Exhibit 3(b)

                         AMENDED AND RESTATED BYLAWS
                                      OF
                      HALLMARK FINANCIAL SERVICES, INC.

                                  ARTICLE 1.

                                   OFFICES

      Section 1.  Principal Office.  The principal  office of the Corporation
 shall be in Dallas, Texas, or at such other place as the Board of  Directors
 by resolution  may  from  time to  time  determine.  The  Corporation  shall
 maintain a resident agent in Nevada.

      Section 2.  Other  Offices.  The Corporation may also have  offices  at
 such other places both in and  outside the State  of Nevada as the Board  of
 Directors may from time to time determine or the business of the Corporation
 may require.

                                 ARTICLE II.

                                SHAREHOLDERS

      Section 1.     Place  of   Shareholder   Meetings.  Meetings   of   the
 Corporation's shareholders, both annual and special,  shall be held at  such
 place, in or outside the State of Nevada, as determined by resolution of the
 Board of Directors.

      Section 2.     Annual Meetings.  Annual meetings  of the  Corporation's
 shareholders shall ordinarily be held at  10:00 a.m. on the third Monday  of
 May of each year,  if not a legal  holiday, and it a  legal holiday, on  the
 next business day.  At each annual  meeting the shareholders  shall elect  a
 Board of  Directors and  transact such  other business  as may  properly  be
 brought before the meeting. Any annual shareholders meeting may be held on a
 date different than that specified if  the Board of Directors so  determines
 and so states in the notice of the meeting.

      Section 3.     Special Meetings. Special  meetings of the  shareholders
 may be called at any time  by the President or  the Board of Directors,  and
 shall be called by the President or the Secretary at the request in  writing
 of the  holders  of  not less  than  10%  of the  Corporation's  issued  and
 outstanding shares which are entitled to  vote at the meeting. Such  request
 shall state  the purposes  of the  meeting, and  business conducted  at  the
 meeting shall be confined to the purposes stated in the notice.

      Section 4.     Notice. Written or printed notice stating the place, day
 and hour of any shareholders meeting and, in the case of a special  meeting,
 the purpose or purposes for which the meeting is called, shall be  delivered
 not less than  10 nor  more than 60  days before  the date  of the  meeting,
 either personally or by mail, by or  at the direction of the President,  the
 Secretary or the officer or person calling the meeting, to each  shareholder
 of record entitled  to vote at  the meeting. If  mailed, a  notice shall  be
 deemed to be  delivered when deposited  in the United  States mail,  postage
 prepaid, addressed to  the shareholder at  the shareholder's  address as  it
 appears on the stock transfer books of the Corporation.

      Section 5.     Record Date. For the purpose of determining shareholders
 entitled to notice of or to vote at any meeting of shareholders, or entitled
 to receive payment of any dividend or,  except as provided in Section 11  of
 this Article, in order to make a determination of shareholders for any other
 proper purpose, the  Board of Directors  may fix in  advance a  date as  the
 record date for any such determination. Such  date in any case shall not  be
 more than 60 days and, in case of  a meeting of shareholders, not less  than
 10 days prior  to the  date on which  the particular  action requiring  such
 determination is made. The stock transfer books of the Corporation shall not
 be closed for the  purpose of making a  determination of shareholders  under
 this Section. For purposes of determining the shareholders entitled to  vote
 or to receive a dividend, if no  record date is fixed for the  determination
 of shareholders, the date on which the  notice of the meeting is mailed,  or
 the  date  on  which  the  resolution  declaring a dividend  is  adopted, as
 the case may be,  shall  be the  record  date  for  such  determination   of
 shareholders. When a determination of shareholders  entitled to vote at  any
 meeting has been made as provided herein, such determination shall apply  to
 any adjournment thereof.

      Section 6.     List of  Shareholders.  The  officer  or  agent  of  the
 Corporation having charge of its stock  transfer books shall make, at  least
 10 days before  each meeting  of the shareholders,  a complete  list of  the
 shareholders entitled  to  vote at  the  meeting, arranged  in  alphabetical
 order, with the address of and the number  of shares held by each. The  list
 shall be kept on  file at the  registered office of  the Corporation for  10
 days prior  to  the meeting,  and  shall be  subject  to inspection  by  any
 shareholder at any time during usual business hours. The list shall also  be
 produced and kept open at the meeting  and shall be prima facie evidence  as
 to the identity of the shareholders entitled to examine the list or transfer
 books or to vote at the meeting.

      Section 7.     Quorum. The  holders of  one-third (1/3)  of the  shares
 entitled to vote at  a meeting, present in  person or represented by  proxy,
 shall constitute a quorum  at all meetings of  shareholders. If a quorum  is
 not present  or represented  at any  meeting,  the shareholders  present  in
 person or represented by proxy, shall have power to adjourn the meeting from
 time to time, without notice other than announcement at the meeting, until a
 quorum is present or represented. When  a quorum is present or  represented,
 any business  may be  transacted  that might  have  been transacted  at  the
 meeting  as  originally  notified.  Once   a  quorum  is  constituted,   the
 shareholders present  or  represented  by proxy  at  a  meeting may continue
 to transact  business  until  adjournment,  notwithstanding  the  subsequent
 withdrawal of such number of shareholders as to leave less than a quorum.

      Section 8.     Voting.  Except  for  the  election  of  directors,  the
 affirmative vote  of the  holders of  a majority  of the  shares present  or
 represented at a meeting and entitled to vote on, and actually voted for  or
 against, any  matter at  a meeting  or any  adjournment thereof  at which  a
 quorum is present shall  be the act of  the shareholders unless a  different
 vote is required  by these Bylaws,  the Articles of  Incorporation (as  from
 time to time  amended) or  Chapter 78 of  the Nevada  Revised Statutes  (the
 'NRS") or other law. Directors shall be elected by a plurality of the  votes
 cast by the holders of shares entitled to vote in the election of  directors
 at a meeting of shareholders or any adjournment thereof at which a quorum is
 present.

      Each shareholder shall be  entitled to one vote  in person or by  proxy
 for each share  held by  such shareholder.  At each  election for  directors
 every shareholder shall  be entitled  to vote, in  person or  by proxy,  the
 number of shares held by  the shareholder for as  many persons as there  are
 directors to be elected.

      Every proxy must be  executed in writing by  the shareholder or by  his
 duly  authorized  attorney-infact  and  filed  with  the  Secretary  of  the
 Corporation before or at the  time of the meeting.  No proxy shall be  valid
 after six  months from  the date  of its  execution unless  coupled with  an
 interest, or unless the person executing it specifies therein the length  of
 time for which  it is to  continue in force.  In no event  shall a proxy  be
 valid for more than seven years from  the date of its execution. Each  proxy
 shall be revocable unless it expressly  provides to be irrevocable or it  is
 otherwise made  irrevocable  by  law.  A proxy  may  be  revoked  either  by
 delivering to the Secretary of the Corporation an instrument revoking it, or
 by filing  with the  Secretary  of the  Corporation  a duly  executed  proxy
 bearing a later date.

      Shares of its own stock belonging to the Corporation or held by it in a
 fiduciary capacity  shall  not be  voted,  directly or  indirectly,  at  any
 meeting, and  shall  not be  counted  in  determining the  total  number  of
 outstanding shares at any given time.

      Section 9.     Presence  at   Meetings  by   Means  of   Communications
 Equipment. Subject  to  the  requirements of  Section  4  of  this  Article,
 shareholders may participate in and hold a meeting of shareholders by  means
 of conference  telephone or  similar communications  equipment by  means  of
 which  all  persons  participating  in  the  meeting  can  hear  each  other
 simultaneously. Participation in  a meeting  held pursuant  to this  section
 shall constitute presence in person at  such meeting, except where a  person
 participates for the express purpose of objecting to the transaction of  any
 business on the ground that the meeting is not lawfully called or convened.

      Section 10.    Action by Consent. Any  action required or permitted  to
 be taken at a meeting  of the shareholders may  be taken without a  meeting,
 without prior  notice  and  without a  vote  if  a consent  in  writing  (or
 counterpart copies of the same consent), setting forth the action so  taken,
 is signed  by shareholders  entitled to  vote with  respect to  the  subject
 matter thereof. A  shareholder consent will  be effective if  signed by  the
 holders of shares having not less than the minimum number of votes necessary
 to take such action at a meeting at which the holders of all shares entitled
 to vote on the action were present and voted.

      Section 11.    Record Dates for Consents. Unless a record date has been
 previously fixed pursuant to Section 5 of this Article, whenever shareholder
 action is proposed to be taken by consent, the Board of Directors may fix  a
 record date for determining shareholders entitled to consent to the proposed
 action, which shall not precede and shall not be more than 10 days after the
 date the Board adopts  the resolution fixing the  record date. If the  Board
 does not fix a  record date and prior  Board action is  not required by  the
 NRS, the record date for determining shareholders entitled to consent  shall
 be the first date  on which a  signed consent with  respect to the  proposed
 action is delivered by hand or certified mail, return receipt requested,  to
 the Corporation at  its principal  place of  business and  addressed to  the
 attention of its  President. Hand delivery  will include  transmission to  a
 telex or telephone facsimile terminal located in the Corporation's principal
 off ice. If the Board does not fix a  record date and prior Board action  on
 the subject matter of the  consent is required by  the NRS, the record  date
 for determining  shareholders entitled  to consent  shall  be the  close  of
 business on  the date  the Board  adopts a  resolution taking  the  required
 action.

      Section 12.    Formal  Requirements  for  Consents.  Every  shareholder
 consent shall show the date on  which each signatory shareholder signed  the
 consent. No consent shall be effective unless, within 60 days after the date
 of the  earliest consent  which is  delivered to  the Corporation,  consents
 signed by the holders  of the minimum number  of shares required to  approve
 the action in accordance with Section 1 of this Article are delivered to the
 Corporation. To be effective,  a consent delivered  in accordance with  this
 Section must be delivered by hand or by certified or registered mail, return
 receipt requested, to the Corporation at its principal place of business and
 addressed to the attention of its President. If now or at anytime  permitted
 by Nevada  law,  hand delivery  will  include  transmission to  a  telex  or
 telephone facsimile terminal located in the Corporation's principal office.

      Section 13.    Alternative Consent Forms. A telegram, telex,  cablegram
 or similar transmission  by a shareholder,  or a photographic,  photostatic,
 telephone facsimile  or  similar reproduction  of  a document  signed  by  a
 shareholder, shall satisfy the requirements of this Article for a consent to
 be signed and in writing.

      Section 14.    Notification of Action by Consent. Prompt notice of  any
 shareholder action under  this Article  by less  than unanimous  shareholder
 consent shall be given to shareholders who did not consent to the action  in
 writing. Notice  given within  five business  days after  the last  required
 consent is delivered to the Corporation will be regarded as prompt notice.

                                 ARTICLE Ill.

                                  DIRECTORS

      Section 1.     General  Powers.  The  business   and  affairs  of   the
 Corporation shall be managed  by its Board of  Directors (the 'Board').  The
 Board may exercise  all of the  powers of the  Corporation and  do all  such
 lawful acts  and  things  as are  not  by  these By-Laws,  the  Articles  of
 Incorporation, the NRS or other law directed or required to be exercised  or
 done by the shareholders.

      Section 2.     Number of  Directors. The  number  of directors  of  the
 Corporation shall be fixed from time to time by resolution of the Board, but
 in no event shall  the number of directors  be less than  one nor more  than
 fifteen. Until otherwise  fixed by resolution  of the Board,  the number  of
 directors shall be eight. No decrease in the number of directors shall  have
 the effect of reducing the term  of any incumbent director. Directors  shall
 be elected at each annual meeting of shareholders or by shareholder  consent
 in lieu of an annual meeting executed in accordance with Article 11, Section
 10, except as provided in Section 3 of this Article, and each director shall
 hold office  until the  next annual  meeting of  shareholders or  until  his
 successor is elected and qualifies. Directors  need not be residents of  the
 State of Nevada or shareholders of the Corporation.

      Section 3.     Removal. Holders of not less than two-thirds (2/3RDS) of
 the Corporation's issued  and outstanding voting  shares may,  at any  time,
 with or without cause,  remove from office  any or all  of the directors  by
 vote at any  annual or  special meeting  called for  that purpose,  or by  a
 shareholder consent executed in  accordance with Article  11, Section 10.  A
 director's removal  shall be  effective  immediately upon  such  shareholder
 action, even if a successor is not elected simultaneously.

      Section 4.     Vacancies.  Any  vacancy occurring in  the Board may  be
 filled by the  affirmative vote of  a majority of  the remaining  directors,
 even though the remaining directors constitute  less than a quorum as  fixed
 by Section 9 of this Article. A director elected to fill a vacancy shall  be
 elected for the unexpired  term of his predecessor.  Any directorship to  be
 filled by reason  of an  increase in  the number  of directors  may also  be
 tilled by the directors or, at the discretion of the Board, by election at a
 special meeting of shareholders called for that purpose or by a  shareholder
 consent executed in accordance with Article IV.

      Section 5.     Annual Meetings. The first meeting of each newly elected
 Board shall  be  held, without  further  notice, immediately  following  the
 annual meeting of the shareholders at  the same place, unless, by  unanimous
 consent of the  directors then elected  and serving, such  time or place  is
 changed.

      Section 6.     Regular  and  Special  Meetings.  The  Board  may   hold
 meetings, both  regular and  special,  either in  or  outside the  State  of
 Nevada.

      Section 7.     Time and Place of Regular Meetings. Regular meetings  of
 the Board may be held with or without notice  at such time and place as  the
 Board may from time to time determine by resolution.

      Section 8.     Time and Place of Special Meetings. Special meetings  of
 the Board  may be  called by  or at  the  request of  the President  or  the
 Secretary and shall be called by  the President or Secretary at the  written
 request of a  majority of  the incumbent  directors. The  person or  persons
 authorized to call special meetings of the Board may fix the time and  place
 for holding any  special meeting so  called. Notice of  any special  meeting
 shall be given  at least  24 hours in  advance, it  given either  personally
 (including written  notice  delivered  personally  or  by  telephone  or  by
 telefax) and at  least 72 hours  in advance if  given by  mail. Neither  the
 business to be  transacted at, nor  the purpose of,  any regular or  special
 meeting of the Board need be specified in the notice or waiver of notice  of
 the meeting.  If mailed,  a notice  shall  be deemed  to be  delivered  when
 deposited in the United  States mail, postage prepaid.  The attendance of  a
 director at a meeting  shall constitute a waiver  of notice of the  meeting,
 except when  a  director  attends  a meeting  for  the  express  purpose  of
 objecting to the  transaction of  any business  because the  meeting is  not
 lawfully called or convened.

      Section 9.     Quorum and Voting.  At all  meetings of  the Board,  the
 presence of  a simple  majority  of the  directors  shall be  necessary  and
 sufficient to constitute a quorum. The affirmative vote of a majority of the
 directors present at any meeting at which  a quorum is present shall be  the
 act of the Board. If a quorum is not  present at any meeting, a majority  of
 the directors present may adjourn the  meeting without notice other than  an
 announcement at the meeting, until a quorum is present.

      Section 10.    Executive  and  Other  Committees.  The  Board  may,  by
 resolution adopted by a majority of the full Board, designate from among its
 members an Executive Committee and one  or more other committees to  consist
 of one or more directors. Each such committee, to the extent provided in the
 resolution which  creates  it,  shall  have and  may  exercise  all  of  the
 authority of the Board. However, no such committee shall have the  authority
 of the Board in reference to amending the Articles of Incorporation or these
 By-Laws, approving a plan  of merger or  consolidation, recommending to  the
 shareholders the sale, lease, or exchange of all or substantially all of the
 property and assets of the Corporation otherwise than in the ordinary course
 of its business, recommending to the shareholders a voluntary dissolution of
 the Corporation,  filling vacancies  in the  Board  or any  such  committee,
 electing or removing officers or members  of any such committee, fixing  the
 compensation of any member of such  committee, or altering or repealing  any
 resolution of the Board. Unless expressly  provided in the resolution  which
 creates a committee, no such committee shall have the power or authority  to
 declare a dividend  or to  authorize the issuance  of capital  stock of  the
 Corporation. All committees shall keep regular  minutes or records of  their
 proceedings and  report them  to the  Board  when requested.  Delegation  of
 authority to  a committee  shall not  operate to  relieve the  Board or  any
 director of any responsibility imposed by law.

      Section 11.    Compensation of Directors. Directors, in their  capacity
 as directors,  shall  not  receive any  salary  or  compensation  for  their
 services, but the Board may establish a fixed sum for attending meetings and
 may authorize the reimbursement of expenses which directors incur to  attend
 Board meetings.  Members  of  the  Executive  Committee  and  other  special
 committees may, by resolution  of the Board,  be allowed like  reimbursement
 for attending committee meetings. Nothing in this Section shall preclude any
 director from serving the  Corporation in any  other capacity and  receiving
 compensation for that service.

      Section 12.    Action by  Unanimous  Consent. Any  action  required  or
 permitted to be taken at any meeting of the Board or of any committee may be
 taken without a meeting  if a written consent,  setting forth the action  so
 taken, is signed by all the  members of the Board  or the committee, as  the
 case may be. A  written consent shall have  the same force  and effect as  a
 unanimous vote at a meeting.

      Section 13.    Presence  at   Meetings   by  Means   of   Communication
 Equipment. Provided notice  is given in  accordance with Section  8 of  this
 Article  or  is  waived,  directors may participate in and hold a meeting of
 the  Board  or  committee  by  means  of  conference  telephone  or  similar
 communications equipment by means of which all persons participating in  the
 meeting can hear each other simultaneously. Participation in a meeting  held
 pursuant to  this  Section  shall constitute  presence  in  person  at  such
 meeting, except where  a director participates  for the  express purpose  of
 objecting to the transaction of any business on the ground that the  meeting
 is not lawfully called or convened. Each person participating in the meeting
 shall sign the minutes (or counterpart copies) thereof).

                                 ARTICLE IV.

                                   NOTICES

      Section 1.     Form of  Notices.   Whenever notice  is required  to  be
 given to any director, officer, shareholder or other person and no provision
 is made in these By-Laws as to how the  notice is to be given, such  silence
 shall not be construed to mean personal notice exclusively. Any such  notice
 may be given in writing, either by mail, postage prepaid, addressed to  such
 person at the address which appears on  the books of the Corporation, or  by
 telephone facsimile transmission  to a terminal  whose telephone number  has
 been furnished to  the Corporation by  such person. Any  notice required  or
 permitted to be given by mail shall be deemed to be given when deposited  in
 the United States mail, postage prepaid.

      Section 2.     Waivers of Notice. Whenever  written notice is  required
 to be given to any director, officer, shareholder or other person, a written
 waiver of notice signed  by a person entitled  to notice, whether before  or
 after the time stated in  the notice, shall be  equivalent to the giving  of
 proper notice.

                                  ARTICLE V.

                                   OFFICERS

      Section 1.     General. The elected officers  of the Corporation  shall
 be a President, a  Secretary and a  Treasurer. The Board  may also elect  or
 appoint a Chairman of the  Board, one or more  Vice Presidents, one or  more
 Assistant Secretaries,  one  or more  Assistant  Treasurers and  such  other
 officers and assistant  officers as  may be  deemed necessary,  all of  whom
 shall also be  officers. Any two  or more offices  may be held  by the  same
 person.

      Section 2.     Election. The  Board shall  elect  the officers  of  the
 Corporation at each annual meeting of the Board. The Board may from time  to
 time elect  or appoint  such other  officers  and agents  as it  shall  deem
 necessary and shall determine the remuneration  of all officers and  agents.
 The  officers  shall  hold  office  until   the  earlier  of  their   death,
 resignation, or removal  from office, or  until their respective  successors
 are chosen and qualify. Except for the Chairman of the Board, officers  need
 not be members of the  Board. Any officer or  agent elected or appointed  by
 the Board may be removed, with or without  cause, at any time by a  majority
 vote of the  entire Board. Election  or appointment of  an officer or  agent
 shall not of itself create contract rights.

      Section 3.     Chairman of the Board. The Chairman of the Board, if one
 is elected, must be an incumbent  director and shall be the chief  executive
 officer of the Corporation, shall preside  at all meetings of the  directors
 or shareholders,  shall  have  responsibility for  the  general  and  active
 management of the business of the Corporation, and shall see that all orders
 and resolutions of the  Board are carried into  effect. The Chairman of  the
 Board and such other officers as  the Board may determine shall execute  all
 contracts requiring a seal and shall  execute any mortgages, conveyances  or
 other legal instruments in the name of and on behalf of the Corporation, but
 this provision  shall not  prohibit the  delegation of  such powers  by  the
 Chairman of  the  Board to  some  other  agent or  attorney-in-fact  of  the
 Corporation.

      Section 4.     President. If a  Chairman of the  Board is elected,  the
 President shall be  the chief operating  officer of  the Corporation,  shall
 generally assist  the  Chairman  of  the Board  in  the  management  of  the
 Corporation and shall perform the duties  and exercise the powers  delegated
 by the Chairman of the Board or from time to time assigned by the Board.  If
 a Chairman of the Board is not elected,  or in the absence or disability  of
 the Chairman  of the  Board,  the President  shall  be the  chief  executive
 officer of the  Corporation and shall  perform the duties  and exercise  the
 powers otherwise assigned to the Chairman of the Board.

      Section 5.     Vice Presidents.  Each  Vice President,  if  any,  shall
 generally assist  the President  in the  management of  the corporation  and
 shall perform the duties and exercise  the powers delegated by the  Chairman
 of the Board (if any) or the President, or from time to time assigned by the
 Board. Each Vice President, in the order of seniority or in any other  order
 determined. by  the Board,  shall,  in the  absence  or disability  -of  the
 President, perform the duties and exercise the powers of the President.

      Section 6.     Secretary. The Secretary  shall attend  all meetings  of
 the Board and the  shareholders, shall record all  votes and actions  taken,
 and shall maintain the minutes or records of all such proceedings in a  book
 to be kept for that purpose. The Secretary shall give, or cause to be given,
 notice of  all meetings  of the  shareholders and  special meetings  of  the
 Board, and shall perform such other duties as may be prescribed by the Board
 and the President.

      Section 7.     Assistant Secretaries. Any Assistant Secretary shall, in
 the absence or disability of the Secretary, perform the duties and  exercise
 the powers of the Secretary  and shall perform such  other duties as may  be
 prescribed by the Board and the President.

      Section 8.     Treasurer. The Treasurer  shall perform  such duties  as
 are from time to time assigned or delegated by the Chairman of the Board (if
 any), the President or  the Board. Unless the  positions of chief  financial
 officer or chief accounting officer are  assigned to other officers of  vice
 presidential or more senior rank, the Treasurer shall be the chief financial
 and accounting Officer of the Corporation  and, subject to the direction  of
 the President and the Board, shall  have custody of all corporate funds  and
 securities, shall deposit all monies and other valuable effects in the  name
 and to  the  credit  of the  Corporation  in  such depositories  as  may  be
 designated from time to time by the Board, shall manage the disbursements of
 the Corporation's funds in satisfaction of its corporate obligations and  in
 a manner consistent with its business objectives, taking proper receipts  or
 vouchers for such disbursements,  shall keep full  and accurate records  and
 books of account of all the Corporation's receipts and disbursements,  shall
 render to the President and/or the  Board upon request an accounting of  all
 the financial transactions  taken on behalf  of the Corporation  and  of the
 financial condition  of  the  Corporation,  and  shall  be  responsible  for
 planning and budgeting the Corporation's receipts, disbursements and capital
 requirements.

      Section 9.     Assistant Treasurers. Any Assistant Treasurer shall,  in
 the absence or disability of the Treasurer, perform the duties and  exercise
 the powers of the Treasurer  and shall perform such  other duties as may  be
 prescribed by the Board and the President.

      Section 10.    Bonding. If required by  the Board, all  or some of  the
 officers, employees or agents of the Corporation shall give the  Corporation
 a bond in such form, in such sum and  with such surety or sureties as  shall
 be satisfactory to the Board, for the faithful performance of the duties  of
 their office or position and for the restoration to the Corporation, in case
 of their  death, resignation,  retirement or  removal  from  office,  of all
 books,  papers,  vouchers,  money  and  other  property  belonging  to   the
 Corporation of whatever kind in their  possession or under their custody  or
 control.

                                 ARTICLE VI.

                       CERTIFICATES REPRESENTING SHARES

      Section 1.     Form of  Certificates.  The  Corporation  shall  deliver
 certificates representing  all shares  to which  shareholders are  entitled.
 Certificates representing shares of the corporation shall be in such form as
 shall  be  approved  and  adopted  by  the  Board  and  shall  be   numbered
 consecutively and  entered in  the  books of  the  Corporation as  they  are
 issued. Each certificate  shall state on  its face  the Corporation's  name,
 that the Corporation is organized under the laws of the State of Nevada, the
 name of the registered holder, the number, class of shares, and  designation
 of the series, if  any, which the certificate  represents, the par value  of
 the shares or a  statement that the  shares are without  par value and  such
 other information as is required by  the Articles of Incorporation, the  NRS
 or other  law. Certificates  shall be  signed by  the President  and by  the
 Secretary. In case  any officer who  has signed a  certificate ceases to  be
 such officer before the certificate has  been delivered by the  Corporation,
 the certificate may nevertheless be issued and delivered as though a  person
 who signed it had not ceased to be such officer.

      Section 2.     Facsimile  Signatures.  Whenever   any  certificate   is
 countersigned or otherwise  authenticated by  a transfer  agent or  transfer
 clerk, and  by  a registrar,  then  a facsimile  of  the signatures  of  the
 officers or agents of  the Corporation may be  printed or lithographed  upon
 the certificate in lieu of the actual signatures. With respect to the use of
 facsimile signatures, the Corporation  may not act as  its registrar of  its
 own stock.

      Section 3.     Lost Certificates. The Corporation may direct that a new
 certificate be issued in place of any certificate alleged to have been lost,
 stolen or destroyed, upon  the making of  an affidavit of  that fact by  the
 person claiming  the  certificate to  be  lost, stolen  or  destroyed.  When
 authorizing the issue of a new certificate, the Board, in its discretion and
 as  a  condition precedent  to  the  issuance thereof, may require the owner
 of  the  lost,  stolen  or  destroyed  certificate,  or  the  owner's  legal
 representative, to advertise  the same in  such manner as  it shall  require
 and/or give the Corporation a bond in such form, in such sum, and with  such
 surety or sureties as it may direct,  as indemnity against any claim '  that
 may be made against the Corporation with respect to the certificate  alleged
 to have been lost, stolen or destroyed.

      Section 4.     Transfer  of   Shares.   Shares  of   stock   shall   be
 transferable only on the books of the Corporation by the holder in person or
 by his duly authorized attorney. Subject to compliance with any restrictions
 on transfer conspicuously noted  on any certificate,  upon surrender to  the
 Corporation or to  the transfer agent  of the Corporation  of a  certificate
 representing shares  duly  endorsed or  accompanied  by proper  evidence  of
 succession, assignment or authority to transfer, it shall be the duty of the
 Corporation or  the  transfer  agent  of the  Corporation  to  issue  a  new
 certificate to the person entitled thereto, cancel the old certificate,  and
 record the transaction in its books.

      Section 5.     Registered  Shareholders.  The   Corporation  shall   be
 entitled to recognize the holder of record  of any share or shares of  stock
 as holder in  fact and,  accordingly, shall not  be bound  to recognize  any
 equitable or other claim to or interest in such share or shares on the  part
 of any other person, whether or not  it shall have express or other  notice,
 except as otherwise provided by law.

                                 ARTICLE VIl.

           INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS

      Section 1.     Scope of Indemnification. To the full extent authorized,
 permitted or required by Section 78.751 of the  NRS (as now in effect or  as
 subsequently  amended  or  superseded),   but  subject  to  the   procedural
 requirements stated therein, the Corporation shall indemnify each  director,
 officer, employee  and  agent  of the  Corporation  and  each  other  person
 identified in Sections  78.751 1  and 2 of  the NRS  against all  judgments,
 fines, settlements,  costs,  expenses  and  other  monetary  obligations  an
 indemnitee suffers, sustains  or incurs as  the result of  actions taken  or
 omitted by an indemnitee under circumstances and in situations described  or
 defined in, or contemplated by, Section 78.751 of the NRS.

      Section 2.     Expense Advances. Decisions whether to advance  expenses
 to an indemnitee under circumstances permitted in Sections 78.751 4 and 5 of
 the NRS will be made on a case-by-case basis by the Corporation's Board. The
 Board's decision in any such case will be final and binding.

      Section 3.     Insurance, Other Financial Arrangements. The Corporation
 may, but  will have  no  obligation to,  purchase  and maintain  errors  and
 omissions insurance for the benefit of  all or any group of indemnitees  and
 each other  person  identified  in  Section 78.752  of  the  NRS.  Under  no
 circumstances will  the  Corporation  have or  incur  any  liability  to  an
 indemnitee or such other person on  account of its decision not to  purchase
 or its failure to maintain any such insurance. The Corporation may make such
 other financial arrangements against liability for the benefit of all or any
 group of  indemnities or  such  other person  as  permitted by  NRS  Section
 78.752.

      Section 4.     Enforceability. The provisions of  this Article VII  are
 to  be  deemed  an  element  of  the  contract  or  engagement  between  the
 Corporation  and  each  person   who  holds  a   position  giving  rise   to
 indemnification. Subject  to the  conditions  and limitations  expressed  in
 Sections 3 and 4, the indemnification provided in this Article VII may  thus
 be enforced against the Corporation as a matter of contractual right.

                                ARTICLE VIll.

                              GENERAL PROVISIONS

      Section 1.     Dividends. Dividends on  the outstanding  shares of  the
 Corporation, subject to the provisions of the Articles of Incorporation, the
 NRS or other law  and any agreements or  obligations of the Corporation,  if
 any, may be  declared by the  Board, or a  Board committee,  as provided  in
 Article III, Section 11 of these By-Laws, at any regular or special meeting.
 Dividends may be declared and paid in cash, in property, or in shares of the
 Corporation, provided that all such  declarations and payments of  dividends
 shall be in strict  compliance with all applicable  laws, these By-Laws  and
 the Articles of Incorporation. The Board,  or a Board committee, may fix  in
 advance a record date for the purposes of determining shareholders  entitled
 to receive payment of  any dividend, such  record date to  be not more  than
 fifty (50) days prior to the payment  date of such dividend. In the  absence
 of any action by the Board,  or a Board committee,  the date upon which  the
 Board, or a Board committee, adopts  the resolution declaring such  dividend
 shall be the record date.

      Section 2.     Reserves. There  may be  created  by resolution  of  the
 Board out of the earned surplus of the Corporation such reserve or  reserves
 as the Board from time to time,  in its discretion, deems proper to  provide
 for contingencies, or to  equalize dividends, or to  repair or maintain  any
 property of the Corporation, or for  such other proper purpose as the  Board
 shall deem  beneficial to  the  Corporation, and  the  Board may  modify  or
 abolish any reserve in the same manner in which it was created.

      Section 3.     Fiscal Year. The fiscal year  of the Corporation may  be
 fixed from time to  time by resolution  of the Board.  Unless and until  the
 Board establishes a different date, the  Corporation's fiscal year will  end
 on December 31 of each year.

      Section 4.     Seal. The Corporation  may (but  need not)  have a  seal
 that may be used by causing it thereof to be impressed or affixed or in  any
 manner reproduced. Any officer  of the Corporation  shall have authority  to
 affix the seal to any document requiring it.

      Section 5.     Resignation. Any director, officer, or employee or agent
 of the Corporation  may resign by  giving written notice  to the Board,  the
 President or the Secretary. The resignation shall take effect at the time it
 specifies, or  immediately upon  delivery if  no time  is specified.  Unless
 provided in the resignation,  the acceptance of a  resignation shall not  be
 necessary to make it effective.

      Section 6.     Guaranty  of  Obligations  of  Directors,  Officers  and
 Employees. When determined by the  Board to be in  the best interest of  the
 Corporation, the Corporation may guaranty  the obligations of any  director,
 officer or employee of  the Corporation. As used  in this Section, the  term
 mguaranty- means a guaranty, mortgage,  pledge, security agreement or  other
 agreement making the  Corporation or its  assets responsible respecting  the
 obligation or obligations of such director, officer or employee.

                                  ARTICLE IX

                            AMENDMENTS TO BY-LAWS

      Section 1.     Amendments.  These  By-Laws  may  be  altered,  amended,
 modified or repealed, or new By-Laws may  be adopted, at any meeting of  the
 Board at which a quorum is present by the affirmative vote of a majority  of
 the directors present at such meeting.

                           CERTIFICATE OF ADOPTION

 The undersigned, Secretary of  Hallmark Financial Services, Inc.  (formerly,
 ACOI, Inc. and  American Credit Optical,  Inc.) (the 'Corporation'),  hereby
 certifies that the foregoing Amended and  Restated Bylaws were duly  adopted
 by the Board of Directors  of the Corporation at  its meeting held on  March
 29, 1994.

                                    /s/  RAYMOND A. KILGORE
                                    -----------------------------
                                    Raymond A. Kilgore, Secretary


<PAGE>


                           AMENDMENT OF ARTICLE VII
                                    OF THE
                         AMENDED AND RESTATED BYLAWS
                                      OF
                      HALLMARK FINANCIAL SERVICES, INC.


      The Amended and  Restated Bylaws  of the  Hallmark Financial  Services,
 Inc. (the "Corporation") are amended by deleting the current Article VII  in
 its entirety and substituting therefor the following new Article VII:

                                 ARTICLE VII.

           INDEMNIFICATION OF DIRECTORS, OFFICERS AND OTHER PERSONS

           Section 1.     Scope  of  Indemnification.  To  the   fullest
      extent authorized, permitted  or required by  NRS Section  78.7502
      (as now in effect or as  subsequently amended or superseded),  but
      subject to  the  procedural  requirements stated  in  NRS  Section
      78.751, the Corporation  shall indemnify  each director,  officer,
      employee and  agent  of  the Corporation  and  each  other  person
      identified in NRS  Section 78.7502 against  all judgments,  fines,
      settlements, costs, expenses and  other monetary obligations  such
      person may suffer, sustain or incur as the result of actions taken
      or omitted by  such person under  circumstances and in  situations
      described or defined in, or contemplated by, NRS Section 78.7502.

           Section 2.     Expense Advances.   The  expenses of  officers
      and directors of the Corporation incurred in defending a civil  or
      criminal  action,  suit  or  proceeding  shall  be  paid  by   the
      Corporation as  they are  incurred and  in  advance of  the  final
      disposition of the action, suit or proceeding, upon receipt of  an
      undertaking by or on  behalf of the director  or officer to  repay
      the amount if it is ultimately determined by a court of  competent
      jurisdiction that he or she is  not entitled to be indemnified  by
      the Corporation.  The provisions  of this Section 2  do not affect
      any rights to advancement of expenses to which corporate personnel
      other than  directors  or  officers  may  be  entitled  under  any
      contract or otherwise by law.

           Section 3.     Insurance, Other  Financial Arrangements.  The
      Corporation may,  but will  have no  obligation to,  purchase  and
      maintain errors and  omissions insurance or  make other  financial
      arrangements for  the benefit  of any  or  all of  its  directors,
      officers, employees or agents or  other persons identified in  NRS
      Section 78.752.  Under no circumstances will the Corporation  have
      or incur any liability  to any person on  account of its  decision
      not to purchase or maintain any  such insurance or make any  other
      such financial arrangements.

      Section 4.     Enforceability. The provisions of  this Article VII  are
 to  be  deemed  an  element  of  the  contract  or  engagement  between  the
 Corporation  and  each  person   who  holds  a   position  giving  rise   to
 indemnification. Subject to the conditions and limitations expressed  herein
 and in NRS Sections 78.7502, 78.751 and 78.752, the indemnification provided
 in this Article VII may thus be enforced against the Corporation as a matter
 of contractual right.

      The undersigned  Secretary  of the  Corporation  hereby certifies  that
 the foregoing amendment was duly adopted by the Board of  Directors  of  the
 Corporation on July 19, 2002.


                                    /s/ RAYMOND A. KILGORE
                                    -----------------------------
                                    Raymond A. Kilgore, Secretary