Document:

EXHIBIT 10 (b)

                                ADDENDUM NO. 2

                                    to the

                      QUOTA SHARE RETROCESSION AGREEMENT
                           Effective:  July 1, 2000

                         entered into by and between

                 AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS
                                Dallas, Texas

                                     and

                         DORINCO REINSURANCE COMPANY
                              Midland, Michigan

 IT IS HEREBY AGREED, effective retroactively to July 1, 2000, that the
 third paragraph of ARTICLE 2 - COVER shall be deleted and the following
 substituted therefor:

      "In no event shall the net written premium ceded hereunder for any
      Underwriting Year exceed $37,000,000.  For the period from July 1,
      2001 to September 30, 2001, the net written premium ceded hereunder
      shall not exceed $10,000,000."

 IT IS FURTHER AGREED, effective April 1, 2001, with respect to policies
 attaching to Underwriting Periods commencing on or after that date, that
 the following paragraph shall be added to ARTICLE 2 - COVER:

      "Notwithstanding the above, the Reinsurer shall have no liability for
      the amount by which incurred losses and loss adjustment expenses for
      the period effective April 1, 2001 to June 30, 2001 is between 65% and
      77% of ceded premium for the same period.  This 'loss ratio corridor'
      between 65% and 77% shall be held net and unreinsured by the Company,
      and in addition to its quota share retention set forth above.

      In addition, in the event such loss corridor is utilized, then
      effective for Underwriting Years commencing on or after July 1, 2001,
      the Reinsurer shall have no liability for the amount by which incurred
      losses and loss adjustment expenses for the Underwriting Year is
      between 65% and 80% of ceded premium for the same period.  This 'loss
      ratio corridor' between 65% and 80% shall be held net and unreinsured
      by the Company, and in addition to its quota share retention set forth
      above."

 IT IS ALSO AGREED, effective April 1, 2001, that subparagraph 1 of paragraph
 A of ARTICLE 7 - ACCOUNTS AND REMITTANCES shall be deleted and the following
 substituted therefor:

      "1.  Ceded net written premium (i.e., ceded gross written premium,
           including the Reinsurer's share of 100% of the collected Policy
           fees, less returns and cancellations), under Policies attaching
           to each Underwriting Period; less"

 IT IS ALSO AGREED, effective April 1, 2001, that ARTICLE 8 - CEDING
 COMMISSION shall be deleted and the following substituted therefor:

                                  "ARTICLE 8

      CEDING COMMISSION

      The Reinsurer will allow the Company a provisional ceding commission on
      ceded net written premiums as follows:

      A.   For the period from July 1, 2000 to March 31, 2001, 41.0%;

      B.   For the period from April 1, 2001 to June 30, 2001, 34.0%;

      C.   As respects the second and subsequent Underwriting Years
           hereunder, 31.0%.

      Return commission shall be allowed on return premiums at the same rate
      for the same period."

 IT IS ALSO AGREED, effective April 1, 2001, that subparagraph 2 of paragraph
 A of ARTICLE 9 - COMMISSION ADJUSTMENT shall be deleted and the following
 substituted therefor:

      "2.  Within 18 months from the beginning of each Underwriting Year,
           the Company will calculate an adjusted ceding commission for
           the Underwriting Year then expired based on premiums earned and
           losses incurred.  The ceding commission paid to that date, whether
           provisional or prior adjustment, shall be adjusted between the
           parties as appropriate.  At the end of each Underwriting Year,
           adjustments will continue to be made annually until all losses
           have been paid or closed, at which time the ceding commission
           will become final."

 IT IS ALSO AGREED, effective April 1, 2001, that paragraph B of ARTICLE 9 -
 COMMISSION ADJUSTMENT (as amended by Addendum No. 1) shall be deleted and
 the following substituted therefor:

 "B.  The adjusted ceding commission shall be calculated as follows:

      1.  As respects the first Underwriting Year calculation, the following
          shall apply:

           a.   For the period from July 1, 2000 to December 31, 2000, if
                the ratio of losses incurred to premium earned is 64.5% or
                higher, then the adjusted ceding commission shall be 31.0%.
                If the ratio of losses incurred to premium earned is less
                than 64.5%, then the adjusted commission shall be determined
                by adding one percentage point to the ceding commission for
                each percentage point reduction loss ratio subject to a
                ceding commission of 41.0% at a loss ratio of 54.5% or less.
                If the ratio of losses incurred to premium earned is greater
                than 64.5% or less than 54.5%, the difference between the
                actual loss ratio and 64.5% or 54.5%, as the case may be,
                will be multiplied by the earned premium for the Underwriting
                Year and carried forward as a debit or credit to the ensuing
                Underwriting Year calculation.

           b.   For the period from January 1, 2001 to February 28, 2001, if
                the ratio of losses incurred to premium earned is 64.0% or
                higher, then the adjusted ceding commission shall be 31.0%.
                If the ratio of losses incurred to premium earned is less
                than 64.0%, then the adjusted commission shall be determined
                by adding one percentage point to the ceding commission for
                each percentage point reduction loss ratio subject to a
                ceding commission of 41.0% at a loss ratio of 54.0% or less.
                If the ratio of losses incurred to premium earned is greater
                than 64.0% or less than 54.0%, the difference between the
                actual loss ratio and 64.0% or 54.0%, as the case may be,
                will be multiplied by the earned premium for the Underwriting
                Year and carried forward as a debit or credit to the ensuing
                Underwriting Year calculation.

           c.   For the period from March 1, 2001 to March 31, 2001, if
                the ratio of losses incurred to premium earned is 69.0% or
                higher, then the adjusted ceding commission shall be 26.0%.
                If the ratio of losses incurred to premium earned is less
                than 69.0%, then the adjusted commission shall be determined
                by adding one percentage point to the ceding commission for
                each percentage point reduction loss ratio subject to a
                ceding commission of 41.0% at a loss ratio of 54.0% or less.
                If the ratio of losses incurred to premium earned is greater
                than 69.0% or less than 54.0%, the difference between the
                actual loss ratio and 69.0% or 54.0%, as the case may be,
                will be multiplied by the earned premium for the Underwriting
                Year and carried forward as a debit or credit to the ensuing
                Underwriting Year calculation.

           d.   For the period from April 1, 2001 to June 30, 2001, if the
                ratio of losses incurred to premium earned is 65.0% or
                higher, then the adjusted ceding commission shall be 26.0%.
                If the ratio of losses incurred to premium earned is less
                than 65.0%, then the adjusted commission shall be determined
                by adding one percentage point to the ceding commission for
                each percentage point reduction loss ratio subject to a
                ceding commission of 34.0% at a loss ratio of 50.0% or less.
                If the ratio of losses incurred to premium earned is greater
                than 65.0% or less than 50.0%, the difference between the
                actual loss ratio and 65.0% or 50.0%, as the case may be,
                will be multiplied by the earned premium for the Underwriting
                Year and carried forward as a debit or credit to the ensuing
                Underwriting Year calculation.

      2.   As respects the second and subsequent Underwriting Years
           hereunder, if the ratio of losses incurred to premium earned
           is 65.0% or higher, then the adjusted ceding commission shall
           be 26.0%.  If the ratio of losses incurred to premium earned is
           less than 65.0%, then the adjusted commission shall be determined
           by adding one percentage point to the ceding commission for
           each percentage point reduction loss ratio subject to a ceding
           commission of 31.0% at a loss ratio of 50.0% or less.  If the
           ratio of losses incurred to premium earned is greater than 65.0%
           or less than 50.0%, the difference between the actual loss ratio
           and 65.0% or 50.0%, as the case may be, will be multiplied by the
           earned premium for the Underwriting Year and carried forward as a
           debit or credit to the ensuing Underwriting Year calculation.

      Following termination of this Agreement any debit or credit
      carryforward remaining after the final adjustment of the concluding
      Underwriting Year will be null and void."

 IT IS ALSO AGREED, effective July 1, 2001, with respect to policies
 attaching to Underwriting Years commencing on or after that date, that
 the first paragraph of ARTICLE 1 - BUSINESS REINSURED shall be deleted
 and the following substituted therefor:

      "This Agreement is to share with the Reinsurer the interests and
      liabilities of the Company under all Policies classified by the Company
      as Private Passenger Automobile Business (including Motorist Bodily
      Injury and Property Damage, Physical Damage, Uninsured/Underinsured
      Motorist Bodily Injury and Property Damage, Personal Injury Protection,
      and Towing and Rental insurance) written or renewed by or through
      American Hallmark General Agency, Inc., Dallas, Texas for and on
      behalf of State and County Mutual Insurance Company, Ft. Worth, Texas
      (hereinafter called the 'Issuing Carrier') and assumed by the Company
      as reinsurance from the Issuing Carrier, during the term of this
      Agreement, subject to the terms and conditions herein contained."

 IT IS ALSO AGREED, effective July 1, 2001, with respect to policies
 attaching to Underwriting Years commencing on or after that date, that
 ARTICLE 5 - WARRANTY shall be deleted and the following substituted
 therefor:

                                  "ARTICLE 5

      WARRANTY

      It is warranted for purposes of this Agreement that the maximum Policy
      limits for which American Hallmark General Agency, Inc. shall have the
      authorization to bind the Issuing Carrier for business ceded hereunder
      shall be as follows or so deemed:

      A.   Bodily Injury, per person/per accident         $25,020/$50,020

      B.   Property Damage, per accident                  $25,020

      C.   Physical Damage                                Actual Cash Value
                                                          (ACV) not to exceed
                                                          $50,020
                                                          per vehicle

      D.   Personal Injury Protection,
           per person/per accident                        $2,520

      E.   Uninsured/Underinsured Motorist Bodily
           Injury, per person/per accident                $25,020/$50,020

      F.   Uninsured/Underinsured Motorist Property
           Damage, per accident                           $25,020

      In the event of a statutory increase in limits by the State of Texas,
      or travel by an insured to a state with greater statutory requirements,
      the maximum Policy limits shall be increased to statutory limits in
      effect."

 IT IS ALSO AGREED, effective July 1, 2001, that the fifth paragraph of
 ARTICLE 16 - EXTRA CONTRACTUAL OBLIGATIONS AND EXCESS OF POLICY LIMITS
 shall be deleted and the following substituted therefor:

      "Notwithstanding the above, as respects any loss under policies
      attaching prior to July 1, 2001 which includes either Extra Contractual
      Obligations or Excess of Policy Limits or both, the Reinsurer's limit
      of liability for Extra Contractual Obligations and/or Excess of Policy
      Limits shall be limited to $2,000,000 each loss in addition to the
      indemnity loss.  As respects any loss under policies attaching to
      Underwriting Years commencing on or after July 1, 2001 which includes
      Extra Contractual Obligations and/or Excess of Policy Limits, the
      Reinsurer's limit of liability for Extra Contractual Obligations and/or
      Excess of Policy Limits shall be limited to $700,000 (i.e., 70% of
      $1,000,000) each loss in addition to the indemnity loss."

 The provisions of this Agreement shall remain otherwise unchanged.

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

 Dallas, Texas, this ___________ day of_________________________, 20__.

                _______________________________________________________
                AMERICAN HALLMARK INSURANCE COMPANY OF TEXAS

 Midland, Michigan, this __________ day of______________________, 20__.

                _______________________________________________________
                DORINCO REINSURANCE COMPANYEXHIBIT 10 (c)

                              ENDORSEMENT NO. 1

                                    to the

             GUARANTY OF PERFORMANCE AND HOLD HARMLESS AGREEMENT
                           Effective:  July 1, 1996

                                by and between

                      HALLMARK FINANCIAL SERVICES, INC.

                                     and

                         DORINCO REINSURANCE COMPANY

 IT IS HEREBY AGREED, effective July 1, 2000, that subparagraph 8 of the
 Agreement shall be deleted and the following substituted therefor:

      "8.  IT IS FURTHER AGREED, that American will maintain a surplus of
 $2,500,000, however, in the event American's surplus falls below $2,500,000
 the Guarantor will provide within fifteen days, collateral in a form
 acceptable to Dorinco in an amount equal to 100% of American's liabilities
 due to County on business American assumes from County and does not
 retrocede to the Quota Share Retrocession Agreement."

 The provisions of this Agreement shall remain otherwise unchanged.

 IN WITNESS WHEREOF, the parties hereto have caused this Endorsement to be
 executed in duplicate by:

                          Hallmark Financial Services, Inc.

                          By:    ______________________________________

                          Its:   ______________________________________

                          Date:  ______________________________________

                          Dorinco Reinsurance Company

                          By:    ______________________________________

                          Its:   ______________________________________

                          Date:  ______________________________________

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