Pledge Agreement Dated December 22, 2006


EXHIBIT 10.2







PLEDGE AGREEMENT



        THIS
PLEDGE AGREEMENT (this “Agreement”) is made as of this 22nd
day of December 2006, by ATLANTIC AMERICAN CORPORATION, a Georgia corporation
(the “Pledgor”), in favor of WACHOVIA BANK, NATIONAL ASSOCIATION, a
national banking association (the “Bank”). 


Recitals:


        Pursuant
to the provisions of a Credit Agreement dated as of even date herewith (the
“Credit Agreement”) between the Pledgor and the Bank, the Bank will
state the conditions under which a loan was made to the Pledgor. The Bank has
required, as a condition to entering into the Credit Agreement, the Pledgor to
grant a security interest in certain Collateral (as hereinafter defined), to
agree that the Collateral will secure the Pledgor’s obligations to the Bank
under the Credit Agreement pursuant to this Agreement and to pledge shares of
stock as Collateral as more particularly described herein. 


        The
Pledgor is the record and beneficial owner of all of the issued and outstanding
capital stock of those Subsidiaries of the Pledgor listed in Exhibit A hereto
(the “Pledged Subsidiaries”). 


        NOW,
THEREFORE, in consideration of the premises and in order to induce the Bank to
enter into the Credit Agreement and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, Pledgor hereby
agrees with the Bank as follows: 


        1.      Defined Terms. Unless otherwise defined herein, all capitalized terms used herein shall have the meanings given them in the
Credit Agreement.


        2.      Pledge.  In order to secure  the  prompt  payment  of all  Obligations  of the  Pledgor  to the Bank as  defined in the Credit
Agreement and the performance by the Pledgor of all of the terms,  conditions and provisions of this Agreement,  the Credit  Agreement,
the Note and the other Loan  Documents  to which the Pledgor is a party and in respect of all other  Obligations  of the Pledgor to the
Bank (collectively,  the "Pledgor's  Obligations"),  the Pledgor hereby pledges,  assigns and grants to the Bank a security interest in
(a) certain shares of stock of the Pledged  Subsidiaries,  all as more  particularly set forth in Schedule 1 attached hereto and made a
part hereof,  (b) all shares of stock or other equity interests in the Pledged  Subsidiaries  which the Pledgor may hereafter  acquire,
and (c) all shares of stock or other equity  interests in Persons which  hereafter  become  Insurance  Subsidiaries  (as defined in the
Credit  Agreement) of the Borrower  (excluding  Statutory Trust I and Statutory Trust II and other similar statutory trusts that may be
organized or formed in the future) together with (i) all dividends now or hereafter  earned thereon and (ii) all extensions,  renewals,
modifications,  replacements,  amendments,  substitutions and exchanges thereof and therefor (and all property  subsequently  deposited
pursuant hereto in addition to or in substitution for any such property),  including,  without limitation,  all moneys due or to become
due thereunder,  all cash, stock, and other dividends now or hereafter  declared thereon,  all rights to subscribe to securities now or
hereafter issued incident thereto,  or declared or granted in connection  therewith,  and all distributions  (cash or property) made or
to be made in  connection  therewith or incident  thereto,  together  with all cash and  non-cash  proceeds  thereof,  and all options,
rights,  certificates  or other  distributions  issued as an addition  to, in  substitution  of, in  exchange  for or on account of the
foregoing,  and the proceeds of all  insurance  policies  covering  all or any part of such  property  (all of the  foregoing is herein
collectively  referred to as the "Collateral").  The Pledgor will execute and deliver to the Bank all stock  certificates  (whether now
owned or hereafter acquired), assignments,  endorsements,  powers, hypothecations,  and other documents reasonably required at any time
and from time to time by the Bank with respect to the  Collateral  or in order to effect the purposes of this  Agreement.  With respect
to any part of the  Collateral  consisting of  uncertificated  securities,  the Pledgor will cause the pledge of such  securities to be
registered on the books of the issuer of such securities.


















        3.      Representations and Warranties of Pledgor.  Pledgor represents and warrants to the Bank that:


                (a)      The Pledgor is the owner of the Collateral and has good,  valid and marketable  title to the Collateral  free and clear of all
liens,  security interests,  and other encumbrances except for those in favor of the Bank and those previously  disclosed in writing to
the Bank.


                (b)      The stock  listed on  Schedule  1 beside the name of each  Pledged  Subsidiary  represents  100% of the  beneficial  ownership
(within  the meaning of Rule 13d-3 of the  Securities  and  Exchange  Commission  under the  Securities  Exchange  Act of 1934) of each
Pledged Subsidiary.


                (c)      The Pledgor will not sell,  transfer,  exchange,  or otherwise  dispose of the  Collateral,  or any part thereof,  without the
prior written consent of the Bank and will not permit any lien,  security  interest,  or other encumbrance to attach to the Collateral,
or any part thereof, other than those in favor of the Bank or those permitted by the Bank in writing.


                (d)      The Pledgor will not allow any Pledged  Subsidiary to issue any beneficial  interests in such  Subsidiary that would cause the
percentage of beneficial  interest in such Collateral  pledged  pursuant to this Agreement to fall below the  percentages  specified in
clause (b)  above,  unless  such  additional  interests  are  subject to the terms  hereof or, if  represented  by  certificates,  such
certificates are promptly delivered to Bank.


                (e)      The Collateral has been duly and validly issued and is fully paid and nonassessable.


                (f)      
Pledgor will advise  the Bank  promptly,  but in any event  within 30 days prior to such  happening,  in
 reasonable  detail, of (i) any security  interest (other than the security  interests created by this Agreement) on, or claim asserted
against,  any of the Collateral,  or (ii) the occurrence of any event, claim or occurrence that could reasonably be expected to have a
material adverse effect on the value of the Collateral  greater than or equal to 10% of Pledgor's  Consolidated  Tangible Net Worth or
on the security interests created by this Agreement.



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                (g)      No consent,  approval,  authorization  of or  designation  or filing with any  authority on the part of Pledgor is required in
connection with the pledge and security interest granted under this Agreement, except those which have been obtained or made.


                (h)      The execution,  delivery and performance of this Agreement (i) are within the Pledgor's  corporate powers, (ii) have been duly
authorized by all necessary corporate action,  (iii) do not contravene,  or constitute a default under, any provision of applicable law
or regulation or of the  certificate  of  incorporation  or articles of  incorporation  or by-laws of the Pledgor or of any  agreement,
judgment,  injunction,  order,  decree  or other  instrument  binding  upon the  Pledgor,  and (iv) do not  result in the  creation  or
imposition of any Lien on any asset of the Pledgor, other than the Lien created hereby.


                (i)      This Agreement  constitutes a valid and binding  agreement of the Pledgor  enforceable in accordance  with its terms except as
such enforceability may be (i) limited by any applicable bankruptcy, insolvency,  reorganization,  moratorium or similar laws affecting
the  enforceability  of creditors'  rights  generally,  and (ii) subject to general legal and equitable  principles of good faith, fair
dealing and equity, as well as considerations of public policy as the same may be held or deemed to apply.


        4.      Distributions.  If the Pledgor shall become entitled to receive or shall receive any: (i) stock  certificate  (including,  but
without  limitation,  any  certificate  representing a stock dividend or a distribution in connection with any increase or reduction of
capital,  reclassification,  merger,  consolidation,  sale of assets, combination of shares, stock split, spin-off or split-off);  (ii)
option,  warrant or right,  whether as an addition to, in  substitution  of, or in exchange for the  Collateral,  or  otherwise;  (iii)
dividends or distributions  payable in property (other than cash or cash equivalents),  including securities issued by any person other
than the issuer of the Collateral;  or (iv) dividends or distributions on dissolution,  or in partial or total  liquidation,  then, the
Pledgor shall accept any such  instruments or  distributions  as the Bank's agent,  shall receive them in trust for the Bank, and shall
deliver them  forthwith to the Bank in the exact form received  with, as applicable,  the Pledgor's  endorsement  and when necessary or
appropriate  undated  stock or bond powers duly  executed in blank,  to be held by the Bank,  subject to the terms  hereof,  as further
collateral  security for the Pledgor's  Obligations.  Unless an Event of Default shall have occurred and be  continuing,  Pledgor shall
be entitled,  from time to time, to collect and receive for its own use cash  dividends on the  Collateral.  Upon the occurrence of any
Event of Default,  the Bank shall have the right to require that all cash dividends on the Collateral  payable with respect to any part
of the  Collateral  be paid to the  Bank to be held by the  Bank as  additional  collateral  security  hereunder  or to be  applied  in
satisfaction  of any of the  Pledgor's  Obligations.  Any non-cash  sums paid on or in respect of the  Collateral  shall be accepted by
Pledgor  as Bank's  agent,  Pledgor  shall  receive  such  sums in trust for the Bank and all such  non-cash  sums  shall be  delivered
forthwith  to the Bank in the exact form as  received,  to be held by the Bank,  subject  to the terms  hereof,  as further  collateral
security for the Pledgor's  Obligations.  So long as (i) any of the Pledgor's  Obligations remain outstanding or any loan or advance by
the Bank to the Pledgor,  or any  commitment  of the Bank to make a loan or advance to the Pledgor,  remains  outstanding,  or (ii) the
Pledgor has not performed all of its obligations  under the Credit  Agreement or any of the Loan Documents to which it is a party,  the
Bank shall hold possession of the Collateral.



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        5.       Preservation  of  Collateral.  The  Pledgor  shall  be  responsible  for the  preservation  of the  Collateral  in the  Bank's
possession  and shall take all action  necessary  to preserve the rights of the Pledgor and of the Bank  against  prior  parties to the
Collateral.  The Bank shall be under no duty (a) to collect any of the  Collateral or any moneys due or to become due  thereunder,  (b)
to give any notices with respect to the  Collateral,  (c) to preserve or maintain any of the Collateral not in its  possession,  or (d)
to preserve  rights of the Bank against prior parties to the  Collateral.  The Bank shall be deemed to have exercised  reasonable  care
with  respect to any of the  Collateral  in its  possession  if the Bank  exercises  reasonable  care to assure the safe custody of the
Collateral  and takes such  action  for the  purpose  of the care of the  Collateral  in the Bank's  possession  as the  Pledgor  shall
reasonably  request in  writing;  but no failure to comply  with any such  request  shall,  of itself,  be deemed a failure to exercise
reasonable  care,  and no failure  to do any act not  requested  by the  Pledgor  shall,  of  itself,  be deemed a failure to  exercise
reasonable care.


        6.       Rights of Bank.  In  addition to all other  rights  available  to it under  applicable  laws or  otherwise:  (a) the Bank,  in
 conjunction with the assignment,  pledge,  or transfer of any of the loans or advances by the Bank to the Pledgor shall have the right,
to the extent permitted by applicable law, to assign therewith the Bank's rights in any of the Collateral,  and any assignee,  pledgee,
or transferee  shall have the rights of the Bank hereunder with respect to the Collateral so assigned,  pledged,  or  transferred,  and
the Bank shall be thereafter  relieved from all duties with respect to any such Collateral;  and (b) upon the occurrence and during the
continuance  of an Event of Default,  the Bank shall have the right,  to the extent  permitted by  applicable  law, (i) to transfer the
whole or any part of the  Collateral  into the name of the Bank or its  nominee,  (ii) to notify  any  person  obligated  on any of the
Collateral  to make payment  directly to the Bank or its nominee of any amounts due or to become due thereon,  and (iii) upon notice to
the Pledgor,  to take control of any of the  Collateral  to the extent  permitted by applicable  law;  provided that the failure by the
Bank to give notice to the Pledgor shall not affect the right of the Bank to take control of any of the Collateral or otherwise give
rise to any liability on the part of the Bank.


        7.       Administration of Security.  At any time,  either before or after the occurrence of an Event of Default,  any or all shares of
stock  constituting  the  Collateral or a part thereof held by the Bank  hereunder may, at the option of the Bank, be registered in the
name of the Bank or in the name of Bank's nominee and Pledgor hereby  covenants that,  upon demand  therefor by the Bank,  Pledgor will
cause the issuer of the  Collateral  to effect such  registration  on such  issuer's  books,  subject in each case to  compliance  with
applicable  statutes,  rules and regulations.  If such  registration  shall be effected prior to the occurrence of an Event of Default,
Pledgor shall  nevertheless  retain all voting rights with respect to the  Collateral.  Immediately  upon the occurrence and during the
continuance of an Event of Default,  irrespective  of whether or not prior thereto the  Collateral  had been  registered in the name of
either of the Bank or its  nominee,  the Bank or its  nominee may at the Bank's  option,  upon  notice to the  Pledgor,  and subject to
compliance with  applicable  statutes,  rules and  regulations,  exercise all voting and corporate  rights with respect thereto and the
Bank or its nominee  shall have the right to exercise any and all rights of  conversion,  exchange,  subscription  or any other rights,
privileges  or options  pertaining  to any shares of the  Collateral  as if the Bank was the absolute  owner  thereof,  including,  but
without  limitation,  the right to exchange,  at the Bank's  discretion,  any or all of the Collateral upon the merger,  consolidation,
reorganization,  recapitalization  or other  readjustment  of the issuer  thereof,  or upon the  exercise  by such issuer of any right,
privilege or option pertaining to any such shares of the Collateral,  and, in connection therewith,  to deposit and deliver any and all
of the Collateral with any committee,  depository,  transfer agent, registrar or other designated agency upon such terms and conditions
as the Bank may  determine,  all without  liability  except to account for property  actually  received by the Bank,  provided that the
failure by the Bank to give notice to the Pledgor shall not affect the right of the Bank to exercise any such rights or to take any
such action or otherwise  give rise to any  liability  on the part of the Bank;  but the Bank shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any failure to do so or delay in so doing.







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        8.       Remedies.  Upon the occurrence and during the  continuance  of an Event of Default,  the Bank may, at its option,  and without
notice to the Pledgor,  declare the unpaid  balance of the Pledgor's  Obligations  to be  immediately  due and payable and,  subject to
compliance  with  applicable  statutes,  rules and  regulations,  sell or  otherwise  dispose  of the  Collateral.  The  occurrence  or
non-occurrence  of an Event of Default  shall in no manner  impair  the  ability  of the Bank to demand  payment of any  portion of the
Pledgor's  Obligations  which are payable on demand.  The Bank shall have all of the rights and  remedies of a secured  party under the
Georgia Uniform Commercial Code or under other applicable laws.


        Upon
the occurrence and during the continuance of any Event of Default and subject to
all applicable statutes, regulations and rules, the Bank may in addition to and
not in substitution or limitation of any right or remedy provided herein or
under applicable law, without demand of performance or other demand,
advertisement or notice of any kind (except the notice specified below of the
time and place of public or private sale) to or upon the Pledgor or any other
person (all and each of which demands, advertisements and notices are, to the
extent permitted by law, hereby expressly waived) forthwith collect, receive,
appropriate and realize upon the Collateral or any part thereof, and may
forthwith sell, assign, give an option or options to purchase, contract to sell
or otherwise dispose of and deliver the Collateral or any part thereof, in one
or more parcels at public or private sale or sales, at any exchange,
broker’s board or at any of the Bank’s offices or elsewhere, at such
prices and on such terms (including, but without limitation, a requirement that
any purchaser of all or any part of the Collateral purchase the shares
constituting the Collateral for investment and without any intention to make a
distribution thereof) as they may deem best, for cash or on credit, or for
future delivery without assumption of any credit risk, with the right to the
Bank or any purchaser upon any such sale or sales, public or private, to
purchase the whole or any part of the Collateral so sold free of any rights or
equity of redemption in the Pledgor, which right or equity is, to the extent
permitted by applicable law, hereby expressly waived and released. 


        Any
written notice of the sale, disposition, or other intended action by the Bank
with respect to the Collateral which is required by applicable laws and is sent
by certified mail, postage prepaid, to the Pledgor at the Pledgor’s address
specified below, or such other address of the Pledgor which may from time to
time be shown on the Bank’s records, at least ten (10) days prior to such
sale, disposition, or action shall constitute reasonable notice to the Pledgor.
Any other notice required or permitted by this Agreement shall be effective if
given in accordance with the provisions of the Credit Agreement. 


        If
the sale or other disposition of the Collateral fails to satisfy in full the
Pledgor’s Obligations, the Pledgor shall remain liable to the Bank for any
deficiency. 






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        9.       Sale of  Collateral.  The  Pledgor  recognizes  that the  Bank may be  unable  to  effect a public  sale of all or part of the
Collateral by reason of certain  prohibitions  contained in the Securities Act of 1933, as amended, and applicable state securities and
insurance  laws but may be compelled to resort to one or more private sales to a restricted  group of purchasers  who will be obligated
to agree,  among other things,  to acquire all or a part of the Collateral for their own account,  for investment,  and not with a view
to the  distribution  or resale  thereof.  The Bank shall give not less than 10 days prior  notice of any private  sale and the Pledgor
acknowledges  and agrees that any private  sale so made may be at prices and on other terms less  favorable  to the seller than if such
Collateral  were sold at public sale and that the Bank has no  obligation to delay the sale of such  Collateral  for the period of time
necessary  to permit the  registration  of such  Collateral  for public sale under any  securities  laws.  To the extent  permitted  by
applicable  law, the Pledgor  agrees that a private sale or sales made under the foregoing  circumstances  shall be deemed to have been
made in a commercially  reasonable  manner.  If any consent,  approval,  or authorization of any federal,  state,  municipal,  or other
governmental  department,  agency, or authority should be necessary to effectuate any sale or other  disposition of the Collateral,  or
any partial sale or other  disposition of the Collateral,  the Pledgor will execute all  applications  and other  instruments as may be
required in connection with securing any such consent,  approval,  or  authorization  and will otherwise use its best efforts to secure
the same.  In  addition,  in  connection  with a sale or  disposition  of the  Collateral,  the Pledgor  agrees to provide any material
adverse  information in regard to the current and prospective  operations of any corporation  whose stock  constitutes all or a portion
of the Collateral of which the Pledgor has knowledge and which has not been publicly  disclosed,  and the Pledgor  hereby  acknowledges
that the Pledgor's failure to provide such information may result in criminal and/or civil liability.


        10.       Expenses. All costs and expenses,  including,  without limitation,  reasonable attorneys' fees and expenses, actually incurred
by or on behalf of the Bank (a) in enforcing the Pledgor's Obligations,  and (b) in connection with the taking, holding,  preparing for
sale or other disposition,  selling,  managing,  collecting, or otherwise disposing of the Collateral  (collectively,  the "Liquidation
Costs"),  together with  interest  thereon at the Default  Rate,  from the date of payment  until repaid in full,  shall be paid by the
Pledgor to the Bank on demand and shall  constitute  and become a part of the Pledgor's  Obligations  secured  hereby.  Any proceeds of
sale or other  disposition of the Collateral  will be applied by the Bank to the payment of the Liquidation  Costs,  and the balance of
such  proceeds  (if any) will be applied by the Bank  toward the  payment of the  remaining  Pledgor's  Obligations,  in such order and
manner of application as the Bank may from time to time in its sole discretion determine.


        11.       No Waiver,  Cumulative Remedies,  Etc. Neither this Agreement nor any term,  condition,  covenant,  or agreement hereof may be
changed,  waived,  discharged,  or terminated orally, but only by an instrument in writing signed by the party against whom enforcement
of the change,  waiver,  discharge,  or termination is sought. No failure or delay by the Bank to insist upon the strict performance of
any term, condition,  covenant, or agreement of this Agreement,  the Credit Agreement or any of the Loan Documents,  or to exercise any
right,  power,  or remedy  consequent  upon a breach  thereof,  shall  constitute a waiver of any such term,  condition,  covenant,  or
agreement or of any such breach,  or preclude the Bank from  exercising  any such right,  power,  or remedy at any later time or times.
By accepting  payment  after the due date of any of the  Pledgor's  Obligations,  the Bank shall not be deemed to have waived the right
either to require  prompt  payment  when due of all other  Pledgor's  Obligations  or to declare a Default  for  failure to effect such
payment of any such other Pledgor's  Obligations.  Each right,  power,  and remedy of the Bank as provided for in this  Agreement,  the
Credit  Agreement or any of the Loan  Documents or now or  hereafter  existing at law or in equity or by statute or otherwise  shall be
cumulative and concurrent and shall be in addition to every other right,  power, or remedy  provided for in this Agreement,  the Credit
Agreement or any of the Loan  Documents or now or hereafter  existing at law or in equity or by statute or otherwise,  and the exercise
or beginning of the exercise by the Bank of any one or more of such rights,  powers,  or remedies  shall not preclude the  simultaneous
or later exercise by the Bank of any or all such other rights,  powers,  or remedies.  This Agreement  shall be governed by the laws of
the State of  Georgia,  shall be  binding  upon the  successors  and  assigns  of the  Pledgor  and shall  inure to the  benefit of the
successors  and assigns of the Bank. As used herein,  the singular  number shall include the plural,  the plural the singular,  and the
use of the  masculine,  feminine,  or neuter gender shall include all genders as the context may require,  and the term "person"  shall
include an individual, a corporation,  an association,  a partnership,  a trust, and an organization.  Unless varied by this Agreement,
all terms used herein which are defined by the Georgia Uniform  Commercial  Code shall have the same meanings  hereunder as assigned to
them by the Georgia Uniform Commercial Code.









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        12.       Upon repayment in full of all Pledgor's  Obligations and upon termination of the Credit  Agreement and of this Agreement,  the
Bank agrees to promptly return to Pledgor all original  certificates  and stock powers  representing  the  Collateral,  and, if Bank is
unable to do so, Bank agrees to provide Pledgor with lost certificate  affidavits that contain indemnity  language as is customary with
respect to such lost certificate affidavits.




[The remainder of this page is left blank intentionally.]








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        The
signature and seal of the Pledgor are subscribed to this Agreement on the day
and year written above. 




	ATTEST:	ATLANTIC AMERICAN CORPORATION
	 
	          
                  /s/  
Janie L. Ryan                  
        , Secretary	By:          
         /s/  John G. Sample, Jr.     
           (SEAL)
	          
     
        [CORPORATE SEAL]	
Name:                      John G. Sample, Jr.                  

	 	
Title:  Senior Vice President and Chief Financial Officer

	 
	 	4370 Peachtree Road, N.E.
Atlanta, Georgia 30319-3000

Attention:   John G. Sample, Jr.,
               
    Senior Vice President and
               
    Chief Financial Officer
Telecopy number: (404) 266-5702
Telephone number: (404) 266-5501





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SCHEDULE 1





	 
 
Subsidiary	 
Number of
Shares of Stock	 
 
Class of Stock
	 
	American Southern Insurance Company	300,000	Capital
	 
	Association Casualty Insurance Company	900,000	Common
	 
	Bankers Fidelity Life Insurance Company	2,500,000	Capital
	 
	 Georgia Casualty & Surety Company	2,000,000	Capital
































 EXHIBIT A


 Insurance Subsidiaries of Atlantic American Corporation


	American Safety Insurance Company, a Georgia domestic insurance company
	 
	American Southern Insurance Company, a Kansas domestic insurance company
	 
	Association Casualty Insurance Company, a Texas stock, fire and casualty insurance company
	 
	Bankers Fidelity Life Insurance Company, a Georgia domestic insurance corporation
	 
	Georgia Casualty & Surety Company, a Georgia domestic insurance corporation