EXHIBIT (10)(V)



THIRD AMENDMENT TO LOAN AGREEMENT





THIS THIRD AMENDMENT TO LOAN AGREEMENT (the Amendment) dated this 1st day of March, 2005, effective as of March 19, 2005, by and between HARLEYSVILLE GROUP INC., a corporation organized and existing under the laws of the State of Delaware with an address of 355 Maple Avenue, Harleysville, PA 19438 (the Borrower), and HARLEYSVILLE MUTUAL INSURANCE COMPANY, an insurance company organized and existing under the laws of the Commonwealth of Pennsylvania, with an address of 355 Maple Avenue, Harleysville, PA 19438 (the Lender):



WITNESSETH:



WHEREAS, The Borrower and the Lender entered into a Loan Agreement (the Agreement) dated March 19, 1991 whereby the Borrower borrowed the sum of $18,500,000 (the Loan) from the Lender for the purpose of acquiring the shares of stock of Phoenix General Insurance Company and its subsidiaries, and the principal amount of the loan remains unpaid and outstanding; and



WHEREAS, The Borrower and the Lender entered into the Second Amendment to Loan Agreement dated March 4, 1998, effective as of March 19, 1998, whereby the Loan Agreement was extended for an additional seven (7) years at an interest rate of LIBOR plus sixty-five one-hundredths (0.65%) per cent with all other terms and conditions of the Loan Agreement remaining the same; and



WHEREAS, The Borrower and the Lender desire to extend the Loan Agreement an additional seven (7) years at an interest rate of LIBOR plus forty-five one-hundredths (0.45%) per cent with all other terms and conditions of the Loan Agreement remaining the same; and



WHEREAS, Section 8.03 of the Agreement provides, inter alia, that the Borrower and the Lender may enter into a written agreement amending, modifying or supplementing the Agreement.



NOW, THEREFORE, In consideration of the premises and the mutual covenants and conditions herein contained, and intending to be legally bound hereby, the parties hereto agree as follows:



1.

The definition of Maturity Date in Section 1.01 of Article I of the Agreement shall be deleted, and the following shall be substituted in its place:



Maturity Date shall mean the earlier to occur of March 18, 2012 or the date on which the Lender makes a demand for payment of the Note in full .

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2.

The last sentence of Section 2.01(b) of Article II of the Agreement shall be deleted, and the following shall be substituted in its place:



The rate of interest shall be equal to LIBOR, as established by the LIBOR interest period selected by the Borrower plus forty-five one-hundredths (0.45%) per cent.



3.

The last line of Section 2.06 of Article II of the Agreement shall be deleted and the following shall be substituted in its place:



then current LIBOR plus forty-five one-hundredths (0.45%) per cent.



4.

Exhibit A-1 which amended Exhibit A referred to in Section 2.03 of Article II of the Agreement shall be deleted and Exhibit A-2, copy of which is attached hereto and made a part hereof, shall be substituted in its place.



5.

Exhibit B-1 referred to in Section 3.11 of Article III of the Agreement shall be deleted and Exhibit B-2, which is attached hereto and made a part hereof, shall be substituted in its place.



6.

All other terms, conditions, and provisions of the Agreement are hereby ratified and confirmed by the Borrower and the Lender and remain in full force and effect, except as herein modified, amended, and changed.



IN WITNESS WHEREOF, The parties hereto, by their duly authorized officers, have executed and delivered this Third Amendment to Loan Agreement on the date first above written, effective as of the date stated herein.





HARLEYSVILLE MUTUAL INSURANCE COMPANY



BY:

/s/ Mark R. Cummis



Mark R. Cummins

Senior Vice President, Chief Investment

Officer and Treasurer





HARLEYSVILLE GROUP INC.



BY:

/s/ Bruce J. Magee



Bruce J. Magee

Senior Vice President &

Chief Financial Officer





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Exhibit A-2





AMENDMENT TO PROMISSORY NOTE









By the Third Amendment to Loan Agreement dated as of March 19, 1991 as amended by the Second Amendment to Loan Agreement dated March 4, 1998, by and between HARLEYSVILLE GROUP INC. and HARLEYSVILLE MUTUAL INSURANCE COMPANY, certain modifications, amendments and changes were made, as set forth therein. As a result of those modifications, amendments and changes, the Promissory Note dated March 19, 1991, as amended on March 4, 1998, effective as of March 19, 1998, is now amended, as follows:



1.

The Maturity Date has been extended from March 18, 2005 to March 18, 2012.



2.

The interest rate has been changed from LIBOR plus sixty-five one-hundredths (0.65%) per cent to LIBOR plus forty-five one-hundredths (.45%) per cent.







Dated: March 1, 2005





HARLEYSVILLE GROUP INC.

Attest:

By:

/s/ Bruce J. Magee



/s/ Robert A. Kauffman

Bruce J. Magee

Robert A. Kauffman

Senior Vice President &

Secretary

Chief Financial Officer













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Exhibit B-2





HARLEYSVILLE GROUP INC. SUBSIDIARIES





|NAME OF SUBSIDIARY                           |  | STATE OF DOMICILE |  | PERCENTAGE
OWNED BY
HARLEYSVILLE GROUP INC.
|-------------------------------------------- |  | ----------------- |  | -------------------------------------------
|                                             |  |                   |  |                                            
|Carlton Holding Corporation                  |  | New York          |  | 100%                                       
|Harleysville Asset Management                |  | Pennsylvania      |  | 100%                                       
|Harleysville-Atlantic Insurance Company      |  | Georgia           |  | 100%                                       
|Harleysville Insurance Company               |  | Minnesota         |  | 100%                                       
|Harleysville Insurance Company of New Jersey |  | New Jersey        |  | 100%                                       
|Harleysville Insurance Company of New York   |  | New York          |  | 100%                                       
|Harleysville Insurance Company of Ohio       |  | Ohio              |  | 100%                                       
|Harleysville Lake States Insurance Company   |  | Michigan          |  | 100%                                       
|Harleysville Preferred Insurance Company     |  | Pennsylvania      |  | 100%                                       
|Harleysville Worcester Insurance Company     |  | Massachusetts     |  | 100%                                       
|Insurance Management Resources LP            |  | Pennsylvania      |  | 100%                                       
|Mid-America Insurance Company                |  | Pennsylvania      |  | 100%