EXHIBIT 99.4
HALLMARK FINANCIAL SERVICES, INC.
__________ Shares of Common Stock
Offered Pursuant to Rights Distributed to Security Holders
_________, 2003
To Securities Dealers, Commercial Banks, Trust Companies and Other Nominees:
This letter is being distributed to securities dealers, commercial
banks, trust companies and other nominees in connection with the rights offering
(the "Rights Offering") by Hallmark Financial Services, Inc. (the "Company") of
shares of its Common Stock (as such term is defined below), pursuant to
non-transferable subscription rights (the "Rights") distributed to all holders
of record (collectively, the "Recordholders") of shares of its common stock, par
value $0.03 per share (the "Common Stock"), at the close of business on
________, 2003 (the "Record Date"). The Rights are described in the Company's
Prospectus dated _____, 2003 (the "Prospectus").
In the Rights Offering, the Company is offering an aggregate of
______ shares of Common Stock, as described in the Prospectus.
The Rights will expire, if not exercised, at 5:00 p.m., New York
City time, on _____, 2003, unless extended in the sole discretion of the Company
(as it may be extended, the "Expiration Date").
Each Right entitles the holder thereof to subscribe for _______
shares of Common Stock (the "Basic Subscription Privilege") at the cash price of
$___ per share (the "Subscription Price").
Each Right also entitles the holder thereof to subscribe (the
"Over-Subscription Privilege") for additional shares of Common Stock that have
not been purchased by other Recordholders pursuant to their Basic Subscription
Privilege, at the Subscription Price, if such holder has fully exercised its
Basic Subscription Privilege. See "The Rights Offering" in the Prospectus.
The Rights are evidenced by a non-transferable Rights certificate (a
"Rights Certificate") registered in your name or the name of your nominee. Each
beneficial owner of shares of Common Stock registered in your name or the name
of your nominee is entitled to one Right for each share of Common Stock owned by
such beneficial owner at the close of business on the Record Date.
We are asking persons who hold shares of Common Stock beneficially
and who have received the Rights distributable with respect to those shares
through a broker, dealer, commercial bank, trust company or other nominee, as
well as persons who hold certificates of Common Stock directly and prefer to
have such institutions effect transactions relating to the Rights on their
behalf, to contact the appropriate institution or nominee and request it to
effect the transactions for them. In addition, we are asking beneficial owners
who wish to obtain a separate Rights Certificate to contact the appropriate
nominee as soon as possible and request that a separate Rights Certificate be
issued.
If you exercise the Over-Subscription Privilege on behalf of
beneficial owners of Rights, you will be required to certify to the Subscription
Agent and the Company, in connection with the exercise of the Over-Subscription
Privilege, as to the aggregate number of Rights that have been exercised
pursuant to the Basic Subscription Privilege, whether the Basic Subscription
Privilege of each beneficial owner of Rights on whose behalf you are acting has
been exercised in full, and the number of shares of Common Stock being
subscribed for pursuant to the Over-Subscription Privilege by each beneficial
owner of Rights on whose behalf you are acting.
Enclosed are copies of the following documents:
1. Prospectus;
2. Instructions as to Use of Rights Certificates;
3. A form of letter that may be sent to your clients for whose accounts
you hold shares of Common Stock registered in your name or the name
of your nominee, with an attached form of instruction;
4. Notice of Guaranteed Delivery for Rights Certificates;
5. Nominee Holder Certification;
6. Substitute Form W-9 (including Guidelines for Certification of
Taxpayer Identification Number on Substitute Form W-9); and
7. A return envelope addressed to _____________________, the
Subscription Agent.
We are asking you to contact those of your clients for whose
accounts you hold shares of Common Stock registered in your name or the name of
your nominee to obtain their instructions with respect to the Rights.
All commissions, fees and other expenses (including brokerage
commissions and transfer taxes), other than fees and expenses of the
Subscription Agent, incurred in connection with the exercise of the Rights will
be for the account of the holder of the Rights, and none of such commissions,
fees or expenses will be paid by the Company or the Subscription Agent.
Your prompt action is requested. To exercise Rights, you should
deliver the properly completed and signed Rights Certificate (or the Notice of
Guaranteed Delivery if you are following the Guaranteed Delivery Procedures),
with payment of the Subscription Price in full for each share of Common Stock
subscribed for, to the Subscription Agent, as indicated in the Prospectus. The
Subscription Agent must receive the Rights Certificate or Notice of Guaranteed
Delivery with payment of the Subscription Price, including final clearance of
any checks, prior to 5:00 p.m., New York City time, on the Expiration Date.
FAILURE TO RETURN THE PROPERLY COMPLETED RIGHTS CERTIFICATE WITH THE CORRECT
PAYMENT WILL RESULT IN YOUR NOT BEING ABLE TO EXERCISE YOUR RIGHTS. A Rights
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holder cannot revoke the exercise of its Rights. Rights not exercised prior to
the Expiration Date will expire.
Additional copies of the enclosed materials and assistance or
information may be obtained from __________________, the Information Agent. The
Information Agent's telephone number for stockholders is ( ) ________ and
telephone number for banks and brokerage firms is ( ) ________.
Very truly yours,
HALLMARK FINANCIAL SERVICES, INC.
_________________________________
Nothing in the Prospectus or in the enclosed documents shall constitute you or
any person as an agent of Hallmark Financial Services, Inc., the Subscription
Agent, the Information Agent or any other person making or deemed to be making
offers of the securities issuable upon valid exercise of the rights, or
authorize you or any other person to make any statements on behalf of any of
them with respect to the offering except for statements made in the Prospectus.
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