Document:

Exhibit 10.3

 

FIRST AMENDMENT TO CREDIT AGREEMENT

 

THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this “First
Amendment”) is made and entered into as of the 24th day of September, 2014, by and among:

 

(i)          JAMES
RIVER GROUP HOLDINGS, LTD., a Bermuda company (the former company name of which is Franklin Holdings (Bermuda), Ltd.), and JRG
REINSURANCE COMPANY LTD., a regulated insurance company domiciled in Bermuda (each a “Borrower” and, collectively,
the “Borrowers”);

 

(ii)         THE
FINANCIAL INSTITUTIONS as signatory lender parties hereto and their successors and assigns (each a “Lender” and, collectively,
the “Lenders”);

 

(iii)        KEYBANK
NATIONAL ASSOCIATION, a national banking association, in its capacities as “Administrative Agent”, and “Letter
of Credit Issuer” under the Credit Agreement (defined below); and

 

(iv)        BANK
OF MONTREAL, CHICAGO BRANCH, which is joining KEYBANK NATIONAL ASSOCIATION and SUNTRUST ROBINSON HUMPHREY, INC. as an additional
Joint Book Runner for the purposes of this First Amendment.

 

Recitals:

 

A.           The
Borrowers, the Lenders, the Letter of Credit Issuer and the Administrative Agent and certain other parties are the parties to that
certain Credit Agreement dated as of June 5, 2013 (the “Credit Agreement”), pursuant to which, inter alia, the
Lenders agreed, subject to the terms and conditions thereof, to advance Loans (as this and other capitalized terms used herein
and not otherwise defined herein are defined in the Credit Agreement) to the Borrowers; and the Letter of Credit Issuer agreed,
subject to the terms and conditions thereof, to issue Letters of Credit.

 

B.           The
Borrowers have requested the Lenders, the Letter of Credit Issuer and the Administrative Agent to (i) extend the Maturity Date,
(ii) increase the Total Unsecured Facility Commitment to $112,500,000, and (iii) agree to certain other amendments to the Credit
Agreement.

 

    	 

    	 

    

 

Agreements:

 

NOW, THEREFORE, in consideration
of the foregoing Recitals and the mutual agreements hereinafter set forth, the Borrowers, the Lenders, the Letter of Credit Issuer
and the Administrative Agent, intending to be legally bound, hereby agree as follows:

 

1.          Amendments
to Credit Agreement.    Subject to the terms and conditions of this First Amendment, including,
without limitation, Paragraph 2, below:

 

(a)          The
definitions of “Fixed Charges”, “LIBO Rate”, “Parent”, “Revolving Availability
Termination Date”, and “Unsecured Facility Commitment” in Section 1.01 (Defined Terms) of the Credit Agreement
are hereby amended and restated in their entirety to provide, respectively, as follows:

 

“Fixed
Charges” means, for any period, the sum, without duplication, of (a) Consolidated Interest Expense for such period
and (b) Restricted Payments made or incurred by the Parent during such period, other than (i) the Restricted Payments made to the
Redeemed Investors on or about April 3, 2013 in connection with the Parent’s redemption of Equity Interests of the Parent
theretofore owned by the Redeemed Investors and (ii) the 2014 Special Dividend.

 

*        *        *

 

“LIBO
Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the greater of (i) zero percent
(0.00%) per annum and (ii) the per annum rate of interest, determined by the Administrative Agent in accordance with its usual
procedures (which determination shall be conclusive and binding absent manifest error) as of approximately 11:00 a.m. (London time)
two (2) Business Days prior to the beginning of such Interest Period pertaining to such Eurodollar Borrowing, equal to the London
Interbank Offered Rate, as published by Bloomberg (or other commercially available source providing quotations of such London Interbank
Offered Rate as designated by the Administrative Agent from time to time for purposes of providing quotations of interest rates
applicable to dollar deposits in the London interbank market), having a maturity comparable to such Interest Period. In the event
that such a rate quotation is not available for any reason, then, subject to clause (i) of the immediately preceding sentence,
the rate for such period shall be a comparable replacement rate determined by the Administrative Agent in its good faith commercial
judgment at such time rate.

 

*        *        *

 

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“Parent” means
James River Group Holdings, Ltd., a Bermuda company, and its successors and permitted assigns.

 

*        *        *

 

“Revolving
Availability Termination Date” means September 24, 2019 (or if such date is not a Business Day with respect to
Eurodollar Loans, the next preceding day that is a Business Day with respect to Eurodollar Loans).

 

*        *        *

 

“Unsecured
Facility Commitment” means, with respect to each Lender, the commitment of such Lender to make unsecured Loans
and to acquire participations in unsecured Letters of Credit hereunder, expressed as an amount representing the maximum aggregate
amount of such Lender’s Unsecured Exposure under the Unsecured Facility, as such commitment may be (a) reduced from time
to time pursuant to Section 2.08, (b) increased from time to time pursuant to Section 2.11 and (c) reduced or increased from time
to time pursuant to assignments by or to such Lender pursuant to Section 9.04. As of the First Amendment Effective Date the initial
amount of each Lender’s Unsecured Facility Commitment is set forth on Schedule 2.01(b). The aggregate amount of the Unsecured
Facility Commitments as of the First Amendment Effective Date is $112,500,000.

 

(b)          The
following new defined terms are added to Section 1.01 (Defined Terms) of the Credit Agreement in the appropriate alphabetical
order:

 

“2014
Special Dividend” means the dividend to be made by the Parent to the holders of its Equity Interests after the
First Amendment Effective Date and on or before October 31, 2014, which dividend shall not exceed, in the aggregate as to all such
holders taken together, seventy million dollars ($70,000,000).

 

“First
Amendment Effective Date” has the meaning specified in the First Amendment to Credit Agreement dated as of September
24, 2014 among the parties to this Agreement as of such date.

 

(c)          The
first sentence of Section 5.10 (Use of Proceeds and Letters of Credit) of the Credit Agreement is hereby amended and restated
in its entirety to provide as follows:

 

The proceeds
of the Loans will be used only to finance the general corporate purposes of the Borrowers (including, without limitation, liquidity,
acquisitions (except to the extent restricted pursuant to this Agreement), the satisfaction of Debt required by Section 4.01(j),
a portion of the 2014 Special Dividend, and working capital needs of the Borrowers and their Subsidiaries).

 

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(d)          Section
6.08 (Restricted Payments) of the Credit Agreement is hereby amended and restated in its entirety to provide as follows:

 

Section
6.08. Restricted Payments.    No Loan Party shall declare or make,
or agree to pay or make, directly or indirectly, any Restricted Payment, or incur any obligation (contingent or otherwise) to do
so unless, both immediately before and after giving effect to such Restricted Payment, no Default exists; provided that
nothing in this Section shall be construed to restrict payments by a Subsidiary to its immediate parent entity; and provided,
further, that the Parent may pay the 2014 Special Dividend so long as:

 

(a)          immediately
prior to and after giving pro forma effect to the payment of the 2014 Special Dividend, no Default has occurred or would
result therefrom;

 

(b)          the
representations and warranties of the Borrowers under Paragraph 3 of the First Amendment to Credit Agreement dated as of September
24, 2014 among the parties to this Agreement as of such date shall be true and correct in all material respects as of the date
on which the 2014 Special Dividend is paid;

 

(c)          without
limiting the generality of clause (a) above, as of the end of the Fiscal Quarter most recently ended prior to the payment of the
2014 Special Dividend for which financial statements are required pursuant to Section 5.01 (the “Test Quarter”),
and after giving pro forma effect to the 2014 Special Dividend and to any Loans or other Debt incurred in connection therewith,
as if, as applicable, paid or incurred during such Test Quarter, the Borrowers shall be in compliance with each of Section 6.11,
Section 6.12, Section 6.13 and Section 6.14; and

 

(d)          the
Parent shall have delivered to the Administrative Agent, on the date of the 2014 Special Dividend, a certificate signed by a Financial
Officer to the effect set forth in clauses (a), (b) and (c) above, which shall include, with respect to clause (c), a worksheet
setting forth reasonably detailed calculations demonstrating compliance with Sections 6.11, 6.12, 6.13 and 6.14.

 

(e)          The
Pricing Schedule to the Credit Agreement is hereby amended and restated in its entirety by the Amended
and Restated Pricing Schedule attached as Attachment 1 to this First Amendment and incorporated herein by reference. By
way of clarification and not limitation, the Loans under the Unsecured Facility shall commence to accrue interest, the Letters
of Credit under the Unsecured Facility shall commence to accrue participation fees, and facility
fees under the Unsecured Facility shall commence to accrue in each case at rates per annum reflecting the

 

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decreased Applicable Rates as of the First
Amendment Effective Date (defined below) and (together with the interest, participation fees and facility fees accrued and unpaid
prior to the First Amendment Effective Date) shall be payable on the applicable Interest Payment Date next following the First
Amendment Effective Date.

 

(f)          Schedule
2.01(b) (Unsecured Facility Commitment Schedule) to the Credit Agreement is hereby amended and restated in its entirety by the
Amended and Restated Schedule 2.01(b) attached as Attachment 2 to this First Amendment and incorporated herein by reference.

 

2.          Amendment
Effective Date; Conditions Precedent.    The amendments set forth
in Paragraph 1, above, shall not be effective unless and until the date on which all of the following conditions precedent have
been satisfied (such date of effectiveness being the “First Amendment Effective Date”):

 

(a)          Officer’s
Certificate.    On the First Amendment Effective Date, after giving
effect to the amendments set forth in Paragraph 1, above, (i) there shall exist no Default, and a Financial Officer or other executive
officer of each Borrower, on behalf of such Borrower, shall have delivered to the Administrative Agent written confirmation thereof
dated as of the First Amendment Effective Date, (ii) the representations and warranties of the Borrowers under Article 3 of the
Credit Agreement and under Paragraph 3 of this First Amendment shall have been reaffirmed in writing by each Borrower as being
true and correct in all material respects as of the First Amendment Effective Date (unless and to the extent that any such representation
and warranty is stated to relate solely to an earlier date, in which case such representation and warranty shall have been true
and correct in all material respects as of such earlier date), and (iii) each Borrower shall have reaffirmed in writing that the
Regulatory Condition Satisfaction remains effective.

 

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(b)          First
Amendment.    The Administrative Agent or the Special Counsel (defined below) shall have received from each Borrower and each Lender either (i) a counterpart of this First Amendment signed on behalf
of such party or (ii) written evidence satisfactory to the Administrative Agent (which may include telecopy or email transmission
of a signed signature page of this First Amendment) that such party has signed a counterpart of this First Amendment. 

 

(c)          Corporate
Authorization.    Each Borrower shall have delivered to the Administrative
Agent a copy, certified by its Secretary or Assistant Secretary, of resolutions of its Board of Directors (or equivalent body otherwise
named) authorizing the execution and delivery of this First Amendment and the transactions contemplated hereby, together with the
names and signatures of the officers of such Borrower executing or attesting to this First Amendment, in form and substance reasonably
satisfactory to the Administrative Agent. 

 

(d)          Good
Standing, etc.    Each Borrower shall have delivered to the Administrative Agent (a) its certificate of incorporation (or equivalent document otherwise named) or a certification of its Secretary or
an Assistant Secretary to the effect that the same has not been modified since the Effective Date, (b) a certificate of good standing
for such Borrower, in each case certified by the office of the applicable Governmental Authority of the jurisdiction of its organization
or formation of such Borrower, and (c) a certificate of qualification to transact business as a foreign company or other entity
in every other jurisdiction where such Borrower’s failure so to qualify could have a Material Adverse Effect. 

 

(e)          Restated
Notes.    The Borrowers shall have executed and delivered to the Administrative Agent (for further delivery to each Lender requesting same) an amended and restated Unsecured Facility note
reflecting such Lender’s increased Unsecured Facility Commitment. 

 

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(f)          James
River Confirmation.    James River shall have executed and delivered
to the Administrative Agent a confirmation of its Payment Guaranty in form and substance reasonably satisfactory to the
Administrative Agent, accompanied by such certifications regarding good standing and authorization as the Administrative Agent
may reasonably request. 

 

(g)          Opinions.    The
Borrowers shall have caused their and James River’s special counsel, Bryan Cave LLP and Conyers Dill & Pearman,
to deliver favorable opinions of counsel in favor of the Lenders, the Letter of Credit Issuer and the Administrative Agent, all
in form and substance reasonably acceptable to the Administrative Agent. 

 

(h)          Agent
Expenses.    The Borrowers shall have paid or caused to be paid to
the Administrative Agent all fees and other amounts due and payable on or prior to the First Amendment Effective Date, including,
to the extent invoiced, reimbursement or payment of all reasonable out-of-pocket expenses (including fees, charges and disbursements
of the Special Counsel) required to be reimbursed or paid by the Borrowers hereunder, under any other Loan Document or under said
fee letter agreement. 

 

(i)          Closing
Fees.    The Borrowers shall have (a) paid to the Administrative Agent,
in immediately available funds, for the ratable benefit of each Lender, upfront fees in an amount equal to sum of (i) seven
and one-half basis points (0.00075) of the aggregate amount of such Lender’s Secured Facility Commitment and its Unsecured
Facility Commitment immediately prior to the effectiveness of this First Amendment and (ii) twenty basis points (0.00200) of the
amount by which such Lender’s Unsecured Facility Commitment is increased pursuant to this First Amendment and (b) reimbursed
the Administrative Agent for all costs and expenses invoiced pursuant to Section 9.03 of the Credit Agreement, including those
described in Paragraph 6 of this First Amendment

 

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(j)          Legal Matters.    All legal matters incident to this First Amendment
and the consummation of the transactions contemplated hereby shall be reasonably satisfactory to Squire Patton Boggs (US) LLP,
Cleveland, Ohio, special counsel to the Administrative Agent (the “Special Counsel”).

 

Notwithstanding the foregoing, if the First
Amendment Effective Date has not occurred on or before September 30, 2014, this First Amendment shall not become effective and
shall be deemed of no further force and effect.

 

3.          Certain
Borrower Representations.    The Borrowers hereby represent and warrant to the Lender Parties that (i) $50,000,000 of the 2014 Special Dividend will be funded by the Parent from the proceeds of a
dividend paid to it by JRG Reinsurance, (ii) the payment by JRG Reinsurance of such $50,000,000 dividend to the Parent does not
require any consent or approval of its Applicable Insurance Regulatory Authority or other Governmental Authority that has not been
obtained and in effect, and (iii) the payment by JRG Reinsurance of such $50,000,000 dividend to the Parent does not, and will
not, cause the shareholders’ equity of JRG Reinsurance as of the end of the Fiscal Year ending December 31, 2014 (or if applicable,
ending December 31, 2013) to be less than 2.50 times the Bermuda Minimum Solvency Requirement. 

 

4.          No
Other Modifications.    Except as expressly provided in this First
Amendment, all of the terms and conditions of the Credit Agreement and the other Loan Documents remain unchanged and in
full force and effect. 

 

5.          Confirmation
of Obligations; Release.    Each Borrower hereby affirms as of the date hereof all of its respective Debt and other obligations to each of the Lender Parties under and pursuant to the Credit
Agreement and each of the other Loan Documents and that such Debt and other obligations are owed to each of the Lender Parties
according to their respective terms. 

 

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Each Borrower hereby affirms as of the date
hereof that there are no claims or defenses to the enforcement by the Lender Parties of the Debt and other obligations of such
Borrower to each of them under and pursuant to the Credit Agreement or any of the other Loan Documents.

 

6.          Administrative
Agent’s Expense.    The Borrowers agree to reimburse the Administrative
Agent promptly for its reasonable invoiced out-of-pocket costs and expenses incurred in connection with this First Amendment and
the transactions contemplated hereby, including, without limitation, the reasonable fees and expenses of the Special Counsel.

 

7.          Governing
Law; Binding Effect.    THIS FIRST AMENDMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK AND SHALL BE BINDING UPON AND INURE TO THE BENEFIT OF THE BORROWERS,
THE LENDERS, THE LETTER OF CREDIT ISSUER AND THE ADMINISTRATIVE AGENT AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS.

 

7.          Counterparts.    This
First Amendment may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original,
but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.
Any party hereto may execute and deliver a counterpart of this First Amendment by delivering by facsimile or email transmission
a signature page of this First Amendment signed by such party, and any such facsimile or email signature shall be treated in all
respects as having the same effect as an original signature. Any party delivering by facsimile or email transmission a counterpart
executed by it shall promptly thereafter also deliver a manually signed counterpart of this First Amendment.

 

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8.          Miscellaneous.

 

(a)          Upon
the effectiveness of this First Amendment, this First Amendment shall be a Loan Document.

 

(b)          The
invalidity, illegality, or unenforceability of any provision in or Obligation under this First Amendment in any jurisdiction shall
not affect or impair the validity, legality, or enforceability of the remaining provisions or obligations under this First Amendment
or of such provision or obligation in any other jurisdiction.

 

(c)          This
First Amendment and all other agreements and documents executed in connection herewith have been prepared through the joint efforts
of all of the parties. Neither the provisions of this First Amendment or any such other agreements and documents nor any alleged
ambiguity shall be interpreted or resolved against any party on the ground that such party’s counsel drafted this First Amendment
or such other agreements and documents, or based on any other rule of strict construction. Each of the parties hereto represents
and declares that such party has carefully read this First Amendment and all other agreements and documents executed in connection
herewith and therewith, and that such party knows the contents thereof and signs the same freely and voluntarily. The parties hereby
acknowledge that they have been represented by legal counsel of their own choosing in negotiations for and preparation of this
First Amendment and all other agreements and documents executed in connection therewith and that each of them has read the same
and had their contents fully explained by such counsel and is fully aware of their contents and legal effect.

 

(d)          The
Obligations of the Borrowers hereunder are joint and several, all as more fully set forth in Article 10 of the Credit Agreement.

 

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9.          Waiver
of Jury Trial. EACH OF THE PARTIES TO THIS FIRST AMENDMENT HEREBY IRREVOCABLY WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS FIRST AMENDMENT,
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. EACH PARTY HERETO HEREBY (A) CERTIFIES THAT NO REPRESENTATIVE,
AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO
ENTER INTO THIS FIRST AMENDMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATION IN THIS SECTION.

 

[No additional provisions are on this page;
the page next following is the signature page.]

 

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IN WITNESS
WHEREOF, the Borrowers, the Lenders, the Letter of Credit Issuer and the Administrative Agent have hereunto set their hands as
of the date first above written.

 

	 	BORROWERS
	 	 
	 	JAMES RIVER GROUP HOLDINGS, LTD.
	 	 
	 	By:	/s/ Gregg
    Davis        9-22-14    HAMILTON, BDA
	 	 	Gregg Davis, Chief Financial Officer
	 	 
	 	JRG REINSURANCE COMPANY LTD.
	 	 
	 	By:	/s/ Kevin Copeland        09/23/14
	 	 	Kevin Copeland, Chief Financial Officer

 

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	 	ADMINISTRATIVE AGENT AND LETTER OF
	 	CREDIT ISSUER
	 	 
	 	KEYBANK NATIONAL ASSOCIATION, as
	 	Administrative Agent and Letter of Credit Issuer
	 	 
	 	LENDERS
	 	 
	 	KEYBANK NATIONAL ASSOCIATION,
	 	as Lender
	 	 
	 	By:	/s/ James Cribbet
	 	 	James Cribbet, Senior Vice President

 

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	[Lender Signatures Continued]
	 	 
	 	SUNTRUST BANK, 
	 	as Lender
	 	 
	 	By:	/s/ Paula Mueller
	 	 	Name: Paula Mueller
	 	 	Title: Director

 

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	[Lender Signatures Continued]
	 	 
	 	BANK OF MONTREAL, CHICAGO BRANCH, as Lender and joining as an additional Joint Book Runner for the purposes of this First Amendment
	 	 
	 	By:	/s/ Debra Basler
	 	 	Name: Debra Basler
	 	 	Title: Managing Director

 

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	[Lender Signatures Continued]
	 	 
	 	THE BANK OF NOVA SCOTIA, 
	 	as Lender
	 	 
	 	By: 	/s/ Thane Rattew
	 	 	Name: Thane Rattew
	 	 	Title: Managing Director

 

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	[Lender Signatures Continued]
	 	 
	 	THE BANK OF N.T. BUTTERFIELD & SON 
	 	LIMITED, as Lender
	 	 
	 	By:	/s/ ALAN DAY
	 	 	Name: ALAN DAY
	 	 	Title: Vice President
	 	 
	 	And:  	/s/ RAYMOND H. LONG
	 	 	Name:   RAYMOND H. LONG
	 	 	Title:     VICE PRESIDENT

   

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	[Lender Signatures Continued]
	 	 
	 	FIRST TENNESSEE BANK, N.A., 
	 	as Lender
	 	 
	 	By:	/s/ Jason Markey
	 	 	Name:  Jason Markey
	 	 	Title: Vice President

 

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	[Lender Signatures Continued]
	 	 
	 	YADKIN BANK,
	 	as Lender
	 	 
	 	By:	/s/ Jeff Hendrick
	 	 	Name: Jeff Hendrick
	 	 	Title: Vice President

 

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Attachment 1

 

Amended and Restated Pricing Schedule

 

PRICING SCHEDULE

 

	 	 	 	 	Eurodollar	 	 	Base Rate	 	 	Commitment	 
	Leverage Ratio	 	Pricing Level	 	Margin	 	 	Margin	 	 	Fee Rate	 
	 	 	 	 	 	 	 	 	 	 	 	 
	< 0.15 to 1	 	Level I	 	 	1.500	%	 	 	0.500	%	 	 	0.150	%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3 0.15 to 1 and < 0.25 to 1	 	Level II	 	 	1.750	%	 	 	0.750	%	 	 	0.200	%
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	3 0.25 to 1	 	Level III	 	 	2.000	%	 	 	1.000	%	 	 	0.250	%

 

The Eurodollar Margin, Base Rate Margin
and Commitment Fee Rate will be determined by reference to the Leverage Ratio.

 

For purposes of this Schedule, “Pricing
Level” means for any day, the Pricing Level (I, II or III) indicated on the table above that corresponds to the Leverage
Ratio as of the end of the most recent Fiscal Quarter or Fiscal Year, as the case may be, for which the Parent delivered financial
statements pursuant to the Loan Documents, effective on the business day immediately following the date on which such financial
statements are delivered to the Administrative Agent; provided, however, that, at any and all times during which
(a) the Parent is in default of the timely delivery of (1) the financial statements required by the Loan Documents for any
period or (2) the accompanying compliance certificate required by the Loan Documents, the Eurodollar Margin, Base Rate Margin and
Commitment Fee Rate shall be determined under Pricing Level III or (b) an Event of Default has occurred and is continuing, the
Eurodollar Margin, Base Rate Margin and Commitment Fee Rate shall be determined under Pricing Level III.

 

Pricing Level III shall apply commencing on the First Amendment
Effective Date until adjusted pursuant to the immediately preceding paragraph.

 

    	 

    	 

    

  

Attachment 2

 

Amended and Restated Schedule 2.01(b)

 

	 	Schedule 2.01(b)
	 
	Unsecured Facility Commitment Schedule

 

	Name of Lender	 	Unsecured Facility Commitment	 
	 	 	 	 
	KeyBank National Association	 	$	24,500,000.00	 
	SunTrust Bank	 	$	24,500,000.00	 
	Bank of Montreal, Chicago Branch	 	$	24,500,000.00	 
	The Bank of Nova Scotia	 	$	17,000,000.00	 
	The Bank of N.T. Butterfield & Son Limited	 	$	8,000,000.00	 
	First Tennessee Bank, N.A.	 	$	8,000,000.00	 
	Yadkin Bank	 	$	6,000,000.00	 
	 	 	 	 	 
	Total	 	$	112,500,000.00Exhibit 10.4

 

REDEMPTION AGREEMENT

 

This REDEMPTION AGREEMENT
(this “Agreement”) is made as of April 3, 2013, by and between FRANKLIN HOLDINGS (BERMUDA), LIMITED,
a company organized under the laws of Bermuda (the “Company”), and LEHMAN BROTHERS OFFSHORE PARTNERS LTD.,
a Bermuda exempted company (“Shareholder”) (Company and Shareholder are individually referred to herein as
a “Party”, and collectively referred to herein as the “Parties”).

 

Recitals

 

Whereas, Shareholder owns, beneficially
and of record, Twenty Five Thousand (25,000) Class A Common Shares of the Company (the “Redeemed Shares”);

 

Whereas, Company wishes to purchase
and redeem, and Shareholder wishes to sell, all of the Redeemed Shares, upon the terms and conditions set forth below;

 

Whereas, concurrently
with the execution and delivery of this Agreement and the Promissory Note (as defined hereinafter), the Company is entering into
a redemption agreement (the “Sunlight Redemption Agreement”) with Sunlight Capital Ventures, LLC and Sunlight
Capital Partners II, LLC (collectively, “Sunlight”) and issuing a promissory note in favor of Sunlight; and

 

Whereas, capitalized
terms not otherwise defined herein shall have the meanings ascribed to them in that certain Second Amended and Restated Investor
Shareholders Agreement of the Company dated April 8, 2009 (the “Shareholders Agreement”).

 

Agreement

 

NOW, THEREFORE,
for and in consideration of the mutual covenants and agreements contained herein, and for other valuable consideration, the receipt
and sufficiency of which are hereby acknowledged, the Parties agree as follows:

 

1.            Redemption.

 

(a)          At
Closing, subject to the terms and conditions hereof, and for and in consideration of the Purchase Price, Shareholder hereby sells,
transfers, assigns and delivers to Company, and Company hereby purchases, redeems, acquires and accepts from Shareholder, all
of the right, title and interest in and to the Redeemed Shares, in each case free and clear of any Liens. As used herein, “Liens”
shall mean any lien, pledge, hypothecation, mortgage, security interest, claim, lease, charge, option, right of first refusal,
easement, servitude, transfer restriction under any stockholder or similar agreement, encumbrance or any other restriction or
limitation whatsoever, except for those restrictions created by the Shareholders Agreement and applicable securities laws.

 

(b)          The
purchase price for the Redeemed Shares (the “Purchase Price”) is Eighteen Million Four Hundred Sixty Thousand
and 00/100 Dollars ($18,460,000.00). The Purchase Price shall be paid at Closing by the Company to Shareholder as follows: (i)
Fourteen

 

    	 

    	 

    

  

Million Seven Hundred
Sixty Eight Thousand and 00/100 Dollars ($14,768,000.00) shall be paid by wire transfer of immediately available funds to an account
designated by Shareholder in writing, and (ii) the balance shall be paid via delivery by Company of a promissory note in favor
of Shareholder in the original principal amount of Three Million Six Hundred Ninety Two Thousand and 00/100 Dollars ($3,692,000.00),
substantially in the form attached hereto as Exhibit A (the “Promissory Note”).

 

2.            Closing
of Transactions.    The consummation of the purchase and sale of the Redeemed Shares shall be effected
by facsimile or other electronic exchange of documentation, and held on the date hereof contemporaneously with the execution and
delivery of this Agreement and the Promissory Note, at the offices of Bryan Cave LLP, legal counsel to Company, at 1201 West Peachtree
Street, 14th Floor, One Atlantic Center, Atlanta, Georgia 30309, or at such other time, date, and place as shall be
mutually agreed to by the Parties. The Parties acknowledge and agree that the consummation of the purchase and sale of the Redeemed
Shares shall be effective as of 11:59 PM Eastern Time on the date hereof (which time and date are referred to herein as the “Closing”
or the “Closing Date”).

 

3.            Representations
and Warranties of Shareholder.

 

(a)          Shareholder
has the full legal right, capacity and power to enter into, execute and deliver this Agreement and to perform fully its obligations
thereunder. This Agreement has been duly executed and delivered by Shareholder, and constitutes the valid and binding obligation
of Shareholder, enforceable against Shareholder in accordance with its terms.

 

(b)          Shareholder
has, and at Closing will have, good and valid title to all of the Redeemed Shares. The Redeemed Shares will be transferred by Shareholder
to Company at Closing, free and clear of any Lien.

 

(c)          After
giving effect to the Closing, Shareholder will not hold, beneficially or of record, any equity interests or rights in or to the
Company.

 

(d)          Shareholder
acknowledges that it has been furnished all materials relating to Company, its subsidiaries and affiliates, their business and
affairs, the sale and redemption of the Redeemed Shares, and other materials, that it has requested, and that it has been afforded
the opportunity to ask questions and receive answers concerning the terms and conditions of the transactions contemplated by this
Agreement, and to obtain additional information which the Company or its subsidiaries and affiliates possess or can acquire without
unreasonable effort or expense that is necessary to verify the accuracy of any representations or information set forth in any
such material. Shareholder further acknowledges that Company, its subsidiaries and affiliates, and their officers, directors, and
managers, have answered all inquiries that Shareholder has made of them concerning the Company and its subsidiaries and affiliates,
or any other matters relating to the transactions contemplated by this Agreement. IN CONNECTION WITH THIS AGREEMENT AND THE
RELATED TRANSACTIONS, SHAREHOLDER ACKNOWLEDGES THAT IT HAS BEEN ADVISED TO RETAIN LEGAL COUNSEL, AND HAS OTHERWISE HAD THE OPPORTUNITY
TO CONSULT WITH LEGAL COUNSEL BEFORE EXECUTING THIS AGREEMENT AND COMPLETING THE CONTEMPLATED TRANSACTIONS.

 

    	 

    	 

    

  

(e)          The
per share purchase price of the Company’s Class A Common Shares subject to the Sunlight Redemption Agreement is the same as the
per share purchase price for the Redeemed Shares. The Sunlight Redemption Agreement contains terms and conditions which vary from
this Agreement, but such variances, when taken together, do not place Sunlight in a materially advantageous position vis-à-vis
the Shareholder.

 

4.            Representations
and Warranties of Company.

 

(a)          The
Company has the full legal right, capacity and power to enter into, execute and deliver this Agreement and the Promissory Note
and to perform fully its obligations hereunder and thereunder. This Agreement has been duly executed and delivered by Company,
and constitutes the valid and binding obligation of Company, enforceable against Company in accordance with its terms.

 

(b)          The
Company has obtained the Supermajority Approval of the Company’s shareholders in accordance with the Shareholders Agreement approving
the Company entering into this Agreement and the Promissory Note, and the consummation of the transactions contemplated hereby
and thereby. No other consent or authorization of, filing with, notice to or other act by, or in respect of, any entity, governmental
authority, agency or any other Person (including any of the Company’s shareholders) is required for the Company to execute, deliver,
or perform any of its obligations under this Agreement, except such as have been obtained or made and are in full force and effect.

 

(c)          The
execution and delivery of this Agreement and the consummation of the transactions contemplated hereby do not and will not (i) violate
or conflict with Company’s organizational documents, (ii) violate any law or order applicable to the Company or by which any of
its material properties or assets may be bound, or (iii) constitute a default under any agreement or contract that binds the Company,
which default would materially adversely affect the ability of the Company to consummate the transactions contemplated by this
Agreement.

 

(d)          The
Company has obtained the valid and enforceable waiver of all tag-along rights, rights of first refusal and similar rights arising
under the Shareholders Agreement that are otherwise applicable to the transfer of the Redeemed Shares pursuant to this Agreement,
and such waiver is in full force and effect.

 

5.            Release.

 

(a)          Each
Party (the “Releasing Party”) hereby releases and forever discharges the other Party and each of the other
Party’s affiliates and each of their respective, past, present, and future, as it may apply, shareholders, directors, officers,
partners, managers, members, employees, counsel, agents and representatives, and each of their respective successors and assigns
(individually, a “Releasee” and, collectively, the “Releasees”) from any and all claims
and liabilities whatsoever, whether known or unknown, suspected or unsuspected, both at law and in equity, arising contemporaneously
with or prior to the Closing Date, or on account of or arising out of any matter, cause or event occurring contemporaneously with
or prior to the Closing Date, including, but not limited to, any rights to indemnification, reimbursement, or compensation from
any Releasee, whether pursuant to any charter documents, contracts, law,

 

    	 

    	 

    

  

arrangement, commitment,
undertaking or otherwise whether written or oral and whether or not relating to claims pending on, or asserted after, the Closing
Date; provided, however, that nothing contained herein shall operate to release any obligations of the Company or Shareholder arising
under this Agreement or the obligations of the Company arising under the Promissory Note, it being acknowledged that each Party
shall retain all rights, obligations and claims available under the terms of this Agreement and the Promissory Note.

 

(b)          Further, the
Releasing Party hereby irrevocably covenants to refrain from, directly or indirectly, asserting any claim or demand, or
commencing, instituting or causing to be commenced, any proceeding of any kind against any Releasee, based upon any matter
released hereby.

 

6.            Expenses.    Each Party shall pay all costs and expenses incurred or to be incurred by it in negotiating and preparing this Agreement and in
closing and carrying out the transactions contemplated by this Agreement.

 

7.            Further
Assurances.    At any time and from time to time after the Closing Date at the request of Company, and without further consideration,
Shareholder will execute and deliver such other instruments of sale, transfer, conveyance, assignment and confirmation and take
such other action as Company may reasonably deem necessary or desirable in order to transfer, convey and assign more effectively
to Company the Redeemed Shares, to assist Company in exercising all rights with respect thereto, and to effect the transactions
contemplated by this Agreement.

 

8.            Notices.    All notices, requests, demands and other communications required or permitted to be given hereunder shall be in writing and shall
be given personally, sent by facsimile transmission or sent by prepaid air courier or certified, registered or express mail, postage
prepaid. Any such notice shall be deemed to have been given (a) when received, if delivered in person, sent by facsimile transmission
and confirmed in writing within three (3) business days thereafter, or sent by prepaid air courier, (b) five (5) business days
following the mailing thereof, if mailed by certified first class mail, postage prepaid, return receipt requested, in any such
case as follows (or to such other address or addresses as a Party may have advised the other in the manner provided in this Section
8), or (c) on the date delivered if sent by email (provided confirmation of email receipt is obtained):

 

(i)          if
to Shareholder:

 

Lehman Brothers Offshore Partners
Ltd.

c/o LAMCO LLC

1271 Avenue of the Americas, 40th
Floor

New York, New York 10020

Attention:        Ashvin
Rao

           Faruk
Amin

Email: ashvin.rao@lehmanholdings.com

           faruk.amin@lehmanholdings.com

 

with a copy (which shall not constitute notice) to:

 

    	 

    	 

    

  

Weil, Gotshal & Manges LLP

201 Redwood Shores Parkway

Redwood Shores, CA 94065

Attention:         Craig
Adas

Facsimile:         (650)
802-3100

 

(iii)        if
to the Company:

 

Franklin Holdings (Bermuda), Ltd.

Clarendon House

2 Church Street

Hamilton HM 11 Bermuda

Attention:         Secretary

Facsimile:         (441)
292-4720

 

with a copy (which shall not constitute notice) to:

 

Bryan Cave LLP

1290 Avenue of the Americas

New York, New York 10104

Attention: Kenneth L. Henderson, Esq.

Facsimile:          
(212) 541-4630

 

9.            Publicity.    Except to the extent required by law, no publicity release or announcement concerning this Agreement or the transactions contemplated
by this Agreement shall be made without advance approval thereof as to form and content by each of the Parties.

 

10.           Interpretation.

 

(a)          This
Agreement (including the Exhibits) and the agreements, certificates and other documents delivered pursuant to this Agreement contain
the entire agreement among the Parties with respect to the transactions described herein, and supersede all prior agreements, written
or oral, with respect thereto.

 

(b)          This
Agreement may be amended, superseded, cancelled, renewed or extended, and the terms hereof may be waived, only by a written instrument
signed by the Parties or, in the case of a waiver, by the Party waiving compliance.

 

(c)          This
Agreement may be executed by the Parties hereto in separate counterparts, each of which when so executed and delivered shall be
an original, but all such counterparts shall together constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by all, of the Parties hereto. The exchange of a fully
executed Agreement (in counterparts or otherwise) by electronic transmission or facsimile shall be sufficient to bind the Parties
to the terms and conditions of this Agreement.

 

    	 

    	 

    

  

(d)          No
remedy made available by any of the provisions of this Agreement is intended to be exclusive of any other remedy, and each and
every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at
law or in equity.

 

11.           Binding
Effect; No Assignment.    This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors
and permitted assigns. This Agreement is not assignable by any Party without the prior written consent of each other Party except
by operation of law and any other purported assignment shall be null and void.

 

12.           Choice
of Law; Jurisdiction; Waiver of Jury Trial; Specific Performance.

 

(a)          This
Agreement shall be governed and construed in accordance with the laws of the State of New York without regard to conflicts of laws
principles thereof and all questions concerning the validity and construction hereof shall be determined in accordance with the
laws of the State of New York.

 

(b)          Any
action or proceeding seeking to enforce any provision of, or based on any right arising out of, this Agreement may be brought against
any of the parties in the courts of the State of New York, City of New York, or, if it has or can acquire jurisdiction, in the
United States District Court for the Southern District of New York, and each of the Parties consents to the jurisdiction of such
courts (and of the appropriate appellate courts) in any such action or proceeding and waives any objection to venue laid therein.
Process in any action or proceeding referred to in the preceding sentence may be served on any Party anywhere in the world.

 

(c)          EACH
PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT
ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, OR THE BREACH, TERMINATION
OR VALIDITY OF THIS AGREEMENT, OR THE TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT
(I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY
WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (II) EACH SUCH PARTY UNDERSTANDS AND HAS CONSIDERED
THE IMPLICATIONS OF THIS WAIVER, (III) EACH SUCH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (IV) EACH SUCH PARTY HAS
BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 12(C).

 

(d)          Each
of the Parties acknowledges and agrees that the other Party would be damaged irreparably in the event any of the provisions of
this Agreement are not performed in accordance with their specific terms or otherwise are breached. Accordingly, each of the Parties
agrees that the other Party shall be entitled to an injunction or injunctions to prevent breaches of the provisions of this Agreement
and to enforce specifically this Agreement and the terms and

 

    	 

    	 

    

  

provisions hereof in any
action instituted in any court of the United States or any state thereof having, in accordance with the terms of this Agreement,
jurisdiction over the Parties and the matter, in addition to any other remedy to which it may be entitled, at law or in equity.

 

13.           No
Third Party Beneficiary.    Nothing in this Agreement is intended to confer any rights or remedies, whether express or implied,
on any Persons other than the Parties and their successors and permitted assigns.

 

14.           Separate
Counsel.    EACH PARTY ACKNOWLEDGES THAT IT HAS HAD AN OPPORTUNITY TO CONSULT WITH ITS OWN LEGAL COUNSEL WITH REGARD TO THE MATTERS
CONTAINED IN THIS AGREEMENT. EACH PARTY FURTHER ACKNOWLEDGES THAT BRYAN CAVE LLP REPRESENTS THE COMPANY WITH RESPECT TO THE DRAFTING
AND NEGOTIATING OF THIS AGREEMENT, AND THAT BRYAN CAVE LLP DOES NOT REPRESENT ANY OTHER PERSON WITH RESPECT TO THE DRAFTING AND
NEGOTIATING OF THIS AGREEMENT.

 

[The
Remainder of this Page has been Intentionally Left Blank]

 

    	 

    	 

    

  

IN WITNESS WHEREOF, the undersigned have caused
this Redemption Agreement to be executed as of the day and year first above written.

 

	 	Company:
	 	 
	 	Franklin Holdings (Bermuda), Ltd.
	 	 
	 	By:	/s/ Robert P. Myron
	 	Name: 	Robert P. Myron
	 	Title: 	CEO
	 	 
	 	Shareholder:
	 	 
	 	Lehman Brothers Offshore Partners Ltd.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 

 

    	 

    	 

    

  

IN WITNESS WHEREOF, the undersigned have caused
this Redemption Agreement to be executed as of the day and year first above written.

 

	 	Company:
	 	 
	 	Franklin Holdings (Bermuda), Ltd.
	 	 
	 	By:	 
	 	Name:	 
	 	Title:	 
	 	 
	 	Shareholder:
	 	 
	 	Lehman Brothers Offshore Partners Ltd.
	 	 
	 	By:	/s/ Ashvin Rao
	 	Name:	Ashvin Rao
	 	Title:	Vice President

 

    	 

    	 

    

  

Exhibit A

 

Promissory Note

 

    	 

    	 

    

 

PROMISSORY NOTE

(Lehman Brothers Offshore Partners, Ltd.)

 

Amount:         U.S.$3,692,000

 

Dated:            April 3, 2013

 

FOR VALUE RECEIVED,
the undersigned Franklin Holdings (Bermuda) Ltd. (“Borrower”), with an address at Clarendon House, 2 Church Street, Hamilton
HM11, Bermuda, promises to pay to the order of Lehman Brothers Offshore Partners, Ltd. (“Lender”), at its office located
at 1271 Avenue of the Americas, 40th Floor, New York, NY 10020 or at such other place as Lender may direct, U.S. Three Million
Six Hundred Ninety Two Thousand and 00/100 Dollars (U.S.$3,692,000.00) (the “Principal Amount”), together with interest
at the rate, and fees and expenses on the terms provided in, this Promissory Note (the “Loan”). This Promissory Note
(“Note”) is made as of the date of Borrower’s repurchase of one hundred percent (100%) of Lender’s equity ownership interest
in Borrower, and the Principal Amount represents the portion of the purchase price of such equity for which Borrower has not paid
Lender in cash.

 

		1.	INTEREST RATE. Borrower will pay Lender interest on the unpaid Principal Amount at the annual
rate set forth below (calculated on the actual number of days elapsed over a 365 day year) from the date of this Note (except as
provided in the next sentence) until the entire outstanding Principal Amount and accrued and outstanding interest together with
all fees and expenses due under this Note have been paid, whether or not judgment is obtained. At no time, however, will the interest
rate exceed the maximum allowable by Law. Interest will compound annually.

 

Fixed Rate. The rate of five
and one-half percent (5.5%) per annum, subject to automatic (i) reduction to two and one-half percent (2.5%) per annum in
the event Borrower repays all but not less than all amounts related to the Loan on or before April 3, 2014, and (ii) increase as
provided in Section 7 of this Note.

 

		2.	TERM. This Note matures and all unpaid principal, accrued interest and unpaid fees and expenses
are payable on October 3, 2014 (the “Maturity Date”).

 

		3.	FEES AND EXPENSES. All fees and expenses incurred by Lender in connection with the enforcement
of this Note, including but not limited to attorney’s fees, will be promptly reimbursed by Borrower.

 

		4.	PAYMENTS. All unpaid Principal Amount, accrued interest and unpaid fees and expenses shall
be due and payable on the Maturity Date by means of wire transfer of immediately available funds to an account designated in writing
by Lender.

 

		5.	PREPAYMENTS. Borrower may prepay the Loan evidenced by this Note in whole or in part without
penalty before the Maturity Date. All payments made hereunder shall be applied first to the payment of any fees or charges outstanding
hereunder, second to accrued

 

    	 

    	 

    

  

but unpaid interest, and third to the payment of the Principal
Amount outstanding under the Note.

 

		6.	DEFAULT. Each of the following shall constitute an event of default (“Event of Default”)
under this Note: (a) failure of Borrower to make any payment to Lender when due hereunder; (b) the breach or nonperformance of
any representation, warranty or covenant of Borrower contained in this Note and such breach or nonperformance continues for a period
of not less than thirty (30) days after written notice thereof from Lender to Borrower; provided, that, any breach or nonperformance
of the provisions of Sections 4, 8(A)(i), 8(F), 8(G), 8(H), 8(I), 8(J), 9(A), 10(B), 10(C) or 10(E) shall immediately result in
an Event of Default, without such thirty (30) day period; (c) any breach under the Redemption Agreement of even date herewith (the
“Redemption Agreement”) between Borrower and Lender and such breach continues beyond any applicable notice and cure period;
or (d) the institution of proceedings by or against Borrower under any bankruptcy or insolvency law, or any law for the benefit
of creditors or relief of debtors, (provided, however, that the institution of involuntary proceedings against Borrower will not
be an Event of Default if such proceeding is discharged or dismissed within sixty (60) days after the commencement date thereof),
or a custodianship, trusteeship, receivership or assignment for the benefit of creditors is imposed upon or sought by Borrower.

 

		7.	REMEDIES. Upon the occurrence and during the continuance of an Event of Default, at Lender’s
option, all amounts owing to Lender in connection with the Loan and this Note will become due and payable immediately, without
notice of any kind to Borrower. Upon the occurrence and during the continuance of an Event of Default, interest will continue to
accrue on all such amounts until paid, at a default rate of interest equal to two percent (2%) per annum above the otherwise applicable
rate under this Note. In addition, Lender shall have all the rights and remedies available at law, in equity, or otherwise. All
of Lender’s rights and remedies shall be cumulative and may be exercised singularly or concurrently. Election by Lender to pursue
any remedy or combination shall not exclude pursuit of any other remedy, and an election to make expenditures or take action to
perform any obligation of Borrower shall not affect Lender’s right to declare an Event of Default and to exercise its rights and
remedies.

 

		8.	REPRESENTATIONS. As a material inducement to Lender’s willingness to make the Loan, Borrower
represents and warrants that:

 

(A)         it
is (i) a limited company duly incorporated, validly existing and in good standing under the Laws of Bermuda and has the requisite
power and authority, and the legal right, to own, lease and operate its material properties and assets and to conduct its business
as it is now being conducted in all material respects and (ii) in material compliance with all Laws and Orders applicable to it;

 

(B)         Borrower
has the power and authority, and the legal right, to execute and deliver this Note and to perform its obligations hereunder;

 

(C)         Borrower
has duly executed and delivered this Note;

 

 

    	2

    	 

    

  

(D)         no
consent or authorization of, filing with, notice to or other act by, or in respect of, any governmental authority or any other
person (including its shareholders), entity or agency is required in order for Borrower to execute, deliver, or perform any of
its obligations under this Note, except such as have been obtained or made and are in full force and effect;

 

(E)         the
execution and delivery of this Note and the consummation by Borrower of the transactions contemplated hereby do not and will not:
(i) violate or conflict with Borrower’s organizational documents; (ii) violate any Law or Order applicable to Borrower or by which
any of its material properties or assets may be bound; or (iii) constitute a default under any material agreement or contract by
which Borrower may be bound;

 

(F)         this
Note is a valid, legal and binding obligation of Borrower, enforceable against Borrower in accordance with its terms, subject
to applicable bankruptcy, insolvency, reorganization, moratorium and other laws affecting creditors’ rights generally and subject
to general principles of equity, regardless of whether considered in a proceedings in equity or at law;

 

(G)         except for liens identified in
Borrower’s most recent audited financial statements delivered to Lender and liens encumbering certain investment property of JRG
Reinsurance Company Ltd. under that certain Master Letter of Credit Reimbursement and Security Agreement dated as of July 7, 2011
(the “KeyBank Letter of Credit”) between KeyBank National Association and JRG Reinsurance Company Ltd. in the stated
amount of up to $50,000,000, the assets of neither Borrower nor any of its subsidiaries are encumbered by any lien or liens securing
indebtedness outstanding on the date hereof the aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $5,000,000;

 

(H)         excluding
amounts that are due and payable within ninety (90) days after the date hereof (other than any such amounts that are outstanding
under the KeyBank Credit Facility (as defined hereinafter), the KeyBank Letter of Credit or incurred outside the ordinary course
of business), the aggregate outstanding indebtedness of Borrower and its subsidiaries as of the date hereof does not exceed $119,055,000;

 

(I)         the
aggregate principal amount outstanding under the Sunlight Notes (as defined hereinafter) as of the date hereof is Eighteen Million
Four Hundred Sixty Thousand and 00/100 Dollars ($18,460,000.00);

 

(J)         the
terms and conditions of the Sunlight Notes with respect to interest rate, term, fees and expenses, payments, prepayments, remedies,
taxes, maximum rate of interest permitted by law, and avoidance of debt payments are the same in all material respects as the
corresponding terms and conditions set forth in Section 1, Section 2, Section 3, Section 4, Section 5, Section 7, Section 11,
Section 12 and Section 13 of this Note; provided, however, that Borrower shall not be deemed to breach the representations
and warranties in this Section 8(J) solely by virtue of the principal amount outstanding under the Sunlight Notes or the parties
thereto; and

 

(K)         no
action, suit, litigation, investigation or proceeding of, or before, any arbitrator or governmental authority is pending or, to
the knowledge of Borrower, threatened by or

 

    	3

    	 

    

  

against Borrower or any of its property
or assets (i) with respect to this Note or any of the transactions contemplated hereby or (ii) that would reasonably be expected
to materially adversely affect Borrower’s financial condition or the ability of Borrower to perform its obligations under this
Note.

 

Borrower understands and acknowledges
that Lender is reasonably, materially and detrimentally relying on each representation and warranty set forth in this Section 8
and would not be making this Loan “but for” each representation and warranty.

 

For the purposes of this Note:

 

“Law” means any
law (including common law), statute, ordinance, treaty, rule, regulation, policy or requirement of any governmental authority
or agency and authoritative interpretations thereon, whether now or hereafter in effect, in each case, applicable to or binding
on such person or any of its properties or to which such person or any of its properties is subject.

 

“Order” means
any order, decree, judgment, writ, injunction, settlement agreement, requirement or determination of an arbitrator or a court
or other governmental authority, in each case, applicable to or binding on such person or any of its properties or to which such
person or any of its properties is subject.

 

		9.	AFFIRMATIVE COVENANTS. Until all obligations of Borrower under this Note have been satisfied
or terminated in accordance with this Note, Borrower shall:

 

(A)         Preserve,
renew and maintain in full force and effect its corporate or organizational existence and take all reasonable action to maintain
all material rights, privileges and franchises necessary or desirable in the normal conduct of its business;

 

(B)         Comply
with all Laws and Orders applicable to it or its property, other than such Laws and Orders (i) the validity or applicability of
which Borrower is contesting in good faith by appropriate proceedings or (ii) the failure to comply with which would not reasonably
be expected to materially adversely affect Borrower’s financial condition or the ability of Borrower to perform its obligations
under this Note;

 

(C)         Use
its commercially reasonable efforts to obtain third party financing sufficient to pay all amounts due under this Note in full on
or before October 3, 2013;

 

(D)         Upon
the request of Lender, promptly execute and deliver such further instruments and do or cause to be done such further acts as may
be reasonably necessary or advisable to carry out the intent and purposes of this Note;

 

(E)         Pay,
discharge or otherwise satisfy all of its material obligations before the same shall become delinquent or in default, except where
the amount or validity thereof is currently being contested in good faith by appropriate proceedings, and reserves in conformity
with the generally accepted accounting principles of the United States with respect thereto have been provided on its books;

 

    	4

    	 

    

  

(F)         As
soon as practicable and in any event within five (5) business days after an executive officer of Borrower obtains actual knowledge
that an Event of Default has occurred, notify Lender in writing of the nature and extent of such Event of Default and the action,
if any, it has taken or proposes to take with respect to such Event of Default;

 

(G)         Use
the proceeds of any and all new debt incurred or borrowed outside of the ordinary course of business (including all new borrowings
since the March 1, 2013 under that certain Credit Agreement dated as of September 24, 2008 (as in existence as of the date hereof,
the “KeyBank Credit Agreement”) among Borrower, as borrower, Franklin Holdings (II) (Bermuda), Ltd., as subsidiary guarantor,
the lenders party thereto and KeyBank National Association, as administrative agent and letter of credit issuer, but excluding
any reborrowing or refinancing of any amounts outstanding under the KeyBank Credit Agreement by a renewal or replacement facility)
to repay Lender and Sunlight, on a pro rata basis according to the outstanding principal, interest and fees and expenses owed to
Lender and Sunlight under this Note and the Sunlight Notes, respectively, any principal, interest and fees and expenses outstanding
under this Note and the Sunlight Notes, respectively, within three (3) business days of Borrower’s receipt of such proceeds; and

 

(H)         Until
all obligations of Borrower under this Note have been satisfied or terminated in accordance with this Note, Borrower shall provide
Lender with (i) all information and reports required to be delivered to an Original Investor (as such term is defined in the Shareholders
Agreement) holding the Access Minimum Equity (as such term is defined in the Shareholders Agreement) pursuant to Section 2.7(a)
of the Shareholders Agreement and (ii) the access required to be provided to a Shareholder (as such term is defined in the Shareholders
Agreement) holding the Access Minimum Equity pursuant to Section 2.7(c) of the Shareholders Agreement.

 

For the purposes of this Note:

 

“Shareholders Agreement” means that
certain Second Amended and Restated Investor Shareholders Agreement of the Borrower dated April 8, 2009.

 

“Sunlight” means, collectively, Sunlight
Capital Ventures, LLC and Sunlight Capital Partners II, T.T.C.

 

“Sunlight Notes” means those
certain Promissory Notes dated as of the date hereof by Borrower, each in the original principal amount of Nine Million Two Hundred
Thirty Thousand and 00/100 Dollars ($9,230,000.00), one of which is payable to Sunlight Capital Ventures, LLC and the other of
which is payable to Sunlight Capital Partners II, T.T.C.

 

		10.	NEGATIVE COVENANTS. So long as any amount under this Note shall remain unpaid, Borrower
will not, and will cause each of its subsidiaries not to, without the prior written consent of Lender (which consent shall not
be unreasonably withheld, conditioned or delayed):

 

    	5

    	 

    

  

(A)         Create
or suffer to exist any lien, security interest or other charge or encumbrance, or any other type of preferential arrangement, upon
or with respect to any of its properties or assets, whether now owned or hereafter acquired, or assign any right to receive income,
in each case to secure any debt of any person, other than:

 

(i)          liens
imposed by law for taxes that are not yet due or are being contested in compliance with Section 5.05 of the KeyBank Credit Agreement;

 

(ii)         carriers’,
warehousemen’s, mechanics’, materialmen’s, repairmen’s and other like liens imposed by law, arising in the ordinary course of business
and securing obligations that are not overdue by more than thirty (30) days or are being contested in compliance with Section 5.05
of the KeyBank Credit Agreement;

 

(iii)        pledges
and deposits made in the ordinary course of business in compliance with workers’ compensation, unemployment insurance and other
social security laws or regulations (including, without limitation, deposits made in the ordinary course of business to cash collateralize
letters of credit described in the parenthetical in clause (i) of the definition of “Debt” in the KeyBank Credit Agreement);

 

(iv)        deposits
to secure the performance of bids, trade contracts, leases, statutory obligations, surety and appeal bonds, performance bonds and
other obligations of a like nature and liens imposed by statutory or common law relating to banker’s liens or rights of setoff
or similar rights relating to deposit accounts, in each case in the ordinary course of business;

 

(v)         liens
arising under escrows, trusts, custodianships, separate accounts, funds withheld procedures, and similar deposits, arrangements,
or agreements established with respect to insurance policies, annuities, guaranteed investment contracts and similar products underwritten
by, or reinsurance agreements entered into by, any Insurance Subsidiary (as such term is defined in the KeyBank Credit Agreement)
in the ordinary course of business;

 

(vi)        deposits
with insurance regulatory authorities in the ordinary course of business (which deposits may be in the form of cash collateralized
letters of credit);

 

(vii)       easements,
zoning restrictions, rights-of-way, licenses, reservations, minor irregularities of title and similar encumbrances on real property
imposed by law or arising in the ordinary course of business that do not secure any monetary obligation and do not materially detract
from the value of the affected property or interfere with the ordinary conduct of business of Borrower;

 

(viii)      any
lien on any property of Borrower or any subsidiary existing on the date hereof and described in Section 8(G) above; provided
that (A) such lien shall not apply to any other property of Borrower or such subsidiary and (B) such lien shall secure only
those obligations that it secures on the date hereof and extensions, renewals and replacements thereof that do not increase the
aggregate commitment amount secured thereby;

 

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(ix)         any
lien existing on any fixed or capital asset before the acquisition thereof by a
Borrower or any subsidiary or existing on any fixed or capital asset of any person that first becomes a subsidiary after the date
hereof before the time such person becomes a subsidiary; provided that (A) such lien is not created in contemplation of
or in connection with such acquisition or such person becoming a subsidiary, (B) such lien will not apply to any other property
or asset of Borrower or any subsidiary, (C) such lien will secure only those obligations which it secures on the date of such acquisition
or the date such person first becomes a subsidiary, as the case may be, and extensions, renewals and replacements thereof that
do not increase the outstanding principal amount thereof, (D) the principal amount of debt secured by any such lien shall at no
time exceed 80% of the fair market value (as determined in good faith by a senior financial officer of Borrower or a subsidiary)
of such fixed or capital asset at the time it was acquired (by purchase, construction or otherwise) , and (E) the aggregate principal
amount of debt secured by any and all such liens permitted under this clause (ix) shall not at any time exceed $10,000,000;

 

(x)          liens
on fixed or capital assets acquired, constructed or improved by Borrower or any subsidiary; provided that (A) such liens
and the debt secured thereby are incurred before or within ninety (90) days after such acquisition or the completion of such construction
or improvement, (C) the debt secured thereby does not exceed the cost of acquiring, constructing or improving such fixed or capital
assets, (C) such liens will not apply to any other property of Borrower or any subsidiary, and (D) the aggregate principal amount
of debt secured by any and all such liens permitted under this clause (x) shall not at any time exceed $10,000,000;

 

(xi)         liens
to secure a debt owing to Borrower or a subsidiary;

 

(xii)        liens
on the assets of an insurance subsidiary to secure debt owing by such subsidiary to the Federal Home Loan Bank of which such
subsidiary is a member;

 

(xiii)       cash
deposited as collateral to secure letter of credit debt incurred by an insurance subsidiary of Borrower in the ordinary course
of business; and

 

(xiv)      any
lien arising out of the refinancing, extension, renewal or refunding of any debt secured by a lien permitted by any of clauses
(viii), (ix), (x), (xi), (xii) or (xiii) of this Section; provided that such debt under any of clauses (viii), (ix) and
(x) is not increased (except by the amount of fees, expenses and premiums required to be paid in connection with such refinancing,
extension, renewal or refunding) and is not secured by any additional assets;

 

provided that, except as
provided in clause (iii) above, the liens permitted pursuant to clauses (i) through (vii) above shall not include any lien that
secures indebtedness for borrowed money;

 

(B)         Except
for payments to Sunlight made on the date hereof and to be made pursuant to the Sunlight Notes, pay any cash dividends, cash distributions
or other cash payments, including by way of loans, indemnities or guaranties, to the shareholders of Borrower; provided,
however, that the foregoing shall in no way limit any right to indemnification

 

    	7

    	 

    

  

afforded any director or officer
of Borrower by corporate policy or applicable statute for their actions (or inactions) in such capacity;

 

(C)         Merge
or consolidate with or into, or convey, transfer, otherwise dispose of (other than in the ordinary course of business) any of its
assets (whether now owned or hereafter acquired) to, or acquire all or substantially all of the assets of, or otherwise enter into
a material business combination with, any person, unless the surviving or acquiring entity in such transaction expressly agrees
in writing to assume and perform all of Borrower’s obligations under this Note;

 

(D)         Prepay
any amount under the Sunlight Notes without concurrently making a pro rata (according to the amount of principal, interest, fees
and expenses outstanding under each of this Note and the Sunlight Notes) prepayment against the Loan in accordance with Section
5 of this Note; or

 

(E)         materially
amend, supplement or modify the Sunlight Notes.

 

		11.	TAXES.

 

(A)         Any
and all payments by Borrower under this Note shall be made free and clear of and without deduction for any and all present or future
taxes, levies, imposts, deductions, charges or withholdings, and all liabilities with respect thereto (all such taxes, levies imposts,
deductions, charges, withholdings and liabilities, but excluding any taxes based on Lender’s income, being hereinafter referred
to as “Taxes”).

 

(B)         In
addition, Borrower shall pay any present or future stamp, documentary, excise, property or similar taxes, charges or levies that
arise from any payment made under this Note or from the execution, delivery or registration of, or otherwise with respect to, this
Note (all such taxes, charges and levies being hereinafter referred to as “Other Taxes”).

 

(C)         Borrower
shall indemnify Lender for the full amount of Taxes and Other Taxes, and for the full amount of Taxes imposed by any jurisdiction
on amounts payable under this paragraph, paid by Lender and any liability (including, without limitation, penalties, additions
to tax, interest and expenses) arising therefrom or with respect thereto. This indemnification payment shall be made within thirty
days from the date Lender makes written demand therefor.

 

(D)         Without
prejudice to the survival of any other agreement of Borrower under this Note, the agreements and obligations of Borrower contained
in this paragraph shall survive the payment in full of principal and interest under this Note.

 

		12.	MAXIMUM RATE PERMITTED BY LAW. All agreements in this Note are expressly limited so that
in no contingency or event whatsoever, whether reason of acceleration of maturity of the indebtedness evidenced hereby or otherwise,
shall the amount agreed to be paid hereunder for the use, forbearance, or detention of money exceed the highest lawful rate permitted
under applicable usury laws. If, from any circumstance whatsoever, fulfillment of any provision of this Note at the time performance
of such provision shall be

 

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due shall involve exceeding any
usury limit prescribed by law that a court of competent jurisdiction may deem applicable hereto, then, ipso facto,
the obligations to be fulfilled shall be reduced to allow compliance with such limit, and if, from any circumstance whatsoever,
Lender shall ever receive as interest an amount that would exceed the highest lawful rate, the receipt of such excess shall be
deemed a mistake and shall be canceled automatically or, if theretofore paid, such excess shall be credited against the principal
amount of the indebtedness evidenced hereby to which the same may lawfully be credited, and any portion of such excess not capable
of being so credited shall be refunded immediately to Borrower.

 

		13.	AVOIDANCE OF DEBT PAYMENTS. To the extent that any payment to Lender and/or any payment
or proceeds of any collateral received by Lender in reduction of the Loan is subsequently invalidated, declared to be fraudulent
or preferential, set aside and/or required to be repaid to a trustee, to Borrower (or Borrower’s successor) as a debtor in possession,
or to a receiver, creditor, or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then
the portion of the Loan intended to have been satisfied by such payment or proceeds shall remain due and payable hereunder, be
evidenced by this Note, and shall continue in full force and effect as if such payment or proceeds had never been received by Lender
whether or not this Note has been marked “paid” or otherwise cancelled or satisfied and/or has been delivered to Borrower,
and in such event Borrower shall be immediately obligated to return the original Note to Lender and any marking of “paid”
or other similar marking shall be of no force and effect.

 

		14.	SEVERABILITY. If any provision of this Note is found to be invalid or unenforceable, such
provision shall be stricken and all remaining provisions of this Note shall remain valid and enforceable.

 

		15.	WAIVER; AMENDMENTS. No amendment
                                         of this Note, and no waiver of any one or more of the provisions hereof, shall be effective
                                         unless set forth in a writing signed by Lender and Borrower; provided, however,
                                         that any such waiver shall be restricted to the matters specified in such writing.

 

		16.	ENTIRE AGREEMENT. This Note and the associated Redemption Agreement constitute the sole
agreements of the parties regarding the subject matter hereof and thereof and supersede all oral negotiations and prior writings
regarding the subject matter hereof and thereof.

 

		17.	APPLICABLE LAW; JURISDICTION.
                                         THIS NOTE WILL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAW OF
                                         THE STATE OF NEW YORK, WITHOUT REFERENCE TO ANY PRINCIPLES OF CONFLICTS OF LAW. ANY LEGAL
                                         ACTION OR PROCEEDING BY OR AGAINST ANY PARTY HERETO OR WITH RESPECT TO OR ARISING OUT
                                         OF THIS NOTE MAY BE BROUGHT IN OR REMOVED TO THE COURTS OF THE STATE OF NEW YORK, IN
                                         AND FOR THE COUNTY OF NEW YORK, OR OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT
                                         OF NEW YORK (IN EACH CASE SITTING IN THE BOROUGH OF MANHATTAN). BY EXECUTION AND DELIVERY
                                         OF THIS NOTE, BORROWER ACCEPTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY
                                         AND UNCONDITIONALLY, THE

 

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JURISDICTION OF THE AFORESAID
COURTS (AND COURTS OF APPEALS THEREFROM) FOR ANY LEGAL PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS NOTE.

 

		18.	SUCCESSORS AND ASSIGNS. This Note shall be binding upon Borrower and Borrower’s successors
and assigns and shall inure to the benefit of Lender, its successors and assigns. Borrower may not assign or transfer its rights
or obligations under this Note without the prior written consent of Lender. Lender may not assign or transfer its rights or obligations
under this Note without the prior written consent of Borrower, which consent shall not be unreasonably withheld. By acceptance
of this Note, Lender is hereby deemed to have accepted the terms and conditions hereof.

 

		19.	NO WAIVER, MODIFICATION OR PARTNERSHIP. Nothing set forth in this Note shall be construed
as making Lender or Borrower the partner, agent or joint venturer of the other party. Borrower and Lender shall have no relationship
to each other than as debtor and creditor.

 

IN WITNESS WHEREOF,
BORROWER, INTENDING TO BE LEGALLY BOUND, HAS EXECUTED THIS NOTE IN FAVOR OF LENDER AS OF THE DATE ABOVE WRITTEN.

 

	 	BORROWER:
	 	 
	 	FRANKLIN HOLDINGS (BERMUDA) LTD.
	 	 
	 	By:	 
	 	 	Name:
	 	 	Title:

 

    	10

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