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EXHIBIT 10.1

        [CITY NATIONAL BANK LOGO]

PROMISSORY NOTE

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Principal
$20,000,000.00   Loan Date
08-09-2002   Maturity
08-01-2003   Loan No.
11552   Call/Call   Account
209600   Officer
FB   Initials
F.B.

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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.

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Borrower: ZENITH NATIONAL INSURANCE CORP., A DELAWARE CORPORATION
21255 CALIFA STREET
WOODLAND HILLS, CA 91367   Lender: City National Bank, NA
Westside Commercial Banking Center #674000
400 North Roxbury Drive
Beverly Hills, CA 90210

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Principal Amount: $20,000,000.00   Initial Rate: 4.750%   Date of Note:
August 9, 2002

PROMISE TO PAY.    ZENITH NATIONAL INSURANCE CORP., A DELAWARE CORPORATION
["Borrower"] promises to pay to City National Bank, NA ("Lender"), or order, in
lawful money of the United States of America, the principal amount of Twenty
Million & 00/100 Dollars ($20,000,000.00) or so much as may be outstanding,
together with interest on the unpaid outstanding principal balance of each
advance. Interest shall be calculated from the date of each advance until
repayment of each advance.

PAYMENT.    Borrower will pay this loan in one payment of all outstanding
principal plus all accrued unpaid interest on August 1, 2003. In addition,
Borrower will pay regular monthly payments of all accrued unpaid interest due as
of each payment date, beginning September 1, 2002, with all subsequent interest
payments to be due on the same day of each month after that. Unless otherwise
agreed or required by applicable law, payments will be applied first to accrued
unpaid interest, then to principal, and any remaining amount to any unpaid
collection costs and late charges. The annual interest rate for this Note is
computed on a 365/360 basis; that is, by applying the ratio of the annual
interest rate over a year of 360 days, multiplied by the outstanding principal
balance, multiplied by the actual number of days the principal balance is
outstanding. Borrower will pay Lender at Lender's address shown above or at such
other place as Lender may designate in writing.

VARIABLE INTEREST RATE.    The interest rate on this Note is subject to change
from time to time based on changes in an index which is the City National Bank
Prime Rate (the "Index"). Prime Rate shall mean the rate most recently announced
by Lender at its principal office in Beverly Hills, California, as its "Prime
Rate". Any change in the Prime Rate shall become effective on the same business
day on which the Prime Rate shall change, without prior notice to Borrower.
Lender will tell Borrower the current Index rate upon Borrower's request. The
interest rate change will not occur more often than each day. Borrower
understands that Lender may make loans based on other rates as well. The Index
currently is 4.750%. The interest rate to be applied to the unpaid principal
balance of this Note will be at a rate equal to the Index, resulting in an
initial rate of 4.750%. NOTICE: Under no circumstances will the interest rate on
this Note be more than the maximum rate allowed by applicable law.

PREPAYMENT.    Borrower agrees that all loan fees and other prepaid finance
charges are earned fully as of the date of the loan and will not be subject to
refund upon early payment (whether voluntary or as a result of default), except
as otherwise required by law. Except for the foregoing, Borrower may pay without
penalty all or a portion of the amount owed earlier than it is due. Early
payments will not, unless agreed to by Lender in writing, relieve Borrower of
Borrower's obligation to continue to make payments of accrued unpaid interest.
Rather, early payments will reduce the principal balance due. Borrower agrees
not to send Lender payments marked "paid in full", "without recourse", or
similar

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language. If Borrower sends such a payment, Lender may accept it without losing
any of Lender's rights under this Note, and Borrower will remain obligated to
pay any further amount owed to Lender. All written communications concerning
disputed amounts, including any check or other payment instrument that indicates
that the payment constitutes "payment in full" of the amount owed or that is
tendered with other conditions or limitations or as full satisfaction of a
disputed amount must be mailed or delivered to: City National Bank, NA; Westside
Commercial Banking Center #674000; 400 North Roxbury Drive; Beverly Hills, CA
90210.

LATE CHARGE.    If a payment is 10 days or more late, Borrower will be charged
5.000% of the unpaid portion of the regularly scheduled payment or $10.00,
whichever is greater.

INTEREST AFTER DEFAULT.    Upon Borrower's failure to pay all amounts declared
due pursuant to this section, including failure to pay upon final maturity,
Lender, at its option, may, if permitted under applicable law, increase the
variable interest rate on this Note to 5.000 percentage points over the Index.

DEFAULT.    Each of the following shall constitute an event of default ("Event
of Default") under this Note:

Payment Default.    Borrower fails to make any payment when due under this Note.

Other Defaults.    Borrower fails to comply with or to perform any other term,
obligation, covenant or condition contained in this Note or in any of the
related documents or to comply with or to perform any term, obligation,
covenant, or condition contained in any other agreement between Lender and
Borrower.

Default in Favor of Third Parties.    Borrower or any Grantor defaults under any
loan, extension of credit, security agreement, purchase or sales agreement, or
any other agreement, in favor of any other creditor or person that may
materially affect Borrower's property or Borrower's ability to repay this Note
or perform Borrower's obligations under this Note or any of the related
documents.

False Statements.    Any warranty, representation or statement made or furnished
to Lender by Borrower or on Borrower's behalf under this Note or the related
documents is false or misleading in any material respect, either now or at the
time made or furnished or becomes false or misleading at any time thereafter.

Insolvency.    The dissolution or termination of Borrower's existence as a going
business, the insolvency of Borrower, the appointment of a receiver for any part
of Borrower's property, any assignment for the benefit of creditors, any type of
creditor workout, or the commencement of any proceeding under any bankruptcy or
insolvency laws by or against Borrower.

Creditor or Forfeiture Proceedings.    Commencement of foreclosure or forfeiture
proceedings, whether by judicial proceeding, self-help, repossession or any
other method, by any creditor of Borrower or by any governmental agency against
any collateral securing the loan. This includes a garnishment of any of
Borrower's accounts, including deposit accounts, with Lender. However, this
Event of Default shall not apply if there is a good faith dispute by Borrower as
to the validity or reasonableness of the claim which is the basis of the
creditor or forfeiture proceeding and if Borrower gives Lender written notice of
the creditor or forfeiture proceeding and deposits with Lender monies or a
surety bond for the creditor or forfeiture proceeding, in an amount determined
by Lender, in its sole discretion, as being an adequate reserve or bond for the
dispute.

Events Affecting Guarantor.    Any of the preceding events occurs with respect
to any guarantor, endorser, surety, or accommodation party of any of the
indebtedness or any guarantor, endorser,

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surety, or accommodation party dies or becomes incompetent, or revokes or
disputes the validity of, or liability under, any guaranty of the indebtedness
evidenced by this Note.

Change in Ownership.    Any change in ownership of twenty-five percent (25%) or
more of the common stock of Borrower, in a single or related series of
transactions.

Adverse Change.    A material adverse change occurs in Borrower's financial
condition, or Lender believes the prospect of payment or performance of this
Note is impaired.

Insecurity.    Lender in good faith believes itself insecure.

LENDER'S RIGHTS.    Upon default, Lender may declare the entire unpaid principal
balance on this Note and all accrued unpaid interest immediately due, and then
Borrower will pay that amount.

ATTORNEYS' FEES; EXPENSES.    Lender may hire or pay someone else to help
collect this Note if Borrower does not pay. Borrower will pay Lender that
amount. This includes, subject to any limits under applicable law, Lender's
attorneys' fees and Lender's legal expenses, whether or not there is a lawsuit,
including attorneys' fees, expenses for bankruptcy proceedings (including
efforts to modify or vacate any automatic stay or injunction), and appeals.
Borrower also will pay any court costs, in addition to all other sums provided
by law.

GOVERNING LAW.    This Note will be governed by, construed and enforced in
accordance with federal law and the laws of the State of California. This Note
has been accepted by Lender in the State of California.

CHOICE OF VENUE.    If there is a lawsuit, Borrower agrees upon Lender's request
to submit to the jurisdiction of the courts of LOS ANGELES County, State of
California.

LINE OF CREDIT.    This Note evidences a revolving line of credit. Advances
under this Note may be requested orally by Borrower or as provided in this
paragraph. All oral requests shall be confirmed in writing on the day of the
request. All communications, instructions, or directions by telephone or
otherwise to Lender are to be directed to Lender's office shown above. The
following persons currently are authorized to request advances and authorize
payments under the line of credit until Lender receives from Borrower, at
Lender's address shown above, written notice of revocation of their authority:
STANLEY R. ZAX; WILLIAM J. OWEN; and HYMAN J. LEE, JR. Borrower agrees to be
liable for all sums either: (A) advanced in accordance with the instructions of
an authorized person or (B) credited to any of Borrower's accounts with Lender.
The unpaid principal balance owing on this Note at any time may be evidenced by
endorsements on this Note or by Lender's internal records, including daily
computer print-outs. Lender will have no obligation to advance funds under this
Note if: (A) Borrower or any guarantor is in default under the terms of this
Note or any agreement that Borrower or any guarantor has with Lender, including
any agreement made in connection with the signing of this Note; (B) Borrower or
any guarantor ceases doing business or is insolvent; (C) any guarantor seeks,
claims or otherwise attempts to limit, modify or revoke such guarantor's
guarantee of this Note or any other loan with Lender; (D) Borrower has applied
funds provided pursuant to this Note for purposes other than those authorized by
Lender; or (E) Lender in good faith believes itself insecure.

SUCCESSOR INTERESTS.    The terms of this Note shall be binding upon Borrower,
and upon Borrower's heirs, personal representatives, successors and assigns, and
shall inure to the benefit of Lender and its successors and assigns.

NOTIFY US OF INACCURATE INFORMATION WE REPORT TO CONSUMER REPORTING
AGENCIES.    Please notify us if we report any inaccurate information about your
account(s) to a

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consumer reporting agency. Your written notice describing the specific
inaccuracy(ies) should be sent to us at the following address: City National
Bank, 831 South Douglas Street, El Segundo, CA 90245

GENERAL PROVISIONS.    Lender may delay or forgo enforcing any of its rights or
remedies under this Note without losing them. Borrower and any other person who
signs, guarantees or endorses this Note, to the extent allowed by law, waive any
applicable statute of limitations, presentment, demand for payment, and notice
of dishonor. Upon any change in the terms of this Note, and unless otherwise
expressly stated in writing, no party who signs this Note, whether as maker,
guarantor, accommodation maker or endorser, shall be released from liability.
All such parties agree that Lender may renew or extend (repeatedly and for any
length of time) this loan or release any party or guarantor or collateral; or
impair, fail to realize upon or perfect Lender's security interest in the
collateral; and take any other action deemed necessary by Lender without the
consent of or notice to anyone. All such parties also agree that Lender may
modify this loan without the consent of or notice to anyone other than the party
with whom the modification is made. The obligations under this Note are joint
and several.

PRIOR TO SIGNING THIS NOTE, BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF
THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. BORROWER AGREES TO
THE TERMS OF THE NOTE.

BORROWER ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THIS PROMISSORY NOTE.

BORROWER:    
ZENITH NATIONAL INSURANCE CORP., A DELAWARE CORPORATION
By:
/s/  STANLEY R. ZAX      

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STANLEY R. ZAX, Board Chairman/President of ZENITH NATIONAL INSURANCE CORP., A
DELAWARE CORPORATION
 
 

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[CITY NATIONAL BANK LOGO]

DISBURSEMENT REQUEST AND AUTHORIZATION

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Principal
$20,000,000.00   Loan Date
08-09-2002   Maturity
08-01-2003   Loan No.
11552   Call/Call   Account
209600   Officer
FB   Initials
F.B.

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References in the shaded area are for Lender's use only and do not limit the
applicability of this document to any particular loan or item.
Any item above containing "***" has been omitted due to text length limitations.

--------------------------------------------------------------------------------

Borrower: ZENITH NATIONAL INSURANCE CORP., A DELAWARE CORPORATION
21255 CALIFA STREET
WOODLAND HILLS, CA 91367   Lender: City National Bank, NA
Westside Commercial Banking Center #674000
400 North Roxbury Drive
Beverly Hills, CA 90210

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LOAN TYPE.    This is a Variable Rate Nondisclosable Revolving Line of Credit
Loan to a Corporation for $20,000,000.00 due on August 1, 2003. The reference
rate (CITY NATIONAL BANK PRIME, currently 4.750%), resulting in an initial rate
of 4.750.

PRIMARY PURPOSE OF LOAN.    The primary purpose of this loan is for:

o  Personal, Family, or Household Purposes or Personal Investment.

ý  Business (including Real Estate Investment).

SPECIFIC PURPOSE.    The specific purpose of this loan is: WORKING CAPITAL.

*DISBURSEMENT INSTRUCTIONS.    Borrower understands that no loan proceeds will
be disbursed until all of Lender's conditions for making the loan have been
satisfied. Please disburse the loan proceeds of $20,000,000.00 as follows:

Amount paid on Borrower's account:   $ 20,000,000.00     $20,000,000.00 Payment
on Loan # 209600/11552 (RENEWAL)            

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  Note Principal:   $ 20,000,000.00 *

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*NO disbursement is being requested by this form. This form signifies simply
that an existing $20 million Note, on which the principal balance is 0, is being
renewed by a new note.

CHARGES PAID IN CASH.    Borrower has paid or will pay in cash as agreed the
following charges:

Prepaid Finance Charges Paid in Cash:   $ 100,000.00   $100,000.00 Loan Fee    
     

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Total Charges Paid in Cash:   $ 100,000.00

LOAN PROCEEDS.    Loan proceeds are to be credited to Account Number 001-670786
at City National Bank.

FINANCIAL CONDITION.    BY SIGNING THIS AUTHORIZATION, BORROWER REPRESENTS AND
WARRANTS TO LENDER THAT THE INFORMATION PROVIDED ABOVE IS TRUE AND CORRECT AND
THAT THERE HAS BEEN NO MATERIAL ADVERSE CHANGE IN BORROWER'S

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FINANCIAL CONDITION AS DISCLOSED IN BORROWER'S MOST RECENT FINANCIAL STATEMENT
TO LENDER. THIS AUTHORIZATION IS DATED AUGUST 9, 2002.

BORROWER:    
ZENITH NATIONAL INSURANCE CORP., A DELAWARE CORPORATION
By:
/s/  STANLEY R. ZAX      

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STANLEY R. ZAX, Board Chairman/President of ZENITH NATIONAL INSURANCE CORP., A
DELAWARE CORPORATION
 
 

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PROMISSORY NOTE
DISBURSEMENT REQUEST AND AUTHORIZATION