EXHIBIT 99.4
HALLMARK FINANCIAL SERVICES, INC.
50,000,000 Shares of Common Stock
Offered Pursuant to Rights Distributed to Security Holders
___________, 2005
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 April 20, 2005 (the "Record Date"). The Rights
are described in the Company's Prospectus dated ________, 2005 (the
"Prospectus").
In the Rights Offering, the Company is offering an aggregate of
50,000,000 shares of Common Stock, as described in the Prospectus.
The Rights will expire, if not exercised at 5:00 p.m., Dallas, Texas
time, on ________, 2005, 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 1.37 shares
of Common Stock (the "Basic Subscription Privilege") at the cash price of
$0.90 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 Offering - Subscription Rights - Over-
Subscription Privilege" 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 shares 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 Securities Transfer Corporation, 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 executed 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., Dallas, Texas
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 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 Subscription Agent. The Subscription
Agent's telephone number is (469) 633-0101
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 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.