Document:

EXHIBIT 10(bm)

                              FIRST AMENDMENT TO

                      HALLMARK FINANCIAL SERVICES, INC.

                  1994 KEY EMPLOYEE LONG TERM INCENTIVE PLAN

      1.   Introduction.    Resolutions   amending  the  Hallmark   Financial
 Services, Inc.  1994  Key  Employee Long  Term  Incentive  Plan  (the  "1994
 Employee Plan") were adopted by the  Board of Directors on January 9,  1996,
 and approved at  the Annual Meeting  of Shareholders  of Hallmark  Financial
 Services, Inc. on May 21, 1996.

      2.   Amendment.  In  accordance with Section  17 of  the 1994  Employee
 Plan, Section 2 of the 1994 Employee Plan is hereby amended by  substituting
 the number "1,500,000"  for the  number "500,000"  in each  place where  the
 latter occurs.

      3.   Effect on Other Provisions.   Except as expressly amended  hereby,
 the 1994 Employee Plan shall remain  in full force and effect as  originally
 adopted.EXHIBIT 10(bn)

                              FIRST AMENDMENT TO

                      HALLMARK FINANCIAL SERVICES, INC.

                 1994 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN

      1.   Introduction.    Resolutions   amending  the  Hallmark   Financial
 Services, Inc.  1994  Non-Employee Director  Stock  Option Plan  (the  "1994
 Director Plan") were adopted by the Board of Directors on January 30,  1996,
 and approved at  the Annual Meeting  of Shareholders  of Hallmark  Financial
 Services, Inc. on May 21, 1996.

      2.   Amendment to Section 2.  In accordance with Section 10 of the 1994
 Director Plan, Section  2 of  the 1994 Director  Plan is  hereby amended  by
 deleting the  number  "700,000"  and  inserting  in  its  place  the  number
 "1,375,000".

      3.   Amendment to Subsection 5(d).   In accordance  with Section 10  of
 the 1994 Director Plan, Subsection 5(d) of the 1994 Director Plan is  hereby
 amended by  deleting the  number "75,000"  and inserting  in its  place  the
 number "125,000".

      4.   Addition of Subsection 5(f).  In accordance with Section 10 of the
 1994 Director Plan, Section 5 of the 1994 Director Plan is hereby amended by
 adding the following Subsection (f):

           "(f) Notwithstanding Section 5(e) hereof, effective as of  January
      9, 1996,  the  following  Eligible  Persons  are  hereby  granted  non-
      qualified options to purchase the number of shares of the Common  Stock
      set forth opposite their respective names and at the exercise price  so
      indicated (as determined in accordance with Section 3 hereof):

                               No. of Shares for
      Name                   which Options Granted    Exercise Price
      ----                   ---------------------    --------------
      Jack R. Daugherty              50,000                $1.00
      Kenneth H. Jones, Jr.          50,000                $1.00
      Samuel W. Rizzo                50,000                $1.00
      A. R. Dike                     50,000                $1.00
      James H. Graves                50,000                $1.00
      George R. Manser               50,000                $1.00
      C. Jeffrey Rogers              50,000                $1.00

      5.   Effect on Other Provisions.   Except as expressly amended  hereby,
 the 1994 Director Plan shall remain  in full force and effect as  originally
 adopted.EXHIBIT 10(bo)

                                ADDENDUM NO. 1

                                    To the

                      QUOTA SHARE RETROCESSION CONTRACT
                        Effective:  September 1, 2000

                                  issued to

                         DORINCO REINSURANCE COMPANY
                              Midland, Michigan

 IT IS  HEREBY  AGREEED,  effective  retroactively  to  12:01  a.m.,  Central
 Standard Time, on September  1, 2000, that the  following shall be added  to
 ARTICLE I - COMMENCEMENT AND TERMINATION:

 "D.  'Underwriting year' as used herein shall mean the period from September
      1, 2000,  through December  31, 2001,  both  days inclusive,  and  each
      subsequent 12-month period shall be a separate underwriting year.   All
      premiums and losses  from policies  allocated to  an underwriting  year
      shall be credited or charged, respectively, to such underwriting  year,
      regardless of the  date said  premiums earn  or such  losses occur,  it
      being understood that a  policy will be  allocated to the  underwriting
      year which is in effect as of:

      1.   As respects all new policies, the effective date of such coverage;

      2.   As respects  renewals  of one  year  or less  term  policies,  the
           renewal date of such policies;

      3.   As respects continuous or greater than one year term policies, the
           premium anniversary date of such policies.

      Such policies shall remain in the same underwriting year, as originally
      allocated, until the next renewal date or premium anniversary date,  at
      which time such policies shall be reallocated to the underwriting  year
      in effect as of such date as provided in subpapagraphs 2 and 3 above."

 IT IS FURTHER  AGREED, effective at  12:01 a.m., Central  Standard Time,  on
 January 1, 2002, as  respects losses arising  out of occurrences  commencing
 under Policies written or renewed on or  after that time and date, that  the
 introductory paragraph of this Contract shall  be deleted and the  following
 substituted therefor:

      "BY  THIS  CONTRACT  the  Retrocedant   agrees  to  retrocede  to   the
      Retrocessionaire and the Retrocessionaire agrees  to accept 40% of  the
      Retrocedant's 100% in the interests and liabilities of the  Retrocedant
      under the 100% Quota  Share Reinsurance Agreement, effective  September
      1, 1998, issued to State and County Mutual Fire Insurance Company, Fort
      Worth,  Texas,   and  Van   Wagoner  Companies,   Inc.,  Plano,   Texas
      (hereinafter referred to as the 'Original  Agreement').  A copy of  the
      Original Agreement and  any Endorsements thereto,  are attached to  and
      form part of this Contract."

 IT IS  ALSO AGREED,  effective  as 12:01  a.m.,  Central Standard  Time,  on
 January  1,  2002,  that  paragraph  B  of  ARTICLE  I  -  COMMENCEMENT  AND
 TERMINATION shall be deleted and the following substituted therefor:

 "B.  Either party may  terminate this Contract  on any January  1, April  1,
      July 1 or October  1 by giving the  other party not  less than 30  days
      prior notice by certified mail, it being understood and agreed that  if
      the Original  Agreement is  terminated for  any reason,  this  Contract
      shall expire automatically at the same time."

 IT IS  ALSO AGREED,  effective  at 12:01  a.m.,  Central Standard  Time,  on
 January 1, 2002, that Paragraph A of ARTICLE III - PREMIUM shall be  deleted
 and the following substituted therefor:

 "A.  As premium  for the  reinsurance  provided hereunder,  the  Retrocedant
      shall retrocede  40% of  the gross  premiums ceded  to the  Retrocedant
      under the Original Agreement."

 IT IS  ALSO AGREED,  effective  as 12:01  a.m.,  Central Standard  Time,  on
 January 1, 2002, as  respects losses arising  out of occurrences  commencing
 under Policies written or renewed on or  after that time and date, that  the
 following shall be added to ARTICLE V - LOSSES AND SALVAGE.

 "C.  Notwithstanding the provisions of paragraph  B above, the liability  of
      the Reinsurer for loss hereunder shall  be limited to the following  as
      respects any one underwriting year:

      1. That  amount of  total losses incurred  (as defined  herein) for the
         underwriting year under consideration less than or equal to 73.0% of
         premiums earned for the same underwriting year; plus

      2. That amount of total losses incurred for the underwriting year under
         consideration greater than or  equal to 76.0% of premiums earned for
         the same underwriting year.

 D.   'Losses incurred' as used herein shall mean the losses incurred for the
      underwriting year  under  the Original  Agreement,  prior to  the  loss
      corridor retention under such Agreement."

 The provisions of this Contract shall remain otherwise unchanged.

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

 In Midland, Michigan, this 14th day of November, 2002.

                                DORINCO REINSURANCE COMPANY

                                By /s/ David E. Chamberlain
                                ---------------------------
                                V.P. Underwriting

 In Dallas, Texas, this 22nd day of July, 2002

                                AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS

                                By /s/ Linda H. Sleeper
                                ---------------------------
                                President & CEOEXHIBIT 10 (bp)

                               October 31, 2002

 Dorinco Reinsurance Company
 1320 Waldo Avenue, Suite 200
 Midland, Michigan  48642

 Attention:  David E. Chamberlain

 RE:  Loan Agreement dated  March 10,  1997, as  amended by  Amendment No.  1
      executed August  14, 1998,  Amendment No.  2 effective  March 5,  1999,
      Amendment No.  3  effective November  19,  1999, and  Amendment  No.  4
      effective November  8, 2001  (the  "Loan Agreement")  between  Hallmark
      Financial Services, Inc. ("Borrower")  and Dorinco Reinsurance  Company
      ("Lender")

 Dear Mr. Chamberlain:

 The purpose of this letter is to obtain the express prior written consent of
 Lender pursuant  to  Section  7.j.(i) of  the  Loan  Agreement  to  Borrower
 creating indebtedness for borrowed money in the original principal amount of
 up to $9,000,000 to be evidenced  by a promissory note in substantially  the
 form attached hereto.  The purpose  of this borrowing is to provide  interim
 financing for a proposed acquisition by  Borrower, which we have  previously
 discussed with you on a confidential basis.

 As you are  aware, the  payee of  the promissory  note, Newcastle  Partners,
 L.P., is an  affiliate of  Mark E.  Schwarz, the  Chairman of  the Board  of
 Directors  of  Borrower.  In  accordance  with  Section  6.p.  of  the  Loan
 Agreement, a  special  committee  of  the Board  of  Directors  of  Borrower
 consisting solely of disinterested independent directors has determined that
 this proposed interim  loan transaction is  in good  faith and  commercially
 reasonable.

 Please acknowledge Lender's  consent to  this proposed  loan transaction  by
 executing and returning to the  undersigned the enclosed duplicate  original
 of this letter.  Thank you for your courtesy and cooperation in this matter.

 Very truly yours,

 Linda H. Sleeper
 President and CEO

 CONSENTED TO AND AGREED AS OF OCTOBER 31, 2002:

 DORINCO REINSURANCE COMPANY

 By:  ______________________________

      Name:_________________________

      Title:__________________________

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