FOURTH AMENDMENT TO LOAN AGREEMENT
                            AND GUARANTOR CONSENT


      THIS  FOURTH  AMENDMENT  TO  LOAN AGREEMENT AND GUARANTOR CONSENT (the
"Fourth  Amendment")  is made as of November 1, 1998, among HALLMARK FINANCE
CORPORATION,  referred  to  herein  as  the   "Borrower," HALLMARK FINANCIAL
SERVICES,  INC.,  HALLMARK  CLAIMS  SERVICE, INC., AMERICAN HALLMARK GENERAL
AGENCY,  INC.,  ACO  HOLDINGS,  INC.,  and  AMERICAN HALLMARK AGENCIES, INC.
(collectively,  the "Guarantors"), and NATIONSBANK, N.A., a national banking
association  previously  known  as  NationsBank  of Texas, N.A., referred to
herein as the  Lender. 

                                R E C I T A L S:

      A.    The  Borrower  and  the  Lender  are parties to a Loan Agreement
dated as of March 17, 1997 (the "Original Loan Agreement"). 

      B.    The  Guarantors  executed  Guaranty  Agreements  in favor of the
Lender pursuant to the Original Loan Agreement.  

      C.    The  Original  Loan  Agreement has been amended pursuant to that
certain  First Amendment to Loan Agreement and Guarantor Consent (the "First
Amendment")  dated as of July 31, 1997,  by that certain Second Amendment to
Loan  Agreement  and  Guarantor Consent (the "Second Amendment") dated as of
October  1,  1997, and by that certain Third Amendment to Loan Agreement and
Guarantor  Consent ("Third Amendment") dated as of September 17, 1998, among
the  Borrower,  the Guarantors, and the Lender (the Original Loan Agreement,
as  amended  by  the  First  Amendment,  the Second Amendment, and the Third
Amendment is hereinafter called the "Loan Agreement").

      D.    The  Borrower has requested that the Expiration Date (as defined
in the Loan Agreement) of 2:00 p.m. (Dallas, Texas time) on November 1, 1998
be  extended  to  2:00  p.m. (Dallas, Texas time) on December 15, 1998.  The
Lender  is  willing  to  amend the Loan Agreement to so extend such maturity
date  on the condition that the Loan Agreement also be amended to reduce the
Maximum  Amount  to  the lesser of $1,000,000 or the Borrowing Base and that
all  other terms, conditions and covenants of the Loan Agreement, as amended
hereby,  continue  unaffected,  but  such  amendment shall be subject to the
terms and conditions set forth below.

      E.    Each of the Guarantors desires to consent to such amendment.

      NOW,  THEREFORE,  in  consideration of the premises and for other good
and  valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

            1.    Same  Terms.    All terms used herein which are defined in
the  Loan  Agreement  have  the  same  meanings  when used herein unless the
context  hereof otherwise requires or provides.  In addition, all references
in  the  Loan Documents to the "Agreement" mean the Original Loan Agreement,
as  amended  by  the  First  Amendment,  the  Second  Amendment,  the  Third
Amendment,  and this Fourth Amendment, and as the same are hereafter amended
from time to time.

            2.    Amendment  to  Loan  Agreement.   Effective as of the date
above, the Loan Agreement is hereby amended as follows:
<PAGE>
                  (a)   Section  1.0,  Certain  Definitions,  is  amended to
delete  the   definition  of   "Expiration  Date"    contained  therein  and
substituting in lieu thereof the following:

                   "Expiration  Date"   means 2 p.m. (Dallas, Texas time) on
December  15,  1998  or  any  other  date  on which the Loans become due and
payable pursuant to the terms of this Agreement.                  

                  (b)   Section  1.0,  Certain  Definitions,  is  amended to
delete the definition of  Maximum Amount  contained therein and substituting
in lieu thereof the following:

                   "Maximum  Amount"   means the lesser of $1,000,000 or the
Borrowing Base.

                  (c)   Section  2.10, Usage Fee, is deleted and therefore a
usage fee will not be charged.

                  (d)   Exhibit  "B", Borrowing Base Certificate, is deleted
and  Exhibit B-1, Borrowing Base Certificate, is wholly substituted therefor
and in such Exhibit B-1, the Calculation of Borrowing Base shall now be:

                  [(Total Adjusted Eligible Premium Finance
                  Agreements-Bank Reserve) x 60%] =
                  Maximum Amount of borrowings (not
                  to exceed $1,000,000)                     $

                  LESS: Outstandings                        $

                  Available Amount/Overadvance Due Bank
                  (Amount of Borrowing Base - Outstandings) $

            3.    Certain  Representations.    The  Borrower and each of the
Guarantors,  jointly  and severally, represents and warrants that, as of the
date hereof:

                  (a)   the  representations and warranties contained in the
Loan  Agreement as amended hereby are true and correct on and as of the date
hereof as made on and as of such date;

                  (b)   no  event  has  occurred  and  is  continuing  which
constitutes a Default or an Event of Default;

                  (c)   The Borrower represents and warrants that, as of the
date  hereof:  (I) the Borrower has full power and authority to execute this
Fourth Amendment, and this Fourth Amendment constitutes the legal, valid and
binding obligation of the Borrower enforceable in accordance with its terms,
e x c ept  as  enforceability  may  be  limited  by  applicable  bankruptcy,
insolvency, reorganization, moratorium, and other similar laws affecting the
enforcement  of  creditors'  rights  generally;  and  (ii) no authorization,
approval,  consent  or  other  action  by,  notice  to,  or filing with, any
governmental  authority  or  other  person  is  required  for the execution,
delivery and performance by the Borrower of this Fourth Amendment.

                  (d)   Each  Guarantor  represents and warrants that, as of
the date hereof:  (i) such Guarantor has full power and authority to execute
this  Fourth  Amendment,  and  this  Fourth Amendment constitutes the legal,
valid  and  binding  obligation  of such Guarantor enforceable in accordance
<PAGE>
with  its  terms,  except  as  enforceability  may  be limited by applicable
bankruptcy,  insolvency,  reorganization, moratorium, and other similar laws
affecting  the  enforcement  of  creditors'  rights  generally;  and (ii) no
authorization,  approval,  consent  or other action by, notice to, or filing
with,  any  governmental  authority  or  other  person  is  required for the
execution,  delivery  and  performance  by  such  Guarantor  of  this Fourth
Amendment.

            4.    Guarantors' Acknowledgment.  By signing below, each of the
Guarantors:  (i)  acknowledges  and  consents to the execution, delivery and
performance  of  this  Fourth Amendment; (ii) agrees that its obligations in
respect  of its Guaranty are not released, modified, impaired or affected in
any  manner  by  this Fourth Amendment or any of the provisions contemplated
herein;  (iii)  acknowledges  that  it  has no claims or offsets against, or
defenses  or  counterclaims to, its Guaranty; and (iv) agrees, ratifies, and
affirms that the Renewal Promissory Note in the original principal amount of
$1,000,000 and payable by the Borrower to the Lender, upon being executed by
Borrower  and  delivered to Lender as required below shall be an  Obligation
of each Guarantor under each of the respective Guarantees.

            5.    Conditions  of Effectiveness.  This Fourth Amendment shall
be  effective  as  of  the date and year first above written, subject to the
following:

                  (a)   The Lender shall have received this Fourth Amendment
executed by Borrower and each Guarantor;

                  (b)   The   Lender  shall  have  received  the  $1,000,000
Renewal  Promissory  Note  executed by Borrower and satisfactory in form and
content  to  Lender,  such  Renewal  Promissory  Note  being  in renewal and
extension  of the unpaid principal balance of the $8,000,000 Promissory Note
dated  March  17,  1997  as  previously  renewed  by that $8,000,000 Renewal
Promissory Note dated as of September 17, 1998;

                  (c)   The  Lender  shall  have  received  certificates  of
incumbency  and  containing  specimen  signatures  of  all  officers  of the
Borrower  and  each  of  the Guarantors who will be authorized to execute or
attest to any of the documents contemplated hereby on behalf of the Borrower
and each of the Guarantors executed by the President and by the Secretary of
the  Borrower  and  each  of  the  Guarantors  on  the date hereof, and such
certification may be conclusively relied upon by the Lender until the Lender
receives  notice  in writing from the Borrower and each of the Guarantors to
the  contrary  and  providing  a  substitute  certificate  conforming to the
requirements hereof;

                  (d)   All of the conditions precedent set forth in Section
4.0,  Conditions  Precedent to Subsequent Loans, of the Loan Agreement shall
be satisfied; and

                  (e)   The Lender shall have received such other documents,
opinions, certifications, consents, waivers, agreements, and evidence as the
Lender may reasonably request.

            6.    Limitation  on  Agreements.    The modifications set forth
herein are limited precisely as written and shall not be deemed: (a) to be a
consent  under or a waiver of or an amendment to any other term or condition
in  the  Loan  Agreement  or  any  of  the  other  Loan Documents; or (b) to
prejudice  any  right  or rights which the Lender now has or may have in the
<PAGE>
future  under  or  in  connection with the Loan Agreement and the other Loan
Documents, each as amended hereby, or any of the other documents referred to
herein or therein. This Fourth Amendment constitutes a Loan Document for all
purposes.  The  Loan Agreement, as amended by this Fourth Amendment, and all
of  the  other Loan Documents executed in connection therewith, shall remain
in full force and effect and are each hereby ratified and confirmed.

            7.    ARBITRATION.    ANY  CONTROVERSY OR CLAIM BETWEEN OR AMONG
THE  PARTIES  HERETO  INCLUDING  BUT  NOT LIMITED TO THOSE ARISING OUT OF OR
RELATING  TO  THIS  AGREEMENT  OR  ANY  RELATED  AGREEMENTS  OR INSTRUMENTS,
INCLUDING  ANY  CLAIM  BASED  ON  OR  ARISING FROM AN ALLEGED TORT, SHALL BE
DETERMINED BY BINDING ARBITRATION IN ACCORDANCE WITH THE FEDERAL ARBITRATION
ACT (OR IF NOT APPLICABLE, THE APPLICABLE STATE LAW).  THE RULES OF PRACTICE
AND  PROCEDURE  FOR  THE    ARBITRATION  OF  COMMERCIAL DISPUTES OF JUDICIAL
ARBITRATION  AND MEDIATION SERVICES, INC. (J.A.M.S.), AND THE  SPECIAL RULES
SET FORTH BELOW.  IN THE EVENT OF ANY INCONSISTENCY, THE SPECIAL RULES SHALL
CONTROL.    JUDGMENT  UPON ANY ARBITRATION AWARD MAY BE ENTERED IN ANY COURT
HAVING  JURISDICTION.    ANY  PARTY  TO  THIS AGREEMENT MAY BRING AN ACTION,
INCLUDING  A  SUMMARY  OR EXPEDITED PROCEEDING, TO COMPEL ARBITRATION OF ANY
CONTROVERSY  OR  CLAIM  TO  WHICH THIS AGREEMENT APPLIES IN ANY COURT HAVING
JURISDICTION OVER SUCH ACTION.

            A.    SPECIAL  RULES.  THE ARBITRATION SHALL BE CONDUCTED IN THE
CITY  OF  THE  BORROWER'S DOMICILE AT TIME OF THIS AGREEMENT'S EXECUTION AND
ADMINISTERED  BY  J.A.M.S.  WHO  WILL  APPOINT AN ARBITRATOR; IF J.A.M.S. IS
UNABLE  OR  LEGALLY  PRECLUDED  FROM ADMINISTERING THE ARBITRATION, THEN THE
AMERICAN  ARBITRATION ASSOCIATION WILL SERVE.  ALL ARBITRATION HEARINGS WILL
BE  COMMENCED  WITHIN  90  DAYS  OF THE DEMAND FOR ARBITRATION; FURTHER, THE
ARBITRATOR  SHALL  ONLY, UPON A SHOWING OF CAUSE, BE PERMITTED TO EXTEND THE
COMMENCEMENT OF SUCH HEARING FOR UP TO AN ADDITIONAL 60 DAYS.

            B.    RESERVATION OF RIGHTS.  NOTHING IN THIS AGREEMENT SHALL BE
DEEMED  TO: (I) LIMIT THE APPLICABILITY OF ANY OTHERWISE APPLICABLE STATUTES
OF LIMITATION OR REPOSE AND ANY WAIVERS CONTAINED IN THIS AGREEMENT; OR (II)
BE  A WAIVER BY THE BANK OF THE PROTECTION  AFFORDED TO IT BY 12 U.S.C. SEC.
91  OR  ANY  SUBSTANTIALLY EQUIVALENT STATE LAW; OR (III) LIMIT THE RIGHT OF
THE BANK HERETO: (A) TO EXERCISE SELF HELP REMEDIES SUCH AS (BUT NOT LIMITED
TO)  SET  OFF;  OR  (B)  TO  FORECLOSE AGAINST ANY REAL OR PERSONAL PROPERTY
COLLATERAL;  OR (C) TO OBTAIN FROM A COURT PROVISIONAL OR ANCILLARY REMEDIES
SUCH  AS  (BUT  NOT LIMITED TO) INJUNCTIVE RELIEF, WRIT OF POSSESSION OR THE
APPOINTMENT  OF  A  RECEIVER.   THE BANK MAY EXERCISE SUCH SELF HELP RIGHTS,
FORECLOSE  UPON  SUCH  PROPERTY,  OR  OBTAIN  SUCH  PROVISIONAL OR ANCILLARY
REMEDIES  BEFORE, DURING OR AFTER THE PENDENCY OF ANY ARBITRATION PROCEEDING
BROUGHT  PURSUANT  TO  THIS  AGREEMENT.   NEITHER THIS EXERCISE OF SELF HELP
REMEDIES  NOR THE INSTITUTION OR MAINTENANCE OF AN ACTION FOR FORECLOSURE OR
PROVISIONAL  OR ANCILLARY REMEDIES SHALL CONSTITUTE A WAIVER OF THE RIGHT OF
ANY  PARTY,  INCLUDING  THE  CLAIMANT  IN  ANY SUCH ACTION, TO ARBITRATE THE
MERITS OF THE CONTROVERSY OR CLAIM OCCASIONING RESORT TO SUCH REMEDIES.

            8.    Entirety,  Etc.   This instrument together with all of the
other  Loan  Documents  embodies  the  entire agreement between the parties.
THIS  AGREEMENT  AND  ALL  OF  THE  OTHER LOAN DOCUMENTS REPRESENT THE FINAL
AGREEMENT  BETWEEN  THE  PARTIES  AND MAY NOT BE CONTRADICTED BY EVIDENCE OF
PRIOR,  CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES.  THERE
ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
<PAGE>
      IN  WITNESS  WHEREOF,  the  parties  hereto  have executed this Fourth
Amendment  to  Loan  Agreement to be effective as of the date and year first
above written.

                                    BORROWER:

Address:                            HALLMARK FINANCE CORPORATION

14651 Dallas Parkway
Suite 900
Dallas, Texas  75240                By:
                                    Name:
                                    Title:


                                    GUARANTORS:

Address:                            HALLMARK FINANCIAL SERVICES, 
                                    INC.
14651 Dallas Parkway
Suite 900
Dallas, Texas  75240                By:
                                    Name:
                                    Title:


Address:                            HALLMARK CLAIMS SERVICE, INC.

14651 Dallas Parkway
Suite 900
Dallas, Texas  75240                By:
                                    Name:
                                    Title:

                                    
Address:                            AMERICAN HALLMARK GENERAL
                                    AGENCY, INC.
14651 Dallas Parkway
Suite 900
Dallas, Texas  75240                By:
                                    Name:
                                    Title:


Address:                            ACO HOLDINGS, INC.

14651 Dallas Parkway
Suite 900
Dallas, Texas  75240                By:
                                    Name:
                                    Title:

<PAGE>
Address:                            AMERICAN HALLMARK AGENCIES,
                                    INC.
14651 Dallas Parkway
Suite 900
Dallas, Texas  75240                By:
                                    Name:
                                    Title:

                                    LENDER:

Address:                            NATIONSBANK OF TEXAS, N.A.

NationsBank Plaza
900 Main Street, 7th Floor
Dallas, Texas  75202                By:
                                    Susan M. Raher, Senior Vice President