EXHIBIT 4.1


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                               CREDIT AGREEMENT

                                    AMONG

                      HALLMARK FINANCIAL SERVICES, INC.,
                                 AS BORROWER,
                AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS,
                                     AND
                     PHOENIX INDEMNITY INSURANCE COMPANY

                                     AND

                           THE FROST NATIONAL BANK,
                                  AS LENDER

                                JUNE 29, 2005
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                              TABLE OF CONTENTS


 Section                                                           Page


 ARTICLE I   DEFINITIONS .......................................     1
      1.1    Definitions........................................     1
      1.2    Additional Definitions.............................    18
      1.3    Construction.......................................    19

 ARTICLE II  LOANS .............................................    19
      2.1    Loans..............................................    19
      2.2    Borrowings.........................................    20
      2.3    Repayment..........................................    21
      2.4    Voluntary Prepayments..............................    21
      2.5    Mandatory Prepayments..............................    21
      2.6    Termination and Reduction of Commitments...........    22
      2.7    Interest on Loans Generally........................    22
      2.8    Computations.......................................    22
      2.9    Interest After an Event of Default.................    23
      2.10   Payments Generally.................................    23
      2.11   Booking the Loans..................................    23
      2.12   Collateral.........................................    23

 ARTICLE III LETTER OF CREDIT FACILITY..........................    24
      3.1    The L/C Commitment.................................    24
      3.2    Procedures for Issuance and Amendment of Letters
             of Credit; Auto-Renewal Letters of Credit..........    25
      3.3    Drawings and Reimbursements........................    26
      3.4    Obligations Absolute...............................    26
      3.5    Role of Lender.....................................    27
      3.6    Cash Collateral....................................    28
      3.7    Letter of Credit Fees..............................    28
      3.8    Fronting Fee and Documentary and Processing Charges
             Payable to Lender..................................    28
      3.9    Conflict with L/C Agreements.......................    28
      3.10   Letters of Credit Issued for RIC...................    28

 ARTICLE IV  TAXES, YIELD PROTECTION AND ILLEGALITY ............    29
      4.1    Taxes..............................................    29
      4.2    Illegality.........................................    30
      4.3    Inability to Determine Rates.......................    30
      4.4    Increased Cost and Reduced Return; Capital
             Adequacy; Reserves on Eurodollar Rate Loans........    31
      4.5    Matters Applicable to all Requests for Compensation    32
      4.6    Survival...........................................    32

 ARTICLE V   CONDITIONS PRECEDENT ..............................    32
      5.1    Conditions Precedent to Initial Loan and Letter of
             Credit.............................................    32
      5.2    Conditions Precedent to all Loans and L/C Credit
             Extensions.........................................    34
      5.3    Conditions Precedent to all Term Loans.............    35

 ARTICLE VI  AFFIRMATIVE COVENANTS .............................    35
      6.1    General Covenants..................................    36
      6.2    Accounts, Reports and Other Information............    36
      6.3    Inspection.........................................    40
      6.4    Compliance with ERISA..............................    41
      6.5    Performance of Obligations.........................    41
      6.6    Maintenance of Priority of Bank Liens..............    41
      6.7    Indemnity..........................................    41
      6.8    Use of Proceeds....................................    42

 ARTICLE VII NEGATIVE COVENANTS ................................    42
      7.1    AHIC Total Adjusted Capital........................    43
      7.2    PIIC Total Adjusted Capital........................    43
      7.3    Net Underwriting Gain..............................    43
      7.4    Loss Ratio.........................................    43
      7.5    Consolidated Net Worth.............................    43
      7.6    Fixed Charges Coverage Ratio.......................    43
      7.7    Consolidated Net Income............................    43
      7.8    Limitation on Debt.................................    43
      7.9    Limitation on Liens................................    43
      7.10   Burdensome Agreements..............................    43
      7.11   Disposition of Assets..............................    43
      7.12   Acquisition of Assets..............................    44
      7.13   Merger and Consolidation...........................    45
      7.14   Loans and Investments..............................    45
      7.15   ERISA..............................................    45
      7.16   Assignment.........................................    45
      7.17   Transactions with Affiliates.......................    45
      7.18   Business...........................................    45
      7.19   Activities of Hallmark Trust I.....................    45
      7.20   2005 Documents.....................................    46

 ARTICLE VIII REPRESENTATIONS AND WARRANTIES ...................    46
      8.1    Organization and Qualification.....................    46
      8.2    Financial Statements...............................    46
      8.3    Compliance With Laws and Other Matters.............    47
      8.4    Litigation.........................................    47
      8.5    Debt...............................................    47
      8.6    Title to Properties................................    47
      8.7    Authorization; Validity............................    47
      8.8    Taxes..............................................    47
      8.9    Use of Proceeds....................................    48
      8.10   Possession of Franchises, Licenses, Etc............    48
      8.11   Leases.............................................    48
      8.12   Disclosure.........................................    48
      8.13   ERISA..............................................    49
      8.14   Regulatory Acts....................................    49
      8.15   Solvency...........................................    49
      8.16   Environmental Matters..............................    49
      8.17   Investments........................................    50
      8.18   Intellectual Property, Etc.........................    50
      8.19   Reinsurance Agreements.............................    50
      8.20   Retrocession Agreements............................    50
      8.21   2005 Documents.....................................    50
      8.22   Subordination; 2005 Documents......................    51
      8.23   Survival of Representations and Warranties, Etc....    51

 ARTICLE IX  EVENTS OF DEFAULT .................................    51
      9.1    Default............................................    51
      9.2    Remedies...........................................    53
      9.3    Application of Funds...............................    54

 ARTICLE X   MISCELLANEOUS .....................................    55
      10.1   Notices............................................    55
      10.2   Expenses...........................................    55
      10.3   Waivers............................................    55
      10.4   Determinations by Lender...........................    55
      10.5   Set-Off............................................    56
      10.6   Assignment.........................................    56
      10.7   Amendment and Waiver...............................    57
      10.8   Confidentiality....................................    57
      10.9   Counterparts.......................................    58
      10.10  Severability.......................................    58
      10.11  Interest and Charges...............................    58
      10.12  Exception to Covenants.............................    58
      10.13  USA Patriot Act Notice.............................    58
      10.14  GOVERNING LAW......................................    59
      10.15  WAIVER OF JURY TRIAL...............................    59
      10.16  ENTIRE AGREEMENT...................................    59

 SIGNATURES.....................................................    S-1




                            EXHIBITS AND SCHEDULES
                            ----------------------

 Exhibit A      Revolving Note
 Exhibit B      Term Loan Note
 Exhibit C      Pledge Agreement - Borrower
 Exhibit D      Pledge Agreement - Subsidiary
 Exhibit E      Security Agreement - Borrower
 Exhibit F      Security Agreement - Subsidiary
 Exhibit G      Guaranty Agreement
 Exhibit H      Revolving Loan Notice
 Exhibit I      Term Loan Notice
 Exhibit J      Term Loan Request
 Exhibit K      Compliance Certificate
 Exhibit L      Notice of Final Agreement
 Exhibit M      Applicable Rate Certificate
 Exhibit N      2005 Documents

 Schedule 8.1   Subsidiaries
 Schedule 8.4   Existing Litigation
 Schedule 8.5   Existing Debt
 Schedule 8.10  Licensed Jurisdictions
 Schedule 8.13  Plans
 Schedule 8.16  Environmental Matters
 Schedule 8.17  Existing Investments
 Schedule 8.19  Reinsurance Agreements
 Schedule 8.20  Retrocession Agreements
 Schedule 10.1  Notice Addresses




                               CREDIT AGREEMENT


      THIS CREDIT AGREEMENT  is dated as  of June 29,  2005 (this  agreement,
 together with  all amendments  and  restatements, this  "Agreement"),  among
 HALLMARK FINANCIAL SERVICES,  INC., a Nevada  corporation ("Borrower"),  THE
 FROST NATIONAL BANK,  a national  banking association  ("Lender"), and  each
 RIC.  Each RIC is a party to this Agreement to acknowledge and agree to  its
 obligations pursuant to Articles III, IV, and X.

                                  BACKGROUND
                                  ----------

      Borrower has requested that Lender make  a revolving credit and a  term
 credit facility  available  to  Borrower and  Borrower  and  each  RIC  have
 requested that Lender make available  Letters of Credit for the  account  of
 Borrower and each RIC.  Lender has agreed to do so, subject to the terms and
 conditions of this Agreement.

                                  AGREEMENT
                                  ---------

      In consideration  of  the  mutual covenants  and  agreements  contained
 herein, and  other good  and valuable  consideration,  receipt of  which  is
 acknowledged by the parties hereto, the parties hereto agree as follows:


                                  ARTICLE I

                                 DEFINITIONS

     1.1       Definitions.  For purposes of this Agreement:

      "Affiliate" means any Person that directly, or indirectly, through  one
 or more intermediaries,  Controls or  is Controlled  By or  is Under  Common
 Control with any other Person.

      "Aggregate Commitment" means $7,500,000.00.

      "Agreement Date" means the date of this Agreement.

      "AHIC" means  American Hallmark  Insurance Company  of Texas,  a  Texas
 insurance corporation.

      "Applicable Law" means (a) in respect of any Person, all provisions  of
 Laws and orders of  Governmental Authorities applicable  to such Person  and
 its properties, including,  without limiting the  foregoing, all orders  and
 decrees of all  Governmental Authorities and  arbitrators in proceedings  or
 actions to which the Person  in question is a  party, and (b) in respect  of
 contracts relating to interest or finance charges that are made or performed
 in the State of Texas, "Applicable Law" means the Laws of the United  States
 of America, including  without limitation 12 U.S.C.  SS85 and 86,   and  any
 other statute of the United States of  America now or at any time  hereafter
 prescribing the maximum rates of interest on loans and extensions of credit,
 and the Laws of the State of Texas, and any other Laws of the State of Texas
 now or at any time hereafter prescribing maximum rates of interest on  loans
 and extensions of credit.

      "Applicable Rate"  means  a  per annum  percentage  equal  to  (a) with
 respect to Loans, 2.75%, and (b) with  respect to L/C Fees, 1.50%;  provided
 that,  after  receipt  by  Lender  of  the  initial  Compliance  Certificate
 delivered by Borrower  pursuant to Section 6.2(b)(iv)  and thereafter,  such
 percentages shall be adjusted as follows:   effective on the third  Business
 Day after receipt by Lender of  such Compliance Certificate demonstrating  a
 change in either Consolidated Net Worth  or Consolidated Net Income so  that
 another Applicable Rate should be applied  pursuant to the table below,  the
 Applicable Rate shall be  (i) the percentage set forth  in Column 1 if  both
 Consolidated Net Worth and Consolidated Net Income are the amounts stated in
 Column 1, (ii) the percentage set forth in Column 2 if (A) both Consolidated
 Net Worth and Consolidated Net Income are the amounts stated in Column 2  or
 (B) either Consolidated Net Worth or Consolidated Net Income are the amounts
 stated in  Column 1  and Column  2,  or (iii) the  percentage set  forth  in
 Column 3 if either Consolidated Net Worth or Consolidated Net Income are the
 amounts stated in Column 3.  If a Compliance Certificate is not received  by
 Lender by the date required  pursuant to Section 6.2(b)(iv), the  Applicable
 Rate shall be the percentage stated in Column 3 until the third Business Day
 after receipt by Lender of a  Compliance Certificate demonstrating a  change
 in either Consolidated Net Worth or Consolidated Net Income so that  another
 Applicable Rate should be applied pursuant to the table below.  For purposes
 of determining Applicable Rate, Consolidated  Net Worth shall be  calculated
 as at the last day of each  fiscal quarter of Borrower and Consolidated  Net
 Income shall be  calculated as at  the last day  of each  fiscal quarter  of
 Borrower for the preceding four fiscal quarters.


      -----------------------------------------------------------------------
                          Column 1           Column 2           Column 3
      -----------------------------------------------------------------------
                                          >= $33,000,000
        Consolidated   >= $40,000,000            and          < $33,000,000
         Net Worth                         < $40,000,000
      -----------------------------------------------------------------------
                                           >= $4,000,000
        Consolidated    >= $7,000,000            and           < $4,000,000
         Net Income                         < $7,000,000
      -----------------------------------------------------------------------
             Loans           2.25%              2.50%              2.75%
      -----------------------------------------------------------------------
            L/C Fee          1.00%              1.25%              1.50%
      -----------------------------------------------------------------------


      "Applicable Rate Certificate" means a certificate substantially in  the
 form of Exhibit M.

      "Attorney  Costs"   means  and   includes   all  fees,   expenses   and
 disbursements of  any  law  firm or  other  external  counsel  and,  without
 duplication, the allocated cost of internal legal services and all  expenses
 and disbursements of internal counsel.

      "Auditors" means  KPMG  LLP,  or  other  independent  certified  public
 accountants selected by  Borrower and  reasonably acceptable  to Lender  and
 that are a Registered Public Accounting Firm.

      "Authorized Control Level" means "Authorized Control Level" as  defined
 by NAIC from time to time  and as applied in  the context of the  Risk-Based
 Capital Guidelines promulgated by NAIC (or any term substituted therefor  by
 NAIC).

      "Authorized Signatory"  means such  senior personnel  of Borrower,  any
 Subsidiary of  Borrower  or  an  Obligor  as  may  be  duly  authorized  and
 designated in  writing  by Borrower,  such  Subsidiary or  such  Obligor  to
 execute documents, agreements  and instruments on  behalf of Borrower,  such
 Subsidiary or such Obligor.

      "Bank Liens"  means Liens  in favor  of or  for the  benefit of  Lender
 securing all  or any  of the  Obligations, including,  but not  limited  to,
 rights in any Collateral  created in favor of  Lender, whether by  mortgage,
 pledge, hypothecation, assignment, transfer,  or other granting or  creation
 of Liens.

      "Business Day" means any  day other than a  Saturday, Sunday, or  other
 day on which commercial banks are authorized to close under the Laws of,  or
 are in fact closed in,  the state where Lender's  office is located and,  if
 such day relates to any  Eurodollar Rate Loan, means  any such day on  which
 dealings in  Dollar deposits  are  conducted by  and  between banks  in  the
 applicable offshore Dollar interbank market.

      "Capital Leases" means capital leases and subleases, as defined in  the
 Financial Accounting  Standards  Board  Statement  of  Financial  Accounting
 Standards No. 13, dated November 1976, as amended.

      "Cash Capex" means  any capital expenditure  (determined in  accordance
 with GAAP) the source of funds for which was  not or is not proceeds of  any
 Debt (whether or not subordinate to any other obligation of any Person), any
 operating lease or any equity issuance.

      "Code" means the Uniform Commercial Code as in effect in Texas.

      "Collateral" means any assets of any Person in which at any time Lender
 shall be granted a Bank Lien to secure the Obligations.

      "Commercial  Lines"  means  property  and  casualty  insurance  written
 through Hallmark General Agency, Inc.

      "Commitment" means each  of the Revolving  Commitment, Term  Commitment
 and L/C Commitment.

      "Compliance Certificate" means a compliance certificate,  substantially
 in the form of Exhibit K.

      "Consolidated Interest Expenses"  means, for any  period, for  Borrower
 and its Subsidiaries on a consolidated  basis, the sum of (a) all  interest,
 premium payments,  debt  discount, fees,  charges  and related  expenses  of
 Borrower and its Subsidiaries in  connection with borrowed money  (including
 that attributable  to Capital  Leases) or  in connection  with the  deferred
 purchase price of assets, in each case to the extent treated as interest  in
 accordance with GAAP, and  (b) the portion of rent  expense of Borrower  and
 its Subsidiaries with respect  to such period under  Capital Leases that  is
 treated as interest in accordance with GAAP.

      "Consolidated Net  Income"  means, with  respect  to Borrower  and  its
 Subsidiaries for any period,  the net income (or  loss) of Borrower and  its
 Subsidiaries for  such period  (excluding any  extraordinary gains  and  any
 gains from discontinued  operations but including  extraordinary losses  for
 such period), all determined in accordance with GAAP.

      "Consolidated Net  Worth"  means the  net  worth of  Borrower  and  its
 Subsidiaries determined  on a  consolidated basis  in accordance  with  GAAP
 after appropriate deduction for any minority interests in Subsidiaries.

      "Contingent Debt" means, for any Person:

           (a)  guarantees,  endorsements   (other   than   endorsements   of
      negotiable  instruments  for  collection  in  the  ordinary  course  of
      business) and other contingent liabilities (whether direct or indirect)
      in connection with the obligations of any other Person;

           (b)  obligations under any  contract providing for  the making  of
      loans, advances or capital  contributions to any  other Person, or  for
      the purchase of  any property from  any other Person,  in each case  in
      order to  enable  such  other  Person  primarily  to  maintain  working
      capital, net  worth or  any other  balance sheet  condition or  to  pay
      Debts, Dividends or expenses;

           (c)  obligations under any contract to  rent or lease (as  lessee)
      any real or  personal property (other  than operating  leases) if  such
      contract (or any related document) provides that the obligation to make
      payments thereunder is absolute and unconditional under conditions  not
      customarily found in commercial leases then in general use or  requires
      that the lessee purchase or otherwise acquire securities or obligations
      of the lessor;

           (d)  obligations in respect of letters of credit; and

           (e)  obligations under  any  other  contract  which,  in  economic
      effect, is substantially  equivalent to a  guaranty, including but  not
      limited to "keep well" or "capital maintenance" agreements.

      "Control"  or  "Controlled   By"  or  "Under   Common  Control"   means
 possession, directly  or  indirectly,  of  power  to  direct  or  cause  the
 direction of management  or policies  (whether through  ownership of  voting
 securities, by  contract or  otherwise); provided  that,  in any  event  any
 Person which  beneficially owns,  directly or  indirectly, 10%  or more  (in
 number of votes)  of the  securities having  ordinary voting  power for  the
 election of directors of  a corporation or managers  of a limited  liability
 company or  other  governance  board of  an  entity  shall  be  conclusively
 presumed to control such corporation or limited liability company.

      "Current Financials" means the most recent annual Financial  Statements
 of Borrower or any of its Subsidiaries.

      "Debt"  means,  at  any  time,  for  any  Person,  (a) Capital  Leases,
 (b) Contingent Debt, (c) debt created, issued, incurred or assumed for money
 borrowed or for the deferred purchase  price of property purchased,  (d) all
 debt, obligations  and liabilities  secured by  any Lien  upon any  property
 owned by such Person, even  though it has not  assumed or become liable  for
 the payment  of same,  and (e) liabilities  in  respect of  unfunded  vested
 benefits under any Plans; provided, that, for purposes of Section 7.6,  Debt
 shall not include the unpaid principal amount of the 2005 Debentures  or the
 obligations  with  respect  to  the  2005   Guaranty  if  at  the  time   of
 determination all amounts owed with respect  to  the 2005 Debentures and the
 2005 Guaranty are  subordinated to all  Obligations on  terms  acceptable to
 Lender.

      "Debtor Relief Laws" means any applicable liquidation, conservatorship,
 bankruptcy, moratorium,  rearrangement, insolvency,  fraudulent  conveyance,
 reorganization or  similar  debtor  relief  Laws  affecting  the  rights  of
 creditors generally from time to time in effect.

      "Default" means any of the events specified in Section 9.1 that  would,
 with the  giving of  notice or  the  passage of  time,  become an  Event  of
 Default.

      "Default Rate" means  for any  date a  simple per  annum interest  rate
 equal to the lesser of (a) the Eurodollar Rate in effect at such time,  plus
 2%, and (b) the Highest Lawful Rate.

      "Disposition"  and  "Dispose"  mean   any  sale,  lease,   abandonment,
 transfer, disposal, exchange or other transfer of any ownership or leasehold
 interest in or control of any asset.

      "Dividends" means,  with respect  to any  Person, any  dividend on  any
 class of  its  capital stock  or  other  equity interest  now  or  hereafter
 outstanding, any distribution of cash or property to owners of any shares of
 such stock or other equity interest, any retirement, redemption, purchase or
 other acquisition, directly or indirectly, of any shares of any class of its
 capital stock or other equity interest now or hereafter outstanding.

      "Dollars" and the sign  "$" mean lawful money  of the United States  of
 America.

      "EBITDA" means, for any period, for Borrower and its Subsidiaries on  a
 consolidated basis,  an amount  equal to  Consolidated Net  Income for  such
 period plus (a) the  following to the  extent deducted  in calculating  such
 Consolidated Net Income: (i) Consolidated Interest Expenses for such period,
 (ii) the provision  for  federal,  state, local  and  foreign  income  Taxes
 payable by Borrower and its Subsidiaries  for such period, (iii) the  amount
 of depreciation and amortization expense and (iv) other expenses of Borrower
 and its  Subsidiaries reducing  such Consolidated  Net Income  which do  not
 represent a cash item in such period or any future period, and minus (b) all
 non-cash items increasing Consolidated Net Income for such period.

      "Environment"  means  ambient  air,   surface  water  and   groundwater
 (including potable water, navigable water and wetlands), the land surface or
 subsurface strata, real property improvements or as otherwise defined in any
 Environmental Law.

      "Environmental Claim" means any written accusation, allegation,  notice
 of violation, claim, demand, order, directive, consent decree, cost recovery
 action or  other cause  of action  by,  or on  behalf of,  any  Governmental
 Authority or  any  Person  for  damages,  injunctive  or  equitable  relief,
 personal injury  (including sickness,  disease  or death),  Remedial  Action
 costs, property damage, natural  resource damages, nuisance, pollution,  any
 adverse effect on the Environment caused  by any Hazardous Material, or  for
 fines, penalties  or restrictions,  resulting from  or based  upon:  (a) the
 existence, or the continuation of the existence, of a Release;  (b) exposure
 to any Hazardous Material; (c) the presence, use, handling,  transportation,
 storage, treatment  or  disposal  of  any  Hazardous  Material;  or  (d) the
 violation or alleged  violation of  any Environmental  Law or  Environmental
 Permit.

      "Environmental  Law"  means  any  and  all  applicable  domestic  Laws,
 judgments, injunctions, notices or binding agreements issued, promulgated or
 entered into  by any  Governmental Authority,  relating in  any way  to  the
 Environment,  preservation  or   reclamation  of   natural  resources,   the
 management, Release or threatened  Release of any  Hazardous Material or  to
 health  and  safety  matters,  including  the  Comprehensive   Environmental
 Response, Compensation,  and  Liability  Act of  1980,  as  amended  by  the
 Superfund Amendments and Reauthorization Act  of 1986, 42 U.S.C. SS 9601  et
 seq. (collectively "CERCLA"), the  Solid Waste Disposal  Act, as amended  by
 the Resource Conservation and Recovery Act  of 1976 and Hazardous and  Solid
 Waste Amendments  of 1984,  42 U.S.C. SS 6901  et  seq., the  Federal  Water
 Pollution Control Act, as amended by the Clean Water Act of 1977,  33 U.S.C.
 SS 1251 et seq., the Clean  Air Act of 1970,  42 U.S.C. SS 7401 et seq.,  as
 amended, the  Toxic Substances  Control Act  of 1976,  15 U.S.C. SS 2601  et
 seq., the  Occupational  Safety  and  Health Act  of  1970,  as  amended  by
 29 U.S.C. SS 651 et seq., the Emergency Planning and Community Right-to-Know
 Act of 1986,  42 U.S.C. SS 11001  et seq., the  Safe Drinking  Water Act  of
 1974, as amended  by 42 U.S.C. SS 300(f)  et seq.,  the Hazardous  Materials
 Transportation  Act,  49 U.S.C.  SS 5101  et   seq.,  and  any  similar   or
 implementing Law.

      "Environmental  Permit"  means  any  permit,  approval,  authorization,
 certificate, license, variance, filing or permission required by or from any
 Governmental Authority pursuant to any Environmental Law.

      "ERISA" means the Employee Retirement Income Security Act of 1974.

      "Eurodollar Basis" means  for any  day a rate  per annum  equal to  the
 "London Interbank Offered Rate" for a three-month term, as published in  the
 "Money Rates" column of The Wall Street Journal, Central Edition, from  time
 to time, or if any reason such rate is no longer available:

           (a)  for any day the rate per annum (rounded upward to the nearest
      1/100 of 1%) equal to the rate  determined by Lender to be the  offered
      rate that appears on the page of the Telerate screen (or any  successor
      thereto) that displays an average British Bankers Association  Interest
      Settlement Rate for deposits  in Dollars (for delivery  on the date  of
      determination) with a three-month term, determined as of  approximately
      11:00 a.m. (London time) on the date of determination, or

           (b)  if the rate referenced in clause (a) does not appear on  such
      page or service or such page or service shall not be available, for any
      day the rate  per annum  (rounded upward to  the nearest  1/100 of  1%)
      equal to the rate determined by Lender  to be the offered rate on  such
      other page or other  service that displays  an average British  Bankers
      Association Interest  Settlement  Rate  for deposits  in  Dollars  (for
      delivery on date of determination) with a three-month term,  determined
      as of approximately 11:00 a.m. (London time).

      The Eurodollar  Basis shall  change effective  as of  the date  of  any
 change as  published in  The Wall  Street Journal,  Central Edition,  or  as
 determined by Lender, as appropriate.   The Eurodollar Basis is a  reference
 rate and does  not necessarily represent  the lowest or  best rate  actually
 charged to any customer of Lender.

      "Eurodollar Rate"  means  the sum  of  the Eurodollar  Basis  plus  the
 Applicable Rate.

      "Eurodollar Rate Loan" means  a Loan when it  bears interest at a  rate
 based on the Eurodollar Rate.

      "Event of Default" means  any of the  events specified in  Section 9.1,
 provided there has been  satisfied any requirement  in connection with  such
 event for the giving of notice,  or the lapse of  time, or the happening  of
 any further specified condition, event or act.

      "Existing Debt"  means  the  Debt  of  Borrower  and  its  Subsidiaries
 existing  on  the  Agreement  Date,  which  is  described  on  Schedule 8.5,
 including renewals (but not increases) thereof.

      "Existing Investments"  means  the  Investments  of  Borrower  and  its
 Subsidiaries  existing  on  the  Agreement  Date,  which  are  described  on
 Schedule 8.17.

      "Existing Litigation"  means  the  Litigation  involving  or  otherwise
 affecting Borrower and its Subsidiaries existing on the Agreement Date.

      "Federal Funds Rate" means,  for any day, the  rate per annum equal  to
 the weighted average of  the rates on  overnight Federal funds  transactions
 with members of the Federal Reserve System arranged by Federal funds brokers
 on such day, as published  by the Federal Reserve  Bank on the Business  Day
 next succeeding such day;  provided that (a) if such  day is not a  Business
 Day, the  Federal  Funds Rate  for  such day  shall  be such  rate  on  such
 transactions on the next preceding Business Day as so published  on the next
 succeeding Business Day,  and (b) if no  such rate is  so published on  such
 next succeeding Business Day, the Federal  Funds Rate for such day shall  be
 the average rate (rounded upward, if necessary, to a whole multiple of 1/100
 of 1%) charged to Frost  on such day on  such transactions as determined  by
 Lender.

      "Financial Statements" includes, but is not limited to, balance sheets,
 profit and loss  statements, reconciliations of  capital and surplus  and/or
 partnership capital accounts, as appropriate,  and statements of changes  in
 financial position or cash flow, prepared  in comparative form with  respect
 to the corresponding  period of the  preceding fiscal year  and prepared  in
 accordance with SAP or GAAP, as appropriate.

      "Fixed Charges" means the sum of (a) Consolidated Interest Expenses for
 the four fiscal  quarter period  ended on  the date  of determination,  plus
 (b) scheduled principal  payments of  Debt which  would be  classified as  a
 current liability  on  a consolidated  balance  sheet of  Borrower  and  its
 consolidated Subsidiaries  payable during  the  four fiscal  quarter  period
 beginning on  the day  following the  date of  determination, plus  (c) Cash
 Capex actually paid by Borrower and its consolidated Subsidiaries during the
 four fiscal quarter period ended on the date of determination, plus  (d) the
 aggregate amount of  Taxes actually paid  by Borrower  and its  consolidated
 Subsidiaries during the  four fiscal  quarter period  ended on  the date  of
 determination, plus (e) cash Dividends actually paid by Borrower during  the
 four fiscal quarter period ended on the date of determination.

      "Fixed Charges Coverage Ratio" means the ratio (rounded to two  decimal
 places) determined as at the last day  of the most recent fiscal quarter  of
 Borrower of (a) EBITDA for the four fiscal quarter period ended on the  last
 day of such fiscal quarter, to  (b) Fixed Charges determined as at the  last
 day of such fiscal quarter.

      "GAAP" means  generally accepted  accounting  principles applied  on  a
 consistent basis, set  forth in the  Opinions of  the Accounting  Principles
 Board of the American  Institute of Certified  Public Accountants and/or  in
 statements of the Financial Accounting Standards Board, which are applicable
 in the circumstances as of the date in question, and the requisite that such
 principles be applied on a consistent  basis shall mean that the  accounting
 principles observed  in a  current period  are  comparable in  all  material
 respects to those applied in a preceding period.

      "Governmental Authority" means any nation  or government, any state  or
 other political subdivision thereof, any agency, authority, instrumentality,
 regulatory body,  court,  administrative  tribunal, central  bank  or  other
 entity exercising executive,  legislative, judicial,  taxing, regulatory  or
 administrative powers or functions of or pertaining to government.

      "Guarantor" means each Subsidiary  (whether now or hereafter  existing)
 of Borrower (other than a RIC).

      "Guaranty" means a  Guaranty Agreement,  substantially in  the form  of
 Exhibit G, duly executed by each Guarantor.

      "Hallmark Trust I" means Hallmark Statutory Trust I, a special  purpose
 statutory Delaware business trust established by Borrower, of which Borrower
 holds all the common securities, which  is the issuer of the  2005 Preferred
 Securities, and which purchased from  Borrower the 2005 Debentures with  the
 net proceeds of the issuance and sale of the 2005 Preferred Securities.

      "Hallmark Trust I Declaration of Trust" means the Amended and  Restated
 Declaration of  Trust  of Hallmark  Trust  I, dated  as  of June  21,  2005,
 together with all amendments and restatements.

      "Hazardous Materials" means all explosive or radioactive substances  or
 wastes, hazardous or toxic substances  or wastes, pollutants, solid,  liquid
 or gaseous wastes, including petroleum or petroleum distillates, asbestos or
 asbestos-containing materials,  polychlorinated biphenyls  ("PCBs") or  PCB-
 containing materials or equipment, radon  gas, infectious or medical  wastes
 and all other substances or wastes  of any nature regulated pursuant to  any
 Environmental Law.

      "Highest Lawful  Rate" means  at the  particular time  in question  the
 maximum rate  of  interest  which, under  Applicable  Law,  Lender  is  then
 permitted to charge  on the Obligations.   If the  maximum rate of  interest
 which,  under  Applicable  Law,  Lender  is  permitted  to  charge  on   the
 Obligations shall  change after  the date  hereof, the  Highest Lawful  Rate
 shall be automatically increased or decreased, as the case may be, from time
 to time as of the effective time of  each change in the Highest Lawful  Rate
 without notice to Borrower.  For purposes of determining the Highest  Lawful
 Rate  under  Applicable  Law, the indicated rate ceiling shall be the lesser
 of  (a)(i)  the  "weekly  ceiling",   as  that  expression   is  defined  in
 Section 303.003 of the Texas Finance Code, as amended, or (ii) if  available
 in accordance with the terms thereof and at Lender's option after notice  to
 Borrower and otherwise in  accordance with the  terms of Section 303.103  of
 the Texas Finance Code, as amended,  the "annualized ceiling" and  (b)(i) if
 the amount outstanding under this Agreement  is less than $250,000, 24%  per
 annum, or (ii) if  the amount under  this Agreement is  equal to or  greater
 than $250,000, 28% per annum.

      "Insurance Business"  means one  or more  aspects  of the  business  of
 selling, issuing or underwriting insurance or reinsurance.

      "Insurance Contract" means any insurance contract or policy issued by a
 RIC, but  shall  not  include  any  Reinsurance  Agreement  or  Retrocession
 Agreement.

      "Insurance Regulator" means,  when used with  respect to  any RIC,  the
 Governmental  Authority,  insurance  department  or  similar  administrative
 authority or agency located in (a) each state in which such RIC is domiciled
 or (b) to the extent  asserting regulatory jurisdiction  over such RIC,  the
 Governmental Authority, insurance  department, authority or  agency in  each
 state in which such RIC is licensed, and shall include any Federal insurance
 regulatory department,  authority or  agency that  may be  created and  that
 asserts regulatory jurisdiction over such RIC.

      "Interest Payment Date"  means each  Payment Date,  the Revolving  Loan
 Maturity Date (with respect to Revolving Loans) and each Term Loan  Maturity
 Date (with respect to the respective Term Loan).

      "Internal Control Event" means  a material weakness  in, or fraud  that
 involves management  or other  employees who  have  a significant  role  in,
 Borrower's "disclosure controls and  procedures" or "internal controls  over
 financial reporting", in each case as described in Rule 13A-15 or Rule  15d-
 15 promulgated under the Securities Act of 1934.

      "Investment"  means,  as  to  any   Person,  any  direct  or   indirect
 acquisition or  investment by  such  Person, whether  by  means of  (a)  the
 purchase or acquisition  of all or  substantially all of  the assets of  any
 Person, (b) any direct  or indirect purchase or  other acquisition of, or  a
 beneficial interest in, any equity interest or other securities of any other
 Person, or (c) any direct or indirect loan, advance, or capital contribution
 to or  investment in  any other  Person,  including without  limitation  the
 incurrence or sufferance of Debt or accounts receivable of any other  Person
 that are not current assets or do not arise from Dispositions to that  other
 Person in the ordinary course of business.

      "Investment Grade Securities"  means and  includes (a) securities  that
 are direct obligations of the United States of America, the payment of which
 is backed by  the full faith  and credit of  the United  States of  America,
 (b) debt securities or debt instruments with a rating of A or higher by S&P,
 A2 or higher by Moody's,  Class (1) or higher by  NAIC or the equivalent  of
 such rating by S&P,  Moody's or NAIC, or  if none of  S&P, Moody's and  NAIC
 shall then exist,  the equivalent  of such  rating by  any other  nationally
 recognized securities rating  agency, but excluding  any debt securities  or
 instruments  constituting  loans   or  advances  among   Borrower  and   its
 wholly-owned  Subsidiaries,  and  (c) any  fund  investing  exclusively   in
 investments of the type  described in clauses (a) and  (b), which funds  may
 also hold immaterial amounts of cash pending investment and/or distribution.

      "Investment Policy"  means the  written policies  and procedures  which
 govern  the  acquisition  and  maintenance  of  Investments  and  the   cash
 management procedures of each Borrower and each of its Subsidiaries, as such
 written policies and procedures exist on the Agreement Date.

      "L/C Agreements" means all agreements related  to any letter of  credit
 issued by Lender or any Affiliate of Lender for the account of Borrower, any
 RIC or any other Obligor, including  but not limited to, any application  or
 agreement for issuance of a letter  of credit, any reimbursement  agreement,
 and any amendment or restatement thereof.

      "L/C Commitment" means $7,500,000.

      "L/C Credit Extension" means, with respect to any Letter of Credit, the
 issuance thereof, the extension of the  expiry date thereof (including  with
 respect to any Auto-Renewal Letter of Credit) or the increase of the  amount
 thereof.

      "L/C Due Date"  means the earliest  date specified  in each  respective
 Letter of Credit Application on which  payment is due and payable to  Lender
 with respect  to any  draft honored  by  Lender for  the related  Letter  of
 Credit.

      "L/C Facility" means  facility for the  issuance of  Letters of  Credit
 provided for in Article III.

      "L/C Facility Expiration Date" means the first to occur of (a) June 29,
 2007, (b) the  date  the  L/C Facility  is  terminated  pursuant  to  either
 Section 2.6 or 9.2, and (c) the date the Obligations are accelerated.

      "L/C Obligations" means, as at any date of determination, the aggregate
 undrawn amount of all  outstanding Letters of Credit  plus the aggregate  of
 all Unreimbursed Amounts.

      "Laws" means, collectively, all international, foreign, Federal,  state
 and local constitutions, statutes, treaties, rules, guidelines, regulations,
 ordinances, codes and administrative or judicial precedents or  authorities,
 including the interpretation or  administration thereof by any  Governmental
 Authority charged  with the  enforcement, interpretation  or  administration
 thereof,  and  all  applicable   administrative  orders,  directed   duties,
 requests, licenses, authorizations and permits of, and agreements with,  any
 Governmental Authority, in each case whether or not having the force of law.

      "Lender's Office" means Lender's  address and, as appropriate,  account
 as set forth on  Schedule 10.1, or such other  address or account as  Lender
 may from time to time notify Borrower.

      "Letter of Credit" means any letter  of credit issued hereunder.   Each
 Letter of Credit shall be a standby letter of credit.

      "Letter of Credit Application" means  an application and agreement  for
 the issuance or amendment  of a Letter of  Credit in the  form from time  to
 time in use by Lender.

      "Lien" means any mortgage, pledge, security interest, encumbrance, lien
 or charge of any kind (including any agreement to give or not to give any of
 the foregoing), any conditional sale or other title retention agreement, any
 financing or  other  lease in  the  nature thereof,  and  the filing  of  or
 agreement to give any  financing statement or other  similar form of  public
 notice under the Laws of any jurisdiction.

      "Litigation" means any proceeding, claim, lawsuit and/or  investigation
 conducted or threatened by or before any Governmental Authority,  including,
 but not  limited to,  proceedings, claims,  lawsuits, and/or  investigations
 under or pursuant  to any  environmental, occupational,  safety and  health,
 antitrust, unfair competition, securities,  Tax, or other  Law, or under  or
 pursuant to any contract, agreement or other instrument.

      "Litigation Report" means a report, certified  to be true, correct  and
 complete by an Authorized Officer of  Borrower and each of its  Subsidiaries
 which is a party  to any Litigation, describing  all Litigation relating  to
 Insurance Business  of Borrower  and each  of  its Subsidiaries,  in  format
 acceptable to Lender.

      "Loan" means a Revolving Loan or a Term Loan.

      "Loan  Documents"  means  this  Agreement,  the  Notes,  the   Security
 Documents, the Guaranties, the  L/C Agreements and  all other documents  and
 instruments executed and  delivered to Lender  by any Obligor  or any  other
 Person in connection with this Agreement.

      "Loss Ratio" means  the ratio of  Losses Incurred  to Premiums  Earned,
 determined as of the last  day of each fiscal  quarter, for the four  fiscal
 quarters ended on such date.

      "Loss Report" means a quarterly summarization of losses, allocated loss
 adjustment expenses and related reserves in format acceptable to Lender  and
 within the ability of Borrower to produce.

      "Losses Incurred" means  losses and loss  adjustment expenses paid  for
 the period  of calculation,  plus net  losses and  loss adjustment  expenses
 unpaid for  the  period  of  calculation, and  minus  net  losses  and  loss
 adjustment  expenses  unpaid  for  the  four  fiscal  quarters   immediately
 preceding the period of calculation.

      "Material Adverse  Change  or Effect"  means  (a)  a  material  adverse
 change in,  or a  material adverse  effect upon,  the operations,  business,
 properties, liabilities  (actual  or contingent),  condition  (financial  or
 otherwise) or prospects of Borrower or  Borrower and its Subsidiaries  taken
 as a  whole; (b) a  material impairment  of the  ability of  any Obligor  to
 perform its obligations under any Loan Document  to which it is a party;  or
 (c)  a material adverse effect upon  the legality, validity, binding  effect
 or enforceability against any Obligor of any Loan Document to which it is  a
 party or its property is subject.

      "Maximum Amount"  means the  maximum amount  of interest  which,  under
 Applicable Law, Lender is permitted to charge on the Obligations.

      "Moody's" means Moody's Investors Service, Inc.

      "NAIC" means the National Association of Insurance Commissioners or any
 successor organization thereto.

      "NAIC  Tests"  means  the  ratios  and  other  financial   measurements
 developed by NAIC under its Insurance  Regulatory Information System, as  in
 effect from time to time.

      "Net Underwriting Gain" means, at any  date with respect to a RIC,  net
 underwriting gain (or loss) as shown on line 8 of the Statement of Income of
 such RIC as would be prepared as of such date utilizing the identical format
 promulgated by NAIC and utilized by  such RIC in preparing the December  31,
 2004, annual statements filed with the applicable Insurance Regulator, or if
 such  format  is  changed  after  the  Agreement  Date,  the  same  type  of
 information, computed in  the same  manner, as contained  in line  8 of  the
 Statement of Income of such RIC dated as of December 31, 2004.

      "Notes" means the Revolving Notes and the Term Loan Notes.

      "Notice of Final Agreement" means the  Arbitration and Notice of  Final
 Agreement, substantially in the form of Exhibit L.

      "Obligations" means all obligations, indebtedness and liabilities under
 the Loan Documents now or hereafter owing by Borrower or any other Person to
 or for the benefit of Lender, whether joint or several, fixed or contingent,
 including principal, interest,  expenses of collection  and foreclosure  and
 attorneys' fees that Borrower is  responsible for pursuant to  Section 10.2.
 Without limiting  the generality  of the  foregoing, "Obligations"  includes
 interest, fees and other amounts that would accrue after the commencement by
 or against Borrower, any Affiliate thereof  or any other Person (other  than
 Lender, any Assignee or any Participant) of any proceeding under any  Debtor
 Relief Laws naming such Person as the debtor in such proceeding,  regardless
 of whether such interest, fees and other amounts are allowed claims in  such
 proceeding.

      "Obligor" means Borrower and each  other Person liable for  performance
 of any of the Obligations or  the property of which secures the  performance
 of any of the Obligations.

      "Off-Balance Sheet Liabilities" means, with respect to any Person as of
 any date of determination thereof, without duplication and to the extent not
 included as a liability on the consolidated balance sheet of such Person and
 its Subsidiaries  in accordance  with GAAP:  (a) with respect  to any  asset
 securitization  transaction  (including  any  accounts  receivable  purchase
 facility) (i) the  unrecovered investment  of purchasers  or transferees  of
 assets so transferred and (ii) any other payment, recourse, repurchase, hold
 harmless, indemnity  or similar  obligation of  such Person  or any  of  its
 Subsidiaries in respect of  assets transferred or  payments made in  respect
 thereof, other  than  limited recourse  provisions  that are  customary  for
 transactions of such type and that  neither (x) have the effect of  limiting
 the loss or credit  risk of such purchasers  or transferees with respect  to
 payment or performance  by the  obligors of  the assets  so transferred  nor
 (y) impair the  characterization of  the transaction  as a  true sale  under
 applicable Laws (including Debtor Relief Laws); (b) the monetary obligations
 under any financing lease  or so-called "synthetic,"  tax retention or  off-
 balance sheet lease transaction  which, upon the  application of any  Debtor
 Relief Law to such Person or any of its Subsidiaries, would be characterized
 as indebtedness; (c) the monetary obligations  under any sale and  leaseback
 transaction which does not  create a liability  on the consolidated  balance
 sheet of  such  Person  and its  Subsidiaries;  or  (d) any  other  monetary
 obligation arising with respect to any other transaction which (i) upon  the
 application of  any  Debtor  Relief  Law  to  such  Person  or  any  of  its
 Subsidiaries,  would  be  characterized  as  indebtedness  or  (ii) is   the
 functional equivalent of or takes the place of  borrowing but which does not
 constitute a liability on the consolidated balance sheet of such Person  and
 its  Subsidiaries  (for  purposes   of  this  clause (d),  any   transaction
 structured to provide tax deductibility as interest expense of any Dividend,
 coupon or  other  periodic payment  will  be  deemed to  be  the  functional
 equivalent of a borrowing).

      "Outstanding Amount" means, as of any  date of determining, the sum  of
 (a) the aggregate outstanding principal amount of all Revolving Loans, after
 giving effect  to  any Revolving  Borrowing  and any  principal  payment  of
 Revolving Loans  occurring  on  such  date,  (b) the  aggregate  outstanding
 principal amount  of  all  Term  Loans, after  giving  effect  to  any  Term
 Borrowing and any principal  payment of Term Loans  occurring on such  date,
 and (c) the L/C  Obligations on such  date, after giving  effect to any  L/C
 Credit Extension and any  other changes in the  aggregate amount of the  L/C
 Obligations  on  such  date,  including  as  a  result  of  payment  of  any
 Unreimbursed Amount.

      "Payment Date" means the first Business Day of each calendar quarter.

      "PBGC" means the Pension Benefit Guaranty Corporation established under
 ERISA.

      "PCAOB" means the  Public Company  Accounting Oversight  Board, or  any
 entity succeeding to any of its principal functions.

      "Permitted Acquisition" means the  acquisition of all or  substantially
 all of the  assets or all  of the equity  of an  insurance agency,  managing
 general agency or  property and casualty  insurance company, so  long as  in
 each case (a) there exists  no Default or Event  of Default both before  and
 after giving  effect to  any such  acquisition, (b) all  of the  authorized,
 issued and outstanding equity of each acquired insurance agency or  managing
 general agency and all voting rights  (including voting rights arising  upon
 the occurrence of a  contingency) with respect to  such insurance agency  or
 managing  general  agency  will  be  owned  by  Borrower,  (c)  all  of  the
 authorized, issued  and outstanding  equity of  each acquired  property  and
 casualty insurance company  and all voting  rights (including voting  rights
 arising upon the occurrence of a contingency) with respect to such  property
 and casualty insurance company will be owned by either Borrower or a wholly-
 owned RIC, (d)  such acquired assets  are acquired by  either Borrower or  a
 wholly-owned Subsidiary that is  a Guarantor (with respect  to assets of  an
 insurance agency  or managing  general agency)  or a  RIC (with  respect  to
 assets of a property and casualty insurance company), (e) Borrower  provides
 Lender with information and a Compliance Certificate demonstrating pro forma
 compliance with the terms of this Agreement through the last to occur of the
 Termination Date and the last Term  Loan Maturity Date, after giving  effect
 to such  acquisition,  including,  without  limitation,  each  provision  of
 Sections  7.1  through   7.8,  (f) the   aggregate  cash   portion  of   the
 consideration for all  such acquisitions does  not exceed $1,500,000  during
 any fiscal year of Borrower or  $3,000,000 over the term of this  Agreement,
 (g) each acquisition  is consummated  pursuant to  a negotiated  acquisition
 agreement on  a  non-hostile  basis pursuant  to  an  acquisition  agreement
 approved by the board of directors or other applicable governing body of the
 entity to be acquired prior to the commencement thereof, (h) Borrower or the
 Guarantor acquiring the assets or equity of an insurance agency or  managing
 general agency,  and each  acquired insurance  agency and  managing  general
 agency executes and delivers, or causes  to be executed and delivered,  each
 of the documents applicable  to it described in  Sections 7.12(a) - (i)  and
 (i) Borrow executes and  delivers, or causes to  be executed and  delivered,
 each of the documents applicable to it described in Sections 7.12 (a),  (d),
 (e), (f),  (g) and  (i) (with  respect to  the acquisition  of equity  of  a
 property and  casualty  insurance  company).  For  purposes  of  determining
 compliance with clause (f), (y) the  cash portion of the consideration  paid
 for each  acquisition  of  assets  or equity  of  a  property  and  casualty
 insurance company shall be deemed to exclude an amount up to and not greater
 than an amount equal to the sum of the  amount of the capital stock of  such
 entity (in the case of  the acquisition of equity  of such entity) plus  the
 amount of the surplus as regards  policyholders (without duplication of  the
 amount of the capital stock of  such entity) being acquired (all  determined
 in accordance with SAP as at the date of the acquisition), and (z) the  cash
 portion of the consideration for each  acquisition of assets or equity of  a
 property and  casualty insurance  company shall  be deemed  to be  allocated
 first to the surplus  as regards policyholders  (without duplication of  the
 amount of the capital stock of such entity) being acquired.

      "Permitted  Debt"   means  (a) Existing   Debt,  (b) the   Obligations,
 (c) trade accounts payable  and other  similar obligations  incurred in  the
 ordinary course  of  business,  (d) intercompany balances  in  the  ordinary
 course of business among Borrower and  its Subsidiaries; provided, that  all
 amounts owed by any Obligor to its Subsidiaries shall be subordinated to all
 Obligations on terms  acceptable to Lender,  (e) Capital Leases of  Borrower
 and each of its Subsidiaries in an aggregate principal amount not to  exceed
 $200,000 at any time,  (f) the 2005 Debentures;  provided, that all  amounts
 owed with  respect to  the  2005 Debentures  shall  be subordinated  to  all
 Obligations on  terms  acceptable  to Lender,  and;  provided  further,  the
 aggregate  principal  amount  of  all  2005  Debentures  shall  not   exceed
 $30,928,000, (g) the 2005  Guaranty; provided,  that all  amounts owed  with
 respect to the  2005 Guaranty shall  be subordinated to  all Obligations  on
 terms acceptable to Lender, and (h) other Debt of Borrower and  Subsidiaries
 in an  aggregate amount  not to  exceed $400,000  at any  time and  that  is
 subordinated to  the  Obligations  on terms  acceptable  to  Lender  in  its
 discretion.

      "Permitted  Investments"   means   (a) Investment   Grade   Securities,
 (b) Existing Investments, (c) travel advances  to employees in the  ordinary
 course of business, (d)  equity contributions made  by Borrower in  existing
 Subsidiaries that are either Guarantors or RICs, if such equity contribution
 results  in  an  increase  in  shareholders'  or  members'  equity  of  such
 Subsidiary receiving such equity contribution, (e) the purchase by  Borrower
 of surplus debentures issued  by a RIC if  the original principal amount  of
 such surplus debenture is not less than the consideration paid by  Borrower,
 and (f) other Investments of  Borrower and Subsidiaries that  do not, as  at
 any date of determination,  exceed in the aggregate  $500,000 (the value  of
 each such Investment to be the greater of (1) the then current market  value
 of such Investment, and (2) the purchase price of such Investment).

      "Permitted Liens" means (a) Bank Liens, (b) pledges or deposits made to
 secure payment of workmen's compensation, or  to participate in any fund  in
 connection with workmen's compensation, unemployment insurance, pensions, or
 other social security programs  (excluding any Liens  in respect of  ERISA),
 (c) good-faith pledges  or  deposits made  to  secure performance  of  bids,
 tenders, contracts  (other than  for the  repayment of  borrowed money),  or
 leases, or  to secure  statutory obligations,  surety  or appeal  bonds,  or
 indemnity, performance, or  other similar bonds  in the  ordinary course  of
 business, (d) encumbrances consisting of zoning restrictions, easements,  or
 other restrictions on the use of real property, none of which impair the use
 of such property by any Obligor or any of its Subsidiaries in the  operation
 of its business in  any manner which would  have a Material Adverse  Effect,
 (e) the following, if the validity or  amount thereof is being contested  in
 good faith and by appropriate and lawful proceedings and so long as levy and
 execution thereon have  been stayed and  continue to be  stayed: claims  and
 Liens for Taxes due and payable; claims and Liens upon, and defects of title
 to, real or personal property or  other legal process prior to  adjudication
 of a dispute on  the merits, including  mechanic's and materialmen's  Liens;
 and adverse judgments on appeal,  (f) set-off, charge-back and other  rights
 of depository and  collection banks  and other  financial institutions  with
 respect to money or instruments of  Borrower or its Subsidiaries on  deposit
 with or in  possession of  such institutions,  and (g)  Liens arising  under
 Capital Leases permitted under this Agreement.

      "Person" means  and  includes an  individual,  a partnership,  a  joint
 venture,  a  limited   liability  company,  a   corporation,  a  trust,   an
 unincorporated  organization,   and   a  government   or   any   department,
 Governmental Authority, agency or political subdivision thereof.

      "PIIC" means Phoenix Indemnity Insurance Company, an Arizona  insurance
 corporation.

      "Plan" means any plan subject to  Title IV of ERISA and maintained  for
 employees of any Obligor or any of its  Subsidiaries, or of any member of  a
 controlled  group  of  corporations,  as  the  term  "controlled  group   of
 corporations" is defined  in Section 1563 of  the Internal  Revenue Code  of
 1986, as amended, of which any Obligor or any of its Subsidiaries is a part.

      "Pledge Agreements" means  the Pledge Agreement  executed by  Borrower,
 substantially in the form of Exhibit C, and the Pledge Agreement executed by
 a Subsidiary, substantially in the form of Exhibit D.

      "Premiums Earned" means gross premiums unearned at the beginning of the
 calculation period, plus gross premiums written during the calculation
 period, less gross premiums unearned at the end of the calculation period.

      "Prime Rate" means for any  day a per annum  rate of interest equal  to
 the "prime  rate," as  published in  the "Money  Rates" column  of The  Wall
 Street Journal, Central  Edition, from time  to time, or  if for any  reason
 such rate is  no longer  available, the rate  established by  Lender as  its
 prime rate.  The  Prime Rate shall change  effective as of  the date of  any
 change as  published in  The Wall  Street Journal,  Central Edition,  or  as
 established by Lender, as appropriate.   The Prime Rate is a reference  rate
 and does not necessarily represent the lowest or best rate actually  charged
 to any customer of Lender.

      "Prime Rate Loan" means a Loan when  it bears interest at a rate  based
 on the Prime Rate.

      "Principal Office"  means  the  location of  Lender's  chief  executive
 office.

      "Registered Public Accounting Firm" means  an accounting firm that  (a)
 has registered with the PCAOB pursuant  to the provisions of Section 102  of
 Sarbanes-Oxley and whose  registration has not  been withdrawn,  terminated,
 revoked or  suspended  and  (b) meets  the  "independence"  requirements  of
 Section 10A of the Securities Exchange Act of 1934.

      "Reinsurance Agreement" means any agreement, contract, treaty or  other
 arrangement whereby one or more insurers, as reinsurers, assume  liabilities
 under insurance  policies  or  agreements issued  by  another  insurance  or
 reinsurance company or companies.

      "Release" means  any  spilling, leaking,  pumping,  pouring,  emitting,
 emptying, discharging,  injecting, escaping,  leaching, dumping,  disposing,
 depositing, dispersing, emanating or migrating of any Hazardous Material in,
 into, onto or through the Environment.

      "Remedial Action" means (a) "remedial action"  as such term is  defined
 in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other actions required by
 any  Governmental  Authority  or  voluntarily  undertaken  to:  (i) cleanup,
 remove, treat, abate or in any  other way address any Hazardous Material  in
 the Environment; (ii) prevent the Release or threat of Release, or  minimize
 the further Release  of any  Hazardous Material so  it does  not migrate  or
 endanger or threaten to endanger public health, welfare or the  Environment;
 or (iii) perform  studies and  investigations in  connection with,  or as  a
 precondition to, (i) or (ii) above.

      "Reportable  Event"   means   a   reportable  event   as   defined   in
 Section 4043(b) of Title IV of ERISA or PBGC regulations issued  thereunder,
 other than a  reportable event  not subject  to Section 4043's  notification
 requirements pursuant to PGBC's regulations.

      "Retrocession  Agreement"   means   any   agreement,  contract,  treaty
 or other  arrangement  whereby  one  or  more  insurers  or  reinsurers,  as
 retrocessionaires, assume  liabilities  of reinsurers  under  a  Reinsurance
 Agreement or other retrocessionaires under another retrocession agreement.

      "Revolving Borrowing" means a borrowing by Borrower of Revolving  Loans
 made by Lender pursuant to Section 2.1.

      "Revolving Commitment" means $2,000,000.

      "Revolving Loan  Maturity Date"  means the  first to  occur of  (a) the
 Termination Date,  (b) the date  any Commitment  is terminated  pursuant  to
 either  Section 2.6  and   9.2,  and  (c) the   date  the  Obligations   are
 accelerated.

      "Revolving Loan Notice" means a notice of a Revolving Borrowing request
 pursuant to Section 2.2(a), substantially in the form of Exhibit H.

      "Revolving Note" means the promissory note made by Borrower in favor of
 Lender evidencing the Revolving Loans made  by Lender, substantially in  the
 form of Exhibit A.

      "RIC" means any  Subsidiary, whether now  owned or hereafter  acquired,
 that is authorized or admitted to carry on or transact Insurance Business in
 any jurisdiction, is regulated by any  Insurance Regulator, and is  required
 by any  Insurance  Regulator  to  file  an  annual  statement  in  the  form
 prescribed by NAIC for a property and casualty insurance company.

      "Risk-Based Capital"  means  for  a RIC,  the  ratio  (expressed  as  a
 percentage), at any time, of the Total  Adjusted Capital of such RIC to  the
 Authorized Control Level of such RIC.

      "S&P" means  Standard &  Poor's Ratings  Group, a  division of  McGraw-
 Hill, Inc., a New York corporation.

      "SAP" means the statutory accounting and reporting practices prescribed
 by the insurance Laws or Insurance Regulator (or other similar  Governmental
 Authority) with respect to each RIC.

      "Sarbanes-Oxley" means the Sarbanes-Oxley Act of 2002.

      "SEC" means the Securities and Exchange Commission, or any Governmental
 Authority succeeding to any of its principal functions.

      "Securities Laws"  means the  Securities Act  of 1933,  the  Securities
 Exchange Act  of  1934, Sarbanes-Oxley  and  the applicable  accounting  and
 auditing principles, rules, standards and practices promulgated, approved or
 incorporated by the SEC or the PCAOB.

      "Security  Agreements"  means  the   Security  Agreement  executed   by
 Borrower, substantially  in  the  form  of  Exhibit  E,  and  each  Security
 Agreement executed by a Subsidiary, substantially in the form of Exhibit F.

      "Security Documents" means,  collectively, the  Pledge Agreements,  the
 Security Agreements and any and all other documents, instruments,  financing
 statements, public notices and the like executed and delivered in connection
 with any of the Bank Liens or the Collateral.

      "Solvent" means, with respect to any Person, that the fair value of the
 assets of such Person (both at  fair valuation and at present fair  saleable
 value) is, on the  date of determination, greater  than the total amount  of
 liabilities (including  contingent  and unliquidated  liabilities)  of  such
 Person as of such date and that, as of such date, such Person is able to pay
 all liabilities of such  Person as such liabilities  mature and such  Person
 does not  have  unreasonably  small  capital with  which  to  carry  on  its
 business.  In computing the amount of contingent or unliquidated liabilities
 at any time, such liabilities will be computed at the amount which, in light
 of all the  facts and circumstances  existing at such  time, represents  the
 amount that  can reasonably  be  expected to  become  an actual  or  matured
 liability discounted to present value at rates believed to be reasonable  by
 such Person.

      "Special  Counsel"   means  the   law  firm   of  Winstead   Sechrest &
 Minick P.C., or such other legal counsel as Lender may select.

      "Subsidiary" of  a  Person  means  a  corporation,  partnership,  joint
 venture, limited  liability company  or other  business  entity of  which  a
 majority of  the shares  of securities  or other  interests having  ordinary
 voting power for the  election of directors or  other governing body  (other
 than securities  or  interests having  such  power  only by  reason  of  the
 happening of  a contingency)  are at  the time  beneficially owned,  or  the
 management of which is otherwise Controlled, directly or indirectly  through
 one or  more intermediaries,  or both,  by such  Person.   Unless  otherwise
 specified, all references to a "Subsidiary" or to "Subsidiaries" refers to a
 Subsidiary or Subsidiaries of Borrower.  For purposes of the Loan Documents,
 Hallmark Trust I is deemed to be a Subsidiary of Borrower.

      "Taxes" means all taxes, assessments, fees  or other charges from  time
 to time or at any time imposed by any Laws or by any Governmental Authority.

      "Term Borrowing" means a borrowing by  Borrower of a Term Loan made  by
 Lender pursuant to Section 2.1.

      "Term Commitment" means $3,500,000.

      "Term Facility Date" means  the first to occur  of (a) the  Termination
 Date, (b) the date any Commitment  is terminated pursuant to either  Section
 2.6 or 9.2, and (c) the date the Obligations are accelerated.

      "Term Loan Maturity Date"  means, with respect to  each Term Loan,  the
 first to occur of (a) the fifth anniversary date of the making of such  Term
 Loan, and (b) the date the Obligations are accelerated.

      "Term Loan Note" means a promissory  note made by Borrower in favor  of
 Lender evidencing a Term Loan, substantially in the form of Exhibit B.

      "Term Loan Notice" means a notice of a Term Borrowing request  pursuant
 to Section 2.2(b), substantially in the form of Exhibit I.

      "Term Loan Request" means a notice of a request that Lender make a Term
 Loan pursuant to Section 2.2(b), substantially in the form of Exhibit J.

      "Termination Date" means June 29, 2007.

      "Total Adjusted Capital" means "Total Adjusted Capital" as defined by
 NAIC from time to time and as applied in the context of the Risk-Based
 Capital Guidelines promulgated by NAIC (or any term substituted therefor by
 NAIC).

      "2005 Debentures" means the  $30,928,000 aggregate principal amount  of
 Junior Subordinated Debt Securities due June 15, 2035 issued by Borrower  to
 Hallmark Trust I.

      "2005 Documents" means  any equity security  of Hallmark  Trust I,  any
 2005 Debenture,  any  2005  Preferred  Security,  the  2005  Indenture,  the
 Hallmark Trust  I Declaration  of Trust,  the  2005 Guaranty,  any  document
 evidencing or governing any equity or Debt of Hallmark Trust I and all other
 documents and instruments  executed and  delivered by  Borrower or  Hallmark
 Trust I in connection with any of the foregoing.

      "2005 Guaranty" means the Guaranty Agreement dated June 21, 2005,  made
 by Borrower  in  favor of  JPMorgan  Chase Bank,  National  Association,  as
 Guarantee Trustee, together with all amendments and restatements.

      "2005 Indenture"  means  the Indenture  dated  June 21,  2005,  between
 Borrower and JPMorgan Chase Bank, National Association, as Trustee, together
 with all amendments and restatements.

      "2005 Preferred Securities" means the $30,000,000 Preferred  Securities
 issued by Hallmark Trust I.

     1.2  Additional  Definitions.   The following  additional terms have the
 meaning specified  in  the indicated  Section  or other  provision  of  this
 Agreement:

           Term                           Section/Provision
           -----------------------------  -------------------------------
           Agreement                      Introductory Paragraph
           Assignee                       Section 10.6(c)
           Auto-Renewal Letter of Credit  Section 3.2(c)
           Borrower                       Introductory Paragraph
           Cash Collateralize             Section 3.6
           Eurocurrency liabilities       Section 4.4(c)
           Indemnified Matters            Section 6.7
           Indemnified Taxes              Section 4.1(a)
           Indemnitees                    Section 6.7
           Information                    Section 10.8
           L/C Fee                        Section 3.7
           Lender                         Introductory Paragraph
           Nonrenewal Notice Date         Section 3.2(c)
           Other Taxes                    Section 4.1(b)
           Participant                    Section 10.6(b)
           Participation                  Section 10.6(b)
           Properties                     Section 8.16(a)
           Revolving Loans                Section 2.1(a)
           Term Loans                     Section 2.1(b)
           Unreimbursed Amount            Section 3.3

     1.3  Construction.   Unless   otherwise   expressly  provided   in  this
 Agreement or the context requires otherwise,  (a) the singular shall include
 the plural, and vice versa,  (b) words of a gender include the other gender,
 (c) all accounting terms shall be construed in accordance  with GAAP or SAP,
 as the context requires, (d) all references to  time  are San Antonio  time,
 (e)  monetary  references  are to Dollars, (f) all references to "Articles,"
 "Sections,"  "Exhibits,"  and  "Schedules"  are  to the Articles,  Sections,
 Exhibits, and Schedules of  and to this Agreement, (g) headings used in this
 Agreement and each other  Loan  Document  are for convenience only and shall
 not be used in connection with the interpretation of any provision hereof or
 thereof, (h) references to any Person include that Person's heirs,  personal
 representatives,  successors,  and  permitted  assigns,  that  Person  as  a
 debtor-in  possession,  and  any receiver, trustee, liquidator, conservator,
 custodian,  or  similar  party  appointed  for  such  Person   or   all   or
 substantially all  of  its  assets,  (i) references to any Law include every
 amendment or restatement to it, rule and regulation  adopted  under it,  and
 successor  or  replacement  for  it,  and  (j)  references  to  a particular
 Loan  Document  include  each amendment, modification, or supplement  to  or
 restatement  of it  made in  accordance  with  this  Agreement and such Loan
 Document.



                                 ARTICLE II

                                    LOANS

     2.1  Loans.

           (a) Revolving Loans.   Subject to the terms and conditions of this
 Agreement, Lender agrees to make loans (each such loan, a "Revolving Loan"),
 to Borrower from time to time on any Business Day during the period from the
 Agreement Date to the Revolving Loan  Maturity Date, in an aggregate  amount
 not to exceed at  any time outstanding  the Revolving Commitment;  provided,
 however, that after giving effect to any Revolving Borrowing,

                (i)  the aggregate unpaid principal  amount of all  Revolving
      Loans shall not exceed the Revolving Commitment, and

                (ii) the  Outstanding Amount shall  not exceed the  Aggregate
      Commitment.

 Prior to the Revolving  Loan Maturity Date, Borrower  may borrow,  repay and
 reborrow Revolving  Loans,  all  in  accordance  with  this  Agreement.  The
 Revolving Commitment is a subfacility of the Aggregate Commitment and not in
 addition to the Aggregate Commitment.

           (b) Term Loans.   Subject  to the  terms  and conditions  of  this
 Agreement (including, but not limited to,  Section 5.3), Lender may, in  its
 discretion, make loans (each such loan, a "Term Loan") to Borrower from time
 to time on any Business Day during the period from the Agreement Date to the
 Term  Facility  Date,  in  an  aggregate  amount  not  to  exceed  the  Term
 Commitment;  provided,  however,  that  after  giving  effect  to  any  Term
 Borrowing,

                (i)  the  aggregate  original  principal amount  of  all Term
      Loans shall not exceed the Term Commitment, and

                (ii) the  Outstanding Amount shall  not exceed the  Aggregate
      Commitment.

 Term Loans may not be repaid and then reborrowed.  The Term Commitment is  a
 subfacility of the Aggregate Commitment and not in addition to the Aggregate
 Commitment.

     2.2  Borrowings.

           (a) Revolving Borrowings.   Each Revolving Borrowing shall be made
 upon Borrower's  irrevocable  notice  to  Lender,  which  may  be  given  by
 telephone.  Each such notice must be received by Lender not later  than 2:00
 p.m. (i) one  Business  Day  prior  to the requested date  of any  Revolving
 Borrowing  of  Eurodollar Rate  Loans and (ii) one Business Day prior to the
 requested date of  any  Revolving  Borrowing of Prime Rate Loans (subject to
 Section 2.7).  Each  such  telephonic  notice  must  be  confirmed  promptly
 by  delivery  to  Lender  of a written Revolving  Loan  Notice appropriately
 completed  and  signed  by  an  Authorized  Signatory  of   Borrower.   Each
 Revolving Loan  Notice  (whether  telephonic  or  written) shall specify (i)
 the requested date of the Revolving  Borrowing,  as the  case may  be (which
 shall  be a  Business Day),  (ii) the principal amount of the Revolving Loan
 to  be  borrowed  and  (iii) whether  such  Revolving  Borrowing  will  be a
 Eurodollar  Rate Loan or  a Prime Rate  Loan.  Each Revolving Loan  shall be
 in the principal  amount of  $100,000 or  any whole multiple  of  $25,000 in
 excess thereof or the unused portion of the Revolving Commitment.

           (b) Term  Borrowings.  Each request for  a Term Borrowing shall be
 made upon Borrower's irrevocable written notice  to Lender in the form of  a
 written  Term  Loan  Request  appropriately  completed  and  signed  by   an
 Authorized Signatory of Borrower.  Each  Term Loan Request must be  received
 by Lender not less than fifteen days prior to the date of the requested Term
 Borrowing, together with all information required by such Term Loan Request.
 Upon delivery to Borrower by Lender of written notice of Lender's  agreement
 (which agreement shall be  subject to the terms  and conditions of the  Loan
 Documents and Lender's notice to Borrower) to make the requested Term  Loan,
 Borrower shall deliver to Lender  Borrower's irrevocable written notice,  in
 the form of  a Term  Loan Notice appropriately  completed and  signed by  an
 Authorized Signatory of  Borrower.   Each such  notice must  be received  by
 Lender not later than 2:00 p.m. (i) one Business Day prior to the  requested
 date of any Term  Borrowing of Eurodollar Rate  Loans and (ii) one  Business
 Day prior to the requested  date of any Term  Borrowing of Prime Rate  Loans
 (subject to  Section 2.7).   Each  Term Loan  Notice shall  specify  (i) the
 requested date of the Term Borrowing, as the  case may be (which shall be  a
 Business Day), (ii) the  principal amount of  the Term Loan  to be  borrowed
 (which cannot exceed the maximum amount that Lender has agreed to advance as
 stated in Lender's notice agreeing to such Term Loan) and (iii) whether such
 Term Borrowing will be a Eurodollar  Rate Loan or a  Prime Rate Loan.   Each
 Term Loan shall be in the principal amount of $500,000 or any whole multiple
 of $100,000 in excess thereof or such other amount as Lender may agree.

           (c) Funding.   Upon satisfaction of  the applicable conditions set
 forth in  Article V,  Lender  shall make  the  proceeds  of  each  Revolving
 Borrowing and Term Borrowing available to Borrower by crediting the  account
 of Borrower on the books of Lender with the amount of such funds.

     2.3  Repayment.

           (a) Revolving Loans.   The principal amount of all Revolving Loans
 shall be due and payable in full on the Revolving Loan Maturity Date.

           (b) Term Loans.   The principal of each Term Loan shall be due and
 payable on the following dates and in the following amounts:

          Payment Date                     Payment Amount
          ------------                     --------------
  Each Payment Date after the      An amount equal to 1/20th of
            date such              the original principal amount
       Term Loan was made                of such Term Loan

    The applicable Term Loan       The remaining unpaid principal
          Maturity Date                  of such Term Loan
        of such Term Loan

     2.4  Voluntary  Prepayments.  Borrower may at any  time or  from time to
 time voluntarily prepay  the Loans in  whole or in  part without premium  or
 penalty.  Each voluntary prepayment shall be accompanied by all accrued  and
 unpaid interest thereon.  Any voluntary  prepayment of the Term Loans  shall
 be applied to the unpaid scheduled installment payments of the Term Loans in
 the inverse order of maturity.

     2.5  Mandatory  Prepayments.   On each  date that the Outstanding Amount
 exceeds the Aggregate Commitment, Borrower shall prepay the Revolving  Loans
 in an amount equal to such excess or, if no Revolving Loans are outstanding,
 prepay the  Term  Loans  (to be  applied  to  unpaid  scheduled  installment
 payments of the Term Loans  in the inverse order  of maturity) in an  amount
 equal  to  such  excess,  or  if   no  Term  Loans  are  outstanding,   Cash
 Collateralize the L/C  Obligations in an  amount equal to  such excess.   On
 each date  that the  outstanding principal  amount  of all  Revolving  Loans
 exceeds the Revolving Commitment, Borrower  shall repay the Revolving  Loans
 in an  amount equal  to such  excess.   On each  date that  the  outstanding
 principal amount of  all Term Loans  exceeds the  Term Commitment,  Borrower
 shall prepay  the  Term  Loans  (to  be  applied  to  the  unpaid  scheduled
 installment payments of the Term Loans in the inverse order of maturity)  in
 an amount equal  to such  excess.   On each  date that  the L/C  Obligations
 exceeds the  L/C  Commitment,  Borrower shall  Cash  Collateralize  the  L/C
 Obligations in an amount  equal to such excess.   Each mandatory  prepayment
 shall be accompanied by all accrued interest thereon.

     2.6  Termination and Reduction of Commitments.

           (a) Borrower  shall  have the  right  to terminate  or  reduce the
 Revolving Commitment, Term Commitment and L/C Commitment at any time.   Each
 reduction shall be in the minimum amount of $500,000 and a whole multiple of
 $100,000 in excess thereof.

           (b) On  the Termination Date,  each Commitment shall automatically
 reduce to zero and terminate.

           (c) Borrower  shall not have any  right to rescind any termination
 or reduction.  Once  terminated or reduced,  the Revolving Commitment,  Term
 Commitment and L/C Commitment, respectively, may not be reinstated.

     2.7  Interest on Loans Generally.

           (a) Subject  to the provisions  of Section 2.7(b) and Section 2.9,
 each Loan shall bear  interest on the  outstanding principal amount  thereof
 from the applicable borrowing date or such other date on which it becomes  a
 Eurodollar Rate Loan (as applicable) to but not including the date on  which
 another interest rate becomes applicable to it pursuant to the terms of this
 Agreement at a rate per annum equal to the lesser  of (i) the Highest Lawful
 Rate and (ii) the Eurodollar Rate.

           (b) Subject  to  the provisions  of  Section 2.9, if  at  any time
 Lender has  notified Borrower  that the  provisions of  Sections 4.2 or  4.3
 apply, each Loan  shall bear interest  on the  outstanding principal  amount
 thereof from the  date on which  Lender determines or  is notified that  the
 provisions of Sections 4.2 or 4.3 apply  to and including the date on  which
 Lender notifies  Borrower that  the provisions  of Sections 4.2  and 4.3  no
 longer  apply  at  a  rate  per annum equal to the lesser of (i) the Highest
 Lawful Rate and (ii) the  Prime Rate.  Borrower may not elect  that any Loan
 be a Prime Rate Loan unless Lender has notified Borrower that the provisions
 of Sections 4.2 or 4.3 apply.

           (c) Interest  on the Loans shall be due  and payable in arrears on
 each Interest  Payment Date  and at  such other  times as  may be  specified
 herein.  Interest hereunder shall be due and payable in accordance with  the
 terms  hereof  before  and  after  judgment,   and  before  and  after   the
 commencement of any proceeding under any Debtor Relief Law.

     2.8  Computations. Subject to Section 10.11, interest on the Loans, fees
 and any other  amounts due  hereunder shall be  calculated on  the basis  of
 actual days elapsed over a year  of 360 days, unless such calculation  would
 result in a rate greater than the highest rate permitted by Applicable  Law,
 in which case interest shall be computed on the basis of a year of 365  days
 or 366 days in  a leap year, as  the case may be.   Nothing herein shall  be
 deemed to obligate Lender to obtain the funds for any Loan in any particular
 place or manner  or to  constitute a representation  by Lender  that it  has
 obtained or will obtain the  funds for any Loan  in any particular place  or
 manner.

     2.9  Interest  After  an  Event of Default.  (a) If an Event of  Default
 exists  (other  than  an  Event  of  Default  specified  in  Section  9.1(e)
 or  (f)),  at  the  option  of  Lender,  and (b) after an Event  of  Default
 specified in  Section 9.1(e) or (f)  and  during  any  continuance  thereof,
 automatically and  without any  action  by  Lender,  the  Obligations  shall
 bear interest at a rate per annum equal to the  lesser  of  (i)  the Default
 Rate and  (ii)  the  Highest  Lawful  Rate.   Such interest shall be payable
 on  the earlier of demand,  the  Termination Date  or  the  applicable  Term
 Loan  Maturity  Date  and  shall accrue  until  the earlier  of  (a)  waiver
 or  cure  (to  the  satisfaction  of  Lender)  of  the  applicable  Event of
 Default,  (b) agreement  by  Lender to  rescind the charging of interest  at
 the Default Rate, or (c) payment in  full of the Obligations.  Lender  shall
 not be required  to accelerate  the maturity of  any Loan,  to exercise  any
 other rights or  remedies under  the Loan Documents,  or to  give notice  to
 Borrower of the  decision to charge  interest at the  Default Rate.   Lender
 will undertake to notify Borrower, after the effective date, of the decision
 to charge interest at the Default Rate.

     2.10 Payments  Generally.  (a) Each  payment  (including prepayments) by
 Borrower of the  principal of or interest on the Loans and any other  amount
 owed  under  this  Agreement or  any other  Loan Document shall be made  not
 later than 2:00 p.m. on the date specified for payment under  this Agreement
 to  Lender at Lender's Office, in Dollars constituting immediately available
 funds.  All  payments  received  by  Lender  after 2:00 p.m. shall be deemed
 received on the next succeeding Business Day and any  applicable interest or
 fee shall continue to accrue.

           (b) If any payment under this Agreement or any other Loan Document
 shall be specified to  be made upon a  day which is not  a Business Day,  it
 shall be made  on the  next succeeding day  which is  a Business  Day.   Any
 extension of time shall in such  case be included in computing interest  and
 fees, if any, in connection with such payment.

           (c) Borrower agrees to pay principal, interest, fees and all other
 amounts due  under  the Loan  Documents  without deduction  for  set-off  or
 counterclaim or any deduction whatsoever.

           (d) If  some  but less  than  all  amounts due  from  Borrower are
 received by Lender, Lender shall apply  such amounts in the following  order
 of priority: (i)  to the  payment  of  Lender's expenses incurred under  the
 Loan Documents  then due and  payable, if  any;  (ii) to the payment  of all
 other  fees  under  the  Loan Documents  then due and payable;  (iii) to the
 payment of interest then due and payable on the Loans  (applied as  provided
 in Section 9.3); (iv) to  the  payment of  all  other amounts not  otherwise
 referred to  in  this Section 2.10(d) then  due  and  payable under the Loan
 Documents; and (v) to  the payment of principal then due and  payable on the
 Loan (applied as  provided in Section 9.3).

     2.11 Booking the Loans.  Lender  may make, carry  or transfer each  Loan
 at, to or for the account of any of its branch offices or the office of  any
 Affiliate.

     2.12 Collateral.  Payment of the Obligations is secured on the Agreement
 Date by  (a) a  perfected first  priority security  interest in  all of  the
 authorized, issued and outstanding capital stock and other equity  interests
 of each  Subsidiary of  Borrower, (b) a  perfected first  priority  security
 interest (subject only to Permitted Liens) in current and future assets  and
 properties of Borrower and all of its Subsidiaries (other than a RIC, except
 as provided in Section 3.6), and  (c) Guaranties of the Obligations by  each
 Subsidiary (other than a RIC).  Borrower shall cause each Subsidiary  (other
 than a RIC)  of Borrower  created or acquired  after the  Agreement Date  to
 execute and deliver to Lender a Guaranty, Security Agreement and such  other
 documents as are required  to grant to Lender  and perfect the Lien  granted
 pursuant to such Security Agreement.

                                 ARTICLE III

                          LETTER OF CREDIT FACILITY

     3.1  The L/C Commitment.

           (a) Subject to  the terms and conditions of this Agreement, Lender
 agrees, (i) on any Business  Day during the period  from the Agreement  Date
 until the L/C Facility Expiration Date,  to issue Letters of Credit for  the
 account of Borrower and each  RIC, and to amend  or renew Letters of  Credit
 previously issued  by it,  in accordance  with Section 3.1(b),  and  (ii) to
 honor drafts under the Letters of Credit; provided that Lender shall not  be
 obligated to make  any L/C Credit  Extension with respect  to any Letter  of
 Credit, if as of the date of and before  or after giving effect to such  L/C
 Credit Extension, (1) the L/C Obligations  would exceed the L/C  Commitment,
 or (2) the Outstanding Amount would exceed the Aggregate Commitment.  Within
 the foregoing  limits,  and subject  to  the terms  and  conditions  hereof,
 Borrower's ability to obtain Letters of Credit shall be fully revolving, and
 accordingly Borrower and each RIC may,  during the foregoing period,  obtain
 Letters of Credit  to replace Letters  of Credit that  have expired or  that
 have been drawn upon and reimbursed.  The L/C Commitment is a subfacility of
 the Aggregate Commitment and not in addition to the Aggregate Commitment.

           (b) Lender  shall be  under no obligation  to make  any L/C Credit
 Extension if:

                (i) any  order,  judgment  or  decree  of  any   Governmental
      Authority or  arbitrator  shall  by its  terms  purport  to  enjoin  or
      restrain Lender  from  issuing, amending  or  renewing such  Letter  of
      Credit, or any  Law applicable to  Lender or any  request or  directive
      (whether or  not  having  the  force  of  law)  from  any  Governmental
      Authority with jurisdiction over Lender shall prohibit, or request that
      Lender refrain from, the issuance, amendment  or renewal of letters  of
      credit generally or such Letter of Credit in particular or shall impose
      upon Lender  with respect  to such  Letter of  Credit any  restriction,
      reserve or  capital  requirement (for  which  Lender is  not  otherwise
      compensated hereunder) not in  effect on the  Agreement Date, or  shall
      impose upon Lender any unreimbursed loss, cost or expense which was not
      applicable on the Agreement Date and  which Lender in good faith  deems
      material to it;

                (ii) the  expiry  date of  such  requested Letter  of  Credit
      would occur (A) after the first to occur of (1) one year after the date
      of issuance and  (2) June  29, 2012, or  (B) in  the case  of an  Auto-
      Renewal Letter  of  Credit, more  than  five years  after  the  initial
      issuance date of such Auto-Renewal Letter of Credit;

                (iii)  the  L/C Credit  Extension would  violate one  or more
      policies of Lender;

                (iv) such Letter of Credit is to be used for a purpose  other
      than (A) to assure the performance of  Borrower or a RIC pursuant to  a
      Reinsurance Agreement to which Borrower and/or such RIC is a party,  or
      (B) as may be agreed to by Lender in its discretion;

                (v) such Letter of Credit is to be denominated in a  currency
      other than Dollars;

                (vi) the face amount of such Letter of Credit (including  the
      face amount  of  any  Auto-Renewal  Letter  of  Credit)  is  less  than
      $100,000;

                (vii)  Lender  has not received  the L/C Fee  with respect to
      such L/C Credit Extension; or

                (viii)  such  Letter  of Credit  contains any  provisions for
      automatic  reinstatement  of   the  stated  amount   after  a   drawing
      thereunder.

           (c) Lender  shall be  under no  obligation to  amend or  renew any
 Letter of Credit  if (i) Lender  would have no  obligation at  such time  to
 issue such Letter of Credit in its  amended or renewed form under the  terms
 hereof, or (ii) the beneficiary of such Letter of Credit does not accept the
 proposed amendment or renewal to such Letter of Credit.

     3.2  Procedures for Issuance and  Amendment of Letters of Credit;  Auto-
 Renewal Letters of Credit.

           (a) Each Letter  of Credit shall be issued or amended, as the case
 may be, upon the request of Borrower and the applicable RIC (if such RIC  is
 a party to the respective Reinsurance Agreement or other agreement to  which
 the requested Letter of Credit relates) delivered to Lender in the form of a
 Letter of  Credit  Application, appropriately  completed  and signed  by  an
 Authorized Signatory of Borrower and such  RIC, together with a copy of  the
 Reinsurance Agreement or other agreements to  which the requested Letter  of
 Credit relates  and  such other  documents  and information  as  Lender  may
 request.  Such Letter of Credit  Application must be received by Lender  not
 later than 2:00 p.m. at  least three Business Days  (or such other date  and
 time as Lender may  agree in a particular  instance in its sole  discretion)
 prior to the proposed issuance  date or date of  amendment, as the case  may
 be.  In the case of a request for an initial issuance of a Letter of Credit,
 such  Letter  of  Credit  Application  shall  specify  in  form  and  detail
 reasonably satisfactory to  Lender: (i) the  proposed issuance  date of  the
 requested Letter of Credit (which shall be a Business Day); (ii) the  amount
 thereof; (iii) the expiry  date thereof; (iv) the  name and  address of  the
 beneficiary thereof; (v) the documents to  be presented by such  beneficiary
 in case  of any  drawing thereunder  (if  any); (vi) the  full text  of  any
 certificate to  be presented  by such  beneficiary in  case of  any  drawing
 thereunder (if any); and (vii) such other  matters as Lender may  reasonably
 require.  In  the case  of a  request for  an amendment  of any  outstanding
 Letter of Credit, such  Letter of Credit Application  shall specify in  form
 and detail reasonably satisfactory to Lender: (i) the Letter of Credit to be
 amended; (ii) the  proposed date  of amendment  thereof  (which shall  be  a
 Business Day); (iii) the  nature of  the proposed  amendment; and  (iv) such
 other matters as Lender may reasonably require.

           (b) Unless Lender has received written notice from Borrower or the
 appropriate RIC, at least  one Business Day prior  to the requested date  of
 issuance or amendment of the applicable  Letter of Credit, that one or  more
 applicable conditions  contained  in  this Article III  shall  not  then  be
 satisfied, then, subject to the terms  and conditions hereof, Lender  shall,
 on the requested date, issue a Letter of Credit for the account of  Borrower
 and the applicable RIC or enter  into the applicable amendment, as the  case
 may be,  in  each case  in  accordance  with Lender's  usual  and  customary
 business practices.

           (c) If Borrower  and the applicable RIC (if such RIC is a party to
 the respective  Reinsurance  Agreement  or  other  agreement  to  which  the
 respective Letter of Credit relates) so request in any applicable Letter  of
 Credit Application, Lender may, in its  sole and absolute discretion,  agree
 to issue a Letter of Credit that has automatic renewal provisions (each,  an
 "Auto-Renewal Letter of Credit"); provided that any such Auto-Renewal Letter
 of Credit must permit Lender  to prevent any such  renewal at least once  in
 each twelve-month  period (commencing  with the  date  of issuance  of  such
 Letter of Credit and in no event later than seven Business Days prior to the
 expiry date  of  such  Letter of  Credit)  by  giving prior  notice  to  the
 beneficiary thereof not later than a  day (the "Nonrenewal Notice Date")  in
 each such twelve-month period to be agreed  upon at the time such Letter  of
 Credit is issued  (or if no  date is agreed  to at issuance,  the day  seven
 Business Days prior to the  expiry date of such  Letter of Credit).   Unless
 otherwise directed  by Lender,  Borrower shall  not be  required to  make  a
 specific request to Lender for any such renewal.

           (d) Promptly  after its  delivery of any  Letter of  Credit or any
 amendment to a Letter of Credit to an advising bank with respect thereto  or
 to the beneficiary thereof, Lender will also deliver to Borrower a true  and
 complete copy of such Letter of Credit or amendment.

     3.3  Drawings and Reimbursements.  Upon  receipt from the beneficiary of
 any Letter of Credit of any notice of a drawing under such Letter of Credit,
 Lender shall notify Borrower and the applicable RIC thereof.  Not later than
 the Business Day  immediately following the  date of any  payment by  Lender
 under a  Letter of  Credit, Borrower  and the  applicable RIC,  jointly  and
 severally, shall  reimburse Lender  in an  amount equal  to the  sum of  the
 amount of such  drawing (which,  if no Default  or Event  of Default  exists
 before and after giving effect thereto  and subject to the other  conditions
 of this Agreement, can be made with the proceeds of a Revolving Loan),  plus
 interest on the amount of such  payment, which interest shall accrue at  the
 lesser of (i) the Prime Rate (if no  Default or Event of Default exists)  or
 the Default Rate (if  a Default or  Event of Default  exists), and (ii)  the
 Highest Lawful  Rate.    If Borrower  or  the  applicable RIC  fails  to  so
 reimburse Lender by such time, the  amount of the unreimbursed drawing  (the
 "Unreimbursed Amount") shall  be due and  payable on  demand (together  with
 interest) and shall bear interest at the Default Rate.

     3.4  Obligations Absolute. The obligation of Borrower and the applicable
 RIC to reimburse Lender for each  drawing under each Letter of Credit  shall
 be absolute, unconditional and  irrevocable, and shall  be paid strictly  in
 accordance  with  the  terms  of  this  Agreement  and  the  applicable  L/C
 Agreements under all circumstances, including the following:

           (a) any  lack  of validity  or  enforceability of  such  Letter of
 Credit, this Agreement, or any other Loan Document;

           (b) the  existence of any claim,  counterclaim, setoff, defense or
 other right that Borrower or the applicable RIC may have at any time against
 any beneficiary or any  transferee of such Letter  of Credit (or any  Person
 for whom any such beneficiary or any such transferee may be acting),  Lender
 or any  other  Person,  whether  in  connection  with  this  Agreement,  the
 transactions contemplated  hereby  or  by  such  Letter  of  Credit  or  any
 agreement or instrument relating thereto, or any unrelated transaction;

           (c) any  draft,  demand, certificate  or other  document presented
 under such Letter  of Credit proving  to be forged,  fraudulent, invalid  or
 insufficient in  any  respect  or any  statement  therein  being  untrue  or
 inaccurate in  any respect;  or any  loss or  delay in  the transmission  or
 otherwise of any  document required in  order to make  a drawing under  such
 Letter of Credit;

           (d) any  payment by  Lender  under such  Letter of  Credit against
 presentation of a draft  or certificate that does  not strictly comply  with
 the terms of such Letter of Credit; or any payment made by Lender under such
 Letter of Credit  to any Person  purporting to be  a trustee in  bankruptcy,
 debtor-in-possession, assignee  for the  benefit of  creditors,  liquidator,
 receiver or other representative of or  successor to any beneficiary or  any
 transferee of such  Letter of Credit,  including any  arising in  connection
 with any proceeding under any Debtor Relief Law; or

           (e) any other circumstance or happening whatsoever, whether or not
 similar to any of the foregoing, including any other circumstance that might
 otherwise constitute a defense available to, or a discharge of, Borrower  or
 the applicable RIC.

      Borrower and the applicable RIC shall  promptly examine a copy of  each
 Letter of Credit and each amendment thereto that is delivered to it and,  in
 the event  of any  claim of  noncompliance with  Borrower's instructions  or
 other irregularity, Borrower will  immediately (but in  no event later  than
 the Business Day immediately following the date on which Borrower receives a
 copy of such Letter of Credit or amendment) notify Lender.  Borrower and the
 applicable RIC shall be  conclusively deemed to have  waived any such  claim
 against Lender  and  its  correspondents unless  such  notice  is  given  as
 aforesaid.

     3.5  Role of Lender.   Borrower and each  RIC agree that,  in paying any
 drawing under a Letter of Credit,  Lender shall not have any  responsibility
 to obtain  any  document  (other than  any  sight  draft,  certificates  and
 documents expressly required  by the Letter  of Credit) or  to ascertain  or
 inquire as to the validity or accuracy of any such document or the authority
 of the Person executing  or delivering any such  document.  None of  Lender,
 any of  its Affiliates  nor any  correspondent, Participant  or Assignee  of
 Lender, shall be liable or responsible  for any of the matters described  in
 Section 3.4; provided,  however,  that  anything  in  such  clauses  to  the
 contrary notwithstanding, Borrower and the applicable  RIC may have a  claim
 against Lender, and Lender may be liable to Borrower and the applicable RIC,
 to the  extent,  but only  to  the extent,  of  any direct,  as  opposed  to
 consequential or exemplary, damages suffered by Borrower and the  applicable
 RIC which Borrower  and the  applicable RIC  prove were  caused by  Lender's
 willful misconduct or gross  negligence or Lender's  willful failure to  pay
 under any Letter of Credit after  the presentation to it by the  beneficiary
 of a sight draft  and certificate(s) strictly complying  with the terms  and
 conditions of such Letter of Credit.   In furtherance and not in  limitation
 of the foregoing, Lender may accept  documents that appear on their face  to
 be in order, without responsibility for further investigation, regardless of
 any notice  or  information  to  the  contrary,  and  Lender  shall  not  be
 responsible for the validity or  sufficiency of any instrument  transferring
 or assigning or purporting to transfer or  assign a Letter of Credit or  the
 rights or benefits  thereunder or  proceeds thereof,  in whole  or in  part,
 which may prove to be invalid or ineffective for any reason.

     3.6  Cash Collateral. Upon the request of Lender, if an Event of Default
 exists, Borrower  and  the  applicable RIC,  jointly  and  severally,  shall
 immediately Cash  Collateralize  the  then outstanding  amount  of  all  L/C
 Obligations.   Section 2.5 sets  forth  certain additional  requirements  to
 deliver Cash Collateral  hereunder.  For  purposes of  this Section 3.6  and
 Section 2.5, "Cash  Collateralize"  means  to pledge  and  deposit  with  or
 deliver to  Lender,  as collateral  for  L/C Obligations,  cash  or  deposit
 account balances (in an amount not less than the L/C Obligations, or if  the
 Cash Collateralization is required  pursuant to Section  2.5, in the  amount
 required by Section  2.5) pursuant to  documentation in  form and  substance
 satisfactory to  Lender.    Derivatives  of  such  term  have  corresponding
 meanings.  Borrower and each RIC hereby grant to Lender a security  interest
 in all such cash, deposit accounts and all balances therein and all proceeds
 of the foregoing.   Cash  Collateral shall  be maintained  in blocked,  non-
 interest bearing deposit  accounts at Lender  under the  control of  Lender.
 The obligations  imposed on  a RIC  pursuant to  this Section  3.6 shall  be
 limited to the  extent necessary in  order for the  RIC to  comply with  all
 relevant insurance Laws  and may be  subject to regulatory  approval.   Upon
 each request by Lender for Cash Collateral, Borrower and the applicable  RIC
 shall deliver to Lender evidence satisfactory to Lender that the performance
 by such RIC  complies with applicable  insurance Laws and  has received  any
 necessary consent from any applicable Insurance Regulator.

     3.7  Letter of Credit Fees. Borrower and the applicable RIC, jointly and
 severally, shall pay to Lender  a Letter of Credit  fee (the "L/C Fee")  for
 each Letter of Credit equal to the Applicable Rate times the face amount  of
 such Letter  of  Credit.  The L/C  Fee is  due and  payable on  the date  of
 issuance, the date of renewal (including  the date of renewal of each  Auto-
 Renewal Letter of Credit), the date of extension of the expiry date and  the
 date of any amendment to a Letter of Credit if the effect of such  amendment
 is to renew such Letter  of Credit, extend the  expiry date or increase  the
 maximum amount available to be drawn under such Letter of Credit.

     3.8  Fronting  Fee  and  Documentary and  Processing  Charges Payable to
 Lender.  Borrower and the applicable  RIC, jointly and severally, shall  pay
 to  Lender  the  customary  issuance,  presentation,  amendment  and   other
 processing fees, and other standard costs and charges, of Lender relating to
 L/C Credit Extensions as from time to  time in effect.  Such customary  fees
 and standard  costs  and charges  are  due and  payable  on demand  and  are
 nonrefundable.

     3.9  Conflict with L/C Agreements.  In the event of any conflict between
 the terms hereof and the terms of any L/C Agreement, the terms hereof  shall
 control.

     3.10  Letters of Credit Issued for RIC. Notwithstanding that a Letter of
 Credit issued or outstanding hereunder is in support of any obligations  of,
 or is for the account  of, a RIC, Borrower  shall be obligated to  reimburse
 Lender hereunder  for any  and all  drawings under  such Letter  of  Credit.
 Borrower hereby acknowledges that the issuance of Letters of Credit for  the
 account of a  RIC inures  to the benefit  of Borrower,  and that  Borrower's
 business derives substantial benefits from the businesses of each RIC.

                                 ARTICLE IV

                    TAXES, YIELD PROTECTION AND ILLEGALITY

     4.1  Taxes.

           (a) Except  as provided in this  Section 4.1, any and all payments
 by Borrower or any RIC (with  respect to such RIC's obligations pursuant  to
 Article III or any L/C Agreement) to or for the account of Lender under  any
 Loan Document shall be made free and clear of and without deduction for  any
 and all present  or future  income, stamp  or other  Taxes, duties,  levies,
 imposts, deductions, assessments, fees, withholdings or similar charges, now
 or hereafter imposed, and all  liabilities with respect thereto,  excluding,
 in the case of Lender, or  its Principal Office, applicable lending  office,
 or any branch or Affiliate thereof, Taxes imposed on or measured by its  net
 income (including net income Taxes imposed by means of a backup  withholding
 tax) franchise  Taxes,  branch  Taxes, Taxes  on  doing  business  or  Taxes
 measured by or imposed upon  the overall capital or  net worth of Lender  or
 its Principal Office,  applicable lending  office, any  branch or  Affiliate
 thereof, in each case imposed: (i) by the jurisdiction  under  the  Laws  of
 which  Lender,  its  Principal  Office, applicable lending office, branch or
 Affiliate  is organized or is located, or in which  the principal  executive
 office of Lender is located, or any nation within which such jurisdiction is
 located or any  political subdivision thereof,  or  (ii) by  reason  of  any
 present or former connection between the jurisdiction imposing such Tax  and
 Lender or  its  Principal  Office,  applicable  lending  office,  branch  or
 Affiliate  other  than  a  connection  arising  solely  from  Lender  having
 executed, delivered or performed its  obligation under, or received  payment
 under or enforced this Agreement pursuant  to the Laws of such  jurisdiction
 (all such  Taxes, duties,  levies, imposts,  deductions, assessments,  fees,
 withholdings or similar charges, and liabilities being hereinafter  referred
 to as "Indemnified Taxes").   If Borrower or any  RIC (with respect to  such
 RIC's obligations pursuant  to Article III  or any L/C  Agreement) shall  be
 required by any Laws to deduct any  Indemnified Taxes from or in respect  of
 any sum payable under any Loan Document to Lender, (i) the sum payable shall
 be increased as necessary to yield to Lender  an amount equal to the sum  it
 would have received had no such deductions been made, (ii) Borrower and such
 RIC shall make such  deductions, (iii) Borrower and such  RIC shall pay  the
 full  amount  deducted   to  the  relevant   taxation  authority  or   other
 Governmental Authority in accordance with Applicable Laws, and (iv) promptly
 (but in no event  later than thirty  days) after the  date of such  payment,
 Borrower and such RIC  shall furnish to Lender  the original or a  certified
 copy of a receipt evidencing payment thereof.

           (b) In addition, Borrower and each RIC (with respect to such RIC's
 obligations pursuant to Article III or any L/C Agreement) shall pay any  and
 all present or future stamp, court or documentary taxes and any other excise
 or property taxes or charges or similar levies which arise from any  payment
 made under any Loan Document or  from the execution, delivery,  performance,
 enforcement or  registration of,  or otherwise  with  respect to,  any  Loan
 Document (hereinafter referred to as "Other Taxes").

           (c) If Borrower or any RIC (with respect to such RIC's obligations
 pursuant to Article III or any L/C Agreement) shall be required to deduct or
 pay any Indemnified  Taxes or  Other Taxes  from or  in respect  of any  sum
 payable under any Loan Document to Lender, Borrower and such RIC shall  also
 pay to  Lender,  at the  time  interest on  the  Obligations is  paid,  such
 additional amount that Lender specifies as necessary to preserve the  after-
 tax yield  (after factoring  in all  Taxes, including  Taxes imposed  on  or
 measured by net income) Lender would have received if such Indemnified Taxes
 or Other Taxes had not been imposed.

           (d) BORROWER AND  EACH RIC (WITH RESPECT TO SUCH RIC'S OBLIGATIONS
 PURSUANT  TO  ARTICLE  III OR ANY  L/C AGREEMENT) SHALL INDEMNIFY LENDER FOR
 (i)  THE FULL AMOUNT  OF  INDEMNIFIED TAXES  AND  OTHER TAXES (INCLUDING ANY
 INDEMNIFIED TAXES OR OTHER TAXES IMPOSED OR ASSERTED BY ANY JURISDICTION  ON
 AMOUNTS  PAYABLE UNDER  THIS SECTION)  PAID BY  LENDER, (ii) AMOUNTS PAYABLE
 UNDER SECTION 4.1(c) AND (iii) ANY  LIABILITY (INCLUDING PENALTIES, INTEREST
 AND  EXPENSES)  ARISING  THEREFROM  OR  WITH  RESPECT THERETO,  IN EACH CASE
 WHETHER  OR  NOT  SUCH  INDEMNIFIED TAXES  OR OTHER TAXES WERE CORRECTLY  OR
 LEGALLY IMPOSED OR ASSERTED BY THE RELEVANT GOVERNMENTAL AUTHORITY.  PAYMENT
 UNDER  THIS  SECTION  4.1(d) SHALL BE MADE WITHIN THIRTY DAYS AFTER THE DATE
 LENDER MAKES A DEMAND THEREFOR.

           (e) If  Lender determines, in  its reasonable  discretion, that it
 has received a refund of any Indemnified Taxes or Other Taxes as to which it
 has been indemnified by Borrower or a RIC or with respect to which  Borrower
 or a RIC has paid additional amounts pursuant to this Section, it shall  pay
 to Borrower or such RIC, as appropriate, an amount equal to such refund (but
 only to the extent of indemnity  payments made, or additional amounts  paid,
 by Borrower or such RIC under  this Section with respect to the  Indemnified
 Taxes or Other Taxes giving rise  to such refund), net of all  out-of-pocket
 expenses of Lender and without interest (other than any interest paid by the
 relevant Governmental Authority with respect to such refund), provided  that
 Borrower and such RIC,  upon the request of  Lender, jointly and  severally,
 agree to  repay  the amount  paid  over  to Borrower  (plus  any  penalties,
 interest or other charges imposed by the relevant Governmental Authority) to
 Lender in  the  event  Lender is  required  to  repay such  refund  to  such
 Governmental Authority.  Neither  this Section nor  any other Loan  Document
 shall be construed to require Lender  to make available its tax returns  (or
 any other information relating to its  taxes that it deems confidential)  to
 Borrower, any RIC or any other Person.

     4.2  Illegality. If Lender determines that any change in Law on or after
 the Agreement Date has made it unlawful, or that any Governmental  Authority
 on or after the Agreement Date has asserted that it is unlawful, for  Lender
 or its applicable lending office to  make, maintain or fund Eurodollar  Rate
 Loans, or materially restricts the authority of Lender to purchase or  sell,
 or to take deposits of, Dollars in the applicable offshore Dollar market, or
 to determine or charge interest rates based upon the Eurodollar Basis, then,
 on notice thereof by Lender to Borrower, any obligation of Lender to make or
 maintain Eurodollar  Rate Loans  shall be  suspended until  Lender  notifies
 Borrower that the circumstances giving rise to such determination no  longer
 exist.  Upon  the  date of  such  notice, all  Eurodollar Rate  Loans  shall
 convert to Prime Rate Loans.  Lender agrees to designate a different lending
 office  if  such  designation will avoid the need for such notice  and  will
 not,  in  the  good  faith  judgment  of  Lender,  otherwise  be  materially
 disadvantageous to Lender.

     4.3  Inability  to Determine Rates.  If (a) Lender reasonably determines
 in connection with any request for or maintenance of a Eurodollar Rate  Loan
 or any determination of  the Eurodollar Basis  that (i) Dollar deposits  are
 not being offered to banks in the applicable offshore Dollar market for  the
 applicable amount and applicable term, or (ii) adequate and reasonable means
 do not exist for determining the  Eurodollar Basis, or (b)  Lender  notifies
 Borrower that the Eurodollar  Basis for such Eurodollar  Rate Loan does  not
 adequately and fairly reflect the cost  to Lender of funding or  maintaining
 such  Eurodollar   Rate  Loan,   Lender  will   promptly  notify   Borrower.
 Thereafter, the obligation  of Lender to  make or  maintain Eurodollar  Rate
 Loans shall be suspended until Lender notifies Borrower that Lender  revokes
 such notice.  Upon the date of such notice, all Eurodollar Rate Loans  shall
 convert to Prime Rate Loans.

     4.4  Increased Cost and  Reduced Return;  Capital Adequacy;  Reserves on
 Eurodollar Rate Loans.

           (a) If  Lender in good  faith determines that  as a  result of the
 introduction of or any change in or in  the interpretation of any Law on  or
 after the Agreement Date, or Lender's  compliance therewith, there shall  be
 any increase in the cost to Lender of agreeing to make or making, funding or
 maintaining Eurodollar Rate Loans, or a reduction in the amount received  or
 receivable by Lender in connection with any of the foregoing (excluding  for
 purposes of this  Section 4.4(a) any such  increased costs  or reduction  in
 amount resulting  from (i) Indemnified  Taxes  or Other Taxes  (as to  which
 Section 4.1  shall govern), (ii) changes in the basis of taxation of overall
 net income or  overall  gross income by  the United States  or any political
 subdivision of  either thereof under the  Laws of which  Lender is organized
 or has its Principal Office or applicable lending office, and  (iii) reserve
 requirements  contemplated by Section 4.4(c)), then from time to time within
 five  Business  Days  after  demand of Lender,  Borrower shall pay to Lender
 such  additional  amounts  as  will compensate Lender  for increased cost or
 reduction.

           (b) If  Lender in good  faith determines that  the introduction of
 any Law  regarding  capital  adequacy  or  any  change  therein  or  in  the
 interpretation thereof  on or  after the  Agreement Date,  or compliance  by
 Lender (or its  lending office) therewith,  has the effect  of reducing  the
 rate of  return on  the capital  of Lender  or any  corporation  controlling
 Lender  with  respect  to  this  Agreement  as  a  consequence  of  Lender's
 obligations hereunder (taking into  consideration its policies with  respect
 to capital adequacy and Lender's desired return on capital), then from  time
 to time within five Business Days after demand of Lender, Borrower shall pay
 to Lender  such  additional  amounts as  will  compensate  Lender  for  such
 reduction.

           (c) Borrower  shall  pay to  Lender, as  long  as Lender  shall be
 required under regulations of the Federal Reserve Board to maintain reserves
 with  respect  to   liabilities  or  assets   consisting  of  or   including
 Eurocurrency  funds   or   deposits  (currently   known   as   "Eurocurrency
 liabilities"), additional  costs  on the  unpaid  principal amount  of  each
 Eurodollar Rate Loan equal to the actual costs of such reserves allocated to
 such  Loan  by  Lender  (as  determined  by  Lender  in  good  faith,  which
 determination  shall  constitute  prima  facie  evidence  as  to  the  facts
 thereof), which shall be due and payable  on each date on which interest  is
 payable on such Loan, provided Borrower shall have received at least fifteen
 days' prior notice of such additional interest from Lender.  If Lender fails
 to give  notice  fifteen days  prior  to  the relevant  Payment  Date,  such
 additional interest shall be  due and payable fifteen  days from receipt  of
 such notice.

           (d) If  Lender claims any  additional amounts  payable pursuant to
 this Section 4.4, it shall use its reasonable best efforts (consistent  with
 its internal policy  and legal and  regulatory restrictions)  to change  the
 jurisdiction of  its applicable  lending office,  if the  making of  such  a
 change would  avoid  the  need  for,  or reduce  the  amount  of,  any  such
 additional amounts  which  may  thereafter accrue  and  would  not,  in  the
 reasonable judgment of Lender, be disadvantageous to Lender.

     4.5  Matters Applicable to all Requests for Compensation.  Any demand or
 notice delivered  by Lender  to Borrower  or any  RIC claiming  compensation
 under  this  Article  IV shall be in writing and shall certify (a) that  one
 of  the  events  described  in this Article IV  has occurred, describing  in
 reasonable  detail the  nature  of such  event  and (b) as  to the amount or
 amounts  for  which  Lender  seeks compensation hereunder, setting forth  in
 reasonable detail the basis for and calculations of such compensation.  Such
 certification  shall  be  conclusive  in the absence  of manifest error.  In
 determining  such  amount,  Lender  may  use  any  reasonable averaging  and
 attribution methods.

     4.6  Survival.  All of Borrower's and  each RIC's obligations under this
 Article IV shall survive termination of the Aggregate Commitment and payment
 in full of all Obligations.

                                  ARTICLE V

                             CONDITIONS PRECEDENT

     5.1  Conditions  Precedent to  Initial Loan  and Letter  of Credit.  The
 obligation of  Lender to  make the  initial Loan  and to  issue the  initial
 Letter of Credit is subject to (i) receipt by Lender of the following  items
 which are to be delivered, in form and substance reasonably satisfactory  to
 Lender and  (ii) satisfaction  of  the following  conditions,  in  form  and
 substance reasonably satisfactory to Lender:

           (a) Borrower Certificate.  A certificate of officers acceptable to
 Lender  of Borrower  certifying  as to  (i)  the incumbency  of the officers
 signing such certificate and the Loan Documents to which it is a party, (ii)
 an original certified copy of itsArticles of Incorporation or Certificate of
 Incorporation, as applicable, certified as true,  complete and correct as of
 a  date acceptable to Lender  by  the  appropriate authority of the State of
 Nevada,  (iii)  a  copy of its By-Laws,  as in effect on the Agreement Date,
 (iv)  acopy  of the resolutions  of its Board of Directors authorizing it to
 execute, deliver  and perform the Loan Documents to which it is a party, (v)
 an original certificate  or  certificates  of  good  standing, existence and
 qualification issued by the appropriate  authority  or  authorities  of  the
 States of Nevada and Texas (certified  as  of  a date acceptable to Lender),
 (vi)  the  accuracy  of  the  representations  and  warranties  in  the Loan
 Documents,  (vii)  no  Default  or  Event  of Default exists, and (viii)  no
 Material Adverse Change having occurred.

           (b)  Obligor  and  RIC  Certificate.  A  certificate  of  officers
 acceptable  to  Lender of each Obligor  (other than Borrower)  and  each RIC
 certifying as to (i) the incumbency of the officers signing such certificate
 and the Loan Documents to which it is  a  party,  (ii)  if a corporation, an
 original certified copy of its Articles of Incorporation  or  Certificate of
 Incorporation, as applicable, certified as true, complete and correct  as of
 adate  acceptable  to  Lender  by the appropriate authority  of its state of
 incorporation, (iii)  if  a limited liability company, an original certified
 copy of its Articles of Organization (or similar organization and governance
 document), certified as true, complete and correct as  of a date  acceptable
 to Lender by the appropriate authority of its state of organization, (iv) if
 a  limited  partnership,  an  original  certified copy  of  its  Certificate
 of Limited Partnership  (or  similar  organization  or governance document),
 certified as true, complete and correct as of a date acceptable to Lender by
 the appropriate authority  of  its  jurisdiction of organization, (v)  if  a
 corporation, a copy of its By-Laws, as in effect on the Agreement Date, (vi)
 if  a  limited  liability  company,  a copy  of  its operating agreement (or
 similar organization and governance document), as in effect on the Agreement
 Date,  (vii)  if a limited partnership,  a copy of its partnership agreement
 (or  similar organization  or  governance  document),  as  in  effect on the
 Agreement  Date,  (viii)  a  copy  of  the  resolutions  of  the appropriate
 governance board authorizing it to execute, deliver  and  perform  the  Loan
 Documents  to  which  it  is  a  party, and (ix)  an original certificate or
 certificates  of  good  standing  and  existence issued  by  the appropriate
 authority or authorities of its state of organization and the state in which
 its chief executive office is located  (certified as of a date acceptable to
 Lender).

           (c) Revolving Note.  The duly executed Revolving Note,  payable to
 the order of Lender and in an amount equal to the Revolving Commitment.

           (d) Security Documents. The duly executed and completed (i) Pledge
 Agreement executed  by Borrower, dated as of the Agreement Date, granting to
 Lender,  a first priority Lien in the Collateral set forth therein, together
 with  stock  certificates  evidencing  all  of  the  equity interest of each
 directly owned Subsidiary of Borrower,  (ii)  undated,  blank  stock  powers
 executed by Borrower of the stock or other equity interest evidenced by such
 certificates  (with  signatures  guaranteed  as  required by Lender);  (iii)
 confirmations  of  all Liens  in all equity interest  of each directly owned
 Subsidiary  of Borrower;  (iv)  Pledge Agreement executed by each Subsidiary
 (other  than  a  RIC)  that  owns an equity interest in an other Subsidiary,
 dated as of the Agreement Date, granting  to  Lender,  a first priority Lien
 in  the  Collateral  set  forth  therein, together  with  stock certificates
 evidencing all of the equity interest of such other Subsidiary, (v) undated,
 blank  stock powers executed by such Subsidiary of the stock or other equity
 interest  evidenced  by  such  certificates  (with  signatures guaranteed as
 required by Lender);  (vi) confirmations of all Liens in all equity interest
 of  such  other  Subsidiary  of Borrower;  and  (vii)  Security  Agreements,
 executed by Borrower and each Subsidiary (other than a RIC), dated as of the
 Agreement  Date,  granting to Lender a first priority Lien in the Collateral
 set forth therein.

           (e) Guaranties.   A duly executed Guaranty (in the form of Exhibit
 G) for each Subsidiary (other than a RIC).

           (f) Expenses.   Reimbursement for  Attorney Costs incurred through
 the date hereof.

           (g) UCC  and Lien  Searches.   Searches of  the Uniform Commercial
 Code, Tax lien and other records as Lender may require.

           (h) Opinions   of  Borrower's,  each  RIC's  and  Other  Obligors'
 Counsel.  Opinions of counsel to  Borrower, each RIC and each  other Obligor
 addressed to  Lender, dated  the Agreement  Date and  covering such  matters
 incident to  the  transactions  contemplated hereby  as  Lender  or  Special
 Counsel may reasonably request.

           (i) Obligor  Proceedings.   Evidence  that all  corporate, limited
 liability company and partnership proceedings of each Obligor and each other
 Person (other  than  Lender)  taken  in  connection  with  the  transactions
 contemplated by  this  Agreement  and the  other  Loan  Documents  shall  be
 reasonably satisfactory in form and substance to Lender and Special Counsel;
 and Lender shall  have received copies  of all documents  or other  evidence
 which Lender or Special  Counsel may reasonably  request in connection  with
 such transactions.

           (j) Current   Financial  Statements.    A   copy  of  the  Current
 Financials,   including  (i)   the  audited  annual  consolidated  Financial
 Statements,  showing  the  financial  condition and results of operations of
 Borrower and its consolidation Subsidiaries as  of,  and  for the year ended
 on,  December 31, 2004,  together with the opinion  of  Auditors  containing
 only qualifications  and  emphasis acceptable to  Lender,  (ii)  the  annual
 financial statements  of each  RIC prepared in the form of convention blanks
 prescribed by NAIC, as filed  with  the  Insurance  Regulator  of such RIC's
 jurisdiction of organization, for  the year  ended  on  December  31,  2004,
 and  (iii)  the  quarterly  financial statements of each RIC prepared in the
 form of convention blanks  prescribed  by  NAIC, as filed with the Insurance
 Regulator of such RIC's jurisdiction of  organization, for the quarter ended
 on March 31, 2005.

           (k) Compliance  Certificate.  A  Compliance Certificate, dated the
 Agreement Date and signed by an Authorized Signatory of Borrower, confirming
 compliance with the  financial covenants set  forth therein as  of the  most
 recent determination date.

           (l) Reinsurance Agreements and Retrocession Agreements.  A copy of
 each Reinsurance Agreement and Retrocession  Agreement to which Borrower  or
 any Subsidiary is a party or it or its property is subject.

           (m) Insurance    Evidence  that  insurance  required  by  the Loan
 Documents is in effect.

           (n) Investment  Portfolio and Policy.   A schedule of all Existing
 Investments and a copy of the complete currently effective Investment Policy
 of each RIC, and Lender shall be satisfied with the investment portfolio  of
 each RIC and the Investment Policy of each RIC.

           (o) Notice  of Final  Agreement.   The  Notice of  Final Agreement
 executed by all parties thereto.

           (p) Applicable Rate Certificate.  The Applicable Rate Certificate,
 dated the Agreement Date, duly completed  and signed by the chief  financial
 officer of Borrower.

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

     5.2  Conditions Precedent to all  Loans and L/C  Credit Extensions.  The
 obligation of Lender to make each  Loan (including the initial Loan) and  to
 make each L/C Credit Extension (including the issuance of the initial Letter
 of Credit) is subject to fulfillment of the following conditions immediately
 prior to or contemporaneously with each such Loan or L/C Credit Extension:

           (a) Representations  and Warranties.   All  of the representations
 and warranties of Borrower, each of its Subsidiaries and each other  Obligor
 under this  Agreement  and each  other  Loan Document,  which,  pursuant  to
 Section 8.23, are made  at and  as of the  time of  each Loan  and each  L/C
 Credit Extension, shall be true and correct when made, except to the  extent
 applicable to a specific  date, both before and  after giving effect to  the
 application of the proceeds of such Loan and L/C Credit Extension.

           (b) No  Default or  Event of  Default.   There  shall not  exist a
 Default or Event of Default.

           (c) Notices;  Documents.  Lender  shall have  received all notices
 and documents required by Articles II and III as a condition to the  related
 Loan or L/C Credit Extension.

           (d) Litigation.  There shall be no Litigation pending against, or,
 to Borrower's or any Obligor's  knowledge, threatened against Borrower,  any
 other Obligor, or any Subsidiary, or  in any other manner relating  directly
 and adversely to Borrower, any other  Obligor, or any Subsidiary, or any  of
 their respective properties, in  any court or before  any arbitrator of  any
 kind or before or  by any Governmental Authority  which could reasonably  be
 expected to have a Material Adverse Effect.

           (e) Material Adverse  Change.  There shall have occurred no change
 in the business, assets, operations,  prospects or conditions (financial  or
 otherwise)  of  Borrower,  any  other  Obligor,  or  any  Subsidiary   since
 December 31, 2004, which caused or could  reasonably be expected to cause  a
 Material Adverse Effect.

     5.3  Conditions Precedent to all Term Loans. The obligation of Lender to
 make each Term Loan (including the initial Term Loan) is subject to:

           (a) Delivery by  Borrower of a duly executed Term Loan Note, dated
 the date such  Term Loan  is made, payable  to the  order of  Lender and  in
 amount equal to such Term Loan.

           (b) Receipt by  Lender of each of the documents and performance by
 Borrower of each of the acts required by the Loan Documents and Lender as  a
 condition to the making of such Term Loan.

           (c) The agreement  of Lender to make such Term Loan (the making of
 each Term Loan being in the sole discretion of Lender).

                                 ARTICLE VI

                            AFFIRMATIVE COVENANTS

      From the date hereof  and so long  as this Agreement  is in effect  and
 until payment in full of the  Obligations, the termination of the  Aggregate
 Commitment, and the  performance of all  other obligations  of each  Obligor
 under this Agreement and each other  Loan Document, Borrower will, and  will
 cause each Subsidiary to:

     6.1  General Covenants.

           (a) Payment  of Taxes  and Claims.   Pay and  discharge all lawful
 Taxes imposed upon its income or profits or upon any of its property  before
 the same shall  be in  default, and all  lawful claims  for labor,  rentals,
 materials and  supplies which,  if  unpaid, might  become  a Lien  upon  its
 property or  any part  thereof;  provided, however,  that  it shall  not  be
 required to pay or discharge  any such Tax, assessment  or claim so long  as
 the validity  thereof  shall  be contested  in  good  faith  by  appropriate
 proceedings, and adequate  book reserves shall  be established with  respect
 thereto, and it  shall pay  such Tax, charge  or claim  before any  property
 subject thereto shall be sold to satisfy a Lien.

           (b) Maintenance of Existence.  Do all things necessary to preserve
 and keep in full  force and effect its  existence as a corporation,  limited
 liability  company   or  partnership,   as   appropriate  (except,   as   to
 Subsidiaries, as permitted by Section 7.11).

           (c) Preservation  of  Property.   Keep  its  properties  which are
 necessary to  continue  business, whether  owned  in fee  or  otherwise,  or
 leased, in good operating  condition, ordinary wear  and tear excepted,  and
 comply with all material  leases to which it  is a party  or under which  it
 occupies or uses property so as  to prevent any material loss or  forfeiture
 thereunder.

           (d) Insurance.    Maintain  in force  with  financially  sound and
 reputable insurers,  policies  with respect  to  its property  and  business
 against such  casualties  and  contingencies  (including  public  liability,
 larceny, embezzlement or other  criminal misappropriation insurance) and  in
 such amounts as is customary in the case of entities engaged in the same  or
 similar lines of business of comparable size and financial strength.

           (e) Compliance  with  Applicable  Laws.   Comply  in  all material
 respects with the  requirements of  all applicable  Laws and  orders of  any
 Governmental Authority, except where contested in  good faith and by  proper
 proceedings or  where the  failure  to so  comply  could not  reasonably  be
 expected to have a Material Adverse Effect.

           (f) Licenses.  Obtain and maintain all material licenses, permits,
 franchises or other governmental  authorizations necessary to the  ownership
 of its properties or to the conduct of its business.

     6.2  Accounts,  Reports  and Other  Information.  Maintain  a  system of
 accounting in  accordance with  GAAP or  SAP, as  appropriate,  consistently
 applied, and furnish, or cause to be furnished, to Lender the following:

           (a) Annual Financial Statements.

                (i) As  soon as available, but in  any event within 160  days
      after the last day of each fiscal year of Borrower, annual consolidated
      and consolidating  Financial  Statements (such  consolidated  Financial
      Statements to be audited),  showing the consolidated and  consolidating
      financial condition  and  results of  operations  of Borrower  and  its
      consolidated Subsidiaries as of, and for  the year ended on, such  last
      day,  accompanied  by  (A)  an  opinion  of  Auditors  containing  only
      qualifications  (including  qualifications  as  to  the  scope  of  the
      examination) and  emphasis acceptable  to Lender,  which opinion  shall
      state that said consolidated Financial Statements have been prepared in
      accordance with GAAP consistently applied, and that the examination  of
      Auditors in connection with such consolidated Financial Statements  has
      been made in accordance with generally accepted auditing standards  and
      applicable  Securities  Laws  and  that  said  consolidated   Financial
      Statements present  fairly  the  consolidated  financial  condition  of
      Borrower  and  its  consolidated  Subsidiaries  and  their  results  of
      operations; (B)  an attestation  report of  Auditors as  to  Borrower's
      internal controls pursuant to Section 404 of Sarbanes-Oxley  expressing
      a conclusion to which Lender does not object; (C) a certificate of  the
      chief financial officer of Borrower, which certificate shall state that
      said Financial  Statements present  fairly the  financial condition  of
      Borrower  and  its  consolidated  Subsidiaries  and  their  results  of
      operations; and  (D) a  description of  all  Contingent Debt  and  Off-
      Balance Sheet Liabilities of Borrower and its Subsidiaries.

                (ii) As  soon as available, but in  any event within 60  days
      after the last day  of each fiscal year  of Borrower, unaudited  annual
      consolidated and consolidating Financial Statements (such  consolidated
      and consolidating Financial Statements shall  be in a format,  prepared
      in a manner and based on  assumptions and procedures as are  reasonably
      acceptable to  Lender),  showing  the  consolidated  and  consolidating
      financial condition  and  results of  operations  of Borrower  and  its
      consolidated Subsidiaries as of, and for  the year ended on, such  last
      day, accompanied by (A) a certificate of the chief financial officer of
      Borrower, which certificate shall state that said Financial  Statements
      present fairly the financial condition of Borrower and its consolidated
      Subsidiaries and their results of operations; and (B) a description  of
      all Contingent Debt and Off-Balance  Sheet Liabilities of Borrower  and
      its Subsidiaries.

                (iii)  With  respect to  each RIC,  within 15  days after the
      first to occur of (A) the  required filing date (as established by  Law
      or the  applicable  Insurance Regulator),  and  (B) the date  on  which
      actually  filed,  audited  annual  Financial  Statements,  prepared  by
      Auditors in accordance  with SAP, showing  the financial condition  and
      results of operations of such  RIC, as of, and  for the year ended  on,
      such last day,  accompanied by  (1) an opinion  of Auditors  containing
      only qualifications (including  qualifications as to  the scope of  the
      examination) and  emphasis acceptable  to Lender,  which opinion  shall
      state that said Financial Statements  have been prepared in  accordance
      with SAP consistently applied, and that the examination of the Auditors
      in  connection  with  such  Financial  Statements  has  been  made   in
      accordance with  generally accepted  auditing standards  and that  said
      Financial Statements  present fairly  the financial  condition of  such
      RIC, and  its  results of  operations;  and (2) a  description  of  all
      Contingent Debt and Off-Balance Sheet Liabilities of such RIC.

                (iv) With  respect to  each  RIC, within  15 days  after  the
      first to occur of (A) the required  filing date (as established by  Law
      or the  applicable  Insurance Regulator),  and  (B) the date  on  which
      actually filed, annual  Financial Statements  prepared in  the form  of
      convention blanks  prescribed by  NAIC, as  filed with  each  Insurance
      Regulator.

                (v) With  respect to each  RIC, as soon  as available and  in
      any event within 15 days after the required filing date (as established
      by Law or the applicable Insurance Regulator), a copy of the "Statement
      of Actuarial Opinion" and "Management Discussion and Analysis" for such
      RIC (prepared in accordance with SAP) for each fiscal year of such  RIC
      and as filed with the applicable Insurance Regulator in compliance with
      the requirements thereof (or a report containing equivalent information
      for such RIC, if such RIC is not so required to file the foregoing with
      the applicable Insurance Regulator).

                (vi) Within  60 days  after the end  of each  fiscal year  of
      Borrower, a Litigation Report for such fiscal year.

           (b) Quarterly Financial Statements.

                (i) Within 60 days after the last day of each fiscal  quarter
      (excluding the last fiscal  quarter of each  fiscal year) of  Borrower,
      (A) unaudited  consolidated  and  consolidating  Financial   Statements
      (which consolidated and consolidating Financial Statements shall be  in
      format, prepared  in  a  manner  and  based  on  such  assumptions  and
      procedures as are acceptable to  Lender), showing the consolidated  and
      consolidating financial condition and results of operations of Borrower
      and its consolidated Subsidiaries as of, and for the quarter ended  on,
      such last day (subject to year-end adjustment), and which shall include
      an income statement for the fiscal year through such last day, prepared
      in accordance  with  GAAP; (B) a  certificate  of the  chief  financial
      officer of Borrower, which certificate shall state that said  Financial
      Statements present fairly the financial  condition of Borrower and  its
      consolidated Subsidiaries and  their results of  operations; and  (C) a
      description of all Contingent Debt and Off-Balance Sheet Liabilities of
      Borrower and its Subsidiaries.

                (ii) With respect to each RIC, within 60 days after the  last
      day of each fiscal quarter (including  the last fiscal quarter of  each
      fiscal year)  of such  RIC, unaudited  quarterly Financial  Statements,
      prepared in accordance  with SAP, showing  the financial condition  and
      results of operations of such RIC as of, and for the quarter ended  on,
      such last day (subject to year-end adjustment), and which shall include
      an income statement for the fiscal  year through such last day, and  in
      the form  of quarterly  financial statements  prescribed by  NAIC,  and
      including a report with  respect to "Invested Assets"  as set forth  on
      Schedule D on such financial statements, together with a description of
      all Contingent Debt and Off-Balance Sheet Liabilities of such RIC.

                (iii)  Within 60 days after the end of each fiscal quarter of
      Borrower, a Loss Report as at the last day of such quarter.

                (iv) Within 60  days after the end of each fiscal quarter  of
      Borrower, a Compliance Certificate executed by an Authorized  Signatory
      who is a senior financial officer of Borrower.

           (c) Annual Budget.   As soon as available, but in any event within
 60 days prior  to the end  of each fiscal  year of Borrower,  a copy of  the
 annual consolidated operating  budget of Borrower  and Subsidiaries  for the
 succeeding fiscal year in form and substance satisfactory to Lender.

           (d) Other  Reports.   Promptly  upon  request  by  Lender,  a copy
 of  (i)  such  financial  statements,  reports,  notices or proxy statements
 sent  by it  to  stockholders  requested  by  Lender,  (ii)  such regular or
 periodic  reports and any  registration statements, prospectuses and written
 communications  in  respect  thereof  filed  by  it with any state insurance
 department, any securities exchange, or with the SEC or any successor agency
 requested by Lender, and (iii) all press releases concerning it.

           (e) Notice  of  Default.   Promptly  upon  the  happening  of  any
 condition or  event which  constitutes an  Event of  Default or  Default,  a
 written notice specifying  the nature and  period of  existence thereof  and
 what action it is taking and propose to take with respect thereto.

           (f) Notice  of Litigation.   Promptly  upon becoming  aware of the
 existence of any Litigation before any Governmental Authority, arbitrator or
 mediator (but no later than 10 days after the filing thereof) involving  it,
 (i) which could reasonably be expected to involve its payment of $250,000 or
 more, or (ii) which, under normal operating  standards,  could result  in  a
 reserve being established in excess of $250,000 a written notice  specifying
 the nature thereof and whether it will contest such proceeding.

           (g) Notice of  Claimed Default.  Promptly upon becoming aware that
 the holder of any note or any evidence of indebtedness or other security  or
 payee of any obligation in an amount of $100,000 or more has given notice or
 taken any  action with  respect to  a claimed  default or  event of  default
 thereunder, a written notice specifying the notice given or action taken  by
 such holder  and the  nature of  the  claimed default  or event  of  default
 thereunder and what  action it is  taking or proposes  to take with  respect
 thereto.

           (h) Notice  from  Governmental Authority.   Promptly  upon receipt
 thereof, information with respect to and copies of any notices received from
 any Governmental Authority relating  to an order,  ruling, statute or  other
 Law or information  which could reasonably  be expected to  have a  Material
 Adverse Effect.

           (i) Investment  Policy.  Within (i) 90 days after the  last day of
 each fiscal  year of each  RIC, a  copy of the Investment Policy of such RIC
 applicable to the current fiscal year of  such RIC, as approved by the board
 of  directors  or  other  appropriate  governance body of such RIC, and (ii)
 within 5 days after any amendment to or restatement of any Investment Policy
 of any RIC, a copy of such amendment or restatement as approved by the board
 of directors or other appropriate governance body of such RIC.

           (j) Reinsurance  Agreements  and  Retrocession   Agreements.   Not
 later  than  (i)  10  days  prior  to  the  termination  of each Reinsurance
 Agreement and Retrocession Agreement, a copy of the slip or other  document,
 agreement   or  correspondence   with   each   reinsurer,  retrocessionaire,
 reinsurance broker  or agent  which will amend, restate  or  supersede  such
 terminating Reinsurance Agreement  or Retrocession  Agreement,  and  (ii) 30
 days  after  the  first  to  occur  of  (A) execution, and (B) the effective
 date of each Reinsurance Agreement  and Retrocession Agreement,  a  copy  of
 each such Reinsurance Agreement and Retrocession Agreement,  certified to be
 complete and correct by an Authorized Signatory of  the RIC a party  to such
 agreement acceptable to Lender.

           (k) Auditors'  Reports.  Promptly upon  receipt thereof, a copy of
 (i) each other report or "management letter" submitted to Borrower or any of
 its  Subsidiaries  by  Auditors in  connection with any annual,  interim  or
 special audit made by them of the books  of Borrower or such  Subsidiary and
 (ii) each  report submitted to Borrower  or any  of its Subsidiaries  by any
 Auditors  to  the  extent that  such report,  in the  good faith  opinion of
 Borrower or such Subsidiary, identifies a condition, situation or event that
 has or is reasonably likely to have a Material Adverse Effect.

           (l) Internal  Control Event.   Promptly upon the  occurrence of an
 Internal Control Event, a written notice specifying the nature and period of
 existence thereof and  what action it  is taking and  proposes to take  with
 respect thereto.

           (m) Reserve  Adequacy  Report.   Promptly  following  a reasonable
 request from Lender, a  report prepared (at the  expense of Borrower) by  an
 independent actuarial consulting  firm of  recognized professional  standing
 reasonably satisfactory to  Lender reviewing  the adequacy  of reserves  and
 surplus of each RIC determined in  accordance with SAP, which firm shall  be
 provided access  to  or copies  of  all  reserve and  surplus  analyses  and
 valuations relating to the Insurance Business of each RIC in the  possession
 of or available to Borrower or any of its Subsidiaries.

           (n)  Other  Regulatory  Statements  and  Reports.  Promptly  after
 receipt  thereof,  copies  of  all triennial examinations and risk  adjusted
 capital  reports  of  any  RIC,  delivered  to  such Person by any Insurance
 Regulator, insurance commission  or  similar Governmental  Authority,  after
 receipt  thereof,  a copy  of the final report to each RIC from the NAIC for
 each fiscal year, as to such  RIC's compliance or noncompliance with each of
 the NAIC Tests,  after receipt thereof, a copy of any notice of termination,
 cancellation  or recapture  of  any  Reinsurance Agreement  or  Retrocession
 Agreement  to  which  a  RIC  is  a party  to  the  extent such termination,
 cancellation or recapture is likely to have  a Material Adverse Effect,  and
 in  any  event  within  ten  Business  Days after receipt thereof, copies of
 any notice of actual suspension, termination or revocation of any license of
 any RIC by any Insurance Regulator,  including  any request by an Insurance
 Regulator which commits a RIC to take or refrain from taking any action  and
 which,  if  such  RIC  fails  to comply with  such request, could affect the
 authority of such RIC to conduct its business,  and  and in any event within
 thirty  Business  Days  after  Borrower  or  any of its Subsidiaries obtains
 knowledge thereof, notice of any actual change in the insurance Laws enacted
 in  any  state  in  which  any  RIC  is  domiciled which could reasonably be
 expected to have a Material Adverse Effect.

           (o) A.M. Best.   Not later than 15 days after receipt by Borrower,
 a copy of (i) each A.M. Best report, if any, with respect to Borrower or any
 of its Subsidiaries, and (ii) all correspondence from A.M. Best to  Borrower
 or any of its  Subsidiaries the contents of  which (A) relate to a  probable
 downgrade of the A.M. Best rating of any RIC or (B) describe or relate to  a
 circumstance that could reasonably  be expected to  have a Material  Adverse
 Effect.

           (p) Requested Information.  With reasonable promptness, such other
 data, including any management reports to the Board of Directors of Borrower
 or any of  its Subsidiaries, and  information as from  time to  time may  be
 reasonably requested by Lender.

     6.3 Inspection.  (a) If no Event of Default exists, upon  three Business
 Day's prior  notice, and  as often  as may be reasonably requested,  and (b)
 if  an Event of Default exists, upon request by Lender, permit Lender or any
 representatives  of  Lender  to visit and inspect any  of its properties, to
 examine  all  books of account, records, reports and other  papers,  to make
 copies and  extracts therefrom, and  to  discuss the  affairs,  finances and
 accounts  with  its  officers, employees and Auditors (and by this provision
 Borrower authorizes Auditors to discuss  with Lender and its representatives
 the finances and affairs of Borrower  and its Subsidiaries).  All reasonable
 costs  and  expenses  of Lender related to the  first such inspection during
 each fiscal year conducted  when no Event of Default exists  shall be a part
 of  the  Obligations  and  paid by Borrower to  Lender within ten days after
 demand  by  Lender.  All costs  and expenses of Lender  related to each such
 inspection conducted when an Event  of Default exists shall be a part of the
 Obligations  and  paid by Borrower to Lender within ten days after demand by
 Lender.

      6.4  Compliance with ERISA. Comply with ERISA in all material respects,
 and (a) at all times make contributions within  the  time limits imposed  by
 Law to  meet the minimum funding standards set  forth in ERISA  with respect
 to any Plan; (b) notify Lender as soon as reasonably practicable of any fact
 which  it knows or should know, including but not limited  to any Reportable
 Event,  arising  in  connection  with  any  Plan  which could  reasonably be
 expected to result in termination thereof by the PBGC or for the appointment
 by a Governmental Authority of  a trustee  to administer  the Plan;  and (c)
 furnish to Lender upon such request  such additional  information concerning
 any Plan as Lender may reasonably request.

     6.5  Performance  of Obligations.   Perform all of its obligations under
 the Loan Documents.

     6.6  Maintenance of Priority of Bank Liens.   Upon the request of Lender
 from time to time, it shall  perform such acts and duly authorize,  execute,
 acknowledge, deliver, file, and  record such additional assignments,  pledge
 agreements,   security   agreements   and   other   agreements,   documents,
 instruments, and certificates as Lender may deem necessary or appropriate in
 order to perfect and maintain the Bank Liens in favor of Lender and preserve
 and protect the rights of Lender in respect of the Collateral.

     6.7  Indemnity.    BORROWER SHALL DEFEND, PROTECT,  INDEMNIFY  AND  HOLD
 HARMLESS LENDER AND ITS AFFILIATES, AND EACH OF THEIR RESPECTIVE  (INCLUDING
 SUCH  AFFILIATES')  OFFICERS,   DIRECTORS,  EMPLOYEES,  AGENTS,   ATTORNEYS,
 SHAREHOLDERS AND CONSULTANTS (INCLUDING, WITHOUT LIMITATION, THOSE  RETAINED
 IN CONNECTION WITH THE SATISFACTION OR ATTEMPTED SATISFACTION OF ANY OF  THE
 CONDITIONS SET  FORTH  HEREIN)  OF  EACH  OF  THE  FOREGOING  (COLLECTIVELY,
 "INDEMNITEES") FROM  AND  AGAINST  ANY  AND  ALL  LIABILITIES,  OBLIGATIONS,
 LOSSES,  DAMAGES,  PENALTIES,  ACTIONS,  JUDGMENTS,  SUITS,  CLAIMS,  COSTS,
 EXPENSES AND  DISBURSEMENTS OF  ANY KIND  OR NATURE  WHATSOEVER  (INCLUDING,
 WITHOUT LIMITATION,  THE  REASONABLE  ATTORNEY COSTS  OF  COUNSEL  FOR  SUCH
 INDEMNITEES IN CONNECTION WITH ANY INVESTIGATIVE, ADMINISTRATIVE OR JUDICIAL
 PROCEEDING, WHETHER  OR NOT  SUCH INDEMNITEES  SHALL BE  DESIGNATED A  PARTY
 THERETO), IMPOSED  ON, INCURRED  BY, OR  ASSERTED AGAINST  SUCH  INDEMNITEES
 (WHETHER DIRECT, INDIRECT OR CONSEQUENTIAL AND WHETHER BASED ON ANY FEDERAL,
 STATE, OR  LOCAL LAWS  AND REGULATIONS,  UNDER COMMON  LAW OR  AT  EQUITABLE
 CAUSE, OR ON CONTRACT, TORT OR OTHERWISE, ARISING FROM OR CONNECTED WITH THE
 PAST, PRESENT OR FUTURE OPERATIONS OF BORROWER OR ANY OF ITS SUBSIDIARIES OR
 THEIR RESPECTIVE PREDECESSORS IN  INTEREST, OR THE  PAST, PRESENT OR  FUTURE
 ENVIRONMENTAL CONDITION OF PROPERTY OF BORROWER OR ANY OF ITS SUBSIDIARIES),
 IN ANY MANNER RELATING TO OR ARISING  OUT OF THIS AGREEMENT, THE OTHER  LOAN
 DOCUMENTS, OR  ANY  ACT, EVENT  OR  TRANSACTION  OR ALLEGED  ACT,  EVENT  OR
 TRANSACTION RELATING OR ATTENDANT THERETO, THE  MAKING OF ANY LOANS AND  L/C
 CREDIT EXTENSIONS, INCLUDING IN CONNECTION WITH, OR AS A RESULT, IN WHOLE OR
 IN PART,  OF ANY  NEGLIGENCE  OF LENDER  (OTHER  THAN THOSE  MATTERS  RAISED
 EXCLUSIVELY BY A PARTICIPANT AGAINST LENDER AND NOT BORROWER), OR THE USE OR
 INTENDED USE OF THE PROCEEDS OF ANY  LOAN OR LETTER OF CREDIT HEREUNDER,  OR
 IN CONNECTION WITH ANY INVESTIGATION OF ANY POTENTIAL MATTER COVERED HEREBY,
 BUT EXCLUDING ANY CLAIM OR LIABILITY THAT ARISES AS THE RESULT OF THE  GROSS
 NEGLIGENCE OR WILLFUL  MISCONDUCT OF ANY  INDEMNITEE, AS FINALLY  JUDICIALLY
 DETERMINED BY A COURT OF COMPETENT JURISDICTION (COLLECTIVELY,  "INDEMNIFIED
 MATTERS").   IN  ADDITION,   BORROWER  SHALL  PERIODICALLY,  UPON   REQUEST,
 REIMBURSE EACH INDEMNITEE FOR ITS REASONABLE LEGAL AND OTHER ACTUAL EXPENSES
 (INCLUDING  THE  REASONABLE  COST  OF  ANY  INVESTIGATION  AND  PREPARATION)
 INCURRED IN  CONNECTION WITH  ANY INDEMNIFIED  MATTER.   THE  REIMBURSEMENT,
 INDEMNITY AND  CONTRIBUTION  OBLIGATIONS  UNDER THIS  SECTION  SHALL  BE  IN
 ADDITION TO ANY LIABILITY  WHICH BORROWER MAY  OTHERWISE HAVE, SHALL  EXTEND
 UPON THE SAME TERMS AND CONDITIONS TO EACH INDEMNITEE, AND SHALL BE  BINDING
 UPON AND INURE TO THE BENEFIT OF ANY SUCCESSORS, ASSIGNS, HEIRS AND PERSONAL
 REPRESENTATIVES OF BORROWER, LENDER AND ALL OTHER INDEMNITEES.  THIS SECTION
 SHALL  SURVIVE  ANY  TERMINATION  OF  THIS  AGREEMENT  AND  PAYMENT  OF  THE
 OBLIGATIONS.

     6.8  Use  of  Proceeds.   Borrower shall use  (a)  the  proceeds  of the
 Revolving  Loans to  (i) provide working capital to Borrower and Guarantors,
 (ii) to  acquire capital stock  of or make capital contributions to a Person
 that  is either  a  Subsidiary on the Agreement Date or became  a Subsidiary
 after the  Agreement  Date  as  permitted  by  and  in  compliance with this
 Agreement, which capital contribution will result in an increase  of paid-in
 surplus  of such Subsidiary in an amount equal to such capital contribution,
 (iii) to acquire surplus debentures issued by a  RIC that is a Subsidiary of
 Borrower on  the Agreement Date, (iv) to make loans to Subsidiaries, and (v)
 to make Permitted Acquisitions, (b) the proceeds of the Term Loans  to  make
 Permitted Acquisitions, and (c) the Letters of Credit and proceeds of Letter
 of  Credit to  secure the  performance  of Borrower and/or a RIC pursuant to
 Reinsurance Agreements to  which it is  or they are  a party  or such  other
 purpose as Lender may permit in its discretion, and for no other purpose.

                                 ARTICLE VII

                              NEGATIVE COVENANTS

      From the date hereof  and so long  as this Agreement  is in effect  and
 until payment in full of the  Obligations, the termination of the  Aggregate
 Commitment, and the  performance of all  other obligations  of each  Obligor
 under this Agreement and each other Loan Document:

     7.1  AHIC  Total  Adjusted  Capital.   Borrower  shall  not permit Total
 Adjusted Capital of AHIC to be less  than the greater of (a) $9,500,000  and
 (b) the amount required for Risk-Based Capital of AHIC to equal 250%, as  at
 the last day of any fiscal quarter of AHIC.

     7.2  PIIC  Total  Adjusted  Capital.   Borrower  shall  not permit Total
 Adjusted Capital of PIIC to be less than the greater of (a) $10,000,000  and
 (b) the amount required for Risk-Based Capital of PIIC to equal 250%, as  at
 the last day of any fiscal quarter of PIIC.

     7.3  Net  Underwriting Gain.   Borrower shall not  permit the sum of Net
 Underwriting Gain of  any RIC for  any four consecutive  fiscal quarters  of
 such RIC to be equal to or less than zero.

     7.4  Loss  Ratio.  Borrower shall not permit the Loss Ratio with respect
 to the Commercial Lines to be greater than 65.0%  as at the last day of  any
 fiscal quarter of Borrower.

     7.5  Consolidated Net Worth.  Borrower shall not permit Consolidated Net
 Worth to be less than $25,000,000 at any time.

     7.6  Fixed Charges Coverage Ratio.  Borrower  shall not permit the Fixed
 Charges Coverage Ratio to be less  than 1.25 to 1.00 as  at the last day  of
 any fiscal quarter of Borrower.

     7.7  Consolidated Net Income. Borrower shall not permit Consolidated Net
 Income for any fiscal year of Borrower to be less than $2,500,000.

     7.8  Limitation on Debt.  Borrower  shall not, and  shall not permit any
 Subsidiary to, create, incur, assume, become  or be liable in any manner  in
 respect of, or suffer to exist, any Debt except Permitted Debt.

     7.9  Limitation on Liens.  Borrower shall not,  and shall not permit any
 Subsidiary to, create or suffer to be created or to exist any Lien upon  any
 of its properties or assets except Permitted Liens.

     7.10 Burdensome  Agreements.  Borrower  shall not, and  shall not permit
 any Subsidiary to, enter  into any agreement (other  than this Agreement  or
 any other Loan Document)  that limits the ability  (a) of any Subsidiary  to
 pay Dividends to  Borrower or to  otherwise transfer  property to  Borrower,
 (b) of any Subsidiary to guarantee the Obligations or (c) of Borrower or any
 Subsidiary to create, incur, assume or suffer to exist Liens on property  of
 such Person.

     7.11 Disposition of Assets.   Borrower shall not,  and shall not  permit
 any Subsidiary to, directly or indirectly, Dispose of all or any portion  of
 any of its  properties (including any  capital stock of  any Subsidiary  and
 equity interests constituting Collateral) and assets except (a) Dispositions
 pursuant  to its Investment Policy  in the  ordinary course of  business for
 full and  fair consideration,  (b) other Dispositions in the ordinary course
 of business for full  and fair consideration, (c) mergers of Subsidiaries of
 Borrower described in the proviso to  Section 7.13, and (d) Dispositions not
 in  the ordinary  course  of business  if  (i)  no  single asset Disposed of
 or single  transaction  including  a Disposition has a value (valued at  the
 greater of  market or book  (determined in accordance with GAAP) value) less
 than $100,000 and (ii) the aggregate value (valued  at the greater of market
 or book (determined in accordance with GAAP) value) of all such Dispositions
 by Borrower and its Subsidiaries  during any fiscal year of Borrower is less
 than $250,000.

     7.12 Acquisition of Assets.   Borrower shall not,  and shall not  permit
 any Subsidiary to, acquire any assets,  property or business of any  Person,
 or participate in any  joint venture, or create  or acquire any  Subsidiary,
 except  (a) Permitted  Acquisitions,  and  (b) Borrower may form new  direct
 wholly-owned  Subsidiaries  which  are  corporations  or  limited  liability
 companies which will engage  in the insurance  agency  or  managing  general
 agency  business and new  property and casualty insurance companies that are
 wholly-owned  Subsidiaries  of Borrower or another RIC if prior to each such
 new  Subsidiary  conducting  any  activities  other  than  (i)  filing   its
 organizational documents with the appropriate authority of one of the United
 States, (ii) adopting its bylaws, operating  agreement  or  other governance
 document  and   (iii) obtaining consideration for the issuance of its equity
 in an aggregate amount  equal  to the  lesser  of  (A) the  minimum  initial
 capital  required  by Law and (B) $5,000, such  new  Subsidiary delivers  to
 Lender (in such number of counterparts as Lender may reasonably require):

           (a) A  certificate  of  officers  acceptable  to  Lender  of  such
 Subsidiary certifying as to (i) the incumbency of the officers signing  such
 certificate and  the  Loan Documents  to  which it  is  a party,  (ii) if  a
 corporation, an original certified copy of its Articles of Incorporation  or
 Certificate of Incorporation, as applicable, certified as true, complete and
 correct by the appropriate authority of  its state of incorporation as of  a
 date not more than ten days prior to the date such certificate is  delivered
 to Lender, (iii) if a limited liability company, an original certified  copy
 of its Articles  of Organizations  (or similar  organization and  governance
 document), certified  as  true,  complete and  correct  by  the  appropriate
 authority of its state of organization as of  a date not more than ten  days
 prior to  the  date such  certificate  is  delivered to  Lender,  (iv) if  a
 corporation, a  copy  of  its  By-Laws,  as  in  effect  on  the  date  such
 certificate is delivered to  Lender, (v) if a  limited liability company,  a
 copy of  its operating  agreement (or  similar organization  and  governance
 document), as in effect on the date such certificate is delivered to Lender,
 (vi) a  copy  of  the  resolutions  of  the  appropriate  governance   board
 authorizing it to execute, deliver and  perform the Loan Documents to  which
 it is  a party,  and  (vii) an original  certificate  of good  standing  and
 existence issued by the appropriate authority  of its state of  organization
 (certified as  of a  date not  more than  ten days  prior to  the date  such
 certificate is delivered to Lender).

           (b) The  duly executed  and completed  Security Agreement  of such
 Subsidiary (other  than a  RIC),  granting to  Lender,  for the  benefit  of
 Lender, a first priority Lien in the Collateral set forth therein.

           (c) The  duly executed Guaranty  of such Subsidiary  (other than a
 RIC).

           (d) The  duly  executed  and completed  (i)  Pledge  Agreement (or
 amendment to the Pledge Agreement), granting to Lender a first priority Lien
 in all equity of such Subsidiary, together with stock or other  certificates
 evidencing all  of the  equity interest  of such  Subsidiary, (ii)  undated,
 blank stock  powers and  (iii)  confirmations of  all  Liens in  all  equity
 interest of such Subsidiary (other than with respect to any equity of a  RIC
 owned by another RIC).

           (e) Reimbursement  of Lender's reasonable  expenses related to the
 formation of such new Subsidiary, including Attorney Costs.

           (f) Searches  of the Uniform  Commercial Code, Tax  lien and other
 records as Lender may require.

           (g) Opinions of  counsel to Borrower and such Subsidiary addressed
 to Lender and covering such matters incident to such new Subsidiary and  the
 Loan Documents as Lender or Special Counsel may reasonably request.

           (h) A Notice of Final Agreement executed by such Subsidiary.

           (i) In  form  and  substance satisfactory  to  Lender  and Special
 Counsel, such other  documents, instruments and  certificates as Lender  may
 reasonably require in connection with the formation of such new Subsidiary.

     7.13 Merger and Consolidation.  Borrower shall not, and shall not permit
 any Subsidiary to, directly or indirectly consolidate with or merge into any
 other Person, permit any other Person to consolidate with or merge into  it,
 or acquire any Person (other than  acquisitions permitted by Section  7.12);
 provided, so long as no Default or Event of Default exists at the time of or
 immediately after giving effect thereto, (a) Subsidiaries may merge with and
 into Borrower or  any other direct  wholly-owned Subsidiary  of Borrower  so
 long as Borrower or such other direct wholly-owned Subsidiary of Borrower is
 the survivor and the surviving Subsidiary is a Guarantor; and (b) a RIC  may
 merge with and into another RIC.

     7.14 Loans and Investments.   Borrower shall not,  and shall not  permit
 any of  its  Subsidiaries  to,  make  any  Investment  except  (a) Permitted
 Investments, and (b) acquisitions permitted by Section 7.12.

     7.15 ERISA.  Borrower shall not, and shall not permit any Subsidiary to,
 make funding contributions with respect to  any Plan that are less than  the
 minimum required by ERISA or the regulations thereunder, or permit any  Plan
 ever to  be  subject  to involuntary  termination  proceeding  by  the  PBGC
 pursuant to ERISA S 4042(a).

     7.16 Assignment.    Borrower  shall  not,  and  shall  not  permit  any
 Subsidiary to, directly or indirectly, assign or transfer, or attempt to  do
 so, any rights, duties  or obligations under the  Loan Documents,  except in
 connection with  a  merger of  a  Subsidiary  described in  the  proviso  to
 Section 7.13.

     7.17 Transactions  with Affiliates.   Borrower shall not,  and shall not
 permit any  Subsidiary  to, carry  on  any  transaction with  any  of  their
 respective Affiliates except at arm's length  and in the ordinary course  of
 business.

     7.18 Business.   Borrower shall not, and will not permit any  Subsidiary
 to, engage  in  any material  line  or lines  of  business activity  or  any
 businesses other than (a) lines of business activity and businesses  engaged
 in on the Agreement Date, and  (b) Insurance Business activities related  to
 homeowners insurance.

     7.19 Activities  of Hallmark Trust I.   Neither Borrower  nor any of its
 Subsidiaries shall  permit  Hallmark  Trust I  to  engage  in  any  business
 activity other than  as described  in the  Hallmark Trust  I Declaration  of
 Trust (as such agreement existed on June 21, 2005).

     7.20 2005  Documents.  Borrower shall  not, and shall  not permit any of
 its Subsidiaries to, change, amend or restate (or take any action or fail to
 take any action  the result or  which is an  effective amendment, change  or
 restatement) or  accept any  waiver or  consent with  respect to,  any  2005
 Document, that would result in (a)  an increase in the principal,  interest,
 overdue interest, fees or other amounts payable under any 2005 Document, (b)
 an acceleration of any  date fixed for payment  or prepayment of  principal,
 interest, fees or other amounts payable under any 2005 Document  (including,
 without limitation, as a result of any  redemption), (c) a change in any  of
 the subordination provisions of any 2005  Document, or (d) any other  change
 in any  term or  provision of  any 2005  Document that  could reasonably  be
 expected to have an adverse effect on the interest of Lender.

                                ARTICLE VIII

                        REPRESENTATIONS AND WARRANTIES

      Borrower represents, warrants, and covenants to Lender as follows:

     8.1  Organization  and  Qualification.    Borrower  and   each  of   its
 Subsidiaries  (a) is  a  corporation,  limited  liability company or limited
 partnership duly organized, validly existing, and in good standing under the
 Laws of its jurisdiction of organization; (b) is duly  licensed and  in good
 standing as  a foreign corporation,  limited liability  company  or  limited
 partnership  in  each  jurisdiction in  which  the  nature  of  the business
 transacted or  the  property  owned is such as to require licensing as such;
 and  (c)  possesses all  requisite  corporate,  limited liability company or
 limited partnership  (respectively) power,  authority  and legal  right,  to
 execute, deliver  and comply  with the  terms of  the Loan  Documents to  be
 executed by it, all of which have  been duly authorized and approved by  all
 necessary corporate, limited liability company or limited partnership action
 (respectively) and  for which  no approval  or consent  of any  Governmental
 Authority which has not been obtained is required.  No proceeding is pending
 for the forfeiture of any Borrower's  or any such Subsidiary's  organization
 documents or its  dissolution.  The  issued and  outstanding capital  stock,
 limited liability company interest and partnership interest of Borrower  and
 each  Subsidiary  is  duly  authorized   validly  issued,  fully  paid   and
 nonassessable, and free of the preemptive  rights of shareholders and  other
 equity holders.   Schedule 8.1  sets forth  the respective  jurisdiction  of
 organization and  percentage ownership  as of  the  Agreement Date  of  each
 Subsidiary.  Borrower has no direct or indirect Subsidiary other than  those
 set forth on Schedule 8.1.  Neither a material portion of the operations nor
 a material portion of the assets of Borrower or any Subsidiary are conducted
 or located  in  a jurisdiction  other  than such  Person's  jurisdiction  of
 organization.

     8.2  Financial   Statements.   The  financial  statements  described  in
 Section 5.1(j) heretofore furnished  to Lender are  complete and correct  in
 all material  respects and  prepared  in accordance  with  GAAP or  SAP,  as
 appropriate, and  fairly  present the  financial  condition of  the  Persons
 described therein as of  the dates indicated and  for the periods  involved.
 There are no  Contingent Debts, liabilities  for Taxes,  unusual forward  or
 long-term  commitments  or  unrealized   or  anticipated  losses  from   any
 unfavorable commitments, any of which are material in amount in relation  to
 the financial condition of Borrower or  any Subsidiary, except as  disclosed
 on such  financial statements.   The  description of  all Off-Balance  Sheet
 Liabilities of Borrower and Subsidiaries  heretofore furnished to Lender  is
 complete and  correct in  all material  respects.   Since  the date  of  the
 Financial Statements described in Section 5.1(j) or the Current  Financials,
 there has been no Material Adverse Change or Internal Control Event.

     8.3  Compliance With Laws and Other Matters. The execution, delivery and
 performance and compliance  with the terms  of the Loan  Documents will  not
 cause Borrower  or any  Subsidiary to  be, (a) in violation of its corporate
 charter  or  bylaws,  certificate  of  organization,  operating   agreement,
 certificate   of  limited   partnership,   partnership  agreement  or  other
 organization and governance document, (b) in violation  of  any Law  in  any
 respect which could have any Material Adverse Effect, or (c) in default (nor
 has any event occurred which,  with notice or lapse of  time or both,  could
 constitute a default) under any material agreement (including any  agreement
 related to any Debt or such Person).

     8.4  Litigation.   There is  no Litigation  pending  against or,  to the
 knowledge of Borrower, threatened against or  affecting any Borrower or  any
 Subsidiary or  their  respective assets  or  properties which  involves  the
 probability of  any  final judgment  or  liability  which may  result  in  a
 Material Adverse Change.  Schedule 8.4 is a complete and correct description
 of all Existing Litigation  where the amount in  controversy is equal to  or
 greater than  $250,000.   Borrower's good  faith estimate  of the  aggregate
 amount of all claims against Borrower and Subsidiaries pursuant to  Existing
 Litigation on the Agreement Date is  as stated in a  letter dated as of  the
 Agreement Date, from Borrower to Lender.  There are no outstanding or unpaid
 final judgments against Borrower or any Subsidiary.

     8.5  Debt.   Since the date  of  the latest  of the  Current Financials,
 neither Borrower nor any  of its Subsidiaries has  incurred any Debt  except
 Permitted Debt.  Schedule 8.5 is a  complete and correct description of  all
 Existing Debt.

     8.6  Title  to  Properties.   Borrower and each Subsidiary have (a) full
 corporate, limited liability or partnership (respectively) power,  authority
 and  legal right  to  own and  operate the properties which  it now  owns or
 leases,  and to carry on the lines  of business in which it is now  engaged,
 and (b) good and marketable title  to its  owned properties, subject  to  no
 Lien of any kind, except Permitted Liens.

     8.7  Authorization; Validity. The Board of Directors, managers, partners
 or other appropriate governance  board of each  Obligor has duly  authorized
 the execution and delivery of the Loan Documents to which such Obligor is  a
 party and the  performance of  their respective terms.   No  consent of  the
 stockholders, members, partners  or other  equityholders of  any Obligor  is
 required as a prerequisite  to the validity and  enforceability of any  Loan
 Document.  Each Obligor has full corporate, limited liability or partnership
 (respectively) power, authority and legal right  to execute and deliver  and
 to perform and observe  the provisions of all  Loan Documents to which  such
 Obligor is a  party.  Each  of the Loan  Documents is the  legal, valid  and
 binding obligation of each Obligor which is a party thereto, enforceable  in
 accordance with its respective terms, subject as to enforcement of  remedies
 to any Debtor Relief Laws.

     8.8  Taxes.   Borrower and each  Subsidiary have  filed all  federal and
 state and all  other material income  Tax returns which  are required to  be
 filed by such Person and have paid all  Taxes as shown on said returns,  and
 all Taxes due and  payable without returns and  all assessments received  to
 the extent that such Taxes or assessments have become due and payable.   All
 Tax liabilities of Borrower and each Subsidiary are adequately provided  for
 on the books of  such Person, including interest  and penalties.  No  income
 Tax liability of a material nature  has been asserted by taxing  authorities
 for Taxes in excess of those already paid, except such Taxes being contested
 in good faith  by appropriate  proceedings.   There is  no material  action,
 suit, proceeding,  investigation, audit,  or claim  now pending  or, to  the
 knowledge of  Borrower or  any Subsidiary,  threatened by  any  Governmental
 Authority regarding  any  Taxes relating  to  Borrower or  such  Subsidiary.
 Neither Borrower nor any Subsidiary has entered into an agreement or  waiver
 or been requested to enter into an agreement or waiver extending any statute
 of limitations relating to the payment or collection of Taxes of Borrower or
 such Subsidiary,  or is  aware of  any circumstances  that would  cause  the
 taxable years or other taxable periods of Borrower or such Subsidiary not to
 be subject to the normally applicable statute of limitations.

     8.9  Use of Proceeds.  No  Obligor is engaged principally, or as one  of
 its important  activities,  in the  business  of extending  credit  for  the
 purpose of  purchasing  or carrying  margin  stock (within  the  meaning  of
 Regulation U of the Board of Governors of the Federal Reserve System) and no
 part of  the proceeds  of any  Loan or  Letter  of Credit  will be  used  to
 purchase or carry any  margin stock or  to extend credit  to others for  the
 purpose of purchasing or carrying any margin  stock.  None of the assets  of
 any Obligor are margin stock.  No Obligor nor any agent acting on its behalf
 has taken or will take any action which might cause this Agreement or any of
 the Loan Documents to  violate any regulation of  the Board of Governors  of
 the Federal Reserve  System or  to violate  the Securities  Exchange Act  of
 1934, in each  case as in  effect now  or as the  same may  hereafter be  in
 effect.

     8.10 Possession  of  Franchises,  Licenses,  Etc.    Borrower  and  each
 Subsidiary possess all franchises, certificates, licenses, permits and other
 authorizations from  all  Governmental  Authorities,  free  from  burdensome
 restrictions, that  (a) are  necessary  for  the ownership, maintenance  and
 operation of its properties and assets,  and (b) the loss  of  possession of
 which  could reasonably  be expected to have a Material Adverse Effect,  and
 such  Person  is  not in violation of any thereof.  Schedule 8.10 lists with
 respect to each RIC, as of the Agreement  Date, all of the  jurisdictions in
 which such  RIC  holds licenses (including, without  limitation, licenses or
 certificates  of  authority  from relevant Insurance Regulators), permits or
 authorizations  to  transact Insurance Business,  and  indicates the line or
 lines of insurance in  which each such  RIC  is permitted to be engaged with
 respect to each  license therein listed.  To the knowledge of Borrower,  (a)
 no such license is  the subject of a proceeding  for suspension,  revocation
 or limitation or any similar proceedings, (b) there is no  sustainable basis
 for such a suspension, revocation or limitation, and (c) no such suspension,
 revocation  or limitation is threatened by any relevant Insurance Regulator.
 As of the Agreement Date, no RIC transacts any Insurance Business,  directly
 or indirectly, in any jurisdiction other than those listed on Schedule 8.10.

     8.11 Leases.    Borrower  and   each  Subsidiary   enjoy  peaceful   and
 undisturbed possession  of all  leases necessary  for the  operation of  its
 properties and assets the  loss of possession of  which  could reasonably be
 expected to have a Material Adverse Effect.   All such leases are valid  and
 subsisting and are in full force and effect.

     8.12 Disclosure.   Neither  this  Agreement  nor  any  other   document,
 certificate or statement furnished to Lender by or on behalf of Borrower  or
 any Subsidiary in  connection herewith contains  any untrue  statement of  a
 material fact or omits to state a  material fact necessary in order to  make
 the statements contained  herein and therein  not misleading.   There is  no
 fact known  to  Borrower or  any  Subsidiary and  not  known to  the  public
 generally which reasonably  may be expected  to materially adversely  affect
 its assets or in the future may  reasonably be expected (so far as  Borrower
 or such Subsidiary can now foresee) to result in a Material Adverse  Effect,
 which has  not  been  set forth  in  this  Agreement or  in  the  documents,
 certificates and statements furnished to Lender by or on behalf of  Borrower
 or  any  Subsidiary  prior  to  the  date  hereof  in  connection  with  the
 transactions contemplated hereby.

     8.13 ERISA.   Schedule 8.13 sets forth each  Plan.  Neither Borrower nor
 any Subsidiary has  (a) incurred any material accumulated funding deficiency
 within the meaning of ERISA, or (b) incurred any material  liability  to the
 PBGC  in  connection  with  any  Plan established or  maintained  by it.  No
 Reportable  Event  has  occurred  with  respect  to  any  Plan  which  could
 reasonably  be  expected to result in a Material Adverse Change.  No Plan is
 in the process of termination.

     8.14 Regulatory  Acts.   None  of  Borrower  or  any  Subsidiary  is an
 "investment company" within  the meaning of  the Investment  Company Act  of
 1940, as  amended, or  is subject  to regulation  under the  Public  Utility
 Holding Act of 1935, the Federal Power Act, the Interstate Commerce Act,  or
 any other Law  (other than  Regulation X of the  Board of  Governors of  the
 Federal Reserve System  and applicable insurance  Laws) which regulates  the
 incurring by Borrower or any Subsidiary of debt, including, but not  limited
 to, Laws regulating common or contract carriers or the sale of  electricity,
 gas, steam, water, or other public utility services.

     8.15 Solvency.   Borrower  and each  Subsidiary  is,  and  Borrower  and
 Subsidiaries on a consolidated basis are, Solvent.

     8.16 Environmental Matters.   Except as set forth in Schedule 8.16 or as
 could not reasonably be expected to  result in a Material Adverse Change  or
 Effect:

           (a) The properties  owned, operated or leased by Borrower and each
 Subsidiary (the  "Properties") do  not contain  any Hazardous  Materials  in
 amounts or concentrations which  (i) constitute, or constituted a  violation
 of, or (ii) could reasonably  be expected to give  rise to liability  under,
 Environmental Laws,  which violations  and  liabilities, in  the  aggregate,
 could reasonably be expected to result in a Material Adverse Change;

           (b) All Environmental Permits have been obtained and are in effect
 with  respect  to  the  Properties  and  operations  of  Borrower  and  each
 Subsidiary, and  the Properties  and all  operations  of Borrower  and  each
 Subsidiary are  in  compliance,  and  have  been  in  compliance,  with  all
 Environmental Laws and  all necessary Environmental  Permits, except to  the
 extent that such non compliance or failure to obtain any necessary  permits,
 in the aggregate, could not reasonably  be expected to result in a  Material
 Adverse Change;

           (c) Neither Borrower nor any Subsidiary has received any notice of
 an Environmental Claim in connection with  the Properties or the  operations
 of  Borrower  or  such  Subsidiary  or  with  regard  to  any  Person  whose
 liabilities for  environmental  matters  Borrower  or  such  Subsidiary  has
 retained or  assumed, in  whole or  in part,  contractually, which,  in  the
 aggregate, could  reasonably be  expected to  result in  a Material  Adverse
 Change, nor does  Borrower or any  Subsidiary have knowledge  that any  such
 notice will be received or is being threatened; and

           (d) Hazardous   Materials  have  not  been  transported  from  the
 Properties, nor have Hazardous Materials been generated, treated, stored  or
 disposed of at, on  or under any of  the Properties in  a manner that  could
 reasonably be expected  to give rise  to liability  under any  Environmental
 Law, nor has Borrower  or any Subsidiary retained  or assumed any  liability
 contractually,  with  respect  to  the  generation,  treatment,  storage  or
 disposal  of   Hazardous   Materials,  which   transportation,   generation,
 treatment, storage or disposal, or retained  or assumed liabilities, in  the
 aggregate, could  reasonably be  expected to  result in  a Material  Adverse
 Change.

     8.17 Investments.   Schedule 8.17 is a complete and correct  description
 of all Existing Investments as of the Agreement Date.  Borrower has provided
 to Lender a complete copy of the Investment Policy of Borrower and each RIC.
 The Investment Policy of Borrower applies  to each Subsidiary (other than  a
 RIC).

     8.18 Intellectual Property,  Etc.   Borrower  and each  Subsidiary  have
 obtained all  material  patents,  trademarks, service  marks,  trade  names,
 copyrights, licenses and  other rights, free  from burdensome  restrictions,
 that are  necessary for  the operation  of  their respective  businesses  as
 presently conducted and as proposed to be conducted.

     8.19 Reinsurance Agreements.

           (a) Schedule   8.19  is  a  complete   and  correct  list  of  all
 Reinsurance Agreements  to which  Borrower or  any  Subsidiary is  a  party,
 describing the names  of all  parties to each  agreement, the  date of  each
 agreement, and the termination date of each agreement.

           (b) Except as set forth on Schedule F to the Annual Statements for
 each RIC for its fiscal year ending December 31, 2004, there are no material
 liabilities outstanding  as  of the  Agreement  Date under  any  Reinsurance
 Agreement.  Each Reinsurance Agreement is  in full force and effect; no  RIC
 or, to the knowledge of Borrower, any  other party thereto, is in breach  of
 or default under any such Reinsurance Agreement; and Borrower has no  reason
 to believe  that the  financial condition  of any  other party  to any  such
 Reinsurance Agreement is  impaired such that  a default  thereunder by  such
 party could  reasonably  be  anticipated.   Each  Reinsurance  Agreement  is
 qualified under all applicable Laws to receive the statutory credit assigned
 to such Reinsurance Agreement in the relevant annual statement or  quarterly
 statement at the time prepared.  Except as set forth on Schedule 8.19,  each
 Person to whom  any RIC  has ceded any  material liability  pursuant to  any
 Reinsurance Agreement on the Agreement Date  has a rating of "A-" or  better
 by A.M. Best.

           (c) As of  the Agreement Date, there are no Reinsurance Agreements
 between Borrower or any Subsidiary and Affiliates of Borrower.

     8.20 Retrocession Agreements.  Schedule 8.20  is a complete and  correct
 list of all Retrocession Agreements to which Borrower or any Subsidiary is a
 party, describing the names  of all parties to  each agreement, the date  of
 each agreement and the termination date of each agreement.

     8.21 2005 Documents.   Attached as Exhibit N are true and correct copies
 of the Hallmark Trust I Declaration  of Trust, the 2005 Indenture, the  2005
 Guaranty, and all exhibits and schedules  to such agreements.  There are  no
 agreements between  or among  any of  the parties  to such  agreements,  any
 holder of any equity security  or Debt of Hallmark  Trust I, any trustee  of
 Hallmark Trust I, any holder of any  2005 Debenture or any other Person,  or
 their  respective  Affiliates,  related  to  the  subject  matter  of   such
 agreements not contained in the documents attached as Exhibit N.

     8.22 Subordination;  2005 Documents.  The  principal and interest on the
 2005 Debentures and all obligations of Borrower and each of its Subsidiaries
 in respect of and  under the 2005 Debentures,  the 2005 Indenture, the  2005
 Preferred Securities, the Hallmark Trust I Declaration of Trust and the 2005
 Guaranty are subordinate  in all  respects to all  of the  Obligations.   No
 redemption, purchase, Dividend, payment,  distribution or other transfer  of
 property shall be made to or for the benefit of any holder of or in  respect
 of any equity security or Debt of Hallmark Trust I, the 2005 Debentures, the
 2005  Indenture,  the  2005  Preferred  Securities,  the  Hallmark  Trust  I
 Declaration of Trust or the 2005 Guaranty other than, if a Default or  Event
 of Default does not exist prior or after giving effect thereto, payments  of
 regularly scheduled cash interest payments in respect of the 2005 Debentures
 by Borrower and payments  of regularly scheduled  cash interest payments  in
 respect of 2005 Preferred  Securities by Hallmark Trust  I.  No  obligations
 under any 2005 Document benefits from any collateral (including any  sinking
 fund or similar deposit  arrangement) or guaranty  (except, with respect  to
 the 2005 Preferred Securities, only, the 2005 Guaranty).

     8.23   Survival   of   Representations   and   Warranties,   Etc.    All
 representations and warranties made under this Agreement and the other  Loan
 Documents shall be deemed to be made at and as of the Agreement Date and  at
 and as of the date of the making of each Loan and each L/C Credit Extension,
 and   each  shall  be  true  and  correct  in  all  material  respects  when
 made,  except  to  the  extent  applicable  to  a  specific date.  All  such
 representations and  warranties shall  survive, and  not be  waived  by, the
 execution hereof by Lender any investigation or inquiry by Lender or by  the
 making of any Loan or L/C Credit Extension under this Agreement.

                                 ARTICLE IX

                              EVENTS OF DEFAULT

     9.1  Default.   The term "Event  of Default"  as used  herein, means the
 occurrence and  continuance of  any  one or  more  of the  following  events
 (including the passage of time, if any, specified therefor):

           (a) Loans.   The failure or refusal of Borrower to pay any part of
 the principal of or interest  on any Loan or  of Borrower or the  applicable
 RIC to pay any part of any Unreimbursed  Amounts on or before the date  such
 payment is due;

           (b) Other Obligations.   The failure or refusal of Borrower to pay
 any part of the Obligations or a RIC to pay any part of the L/C  Obligations
 related to a Letter of Credit issued for the account of such RIC (other than
 as referenced in Section 9.1(a)) on or  before the date such payment is  due
 and such failure shall continue for five days after such payment was due;

           (c) Certain  Covenants.   The  failure or  refusal of  any Obligor
 punctually and properly to  perform, observe and  comply with any  covenant,
 agreement or condition contained in Article III, Article VII,  Sections 6.2,
 6.3 or 6.6;

           (d) Other  Covenants.    The failure  or  refusal  of  any Obligor
 punctually and properly to  perform, observe and  comply with any  covenant,
 agreement or condition contained  in any of the  Loan Documents (other  than
 covenants to pay the Obligations referenced  in Sections 9.1(a) and (b)  and
 those referenced in  Section 9.1(c)) and such  failure shall  not have  been
 remedied within ten days after the  earlier  of (i) notice thereof by Lender
 (which  may  be telephonic)  and  (ii) actual knowledge thereof  by any such
 Obligor;

           (e) Voluntary   Debtor  Relief.    Any   Obligor  or  any  of  its
 Subsidiaries shall (i) execute an assignment  for the benefit of  creditors,
 or (ii) admit in writing its inability,  or be generally unable, to pay  its
 debts generally as they become due, or (iii) voluntarily seek the benefit or
 benefits of any Debtor Relief Law, or (iv) voluntarily become a party to any
 proceeding provided  for by  any Debtor  Relief Law  that would  suspend  or
 otherwise affect any of the rights of Lender granted in the Loan Documents;

           (f) Involuntary   Proceedings.    Any   Obligor  or   any  of  its
 Subsidiaries  shall  involuntarily  (i)  have  an order,  judgment or decree
 entered against it or a material portion of its property by any Governmental
 Authority pursuant to  any Debtor Relief Law that would suspend or otherwise
 affect any of the rights granted to Lender in any  of the Loan Documents, or
 (ii) have a petition  filed against it or a material portion of its property
 seeking the benefit or benefits provided for by any  Debtor Relief  Law that
 would suspend or otherwise affect any of the rights granted to Lender in any
 of the  Loan Documents;

           (g) Insurance   Regulator.     Any  Insurance   Regulator  of  any
 jurisdiction suspends or takes any steps towards suspending the business  or
 operations of any  Obligor or  any of its  Subsidiaries and  any such  event
 could reasonably be expected to result in a Material Adverse Change;

           (h) Internal Control  Event; Securities Laws.  An Internal Control
 Event shall occur or any Governmental Authority shall allege a violation  or
 commence any action based on an alleged violation of any Securities Laws  by
 Borrower, any  employee,  officer  or director  of  Borrower  or  Borrower's
 auditor (with respect to actions of such auditor in its capacity as  auditor
 for Borrower) and any such event could reasonably be expected to result in a
 Material Adverse Change;

           (i) Judgments.   Any Obligor or any of its Subsidiaries shall have
 rendered against it  a money judgment  in an aggregate  uninsured amount  in
 excess of  $500,000 for  which such  Person has  not set  aside  appropriate
 reserves, and the same shall remain in  effect and unstayed for a period  of
 sixty consecutive days (provided, no Default or Event of Default shall exist
 if a money judgment in an  aggregate uninsured amount in excess of  $500,000
 is rendered against any Obligor or  any of its Subsidiaries with respect  to
 any Litigation described on  Schedule 8.4 if, not  later than five  Business
 Days after  the  entry of  such  judgment,  such Obligor  or  Subsidiary  is
 released from all liability with respect  to all of the uninsured amount  of
 such judgment and Borrower  delivers to Lender evidence  of such release  in
 form and substance satisfactory to Lender);

           (j) Other  Debt.  (i) Any Obligor or any of its Subsidiaries shall
 default  (A) in the  payment of  principal of  or interest on any Debt in an
 aggregate amount, together with all other Debt in which a default exists, in
 excess of $500,000, or (B) in the performance  of any other  covenant,  term
 or condition contained in any agreement  with respect to such Debt  (if such
 default shall occur and be continuing  beyond  any grace period with respect
 to  such  payment  or  performance),  if  the effect of such default  is  to
 cause  or permit the holder or holders of such Debt (or any trustee on their
 behalf)  to cause such  Debt to  become due,  prepaid, redeemed or purchased
 prior to its date of maturity;  or  (ii)  any event shall occur which either
 causes  or  permits  the holder  or  holders  of  such Debt  (or any trustee
 on  their  behalf)  to  cause such Debt to become due, prepaid, redeemed  or
 purchased prior to its date of maturity;

           (k) Misrepresentation.   Any statement, representation or warranty
 in the Loan Documents or in any writing ever delivered to Lender, Lender  or
 any Lender pursuant  to the  Loan Documents proves  to be  incorrect in  any
 material respect when made;

           (l) ERISA.     Any  Reportable  Event   under  any  Plan,  or  the
 appointment by  an  appropriate  Governmental  Authority  of  a  trustee  to
 administer any Plan, or  the termination of any  Plan within the meaning  of
 Title IV of ERISA, or any material accumulated funding deficiency within the
 meaning of ERISA under  any Plan, or the  institution of proceedings by  the
 PBGC to terminate any Plan or to  appoint a trustee to administer any  Plan,
 and any of such events could reasonably be expected to result in a  Material
 Adverse Change;

           (m) Loan Documents.  Any Loan Document shall at any time after its
 execution and delivery and  for any reason,  cease to be  in full force  and
 effect in or be declared to be null and void (other than in accordance  with
 the terms hereof or  thereof) or the validity  or enforceability thereof  be
 contested by any  Person party  thereto (other  than Lender)  or any  Person
 (other than Lender) shall deny in writing  that it has any liability or  any
 further liability or obligations  under any Loan Document  to which it is  a
 party; or any Security Document shall for any reason (other than pursuant to
 the terms thereof) cease to create a valid and perfected first priority Lien
 (other than Permitted Liens) in any Collateral; or

           (n) 2005  Documents.  Any Person who is  a holder of, or claims to
 act for  the benefit  of any  holder  of, any  equity  security or  Debt  of
 Hallmark Trust I, any 2005 Debenture, any 2005 Preferred Security, the  2005
 Guaranty, or any other 2005 Document shall assert that any obligation  under
 any 2005 Document is not subordinate in any respect to the Obligations;  any
 payment or transfer of property shall be made under any 2005 Document (other
 than payment of  regularly scheduled  cash interest  payments in  accordance
 with the 2005 Debentures and 2005  Preferred Securities (as such  agreements
 existed on June 21, 2005) if no Default or Event of Default exists prior  to
 or after giving  effect to such  payment); a default  shall occur under  any
 2005 Document;  or the  2005 Indenture,  2005 Debentures  or 2005  Preferred
 Securities shall benefit from any collateral (including any sinking fund  or
 similar deposit arrangement) or guarantee (except, with respect to the  2005
 Preferred Securities, only, the 2005 Guaranty).

     9.2  Remedies.  If an Event of Default exists:

           (a) With  the  exception  of  an  Event  of  Default  specified in
 Section 9.1(e) or (f),  Lender may terminate  each or all  of the  Revolving
 Commitment, the Term Commitment  and the L/C  Commitment and/or declare  the
 principal of and  interest on the  Loans and Obligations  and other  amounts
 owed under  the Loan  Documents  to be  forthwith  due and  payable  without
 presentment, demand, protest or notice of any kind, all of which are  hereby
 expressly  waived,  anything   in  the  Loan   Documents  to  the   contrary
 notwithstanding.

           (b) Upon  the  occurrence  of an  Event  of  Default  specified in
 Section 9.1(e) or  (f), the  principal  of and  interest  on the  Loans  and
 Obligations and other amounts and under  the Loan Documents shall  thereupon
 and  concurrently  therewith  become  due  and  payable  and  the  Revolving
 Commitment, Term Commitment  and L/C Commitment  shall forthwith  terminate,
 all without any action  by Lender or  any holders of  the Notes and  without
 presentment, demand, protest or other notice  of any kind, all of which  are
 expressly  waived,  anything   in  the  Loan   Documents  to  the   contrary
 notwithstanding.

           (c) Lender may  exercise all of the post-default rights granted to
 it under the Loan Documents or under Law.

           (d) Lender  may require that Borrower  and the applicable RIC Cash
 Collateralize all L/C Obligations.

           (e) The   rights  and  remedies  of   Lender  hereunder  shall  be
 cumulative and not exclusive.

     9.3  Application  of Funds.  After the  exercise of remedies provided  for
 in Section 9.2 (or after the Loans and other Obligations have  automatically
 become immediately due and payable), any amounts received on account of  the
 Obligations shall be applied by Lender in the following order:

           (a) First,   to  payment  of  that   portion  of  the  Obligations
 constituting  fees,  indemnities,  expenses  and  other  amounts  (including
 Attorney  Costs  payable  under  Section 10.2  and  amounts  payable   under
 Article IV) payable under the Loan Documents to Lender;

           (b) Second,  to   payment  of  that  portion  of  the  Obligations
 constituting accrued and unpaid interest on the Loans;

           (c) Third,   to  payment  of  that   portion  of  the  Obligations
 constituting unpaid principal of the Loans in such order as Lender elects in
 its discretion;

           (d) Fourth, to Cash Collateralize the L/C Obligations;

           (e) Fifth, to all other Obligations; and

           (f) Last,  to the  balance, if any,  after all  of the Obligations
 have been indefeasibly paid in full, to Borrower or as otherwise required by
 Law;

      Subject to  Article III,  amounts used  to Cash  Collateralize the  L/C
 Obligations pursuant  to clause  Fourth above  shall be  applied to  satisfy
 drawings under such Letters of Credit as they occur.  If any amount  remains
 on deposit as Cash Collateral after  all Letters of Credit have either  been
 fully drawn or expired, such remaining amount (to the extent such amount was
 paid by Borrower) shall be applied to the other Obligations, if any, in  the
 order set forth above.

                                  ARTICLE X

                                MISCELLANEOUS

     10.1 Notices.

           (a) All  notices  and  other communications  under  this Agreement
 (except in  those  cases  where giving  notice  by  telephone  is  expressly
 permitted) shall be in writing and shall be deemed to have been given on the
 date personally  delivered or  sent by  telecopy (answerback  received),  or
 three days after deposit in the  mail, designated as certified mail,  return
 receipt requested, postage-prepaid, or  one day after  being entrusted to  a
 reputable commercial overnight delivery service,  addressed to the party  to
 which such notice is directed at its address determined as provided in  this
 Section.  All notices and other communications under this Agreement shall be
 given if to Borrower or any RIC, at the address specified on  Schedule 10.1,
 and if to Lender, at the address specified on Schedule 10.1.

           (b) Any party hereto may change the address to which notices shall
 be directed by giving ten days' written  notice of such change to the  other
 parties.

     10.2 Expenses.  Borrower shall promptly pay:

           (a) all  reasonable out-of-pocket expenses and reasonable Attorney
 Costs of Lender in connection  with the preparation, negotiation,  execution
 and  delivery  of  this  Agreement  and   the  other  Loan  Documents,   the
 transactions contemplated hereunder and thereunder, the making of the  Loans
 and L/C  Credit  Extensions  hereunder, and  the  preparation,  negotiation,
 execution and  delivery  of  any waiver,  amendment  or  consent  by  Lender
 relating to this Agreement or the other Loan Documents; and

           (b) all costs, out-of-pocket expenses and Attorney Costs of Lender
 incurred for enforcement, collection, restructuring, refinancing and  "work-
 out",  or  otherwise  incurred  in  obtaining  performance  under  the  Loan
 Documents, and all costs and out-of-pocket expenses of collection if default
 is made in the payment of the Notes or other Obligations which in each  case
 shall include without limitation fees  and expenses of consultants,  counsel
 for Lender, and administrative fees for Lender.

     10.3 Waivers. The rights and remedies of Lender under this Agreement and
 the other Loan Documents shall be cumulative and not exclusive of any rights
 or remedies which it would otherwise have.  No failure or delay by Lender in
 exercising any right shall operate as a waiver of such right.  Any waiver or
 indulgence granted by Lender shall not constitute a modification of any Loan
 Document, except to the extent expressly provided in such written waiver  or
 indulgence, or constitute a course of dealing by Lender at variance with the
 terms of any Loan Document  such as to require  further notice by Lender  of
 Lender's intent  to require  strict  adherence to  the  terms of  such  Loan
 Document in the future.  Any  such actions shall not  in any way affect  the
 ability of Lender, in its discretion, to exercise any rights available to it
 under this Agreement, any other Loan Document or under any other  agreement,
 whether or  not  Lender  is  a party  thereto,  relating  to  Borrower,  its
 Subsidiaries or other Obligors.

     10.4 Determinations by Lender.   Any material  determination required or
 expressly permitted to be made by Lender under this Agreement shall be  made
 in its reasonable judgment  and in good faith,  and shall when made,  absent
 manifest error, constitute prima facie evidence as to the accuracy thereof.

     10.5 Set-Off.  In addition to any rights  now or hereafter granted under
 Law and not by way of limitation of any such rights, during the existence of
 an Event of Default, Lender and any  subsequent holder of any Note or  other
 Obligations, and any Assignee or Participant in any Note or other Obligation
 is hereby authorized by Borrower at any  time or from time to time,  without
 notice to  Borrower  or any  other  Person,  any such  notice  being  hereby
 expressly waived, to set-off, appropriate and apply any deposits (general or
 special (except  trust  and  escrow accounts),  time  or  demand,  including
 without limitation Debt evidenced by certificates  of deposit, in each  case
 whether matured or unmatured) and any other  Debt at any time held or  owing
 by Lender or such holder,  Assignee or Participant to  or for the credit  or
 the account of Borrower, against and on account of the Obligations and other
 liabilities of Borrower to Lender or  such holder, Assignee or  Participant,
 irrespective of whether  or  not  (a) Lender or  such  holder,  Assignee  or
 Participant  shall have  made any demand hereunder or required that Borrower
 or any RIC Cash Collateralize any L/C Obligations,  or  (b)  Lender  or such
 holder,  Assignee  or  Participant shall have declared the principal  of and
 interest  on any  Loan and other amounts due hereunder to be due and payable
 as permitted by Section 9.2 and although such obligations  and  liabilities,
 or  any of them,  shall be contingent  or  unmatured.  Any sums  obtained by
 Lender  or  any  Assignee, Participant or subsequent holder  of any Note  or
 other Obligation shall be subject to pro rata treatment of  the  Obligations
 and other liabilities hereunder.

     10.6 Assignment.

           (a) None of  Borrower, any RIC nor any other Obligor may assign or
 transfer any of its rights or obligations hereunder or under the other  Loan
 Documents without the prior written consent of Lender.

           (b) Lender may  at any time sell participations in all or any part
 in any Commitment and/or the  Loans (collectively, "Participations") to  any
 banks or other  financial institutions ("Participants")  provided that  such
 Participation shall not confer on any Person (other than the parties hereto)
 any right to vote on,  approve or sign amendments  or waivers, or any  other
 independent benefit or any legal or  equitable right, remedy or other  claim
 under this Agreement or  any other Loan Documents,  other than the right  to
 vote on, approve, or sign amendments or waivers or consents with respect  to
 items that would result in  (i)(A)  the  extension  of  the date of maturity
 of  the  Loans,  or  (B)  the  extension  of the due date for any payment of
 principal, interest or fees respecting the Loans,  or  (C)  the reduction of
 the amount  of any installment of  principal or interest on or the change or
 reduction  of any mandatory reduction required hereunder, or (D) a reduction
 of the rate of interest on the Loans;  or  (ii) the release of  security for
 the  Obligations  (except pursuant  to this Agreement).  Notwithstanding the
 foregoing, Borrower and each RIC agree that Participants  shall  be entitled
 to the benefits of Article IX and Section 10.5 as  though they  were Lender.
 To  the fullest  extent it may effectively do so under Law, Borrower  agrees
 that  any  Participant  may  exercise  any  and all rights of banker's lien,
 set-off and counterclaim  with  respect  to its Participation as fully as if
 such Participant were the holder  of the Loans and participation in the  L/C
 Obligations in the amount of its Participation.

           (c) Lender  may assign  to one  or more  financial institutions or
 funds organized under the Laws of  the United States, or any state  thereof,
 or under the Laws of any other country that is a member of the  Organization
 for Economic Cooperation and Development, or a political subdivision of  any
 such country, which is engaged in making, purchasing or otherwise  investing
 in commercial  loans  in the  ordinary  course  of its  business  (each,  an
 "Assignee") its rights and  obligations under this  Agreement and the  other
 Loan Documents.

           (d) Except as specifically set forth in this Section 10.6, nothing
 in this Agreement  or any  other Loan  Documents, expressed  or implied,  is
 intended to or shall confer on any Person other than the respective  parties
 hereto and thereto  and their successors  and assignees permitted  hereunder
 and thereunder any benefit or any legal or equitable right, remedy or  other
 claim under this Agreement or any other Loan Documents.

           (e) Notwithstanding anything in this Section 10.6 to the contrary,
 no Assignee or Participant shall be entitled to receive any greater  payment
 under Article IV  than  Lender would  have  been entitled  to  receive  with
 respect to  the  interest  assigned or  participated  to  such  Assignee  or
 Participant.

     10.7 Amendment and Waiver.  The provisions of  this Agreement may not be
 amended, modified or waived except by the written agreement of Borrower  and
 Lender; provided, however,  that no such  amendment, modification or  waiver
 shall be made without the consent of any  RIC if it would alter the  rights,
 duties or obligations of such RIC or amend, modify or waive any provision of
 any L/C Agreement to which such RIC is a party.  Neither this Agreement  nor
 any term  hereof may  be amended  orally, nor  may any  provision hereof  be
 waived orally but only by an  instrument in writing the parties required  by
 this Section 10.7.

     10.8 Confidentiality.   Lender agrees to maintain the confidentiality of
 the  Information,  except that  Information  may  be  disclosed  (a)  to its
 and its  Affiliates'  directors,  officers, employees  and agents, including
 accountants, legal counsel and other advisors (it being understood that  the
 Persons to whom such disclosure is made will be informed of the confidential
 nature  of  such  Information  and  instructed  to  keep  such   Information
 confidential), (b) to  the extent  requested by  any Governmental  Authority
 (including any  self-regulatory authority,  such as  the NAIC),  (c) to  the
 extent required by Laws or by any subpoena or similar legal process,  (d) in
 connection with the exercise  of any remedies hereunder  or under any  other
 Loan Document or any action or proceeding relating to this Agreement or  any
 other Loan Document or  the enforcement of  rights hereunder or  thereunder,
 (e) subject to an agreement containing provisions substantially the same  as
 those of  this  Section,  to any  Assignee  of  or Participant  in,  or  any
 prospective Assignee of or Participant in, any of its rights or  obligations
 under this Agreement, (f) with the written consent of Borrower or (g) to the
 extent such  Information  (i) becomes publicly  available  other than  as  a
 result  of  a  breach  of  this  Section or (ii) becomes available to Lender
 on  a  nonconfidential basis from  a  source other  than  Borrower,  any  of
 its Subsidiaries  or any  other  Obligor.  For  purposes  of  this  Section,
 "Information" means  all  information  received  from  Borrower,  any  other
 Obligor or any  Subsidiary relating to  Borrower, any other  Obligor or  any
 Subsidiary or  any  of their  respective  businesses, other  than  any  such
 information that is available to Lender on a nonconfidential basis prior  to
 disclosure by Borrower, any other Obligor or any Subsidiary, provided  that,
 in the case of  information received from a  Borrower, any other Obligor  or
 any Subsidiary after the date hereof, such information is clearly identified
 at the time of  delivery as confidential.   Any Person required to  maintain
 the confidentiality  of Information  as provided  in this  Section shall  be
 considered to have complied with its obligation to do so if such Person  has
 exercised the same degree  of care to maintain  the confidentiality of  such
 Information as such Person would accord to its own confidential information.

     10.9 Counterparts.    This Agreement  may be  executed  in any number of
 counterparts, including via facsimile, each of  which shall be deemed to  be
 an original, but  all such separate  counterparts shall together  constitute
 but one and the same instrument.

     10.10 Severability.   Any provision of this  Agreement which  is for any
 reason  prohibited  or  found  or  held  invalid  or  unenforceable  by  any
 Governmental  Authority  shall  be  ineffective   to  the  extent  of   such
 prohibition or  invalidity  or  unenforceability  without  invalidating  the
 remaining provisions hereof in such  jurisdiction or affecting the  validity
 or enforceability of such provision in any other jurisdiction.

     10.11 Interest and Charges.  It  is not the intention  of any parties to
 this Agreement  to  make  an agreement  in  violation  of the  Laws  of  any
 applicable jurisdiction relating to usury.   Regardless of any provision  in
 any Loan Document,  Lender shall never  be entitled to  receive, collect  or
 apply, as interest on the Obligations,  any amount in excess of the  Maximum
 Amount.  If Lender ever receives, collects or applies, as interest, any such
 excess, such amount  which would  be excessive  interest shall  be deemed  a
 partial repayment of principal by Borrower.   In determining whether or  not
 the interest paid or  payable, under any  specific contingency, exceeds  the
 Maximum Amount, Borrower, each RIC and  Lender shall, to the maximum  extent
 permitted under Applicable Law, (a) characterize any nonprincipal payment as
 an expense, fee or  premium rather than  as interest, (b) exclude  voluntary
 prepayments and the effect thereof, and (c) amortize, prorate, allocate  and
 spread in equal parts,  the total amount of  interest throughout the  entire
 contemplated term of the  Obligations so that the  interest rate is  uniform
 throughout the entire term  of the Obligations;  provided, however, that  if
 the Obligations are paid and performed in full prior to the end of the  full
 contemplated term  thereof, and  if the  interest  received for  the  actual
 period of existence thereof exceeds the Maximum Amount, Lender shall  refund
 to Borrower or  the applicable  RIC, as  appropriate, or  such other  Person
 legally entitled thereto the amount of  such excess or credit the amount  of
 such excess against  the total principal  amount of  the Obligations  owing,
 and, in such event, Lender shall not be subject to any penalties provided by
 any Laws for contracting  for, charging or receiving  interest in excess  of
 the Maximum Amount.  This Section shall control every other provision of all
 agreements pertaining to  the transactions contemplated  by or contained  in
 the Loan Documents.   The  provisions of  this Section  10.11 applicable  to
 Lender  are  equally  applicable  to  each  Participant,  Assignee  and  any
 subsequent holder.

     10.12 Exception to Covenants. No Obligor shall be deemed to be permitted
 to take any  action or  fail to take  any action  which is  permitted as  an
 exception to any of  the covenants contained herein  or which is within  the
 permissible limits of any of the  covenants contained herein if such  action
 or omission  would result  in the  breach of  any other  covenant  contained
 herein.

     10.13 USA Patriot Act Notice.  Lender  hereby notifies Borrower and each
 RIC that pursuant to the requirements  of the USA Patriot Act (Title III  of
 Pub.L. 107-56 (signed into  law October 26,  2001)) (the  "Act"), Lender  is
 required to obtain, verify and  record information that identifies  Borrower
 and each RIC, which  information includes the name  and address of  Borrower
 and each  RIC and  other  information that  will  allow Lender  to  identify
 Borrower and each RIC in accordance with the Act.

     10.14 GOVERNING  LAW.  THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL
 BE CONSTRUED IN ACCORDANCE  WITH AND GOVERNED  BY THE LAWS  OF THE STATE  OF
 TEXAS; PROVIDED, HOWEVER, IT IS AGREED THAT THE PROVISIONS OF CHAPTER 346 OF
 THE TEXAS FINANCE CODE SHALL NOT APPLY TO THE LOANS, THIS AGREEMENT AND  THE
 OTHER LOAN DOCUMENTS.   THE LOAN DOCUMENTS ARE  PERFORMABLE IN SAN  ANTONIO,
 BEXAR COUNTY, TEXAS, AND BORROWER, EACH RIC AND LENDER WAIVE THE RIGHT TO BE
 SUED ELSEWHERE.   BORROWER, EACH  RIC AND LENDER  AGREE THAT  THE STATE  AND
 FEDERAL  COURTS  OF  TEXAS  LOCATED  IN   SAN  ANTONIO,  TEXAS  SHALL   HAVE
 JURISDICTION OVER  PROCEEDINGS IN  CONNECTION WITH  THIS AGREEMENT  AND  THE
 OTHER LOAN DOCUMENTS.

     10.15 WAIVER OF JURY TRIAL. EACH OF BORROWER, EACH RIC AND LENDER HEREBY
 KNOWINGLY VOLUNTARILY, IRREVOCABLY AND  INTENTIONALLY WAIVE, TO THE  MAXIMUM
 EXTENT PERMITTED  BY  LAW,  ALL  RIGHT  TO TRIAL  BY  JURY  IN  ANY  ACTION,
 PROCEEDING OR CLAIM ARISING OUT OF OR  RELATED TO ANY OF THE LOAN  DOCUMENTS
 OR THE  TRANSACTIONS CONTEMPLATED  THEREBY.   THIS PROVISION  IS A  MATERIAL
 INDUCEMENT TO LENDER ENTERING INTO THIS  AGREEMENT AND MAKING ANY LOANS  AND
 ISSUING ANY LETTERS OF CREDIT HEREUNDER.

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



      THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK.


      IN WITNESS WHEREOF, this Agreement is executed as of the date first set
 forth above.

 BORROWER:                     HALLMARK FINANCIAL SERVICES, INC.

                               By: ________________________________________
                               Print Name:  _______________________________
                               Print Title: _______________________________


 RIC:                          AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS

                               By: ________________________________________
                               Print Name:  _______________________________
                               Print Title: _______________________________


                               PHOENIX INDEMNITY INSURANCE COMPANY

                               By: ________________________________________
                               Print Name:  _______________________________
                               Print Title: _______________________________


 LENDER:                       THE FROST NATIONAL BANK

                               By: ________________________________________
                               Print Name:  _______________________________
                               Print Title: _______________________________