with Section 8(d), below.

 

    2 

     

    

 

		3.	Withdrawal of Assets from the Trust Accounts.

 

		(a)	Subject to Section 4(a), without notice to or the consent of the Grantors, each Beneficiary shall
have the right, at any time and from time to time, to withdraw from the applicable Trust Account, upon written notice to the Trustee
in substantially the form of EXHIBIT B hereto (a “Withdrawal Notice”), such Assets as are specified in
such Withdrawal Notice. The Withdrawal Notice may designate a third party (the “Designee”) to whom Assets specified
therein shall be delivered. No Beneficiary needs present any statement or document in addition to a Withdrawal Notice in order
to withdraw any Assets.

 

		(b)	Upon receipt of a Withdrawal Notice, the Trustee shall immediately take any and all steps necessary
to transfer absolutely and unequivocally all right, title and interest in the Assets specified in such Withdrawal Notice, and shall
deliver physical custody of such Assets, as applicable, to or for the account of the applicable Beneficiary or such Designee as
specified in such Withdrawal Notice.

 

		(c)	Subject to paragraph (a) of this Section 3 and to Section 5 of this Agreement, in the absence
of a Withdrawal Notice, the Trustee shall allow no substitution or withdrawal of any Asset from the Trust Accounts.

 

		(d)	Each of the Grantors and Beneficiaries shall, on the date of this Agreement, deliver to the other
Parties a certificate in the form of EXHIBIT C hereto as to the incumbency and specimen signature of at least two (2) officers
or other representatives of such Party authorized to act for and give and receive notices, requests and instructions on behalf
of such Party in connection with this Agreement (each such officer or other representative, an “Authorized Person”).
From time to time, the Grantors and the Beneficiaries may, by delivering to the other Parties a revised certificate in the form
of EXHIBIT C, change the information previously given, but each of the Parties shall be entitled to rely conclusively on the then-current
exhibit until receipt of a superseding exhibit.

 

		4.	Application of Assets.

 

		(a)	Each Beneficiary hereby covenants to the Grantors that it shall use and apply any withdrawn Assets,
without diminution because of the insolvency of such Beneficiary or the Grantors, for the following purposes only:

 

		(i)	to fund the Loss Escrow Account(s) (as defined in the Reinsurance Agreement);

 

		(ii)	to pay for the Grantors’ share of Ultimate Net Loss (as defined in the Reinsurance Agreement)
not otherwise paid by the Grantors when due;

 

		(iii)	to pay the Grantors any amounts held in the Trust Accounts that exceed the Minimum Funding Requirement
(as defined in the Reinsurance Agreement);

 

    3 

     

    

 

		(iv)	where the Beneficiaries have received a Termination Notice (as hereinafter defined) pursuant to
Section 11 of this Agreement and where the Grantors’ obligations under the Reinsurance Agreement remain unliquidated
and undischarged ten (10) calendar days prior to the Termination Date (as hereinafter defined), to withdraw amounts equal to such
obligations and deposit such amounts in separate accounts, apart from their other assets, in the name of the Beneficiaries, in
any bank or trust company organized in the United States, in trust for the uses and purposes specified in subparagraphs (ii) or
(v) of this paragraph (a). For purposes of this subparagraph (iv), the phrase “the Trust Accounts” in subparagraph
(v) of this paragraph (a) shall be deemed to read “the separate accounts” established pursuant to this subparagraph
(iv);

 

		(v)	to pay any other amounts due and payable (X) to the Beneficiaries or (Y) by the Grantors or otherwise
permitted to be withdrawn from any Trust Account under the Reinsurance Agreement; and

 

		(vi)	to transfer Assets held in a Trust Account to another Trust Account.

 

		(b)	The Trustee shall have no responsibility whatsoever to determine that any Assets withdrawn from
the Trust Accounts pursuant to Section 3 of this Agreement will be used and applied in the manner contemplated by paragraph (a)
of this Section 4.

 

		5.	Redemption, Investment and Substitution of Assets.

 

		(a)	The Trustee shall surrender for payment all maturing Assets and all Assets called for redemption
and deposit the principal amount of the proceeds of any such payment to the applicable Trust Account(s).

 

		(b)	From time to time, at the written order and direction of the Grantors or their designated investment
advisor, the Trustee shall invest Assets in the Trust Accounts in Eligible Securities. For the purpose of settling such a purchase
of Eligible Securities, the Grantors shall provide the Trustee with sufficient immediately available funds by such time and date
as is required to settle such Eligible Securities in US dollars to be used to settle such transaction.

 

		(c)	From time to time, subject to the prior written approval of the applicable Beneficiary, the Grantors
may direct the Trustee to substitute Assets held in a Trust Account with cash or Eligible Securities of comparable value, or transfer
cash or Eligible Securities of comparable value from a Trust Account to another Trust Account established under this Agreement.
The Trustee shall have no responsibility whatsoever to determine the value of such investments or substituted securities or that
such investments or substituted securities constitute Eligible Securities.

 

		(d)	All investments and substitutions of securities referred to in Sections 5(b) and 5(c) above shall
be in compliance with applicable laws. Any instruction or order concerning such investments or substitutions of securities shall
be referred to herein as an “Investment Order”.
The Trustee shall execute Investment Orders and settle securities transactions by itself or by means of an agent or broker. The
Trustee shall not be responsible for any act or omission, or for the solvency, of any such agent or broker.

 

    4 

     

    

 

		(e)	Following written notice by a Beneficiary to any officer of the Trustee with direct responsibility
for the administration of this Agreement (each, a “Responsible Officer”), with a copy of such notice to the
Grantors, of the failure of any Assets in any applicable Trust Account to consist only of Eligible Securities, then the Trustee
shall liquidate such nonconforming Assets as promptly as practicable and the proceeds will be invested in alternative Eligible
Securities and/or be held in cash, in either case, in accordance with and in reliance upon the joint written instructions received
by the Trustee from both the applicable Grantor and the applicable Beneficiary with respect to both the liquidation of Assets and
investment or holding of cash described in this Section 5(e).

 

		(f)	When the Trustee is directed to deliver or receive Assets against payment, settlement will be made
in accordance with generally accepted market practice.

 

		(g)	Any loss incurred from any investment pursuant to the terms of this Section 5 shall be borne
exclusively by the applicable Trust Account and/or the Grantors.

 

		6.	The Income Account.

 

All payments of interest, dividends and
other income in respect to Assets in each Trust Account shall be posted and credited by the Trustee, subject to deduction of the
Trustee's compensation and expenses as provided in Section 9 of this Agreement, to the separate income ledger (the “Income
Account”) of the applicable Trust Account established and maintained by the Grantors at an office of the Trustee in New
York City. Any interest, dividend or other income automatically posted and credited on the payment date to the Income Account which
is not subsequently received by the Trustee shall be reimbursed by the Grantors to the Trustee and the Trustee may debit the Income
Account for this purpose. The interest, dividends and other income shall be paid to the Grantors or credited to an account of the
Grantors in accordance with written instructions provided from time to time by the Grantors to the Trustee.

 

		7.	Corporate Actions.

 

Whenever there are voluntary rights that
may be exercised or alternate courses of action that may be taken by reason of the Grantors’ ownership of Eligible Securities,
the Grantors or their designee shall be responsible for making any decisions relating thereto and for directing the Trustee to
act. The Trustee shall notify the Grantors or their designee of rights or discretionary actions with respect to Eligible Securities
as promptly as practicable under the circumstances, provided that the Trustee has actually received notice of such right
or discretionary corporate action from the relevant depository, etc. Absent actual receipt of such notice, the Trustee shall have
no liability for failing to so notify the Grantors or their designee. Absent the Trustee’s timely receipt of instructions,
the Trustee shall not be liable for failure to take any action relating to or to exercise any rights conferred by such Eligible
Securities.

 

    5 

     

    

 

		8.	Additional Rights and Duties of the Trustee.

 

		(a)	The Trustee shall notify the applicable Grantor and the applicable Beneficiary in writing within
five days following each deposit to, or withdrawal from, any Trust Account. The Trustee shall provide the Grantors and the Beneficiaries
with access to the Trustee’s automated data system affording on-line access to Trust Account information, subject to the
Trustee’s requirements for creating accounts on such system. The usage of such system will be deemed to fulfil the Trustee’s
notice obligations in this Section 8(a) and Section 8(f), below. Each of the Grantors and the Beneficiaries acknowledges that there
are other risks inherent in communicating through the Internet such as the possibility of virus contamination and disruptions in
service, and each agrees that the Trustee shall not be responsible for any loss, damage or expense suffered or incurred by any
Grantor or any Beneficiary or any person claiming by or through any Grantor or any Beneficiary as a result of the use of such methods,
except to the extent that such loss, damage or expense is the direct result of the Trustee’s negligence, willful misconduct
or lack of good faith.

 

		(b)	Before accepting any Asset for deposit to the any Trust Account, the Trustee shall determine that
such Asset is in such form that the applicable Beneficiary whenever necessary may, or the Trustee upon direction by such Beneficiary
will, negotiate such Asset without consent or signature from any Grantor or any person or entity other than the Trustee in accordance
with the terms of this Agreement.

 

		(c)	The Trustee shall have no responsibility whatsoever to determine whether any Assets are or continue
to be Eligible Securities.

 

		(d)	The Trustee may deposit any Assets in a Trust Account in a book-entry account maintained at
the Federal Reserve Bank of New York or in depositories such as The Depository Trust Company. The Trustee shall have no liability
whatsoever for the action or inaction of any depository or for any losses resulting from the maintenance of Eligible Securities
with a depository. Assets may be held in the name of a nominee maintained by the Trustee or by any such depository.

 

		(e)	The Trustee shall accept and open all mail directed to any Grantor or any Beneficiary in care of
the Trustee.

 

		(f)	The Trustee shall furnish to the Grantors and the Beneficiaries a statement of all Assets, and
the Market Value thereof, in the Trust Accounts at the end of each calendar month.

 

		(g)	Upon the written request of the applicable Grantor or the applicable Beneficiary, the Trustee shall
promptly permit the applicable Grantor or the applicable Beneficiary, their respective agents, employees or independent auditors
to examine, audit, excerpt, transcribe and copy, during the Trustee's normal business hours, any books, documents, papers and records
relating to the any Trust Account or the Assets therein.

 

    6 

     

    

 

		(h)	(1) Unless otherwise provided in this Agreement, the Trustee is authorized to follow and rely upon
all instructions given by Authorized Persons of the Grantors, any relevant investment manager of the Grantors, and any Beneficiary,
respectively, and by attorneys-in-fact acting under written authority furnished to the Trustee by the Grantors or any Beneficiary,
including, without limitation, instructions given by letter, facsimile transmission, telegram, teletype, cablegram or electronic
media, if the Trustee believes in good faith such instructions to be genuine and to have been signed, sent or presented by the
proper party or parties. With respect to any actions to be taken by either Grantor or the Grantors jointly, the Trustee shall be
entitled to rely upon instructions, directions or acknowledgements made by DARAG Bermuda as if it is the sole Grantor hereunder,
and each Grantor and each Beneficiary agrees that any instruction, direction or acknowledgement required or permitted to be made
by DARAG Guernsey hereunder may be made or given by DARAG Bermuda with the same force and effect as if it had been made or given
by DARAG Guernsey. The Trustee shall not incur any liability to anyone resulting from actions taken by the Trustee in reliance
in good faith and without negligence or willful misconduct on such instructions. The Trustee shall not incur any liability in executing
instructions (i) from any attorney-in-fact prior to receipt by it of notice of the revocation of the written authority
of the attorney-in-fact or (ii) from any officer or other representative of the Grantors or any Beneficiary named in an
incumbency certificate delivered hereunder prior to receipt by the Trustee of a more current certificate. Each of the Grantors
and the Beneficiaries acknowledges and agrees that it is fully informed of the protections and risks associated with the various
methods of transmitting instructions to the Trustee, and that there may be more secure methods of transmitting instructions than
the method selected by the sender. Each of the Grantors and the Beneficiaries agrees that the security procedures, if any, to be
followed in connection with a transmission of instructions provide to it a commercially reasonable degree of protection in light
of its particular needs and circumstances.

 

(2) Each of the Grantors and
the Beneficiaries hereby authorizes the Trustee to rely upon and comply with instructions and directions, including funds
transfer instructions, sent by S.W.I.F.T, e-mail, facsimile and other similar secure electronic transmissions containing
applicable authorization codes, passwords and/or authentication keys issued by the Trustee, or another method or system
specified by the Trustee as available for use in connection with its services hereunder (“Electronic
Methods”) by persons believed by the Trustee in good faith to be authorized to give instructions and directions on
behalf of the Grantors and/or the Beneficiaries. Except as set forth below with respect to funds transfers, the Trustee shall
have no duty or obligation to verify or confirm that the person who sent such instructions or directions is, in fact, a
person authorized to give instructions or directions on behalf of the Grantors and/or the Beneficiaries (other than to verify
that the signature on a facsimile is the signature of a person authorized to give instructions and directions on behalf of
such Party), and the Trustee shall have no liability for any losses, liabilities, costs or expenses incurred or sustained by
the Grantors and/or the Beneficiaries as a result of such reliance in good faith upon or compliance with such instructions or
directions. Each of the Grantors and the Beneficiaries agrees to assume all risks arising out of the use of Electronic
Methods to submit instructions and directions to the Trustee, including without limitation the risk of the Trustee acting on
unauthorized instructions, and the risk of interception and misuse by third parties.

 

    7 

     

    

 

(3) With respect to any “funds
transfer,” as defined in Article 4-A of the Uniform Commercial Code, the following security procedure will apply: a payment
instruction of a Grantor or any Beneficiary, as the case may be, is to include the name and (in the case of a facsimile) signature
of the person initiating the funds transfer request. If the name is listed as an Authorized Person on the relevant account, the
Trustee will confirm the instructions by telephone call to any person listed as an Authorized Person on the account, who may be
the same person who initiated the instruction. When calling back, the Trustee will request from the staff member of the applicable
Grantor or the applicable Beneficiary, as the case may be, his or her name. If the name is listed in the Trustee’s records
as an Authorized Person, the Trustee will confirm the instructions with respect to amount, names and numbers of accounts to be
charged or credited and other relevant reference information. Where the Agreement contemplates joint payment instructions from
a Grantor and any Beneficiary, the Trustee shall call back both the applicable Grantor and any such Beneficiary. Each of the Grantors
and Beneficiaries acknowledges that the Trustee has offered such Grantor and Beneficiary other security procedures that are more
secure and are commercially reasonable for such Grantor and Beneficiary, and that such Grantor and Beneficiary has nonetheless
chosen the procedure described in this paragraph. Each of the Grantors and the Beneficiaries agrees to be bound by any payment
order issued in its name, whether or not authorized, that is accepted by the Trustee in accordance with the above procedures. When
instructed to credit or pay a party by both name and a unique numeric or alpha-numeric identifier (e.g. ABA number or account number),
the Trustee, and any other bank participating in the funds transfer, may rely solely on the unique identifier, even if it identifies
a party different than the party named. This applies to beneficiaries as well as any intermediary bank. Each of the Grantors and
Beneficiaries agrees to be bound by the rules of any funds transfer network used in connection with any payment order accepted
by the Trustee hereunder. The Trustee shall not be obliged to make any payment or otherwise to act on any instruction notified
to it under this Agreement if it is unable to validate the authenticity of the request by telephoning an Authorized Person who
has not executed the relevant request or instruction of the applicable Grantor or the relevant Beneficiary, as the case may be.
The Trustee will make any payment or otherwise act on any instruction provided by an Authorized Person of the applicable Grantor
or the relevant Beneficiary, as the case may be, within three (3) Business Days after the Trustee’s verification of such
instructions as set forth above. A “Business Day” shall mean any day (other than a Saturday or Sunday) on which banks
are open for business in New York, New York and Hamilton, Bermuda.

 

    8 

     

    

 

Notwithstanding any
revocation, cancellation or amendment of this authorization, any action taken by the Trustee pursuant to this authorization
prior to the Trustee’s actual receipt and acknowledgement of a notice of revocation, cancellation or amendment shall
not be affected by such notice.

 

		(i)	The duties and obligations of the Trustee shall only be such as are specifically set forth in this
Agreement, as it may from time to time be amended, and no implied duties or obligations shall be read into this Agreement against
the Trustee. The Trustee shall not be liable except for its own negligence, willful misconduct or lack of good faith.

 

		(j)	No provision of this Agreement shall require the Trustee to take any action which, in the Trustee's
reasonable judgment, would result in any violation of this Agreement or any provision of law. The Trustee may, with respect to
questions of law (including, for the avoidance of doubt, questions regarding interpretation of its legal rights and obligations
hereunder), obtain the advice of counsel and shall be fully protected with respect to anything done or omitted by it in good faith
and without negligence or willful misconduct in conformity with such advice.

 

		(k)	Notwithstanding anything in this Agreement to the contrary, in no event shall the Trustee be liable
under or in connection with this Agreement for indirect, special, incidental, punitive or consequential losses or damages of any
kind whatsoever, including but not limited to lost profits, whether or not foreseeable, even if the Trustee has been advised of
the possibility thereof and regardless of the form of action in which such damages are sought.

 

		(l)	The Trustee shall not be responsible for the existence, genuineness or value of any of the Assets
or for the validity, perfection, priority or enforceability of the liens in any of the Assets, whether impaired by operation of
law or by reason of any action or omission to act on its part hereunder, except to the extent such action or omission constitutes
negligence, bad faith or willful misconduct on the part of the Trustee, for the validity of title to the Assets, for insuring the
Assets or for the payment of taxes, charges, assessments or liens upon the Assets.

 

		(m)	The Trustee shall not incur any liability for not performing any act or fulfilling any duty, obligation
or responsibility hereunder by reason of any occurrence beyond the reasonable control of the Trustee, including, but not limited
to, any act or provision of any present or future law or regulation or governmental authority, any act of God or war or terrorism,
accidents, labor disputes, loss or malfunction of utilities or computer software or hardware, or the unavailability of the Federal
Reserve Bank wire or telex or other wire or communication facility.

 

		(n)	The Trustee shall have no responsibility or liability for, and the Grantors are solely responsible
and liable for the payment of and obtaining reclaims, refunds and credits, where applicable, of all taxes assessments, duties,
and other governmental charges (including any interest or penalties with respect thereto) with respect to the Assets or the Trust
Accounts. With respect to the payment of taxes, in the event the Trustee is required under applicable law to pay any tax, duty
or other governmental charge or any interest or penalty with respect thereto in connection with its services hereunder, the
Trustee is hereby authorized to debit the relevant Income Account in the amount thereof and to pay such amount to the appropriate
taxing authority. With respect to tax reclaims, refunds and credits that may be available, the Trustee will submit such forms as
are necessary to the appropriate tax or other governmental authorities and take such action as is reasonable to obtain such benefits
and, where such forms must be completed by the Grantors, will provide the Grantors with the appropriate forms and otherwise assist
the Grantors to obtain such tax benefits.

 

    9 

     

    

 

		(o)	The Trustee shall not be required to risk or expend its own funds in performing its obligations
under this Agreement.

 

		(p)	To the extent that the Trustee has agreed to provide pricing or other information services in connection
with this Agreement, the Trustee is authorized to utilize any vendor (including brokers and dealers of securities) reasonably believed
by the Trustee to be reliable to provide such information (each such vendor, a “Valuation Firm”). Such Valuation
Firm may be an Affiliate of the Trustee. Each of the Grantors and the Beneficiaries understands that certain pricing information
with respect to complex financial instruments may be based on calculated amounts rather than actual market transactions and may
not reflect actual market values, and that the variance between such calculated amounts and actual market values may or may not
be material. Where a Valuation Firm does not provide information for particular securities, the applicable Beneficiary agrees that
the Grantors, with a copy to such Beneficiary, may advise the Trustee in writing regarding the fair market value of, or provide
other information with respect to, such securities as determined by it in good faith. If a Beneficiary shall dispute the Market
Value of any Asset, and the applicable Grantor and such Beneficiary are unable to resolve such dispute within fourteen (14) calendar
days, the value of such Asset shall be determined by an independent appraisal firm which is mutually acceptable to the applicable
Grantor and such Beneficiary, and the applicable Grantor and such Beneficiary shall be bound by such valuation. All fees, costs
and expenses relating to the foregoing work by any such appraisal firm shall be shared equally by such Beneficiary and such Grantor.
The Trustee shall not be a party to any dispute between a Grantor and any Beneficiary relating to the valuation of Assets. It is
understood and agreed that nothing contained herein shall be construed to require the Trustee to make any changes or adjustments
to its systems or pricing methodology as the result of any such Market Value dispute and the Trustee many continue to report the
Market Value generated by the Trustee’s systems and pricing methodology. The Trustee shall not be liable for any loss, damage
or expense incurred as a result of errors or omissions contained in any pricing or other information provided to the Trustee by
a Valuation Firm hereunder.

 

    10 

     

    

 

		9.	The Trustee's Compensation, Expenses, etc.

 

		(a)	The Grantors shall pay the Trustee, as compensation for its services under this Agreement, a fee
computed at rates determined by the Trustee from time to time and communicated in writing to the Grantors. The Grantors shall pay
or reimburse the Trustee for all of the Trustee's
expenses and disbursements in connection with its duties under this Agreement (including reasonable attorney's fees and expenses),
except any such expense or disbursement as may arise from the Trustee's negligence, willful misconduct, or lack of good faith.
The Trustee shall be entitled to deduct its compensation and expenses from payments of dividends, interest and other income in
respect of the Assets held in the Trust Accounts and deposited into the Income Account as provided in Section 6 of this Agreement.
Invasion of the trust corpus is expressly prohibited for the purposes of paying compensation to or reimbursing the expenses of
the Trustee. The Grantors, jointly and severally, hereby indemnify the Trustee for, and holds it harmless against, any loss, liability,
costs or expenses (including reasonable attorney's fees and expenses) (“Losses”) incurred or made without negligence,
willful misconduct or lack of good faith on the part of the Trustee, arising out of or in connection with the performance of its
obligations in accordance with the provisions of this Agreement, including but not limited to any Losses incurred by the Trustee
in connection with its successful defense, in whole or in part, of any claim of negligence or willful misconduct on its part or
Losses arising out of or in connection with the status of the Trustee and its nominee as the holder of record of the Assets. The
Beneficiaries, jointly and severally, hereby indemnify the Trustee for, and hold it harmless against, any Losses incurred or made
without negligence, willful misconduct or lack of good faith on the part of the Trustee, arising out of or in connection with the
Trustee’s reliance upon any instruction or direction given to the Trustee by the applicable Beneficiary hereunder. Each of
the Grantors and Beneficiaries hereby acknowledges that the foregoing indemnities and Grantors payment and reimbursement obligations
shall survive the resignation or discharge of the Trustee or the termination of this Agreement and hereby grants the Trustee a
lien, right of set-off and security interest in the funds in the Income Account for the payment of any claim for compensation,
reimbursement or indemnity hereunder.

 

		(b)	No Assets shall be withdrawn from the Trust Accounts or used in any manner for paying compensation
to, or reimbursement or indemnification of, the Trustee.

 

		10.	Resignation or Removal of the Trustee.

 

		(a)	The Trustee may resign at any time by giving not less than 90 days' written notice thereof to the
Beneficiaries and to the Grantors. The Trustee may be removed by the Grantors' or the Beneficiaries' delivery of not less than
90 days' written notice of removal to the Trustee and (in the case of a removal by the Grantors) the Beneficiaries or (in the case
of a removal by the Beneficiaries) the Grantors. Such resignation or removal shall become effective on the acceptance of appointment
by a successor trustee and the transfer to such successor trustee of all Assets in the Trust Accounts in accordance with paragraph
(b) of this Section 10.

 

    11 

     

    

 

		(b)	Upon receipt by the proper Parties of the Trustee's notice of resignation or the Grantors' notice
of removal, the Grantors and the Beneficiaries shall appoint a successor trustee. Any successor trustee shall be a bank that is
a member of the Federal Reserve System or chartered in the State of New York and shall not be a Parent, a Subsidiary or an Affiliate
of the Grantors or the Beneficiaries. Upon the acceptance of the appointment as Trustee hereunder by a successor trustee and the
transfer to such successor trustee of all Assets in the Trust Accounts, the resignation or removal of the Trustee shall become
effective. Thereupon, such successor trustee shall succeed to and become vested with all the rights, powers, privileges and duties
of the resigning or removed Trustee, and the resigning or removed Trustee shall be discharged from any future duties and obligations
under this Agreement, but the resigning or removed Trustee shall continue after such resignation or removal to be entitled to the
benefits of the indemnity provided herein for the Trustee.

 

		11.	Termination of the Trust Accounts.

 

		(a)	The Trust Accounts and this Agreement, except for the indemnities provided herein, may be terminated
only after (i) the Grantors and the Beneficiaries have given the Trustee joint written notice of their intention to terminate the
Trust Accounts (the “Notice of Intention”), and (ii) the Trustee has given the Grantors and the Beneficiaries
the written notice specified in paragraph (b) of this Section 11. The Notice of Intention shall specify the date on which
the notifying Party intends the Trust Accounts to terminate (the “Proposed Date”).

 

		(b)	Within three days following receipt by the Trustee of the Notice of Intention, the Trustee shall
give written notification (the “Termination Notice”) to the Beneficiaries and the Grantors of the date (the
 “Termination Date”) on which the Trust Accounts shall terminate. The Termination Date shall be (i) the Proposed
Date if the Proposed Date is at least 30 days but no more than 45 days subsequent to the date the Termination Notice is given;
(ii) 30 days subsequent to the date the Termination Notice is given, if the Proposed Date is fewer than 30 days subsequent to the
date the Termination Notice is given; or (iii) 45 days subsequent to the date the Termination Notice is given, if the Proposed
Date is more than 45 days subsequent to the date the Termination Notice is given.

 

		(c)	On the Termination Date, upon receipt of written approval of the Beneficiaries, the Trustee shall
transfer to the Grantors any Assets remaining in the Trust Accounts, at which time all liability of the Trustee with respect to
such Assets shall cease.

 

		12.	Definitions.

 

Except as the context shall otherwise require,
the following terms shall have the following meanings for all purposes of this Agreement (the definitions to be applicable to both
the singular and the plural forms of each term defined if both forms of such term are used in this Agreement):

 

    12 

     

    

 

The term “Affiliate”
with respect to any corporation shall mean a corporation which directly, or indirectly through one or more intermediaries, controls
or is controlled by, or is under common control with, such corporation.

 

The term “Beneficiary”
shall include any successor of the applicable Beneficiary by operation of law including, without limitation, any liquidator, rehabilitator,
receiver or conservator.

 

The term “control” (including
the related terms “controlled by” and “under common control with”) shall mean the ownership,
directly or indirectly, of more than 10% of the voting stock of a corporation.

 

The term “Eligible Securities”
shall mean securities issued in the United States (i) that comply with the Investment Guidelines and (ii) represent investments
of the types specified in subsections (1), (2), (3), (8) and (10) of Section 1404(a) of the New York Insurance Law; provided, however,
that no such securities shall have been issued by a Parent, a Subsidiary or an Affiliate of the Grantors or the Beneficiaries.

 

The term “Investment Guidelines”
shall mean the guidelines set out in EXHIBIT D to this Agreement.

 

The term “Market Value”
means, with respect to any Asset, the fair market value of such Asset, determined in accordance with Section 8(p).

 

The term “person” shall
mean and include an individual, a corporation, a partnership, an association, a trust, an unincorporated organization or a government
or political subdivision thereof.

 

The term “Parent” shall
mean an institution that, directly or indirectly, controls another institution.

 

The term “Subsidiary”
shall mean an institution controlled, directly or indirectly, by another institution.

 

		13.	Governing Law; Etc.

 

This Agreement shall be construed in accordance
with the substantive laws of the State of New York, without regard to conflicts of laws principles thereof. Each Party hereby waives
any and all rights to trial by jury in any legal proceeding arising out of or relating to this Agreement. Each Party consents to
the jurisdiction of any state or federal court situated in New York City, New York in connection with any dispute arising hereunder.
Each Party hereby irrevocably waives, to the fullest extent permitted by applicable law, any objection which it may now or hereafter
have to the laying of venue of any such proceeding brought in such a court and any claim that such proceeding brought in such a
court has been brought in an inconvenient forum. The establishment and maintenance of the Trust Accounts, and all interests, duties
and obligations with respect thereto, shall be governed by the laws of the State of New York.

 

Each of the Parties hereby submits to the
personal jurisdiction of and each agrees that all proceedings relating hereto shall be brought in courts located within the City
and State of New York or elsewhere as the Trustee may select.

 

    13 

     

    

 

		14.	Successors and Assigns.

 

This Agreement shall extend to and
shall be binding upon the Parties and their respective successors and assignees; provided, that no Party may assign
this Agreement or any of its rights or obligations hereunder without the consent of the other Parties, except as expressly
permitted by Section 10 of this Agreement. Notwithstanding the foregoing, this Agreement shall inure to the benefit of,
and bind those who, by operation of law, become successors to any of the Parties, including, without limitation, any
liquidator, rehabilitator, receiver or conservator and any successor merged or consolidated entity, and provided that,
in the case of the Trustee, the successor trustee is eligible to be the trustee under the terms hereof, and in the case of
the Grantors and Beneficiaries, the Parties have provided the Trustee with prior written notice of such assignment and
subject to the Trustee’s satisfactory completion of CIP on such successor.

 

		15.	Severability.

 

In the event that any provision of this
Agreement shall be declared invalid or unenforceable by any regulatory body or court having jurisdiction, such invalidity or unenforceability
shall not affect the validity or enforceability of the remaining portions of this Agreement.

 

		16.	Entire Agreement.

 

This Agreement constitutes the entire agreement
among the Parties, and there are no understandings or agreements, conditions or qualifications relative to this Agreement which
are not fully expressed in this Agreement.

 

		17.	Amendments.

 

This Agreement may be modified or otherwise
amended, and the observance of any term of this Agreement may be waived, if such modification, amendment or waiver is in writing
and signed by the Parties.

 

		18.	Notices, etc.

 

Unless otherwise provided in this Agreement,
all notices, directions, requests, demands, acknowledgments and other communications required or permitted to be given or made
under the terms hereof shall be in writing and shall be deemed to have been duly given or made (a)(i) when delivered personally,
(ii) when made or given by prepaid telex, telegraph, telecopier, facsimile or electronic transmission, or (iii) in the case of
mail delivery, upon the expiration of three days after any such notice, direction, request, demand, acknowledgment or other communication
shall have been deposited in the United States mail for transmission by first class mail, postage prepaid, or upon receipt thereof,
whichever shall first occur and (b) when addressed as follows:

 

If to the Grantors:

 

Darag Bermuda, Ltd.

Attention: General Counsel

The Maxwell Roberts Building, 5th
Fl

One Church Street

Hamilton HM11

Bermuda

Phone: 1-441-542-3905

Email: Daniel.Linden@sobcdarag.com

 

    14 

     

    

 

If to any Beneficiaries:

 

American Hallmark Insurance Company of Texas

5420 Lyndon B. Johnson Freeway, Suite 1100

Dallas, TX 75240-2345

USA

Attention: Christopher J. Kenney

Phone: 1-817-348-1890

Email: ckenney@hallmarkgrp.com

 

If to the Trustee:

 

The Bank of New York Mellon

240 Greenwich Street

Mailstop: 101-0700

New York, New York 10286

Attention: Insurance Trust Group

Facsimile: (732) 667-9536

Email: angelita.pena@bnymellon.com

 

Each Party may from time to time designate
a different address for notices, directions, requests, demands, acknowledgments and other communications by giving written notice
of such change to the other Parties. All notices, directions, requests, demands, acknowledgments and other communications relating
to the a Beneficiary's approval of the Grantors' authorization to substitute the Assets and to the termination of any Trust Accounts
shall be in writing and may be made or given by prepaid telex, telegraph, telecopier, facsimile or electronic transmission.

 

		19.	Headings.

 

The headings of the Sections and the Table
of Contents have been inserted for convenience of reference only and shall not be deemed to constitute a part of this Agreement.

 

		20.	Counterparts.

 

This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall constitute an original, but such counterparts together shall
constitute but one and the same Agreement.

 

    15 

     

    

 

		21.	USA Patriot Act.

 

Each of the Grantors and the
Beneficiaries hereby acknowledges that the Trustee is subject to federal laws, including the Customer Identification Program
(“CIP”) requirements under the USA PATRIOT Act and its implementing regulations, pursuant to which the
Trustee must obtain, verify and record information that allows the Trustee to identify the Grantors and Beneficiaries.
Accordingly, prior to opening the Trust Accounts hereunder, the Trustee will ask the Grantors and Beneficiaries to provide
certain information including, but not limited to, the Grantors’ and Beneficiaries’ names, physical addresses,
tax identification numbers and other information that will help the Trustee to identify and verify the Grantors’ and
Beneficiaries’ identity such as organizational documents, certificates of good standing, licenses to do business, or
other pertinent identifying information. Each of the Grantors and Beneficiaries agrees that the Trustee cannot open the Trust
Accounts hereunder unless and until the Trustee verifies any Grantor’s and Beneficiary’s respective identity in
accordance with the Trustee’s CIP.

 

		22.	Required Disclosure.

 

The Trustee is authorized to supply any
information regarding the Trust Accounts and related Assets as required by any law, regulation or rule now or hereafter in effect.
Each of the Grantors and the Beneficiaries agrees to supply the Trustee with any required information if it is not otherwise reasonably
available to the Trustee.

 

		23.	Representations.

 

Each Party represents and warrants to the
others that it has full authority to enter into this Agreement upon the terms and conditions hereof and that the individual executing
this Agreement on its behalf has the requisite authority to bind such Party to this Agreement, and that the Agreement constitutes
a binding obligation of such Party enforceable in accordance with its terms.

 

		24.	Successors and Assigns of Trustee.

 

Any corporation or other company into which
the Trustee may be merged or converted or with which it may be consolidated, or any corporation or other company resulting from
any merger, conversion or consolidation to which the Trustee shall be a party, or any corporation or other company succeeding to
the business of the Trustee shall be the successor of the Trustee hereunder without the execution or filing of any paper with any
Party or any further act on the part of any of the Parties, except where an instrument of transfer or assignment is required by
law to effect such succession, anything herein to the contrary notwithstanding.

 

		25.	Shareholders Communications Act, Etc.

 

With respect to securities issued in the
United States, the Shareholders Communications Act of 1985 (the “Act”) requires the Trustee to disclose to
the issuers, upon their request, the name, address and securities position of the Grantors who are (a) the “beneficial owners”
(as defined in the Act) of the issuer’s securities, if the beneficial owner does not object to such disclosure, or (b) acting
as a “respondent bank” (as defined in the Act) with respect to the securities. (Under the Act, “respondent banks”
do not have the option of objecting to such disclosure upon the issuers’ request.) The Act defines a “beneficial owner”
as any person who has, or shares, the power to vote a security (pursuant to an agreement or otherwise), or who directs the voting
of a security. The Act defines a “respondent bank” as any bank, association or other entity that exercises fiduciary
powers which holds securities on behalf of beneficial owners and deposits such securities for safekeeping with a bank, such as
the Trustee. Under the Act, a Grantor is either the “beneficial owner” or a “respondent bank.” 

 

    16 

     

    

 

[ ] Each Grantor is the “beneficial
owner,” as defined in the Act, of the securities to be held by Trustee hereunder.

 

[ ] Neither Grantor is the beneficial owner
of the securities to be held by Trustee, but each Grantor is acting as a “respondent bank,” as defined in the Act,
with respect to the securities to be held by Trustee hereunder.

 

IF NO BOX IS CHECKED, THE TRUSTEE SHALL
ASSUME THAT THE GRANTORS ARE THE BENEFICIAL OWNERS OF THE SECURITIES.

 

For beneficial owners of the securities only:

[ ] Grantors object

[ ] Grantors do not object to the disclosure of their names, addresses and securities position to any issuer which requests such
information pursuant to the Act for the specific purpose of direct communications between such issuer and Grantors.

 

IF NO BOX IS CHECKED, THE TRUSTEE SHALL
RELEASE SUCH INFORMATION UNTIL IT RECEIVES A CONTRARY WRITTEN INSTRUCTION FROM THE GRANTORS.

 

With respect to securities issued outside
of the United States, information shall be released to issuers only if required by law or regulation of the particular country
in which the securities are located.

 

The Grantors agree to disseminate in a
timely manner any proxies or requests for voting instructions, other proxy soliciting material, information statements, and/or
annual reports that it receives to any other beneficial owners.

 

		26.	Information Sharing.

 

The Bank of New York Mellon
Corporation is a global financial organization that operates in and provides services and products to clients through its
Affiliates and Subsidiaries located in multiple jurisdictions (the “BNY Mellon Group”).  The BNY
Mellon Group may (i) centralize in one or more Affiliates and Subsidiaries certain activities (the “Centralized
Functions”), including audit, accounting, administration, risk management, legal, compliance, sales, product
communication, relationship management, and the compilation and analysis of information and data regarding the Grantors and
Beneficiaries (which, for purposes of this provision, includes the name and business contact information for the
Grantors’ and Beneficiaries’ employees and representatives) and the accounts established pursuant to this
Agreement (“Grantors and Beneficiaries Information”) and (ii) use third party service providers to store,
maintain and process Grantors and Beneficiaries Information (“Outsourced Functions”). 
Notwithstanding anything to the contrary contained elsewhere in this Agreement and solely in connection with the Centralized
Functions and/or Outsourced Functions, the Grantors and Beneficiaries consent to the disclosure of, and authorize the BNY
Mellon Group to disclose, Grantors and Beneficiaries Information to (i) other members of the BNY Mellon Group (and their
respective officers, directors and employees) and (ii) third-party service providers (but solely in connection with
Outsourced Functions) who are required to maintain the confidentiality of Grantors and Beneficiaries Information.  In
addition, the BNY Mellon Group may aggregate Grantors and Beneficiaries Information with other data collected and/or
calculated by the BNY Mellon Group, and the BNY Mellon Group will own all such aggregated data, provided that the BNY
Mellon Group shall not distribute the aggregated data in a format that identifies Grantors and Beneficiaries Information with
the Grantors and Beneficiaries specifically.  The Grantors and Beneficiaries represent that the Grantors and
Beneficiaries (respectively) are authorized to consent to the foregoing.  The Grantors and Beneficiaries also consent to
the disclosure of Grantors and Beneficiaries Information to governmental and regulatory authorities in jurisdictions where
the BNY Mellon Group operates and otherwise as required by law.

 

    17 

     

    

 

		27.	Agency Agreement.

 

American Hallmark Insurance Company of
Texas shall be deemed the agent of the other persons comprising the Beneficiaries hereunder, including for purposes of sending
or receiving notices required by the terms and conditions of this Agreement and for purposes of remitting or receiving any monies
due any Party.

 

		28.	Specific Performance.

 

Each of the Parties acknowledges and agrees
that the other Parties would be irreparably damaged in the event that any of the provisions of this Agreement were not fulfilled,
performed or complied with in accordance with their specific terms or were otherwise breached or violated. Accordingly, each of
the Parties agrees that, in such circumstances, the other Parties shall be entitled to an injunction or injunctions to prevent
breaches or violations of, the provisions of this Agreement by the other Parties and to enforce specifically this Agreement and
the terms and provisions hereof in any action instituted in accordance with Section 29 of this Agreement, in addition to any
other remedy to which such Party may be entitled, at law or in equity. The Parties further agree that (i) by seeking the remedies
provided for in this Section 28, a Party shall not in any respect waive its right to seek any other form of relief that may
be available to a Party under this Agreement, including monetary damages in the event that this Agreement has been terminated or
in the event that the remedies provided for in this Section 28 are not available or otherwise are not granted and (ii) nothing
contained in this Section 288 shall require any Party to institute any action for (or limit any Party’s right to institute
any action for) specific performance under this Section 28 before exercising any termination right under Section 11 of
this Agreement nor shall the commencement of any action pursuant to this Section 28 or anything contained in this Section 28
restrict or limit any Party’s right to terminate this Agreement in accordance with the terms of Section 11 of this Agreement
or pursue any other remedies under this Agreement that may be available then or thereafter.

 

    18 

     

    

 

		29.	Arbitration; Waiver of Trial by Jury.

 

Unless otherwise provided in this Agreement,
any dispute between any Grantor, on the one hand, and any Beneficiary, on the other hand, arising out of this Agreement and not
involving the Trustee shall be resolved in accordance with the Arbitration Article of the Reinsurance Agreement.

 

EACH PARTY HERETO HEREBY WAIVES TRIAL
BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE)
IN ANY WAY ARISING OUT OF OR RELATED TO THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER, THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE PARTIES TO ENTER INTO THIS AGREEMENT.

 

    19 

     

    

 

IN WITNESS WHEREOF,
the Parties have caused this Agreement to be executed and delivered by their respective officers or other representatives thereunto
duly authorized as of the date first above written.

 

	 	DARAG BERMUDA LTD.
	 	as a Grantor
	 	 
	 	By:	 
	 	 	     Name:
	 	 	     Title:
	 	 
	 	DARAG INSURANCE (GUERNSEY) LIMITED,
	 	as a Grantor
	 	 
	 	By:	 
	 	 	     Name:
	 	 	     Title:
	 	 
	 	AMERICAN HALLMARK
    INSURANCE COMPANY OF TEXAS,
	 	as a Beneficiary
	 	 
	 	By:	 
	 	 	     Name:
	 	 	     Title:
	 	 
	 	HALLMARK SPECIALTY
    INSURANCE COMPANY,
	 	as a Beneficiary
	 	 
	 	By:	 
	 	 	     Name:
	 	 	     Title:
	 	 
	 	HALLMARK INSURANCE
    COMPANY,
	 	as a Beneficiary
	 	 
	 	By:	 
	 	 	     Name:
	 	 	     Title:

 

    20 

     

    

 

	 	HALLMARK
    NATIONAL INSURANCE COMPANY,
	 	as a Beneficiary
	 	 
	 	By:	 
	 	 	     Name:
	 	 	     Title:
	 	 
	 	THE BANK OF NEW YORK
    MELLON,
	 	as Trustee
	 	 
	 	By:	 
	 	 	     Name:
	 	 	     Title:

 

    21 

     

    

 

EXHIBIT A

 

List of Assets Deposited to the Trust Accounts

 

Cash in an amount equal to $[_____________________].

 

    

     

    

 

EXHIBIT B

 

Form of Withdrawal Notice

 

[DATE]

 

The Bank of New York Mellon

240 Greenwich Street

Mailstop: 101-0850

New York, New York 10286

Attention: Insurance Trust

 

 

		Re:	Withdrawal Notice re: Trust Agreement, dated as of [●], 2020, by and among (i) DARAG Bermuda Ltd. and DARAG Insurance
Guernsey Ltd., as Grantors, (ii) American Hallmark Insurance Company of Texas, Hallmark Specialty Insurance Company, Hallmark Insurance
Company and Hallmark National Insurance Company, each, as a Beneficiary and (iii) The Bank of New York Mellon, as Trustee (as
amended, supplemented or otherwise modified, the “Trust Agreement”).

 

We refer to Section 3(a) of the Trust Agreement, and hereby
give you notice of our election to withdraw the following Assets from the following Trust Account:

 

[SPECIFY ASSETS AND TRUST ACCOUNT]

 

Please deliver such assets to or for the account of the person
or entity named below at the address specified below:

 

[SPECIFY DESIGNEE AND ADDRESS]

 

Very truly yours,

 

[BENEFICIARY]

 

	By:	 	 
	 	Name:	 
	 	Title:	 

 

    

     

    

 

EXHIBIT C

 

Form of Incumbency and Specimen Signature

 

Authorized Officers of DARAG Bermuda Ltd,
as a Grantor

 

	Name	 	Signature	 	Phone
    Number
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

Authorized Officers of DARAG Insurance Guernsey
Ltd., as a Grantor

 

	Name	 	Signature	 	 Phone Number
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

Authorized Officers of American Hallmark
Insurance Company of Texas, as a Beneficiary

 

 

 

	Name	 	Signature	 	Phone Number
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

    

     

    

 

Authorized Officers of Hallmark Specialty
Insurance Company, as a Beneficiary

 

 

	Name	 	Signature	 	Phone Number
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

Authorized Officers of Hallmark Insurance
Company, as a Beneficiary

 

	Name	 	Signature	 	Phone Number
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

Authorized Officers of Hallmark National
Insurance Company, as a Beneficiary

 

 

	Name	 	Signature	 	Phone Number
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	 	 

 

    

     

    

 

EXHIBIT D

 

Investment Guidelines 

 

	Investment
    Sectors
	Short-term
    / Cash	-    
                                         Cash (United States legal tender) and SEC registered money market funds that are rated
                                         AAA

        -    
        Certificates of deposit (issued by a United States bank and payable in United States legal tender)

	US
    Government	U.S. Government for the
        purpose of this requirement are the following:

        -    
        Securities directly issued by the US Treasury.

        -    
        Securities 100% defeased with US Treasuries.

        -    
        Securities with the full faith and credit of the US Treasury.

        -    
        Securities issued by U.S. Government Sponsored Enterprises (“GSE”).

        -    
        Residential and Commercial Mortgage Backed Securities (“MBS”) guaranteed by U.S. Government agencies and GSEs.

        -    
        All securities must have the same rating as the US Treasury.

	Credit
    (Corporates, Municipals)	Publicly
    issued corporate bonds, debentures, notes or other forms of debt issued by US corporations. Taxable and tax-exempt US municipal
    issues are permitted investments. 
	Prohibited	-    
        Equities

        -    
        Techniques such as short selling and use of leverage are prohibited.

        -    
        Derivatives (options, futures, etc.) are not to be employed including embedded derivatives but excluding callable bonds.

        -    
        Subordinated securities are not eligible collateral.

        -    
        Collateralized Debt Obligations are not eligible collateral.

        -    
        Derivatives are not eligible collateral.

        -    
        Hedging is not permitted.

        -    
        Securities lending is not permitted.

        -    
        Securities issued by any affiliate of either the Grantors or the Beneficiaries hereunder.

         

	Restrictions
    and Conventions
	Sector
    Limits	-    
        US Government                                        20%-100%

        -    
        US Credit *                                               10%-75%

        -    
        US Securitized *
                                             
        0%-40%

         

        -    At
        least 15% must be in US Governments.

	Credit
    Quality	-    All
securities must be rated by Moody’s, S&P, or Fitch. All securities must have a minimum rating of at least: A3 by Moody’s,
A- by S&P and A- by Fitch at time of purchase.

        -   
        In the case of split ratings, the average rating will apply with any half notch rating that results being rounded up to
        the next rating.

	Quality
    Limits	-   
        Quality                                                       Maximum
                  per Issuer

        -   
        US Government                                                   100%
                100.0%

        -   
        AAA                                                                      85%
                            3.0%

        -   
        AA                                                                        85%
                             3.0%
        

        -   
        A                                                                           65%
                             2.5%

         

        -   
        * The per Issuer limits apply to Short-Term, US Credit and US Securitized.

        -   
        For maximum limit testing, the below A - rated exposures need to be included in the A bucket.

        -   
        These quality limits and per Issuer limits are measured quarterly based on current market values.

	Rating
    Downgrade	-   
In case a security is downgraded so that it breaches a limit or is rated below A3/ A-, the Manager is not necessarily required
to dispose of all or part of the

                                                                                                                                                                               investment immediately.

        -   
The aggregate amount of securities downgraded to BBB is not allowed to exceed 5%. Sub-investment grade securities must be sold. These
rating limits are

              measured daily.

	Base
    Currency	-   All
    assets must be denominated in US Dollars.
	Issuer
    limitations	-   
        Issuer limits are based on the collateral pool for securitized instruments.

        -   
For issuers with multiple ratings on their debt issuance, established limits will apply for each ratings bucket with the cumulative
total not to exceed the limit of the

             highest rated level of debt.

	Asset
    Limitations	-   No
    single invested asset amount shall exceed $100,000,000.00

 

 

    

     

    

 

SCHEDULE I

 

List of Trust Accounts

[●]

 

    

     

    

 

EXHIBIT B

 

Form of Services Agreement

 

(See attached)

 

    Hallmark Financial
Loss Portfolio Transfer Contract

     

    

 

SERVICES
AGREEMENT

 

by
and between

 

American
Hallmark Insurance Company of Texas

 

Hallmark
Specialty Insurance Company

 

Hallmark
Insurance Company

 

Hallmark
National Insurance Company

 

Hallmark
County Mutual Insurance Company

 

and

 

DARAG
BERMUDA LTD.

 

     

     

    

 

Table
of Contents

 

 

	 	Page
	ARTICLE
    I - BACKGROUND	1
	ARTICLE
    II - DEFINITIONS	1
	ARTICLE
    III - SERVICES	4
	ARTICLE
    IV - COMPANY OBLIGATIONS – TRANSITION SERVICES	12
	ARTICLE
    V - Third-Party Reinsurance	14
	ARTICLE
    VI - SERVICE PROVIDER’S OBLIGATIONS	15
	ARTICLE
    VII - COMPLIANCE WITH LAWS	15
	ARTICLE
    VIII - TERM	17
	ARTICLE
    IX - TERMINATION	18
	ARTICLE
    X - WARRANTIES	19
	ARTICLE
    XI - RECORD KEEPING, AUDIT AND INSPECTION	19
	ARTICLE
    XII - COMPLAINTS	22
	ARTICLE
    XIII - NOTICES	22
	ARTICLE
    XIV - AMENDMENTS	22
	ARTICLE
    XV - COUNTERPARTS	22
	ARTICLE
    XVI - NO ADDITIONAL CONSIDERATION	23
	ARTICLE
    XVII - ASSIGNMENT	23

 

    - i -

     

    

 

SERVICES
AGREEMENT

 

(hereinafter
referred to as the “Agreement”)

 

by
and between

 

AMERICAN
HALLMARK INSURANCE COMPANY OF TEXAS, HALLMARK

SPECIALTY INSURANCE COMPANY, HALLMARK INSURANCE COMPANY, 

HALLMARK NATIONAL INSURANCE COMPANY, Hallmark County Mutual

Insurance Company

 

(hereinafter
collectively referred to as the “Company”)

 

and

 

DARAG
BERMUDA LTD.

 

(hereinafter
referred to as the “Service Provider”)

 

(each
a “Party” and collectively the “Parties”)

 

ARTICLE
I - BACKGROUND

 

		A.	The
                                         Company, the Service Provider and DARAG Insurance (Guernsey) Limited (“DARAG Guernsey”)
                                         have entered into a Loss Portfolio Transfer Reinsurance Contract (the “Loss Portfolio
                                         Transfer Agreement”), whereby the Company shall cede to the Service Provider and
                                         DARAG Guernsey, and the Service Provider and DARAG Guernsey shall assume from the Company,
                                         the Ultimate Net Loss of the Company pursuant to the terms of the Loss Portfolio Transfer
                                         Agreement (the “Transaction”).

 

		B.	The
                                         Service Provider shall provide the Claims Handling and Administrative Services to the
                                         Company and shall have authority and responsibility for the handling and administration
                                         of Claims applicable to the Subject Business, including Reinsurer ECO/XPL in accordance
                                         with the terms of this Agreement from the Closing Date or the Transition End Date, as
                                         applicable.

 

ARTICLE
II - DEFINITIONS

 

A.            
In this Agreement:

 

“Affiliate”
means, in relation to any Party, any person or entity under the control of or under common control with the Party.

 

“Aggregate
Limit” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Applicable
Law(s)” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Business
Day” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

     

     

    

 

“Cause”
shall be defined as a material breach of any provision of this Agreement.

 

“Claims”
means all claims reported under the Reinsured Policies, with the exception of the claims relating to any Retained ECO/XPL.

 

“Claims
Handling and Administrative Services” has the meaning given to it in the Services Article.

 

“Closing
Date” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Company
Litigation” means (i) any Litigation in which the Company is named as a party and (ii) any Litigation relating to the claims
relating to the Retained ECO/XPL.

 

“Complaints”
has the meaning given to it in the Complaints Article.

 

“Consents”
means all approvals, authorizations, licenses, and permissions required from any person, organization or government or similar
body including any Regulatory Authority.

 

“Deliverables”
means the items (including reports, user guides, operating procedures and other documents) which are produced and/or delivered
to the Service Provider as outputs of the Claims Handling and Administrative Services, other than trade secrets of a Party.

 

“Extra
Contractual Obligations/Loss in Excess of Policy Limits” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Legal
and Regulatory Department of the Company” is Arizona Department of Insurance, Oklahoma Insurance Department and Texas Department
of Insurance.

 

“Legal
and Regulatory Department of the Service Provider” is the Bermuda Monetary Authority.

 

“Litigation”
means any legal action or proceeding relating to the Subject Business, including but not limited to third-party lawsuits against
insureds, arbitrations, declaratory judgments, and Extra Contractual Obligations/Loss in Excess of Policy Limits arising out of
or related to the Subject Business. Litigation does not include any Complaints, inquiries or proceedings by Regulatory Authorities
relating solely to the Service Provider. For the avoidance of doubt, Litigation includes Company Litigation.

 

“Loss
Adjustment Expense” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Loss
Escrow Accounts” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Loss
Portfolio Transfer Agreement” has the meaning given to it in paragraph A of the Background Article.

 

    Page 2

     

    

 

“Minimum
Funding Requirement” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Notice”
has the meaning given to it in the Notices Article.

 

“PII”
means personally identifiable information in any format (paper, electronic or stored on media etc.) that the Service Provider
becomes aware of in relation to this Agreement.

 

“Record
Retention Period” shall have the meaning set out in the Record Keeping, Audit and Inspection Article.

 

“Regulatory
Authority” means any person, body, authority, government, local government, regulatory agency with regulatory enforcement,
administrative and/or criminal powers in any jurisdiction.

 

“Reinsured
Policies” means the Company’s policies, contracts, agreements and binders of insurance or reinsurance (including any
endorsements, modifications or amendments thereto) on the Subject Business.

 

“Reinsurer
ECO/XPL” shall have the meaning set out in the Loss Portfolio Transfer Agreement.

 

“Retained
ECO/XPL” shall have the meaning set out in the Loss Portfolio Transfer Agreement.

 

“Serious
Injury” means a fatality, amputation, spinal cord injury with paralysis (resulting in partial or total paralysis), permanent
loss of upper or lower extremities, multiple fractures, brain injury, serious burns, a sexual harassment or molestation claim,
a class action suit, serious sensory impairment or loss of sight, serious disfigurement or scarring, Extra Contractual Obligations
or Loss in Excess of Policy Limits, major organ injury or massive internal organ damage.

 

“Subject
Business Information and Systems Data” means all data (including personal data), information, financial transaction records,
text, statistics, analysis and other materials embodied in any form relating to the Subject Business and which may be supplied
by the Company and/or which the Company (and/or any of its subcontractors) generates, collects, processes, stores or transmits
in connection with the Subject Business.

 

“Subject
Business” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Service
Records” shall have the meaning set out in paragraph A of the Record Keeping, Audit and Inspection Article.

 

“Third
Party” means any person or entity which is not a Party to this Agreement.

 

“Third-Party
Reinsurance” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

    Page 3

     

    

 

“Transaction
Documents” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Transition
End Date” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Transition
Services” has the meaning given to it in the Company Obligations – Transition Services Article.

 

“Unallocated
Loss Adjustment Expense” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

“Ultimate
Net Loss” has the meaning given to it in the Loss Portfolio Transfer Agreement.

 

		B.	Capitalized
                                         terms used in this Agreement and not otherwise defined herein will have the meanings
                                         assigned to such terms in the Transaction Documents.

 

ARTICLE
III - SERVICES

 

A.           
1.                  The Company hereby
appoints the Service Provider, and the Service Provider hereby accepts appointment, to provide as an independent contractor of
the Company, from and after the Transition End Date, all of the administrative and other services necessary or appropriate in
connection with the administration of the Subject Business, including those services set forth in this Services Article (the “Claims
Handling and Administrative Services”), all on the terms set forth in this Agreement. Except as provided in this Agreement,
the Claims Handling and Administrative Services shall include, but not be limited to the defense, adjustment, settlement and payment
of all Claims, the recovery of all salvage and subrogation for any liabilities incurred under the Reinsured Policies, the administration
of Litigation and Reinsurer ECO/XPL applicable to the Subject Business, as more fully described below. Notwithstanding any other
provision of this Agreement to the contrary, the Company shall have the right to direct the Service Provider in connection with
the Claims Handling and Administrative Services to perform any action necessary to comply with Applicable Law, or to cease performing
any action that constitutes a violation of Applicable Law.

 

2.                 
In order to assist the Service Provider in the performance of the Claims Handling and Administrative Services hereunder,
the Company hereby appoints the Service Provider, with effect from the Transition End Date, as its attorney-in-fact with respect
to the rights, duties, privileges and obligations of the Company in and to the Subject Business, with full power and authority
to act in the name, place and stead of the Company with respect thereto, including the power, without reservation, to service
the Subject Business, to adjust, to defend, to settle and to pay Claims, and to take such other and further action as may be necessary
or desirable to effect the transactions contemplated by this Agreement, but in all cases only to the extent of the rights and
authority granted to the Service Provider pursuant to this Agreement and in accordance with the terms hereof.

 

    Page 4

     

    

 

3.                 
The Service Provider may employ one or more third-party administrators or subcontractors for the performance of any Claims
Handling and Administrative Services (in each case, a “Subcontractor”) at the Service Provider’s sole expense
and subject to the Company’s prior written approval (such approval not to be unreasonably withheld, conditioned or delayed).
In connection with such approval, the Company shall have the right to review and request reasonable changes to any agreement to
be entered into between the Service Provider and a proposed Subcontractor, and the Service Provider shall not amend any such agreement
in a manner that materially affects the Subcontractor’s performance of the Claims Handling and Administrative Services without
the Company’s prior written approval. In addition, each Subcontractor shall be duly licensed as a claims adjustor in the
United States to the extent required under Applicable Law so as to permit the performances of the Claims Handling and Administrative
Services in compliance with Applicable Law. Notwithstanding the foregoing, no such subcontracting or third-party administration
arrangement shall relieve the Service Provider from any of its obligations or liabilities hereunder, and the Service Provider
shall remain responsible for all obligations or liabilities of each Subcontractor with regards to the provision of such service
or services as if provided by the Service Provider. The Service Provider shall supervise each Subcontractor to ensure its performance
of any Claims Handling and Administrative Services complies with the requirements of this Agreement.

 

4.                 
With respect to any Subcontractor, the Service Provider shall have entered into agreements with such Subcontractor or otherwise
require such Subcontractor to (i) provide any regular audit compliance reports (such as SOC2 reports), financial statements or
other documents or information in connection with the Subject Business upon the Company’s reasonable request, (ii) comply
with paragraph A of the Compliance with Laws Article and paragraph I of the Record Keeping, Audit and Inspection Article and (iii)
comply with the Service Standards.

 

5.                 
To the extent required by Applicable Law or as required for the efficient performance of the Claims Handling and Administrative
Services, the Service Provider agrees to send to policyholders of the Reinsured Policies a written notice prepared by the Service
Provider and in a form reasonably acceptable to the Company to the effect that the Service Provider has been appointed by the
Company to provide Claims Handling and Administrative Services. The Service Provider shall provide such notice at a time and in
a manner reasonably acceptable to the Company and the Service Provider and in all events in accordance with Applicable Law.

 

		B.	The
                                         Service Provider shall provide the following Claims Handling and Administrative Services
                                         after the Transition End Date (unless otherwise specified below) until the termination
                                         or expiration of this Agreement:

 

		1.	Administration
                                         and settlement of Claims. These rights include, without limitation, the power to acknowledge,
                                         consider, review, investigate, deny, defend, settle and pay Claims, determine coverage,
                                         commute policies, set and adjust reserves and to take such other actions as may be necessary
                                         or desirable to manage each Claim and fulfill the Service Provider’s other obligations
                                         with respect to the Subject Business, including payment of all Claims and associated
                                         expenses that are reinsured by the Service Provider using funds from the Loss Escrow
                                         Accounts pursuant to the Loss Portfolio Transfer Agreement on a gross basis (i.e., without
                                         deduction of any amounts payable under the Third-Party Reinsurance). The Company will
                                         reimburse the Service Provider for Third-Party Reinsurance in accordance with the Loss
                                         Portfolio Transfer Agreement. The Company reserves the right to monitor, oversee and
                                         direct the Service Provider’s actions under this Services Article as set forth
                                         in more detail below.

 

    Page 5

     

    

 

The
Service Provider shall not take any substantive action or decision in respect of any Claim or recovery of any payments where the
Service Provider or any applicable Subcontractor knows that any such Claim or recovery:

 

		a.	involves
                                         any media or political interest, or public relations or reputation issues; or

 

		b.	involves
                                         a party instigating a lawsuit against one or more of the entities comprising the Company;

 

in
each case, without first obtaining instructions from the Company, which shall provide written instructions within seven (7) Business
Days of the Service Provider’s request, and the Service Provider will act in accordance with those instructions.

 

Furthermore,
Service Provider shall not take any legal action in relation to the involvement of brokers or other intermediaries in the Reinsured
Policies, without first obtaining prior written consent from the Company (such consent not to be unreasonably withheld).

 

Notwithstanding
anything in this Agreement to the contrary, the Company shall have the right to assume the adjustment and management of any Claim
if it reasonably determines that the Service Provider fails to administer such Claim (including the supervision of the applicable
Subcontractor) in any material respect in accordance with the Service Standards and notifies the Service Provider in writing of
such failure, and the Services Provider does not cure such failure within twenty (20) Business Days of receiving written notice
thereof from the Company. For the avoidance of doubt, the Service Provider shall nevertheless remain responsible for the payment
of such Claim as provided in this paragraph B.

 

2.             
Subject to paragraph 1 above, the Service Provider shall be responsible for pursuing all insured retentions, deductibles
and claims for salvage or subrogation in connection with the Subject Business beginning on the Closing Date. The Company hereby
assigns to the Service Provider the right to collect any retention or deductible and to dispose of any salvage received as a result
of any loss settlement hereunder, and to enforce any right of the Company against any person or organization for damages or equitable
relief for any loss under any of the Subject Business, employing legal counsel as and when appropriate. The Company agrees to
furnish the Service Provider, on request, any and all legal instruments reasonably necessary to recover any retention or deductible
and to implement the foregoing salvage and subrogation. Notwithstanding the foregoing, the Company or a Third- Party Reinsurer,
to the extent permitted or required under the relevant Third-Party Reinsurance agreement, at its expense, shall have the right
to pursue any insured retentions, deductibles and claims for salvage or subrogation in connection with the Subject Business after
the Closing Date upon prior written notice to the Service Provider, if the Service Provider elects not to undertake such actions.

 

    Page 6

     

    

 

		3.	The
                                         Service Provider shall provide any information reasonably required by the Company in
                                         order for the Company to meet its legal, statutory or auditing obligations and allowing
                                         the Company reasonable access to claim files in the possession of or maintained by the
                                         Service Provider or its Subcontractors in connection with the Subject Business.

 

Upon
the reasonable request of the Company, the Service Provider shall timely prepare such reports and summaries, including statistical
summaries, as are reasonably necessary to satisfy any requirements imposed by a Regulatory Authority upon the Company with respect
to the Reinsured Policies. In addition, the Service Provider, upon the reasonable request of the Company, shall promptly provide
to the Company copies of all existing records relating to the Reinsured Policies (including, with respect to records maintained
in machine readable form, hard copies) that are necessary for the Company to satisfy such requirements. Among other responsibilities:

 

		a.	The
                                         Service Provider shall promptly prepare and furnish to Regulatory Authorities such reports
                                         and related summaries, certificates of compliance and other reports required by a Regulatory
                                         Authority with respect to the Reinsured Policies.

 

		b.	The
                                         Service Provider shall assist and cooperate with the Company in taking such actions as
                                         are commercially reasonable and appropriate in connection with any and all market conduct
                                         or other Regulatory Authority examinations relating to the Reinsured Policies.

 

		4.	Subject
                                         to the Complaints Article herein, the Service Provider shall promptly notify the Company
                                         of any Complaints, inquiries or proceedings by Regulatory Authorities (“Regulatory
                                         Proceedings”) relating to the Subject Business. Similarly, the Company shall promptly
                                         notify the Service Provider of any Regulatory Proceedings relating to the Subject Business.
                                         The Service Provider shall respond to such Regulatory Proceedings within the requested
                                         time frame for response or if no such time frame is provided, within the time frame as
                                         allowed by Applicable Law and shall provide promptly a copy of proposed response to the
                                         Legal and Regulatory Department of the Company for the Company’s prior review and
                                         comment; provided, the Company shall have at least two (2) Business Days to review such
                                         proposed response. The Company shall provide its comments to the Service Provider, if
                                         any, promptly and no later than two (2) Business Days before the response is due to the
                                         relevant Regulatory Authority. If the Company does not provide any comments pursuant
                                         to the two immediately preceding sentences, the proposed response shall be deemed to
                                         be approved by the Company. The Service Provider agrees to promptly provide copies of
                                         the responses to any Regulatory Proceedings relating to the Subject Business actually
                                         submitted to the Legal and Regulatory Department of the Company. In addition, upon a
                                         written request from the Company, the Service Provider will provide any data on such
                                         Regulatory Proceedings that may be required for regulatory filings. The Service Provider
                                         further agrees to promptly provide information to the Company as reasonably requested
                                         by the Company, such as a report in a form mutually agreed by the Parties summarizing
                                         the nature of any Regulatory Proceedings relating to the Reinsured Policies, the alleged
                                         actions or omissions giving rise to such Regulatory Proceedings, inquiries or proceedings
                                         and copies of any files or other documents that the Company may reasonably request in
                                         connection with its review of these matters. Except as set forth in this Agreement, the
                                         Service Provider shall supervise and control the investigation, contest, defense and/or
                                         settlement of all Regulatory Proceedings relating to the Reinsured Policies at its own
                                         cost and expense, and in the name of the Company when necessary.

 

    Page 7

     

    

 

		5.	The
                                         Service Provider and the Company shall cooperate with each other with respect to the
                                         Company Litigation and any Regulatory Proceedings relating to the Subject Business. The
                                         Service Provider shall notify the Company promptly of any Company Litigation and any
                                         Litigation involving Serious Injury (“Substantial Litigation”), and in no
                                         event later than five (5) Business Days after receipt of notice thereof. Similarly, the
                                         Company shall notify the Service Provider promptly of any Company Litigation, and in
                                         no event later than five (5) Business Days after receipt of notice thereof. Subject to
                                         the Company’s right to assume and control the defense of any Company Litigation
                                         in accordance with the last two sentences of this Paragraph 5, the Service Provider shall
                                         control, investigate, contest, defend or settle, at its own cost and expense, including
                                         when necessary in the name of the Company, any Litigation. The Service Provider shall
                                         keep the Company reasonably informed of the progress of all Company Litigation it controls
                                         and any Substantial Litigation. With regard to Substantial Litigation and Company Litigation,
                                         at the Company’s request, the Service Provider shall provide a report summarizing
                                         the nature of such Substantial Litigation or Company Litigation, the alleged actions
                                         or omissions giving rise to such Substantial Litigation or Company Litigation and copies
                                         of any files or other documents or information that the Company may reasonably request
                                         in connection with its review of these matters. In no event shall the Service Provider
                                         settle or compromise any Company Litigation without the Company’s prior written
                                         consent unless (A) there is no finding or admission of any violation of Applicable Laws
                                         or any violation of the contractual rights of any person and no effect on any other claims
                                         that may be made against the Company, or (B) the sole relief provided is monetary damages
                                         that are paid in full by the Service Provider and a full and complete release is provided
                                         to the Service Provider.

 

Subject
to the Company’s right to assume and control the defense of any Company Litigation in accordance with the last two sentences
of this Paragraph 5, the Service Provider shall manage all aspects of any Litigation, including coverage litigation, relating
to Claims, which includes but is not limited to:

 

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		a.	Retention
                                         of, communication with and coordination with counsel to defend the insured or the Company
                                         where appropriate; and

 

		b.	Evaluation
                                         of Claims and coverage as needed, including as appropriate, performing factual investigation
                                         of Claims, instituting or defending coverage litigation.

 

Notwithstanding
anything in this Agreement to the contrary, the Company shall have the right to, at its own expense, participate fully in the
defense of any Litigation or Regulatory Proceeding with respect to the Reinsured Policies with counsel of its own choice. In addition,
with respect to any Company Litigation or Regulatory Proceeding, the Company shall have the right to assume and control the investigation,
contest and defense of such Company Litigation or Regulatory Proceeding (“Assumption of Control”) upon prior written
notice to the Service Provider.

 

In
the event of an Assumption of Control by the Company pursuant to the immediately preceding sentence, the Company shall:

 

		a.	have
                                         the right to choose counsel, with consent of the Service Provider (which consent is not
                                         to be unreasonably withheld, delayed or conditioned);

 

		b.	have
                                         the exclusive right to settle or compromise the applicable Company Litigation or Regulatory
                                         Proceeding in a manner that is consistent with how the Company, in the ordinary course
                                         of business, settles or compromises any legal action, proceedings or Regulatory Proceeding
                                         for which the Company is responsible; provided, the Service Provider shall have the right
                                         to consent (such consent not to be unreasonably withheld, delayed or conditioned) in
                                         writing any such settlement or compromise in excess of $2,000,000.00 (inclusive of defense
                                         and indemnification fees) with respect to a Company Litigation that involves Reinsurer
                                         ECO/XPL; provided, further, that upon request, the Service Provider shall have an opportunity
                                         to be associated with the Company, at the Service Provider’s expense, in the defense
                                         of any Company Litigation that involves Reinsurer ECO/XPL and is subject to Company’s
                                         Assumption of Control, and Parties will reasonably cooperate in preparing to prosecute
                                         or defend or in the prosecution or defense of such Company Litigation; and

 

		c.	keep
                                         the Service Provider reasonably informed with respect to the status of any litigation
                                         or proceeding subject to an Assumption of Control.

 

		6.	The
                                         Service Provider shall assume the reporting and accounting obligations set forth below:

 

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		a.	As
                                         soon as practicable after the end of each month, but no later than twenty (20) calendar
                                         days after each month from the Transition End Date until the termination or expiration
                                         of this Agreement, the Service Provider shall provide to the Company and their respective
                                         designated independent auditors such reports and summaries (and, upon reasonable request
                                         of the Company, detailed supporting records) related to the Reinsured Policies as may
                                         be reasonably required for use in connection with the preparation of such financial statements,
                                         tax returns and reports and to comply with the requirements of the Regulatory Authorities
                                         having jurisdiction over the Company. The Parties shall cooperate in good faith to establish
                                         the manner for the providing of such reports. The Service Provider shall provide such
                                         reports, summaries and records to the Company as soon as practicable but no later than
                                         twenty (20) days after the end of each calendar quarter from the Transition End Date
                                         until the termination or expiration of this Agreement. All such reports, summaries and
                                         records shall be accurate and complete in all material respects.

 

		b.	As
                                         soon as practicable, but not more than twenty (20) calendar days after the end of
                                         each month from the Transition End Date until the termination or expiration of this Agreement,
                                         the Service Provider shall provide to the Company (i) the claims bordereau, which contains
                                         information as specified in Article XI(A) (Reports and Remittances) of the Loss Portfolio
                                         Transfer Agreement and other information reasonably requested by the Company, in a form
                                         to be mutually agreed by the Parties and (ii) the report of aggregate Ultimate Net Loss,
                                         which contains information as specified in Article XI(A) (Reports and Remittances) of
                                         the Loss Portfolio Transfer Agreement.

 

		c.	The
                                         Service Provider shall promptly and timely provide notice to the Company and the Service
                                         Provider of any changes in the reserve methodology used by the Service Provider in calculating
                                         statutory reserves for the Reinsured Policies. The Service Provider shall notify the
                                         Company and deliver to the Company a claims summary report in the form attached hereto
                                         as Exhibit A (i) immediately if a Claim is reserved for an amount greater than
                                         $250,000.00 and advise the Company of any subsequent material developments pertaining
                                         thereto, and/or (ii) promptly if a Claim involves a Serious Injury and advise the Company
                                         of any subsequent material developments pertaining thereto

 

		d.	On
                                         and after the Transition End Date, the Service Provider shall deliver communications
                                         and Notices relating to the Subject Business to the Company, and any files and financial
                                         data on the Subject Business to the Company, as requested and agreed upon between the
                                         Parties, such agreement not to be unreasonably withheld.

 

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		C.	The
                                         Service Provider shall provide the Claims Handling and Administrative Services in accordance
                                         with the following standards (the “Service Standards”): (i) with care, skill,
                                         expertise, prudence and diligence that would be expected from experienced and qualified
                                         personnel performing such duties in like circumstances; (ii) in accordance with the terms
                                         of the Reinsured Policies, (iii) in accordance with the applicable terms of this Agreement,
                                         and (iv) in compliance with all Applicable Laws, including maintenance by the Service
                                         Provider, its designees or their respective designees, as applicable, of all licenses,
                                         authorizations, permits and qualifications from Regulatory Authorities necessary to perform
                                         the Claims Handling and Administrative Services required by this Agreement, and (v) to
                                         the extent consistent with clauses (i) through (iv) of this paragraph C, in accordance
                                         with applicable industry standards.

 

		D.	The
                                         Service Provider shall ensure that from the Transition End Date and thereafter during
                                         the term of this Agreement, it, along with all of its Affiliates, agents, Subcontractors
                                         and assignees, provides and maintains consents, permissions, rights, technology, sufficient
                                         expertise, trained personnel, systems, facilities and procedures (financial, legal, accounting,
                                         administrative or otherwise) and other resources as may be necessary or appropriate to
                                         enable it to fulfill its obligations under this Agreement.

 

		E.	Unless
                                         otherwise provided under this Agreement, the Service Provider shall not represent itself
                                         as the agent of the Company and shall not have any authority to give on behalf of the
                                         Company any representations, warranties or undertakings with regard to any matter, except
                                         as set out in this Agreement and/or the Loss Portfolio Transfer Agreement.

 

		F.	The
                                         Parties shall cooperate and use their reasonable efforts in order that the duties assumed
                                         by the Service Provider will be effectively, efficiently and promptly discharged. In
                                         furtherance of the foregoing, the Company shall deliver to the Service Provider such
                                         other documents and instruments as the Service Provider may reasonably request in respect
                                         of its obligations hereunder. Each Party shall, at all reasonable times under the circumstances,
                                         make available to the other Party properly authorized personnel for the purpose of consultation,
                                         deposition or investigations. If a requested witness is not an employee of the Company
                                         or its affiliates, the Company will provide the Service Provider with the last-known
                                         contact information regarding such witness.

 

		G.	In
                                         addition to information provided pursuant to this Services Article, the Record Keeping,
                                         Audit and Inspection Article, or other articles of the applicable Transaction Documents,
                                         upon request and reasonable Notice from the Company, the Service Provider shall share
                                         information relating to coverage positions taken by the Service Provider on behalf of
                                         the Company and shall, upon request and reasonable Notice, discuss such positions with
                                         the Company’s legal representatives for the purpose of maintaining consistency
                                         of coverage positions, where appropriate. Provided, however, that nothing contained in
                                         this Paragraph G shall (i) limit the Service Provider’s right to control Claims
                                         and to make final decisions with regard to Claims or (ii) cause the Service Provider
                                         to provide information which would jeopardize the attorney-client or other applicable
                                         privilege, or protections afforded by the work-product doctrine.

 

    Page 11

     

    

 

ARTICLE
IV - COMPANY OBLIGATIONS – TRANSITION SERVICES

 

		A.	After
                                         the Closing Date through to the Transition End Date, the Company will use its reasonable
                                         efforts to provide assistance to and information requested by the Service Provider (including,
                                         as delegated by the Service Provider, its Affiliates or its Subcontractors) in order
                                         to assist the Service Provider to undertake the Claims Handling and Administrative Services
                                         in all matters relating to the Subject Business including Reinsurer ECO/XPL in accordance
                                         with this Service Agreement. During the Transition Period, the Company will transition
                                         the claims handling of the Subject Business to the Reinsurer and will reasonably assist
                                         in the administration of Claims and provide to the Service Provider the following services
                                         (collectively, the “Transition Services”): (i) Claims handling or other administrative
                                         services provided by the Company (including any applicable Affiliates or Subcontractors)
                                         to the Subject Business immediately prior to the Closing Date and (ii) such support and
                                         assistance as the Service Provider may reasonably request relating to the separation
                                         of the Subject Business Information and System Data and other services reasonably required
                                         for the Service Provider to continue to operate and administer the Subject Business as
                                         of the Transition End Date and the transfer of such data from the Company to the Service
                                         Provider (or its designees). During the Transition Period, the Company will administer
                                         Claims and Litigation with oversight by and instructions from the Service Provider and
                                         its Subcontractors, as provided in this Company Obligations – Transition Services
                                         Article. From the Closing Date until the Transition End Date (“the “Transition
                                         Period”), the Transition Services shall include, among other things:

 

		1.	Allowing
                                         the Service Provider and its Subcontractors reasonable access to claim files;

 

		2.	Except
                                         to the extent of conflicts between the Parties or until either Party determines that
                                         there is no longer a common interest between the Parties, the Company shall promptly
                                         provide to the Service Provider (including, as delegated by the Service Provider, its
                                         Affiliates or its Subcontractors), copies of any reports, files and financial data produced
                                         by or for the benefit of the Company in relation solely to the Subject Business, including
                                         such shared attorney-client privileged information pertaining to the Subject Business,
                                         as is reasonably necessary or desirable so that the Service Provider can perform its
                                         obligations hereunder, and the Service Provider can perform its obligations under the
                                         Loss Portfolio Transfer Agreement; provided, however, that nothing contained herein shall
                                         cause the Company to provide information which would jeopardize the attorney-client or
                                         other applicable privilege, or protections afforded by the work-product doctrine;

 

		3.	Allowing
                                         the Service Provider and its Subcontractors reasonable access to the Company’s
                                         claim staff with substantial knowledge of the Subject Business to discuss current open
                                         claims, claim actions, and claim strategies, including weekly meetings if requested;

 

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		4.	Agreeing
                                         upon (such agreement not to be unreasonably withheld, delayed or conditioned) a format
                                         for claims approval requests from the Company to the Service Provider and its Subcontractors
                                         and the timing for such approval;

 

		5.	Providing
                                         timely notice to the Service Provider and its Subcontractors of upcoming mediations and
                                         settlement conferences;

 

		6.	Obtaining
                                         prior approval from the Service Provider for any changes to individual case reserves
                                         in excess of $100,000.00;

 

		7.	Obtaining
                                         prior approval from the Service Provider for any Claim payment, settlement or commutation
                                         in excess of $50,000.00;

 

		8.	Obtaining
                                         prior approval (such approval not to be unreasonably withheld, delayed or conditioned)
                                         for any ex gratia payment and requesting such advice from coverage counsel as the Company
                                         may deem necessary in its reasonable discretion;

 

		9.	Paying
                                         all Claims and associated expenses using funds from the Loss Escrow Accounts;

 

		10.	Providing
                                         timely responses to inquiries from the Service Provider and its Subcontractors;

 

		11.	Using
                                         reasonable efforts to transfer to the Service Provider and its Subcontractors the Subject
                                         Business Information and System Data;

 

		12.	Assisting
                                         the Service Provider and its Subcontractors with the migration of Subject Business Information
                                         and System Data from the Company’s systems to the Service Provider and its Subcontractors’
                                         systems, as applicable;

 

		13.	Providing
                                         the Service Provider and its Subcontractors with all information in the possession of
                                         the Company that is reasonably necessary to collect retentions, deductibles and pursue
                                         claims for salvage or subrogation;

 

		14.	Using
                                         commercially reasonable efforts to implement and adhere to the schedule of milestones
                                         for the transition of the Claims Handling and Administrative Services of the Subject
                                         Business as agreed upon by the Parties and set forth in Schedule A attached hereto
                                         (the “Schedule of Milestones”); and

 

		15.	Maintaining
                                         claims handling procedures, including claims handler caseload, consistent with claims
                                         handling procedures in place as of May 31, 2020.

 

		B.	Parties
                                         agree to each use commercially reasonable efforts to implement and adhere to the Schedule
                                         of Milestones, and Parties shall cooperate with each other for such implementation and
                                         adherence. The Parties shall use commercially reasonable efforts to minimize costs associated
                                         with implementing and following the Schedule of Milestones.1

 

    Page 13

     

    

 

		C.	Notwithstanding any other provision to the contrary, during the Transition Period, the Parties
shall cooperate to develop a transition plan for the gradual winding down of provision of the Transition Services by the Company
and the takeover of the functions and responsibilities relating thereto by the Service Provider in accordance with the terms of
this Agreement. In furtherance of the foregoing, the Parties acknowledge and agree that, upon written acknowledgement by the Service
Provider that it has received all material Subject Business Information and Systems Data with respect to any portion or sub-set
of the Claims that is required for the handling or administration of such Claims, the Service Provider shall assume responsibility
for and commence providing the Claims Handling and Administrative Services (or a portion thereof, as the Parties may mutually agree)
in respect of such Claims prior to the Transition End Date; provided that the Company shall continue to reasonably cooperate with
the Service Provider as required by paragraph F of the Services Article.2

 

		D.	1.                  For any claims-related Transition Service provided by the Company that have not been transitioned
to the Service Provider 45 days following the Closing Date (the “Transition Interim Date”) due to actions or
omissions of the Service Provider, the Service Provider shall pay (i) the actual cost of the provision of such Transition Service
by the Company to the Service Provider (without overhead allocation, without mark-up and without profit) (the “Fees”)
and (ii) all actual, demonstrable and reasonable out-of-pocket costs (“Out-Of-Pocket Costs”).

 

2.                 
After the Transition Interim Date, the Company shall invoice the Service Provider for the Fees, and all Out-Of-Pocket Costs,
on a monthly basis in arrears, and the Service Provider shall pay the Company such Fees and Out-Of-Pocket Costs within 30 days
of its receipt of such invoice. Company shall provide information reasonably necessary for the Service Provider to verify the accuracy
of such Fees and Out-Of-Pocket Costs with such invoices, as necessary.

 

		E.	For the avoidance of doubt, the Company shall retain the right to approve or otherwise incur any
Loss Adjustment Expenses during or prior to the Transition Period, regardless of when such Loss Adjustment Expenses are invoiced.
To the extent any such Loss Adjustment Expenses are paid by the Company, the Service Provider shall reimburse the Company for such
Loss Adjustment Expenses.

 

ARTICLE
V - Third-Party Reinsurance

 

		A.	The Company shall retain responsibility for all administration and collection of all Third-Party
Reinsurance. The Service Provider shall assist and cooperate with the Company in connection with the administration and collection
of all Third-Party Reinsurance, including without limitation providing
such information as the Company may request on a timely basis.

 

 

1 Note
to Draft: Subject to addition of escalation procedures if certain milestones are not met.

2 Note
to Draft: This paragraph IV.C is subject to revision to reflect Parties’ agreement regarding the takeover of the claims
handling responsibility by the Service Provider on a transition interim date.

 

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		B.	Either Party, when so requested and to the extent permitted
or required under the relevant Third-Party Reinsurance agreement, shall afford a reinsurer under such Third-Party Reinsurance
(the “Third-Party Reinsurer”) an opportunity to be associated with the Company or the Service Provider, at the Third-Party
Reinsurer’s expense, in the defense of any Litigation involving any Subject Business that has been reinsured by such Third-Party
Reinsurer, and all relevant parties will reasonably cooperate in preparing to prosecute or defend or in the prosecution or defense
of such Litigation.

 

ARTICLE
VI - SERVICE PROVIDER’S OBLIGATIONS

 

		A.	The Service Provider shall not be liable for a failure to provide the Claims Handling and Administrative
Services in accordance with the terms of this Agreement to the extent such failure results from the Service Provider’s reliance
on inaccurate or inadequate information provided by the Company. The Service Provider shall perform or re-perform the affected
Claims Handling and Administrative Services as soon as reasonably practicable once such inaccuracy or inadequacy is realized or
brought to its attention.

 

		B.	The Service Provider shall bear all the expenses in connection with the Claims Handling and Administrative
Services provided by the Service Provider incurred on or after the Transition End Date until the expiration or termination of the
Loss Portfolio Transfer Agreement, including in the event this Agreement is terminated prior to the expiration or termination of
the Loss Portfolio Transfer Agreement. This Paragraph B shall survive the termination of this Agreement.

 

ARTICLE
VII - COMPLIANCE WITH LAWS3

 

		A.	1.                  In providing the Claims Handling and Administrative Services, and in connection with maintaining,
administering, handling and transferring the data of the policyholders and other recipients of benefits under the Reinsured Policies,
including the Subject Business Information and System Data and the Service Records, the Service Provider shall, and shall cause
its Affiliates and any permitted Subcontractor to, comply with (i) all Applicable Laws applicable to the conduct of business which
is the subject of this Agreement, including, without limitation, any licensing, privacy, confidentiality and data security obligations
applicable to them or the Company and (ii) the provisions of written privacy policies under which such information was gathered
(a copy of each such policy having been made available to the Service Provider by the Company), in connection with the collection,
use, disclosure, maintenance and transmission of PII regarding any insureds or any other persons or entities with whom the Company
does business. Such Applicable Laws shall include those currently in place and those which may become effective during the term
of this Agreement, including the Gramm-Leach-Bliley Act, the Health Insurance Portability and Accountability Act of 1996 (“HIPAA”),
Fair Credit Reporting Act and any other Applicable Laws.

 

 

3 Note to Draft: DARAG
to confirm NTA can comply with this Paragraph VII.A.

 

    Page 15

     

    

 

2.                 
 The Service Provider shall entitle the Company and their auditors, agents and representatives, at their sole cost and expense,
and any Regulatory Authorities, to the extent required by Applicable Law, to audit the Service Provider’s compliance herewith
upon reasonable notice and during normal business hours. To the extent required by Applicable Laws, the Service Provider shall
also enable individual subjects of PII, upon request from such individuals, to review and correct information maintained by the
Service Provider about them and to restrict use of such PII. The Service Provider agrees that all PII is confidential and proprietary
in nature, and that the Service Provider is required by Applicable Laws to protect and keep confidential nonpublic information
obtained from the Company’s customers, and that said information shall not be divulged by the Service Provider to any third
parties or used in any manner other than in connection with this Agreement and related transactions between the Service Provider
and the Company. The Service Provider shall not use PII other than for the purposes of its business, and shall disclose it only
to those employees of the Service Provider with a specific need to know. Accordingly, the Service Provider shall:

 

		a.	establish and maintain appropriate security measures to protect the security and confidentiality
of such PII as outlined by the state and federal regulations;

 

		b.	protect against any anticipated threats or hazards to the security or integrity of customer information;

 

		c.	regularly maintain and monitor a security plan to protect against unauthorized access to both physically
and electronically maintained information or use of such information that could result in substantial harm to customers, and review
the scope of security measures annually;

 

		d.	otherwise ensure compliance with regulations as set forth in paragraph A.1 of this Compliance with
Laws Article, as they may be amended, and any regulations promulgated;

 

		e.	at the expiration of this Agreement, Service Provider agrees to keep confidential all PII until
it is returned or destroyed;

 

		f.	Service Provider shall notify the Company promptly if any breach of security occurs or is reasonably
expected to occur that may affect PII and document responsive actions taken and post-incident review of events;

 

		g.	Service Provider shall notify the Company if any data breach occurs or is reasonably expected to
occur whereby any Subject Business Information and System Data and the Service Records may be exposed through malicious means;

 

    Page 16

     

    

 

		h.	Make available to Company the information required for Company to provide any accounting of disclosures
or for any other purpose in accordance with HIPAA rules;

 

		i.	Ensure that all Service Provider employees comply with all of the above requirements.

 

3.                 
The Service Provider shall be responsible for all costs and expenses arising from any data breach in connection with the
Subject Business Information and System Data and the Service Records or any breach of security affecting PII, including but not
limited to, the costs of notifying the Company’s customers of such data or security breach and any related expenses, unless
such breach results solely from the Company’s actions.

 

4.                 
Within thirty (30) Business Days upon receipt of a written Notice from the Company requesting the Service Provider to delete
any PII within the Subject Business Information and System Data or Service Records, the Service Provider shall make such deletions
in the event that such PII is not required (i) for continued provision of the Claims Handling and Administrative Services or (ii)
by Applicable Laws.

 

5.                 
The Service Provider shall be insured with financially sound and reputable insurance companies for data security and privacy
liability covering actual or alleged acts, errors or omissions committed by the Service Provider, its Subcontractors, agents or
employees, which policy(-ies) shall have limits of liability of at least $1,000,000.00 per occurrence and $5,000,000.00 in the
aggregate (the “Privacy Insurance”). Servicer will furnish certificate(s) of insurance evidencing the Privacy Insurance
to the Company.

 

6.                 
The terms set forth above in this Compliance with Laws Article have been included herein based on the understanding by the
Parties that they are required to comply with HIPAA. To the extent that any relevant provision of HIPAA has been excluded, is materially
amended or interpreted in a manner that changes the obligations of either Party under this Agreement, the Parties agree to negotiate
in good faith an amendment to this Agreement to give effect to such revised obligations. The terms of this Agreement will be construed
in light of any interpretation of and/or guidance on HIPAA issued by the Department of Health and Human Services or the Office
of Civil Rights, from time to time.

 

		B.	The Service Provider retains the right to control and direct the handling, investigation, response
and/or defense of any administrative or legal proceedings by any Regulatory Authority relating solely to the Service Provider as
a reinsurance provider and not the service administrator. The Company agrees to cooperate, participate and provide any necessary
documentation if any such investigations, administrative or legal proceedings occur.

 

ARTICLE
VIII - TERM

 

Unless terminated earlier in accordance
with the Termination Article, this Agreement shall commence on the Closing Date and shall remain in force until the Loss Portfolio
Transfer Agreement is terminated pursuant to its terms.

 

    Page 17

     

    

 

ARTICLE
IX - TERMINATION

 

		A.	The Company may terminate this Agreement, upon prior written Notice, in the event that there is
Cause, and the Service Provider fails to cure such Cause within 30 Business Days following written Notice of such Cause. It being
understood that nothing in this paragraph A shall relieve either Party from the administrative responsibilities or obligations
under this Agreement unless and until this Agreement is terminated.

 

		B.	In the event that any Regulatory Authority gives Notice to any Party that it requires that this
Agreement be terminated, then the recipient Party shall immediately provide a copy of such Notice to the other Party and upon receipt
of such Notice by the other Party, the Parties shall discuss and, if possible, agree whether to appeal the decision of the Regulatory
Authority. If the Parties do not agree to appeal the decision of the Regulatory Authority within 10 Business Days of each Party
being provided with a copy of any Notice from the Regulatory Authority requiring this Agreement to be terminated or any appeal
is rejected by the Regulatory Authority, this Agreement shall automatically terminate.

 

		C.	Upon the reversion of any Claim, Litigation, or contract related to the Subject Business under
this Agreement, the Service Provider shall fully cooperate in transferring Claims handling responsibility to the Company. Such
cooperation shall include, but not be limited to, transferring all claims files and any other documents associated with the Subject
Business or provision of Claims Handling and Administration Services to the Company in a timely manner, and shall be co-extensive
with the Service Provider’s duty to cooperate under paragraph F of the Services Article.

 

		D.	Either Party may terminate this Agreement in the event of a material breach of the other Party’s
obligations under the Loss Portfolio Transfer Agreement or this Agreement.

 

		E.	In the event of termination for any reason, the Service Provider shall cooperate fully in the orderly
transfer of the Service Provider’s obligations under this Agreement to one or more replacement claim servicers designated
by the Company. The expenses and costs associated with such transfer shall be (a) borne by the Service Provider alone if this Agreement
is terminated by the Company pursuant to Paragraph A or Paragraph D (as a result of a breach by the Service Provider of its obligations)
of this Termination Article, (b) borne by the Company alone if this Agreement is terminated by the Service Provider pursuant to
Paragraph D (as a result of a breach by the Company of its obligations) of this Termination Article, (c) split equally between
the Company and the Service Provider if this Agreement is terminated pursuant to Paragraph B of this Termination Article.

 

		F.	Nothing herein shall relieve any Party from liability for any breach of this Agreement prior to
such termination.

 

    Page 18

     

    

 

ARTICLE
X - WARRANTIES

 

The Service Provider warrants to the Company that:

 

		A.	The Claims Handling and Administrative Services shall be provided by suitable, appropriately licensed,
qualified, experienced and competent personnel engaged by the Service Provider or its Subcontractors;

 

		B.	The Subcontractors providing services at the direction of the Service Provider will be suitable,
appropriately licensed, qualified, and experienced;

 

		C.	The Service Provider will not surrender and shall at all times comply with such consents as are
necessary for the provision of the Claims Handling and Administrative Services; and

 

		D.	The Claims Handling and Administrative Services shall be provided in accordance with and shall
at all times comply with the Service Standards.

 

ARTICLE
XI - RECORD KEEPING, AUDIT AND INSPECTION

 

		A.	The Service Provider shall keep detailed records of all activities carried out in connection with
the provision of the Claims Handling and Administrative Services, including but not limited to all data (including personal data),
information, financial transaction records, text, statistics, analysis and other materials embodied in any form relating to the
Subject Business and any other records that are expressly required to be kept by the Service Provider under this Agreement (the
 “Service Records”). The Service Provider agrees to permit the Company (or its designee), to audit the Service Records
at least quarterly (as agreed between the Parties), in order to track the reserves of the Subject Business. The Service Provider
will provide all reasonable information, including access to Service Records, for such purposes. The Company shall, at its own
expense, be entitled to make copies of the Service Records for these purposes.

 

		B.	The Service Provider shall keep the Service Records for ten (10) years following the Closing Date,
which period is subject to extension as reasonably requested by the Company (such period, the “Record Retention Period”).
unless this Agreement has terminated or expired before the end of the Record Retention Period. Notwithstanding the foregoing, after
the expiration or termination of this Agreement, the Service Provider shall return all of the Service Records to the Company, if
requested by the Company.

 

		C.	Each Party shall, and shall ensure that its Affiliates, Subcontractors, agents and representatives,
grant to the other Party and its agents and representatives, and to any statutory auditor of the other Party, Regulatory Authority
or Third-Party Reinsurer (or its designee), to the extent permitted or required under the relevant Third-Party Reinsurance agreement,
the right of access to such Party’s premises, systems (with the exception of the Company’s systems), such Party’s
personnel, Subject Business Information and System Data and the Service Records as the other Party may reasonably require during
normal business hours in order to:

 

		1.	Verify that the Party is complying with the terms of this Agreement, including compliance with
Applicable Law;

 

		2.	Identify suspected fraud or material accounting mistakes, in which case the other Party and any
statutory auditors of the other Party or its authorized agents, a Regulatory Authority or a Third-Party
Reinsurer (or its designee), to the extent permitted or required under the relevant Third-Party Reinsurance agreement, may discuss
any matter with any Party personnel as the other Party may reasonably require;

 

    Page 19

     

    

 

		3.	Fulfill any request by a Regulatory Authority in the course of carrying out its reporting functions;

 

		4.	Inspect the integrity, confidentiality and security of the Subject Business Information and System
Data and Service Records subject to privilege.

 

		D.	Subject to any requirements specified by a Regulatory Authority and paragraph E below, any audit,
investigation or monitoring undertaken in accordance with this Article shall be subject to the Party providing at least five (5)
Business Days’ Notice of any audit including high level details of the part of the other Party’s organization that
the Party intends to audit pursuant to these provisions.

 

		E.	Where an audit is required by the Party for reasons of suspected fraud or material non-compliance,
the Party shall, to the extent permitted by Applicable Law, disclose the objective of the audit to a senior representative of the
other Party, as soon as reasonably practicable and in any event two (2) Business Days before commencing the audit, who shall undertake
to keep the objective of the audit confidential from any person or function who is, or might reasonably be expected to be, the
subject of such audit.

 

		F.	If any audit or other inspection by or on behalf of a Party (the “Auditing Party”)
demonstrates any non-compliance by the other Party or any of its Affiliates, Subcontractors or agents and representatives (collectively,
the “Audited Party”) of the Audited Party’s obligations in connection with this Agreement, the Audited Party
shall, without prejudice to any other rights and remedies the Auditing Party may have, remedy the cause of such non-compliance
as soon as reasonably practicable to the reasonable satisfaction of the Auditing Party (including its designee).

 

		G.	Each Party shall ensure that any software, hardware and any documentation, including maintenance
documentation, required to retrieve and read any Subject Business Information and System Data or Service Records stored in non-print
media (including electronic, optical or magnetic media) insofar as the Subject Business Information and System Data or Service
Records are in the other Party’s possession and/or control, are retained until the expiration of the term of this Agreement.
The Company will provide twenty (20) Business Days written Notice to the Service Provider of its desire to destroy any of the Subject
Business Information and System Data or Service Records pursuant to its record retention policy or Applicable Laws.

 

		H.	The inspection or audit, or failure to inspect or audit, shall not in any way relieve the Parties
from their obligations under this Agreement.

 

    Page 20

     

    

 

		I.	The Confidentiality Article of the Loss Portfolio Transfer Agreement is hereby incorporated by
reference and shall apply to this Agreement mutatis mutandis, and Parties shall comply with all Applicable Laws relating
to the confidentiality of personal information. The Service Provider
shall, and shall cause its Affiliates and Subcontractors to whom Subject Business Information and System Data or Service Records
are provided to, establish and maintain environmental, safety and facility procedures, data security procedures and other administrative,
physical and technical safeguards against the destruction, loss, unauthorized access or alteration of the data and information
of the Subject Business in the possession of the Service Provider (and its Affiliates and Subcontractors), which are no less rigorous
than those maintained by the Service Provider for its own information of a similar nature and no less rigorous than required by
Applicable Laws, including laws concerning data privacy and personally identifiable information.

 

		J.	Subject to the Confidentiality Article of the Loss Portfolio Transfer Agreement (incorporated herein
by reference), each Party shall, and shall assure that all personnel shall promptly and fully cooperate at all times with the Regulatory
Authorities and their appointees and representatives, including by:

 

		1.	Making itself readily available for meetings with the Regulatory Authorities and their appointees
and representatives, as requested;

 

		2.	Giving the Regulatory Authorities and their appointees and representatives access to:

 

		a.	Any records, files, tapes or computer systems (including all records specified and/or referred
to in this Article) which are within its possession or control;

 

		b.	Any relevant personnel; and

 

		c.	Any facilities which the Regulatory Authorities and their appointees and representatives may request.

 

		3.	Producing to the Regulatory Authorities and their appointees and representatives any records, files,
tapes or computer systems in its possession or control, as requested by the Regulatory Authorities;

 

		4.	Printing information in its possession or control which is held on computer or on microfilm or
otherwise converting it into a readily legible document or any other record which the Regulatory Authorities and their appointees
and representatives may request;

 

		5.	Permitting the Regulatory Authorities and their appointees and representatives to copy documents
or other material on its premises and to remove copies and hold them elsewhere, or providing any copies, as requested by the Regulatory
Authorities;

 

		6.	Answering truthfully, fully and promptly all questions which are reasonably put to it by the Regulatory
Authorities and their appointees and representatives; and

 

    Page 21

     

    

 

		7.	Permitting the Regulatory Authorities and their appointees and representatives to have access to
any of its premises, with or without Notice, and shall take reasonable steps to procure that its agents and suppliers and Subcontractors
permit such access to their business premises where requested by the Regulatory Authorities, subject to privilege.

 

ARTICLE
XII - COMPLAINTS

 

		A.	For the purposes of this Article, a “Complaint” means any oral or written expression
of a material dissatisfaction (whether justified or not) about the provision of, or failure to provide, the Claims Handling and
Administration Services, including, without limitation:

 

		1.	Disagreements with the way a Claim has been handled;

 

		2.	Allegations of inappropriate and/or unprofessional behavior;

 

		3.	Legal action, or threats of legal action, against the Service Provider or Company for any dissatisfaction
in the claims handling process.

 

		B.	The Parties shall notify each other as soon as practicable and in any event within five Business
Days upon receipt of any Complaint directly from a complainant. Any such Complaints received by the Company from the Service Provider
or any Complaints received directly by the Company shall be acknowledged by the Company within five Business Days of receipt of
such Complaint by the Company, and such acknowledgment shall include the handling procedure with respect to such Complaint, as
practicable. The Company will provide a copy of such response to the Legal and Regulatory Department of the Service Provider.

 

		C.	With respect to any Complaint, the Service Provider will act in accordance with Applicable Laws.

 

ARTICLE
XIII - NOTICES

 

The Notices Article of the Loss Portfolio
Transfer Agreement is hereby incorporated by reference and shall apply to this Agreement mutatis mutandis.

 

ARTICLE
XIV - AMENDMENTS

 

This Agreement may be modified or otherwise
amended, and the observance of any term of this Agreement may be waived, if such modification, amendment or waiver is in writing
and signed by the Parties.

 

ARTICLE
XV - COUNTERPARTS

 

This Agreement may be executed in any number
of counterparts, each of which when so executed and delivered shall constitute an original, but all of such counterparts taken
together shall constitute but one and the same Agreement.

 

    Page 22

     

    

 

ARTICLE
XVI - NO ADDITIONAL CONSIDERATION

 

This Agreement is being entered into in
consideration of the Transaction. Except as otherwise set forth herein, there shall be no fee or other consideration due to the
Service Provider for performance of the Claims Handling and Administrative Services under this Agreement with respect to the Reinsured
Policies. Except as otherwise provided by this Agreement, all expenses of the Service Provider shall be borne solely by the Service
Provider.

 

Except as otherwise set forth herein or
in the Loss Portfolio Transfer Agreement, (i) there shall be no fee or other consideration due to the Company for performance of
the Transition Services and (ii) all expenses of the Company shall be borne solely by the Company.

 

ARTICLE
XVII - ASSIGNMENT

 

Neither Party shall assign any of its rights
or obligations under this Agreement without the prior written consent of the other Party other than any assignment by the Company
to any of its Affiliates.

 

    Page 23

     

    

 

IN WITNESS WHEREOF, the Parties hereto
have caused this Agreement to be executed by their duly authorized representatives:

 

AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS

HALLMARK SPECIALTY INSURANCE COMPANY

HALLMARK INSURANCE COMPANY

HALLMARK NATIONAL INSURANCE COMPANY

Hallmark County Mutual
Insurance Company

 

	By:	                               	 

 

	Title:	                            	 

 

DARAG BERMUDA LTD.

 

	By:	                               	 

 

	Title:	                            	 

 

    Page 24

     

    

 

SCHEDULE A

 

SCHEDULE OF TRANSITION
MILESTONES4

 

(See attached)

 

 

4 Note to Draft:
This Schedule A (Schedule of Transition Milestones) is subject to update prior to closing and shall include both a target due
date and a final due date/outside date.

 

     

     

    

 

 

 

     

     

    

 

EXHIBIT A

 

FORM OF CLAIMS SUMMARY
REPORT

 

	Gross Indemnity Reserve:	$	Gross Expense Reserve:	 
	Hallmark U/W Entity:	 	Reinsurance:	 
	Line of Business:	 	Class of Business:	 
	Named Insured:	 	Claimant or Plaintiff:	 
	Claim Number:	 	Policy Number:	 
	Policy Period:	 	Policy Limit:	 
	Date of Loss:	 	Deductible or SIR:	 
	DNR or Claim Made Date:	 	Attachment Point:	 
	Claim or Loss Type:	 	Loss Location:	 
	Prepared by:	 	Date Prepared:	 
	Coverage:
	 
	Description of Occurrence/Wrongful Act/Loss:
	 
	Liability Analysis or Cause of Loss Determination:
	 
	

Damages or Loss Estimates:
	 
	Reserve Analysis:
	 
	Resolution or Loss Adjustment Strategy/Subrogation:
	 

 

     

     

    

 

EXHIBIT C

 

Schedule of Third-Party Reinsurance

 

Third-Party Reinsurance will be applied in the following manner
for business classified as Binding Primary Auto or Brokerage Primary Auto:

 

		·	100% coverage for the portion of policy limits above $1M (with Ultimate Net Loss and Loss Adjustment Expense allocated proportionately
based on the proportion of the Ultimate Net Loss above $1M)

		·	For policies with an effective date prior to 1/1/2019, 0%

		·	For policies with an effective date between 1/1/2019 and 9/30/2019, 25%

		·	For policies with an effective date between 10/1/2019 and 12/31/2019, 21.5%

		·	Extra Contractual Obligations and Loss in Excess of Policy Limits are not covered by Third-Party Reinsurance

 

Hallmark Financial

Loss Portfolio Transfer Contract

     

     

    

 

EXHIBIT D

 

Investment Guidelines

Investment Sectors

 

	Short-term / Cash	-	Cash (United States legal tender) and SEC registered money market funds that are rated AAA
	-	Certificates of deposit (issued by a United States bank and payable in United States legal tender)

	US
Government	U.S.
Government for the purpose of this requirement are the following:
	-	Securities
directly issued by the US Treasury.
	-	Securities
100% defeased with US Treasuries.
	-	Securities
with the full faith and credit of the US Treasury.
	-	Securities
issued by U.S. Government Sponsored Enterprises (“GSE”).
	-	Residential
and Commercial Mortgage Backed Securities (“MBS”) guaranteed by U.S. Government agencies and GSEs.
	-	All
securities must have the same rating as the US Treasury.
	Credit
(Corporates, Municipals)	Publicly
issued corporate bonds, debentures, notes or other forms of debt issued by US corporations. Taxable and tax-exempt US municipal
issues are permitted investments. 
	Prohibited	-	Equities
	-	Techniques
such as short selling and use of leverage are prohibited.
	-	Derivatives
(options, futures, etc.) are not to be employed including embedded derivatives but excluding callable bonds.
	-	Subordinated
securities are not eligible collateral.
	-	Collateralized
Debt Obligations are not eligible collateral.
	-	Derivatives
are not eligible collateral.
	-	Hedging
is not permitted.
	-	Securities
lending is not permitted.
	-	Securities issued by any affiliate of either the Grantors or the Beneficiaries
hereunder. 
	Restrictions
and Conventions

	Sector
Limits	-	US
Government 	20%-100%
	-	US
Credit *	10%-75%
	-	US Securitized *	0%-40% 
	-	At
least 15% must be in US Governments.

	Credit
    Quality	-	All
    securities must be rated by Moody’s, S&P, or Fitch. All securities must have a minimum rating of at least: A3 by
    Moody’s, A- by S&P and A- by Fitch at time of purchase.
	-	In the
    case of split ratings, the average rating will apply with any half notch rating that results being rounded up to the next
    rating.

	Quality
Limits	-	Quality
	Maximum
	per
Issuer	 
	-	US Government
	100%
	100.0%	 
	-	AAA 	85%
	3.0%	 
	-	AA 	85%
	3.0%	 
	-	A	65%	2.5% 	 

	 	-	* The per Issuer limits apply to Short-Term, US Credit
and US Securitized.
	-	For maximum limit testing, the below A - rated exposures
need to be included in the A bucket.
	-	These quality limits and per Issuer limits are measured
quarterly based on current market values.

	Rating
    Downgrade	-	In
    case a security is downgraded so that it breaches a limit or is rated below A3/ A-, the Manager is not necessarily required
    to dispose of all or part of the investment immediately.
	-	The aggregate amount of securities
    downgraded to BBB is not allowed to exceed 5%. Sub-investment grade securities must be sold. These rating limits are measured
    daily.
	Base Currency	-	All
    assets must be denominated in US Dollars.
	Issuer limitations	-	Issuer
    limits are based on the collateral pool for securitized instruments.
	-	For issuers with multiple ratings
    on their debt issuance, established limits will apply for each ratings bucket with the cumulative total not to exceed the
    limit of the highest rated level of debt.
	Asset Limitations	-	No
    single invested asset amount shall exceed $100,000,000.00Exhibit 4.2

    

    

    HEWLETT PACKARD ENTERPRISE COMPANY,

    as the Company,

    

    

    

    

    and

    

    

    

    

    THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.,

    as the Trustee

    

    

    

    

    SEVENTEENTH SUPPLEMENTAL INDENTURE

    

    

    

    

    DATED AS OF JULY 17, 2020

    

    

    

    

    to

    

    

    

    

    INDENTURE

    

    

    

    

    DATED AS OF OCTOBER 9, 2015

    

    

    

    

    Relating to

    

    

    

    

    $1,000,000,000 of 1.450% Notes due 2024

    

    

    

    

    

    

    
      
        

    

    

    

    SEVENTEENTH SUPPLEMENTAL INDENTURE

    

    

    SEVENTEENTH SUPPLEMENTAL INDENTURE, dated as of July 17, 2020 (this “Seventeenth
          Supplemental Indenture”), between Hewlett Packard Enterprise Company, a Delaware corporation (the “Company”), and The Bank of New York Mellon
      Trust Company, N.A., as trustee (the “Trustee”), to the Base Indenture (as defined below).

    

    

    RECITALS

    

    

    WHEREAS, the Company has
      heretofore executed and delivered to the Trustee an Indenture, dated as of October 9, 2015 (the “Base Indenture” and, together with this Seventeenth
      Supplemental Indenture, the “Indenture”), providing for the issuance from time to time of its notes and other evidences of senior debt securities, to be issued
      in one or more series as therein provided;

    

    

    WHEREAS, pursuant to the terms of
      the Base Indenture, on the date hereof, the Company desires to provide for the establishment of a series of notes to be known as its 1.450% Notes due 2024 (the “Notes”);

    

    

    WHEREAS, this Seventeenth
      Supplemental Indenture relates to and sets forth the terms and conditions of the Notes; and

    

    

    WHEREAS, the Company has
      requested that the Trustee execute and deliver this Seventeenth Supplemental Indenture, and all requirements necessary to make this Seventeenth Supplemental Indenture a legal, valid and binding instrument in accordance with its terms, to make the
      Notes, when executed by the Company and authenticated and delivered by the Trustee, the legal, valid and binding obligations of the Company, and all acts and things necessary have been done and performed to make this Seventeenth Supplemental
      Indenture enforceable in accordance with its terms, and the execution and delivery of this Seventeenth Supplemental Indenture has been duly authorized in all respects.

    

    

    WITNESSETH:

    

    

    NOW, THEREFORE, for and in
      consideration of the premises contained herein, each party hereto agrees for the benefit of the other party and for the equal and ratable benefit of the Holders of the Notes, as follows:

    

    

    Article One

    

    

    Definitions

    

    

    Section 1.01          Capitalized
        terms used but not defined in this Seventeenth Supplemental Indenture shall have the meanings ascribed to them in the Base Indenture.

    

    

    Section 1.02          References in
        this Seventeenth Supplemental Indenture to article and section numbers shall be deemed to be references to article and section numbers of this Seventeenth Supplemental Indenture unless otherwise specified.

    

    

    Section 1.03          For purposes of
        this Seventeenth Supplemental Indenture, the following terms have the meanings ascribed to them as follows:

    

    

    “Additional Notes” means any additional Notes
      that may be issued from time to time pursuant to Section 2.01(b).

    

    

    “Base Indenture” has the meaning provided in
      the Recitals.

    

    

    “Below Investment Grade Rating Event” means,
      with respect to the Notes, the rating on the Notes is lowered by each of the Rating Agencies, and the Notes are rated below Investment Grade by each of the Rating Agencies, within 60 days from the earlier of (1) the date of the public notice of an
      arrangement that could result in a Change of Control or (2) the occurrence of a Change of Control (which period shall be extended so long as the rating of the Notes is under publicly announced consideration for possible downgrade by any of the Rating
      Agencies).

    
      
        

    

    
    

    

    “Business Day” for all purposes related to
      the Notes means any calendar day that is not a Saturday, Sunday or legal holiday in New York, New York and on which commercial banks are open for business in New York, New York.

    

    

    “Change of Control” means the occurrence of
      any of the following after the date hereof:

    

    

    (1) the 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 Company’s assets and the assets of the Company’s subsidiaries, taken as a whole, to any “person” or “group” (as those terms are used for purposes of Section 13(d)(3) of the Exchange
      Act), other than the Company or one or more of the Company’s subsidiaries; (2) the consummation of any transaction or series of related transactions (including, without limitation, any merger or consolidation) the result of which is that any “person”
      or “group” (as those terms are used for purposes of Section 13(d)(3) of the Exchange Act), other than the Company or one of the Company’s wholly owned 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, measured by voting power rather than number of shares; (3) the Company consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, the
      Company, in any such event pursuant to a transaction in which any of the Company’s outstanding Voting Stock or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property, other than any such
      transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or any direct or indirect parent
      company of the surviving person, measured by voting power rather than number of shares, immediately after giving effect to such transaction; (4) the first day on which a majority of the members of the Board of Directors are not Continuing Directors;
      or (5) the adoption by the Company of a plan providing for the Company’s liquidation or dissolution.

    

    

    Notwithstanding the foregoing, a transaction will not be considered to be a Change of Control under clause (2) above if (a) the Company
      becomes a direct or indirect wholly owned subsidiary of a holding company and (b) (y) immediately following that transaction, the direct or indirect holders of the Voting Stock of the holding company are substantially the same as the holders of the
      Company’s Voting Stock immediately prior to that transaction or (z) immediately following that transaction, no person (as that term is used in Section 13(d)(3) of the Exchange Act), other than a holding company satisfying the requirements of this
      sentence, is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of the holding company.

    

    

    “Change of Control Repurchase Event” means
      the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

    

    

    “Commission” means the U.S. Securities and
      Exchange Commission.

    

    

    “Company” has the meaning provided in the
      Preamble.

    

    

    “Comparable Treasury Issue” means the United
      States Treasury security selected, in accordance with customary financial practice, by an Independent Investment Banker as having a maturity comparable to the remaining term (assuming for this purpose that the Notes matured on the Par Call Date) (the
      “Remaining Life”) of the Notes to be redeemed.

    

    

    “Comparable Treasury Price” means, with
      respect to any Redemption Date, (1) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such
      Reference Treasury Dealer Quotations, the average of all such quotations.

    

    

    “Continuing Directors” means, as of any date
      of determination, any member of the Board of Directors who (1) was a member of such Board of Directors on October 9, 2015; or (2) was nominated for election, elected or appointed to such Board of Directors with the approval of a majority of the
      Continuing Directors who were members of such Board of Directors at the time of such nomination, election or appointment (either by a specific vote or by approval by such Continuing Directors of the Company’s proxy statement in which such member was
      named as a nominee for election as a director).

    
      3

      
        

    

    

    

    “Depositary” has the meaning provided in
      Section 2.03(d).

    

    

    “Event of Default” has the meaning provided
      in Section 5.01.

    

    

    “Fitch” means Fitch Ratings Inc. and its
      successors.

    

    

    “Indenture” has the meaning provided in the
      Recitals.

    

    

    “Independent Investment Banker” means one of
      the Reference Treasury Dealers that the Company appoints to act as the Independent Investment Banker from time to time.

    

    

    “Initial Notes” means the aggregate principal
      amount of Notes issued on the date hereof, as specified on the first paragraph of Section 2.01.

    

    

    “Interest Payment Date” has the meaning
      provided in Section 2.04.

    

    

    “Investment Grade” means a rating of BBB- or
      better by Fitch (or its equivalent under any successor rating categories of Fitch), Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s) and a rating of BBB- or better by S&P (or its equivalent under any
      successor rating categories of S&P) or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Company.

    

    

    “Moody’s” means Moody’s Investors Service,
      Inc. and its successors.

    

    

    “Notes” has the meaning provided in the
      Recitals. For the avoidance of doubt, “Notes” shall include any Additional Notes.

    

    

    “Par Call Date” means March 1, 2024.

    

    

    “Rating Agency” means (1) each of Fitch,
      Moody’s and S&P; and (2) if any of Fitch, Moody’s or S&P ceases to rate the Notes or fails to make a rating of the 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) of the Exchange Act, selected by the Company as a replacement agency for Fitch, Moody’s or S&P, or all of them, as the case may be.

    

    

    “Reference Treasury Dealer” means each of
      Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Wells Fargo Securities, LLC and any other primary treasury dealer selected by the Company (each, a “Primary Treasury Dealer”) and their respective successors which the Company specifies from time to time; provided, however, that if any of them ceases 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, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted
      in writing to the Company by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

    

    

    “Regular Record Date” has the meaning
      provided in Section 2.04.

    

    

    “S&P” means S&P Global Ratings and
      its successors.

    

    

    “Seventeenth Supplemental Indenture” has the
      meaning provided in the Preamble.

    
      4

      
        

    

    

    

    “Treasury Rate” means, with respect to any
      Redemption Date, the rate per year equal to: (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15” or any successor publication
      which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for
      the maturity corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three months before or after the Remaining Life of the Notes to be redeemed, yields for the two published maturities most closely corresponding to
      the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from those yields on a straight-line basis, rounding to the nearest month; or (2) if such release (or any successor release) is not
      published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semiannual equivalent yield to maturity 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 shall be calculated on the third Business Day preceding the Redemption Date.

    

    

    “Trustee” has the meaning provided in the
      Preamble.

    

    

    “Voting Stock” means, with respect to any
      person as of any date, capital stock 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 such person, even if the right
      so to vote has been suspended by the happening of such a contingency.

    

    

    Article Two

    

    

    General Terms and Conditions of the Notes

    

    

    Section 2.01          Designation and Principal Amount.

    

    

    (a)          The Notes are hereby
        authorized and designated the 1.450% Notes due 2024. The Notes may be authenticated and delivered under the Indenture in an unlimited aggregate principal amount. The Notes issued on the date hereof pursuant to the terms of the Indenture shall be in
        an aggregate principal amount of $1,000,000,000, which amount shall be set forth in the written order of the Company for the authentication and delivery of the Notes pursuant to Section 301 of the Base Indenture. The Notes will be senior unsecured
        obligations of the Company and will rank on the same basis with all of the Company’s other senior unsecured indebtedness from time to time outstanding.

    

    

    (b)          In addition, without the
        consent of the Holders of the Notes, the Company may issue, from time to time in accordance with the provisions of the Indenture, Additional Notes having the same ranking and the same interest rate, maturity and other terms as the Notes (except for
        the issue date, issue price, and, in some cases, the first payment of interest or interest accruing prior to the issue date of such Additional Notes). Any Additional Notes having such similar terms, together with the Notes issued on the date
        hereof, shall constitute a single series of Notes under the Indenture. Additional Notes of a series may only bear the same CUSIP number if they would be fungible for United States federal income tax purposes with the existing Notes of that series.
        No Additional Notes may be issued if an Event of Default has occurred and is continuing with respect to the Notes.

    

    

    Section 2.02          Maturity.

    

    

    Unless an earlier redemption has occurred, the principal amount of the Notes shall mature and be due and payable, together with any
      accrued interest thereon, on April 1, 2024. If the maturity date of the Notes falls on a day that is not a Business Day, payment of principal, premium, if any, and interest for such Notes then due will be paid on the next Business Day. No interest on
      that payment will accrue from and after the maturity date.

    

    

    Section 2.03          Form and Payment.

    

    

    (a)          The Notes shall be issued
        as global notes in fully registered book-entry form without coupons in denominations of $2,000 and integral multiples of $1,000 in excess thereof.

    

    

    (b)          The Notes and the
        Trustee’s Certificates of Authentication to be endorsed thereon are to be substantially in the form of Exhibit A, which form is hereby incorporated in and
        made a part of this Seventeenth Supplemental Indenture. Notwithstanding Section 303 of the Base Indenture, the Trustee may authenticate the Notes by manual or electronic signature.

    
      5

      
        

    

    

    

    (c)          The terms and provisions
        contained in the Notes shall constitute, and are hereby expressly made, a part of this Seventeenth Supplemental Indenture, and the Company and the Trustee, by their execution and delivery of this Seventeenth Supplemental Indenture, expressly agree
        to such terms and provisions and to be bound thereby.

    

    

    (d)          Principal, premium, if
        any, and/or interest, if any, on the global notes representing the Notes shall be made to The Depository Trust Company (together with any successor thereto, the “Depositary”).

    

    

    (e)          The global notes
        representing the Notes shall be deposited with, or on behalf of, the Depositary and shall be registered in the name of the Depositary or a nominee of the Depositary. No global note may be transferred except as a whole by a nominee of the Depositary
        to the Depositary or to another nominee of the Depositary, or by the Depositary or such nominee to a successor of the Depositary or a nominee of such successor.

    

    

    (f)          Additional provisions
        relating to the Initial Notes, Additional Notes and any other Notes issued under this Seventeenth Supplemental Indenture are set forth in Appendix A, which
        is hereby incorporated in and made a part of this Seventeenth Supplemental Indenture.

    

    

    Section 2.04          Interest.

    

    

    Interest on the Notes shall accrue at the rate of 1.450% per annum, payable by the Company semi-annually in arrears on April 1 and
      October 1 of each year, beginning on April 1, 2021 (each, an “Interest Payment Date”), to the Holders of the Notes at the close of business on the 15th
      calendar day (whether or not a Business Day) immediately preceding the related Interest Payment Date (each, a “Regular Record Date”). Interest on the Notes
      will accrue from and including July 17, 2020 to, but excluding, the first Interest Payment Date and then from and including the immediately preceding Interest Payment Date to which interest has been paid or duly provided for to, but excluding, the
      next Interest Payment Date or maturity date, as the case may be. Interest on the Notes shall be computed on the basis of a 360-day year comprised of twelve 30-day months. If any Interest Payment Date for the Notes is not a Business Day, then the
      related payment of interest shall be made on the next succeeding Business Day with the same force and effect as if made on the date such payment was due, and no interest on such payment shall accrue for the period from and after such Interest Payment
      Date to the date of such payment on the next succeeding Business Day.

    

    

    Section 2.05          Other Terms and Conditions.

    

    

    (a)          The Notes are not subject
        to a sinking fund.

    

    

    (b)          The Defeasance and
        Covenant Defeasance provisions of the Article Thirteen of the Base Indenture will apply to the Notes.

    

    

    (c)          The provisions of Article
        Fifteen of the Base Indenture will not apply to the Notes.

    

    

    (d)          The Notes will be subject
        to the Events of Default provided in Section 501 of the Base Indenture, as supplemented by Section 5.01.

    

    

    (e)          The Trustee will
        initially be the Security Registrar and Paying Agent for the Notes.

    

    

    (f)          The Notes will be subject
        to the covenants provided in Article Ten of the Base Indenture, as supplemented by Section 4.01.

    

    

    Article Three

    

    

    Redemption

    

    

    Section 3.01          Optional Redemption of the Notes.

    

    

    (a)          At the Company’s option,
        the Notes may be redeemed, in whole at any time or in part from time to time, on at least 15 days’ but no more than 45 days’ prior written notice sent to the Holders of the Notes to be redeemed.

    
      6

      
        

    

    

    

    (b)          Prior to the Par Call
        Date, the Notes will be redeemable in whole at any time or in part from time to time, at the Company’s option, at a redemption price equal to the greater of:

    

    

    (i)          100%
        of the principal amount of the Notes to be redeemed; and

    

    

    (ii)          the
        sum, as determined by the Company based on the Reference Treasury Dealer Quotations, of the present value of the remaining scheduled payments of principal and interest thereon that would be due if the Notes matured on the Par Call Date (exclusive
        of interest accrued to the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points,

    

    

    plus, in each case, accrued and unpaid interest, if any, on the amount being redeemed to, but excluding, the Redemption Date.

    

    

    On or after the Par Call Date, the Notes will be redeemable in whole at any time or in part from time to time, at the Company’s option,
      at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date. The Company will calculate the redemption price.

    

    

    (c)          If money sufficient to
        pay the redemption price of and accrued interest on the Notes (or portions thereof) to be redeemed on the Redemption Date is deposited with the Trustee or Paying Agent on or before the Redemption Date and the other conditions set forth in Article
        11 of the Base Indenture are satisfied, then on and after the Redemption Date, interest will cease to accrue on the Notes (or such portion thereof) called for redemption and such Notes will cease to be outstanding. If any Redemption Date is not a
        Business Day, the Company will pay the redemption price on the next Business Day without any interest or other payment due to the delay.

    

    

    (d)          If fewer than all of the
        Notes are to be redeemed at any time, not more than 45 days prior to the Redemption Date, the particular Notes or portions thereof for redemption from the outstanding Notes not previously called shall be selected in accordance with the procedures
        of DTC or by lot. No Notes of $1,000 or less will be redeemed in part.

    

    

    (e)          In the case of any
        redemption, the Security Registrar will not be required to register the transfer or exchange of any Note:

    

    

    (i)          during
        a period beginning 15 days before the day of sending of the relevant notice of redemption and ending on the close of business on that day of sending; or

    

    

    (ii)          if
        the Company has called the Note for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part.

    

    

    Article Four

    

    

    Additional Covenants

    

    

    Section 4.01          Purchase of Notes upon a Change of Control Triggering Event.

    

    

    (a)          If a Change of Control
        Repurchase Event occurs after the date hereof, unless the Company has exercised its right to redeem the Notes as set forth in Section 3.01 of this Seventeenth Supplemental Indenture, the Company will make an offer to each Holder of Notes to
        repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Notes at a repurchase price in cash equal to 101% of the aggregate principal amount of Notes repurchased plus any accrued and unpaid
        interest on the Notes repurchased to the date of purchase.

    
      7

      
        

    

    

    

    Within 30 days following any Change of Control Repurchase Event or, at the Company’s option, prior to any Change of Control, but after
      the public announcement of the transaction or event that constitutes or may constitute the Change of Control, the Company will send a notice to each holder to which the Company is required to make a repurchase offer as described above, with a copy to
      the Trustee, describing the transaction or event that constitutes or may constitute the Change of Control Repurchase Event and offering to repurchase the Notes on the payment date specified in the notice, which date will be no earlier than 30 days
      and no later than 60 days from the date such notice is mailed. The notice may, if sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Repurchase Event occurring on
      or prior to the payment date specified in the notice.

    

    

    (b)          On the Change of Control
        Repurchase Event payment date, the Company shall, to the extent lawful:

    

    

    (i)          accept
        for payment all Notes or portions of Notes (in a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof) properly tendered and not withdrawn pursuant to the Company’s offer;

    

    

    (ii)          deposit
        with the Paying Agent an amount equal to the aggregate purchase price in respect of all Notes or portions of Notes properly tendered and not withdrawn; and

    

    

    (iii)          deliver
        or cause to be delivered to the Trustee the Notes properly accepted, together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being purchased by the Company.

    

    

    The Paying Agent will promptly send to each Holder of Notes properly tendered and not withdrawn the purchase price for such Notes, and
      the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each holder a new Note equal in principal amount to any unpurchased portion of any such Notes surrendered; provided that each new Note will be in a minimum
      principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

    

    

    (c)          The Company will not be
        required to make an offer to repurchase the Notes upon a Change of Control Repurchase Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such
        third party purchases all Notes properly tendered and not withdrawn under its offer.

    

    

    (d)          The Company will comply
        with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of
        Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with this Section 4.01, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached
        its obligations under this Section 4.01 by virtue of any such compliance.

    

    

    Article Five

    

    

    Additional Events of Default

    

    

    Section 5.01          Additional Events of Default.

    

    

    In addition to the Events of Default set forth in Section 501 of the Base Indenture, an “Event of Default” with respect to the Notes shall be deemed to have occurred if the Company fails to make the required offer to purchase Notes following a Change of Control Repurchase Event, if that
      failure continues for 90 days after notice is provided as set forth in clause (4) of Section 501 of the Base Indenture.

    
      8

      
        

    

    

    

    Article Six

    

    

    Amendments

    

    

    Section 6.01          Certain
          Amendments to the Indenture

    

    

    The Indenture, solely with respect to the Notes, is hereby amended as follows:

    

    

    (a)          Section 603(8) of the
        Base Indenture is hereby amended by deleting the text of Section 603(8) in its entirety and replacing it with the following text:

    

    

    (8) the Trustee shall not be deemed to have notice of any default or Event of Default unless written notice of any event which is in
      fact such a default is received by a responsible officer of the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Securities and this Indenture.

    

    

    (b)          Section 801 of the Base
        Indenture (Company May Consolidate, Etc., Only on Certain Terms) is hereby amended by deleting the text of Section 801 in its entirety and replacing it with the following text:

    

    

    The Company shall not consolidate with or merge into any other Person (in a transaction in which the Company is not the surviving
      corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, unless:

    

    

    (1) in case the Company shall consolidate with or merge into another Person (in a transaction in which the Company is not the surviving
      corporation) or convey, transfer or lease its properties and assets substantially as an entirety to any Person, the Person formed by such consolidation or into which the Company is merged or the Person which acquires by conveyance or transfer, or
      which leases, the properties and assets of the Company substantially as an entirety shall be a corporation, limited liability company, partnership, trust or other business entity, shall be organized and validly existing under the laws of the United
      States of America, any State thereof or the District of Columbia and shall expressly assume, by an indenture supplemental hereto, executed and delivered to the Trustee, in form satisfactory to the Trustee, the due and punctual payment of the
      principal of and any premium and interest on all the Securities and the performance or observance of every covenant of this Indenture on the part of the Company to be performed or observed;

    

    

    (2) immediately after giving effect to such transaction, no Event of Default, and no event which, after notice or lapse of time or both,
      would become an Event of Default, shall have happened and be continuing; and

    

    

    (3) the Company has delivered to the Trustee an Officers’ Certificate and an Opinion of Counsel, each stating that such consolidation,
      merger, conveyance, transfer or lease and, if a supplemental indenture is required in connection with such transaction, such supplemental indenture comply with this Article and that all conditions precedent herein provided for relating to such
      transaction have been complied with.

    

    

        (c)          Section 1004 of the Base Indenture (Statement by Officers as to Default) is hereby amended by deleting the text of Section 1004 in its entirety and replacing it with the
        following text:

    

    

    The Company will deliver to the Trustee, within 120 days after the end of each fiscal year of the Company ending after the date hereof,
      an Officers’ Certificate, stating whether or not, to the best knowledge of the signers thereof, the Company is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture (without regard to any period
      of grace or requirement of notice provided hereunder) and, if the Company shall be in default, specifying all such defaults and the nature and status thereof of which they may have knowledge. Additionally, the Company will notify the Trustee promptly
      upon becoming aware that it is in default in the performance and observance of any of the terms, provisions and conditions of this Indenture.

    
      9

      
        

    

    

    

        (d)          Section 1008 of the Base Indenture (Limitation on Liens) is hereby amended by deleting the text of Section 1008 in its entirety and replacing it with the following text:

    

    

    The Company will not issue, incur, create, assume or guarantee, and will not permit any Restricted Subsidiary to issue, incur, create,
      assume or guarantee, any Secured Debt without in any such case effectively providing concurrently with such issuance, incurrence, creation, assumption or guarantee of any such Secured Debt, or the grant of a mortgage with respect to any such
      indebtedness, that the Securities (together with, if the Company shall so determine, any other indebtedness of or guarantee by the Company or such Restricted Subsidiary ranking equally with the Securities and then existing or thereafter created)
      shall be secured equally and ratably with (or, at the option of the Company, prior to) such Secured Debt. The foregoing restriction with respect to Secured Debt, however, will not apply to:

    

    

    (1) mortgages on property existing at the time of acquisition thereof by the Company or any Subsidiary, whether or not assumed, provided
      that such mortgages were in existence prior to the contemplation of such acquisitions;

    

    

    (2) mortgages on property, shares of stock or indebtedness or other assets of any corporation existing at the time such corporation
      becomes a Restricted Subsidiary, provided that such mortgages are not incurred in anticipation of such corporation becoming a Restricted Subsidiary (which may include property previously leased by the Company and leasehold interests thereon, provided
      that the lease terminates prior to or upon the acquisition);

    

    

    (3) mortgages on property, shares of stock or indebtedness existing at the time of acquisition thereof by the Company or a Restricted
      Subsidiary (including leases) or mortgages thereon to secure the payment of all or any part of the purchase price thereof, or mortgages on property, shares of stock or indebtedness to secure any indebtedness for borrowed money incurred prior to, at
      the time of or within 12 months after, the latest of the acquisition thereof, or, in the case of property, the completion of construction, the completion of improvements, or the commencement of substantial commercial operation of such property for
      the purpose of financing all or any part of the purchase price thereof, such construction, or the making of such improvements;

    

    

    (4) mortgages to secure indebtedness owing to the Company or to a Restricted Subsidiary;

    

    

    (5) mortgages existing on October 9, 2015;

    

    

    (6) mortgages on property of a corporation existing at the time such corporation is merged into or consolidated with the Company or a
      Restricted Subsidiary or at the time of a sale, lease or other disposition of the properties of a corporation as an entirety or substantially as an entirety to the Company or a Restricted Subsidiary, provided that such mortgage was not incurred in
      anticipation of such merger or consolidation or sale, lease or other disposition;

    

    

    (7) mortgages in favor of the United States or any State, territory or possession thereof (or the District of Columbia), or any
      department, agency, instrumentality or political subdivision of the United States or any State, territory or possession thereof (or the District of Columbia), (i) to secure partial, progress, advance or other payments pursuant to any contract or
      statute, (ii) to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price of the cost of constructing, repairing or improving the property subject to such mortgages or (iii) to secure taxes, assessments or
      other governmental charges or levies which are not yet due and payable or are payable without penalty or of which amount, applicability or validity is being contested by the Company and/or any Restricted Subsidiary in good faith by appropriate
      proceedings and the Company and/or such Restricted Subsidiary shall have set aside in its books reserves which it deems to be adequate with respect thereto (segregated to the extent required by generally accepted accounting principles);

    

    

    (8) mortgages created in connection with the acquisition of assets or a project financed with, and created to secure, a Nonrecourse
      Obligation;

    

    

    (9) mortgages for materialmen’s, mechanic’s, workmen’s, repairmen’s, landlord’s liens for rent, or other similar liens arising in the
      ordinary course of business in respect of obligations which are not yet overdue or which are being contested by the Company or any Restricted Subsidiary in good faith and by appropriate proceedings;

    

    

    (10) mortgages consisting of zoning restrictions, licenses, easements and restrictions on the use of real property and minor defects and
      irregularities in the title thereto, which do not materially impair the use of such property by the Company or any Restricted Subsidiary in the operation of business or the value of such property for the purpose of such business; and

    
      10

      
        

    

    

    

    (11) extensions, renewals, refinancings or replacements of any mortgage referred to in the foregoing clauses (1), (2), (3), (4), (5),
      (6), (7), (8), (9) and (10); provided, however, that any mortgages permitted by any of the foregoing clauses (1), (2), (3), (4), (5), (6), (7), (8), (9) and (10) shall not extend to or cover any property of the Company or such Restricted Subsidiary,
      as the case may be, other than the property, if any, specified in such clauses and improvements thereto, and provided further that any refinancing or replacement of any mortgages permitted by the foregoing clauses (7) and (8) shall be of the type
      referred to in such clauses (7) or (8), as the case may be.

    

    

    Notwithstanding the restrictions outlined in the preceding paragraph, the Company or any Restricted Subsidiary will be permitted to
      issue, incur, create, assume or guarantee Secured Debt, which would otherwise be subject to such restrictions, without equally and ratably securing the Securities, provided that after giving effect thereto, the aggregate amount of all Secured Debt
      (not including mortgages permitted under clauses (1) through (11) above) does not exceed the greater of $500 million and 10% of the Consolidated Net Tangible Assets of the Company as most recently determined on or prior to such date.

    

    

    For purposes of this Section 1008:

    

    

    (i) “Secured Debt” means any debt for
      borrowed money secured by a mortgage upon any Principal Property of the Company or any Restricted Subsidiary or upon any shares of stock or indebtedness of any Restricted Subsidiary (whether such Principal Property, shares or indebtedness are now
      existing or owed or hereafter created or acquired); and

    

    

    (ii) “mortgage” means a mortgage, security
      interest, pledge, lien, charge or other encumbrance.

    

    

        (e)          Section 1009 of the Base Indenture (Limitations on Sale and Lease-Back Transactions) is hereby amended by deleting the text of Section 1009 in its entirety and replacing it with
        the following text:

    

    

    The Company will not, nor will it permit any Restricted Subsidiary to, enter into any Sale and Lease-Back Transaction with respect to
      any Principal Property, other than any such transaction involving a lease for a term of not more than three years or any such transaction between the Company and a Restricted Subsidiary or between Restricted Subsidiaries, unless: (1) the Company or
      such Restricted Subsidiary would be entitled to incur indebtedness secured by a mortgage on the Principal Property involved in such transaction at least equal in amount to the Attributable Debt with respect to such Sale and Lease-Back Transaction,
      without equally and ratably securing the Securities, pursuant to Section 1008; or (2) the Company shall apply an amount equal to the greater of the net proceeds of such sale and the Attributable Debt with respect to such Sale and Lease-Back
      Transaction within 180 days of such sale to either (or a combination of) the retirement (other than mandatory retirement, mandatory prepayment or sinking fund payment or by a payment at maturity) of debt for borrowed money of the Company or a
      Restricted Subsidiary that matures more than 12 months after the creation of such indebtedness or the purchase, construction or development of other comparable property.

    

    

    Notwithstanding the restrictions outlined in the preceding paragraph, the Company or any Restricted Subsidiary will be permitted to
      enter into Sale and Lease-Back Transactions which would otherwise be subject to such restrictions, without applying the net proceeds of such transactions in the manner set forth in clause (2) of the preceding paragraph, provided that after giving
      effect thereto, the aggregate amount of such Sale and Lease-Back Transactions, together with the aggregate amount of all Secured Debt not permitted by clauses (1) through (11) under Section 1008, does not exceed the greater of $500 million and 10% of
      Consolidated Net Tangible Assets of the Company as most recently determined on or prior to such date.

    

    

    (f)          Section 303 of the Base
        Indenture (Execution, Authentication, Delivery and Dating) is hereby amended and restated by deleting the last sentence of the first paragraph thereof in its entirety and replacing it with the following text:

    

    

    The signature of any of these officers on the Securities may be manual, facsimile, or electronic.

    

    

    (g)          Section 303 of the Base
        Indenture (Execution, Authentication, Delivery and Dating) is hereby amended and restated by deleting the second paragraph thereof in its entirety and replacing it with the following text:

    

    

    Securities bearing the manual, facsimile or electronic signatures of individuals who were at any time the proper officers of the Company
      shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Securities or did not hold such offices at the date of such Securities.

    
      11

      
        

    

    

    

    Article Seven

    

    

    Miscellaneous

    

    

    Section 7.01          Application of Seventeenth Supplemental Indenture.

    

    

    The Indenture, as supplemented by this Seventeenth Supplemental Indenture, is in all respects ratified and confirmed. This Seventeenth
      Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided.

    

    

    Section 7.02          Trust Indenture Act.

    

    

    If any provision hereof limits, qualifies or conflicts with the duties imposed by Sections 310 through 317 of the Trust Indenture Act,
      the imposed duties shall control.

    

    

    Section 7.03          Conflict with Base Indenture.

    

    

    To the extent not expressly amended or modified by this Seventeenth Supplemental Indenture, the Base Indenture shall remain in full
      force and effect. If any provision of this Seventeenth Supplemental Indenture relating to the Notes is inconsistent with any provision of the Base Indenture, the provision of this Seventeenth Supplemental Indenture shall control.

    

    

    Section 7.04          Governing
          Law.

    

    

    THIS SEVENTEENTH SUPPLEMENTAL INDENTURE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

    

    

    Section 7.05          Successors.

    

    

    All agreements of the Company in the Base Indenture, this Seventeenth Supplemental Indenture and the Notes shall bind its successors.
      All agreements of the Trustee in the Base Indenture and this Seventeenth Supplemental Indenture shall bind its successors.

    

    

    Section 7.06          Counterparts.

    

    

    This instrument may be executed in any number of counterparts, each of which so executed shall be deemed to be an original, but all such
      counterparts shall together constitute but one and the same instrument.  Delivery of an executed counterpart of this Seventeenth Supplemental Indenture by facsimile, electronically in portable document format (including any electronic signature
      covered by the U.S. federal ESIGN Act of 2000, Uniform Electronic Transactions Act, the Electronic Signatures and Records Act or other applicable law, e.g., www.docusign.com) or in any other format will be effective as delivery of a manually executed
      counterpart. The Company agrees to assume all risks arising out of the use of using electronic signatures and electronic methods to submit communications to the Trustee, including without limitation the risk of the Trustee acting on unauthorized
      instructions and the risk of interception and misuse by third parties.

    

    

    Section 7.07          Trustee Disclaimer.

    

    

    The Trustee makes no representation as to the validity or sufficiency of this Seventeenth Supplemental Indenture and the Notes other
      than as to the validity of its execution and delivery by the Trustee. The recitals and statements herein and in the Notes are deemed to be those of the Company and not the Trustee and the Trustee assumes no responsibility for the same. The Trustee or
      any Authenticating Agent shall not be accountable for the use or application by the Company of Notes or the proceeds thereof.

    

    

    [Remainder of page intentionally left blank]

    
      12

      
        

    

    

    

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

    

    

    	 	
            HEWLETT PACKARD ENTERPRISE COMPANY

          
	 	 	 
	 	 	 
	 	
            By:

          	
            /s/ Kirt Karros

          
	 	
            Name:

          	
            Kirt Karros

          
	 	
            Title:

          	
            Senior Vice President, Finance and Treasurer

          
	 	 	 
	 	 	 
	 	
            THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

          
	 	 	 
	 	 	 
	 	
            By:

          	
            /s/ Kenneth Helbig

          
	 	
            Name:

          	
            Kenneth Helbig

          
	 	
            Title:

          	
            Vice President

          

    
      
        

    

    
    

    

    Appendix A

    

    

    PROVISIONS RELATING TO INITIAL NOTES AND

    ADDITIONAL NOTES

    

    

    Section 1.1          Definitions.

    

    

    (a)          Capitalized Terms.

    

    

    Capitalized terms used but not defined in this Appendix A have the meanings given to them in the Indenture. The following capitalized
      terms have the following meanings:

    

    

    “Custodian” means the Trustee, as custodian
      with respect to the Notes in global form, or any successor entity thereto.

    

    

    “Definitive Note” means a certificated
      Initial Note or Additional Note issued pursuant to the Indenture that does not include the Global Notes Legend.

    

    

    “Global Note” has the meaning ascribed to the
      term “Global Security” in the Indenture.

    

    

    (b)          Other Definitions.

    

    

    	 	
            Term:

          	 	
            Defined in Section:

          
	 	 	 	 
	 	
            “Agent Members”

          	 	
            2.1(c)

          
	 	
            “Definitive Notes Legend”

          	 	
            2.2(e)

          
	 	
            “ERISA Legend”

          	 	
            2.2(e)

          
	 	
            “Global Notes Legend”

          	 	
            2.2(e)

          

     

      

    Section 2.1          Form and Dating.

    

    

    (a)          [Reserved]

    

    

    (b)          Global Notes. The Initial Notes shall be issued initially in the form of one or more Global Notes, in each case without interest coupons and bearing the Global Notes Legend, which
        shall be deposited on behalf of the purchasers of the Notes represented thereby with the Custodian, and registered in the name of the Depositary or a nominee of the Depositary, duly executed by the Company and authenticated by the Trustee as
        provided in the Indenture. Each Global Note shall represent such of the outstanding Notes as shall be specified in the “Schedule of Exchange of Global Notes” attached thereto and each shall provide that it shall represent the aggregate principal
        amount of Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as applicable, to reflect exchanges and redemptions. Any endorsement
        of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Custodian, at the direction of the Trustee, in accordance with
        instructions given by the Holder thereof as required by Sections 304 and Section 305 of the Base Indenture and Section 2.2(c) of this Appendix A.

    

    

    (c)          Book-Entry Provisions. This Section 2.1(c) shall apply only to a Global Note deposited with or on behalf of the Depositary.

    

    

    The Company shall execute and the Trustee shall, in accordance with this Section 2.1(c) and Section 303 of the Indenture and pursuant to
      a Company Order signed by one authorized officer of the Company, authenticate and deliver initially one or more Global Notes that (i) shall be registered in the name of the Depositary for such Global Note or Global Notes or the nominee of such
      Depositary and (ii) shall be delivered by the Trustee to such Depositary or pursuant to such Depositary’s instructions or held by the Trustee as Custodian.

    
      A-1

      
        

    

    

    

    Members of, or participants in, the Depositary (“Agent
          Members”) shall have no rights under the Indenture with respect to any Global Note held on their behalf by the Depositary or by the Trustee as Custodian or under such Global Note, and the Depositary may be treated by the Company, the
      Trustee and any agent of the Company or the Trustee as the absolute owner of such Global Note for all purposes whatsoever. Notwithstanding the foregoing, nothing herein shall prevent the Company, the Trustee or any agent of the Company or the Trustee
      from giving effect to any written certification, proxy or other authorization furnished by the Depositary or impair, as between the Depositary and its Agent Members, the operation of customary practices of such Depositary governing the exercise of
      the rights of a holder of a beneficial interest in any Global Note.

    

    

    (d)          Definitive Notes. Except as provided in Section 2.2 or Section 2.3 of this Appendix A, owners of beneficial interests in Global Notes shall not be entitled to receive physical
        delivery of Definitive Notes.

    

    

    Section 2.2          Transfer and Exchange.

    

    

    (a)          Transfer and Exchange of Definitive Notes for Definitive Notes. When Definitive Notes are presented to the Security Registrar with a written request:

    

    

    (i)          to
        register the transfer of such Definitive Notes; or

    

    

    (ii)          to
        exchange such Definitive Notes for an equal principal amount of Definitive Notes of other authorized denominations;

    

    

    the Security Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Notes surrendered for transfer
      or exchange shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing.

    

    

    (b)          Restrictions on Transfer of a Definitive Note for a Beneficial Interest in a Global Note. A Definitive Note may not be exchanged for a beneficial interest in a Global Note except
        upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Note, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Security Registrar,
        together with written instructions directing the Trustee to make, or to direct the Custodian to make, an adjustment on its books and records with respect to such Global Note to reflect an increase in the aggregate principal amount of the Notes
        represented by the Global Note, such instructions to contain information regarding the Depositary account to be credited with such increase, the Trustee shall cancel such Definitive Note and cause, or direct the Custodian to cause, in accordance
        with the standing instructions and procedures existing between the Depositary and the Custodian, the aggregate principal amount of Notes represented by the Global Note to be increased by the aggregate principal amount of the Definitive Note to be
        exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Note equal to the principal amount of the Definitive Note so canceled. If the applicable Global Note
        is not then outstanding, the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers’ Certificate, a new applicable Global Note in the appropriate principal amount.

    

    

    (c)          Transfer and Exchange of Global Notes.

    

    

    (i)          The
        transfer and exchange of Global Notes or beneficial interests therein shall be effected through the Depositary, in accordance with the Indenture (including applicable restrictions on transfer set forth in Section 2.2(d) of this Appendix A, if any)
        and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Note shall deliver to the Security Registrar a written order given in accordance with the Depositary’s procedures containing information regarding the
        participant account of the Depositary to be credited with a beneficial interest in such Global Note, or another Global Note, and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Note
        and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Note being transferred.

    
      A-2

      
        

    

    

    

    (ii)          If
        the proposed transfer is a transfer of a beneficial interest in one Global Note to a beneficial interest in another Global Note, the Security Registrar shall reflect on its books and records the date and an increase in the principal amount of the
        Global Note to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Security Registrar shall reflect on its books and records the date and a corresponding decrease in the
        principal amount of the Global Note from which such interest is being transferred.

    

    

    (iii)          Notwithstanding
        any other provisions of this Appendix A (other than the provisions set forth in Section 2.3 of this Appendix A), a Global Note may not be transferred except as a whole and not in part if the transfer is 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.

    

    

    (d)          [Reserved]

    

    

    (e)          Legends.

    

    

    Each Definitive Note shall bear the following legend (“Definitive Notes
          Legend”):

    

    

    IN CONNECTION WITH ANY TRANSFER, THE HOLDER WILL DELIVER TO THE SECURITY REGISTRAR SUCH CERTIFICATES AND OTHER INFORMATION AS SUCH
      SECURITY REGISTRAR MAY REASONABLY REQUIRE TO CONFIRM THAT THE TRANSFER COMPLIES WITH THE FOREGOING RESTRICTIONS.

    

    

    Each Global Note shall bear the following legend (“Global Notes Legend”):

    

    

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

    

    

    TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR
      THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

    

    

    Each Note shall bear the following additional legend (“ERISA Legend”):

    

    

    BY ITS ACQUISITION OF THIS SECURITY OR ANY INTEREST HEREIN, THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT
      EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
      AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986,
      AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA
      OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2)
      THE ACQUISITION AND HOLDING OF THIS SECURITY OR ANY INTEREST HEREIN WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

    
      A-3

      
        

    

    

    

    (f)          Cancellation or Adjustment of Global Note. At such time as all beneficial interests in a Global Note have either been exchanged for Definitive Notes, transferred in exchange for
        an interest in another Global Note, redeemed, repurchased or canceled, such Global Note shall be returned by the Depositary to the Trustee for cancellation or retained and canceled by the Trustee. At any time prior to such cancellation, if any
        beneficial interest in a Global Note is exchanged for Definitive Notes, transferred in exchange for an interest in another Global Note, redeemed, repurchased or canceled, the principal amount of Notes represented by such Global Note shall be
        reduced and an adjustment shall be made on the books and records of the Trustee (if it is then the Custodian for such Global Note) with respect to such Global Note, by the Trustee or the Custodian, to reflect such reduction.

    

    

    (g)          Obligations with Respect to Transfers and Exchanges of Notes.

    

    

    (i)          To
        permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate, Definitive Notes and Global Notes at the Security Registrar’s request.

    

    

    (ii)          No
        service charge shall be made for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax, assessments, or similar governmental charge payable in connection therewith (other than
        any such transfer taxes, assessments or similar governmental charge payable upon exchanges pursuant to Sections 304, 305, 306, 906 and 1107 of the Base Indenture).

    

    

    (iii)          Prior
        to the due presentation for registration of transfer of any Note, the Company, the Trustee, the Paying Agent or the Security Registrar may deem and treat the person in whose name a Note is registered as the absolute owner of such Note for the
        purpose of receiving payment of principal, premium, if any, and interest on such Note and for all other purposes whatsoever, whether or not such Note is overdue, and none of the Company, the Trustee, the Paying Agent or the Security Registrar shall
        be affected by notice to the contrary.

    

    

    (iv)          All
        Notes issued upon any transfer or exchange pursuant to the terms of the Indenture shall evidence the same debt and shall be entitled to the same benefits under the Indenture as the Notes surrendered upon such transfer or exchange.

    

    

    (h)          No Obligation of the Trustee.

    

    

    (i)          The
        Trustee shall have no responsibility or obligation to any beneficial owner of a Global Note, a member of, or a participant in the Depositary or any other Person with respect to the accuracy of the records of the Depositary or its nominee or of any
        participant or member thereof, with respect to any ownership interest in the Notes or with respect to the delivery to any participant, member, beneficial owner or other Person (other than the Depositary) of any notice (including any notice of
        redemption or repurchase) or the payment of any amount, under or with respect to such Notes. All notices and communications to be given to the Holders and all payments to be made to Holders under the Notes shall be given or made only to the Holders
        (which shall be the Depositary or its nominee in the case of a Global Note). The rights of beneficial owners in any Global Note shall be exercised only through the Depositary subject to the applicable rules and procedures of the Depositary. The
        Trustee may conclusively rely and shall be fully protected in conclusively relying upon information furnished by the Depositary with respect to its members, participants and any beneficial owners.

    

    

    (ii)          The
        Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under the Indenture or under applicable law with respect to any transfer of any interest in any Note (including any
        transfers between or among Depositary participants, members or beneficial owners in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when
        expressly required by, the terms of the Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

    

    

    (iii)          Neither
        the Trustee nor any agent shall have any responsibility or liability for any actions taken or not taken by the Depositary.

    
      A-4

      
        

    

    

    

    Section 2.3          Definitive Notes.

    

    

    (a)          A Global Note deposited
        with the Depositary or with the Trustee as Custodian pursuant to Section 2.1 may be transferred to the beneficial owners thereof in the form of Definitive Notes in an aggregate principal amount equal to the principal amount of such Global Note, in
        exchange for such Global Note, only if such transfer complies with Section 2.2 of this Appendix A and (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Note or if at any time the
        Depositary ceases to be a “clearing agency” registered under the Exchange Act and, in each case, a successor depositary is not appointed by the Company within 90 days of such notice or after the Company becomes aware of such cessation, or (ii) an
        Event of Default has occurred and is continuing and the Security Registrar has received a request from the Depositary. In addition, any Affiliate of the Company that is a beneficial owner of all or part of a Global Note may have such Affiliate’s
        beneficial interest transferred to such Affiliate in the form of a Definitive Note by providing a written request to the Company and the Trustee and such Opinions of Counsel, certificates or other information as may be required by the Indenture or
        the Company or Trustee.

    

    

    (b)          Any Global Note that is
        transferable to the beneficial owners thereof pursuant to this Section 2.3 shall be surrendered by the Depositary to the Trustee, to be so transferred, in whole or from time to time in part, without charge, and the Trustee shall authenticate and
        deliver, upon such transfer of each portion of such Global Note, an equal aggregate principal amount of Definitive Notes of authorized denominations. Any portion of a Global Note transferred pursuant to this Section 2.3 shall be executed,
        authenticated and delivered only in denominations of $2,000 and integral multiples of $1,000 in excess thereof and registered in such names as the Depositary shall direct.

    

    

    (c)          The Holder of a Global
        Note may grant proxies and otherwise authorize any Person, including Agent Members and Persons that may hold interests through Agent Members, to take any action which a Holder is entitled to take under the Indenture or the Notes.

    

    

    (d)          In the event of the
        occurrence of any of the events specified in Section 2.3(a) of this Appendix A, the Company shall promptly make available to the Trustee a reasonable supply of Definitive Notes in fully registered form without interest coupons.

    
      A-5

      
        

    

    

    

    Exhibit A

    

    

    Form of Note representing the 1.450% Notes due 2024

    

    

    No. R-

    

    

    HEWLETT PACKARD ENTERPRISE COMPANY

    

    

    1.450% Notes due 2024

    

    

    $[●]

    

    

    CUSIP No. 42824C BJ7

    

    

    [GLOBAL NOTES ONLY] [UNLESS THIS
      CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, 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 IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS 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.

    

    

    TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO DTC, TO NOMINEES OF DTC OR TO A SUCCESSOR
      THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.]

    

    

    BY ITS ACQUISITION OF THIS SECURITY OR ANY INTEREST HEREIN, THE HOLDER THEREOF WILL BE DEEMED TO HAVE REPRESENTED AND WARRANTED THAT
      EITHER (1) NO PORTION OF THE ASSETS USED BY SUCH HOLDER TO ACQUIRE OR HOLD THIS SECURITY OR ANY INTEREST HEREIN CONSTITUTES THE ASSETS OF AN EMPLOYEE BENEFIT PLAN THAT IS SUBJECT TO TITLE I OF THE U.S. EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974,
      AS AMENDED (“ERISA”), OF A PLAN, INDIVIDUAL RETIREMENT ACCOUNT OR OTHER ARRANGEMENT THAT IS SUBJECT TO SECTION 4975 OF THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE “CODE”) OR PROVISIONS UNDER ANY OTHER FEDERAL, STATE, LOCAL, NON-U.S. OR
      OTHER LAWS OR REGULATIONS THAT ARE SIMILAR TO SUCH PROVISIONS OF ERISA OR THE CODE (“SIMILAR LAWS”), OR OF AN ENTITY WHOSE UNDERLYING ASSETS ARE CONSIDERED TO INCLUDE “PLAN ASSETS” OF ANY SUCH PLAN, ACCOUNT OR ARRANGEMENT, OR (2) THE ACQUISITION AND
      HOLDING OF THIS SECURITY OR ANY INTEREST HEREIN WILL NOT CONSTITUTE A NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF ERISA OR SECTION 4975 OF THE CODE OR A SIMILAR VIOLATION UNDER ANY APPLICABLE SIMILAR LAWS.

    
      
        

    

    
    

    

    Hewlett Packard Enterprise Company, a corporation duly organized and existing under the laws of Delaware (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to          , or
      registered assigns, the principal sum of   Dollars ($             ) or such other amount indicated on the Schedule of Exchange of Global Notes attached hereto on April 1, 2024 (if such date is not a Business Day, payment of principal, premium, if
      any, and interest for the Securities will be paid on the next Business Day); provided, however, that no interest on that payment will accrue from and after April 1, 2024, and to pay interest thereon from July 17, 2020, or from the most recent Interest Payment Date to which interest has been paid or duly provided
      for, semi-annually in arrears on April 1 and October 1 of each year, commencing April 1, 2021, at the rate of 1.450% per annum, until the principal hereof is paid or made available for payment. The interest so payable, and punctually paid or duly
      provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Holders of this Security (or one or more Predecessor Securities) at the close of business on the Regular Record Date for such interest, which shall be the
      15th calendar day (whether or not a Business Day), as the case may be, next preceding such 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 whereof shall be given to Holders of Securities of this series not less than 10 days prior to such Special Record Date, or be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on
      which the Securities of this series may be listed, and upon such notice as may be required by such exchange, all as more fully provided in said Indenture. Interest on the Security shall be computed on the basis of a 360-day year comprised of twelve
      30-day months. If any Interest Payment Date for the Securities is not a Business Day, then payment of interest shall be made on the next succeeding Business Day with the same force and effect as if made on the date such payment was due, and no
      interest on such payment shall accrue for the period from and after such Interest Payment Date to the date of such payment on the next succeeding Business Day.

    

    

    So long as all of the Securities of this series are represented by Global Securities, the principal of, premium, if any, and interest,
      if any, on this Global Security shall be paid in same day funds to the Depositary, or to such name or entity as is requested by an authorized representative of the Depositary. If at any time the Securities of this series are no longer represented by
      the Global Securities and are issued in definitive form (“Certificated Securities”), then the principal of, premium, if any, and interest, if any, on each
      Certificated Security at Maturity shall be paid to the Holder upon surrender of such Certificated Security at the office or agency maintained by the Company in the Borough of Manhattan, The City of New York (which shall initially be the principal
      corporate trust office of The Bank of New York Mellon Trust Company, N.A., as Trustee) or at such other place or places as may be designated in or pursuant to the Indenture, provided that such Certificated Security is surrendered to the Trustee,
      acting as Paying Agent, in time for the Paying Agent to make such payments in such funds in accordance with its normal procedures. Payments of interest with respect to Certificated Securities other than at Maturity may, at the option of the Company,
      be made by check mailed to the address of the Person entitled thereto as it appears on the Security Register on the relevant Regular Record Date or Special Record Date or by wire transfer in same day funds to such account as may have been
      appropriately designated to the Paying Agent by such Person in writing not later than such relevant Regular Record Date or Special Record Date.

    

    

    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.

    

    

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

    

    

    [Remainder of page intentionally left blank]

    
      2

      
        

    

    

    

    IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

    

    

    	 	 	
            HEWLETT PACKARD ENTERPRISE COMPANY

          
	 	 	 	 
	 	 	
            By:

          	 
	 	 	
            Name:

          	 
	 	 	
            Title:

          	 
	 	 	 	 
	
            Attest:

          	 	 	 
	 	 	 	 
	 	 	 	 
	
            Name:

          	 	 	 
	
            Title:

          	 	 	 

    
      3

      
        

    

    

    

    
      Trustee’s Certificate of Authentication.

    

    
      

      

    

    
      This is one of the Securities of the series designated

      herein referred to in the within-mentioned Indenture.

    

    
      

      

    

    
      Dated:

       

      

    

    
      

      

    

    
      THE BANK OF NEW YORK MELLON

      TRUST COMPANY, N.A., as Trustee

    

    
       

      

    

    	
            By:

          	 	 
	 	
            Authorized Signatory

          	 

    
      4

      
        

    

    

    

    Reverse of Security

    

    

    HEWLETT PACKARD ENTERPRISE COMPANY

    

    

    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 October 9, 2015 (the “Base Indenture”), between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (herein called the “Trustee,”
      which term includes any successor trustee under the Indenture), as supplemented by the Seventeenth Supplemental Indenture, dated as of July 17, 2020 (the “Seventeenth
          Supplemental Indenture,” and together with the Base Indenture, the “Indenture”), between the Company and the Trustee, and reference is hereby
      made to the Indenture and all indentures supplemental thereto 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 in aggregate principal amount of $1,000,000,000.

    

    

    The Company may redeem the Securities, in whole at any time or in part from time to time, on at least 15 days’ but no more than 45 days’
      prior written notice sent to the Holders of the Securities to be redeemed.

    

    

    Prior to the Par Call Date, the Securities will be redeemable in whole at any time or in part from time to time, at the Company’s option,
      at a redemption price equal to the greater of:

    

    

    (i)          100%
        of the principal amount of the Securities to be redeemed; and

    

    

    (ii)          the
        sum, as determined by the Company based on the Reference Treasury Dealer Quotations, of the present value of the remaining scheduled payments of principal and interest thereon that would be due if the Securities matured on the Par Call Date
        (exclusive of interest accrued to the Redemption Date), discounted to the Redemption Date on a semi-annual basis (assuming a 360-day year consisting of twelve 30-day months) at the Treasury Rate plus 20 basis points,

    

    

    plus, in each case, accrued and unpaid interest, if any, on the amount being redeemed to, but excluding, the
      Redemption Date.

    

    

    On or after the Par Call Date, the Securities will be redeemable in whole at any time or in part from time to time, at the Company’s
      option, at a redemption price equal to 100% of the principal amount of the Securities to be redeemed, plus accrued and unpaid interest, if any, to, but excluding, the Redemption Date. The Company will calculate the redemption price.

    

    

    If money sufficient to pay the redemption price of and accrued interest on the Securities (or portions thereof) to be redeemed on the
      Redemption Date is deposited with the Trustee or Paying Agent on or before the Redemption Date and certain other conditions are satisfied, then on and after the Redemption Date, interest will cease to accrue on the Securities (or such portion
      thereof) called for redemption and such Securities will cease to be outstanding. If any Redemption Date is not a Business Day, the Company will pay the redemption price on the next Business Day without any interest or other payment due to the delay.

    

    

    If fewer than all of the Securities are to be redeemed at any time, not more than 45 days prior to the Redemption Date, the particular
      Securities or portions thereof for redemption from the outstanding Securities not previously called shall be selected in accordance with the procedures of DTC or by lot. No Securities of $1,000 or less will be redeemed in part.

    

    

    In the case of any redemption, the Security Registrar will not be required to register the transfer or exchange of any Security:

    

    

    (i)          during
        a period beginning 15 days before the day of sending of the relevant notice of redemption and ending on the close of business on that day of sending; or

    

    

    (ii)          if
        the Company has called the Security for redemption in whole or in part, except the unredeemed portion of any Security being redeemed in part.

    
      5

      
        

    

    

    

    “Comparable Treasury Issue” means the United
      States Treasury security selected, in accordance with customary financial practice, by an Independent Investment Banker as having a maturity comparable to the remaining term (assuming for this purpose that the Securities matured on the Par Call Date)
      (the “Remaining Life”) of the Securities to be redeemed.

    

    

    “Comparable Treasury Price” means, with
      respect to any Redemption Date, (1) the average of the Reference Treasury Dealer Quotations for such Redemption Date, after excluding the highest and lowest Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such
      Reference Treasury Dealer Quotations, the average of all such quotations.

    

    

    “Independent Investment Banker” means one of
      the Reference Treasury Dealers that the Company appoints to act as the Independent Investment Banker from time to time.

    

    

    “Reference Treasury Dealer” means each of
      Citigroup Global Markets Inc., Deutsche Bank Securities Inc., HSBC Securities (USA) Inc., Wells Fargo Securities, LLC and any other primary treasury dealer selected by the Company (each, a “Primary Treasury Dealer”) and their respective successors which the Company specifies from time to time; provided, however, that if any of them ceases 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, the average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted
      in writing to the Company by such Reference Treasury Dealer at 5:00 p.m., New York City time, on the third Business Day preceding such Redemption Date.

    

    

    “Treasury Rate” means, with respect to any
      Redemption Date, the rate per year equal to: (1) the yield, under the heading which represents the average for the immediately preceding week, appearing in the most recently published statistical release designated “H.15” or any successor publication
      which is published weekly by the Board of Governors of the Federal Reserve System and which establishes yields on actively traded United States Treasury securities adjusted to constant maturity under the caption “Treasury Constant Maturities,” for
      the maturity corresponding to the Comparable Treasury Issue; provided that, if no maturity is within three months before or after the Remaining Life of the Securities to be redeemed, yields for the two published maturities most closely corresponding
      to the Comparable Treasury Issue shall be determined and the Treasury Rate shall be interpolated or extrapolated from those yields on a straight-line basis, rounding to the nearest month; or (2) if such release (or any successor release) is not
      published during the week preceding the calculation date or does not contain such yields, the rate per year equal to the semiannual equivalent yield to maturity 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 shall be calculated on the third Business Day preceding the Redemption Date.

    

    

    
      The Indenture contains provisions, which will apply to the Securities, for defeasance and covenant defeasance and Events of Default
        with respect to this Security, in each case upon compliance with certain conditions set forth in the Indenture.

      

      

      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.

      

      

      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 specified percentages in 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.

    

    
      6

      
        

    

    

    

    
      As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have the right to institute any
        proceeding with respect to the Indenture or for the appointment of a receiver or Trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to
        the Securities of this series, the Holders of not less than 25% in principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default
        as Trustee and offered the Trustee indemnity satisfactory to it, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such
        request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity. The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of
        any payment of principal hereof or any premium or interest hereon on or after the respective due dates expressed herein.

      

      

      No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the
        Company, which is absolute and unconditional, to pay the principal of and any premium and interest on this Security at the times, place and rate, and in the coin or currency, herein prescribed.

      

      

      The Securities of this series are issuable only in registered form without coupons in denominations of $2,000 and any integral
        multiples of $1,000 in excess thereof.

      

      

      This Security shall be deemed to be a contract made under the laws of the State of New York, and for all purposes shall be construed
        in accordance with and governed by the laws of said State, without regard to conflict of laws principles thereof.

      

      

      All terms used in this Security that are defined in the Indenture shall have the meanings assigned to them in the Indenture.

      

      

    

    Purchase of Securities upon a Change of Control Triggering Event

    

    

    
      If a Change of Control Repurchase Event occurs after the date hereof, unless the Company has exercised its right to redeem the
        Securities, the Company will make an offer to each Holder of Securities to repurchase all or any part (equal to $2,000 or an integral multiple of $1,000 in excess thereof) of such Holder’s Securities at a repurchase price in cash equal to 101% of
        the aggregate principal amount of Securities repurchased plus any accrued and unpaid interest on the Securities repurchased to the date of purchase.

      

      

      Within 30 days following any Change of Control Repurchase Event or, at the Company’s option, prior to any Change of Control, but after
        the public announcement of the transaction or event that constitutes or may constitute the Change of Control, the Company will send a notice to each holder to which the Company is required to make a repurchase offer as described above, with a copy
        to the Trustee, describing the transaction or event that constitutes or may constitute the Change of Control Repurchase Event and offering to repurchase the Securities on the payment date specified in the notice, which date will be no earlier than
        30 days and no later than 60 days from the date such notice is mailed. The notice may, if sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Repurchase Event
        occurring on or prior to the payment date specified in the notice.

      

      

      On the Change of Control Repurchase Event payment date, the Company shall, to the extent lawful:

      

      

    

    (i)          accept
        for payment all Securities or portions of Securities (in a minimum principal amount of $2,000 and integral multiples of $1,000 in excess thereof) properly tendered and not withdrawn pursuant to the Company’s offer;

    

    

    (ii)          deposit
        with the Paying Agent an amount equal to the aggregate purchase price in respect of all Securities or portions of Securities properly tendered and not withdrawn; and

    
      7

      
        

    

    

    

    (iii)          deliver
        or cause to be delivered to the Trustee the Securities properly accepted, together with an Officers’ Certificate stating the aggregate principal amount of Securities or portions of Securities being purchased by the Company.

    

    

    
      The Paying Agent will promptly send to each Holder of Securities properly tendered and not withdrawn the purchase price for such
        Securities, and the Trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each holder a new Security equal in principal amount to any unpurchased portion of any such Securities surrendered; provided that each new
        Security will be in a minimum principal amount of $2,000 or an integral multiple of $1,000 in excess thereof.

      

      

      The Company will not be required to make an offer to repurchase the Securities upon a Change of Control Repurchase Event if a third
        party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and such third party purchases all Securities properly tendered and not withdrawn under its offer.

      

      

      The Company will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations
        thereunder, to the extent those laws and regulations are applicable in connection with the repurchase of the Securities as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations
        conflict with this provision, the Company will comply with the applicable securities laws and regulations and will not be deemed to have breached its obligations under this provision by virtue of any such compliance.

      

      

      “Below Investment Grade Rating Event”
        means, with respect to the Securities, the rating on the Securities is lowered by each of the Rating Agencies, and the Securities are rated below Investment Grade by each of the Rating Agencies, within 60 days from the earlier of (1) the date of
        the public notice of an arrangement that could result in a Change of Control or (2) the occurrence of a Change of Control (which period shall be extended so long as the rating of the Securities is under publicly announced consideration for possible
        downgrade by any of the Rating Agencies).

      

      

    

    “Change of Control” means the occurrence of
      any of the following after the date hereof:

    

    

    (1) the 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 Company’s assets and the assets of the Company’s subsidiaries, taken as a whole, to any “person” or “group” (as those terms are used for purposes of Section 13(d)(3) of the Exchange
      Act), other than the Company or one or more of the Company’s subsidiaries; (2) the consummation of any transaction or series of related transactions (including, without limitation, any merger or consolidation) the result of which is that any “person”
      or “group” (as those terms are used for purposes of Section 13(d)(3) of the Exchange Act), other than the Company or one of the Company’s wholly owned 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, measured by voting power rather than number of shares; (3) the Company consolidates with, or merges with or into, any person, or any person consolidates with, or merges with or into, the
      Company, in any such event pursuant to a transaction in which any of the Company’s outstanding Voting Stock or the Voting Stock of such other person is converted into or exchanged for cash, securities or other property, other than any such
      transaction where the shares of the Company’s Voting Stock outstanding immediately prior to such transaction constitute, or are converted into or exchanged for, a majority of the Voting Stock of the surviving person or any direct or indirect parent
      company of the surviving person, measured by voting power rather than number of shares, immediately after giving effect to such transaction; (4) the first day on which a majority of the members of the Board of Directors are not Continuing Directors;
      or (5) the adoption by the Company of a plan providing for the Company’s liquidation or dissolution.

    

    

    Notwithstanding the foregoing, a transaction will not be considered to be a Change of Control under clause (2) above if (a) the Company
      becomes a direct or indirect wholly owned subsidiary of a holding company and (b) (y) immediately following that transaction, the direct or indirect holders of the Voting Stock of the holding company are substantially the same as the holders of the
      Company’s Voting Stock immediately prior to that transaction or (z) immediately following that transaction, no person (as that term is used in Section 13(d)(3) of the Exchange Act), other than a holding company satisfying the requirements of this
      sentence, is the beneficial owner, directly or indirectly, of more than 50% of the Voting Stock of the holding company.

    
      8

      
        

    

    

    

    
      For purposes of the foregoing discussion of the purchase of Securities upon a Change of Control Triggering Event, the following
        definitions are applicable:

    

    
      

      

    

    
      “Change of Control Repurchase Event” means
        the occurrence of both a Change of Control and a Below Investment Grade Rating Event.

      

      

    

    “Continuing Directors” means, as of any date
      of determination, any member of the Board of Directors who (1) was a member of such Board of Directors on October 9, 2015; or (2) was nominated for election, elected or appointed to such Board of Directors with the approval of a majority of the
      Continuing Directors who were members of such Board of Directors at the time of such nomination, election or appointment (either by a specific vote or by approval by such Continuing Directors of the Company’s proxy statement in which such member was
      named as a nominee for election as a director).

    

    

    
      “Fitch” means Fitch Ratings Inc. and its
        successors.

      

      

      “Investment Grade” means a rating of BBB-
        or better by Fitch (or its equivalent under any successor rating categories of Fitch), Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s) and a rating of BBB- or better by S&P (or its equivalent under
        any successor rating categories of S&P) or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by the Company.

      

      

      “Moody’s” means Moody’s Investors Service,
        Inc. and its successors.

      

      

    

    “Par Call Date” means March 1, 2024.

    

    

    
      “Rating Agency” means (1) each of Fitch,
        Moody’s and S&P; and (2) if any of Fitch, Moody’s or S&P ceases to rate the Securities or fails to make a rating of the Securities publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating
        organization” within the meaning of Section 3(a)(62) of the Exchange Act, selected by the Company as a replacement agency for Fitch, Moody’s or S&P, or all of them, as the case may be.

      

      

      “S&P” means S&P Global Ratings and
        its successors.

      

      

      “Voting Stock” means, with respect to any
        person as of any date, capital stock 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 such person, even if the
        right so to vote has been suspended by the happening of such a contingency.

    

    
      9

      
        

    

    

    

    ASSIGNMENT FORM

    

    

    FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto:

    

    

    PLEASE INSERT SOCIAL SECURITY NUMBER OR OTHER IDENTIFYING NUMBER OF ASSIGNEE

    

    

    	 

    (Please print or typewrite name and address including postal zip code of assignee)

    

    

    	 	 

    

    

    	 	 

    the within Global Security of HEWLETT PACKARD ENTERPRISE COMPANY and all rights hereunder, hereby irrevocably constituting and appointing

    

    

    	 	 

    

    

    	 	 

    to transfer said Global Security on the books of the within-named Company, with full power of substitution in the premises.

    

    

    	
            Dated:

          	 	 	 

    	 	
            NOTICE: THE SIGNATURE TO THIS

          
	 	
            ASSIGNMENT MUST CORRESPOND

          
	 	
            WITH THE NAME AS WRITTEN

          
	 	
            UPON THE FACE OF THE WITHIN

          
	 	
            INSTRUMENT IN EVERY PARTICULAR,

          
	 	
            WITHOUT ALTERATION OR ENLARGEMENT

          
	 	
            OR ANY CHANGE WHATEVER.

          
	 	 
	 	
            SIGNATURE GUARANTEED

          

    
      10

      
        

    

    

    

    OPTION OF HOLDER TO ELECT PURCHASE

    

    

    If you want to elect to have all or part of this Note purchased by the Company pursuant to Change of Control, state the amount you elect
      to have purchased:

    

    

    	 	
            $

          	

          	 	
            (integral multiples of $1,000,

          	 
	 	 	 	 	
            provided that the unpurchased

          	 
	 	 	 	 	
            portion must be in a minimum

          	 
	 	 	 	 	
            principal amount of $2,000)

          	 

    

    

    	 	
            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).

    
      11

      
        

    

    

    

    SCHEDULE OF EXCHANGE OF GLOBAL NOTES*

    

    

    The initial outstanding principal amount of this Global Note is $__________. The following exchanges of a part of this Global Note for
      an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

     

    

    	
            
              Date of Exchange

            

          	 	
            
              Amount of decrease in Principal Amount of this Global Note

            

          	 	
            
              Amount of increase in Principal Amount of this Global Note

            

          	 	
            
              Principal Amount of this Global Note following such decrease or increase

            

          	 	
            
              Signature of authorized signatory  of Trustee, Depositary or Custodian

            

          
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 

    

    

    
      

    *This schedule should be included only if the Note is issued in global form.

    

    

  

  12

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