Credit Agreement Dated December 22, 2006


EXHIBIT 10.1







CREDIT AGREEMENT


dated as of


December 22, 2006


between


ATLANTIC AMERICAN CORPORATION


and


WACHOVIA BANK, NATIONAL ASSOCIATION





























TABLE OF CONTENTS

	 	 	Page
	ARTICLE I 
DEFINITIONS	1
	
        Section 1.01    Definitions	1
	
        Section 1.02    Accounting Terms and Determinations
	14
	
        Section 1.03    Use of Defined Terms
	15
	
        Section 1.04     Terminology
	15
	
        Section 1.05     References
	15
	ARTICLE II 
THE CREDITS	15
	
        Section 2.01    Commitment to Make Advances
	15
	
        Section 2.02    Method of Borrowing
	15
	
        Section 2.03     Note
	16
	
        Section 2.04    Repayment Terms; Mandatory Prepayments and Repayments
	16
	
        Section 2.05     Interest Rates
	17
	
        Section 2.06    Optional Termination or Reduction of Commitment
	19
	
        Section 2.07    Mandatory Reduction and Termination of Commitment
	19
	
        Section 2.08    Optional Prepayments
	20
	
        Section 2.09    General Provisions as to Payments
	20
	
        Section 2.10    Computation of Interest
	21
	
        Section 2.11    Conversion and Continuation of Advances
	21
	
        Section 2.12    Unused Fees
	22
	ARTICLE III 
CONDITIONS TO ADVANCES	22
	
        Section 3.01    Conditions to Closing
	22
	
        Section 3.02    Conditions to All Borrowings
	24
	ARTICLE IV 
REPRESENTATIONS AND WARRANTIES	24
	
        Section 4.01    Corporate Existence and Power
	24
	
        Section 4.02    Corporate and Governmental Authorization; No Contravention
	25
	
        Section 4.03    Binding Effect
	25
	
        Section 4.04    Financial Information
	25
	
        Section 4.05    Litigation
	25
	
        Section 4.06    Compliance with ERISA
	26
	
        Section 4.07    Taxes
	26
	
        Section 4.08    Subsidiaries
	26
	
        Section 4.09    Not an Investment Company
	26
	
        Section 4.10    Public Utility Holding Company Act
	26
	
        Section 4.11    Ownership of Property; Liens
	27
	
        Section 4.12    No Default
	27
	
        Section 4.13    Full Disclosure
	27
	
        Section 4.14    Environmental  Matters
	27






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        Section 4.15    Compliance with Laws
	28
	
        Section 4.16    Capital Stock
	28
	
        Section 4.17    Margin Stock
	28
	
        Section 4.18    Insolvency
	28
	
        Section 4.19    Insurance
	28
	
        Section 4.20    Debt and Redeemable Preferred Stock
	28
	ARTICLE V 
COVENANTS	28
	
        Section 5.01    Information
	29
	
        Section 5.02    Inspection of Property, Books and Records
	30
	
        Section 5.03    Ratio of Funded Debt to Consolidated Total
Capitalization
	31
	
        Section 5.04    Ratio of Funded Debt to EBITDA
	31
	
        Section 5.05    Minimum Consolidated Tangible Net Worth
	31
	
        Section 5.06    Restricted Payments
	31
	
        Section 5.07    Capital Expenditures
	31
	
        Section 5.08    Loans or Advances
	31
	
        Section 5.09    Investments
	32
	
        Section 5.10    Negative Pledge
	32
	
        Section 5.11    Maintenance of Existence
	33
	
        Section 5.12    Dissolution
	33
	
        Section 5.13    Consolidations, Mergers and Sales of Assets
	33
	
        Section 5.14    Use of Proceeds
	34
	
        Section 5.15    Compliance with Laws; Payment of Taxes
	34
	
        Section 5.16    Insurance
	34
	
        Section 5.17    Change in Fiscal Year
	34
	
        Section 5.18    Maintenance of Property
	34
	
        Section 5.19    Environmental Notices
	35
	
        Section 5.20    Environmental Matters
	35
	
        Section 5.21    Environmental Release
	35
	
        Section 5.22    Additional Covenants, Etc
	35
	
        Section 5.23    Transactions with Affiliates
	36
	
        Section 5.24    Risk-Based Capital Ratio
	36
	
        Section 5.25    Maintenance of Statutory Surplus
	36
	
        Section 5.26    Minimum Investment in NAIC Rated Bonds;
Maximum Investment in 
                
                 Investment Properties
	36
	
        Section 5.27    Senior Indebtedness under Indenture
	36
	
        Section 5.28    Other Obligations of Borrower
	36
	
        Section 5.29    Depository Relationship
	36
	ARTICLE VI 
DEFAULTS	37
	
        Section 6.01    Events of Default
	37
	ARTICLE VII 
CHANGE IN CIRCUMSTANCES; COMPENSATION	40
	
        Section 7.01    Basis for Determining
Interest Rate Inadequate or Unfair
	40
	
        Section 7.02    Illegality
	40




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        Section 7.03    Increased Cost and Reduced Return
	40
	
        Section 7.04    Base Rate Advances Substituted for
Affected Euro-Dollar Advances
	42
	
        Section 7.05    Compensation
	42
	ARTICLE VIII 
MISCELLANEOUS	43
	
        Section 8.01    Notices
	43
	
        Section 8.02    No Waivers
	43
	
        Section 8.03    Expenses; Documentary Taxes;
Indemnification; Increased Cost and Reduced Return
	43
	
        Section 8.04    CONSEQUENTIAL DAMAGES
	44
	
        Section 8.05    Setoffs
	44
	
        Section 8.06    Amendments and Waivers
	44
	
        Section 8.07    Successors and Assigns
	45
	
        Section 8.08    Confidentiality
	46
	
        Section 8.09    Survival of Certain Obligations
	47
	
        Section 8.10    Georgia Law
	47
	
        Section 8.11    Severability
	47
	
        Section 8.12    Interest
	47
	
        Section 8.13    Interpretation
	47
	
        Section 8.14    Consent to Jurisdiction
	47
	
        Section 8.15    Counterparts
	47
	
        Section 8.16    Termination of Existing Credit Facilities
	47



	 	 	 
	SCHEDULE 4.05	LITIGATION
	SCHEDULE 4.08A	EXISTING INSURANCE SUBSIDIARIES
	SCHEDULE 4.08B	EXISTING SUBSIDIARIES WHICH ARE NOT INSURANCE SUBSIDIARIES
	SCHEDULE 4.20	REDEEMABLE PREFERRED STOCK AND DEBT
EXISTING ON CLOSING DATE













	 	 	 
	EXHIBIT A	Note
	EXHIBIT B	Form of Opinion of Counsel for the Borrower
	EXHIBIT C	Form of Closing Certificate of Borrower
	EXHIBIT D	Form of Secretary's Certificate
	EXHIBIT E	Form of Compliance Certificate
	EXHIBIT F	Form of Assignment and Acceptance
	EXHIBIT G	Form of Notice of Conversion or Continuation













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CREDIT AGREEMENT


        AGREEMENT
dated as of December 22, 2006 between ATLANTIC AMERICAN CORPORATION and WACHOVIA
BANK, NATIONAL ASSOCIATION. 


        The
Borrower has requested a revolving loan from the Bank in the amount of Fifteen
Million and No/100 Dollars ($15,000,000.00) to be used to refinance the
Borrower’s existing loans with the Bank and for general corporate purposes
of the Borrower. The Bank has agreed to make such loan on the terms and
conditions as hereinafter provided. The parties hereto agree as follows: 


ARTICLE I
DEFINITIONS

        
Section 1.01   Definitions.  
The terms as defined in this Section 1.01
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein: 




	 	        

 “2002 Debentures” has the meaning given to the term “Debentures” in the 2002 Indenture.
	 



	 	        
“2003 Debentures” has the meaning given to the term “Debentures” in the 2003 Indenture.
	 


	 	        
“2002
Indenture” means that certain indenture delivered in connection with the
2002 Trust Preferred Transaction dated December 4, 2002 by and between the
Borrower and State Street Bank and Trust Company of Connecticut, National
Association, as Trustee.
	 


	 	        
“2003
Indenture” means that certain indenture delivered in connection with the
2003 Trust Preferred Transaction dated May 15, 2003 by and between the Borrower
and U.S. Bank National Association, as Trustee. 
	 


	 	        
“2002 Trust Preferred Transaction” means a transaction in which: (a) the Borrower
established the Statutory Trust I and acquired all of the Statutory Trust
I’s common securities; (b) the Statutory Trust I acquired up to $18,042,000
of the Borrower’s subordinated debentures with proceeds received from the
issuance of its own trust preferred securities; and (c) the Borrower provided a
limited-recourse guaranty to pay the Statutory Trust I’s obligations on the
trust preferred securities, but only to the extent the Statutory Trust I has
funds available for the payment of such obligations.
	 


	 	        
“2003
Trust Preferred Transaction” means a transaction in which: (a) the Borrower
established the Statutory Trust II and acquired all of the Statutory Trust
II’s common securities; (b) the Statutory Trust II acquired up to
$23,196,000 of the Borrower’s subordinated debentures with proceeds
received from the issuance of its own trust preferred securities; and (c) the
Borrower provided a limited-recourse guaranty to pay the Statutory Trust
II’s obligations on the trust preferred securities, but only to the extent
the Statutory Trust II has funds available for the payment of such obligations. 
	 



















	 	        
“Adjusted Capital” shall mean, as to any Insurance Subsidiary, the total amount
identified as “Total Adjusted Capital” in column 1 in the five-year
historical data exhibit of the Annual Statement of each Insurance Subsidiary,
prepared in accordance with statutory accounting principles. 
	 


	 	        “Adjusted
London Interbank Offered Rate” has the meaning set forth in Schedule
2.05(c). 
	 


	 	        “Advance” means any advance made by the Bank under the Commitment pursuant to Section 2.01 hereof.

	 


	 	        “Affiliate”
of any Person means (i) any other Person which directly, or indirectly
through one or more intermediaries, controls such Person, (ii) any other
Person which directly, or indirectly through one or more intermediaries, is
controlled by or is under common control with such Person, or (iii) any
other Person of which such Person owns, directly or indirectly, 20% or more of
the common stock or equivalent equity interests. As used herein, the term
“control” means possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of a Person, whether
through the ownership of voting securities, by contract or otherwise.
	 


	 	        “Aggregate
Value of NAIC Rated Bonds” shall mean the aggregate cost, without
duplication, of all bonds rated “2” or better by NAIC, owned by the
Borrower or any Consolidated Subsidiary and held as investments, as shown on the
books and records of the Borrower or such Consolidated Subsidiary and as
determined in accordance with GAAP. 
	 


	 	        “Aggregate
Value of Total Investments” shall mean the aggregate cost, without
duplication, of all bonds, redeemable preferred stocks, non-redeemable preferred
stocks, common stocks, mortgage loans, loans to policy holders, other long term
investments, short term investments and other properties of the Borrower or any
Consolidated Subsidiary held for investment purposes, as shown on the books and
records of the Borrower or such Consolidated Subsidiary and as determined in
accordance with GAAP. 




	 	        “Agreement”
means this Credit Agreement, together with all amendments
and supplements hereto. 




	 	        “Amortization”
means for any period the sum of all amortization expenses of the Borrower and
its Consolidated Subsidiaries for such period, determined in accordance with
GAAP, exclusive of the amortization of deferred acquisition costs.




	 	        “Annual
Statement” means, with respect to any Insurance Subsidiary, the annual
report, statement or other filing made by such Insurance Subsidiary with the
insurance department or other governmental authority of the state in which such
Insurance Subsidiary is formed or incorporated which regulates, supervises or
otherwise has jurisdiction over such Insurance Subsidiary, all in accordance
with statutory accounting principles.




	 	        
“Applicable Margin” has the meaning set forth in Section 2.05(a).




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“Assignee” has the meaning set forth in Section 8.07(c).




	 	        “Assignment
and Acceptance” means an Assignment and Acceptance executed in accordance
with Section 8.07(c) in the form attached hereto as Exhibit F. 




	 	        “Authority” has the meaning set forth in Section 7.02.




	 	        “Bank”
means Wachovia Bank, National Association, a national banking association, and
its successors and assigns. 




	 	        “Bank Products”shall mean any service or facility extended to the Borrower in
the ordinary course of business by the Bank or any Affiliate of the Bank in the
nature of any cash management or related services provided in the ordinary
course of business for the account of the Borrower (including the Automated
Clearing House processing of electronic funds transfers, controlled
disbursements, accounts or services, commercial credit card and merchant card
services). 




	 	        “Base
Rate” means for any day, the rate per annum equal to the higher as of such
day of (i) the Prime Rate, and (ii) one-half of one percent above the Federal
Funds Rate for such day. For purposes of determining the Base Rate for any day,
changes in the Prime Rate and the Federal Funds Rate shall be effective on the
date of each such change.




	 	        “Base
Rate Advance” means an Advance which bears or is to bear interest at a rate based upon the Base Rate.




	 	        “Book
Value” means with respect to any asset, the cost of such asset, minus
accumulated depreciation or amortization, if any, with respect to such asset. 




	 	        “Borrower”
means Atlantic American Corporation, a Georgia corporation, and its successors
and permitted assigns. 




	 	        “Capital
Expenditures” means for any period the sum of all capital expenditures
incurred during such period by the Borrower and its Consolidated Subsidiaries,
as determined in accordance with GAAP.




	 	        “Capital
Stock” means any redeemable or nonredeemable capital stock of the Borrower
or any Consolidated Subsidiary (to the extent issued to a Person other than the
Borrower), whether common or preferred.





	 	        “CERCLA” means the Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C. §9601 et seq. and its
implementing regulations and amendments.




	 	        
“CERCLIS”
means the Comprehensive Environmental Response Compensation and Liability
Information System established pursuant to CERCLA. 




	 	        
“Change of Law” shall have the meaning set forth in Section 7.02.






-3-














	 	        “Closing Certificate” has the meaning set forth in Section 3.01(d).




	 	        
“Closing Date” means December 22, 2006.




	 	        “Code”
means the Internal Revenue Code of 1986, as amended, or any successor Federal
tax code. Any reference to any provision of the Code shall also be deemed to be
a reference to any successor provision or provisions thereof. 




	 	        
“Commitment” means, for each period shown below, the following commitment amount:





	Period	Commitment Amount
	               
From the Closing Date through June 30, 2007	$  15,000,000.00
	               
From July 1, 2007 through December 31, 2007	$  14,500,000.00
	               
From January 1, 2008 through June 30, 2008	$  14,000,000.00
	               
From July 1, 2008 through December 31, 2008	$  13,500,000.00
	               
From January 1, 2009 through June 30, 2009	$  13,000,000.00
	               
From July 1, 2009 through December 31, 2009	$  12,000,000.00
	               
From January 1, 2010 through June 30, 2010	$  10,500,000.00








	 	        “Company
Action Level” means 200% of the Authorized Control Level Risk-Based Capital
of each Insurance Subsidiary. The Authorized Control Level Risk-Based Capital of
each Insurance Subsidiary shall be computed in the manner from time to time
prescribed by the applicable state insurance department or regulatory authority
for inclusion in the Annual Statement of each Insurance Subsidiary to such
department or regulatory authority. 





	 	        “Compliance Certificate” has the meaning set forth in Section 5.01(c).





	 	        
“Consolidated
Interest Expense” for any period means interest, whether expensed or
capitalized, in respect of Debt of the Borrower and any of its Consolidated
Subsidiaries outstanding during such period. 





	 	        
“Consolidated
Net Income” means, for any period, the Net Income of the Borrower and its
Consolidated Subsidiaries determined on a consolidated basis, but excluding
(i) extraordinary gains and (ii) any equity interests of the Borrower
or any Subsidiary in the unremitted earnings of any Person that is not a
Subsidiary in excess of $500,000, determined on a consolidated basis, per annum. 





	 	        “Consolidated
Subsidiary” means at any date with respect to any Person, any Subsidiary or
other entity the accounts of which, in accordance with GAAP, would be
consolidated with those of such Person in its consolidated financial statements
as of such date. 





	 	        “Consolidated
Tangible Net Worth” means, at any time, Stockholders’ Equity, less the
sum of the value, as set forth or reflected on the most recent consolidated
balance sheet of the Borrower and its Consolidated Subsidiaries, prepared in
accordance with GAAP, of 
























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          (A)     
Any change in equity resulting from any write-up of assets  subsequent to December 31,  2005 (other
than the usual and customary valuation of the investment portfolio of the Borrower or any Consolidated Subsidiary
from time to time);







	 	
          (B)     
All assets which would be treated as  intangible  assets for balance  sheet  presentation  purposes
under GAAP, related to the compliance by the Borrower with the provisions of Financial Accounting Statement Board
Statement No. 141, all determined in accordance with GAAP; provided, however, deferred acquisition costs, as
determined in accordance with GAAP, shall not be deducted from Stockholders Equity;







	 	
          (C)     
To the extent not  included  in (B) of this  definition,  deferred  expenses,  other than  deferred
acquisition costs, as determined in accordance with GAAP, provided, however, that deferred expenses in an amount not
to exceed $2,000,000 incurred as a result of financings of Funded Debt, including, without limitation, the 2002
Trust Preferred Transaction and the 2003 Trust Preferred Transaction, shall be excluded from this definition; and
provided further, that prepaid expenses shall not constitute deferred expenses for the purposes of this definition;
and






	 	
          (D)     
Other than in the  ordinary  course of  business,  loans or  advances to  stockholders,  directors,
officers or employees.







	 	        “Consolidated
Total Assets” means, at any time, the total assets of the Borrower and its
Consolidated Subsidiaries, determined on a consolidated basis, as set forth or
reflected on the most recent consolidated balance sheet of the Borrower and its
Consolidated Subsidiaries, prepared in accordance with GAAP. 





	 	        “Consolidated
Total Capitalization” means, at any time, the sum of (i) Consolidated
Tangible Net Worth, and (ii) Funded Debt.





	 	        “Controlled
Group” means all members of a controlled group of corporations and all
trades or businesses (whether or not incorporated) under common control which,
together with the Borrower, are treated as a single employer under Section 414
of the Code.





	 	        “Debentures”
means the 2002 Debentures and the 2003 Debentures, collectively.





	 	        “Debt”
of any Person means at any date, without duplication, (i) all obligations of
such Person for borrowed money, (ii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (iii) all obligations of
such Person to pay the deferred purchase price of property or services, except
trade accounts payable arising in the ordinary course of business, (iv) all
obligations of such Person as lessee under capital leases, (v) all
obligations of such Person to reimburse any bank or other Person in respect of
amounts payable under a banker’s acceptance, (vi) all Redeemable Preferred
Stock of such Person (in the event such Person is a corporation), (vii) all
obligations (absolute or contingent) of such Person to reimburse any bank or
other Person in respect of amounts paid under a letter of credit or similar
instrument, (viii) all Debt of others secured by a Lien on any asset of such
Person, whether or not such Debt is assumed by such Person, and (ix) all Debt of
others Guaranteed by such Person.



















-5-




















	 	        “Default”
means any condition or event which constitutes an Event of Default or which with
the giving of notice or lapse of time or both would, unless cured or waived in
writing, become an Event of Default.





	 	        “Default Rate” means, on any day, the sum of the Base Rate plus 2%.





	 	        “Depreciation”
means for any period the sum of all depreciation expenses of the Borrower and
its Consolidated Subsidiaries for such period, as determined in accordance with
GAAP.





	 	        “Dividends”
means for any period the sum of all dividends paid or declared during such
period in respect of any Capital Stock and Redeemable Preferred Stock (other
than dividends paid or payable in the form of additional Capital Stock).





	 	        “Dollars” or “$” means dollars in lawful currency of the United States of America.





	 	        “Domestic
Business Day” means any day except a Saturday, Sunday or other day on which
commercial banks in Georgia are authorized or required by law to close. 





	 	        “EBITDA”
for any period means the sum of (i) Consolidated Net Income, (ii) taxes on
income, (iii) Consolidated Interest Expense, (iv) Depreciation and (v)
Amortization, all determined with respect to the Borrower and its Consolidated
Subsidiaries on a consolidated basis for such period and in accordance with
GAAP. In determining EBITDA for any period, (i) any Consolidated Subsidiary
acquired during such period by the Borrower or any other Consolidated Subsidiary
shall be included on a pro forma, historical basis as if it had been a
Consolidated Subsidiary during such entire period and (ii) any amounts which
would be included in a determination of EBITDA for such period with respect to
assets acquired during such period by the Borrower or any Consolidated
Subsidiary shall be included in the determination of EBITDA for such period and
the amount thereof shall be calculated on a pro forma, historical basis as if
such assets had been acquired by the Borrower or such Consolidated Subsidiary
prior to the first day of such period. 





	 	        “Environmental
Authority” means any foreign, federal, state, local or regional government
that exercises any form of jurisdiction or authority under any Environmental
Requirement.





	 	        “Environmental
Authorizations” means all licenses, permits, orders, approvals, notices,
registrations or other legal prerequisites for conducting the business of the
Borrower or any Subsidiary required by any Environmental Requirement.









-6-



















	 	        “Environmental
Judgments and Orders” means all judgments, decrees or orders arising from
or in any way associated with any Environmental Requirements, whether or not
entered upon consent or written agreements with an Environmental Authority or
other entity arising from or in any way associated with any Environmental
Requirement, whether or not incorporated in a judgment, decree or order.





	 	        “Environmental
Laws” means any and all federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges or releases
of pollutants, contaminants, petroleum or petroleum products, chemicals or
industrial, toxic or hazardous substances or wastes into the environment,
including, without limitation, ambient air, surface water, groundwater or land,
or otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of pollutants, contaminants,
petroleum or petroleum products, chemicals or industrial, toxic or hazardous
substances or wastes or the clean-up or other remediation thereof.





	 	        “Environmental
Liabilities” means any liabilities, whether accrued, contingent or
otherwise, arising from and in any way associated with any Environmental
Requirements.





	 	        “Environmental
Notices” means written notice from any Environmental Authority of possible
or alleged noncompliance with or liability under any Environmental Requirement,
including without limitation any complaints, citations, demands or requests from
any Environmental Authority for correction of any violation of any Environmental
Requirement or any investigations concerning any violation of any Environmental
Requirement.





	 	        “Environmental
Proceedings” means any judicial or administrative proceedings arising from
or in any way associated with any Environmental Requirement.





	 	        “Environmental
Releases” means releases as defined in CERCLA or under any applicable state
or local environmental law or regulation.





	 	        “Environmental
Requirements” means any legal requirement relating to health, safety or the
environment and applicable to the Borrower, any Subsidiary or the Properties,
including but not limited to any such requirement under CERCLA or similar state
legislation and all federal, state and local laws, ordinances, regulations,
orders, writs, decrees and common law. 





	 	        “ERISA”
means the Employee Retirement Income Security Act of 1974, as amended from time
to time, or any successor law. Any reference to any provision of ERISA shall
also be deemed to be a reference to any successor provision or provisions
thereof.





	 	        “Euro-Dollar
Business Day” means any Domestic Business Day on which dealings in Dollar
deposits are carried out in the London interbank market.









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	 	        “Euro-Dollar
Advance” means an Advance which bears or is to bear interest at a rate
based upon the London Interbank Offered Rate.






	 	        “Euro-Dollar Reserve Percentage” has the meaning set forth in Section 2.05(c).





	 	        “Event of Default” has the meaning set forth in Section 6.01.





	 	        “Fair
Market Value” means, with respect to any asset, the greater of: (i) the
Gross Proceeds received by the Borrower or any Subsidiary in connection with the
sale, transfer or other disposition by the Borrower or such Subsidiary (as the
case may be) of such asset, or (ii) the Book Value of such asset.





	 	        “Federal
Funds Rate” means, for any day, the rate per annum (rounded upward, if
necessary, to the next higher 1/100th of 1%) equal to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day, provided that (i) if the day for which such rate is to be determined is not
a Business Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if such rate is not so published for any day,
the Federal Funds Rate for such day shall be the average rate charged to the
Bank on such day on such transactions as determined by the Bank.





	 	        “Financing”
shall mean (i) any transaction or series of transactions for the incurrence by
the Borrower of any Debt or for the establishment of a commitment to make
advances which would constitute Debt of the Borrower, which Debt (in either of
the foregoing cases) is not by its terms subordinate and junior to Debt of the
Borrower arising hereunder, (ii) an obligation incurred in a transaction or
series of transactions in which assets of the Borrower are sold and leased back,
or (iii) a sale of accounts or other receivables or any interest therein, other
than a sale or transfer of accounts or receivables attendant to a sale permitted
hereunder of an operating division.





	 	        “Fiscal Quarter” means any fiscal quarter of the Borrower.





	 	        “Fiscal Year” means any fiscal year of the Borrower.





	 	        “Forfeiture
Proceeding” means any action, proceeding or investigation affecting the
Borrower or any of its Subsidiaries before any court, governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, if
such action, proceeding or investigation could reasonably be expected to result
in (i) the seizure or forfeiture of any of their assets, revenues or share
capital, which when the Fair Market Value of such assets, revenues or share
capital subject to such seizure or forfeiture when aggregated with the Fair
Market Value of all other assets, revenues and share capital of the Borrower and
its Subsidiaries seized or forfeited since the Closing Date exceeds $1,000,000,
or (ii) a Material Adverse Effect.





	 	        “Funded
Debt” means, at any date, the total Debt of the Borrower and its
Subsidiaries determined on a consolidated basis, provided however, that for the
purposes of determining compliance with the covenant contained in Section 5.04
only, Funded Debt shall exclude the Subordinated Debt.











-8-


















	 	        “GAAP”
means generally accepted accounting principles applied on a basis consistent
with those which, in accordance with Section 1.02, are to be used in making the
calculations for purposes of determining compliance with the terms of this
Agreement.





	 	        “Gross
Proceeds” means any and all cash, plus the face amount of any and all
notes, bonds, debentures, instruments and evidences of indebtedness, and the
value of any other property, of whatever kind or nature, received by the
Borrower or any Subsidiary in connection with the sale, transfer or other
disposition by the Borrower or such Subsidiary (as the case may be) of any of
its assets.





	 	        “Guarantee”
by any Person means any obligation, contingent or otherwise, of such Person
directly or indirectly guaranteeing any Debt or other obligation of any other
Person and, without limiting the generality of the foregoing, any obligation,
direct or indirect, contingent or otherwise, of such Person (i) to secure,
purchase or pay (or advance or supply funds for the purchase or payment of) such
Debt or other obligation (whether arising by virtue of partnership arrangements,
by agreement to keep-well, to purchase assets, goods, securities or services, to
provide collateral security, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (ii) entered into for the purpose of assuring
in any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part), provided that the term Guarantee shall not include endorsements
for collection or deposit in the ordinary course of business. The term
“Guarantee” used as a verb has a corresponding meaning. 





	 	        “Hazardous
Materials” includes, without limitation, (a) solid or hazardous waste, as
defined in the Resource Conservation and Recovery Act of 1980, 42 U.S.C.
§6901 et seq. and its implementing regulations and amendments, or in any
applicable state or local law or regulation, (b) any “hazardous
substance”, “pollutant” or “contaminant”, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, including crude oil or any fraction
thereof, (d) toxic substances, as defined in the Toxic Substances Control Act of
1976, or in any applicable state or local law or regulation and (e)
insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable state
or local law or regulation, as each such Act, statute or regulation may be
amended from time to time.





	 	        “Insurance
Subsidiaries” means those Persons set forth on Schedule 4.08A
attached hereto, together with their respective successors, and any other
Subsidiary which at any time after the Closing Date is engaged principally in
the property and casualty insurance business, the accident and health insurance
business or the life insurance business or any combination thereof. 











-9-

















	 	        “Interest
Period” means, with respect to each Euro-Dollar Advance, the period
commencing on the date that such Euro-Dollar Advance is first made, converted or
continued and ending on the numerically corresponding day in the first, second,
third or sixth month thereafter, as the Borrower may elect; provided
that:






	 	
          (a)     
any Interest  Period  (subject to clause (c) below) which would otherwise end on a day which is not
a Euro-Dollar Business Day shall be extended to the next succeeding Euro-Dollar Business Day unless such Euro-Dollar
Business Day falls in another calendar month, in which case such Interest Period shall end on the next preceding
Euro-Dollar Business Day;






	 	
          (b)     
any Interest Period which begins on the last Euro-Dollar  Business Day of a calendar month (or on a
day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall, subject
to clause (c) below, end on the last Euro-Dollar Business Day of the appropriate subsequent calendar month; and






	 	
          (c)     
no Interest  Period may be selected which begins before the  Termination  Date and would  otherwise
end after the Termination Date.







	 	        “Investment”
means any investment in any Person, whether by means of purchase or acquisition
of obligations or securities of such Person, capital contribution to such
Person, loan or advance to such Person, making of a time deposit with such
Person, Guarantee or assumption of any obligation of such Person or otherwise. 






	 	        “Investment
Properties” for any period means all real property owned by the Borrower
and its Consolidated Subsidiaries during the applicable period; provided,
however, the definition of Investment Properties shall exclude any real property
if: (i) at least fifty percent (50%) of the net leasable area with respect to
such real property is occupied by the Borrower and/or its Subsidiaries; and (ii)
the primary use of such real property is the operation of the Borrower’s
and/or Subsidiaries’ respective businesses. 






	 	        “Lending
Office” means, as to the Bank, its office located at its address set forth
on the signature pages hereof (or identified on the signature pages hereof as
its Lending Office) or such other office as the Bank may hereafter designate as
its Lending Office by notice to the Borrower. 






	 	        “Lien”
means, with respect to any asset, any mortgage, deed to secure debt, deed of
trust, lien, pledge, charge, security interest, security title, preferential
arrangement which has the practical effect of constituting a security interest
or encumbrance, servitude or encumbrance of any kind in respect of such asset to
secure or assure payment of a Debt or a Guarantee, whether by consensual
agreement or by operation of statute or other law, or by any agreement,
contingent or otherwise, to provide any of the foregoing. For the purposes of
this Agreement, the Borrower or any Subsidiary shall be deemed to own subject to
a Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, capital lease or other
title retention agreement relating to such asset. 















-10-



















	 	        
“Loan
Documents” means this Agreement, the Note, the Pledge Agreement, any other
document evidencing, relating to or securing the Advances, and any other
document or instrument delivered from time to time in connection with this
Agreement, the Note or the Advances, as such documents and instruments may be
amended or supplemented from time to time.




	 	        
“London Interbank Offered Rate” has the meaning set forth in Section 2.05(c).






	 	        “Margin
Stock” means “margin stock” as defined in Regulation T, U or X of
the Board of Governors of the Federal Reserve System, as in effect from time to
time, together with all official rulings and interpretations issued thereunder. 






	 	        “Material
Adverse Effect” means, with respect to any event, act, condition or
occurrence of whatever nature (including any adverse determination in any
litigation, arbitration, or governmental investigation or proceeding), whether
singly or in conjunction with any other event or events, act or acts, condition
or conditions, occurrence or occurrences, whether or not related, a material
adverse change in, or a material adverse effect upon, any of (a) the financial
condition, operations, business or properties of the Borrower and its
Consolidated Subsidiaries taken as a whole, (b) the rights and remedies of the
Bank under the Loan Documents, or the ability of the Borrower to perform its
obligations under the Loan Documents to which it is a party, as applicable, or
(c) the legality, validity or enforceability of any Loan Document. 





	 	        “Multiemployer Plan” shall have the meaning set forth in Section 4001(a)(3) of ERISA.






	 	        “NAIC" means the National Association of Insurance Commissioners.






	 	        “Net
Income” means, as applied to any Person for any period, the aggregate
amount of net income of such Person, after taxes, for such period, as determined
in accordance with GAAP. 






	 	        “Note”
means the promissory note of the Borrower, substantially in the form of
Exhibit A hereto, evidencing the obligation of the Borrower to repay the
Advances. 





	 	        “Notice of Continuation or Conversion” has the meaning as specified in Section 2.02.





	 	        “Obligations”
means all Advances, interest, fees and other obligations owing by the Borrower
to the Bank hereunder and under any other Loan Document, all existing and future
obligations of the Borrower under or in respect of swap agreements, caps and
collar arrangements provided by the Bank or an Affiliate of the Bank, and all
obligations of the Borrower in respect of Bank Products. 





	 	        “Officer's Certificate” has the meaning set forth in Section 3.01(e).





	 	        “Participant” has the meaning set forth in Section 8.07(b).













-11-



















	 	        “PBGC”
means the Pension Benefit Guaranty Corporation or any entity succeeding to any
or all of its functions under ERISA. 






	 	        “Permitted
Acquisition” means the acquisition by the Borrower or any Subsidiary of
shares of capital stock of any Person or assets from any Person, if: (A) in the
case of the acquisition of shares of capital stock of any Person, immediately
after giving effect to such acquisition (i) such Person is a Consolidated
Subsidiary; (ii) the Borrower controls such Person directly or indirectly
through a Subsidiary; (iii) no Default shall have occurred and be continuing;
(iv) the line or lines of business engaged in by such Person are the same or
substantially the same as the lines of business engaged in by the Borrower and
its Subsidiaries on the Closing Date; and (v) such acquisition is made on a
negotiated basis with the approval of the Board of Directors of the Person to be
acquired and, if necessary, the shareholders of the Person to be acquired; and
(B) in the case of the acquisition of assets from any Person, immediately after
giving effect to such acquisition: (i) the assets acquired by the Borrower or
such Subsidiary shall be used by the Borrower or such Subsidiary in a line of
business the same or substantially the same as the lines of business engaged in
by the Borrower and its Subsidiaries on the Closing Date; and (ii) no Default
shall have occurred and be continuing. 






	 	        “Person”
means an individual, a corporation, a limited liability company, a partnership
(including without limitation, a joint venture), an unincorporated association,
a trust or any other entity or organization, including, but not limited to, a
government or political subdivision or an agency or instrumentality thereof. 






	 	        “Plan”
means at any time an employee pension benefit plan which is covered by Title IV
of ERISA or subject to the minimum funding standards under Section 412 of the
Code and is either (i) maintained by a member of the Controlled Group for
employees of any member of the Controlled Group or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more than
one employer makes contributions and to which a member of the Controlled Group
is then making or accruing an obligation to make contributions or has within the
preceding 5 plan years made contributions. 






	 	        “Pledge
Agreement” means the Pledge Agreement dated of even date herewith executed
by the Borrower for the benefit of the Bank, as the same may be amended,
restated, supplemented or otherwise modified from time to time, pursuant to
which the Borrower has pledged to the Bank the stock or other equity interests
it holds in the following Subsidiaries: American Southern Insurance Company,
Association Casualty Insurance Company, Georgia Casualty & Surety Company
and Bankers Fidelity Life Insurance Company, and agrees to pledge any stock or
equity interests it obtains in the future with respect to existing Subsidiaries
or Persons which become Subsidiaries, as more fully set forth therein. 






	 	        “Prime
Rate” refers to that interest rate so denominated and set by the Bank from
time to time as an interest rate basis for borrowings. The Prime Rate is but one
of several interest rate bases used by the Bank. The Bank lends at interest
rates above and below the Prime Rate. 













-12-



















	 	        “Properties”
means all real property owned, leased or otherwise used or occupied by the
Borrower or any Subsidiary, wherever located. 






	 	        “Quarterly
Payment Date” means each April 1, July 1, October 1, and January 1, or if
any such day is not a Domestic Business Day, the next succeeding Domestic
Business Day. 






	 	        “Quarterly
Statement” means, with respect to any Insurance Subsidiary, the quarterly
report, statement or other filing made by such Insurance Subsidiary with the
insurance department or other governmental authority of the state in which such
Insurance Subsidiary is formed or incorporated which regulates, supervises or
otherwise has jurisdiction over such Insurance Subsidiary, all in accordance
with statutory accounting principles. 





	 	        “Rate Determination Date” has the meaning set forth in Section 2.05(a).





	 	        “Redeemable
Preferred Stock” of any Person means any preferred stock issued by such
Person which is at any time prior to the Termination Date either (i) mandatorily
redeemable (by sinking fund or similar payments or otherwise) or (ii) redeemable
at the option of the holder thereof. 






	 	        “Restricted
Payment” means (i) any dividend or other distribution on any shares of
the Borrower’s capital stock (except dividends payable solely in shares of
its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the
Borrower’s capital stock (except shares acquired upon the conversion
thereof into other shares of its capital stock) or (b) any option, warrant
or other right to acquire shares of the Borrower’s capital stock. 





	 	        “Series D Preferred Stock” means the Borrower's Series D Preferred Stock.





	 	        “Statutory
Surplus” means, at any time for any Insurance Subsidiary, the
“Statutory Surplus” of such Insurance Subsidiary as set forth or
reflected on the most recent Annual Statement or Quarterly Statement of such
Insurance Subsidiary, prepared in accordance with statutory accounting
principles. 





	 	        “Statutory Trust I” means ATLANTIC AMERICAN STATUTORY TRUST I, a Connecticut statutory trust.





	 	        “Statutory Trust II” means ATLANTIC AMERICAN STATUTORY TRUST II, a Connecticut statutory trust.





	 	        “Stockholders’
Equity” means, at any time, the shareholders’ equity of the Borrower
and its Consolidated Subsidiaries, as set forth or reflected on the most recent
consolidated balance sheet of the Borrower and its Consolidated Subsidiaries
prepared in accordance with GAAP, but excluding (i) any Redeemable
Preferred Stock of the Borrower or any of its Consolidated Subsidiaries and (ii)
the amount appearing as “accumulated other comprehensive income” on
the balance sheets of the Borrower. Shareholders’ equity generally would
include, but not be limited to (i) the par or stated value of all outstanding
Capital Stock, (ii) capital surplus, (iii) retained earnings, and (iv) various
deductions such as (A) purchases of treasury stock, (B) valuation allowances,
(C) receivables due from an employee stock ownership plan, (D) employee stock
ownership plan debt guarantees, and (E) translation adjustments for foreign
currency transactions. 












-13-























	 	        “Subordinated
Debt” means Debt of the Borrower and its Subsidiaries incurred in
connection with the 2002 Trust Preferred Transaction and the 2003 Trust
Preferred Transaction. 






	 	        “Subsidiary”
means as to any Person, any corporation or other entity of which securities or
other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by such Person. 





	 	        “Taxes” has the meaning set forth in Section 2.09(c).





	 	
        “Termination
Date” means the earlier to occur of (i) June 30, 2010, (ii) the date the
Commitment is terminated pursuant to Section 6.01 following the occurrence of an
Event of Default, or (iii) the date the Borrower terminates the Commitment
entirely pursuant to Section 2.06.





	 	        “Third
Parties” means all lessees, sublessees, licensees and other users of the
Properties, excluding those users of the Properties in the ordinary course of
the Borrower’s or any Subsidiary’s business and on a temporary basis. 





	 	        “Transferee” has the meaning set forth in Section 8.07(d).





	 	        “Unused
Commitment” means at any date, an amount equal to the Commitment less the
aggregate outstanding principal amount of the Advances. 






	 	        “Wholly
Owned Subsidiary” means any Subsidiary all of the shares of capital stock
or other ownership interests of which (except directors’ qualifying shares)
are at the time directly or indirectly owned by the Borrower. 












        
Section 1.02   Accounting
Terms and Determinations. Unless otherwise specified herein, all terms of an
accounting character used herein shall be interpreted, all accounting
determinations hereunder shall be made, and all financial statements required to
be delivered hereunder shall be prepared in accordance with (a) in the case of
the Borrower and each Subsidiary, GAAP, applied on a basis consistent (except
for changes concurred in by the Borrower’s independent public accountants
or otherwise required by a change in GAAP) with the most recent audited
consolidated financial statements of the Borrower and its Consolidated
Subsidiaries delivered to the Bank, unless with respect to any such change
concurred in by the Borrower’s independent public accountants or required
by GAAP, in determining compliance with any of the provisions of this Agreement
or any of the other Loan Documents: (i) the Borrower shall have objected to
determining such compliance on such basis at the time of delivery of such
financial statements, or (ii) the Bank shall so object in writing within 30 days
after the delivery of such financial statements, in either of which events such
calculations shall be made on a basis consistent with those used in the
preparation of the latest financial statements as to which such objection shall
not have been made (which, if objection is made in respect of the first
financial statements delivered under Section 5.01 hereof, shall mean the
financial statements referred to in Section 4.04), and (b) in the case of any
Insurance Subsidiary, statutory accounting principles as in effect from time to
time, applied on a consistent basis. 




-14-


















        
Section 1.03   Use of
Defined Terms. All terms defined in this Agreement shall have the same
meanings when used in any of the other Loan Documents, unless otherwise defined
therein or unless the context shall otherwise require. 


        
Section 1.04   Terminology. All personal pronouns used in this Agreement, whether used
in the masculine, feminine or neuter gender, shall include all other genders;
the singular shall include the plural and the plural shall include the singular.
Titles of Articles and Sections in this Agreement are for convenience only, and
neither limit nor amplify the provisions of this Agreement. 


        
Section 1.05   References. Unless otherwise indicated, references in this Agreement to
“Articles”, “Exhibits”, “Schedules”, and
“Sections” are references to articles, exhibits, schedules and
sections hereof.


ARTICLE II
THE CREDITS



        
Section 2.01   Commitment
to Make Advances. The Bank hereby agrees, on the terms and conditions set
forth herein, to make Advances to the Borrower from time to time before the
Termination Date; provided that, immediately after each such Advance is
made, the aggregate principal amount of outstanding Advances shall not exceed
the Commitment; provided further that, no Advances shall be made
prior to January 8, 2007 other than the first Advance made on the Closing Date
for the purpose of repaying the Borrower’s existing obligations to the Bank
as set forth in Section 8.16 hereof. Within the foregoing limits, the Borrower
may borrow under this Section, repay or, prepay Advances and reborrow under this
Section at any time before the Termination Date. The Bank shall have no
obligation to advance funds in excess of the amount of the Commitment.


        
Section 2.02   Method of
Borrowing. The Borrower shall give the Bank notice (a “Notice of
Borrowing”) prior to 11:00 A.M. (Atlanta, Georgia time) on the same
Domestic Business Day in the case of each proposed Base Rate Advance and on the
third Domestic Business Day prior to each proposed Euro-Dollar Advance
specifying (i) the date of such Advance (which shall be a Domestic Business Day
for a Base Rate Advance and a Euro-Dollar Business Day for a Euro-Dollar
Advance), (ii) whether such Advance is a Base Rate Advance or a Euro-Dollar
Advance, (iii) the aggregate amount of such Advance, and (iv) in the case of a
Euro-Dollar Advance, the duration of the Interest Period applicable thereto,
subject to the provisions of the definition of Interest Period. A Notice of
Borrowing, once given, shall be irrevocable. The Bank shall be entitled to rely
on any telephonic Notice of Borrowing which it believes in good faith to have
been given by a duly authorized officer or employee of the Borrower and any
Advances made by the Bank based on such telephonic notice shall, when credited
by the Bank to the regular deposit account maintained by the Borrower with the
Bank, be an Advance for all purposes hereunder. Not later than 2:00 p.m.,
Atlanta, Georgia time, on the date specified for the Advance in the Notice of
Borrowing, the Bank shall credit, in immediately available funds, the amount of
such Advance to the regular deposit account maintained by the Borrower with the
Bank. Notwithstanding anything to the contrary contained in this Agreement, no
Advance may be made if there shall have occurred a Default, which Default shall
not have been cured or waived.








-15-



















        
Section 2.03   Note. 



	 	
          (a)          The Advances  shall be  evidenced  by a single Note payable to the order of the Bank for the account of its Lending  Office in
an amount equal to the original principal amount of the Commitment as of the Closing Date.




	 	
          (b)          The Bank  shall  record,  and  prior to any  transfer  of the Note  shall  endorse  on the  schedule  forming  a part  thereof
appropriate notations to evidence, the date, amount and maturity of the Advances made by it, the interest rates from time to
time applicable thereto and the date and amount of each payment of principal made by the Borrower with respect thereto and
such schedule shall constitute rebuttable presumptive evidence of the principal amount owing and unpaid on the Note;
provided that the failure of the Bank to make, or any error in making, any such recordation or endorsement shall not affect
the obligation of the Borrower hereunder or under the Note or the ability of the Bank to assign its Note. The Bank is
hereby irrevocably authorized by the Borrower so to endorse the Note and to attach to and make a part of the Note a
continuation of any such schedule as and when required.




        
Section 2.04   Repayment Terms; Mandatory Prepayments and Repayments. 

	 	
          (a)          Accrued  interest on the Advances shall be due and payable in consecutive  quarterly  payments  commencing on January 1, 2007,
and continuing on each Quarterly Payment Date thereafter until the Termination Date, upon which date, the Borrower shall
repay in full the outstanding Advances and all Obligations in connection therewith.




	 	
          (b)          The Advances shall be repaid in the amounts and on the dates as set forth in the table below:






	June 30, 2007	$       500,000
	December 31, 2007	$       500,000
	June 30, 2008	$       500,000
	December 31, 2008	$       500,000
	June 30, 2009	$    1,000,000
	December 31, 2009	$    1,500,000
	June 30, 2010	$  10,500,000



provided,
however, if on any such date listed on the table above Advances
outstanding are less than the applicable repayment amount, such repayment amount
shall equal such outstanding amount. 








-16-















	 	
          (c)          On each date on which the  Commitment  is reduced by  definition  or pursuant to Section  2.06 or Section  2.07,  the Borrower
shall repay or prepay such principal amount of the outstanding Advances, if any (together with interest accrued thereon), as
may be necessary so that after such payment the aggregate unpaid principal amount of the outstanding Advances does not
exceed the aggregate amount of the Commitment as then reduced.





        
Section 2.05   Interest Rates. 

	 	
          (a)          “Applicable  Margin” shall be determined  quarterly based upon the ratio of Funded Debt to Consolidated  Total  Capitalization
(calculated as of the last day of each Fiscal Quarter), as follows:







	Ratio of Funded Debt to
Consolidated Total Capitalization

	Base Rate
Advances
	Euro-Dollar 
Advances

	      Greater than 45%	0%	2.50%
	      Greater  than  or  equal  to 40% but  less

     than or equal to 45%	0%	2.00%
	      Less than 40%	0%	1.75%






	 	        The
Applicable Margin shall be determined effective as of the date (herein, the
“Rate Determination Date”) which is 60 days after the last day of the
Fiscal Quarter as of the end of which the foregoing ratio is being determined,
based on the quarterly financial statements of the Borrower for such Fiscal
Quarter, and the Applicable Margin so determined shall remain effective from
such Rate Determination Date until the date which is 60 days after the last day
of the Fiscal Quarter in which such Rate Determination Date falls (which latter
date shall be a new Rate Determination Date); provided that (i) for the period
from and including the Closing Date to but excluding the Rate Determination Date
next following the Closing Date, the Applicable Margin shall be 0% for Base Rate
Advances and 2.00% for Euro-Dollar Advances (ii) in the case of any Applicable
Margin determined for the fourth and final Fiscal Quarter of a Fiscal Year, the
Rate Determination Date shall be the date which is 120 days after the last day
of such final Fiscal Quarter and such Applicable Margin shall be determined
based upon the annual audited financial statements of the Borrower for the
Fiscal Year ended on the last day of such final Fiscal Quarter, and
(iii) if on any Rate Determination Date the Borrower shall have failed to
deliver to the Bank the financial statements required to be delivered pursuant
to Section 5.01(a) or Section 5.01(b) with respect to the Fiscal Year or Fiscal
Quarter, as the case may be, most recently ended prior to such Rate
Determination Date, then for the period beginning on such Rate Determination
Date and ending (subject to Section 7.05 and the provisions relating to Interest
Periods contained in this Agreement) on the date such financial statements are
delivered, the Applicable Margin shall be determined as if the ratio of Funded
Debt to Consolidated Total Capitalization was more than 45% at all times during
such period. Any change in the Applicable Margin on any Rate Determination Date
shall result in a corresponding change, effective on and as of such Rate
Determination Date, in the interest rate applicable to each Advance outstanding
on such Rate Determination Date, provided that no Applicable Margin shall
be decreased pursuant to this Section 2.05 if a Default is in existence on the
Rate Determination Date until such Default shall have been cured or waived in
accordance with the terms of this Agreement. 












-17-

















	 	
          (b)          Each Base Rate Advance  shall bear  interest on the  outstanding  principal  amount  thereof,  for each day from the date such
Advance is made until it becomes due, at a rate per annum equal to the Base Rate for such day plus the Applicable Margin.
Such interest shall be payable on the first Domestic Business Day of each calendar month while such Base Rate Advance is
outstanding, on the date such Base Rate Advance is converted to a Euro-Dollar Advance and, if a Base Rate Advance is then
outstanding, on the Termination Date. Any overdue principal of and, to the extent permitted by applicable law, overdue
interest on any Base Rate Advance shall bear interest, payable on demand, for each day until paid at a rate per annum equal
to the Default Rate.




	 	
          (c)          Each Euro-Dollar Advance shall bear interest on the outstanding  principal amount thereof,  for the Interest Period applicable
thereto, at a rate per annum equal to the sum of the Applicable Margin plus the applicable Adjusted London Interbank Offered
Rate for such Interest Period; provided that if any Euro-Dollar Advance shall, as a result of clause (1)(c) of the
definition of Interest Period, have an Interest Period of less than one month, such Euro-Dollar Advance shall bear interest
during such Interest Period at the rate applicable to Base Rate Advances during such period. Interest on each Euro-Dollar
Advance shall be payable for each Interest Period on the last day thereof and, if such Interest Period is longer than 3
months, at intervals of 3 months after the first day thereof. Any overdue principal of and, to the extent permitted by
applicable law, overdue interest on any Euro-Dollar Advance shall bear interest, payable on demand, for each day until paid
at a rate per annum equal to the Default Rate.




	 	        The
“Adjusted London Interbank Offered Rate” applicable to any Interest
Period means a rate per annum equal to the quotient obtained (rounded upward, if
necessary, to the next higher 1/100th of 1%) by dividing (i) the applicable
London Interbank Offered Rate for such Interest Period by (ii) 1.00 minus
the Euro-Dollar Reserve Percentage. 






	 	        The
“London Interbank Offered Rate” applicable to any Euro-Dollar Advance
means for the Interest Period of such Euro-Dollar Advance the rate per annum
determined on the basis of the rate for deposits in Dollars of amounts equal or
comparable to the principal amount of such Euro-Dollar Advance offered for a
term comparable to such Interest Period, which rate appears on the display
designated as Page “3750” of the Telerate Service (or such other page
as may replace page 3750 of that service or such other service or services as
may be nominated by the British Banker’s Association for the purpose of
displaying London Interbank Offered Rates for U.S. dollar deposits) determined
as of 1:00 p.m. New York City time, 2 Euro-Dollar Business Days prior to the
first day of such Interest Period. 






	 	        “Euro-Dollar
Reserve Percentage” means for any day that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Board of Governors
of the Federal Reserve System (or any successor) for determining the applicable
reserve requirement for the Bank in respect of “Eurocurrency
liabilities” (or in respect of any other category of liabilities which
includes deposits by reference to which the interest rate on Euro-Dollar
Advances is determined or any category of extensions of credit or other assets
which includes loans by a non-United States office of the Bank to United States
residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage. 











-18-

















	 	
          (d)          The Bank shall  determine  the interest  rates  applicable  to the Advances  hereunder  in  accordance  with the terms of this
Agreement. The Bank shall give prompt notice to the Borrower by telecopy of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.




	 	
          (e)          In the  event  that any  financial  statement  or  Compliance  Certificate  delivered  to the  Bank is shown to be  inaccurate
(regardless of whether this Agreement or the Commitment is in effect when such inaccuracy is discovered), and such
inaccuracy, if corrected, would have led to the application of a higher Applicable Margin for any period (an "Applicable
Period") than the Applicable Margin applied for such Applicable Period, then (i) the Borrower shall immediately deliver to
the Bank a correct Compliance Certificate for such Applicable Period, (ii) the Applicable Margin for such Applicable Period
shall be determined on the basis of the ratio of Funded Debt to Consolidated Total Capitalization set forth in the corrected
Compliance Certificate, and (iii) the Borrower shall immediately pay to the Bank the accrued additional interest owing as a
result of such increased Applicable Margin for such Applicable Period. This Section 2.05(e) shall not limit the rights of
the Bank with respect to Section 2.05(f) below.




	 	
          (f)          After the  occurrence  and during the  continuance  of a Default,  the  principal  amount of the Advances  (and, to the extent
permitted by applicable law, all accrued interest thereon) may, at the election of the Bank, bear interest at the Default
Rate.







        
Section 2.06   Optional
Termination or Reduction of Commitment. The Borrower may, at any time
terminate the Commitment at any time, or reduce the Commitment from time to time
by an aggregate minimum amount of at least $5,000,000 or an integral multiple of
$1,000,000 in excess thereof. If the Commitment is so reduced, such reduction
shall be accounted for in determining any fees due hereunder. If the Commitment
is so terminated in its entirety, all accrued fees shall be payable on the
effective date of such termination. A notice of reduction or termination of the
Commitment hereunder, once given, shall not thereafter be revocable by the
Borrower. 

        
Section 2.07   Mandatory
Reduction and Termination of Commitment. The Commitment shall terminate and
the unpaid principal balance and all accrued and unpaid interest on the Note
will be due and payable upon the first of the following dates or events to
occur: (i) acceleration of the maturity of the Note in accordance with the
remedies contained in Section 6.01; (ii) the Borrower’s termination of
the Commitment pursuant to Section 2.08; or (iii) upon the expiration of
the Commitment on the Termination Date. From and after the date of such
termination, no Advances shall be made.












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Section 2.08   Optional Prepayments. 

	 	
          (a)          The Borrower may,  upon at least 1 Domestic  Business  Day's notice to the Bank,  prepay any Base Rate Advance in whole at any
time, or from time to time in part in amounts aggregating at least $500,000, or any larger multiple of $100,000, by paying
the principal amount to be prepaid together with accrued interest thereon to the date of prepayment.




	 	
          (b)          The Borrower may not prepay all or any portion of the  principal  amount of any  Euro-Dollar  Advance prior to the last day of
an Interest Period applicable thereto, unless the Borrower complies with Section 7.05.




        
Section 2.09   General Provisions as to Payments. 

	 	
          (a)          The Borrower shall make each payment of principal of, and interest on, the Bank's  Advances and of fees  hereunder,  not later
than 11:00 A.M. (Atlanta, Georgia time) on the date when due, in Federal or other funds immediately available at the place
where payment is due, to the Bank at its address set forth on the signature pages hereof.




	 	
          (b)          Whenever any payment of principal  of, or interest on, the Base Rate  Advances or of fees shall be due on a day which is not a
Domestic Business Day, the date for payment thereof shall be extended to the next succeeding Domestic Business Day.
Whenever any payment of principal of or interest on the Euro-Dollar Advances shall be due on a day which is not a
Euro-Dollar Business Day, the date for payment thereof shall be extended to the next succeeding Euro-Dollar Business Day
unless such Euro-Dollar Business Day falls in another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day. If the date for any payment of principal is extended by operation of law or
otherwise, interest thereon shall be payable for such extended time.




	 	
          (c)          All payments of  principal,  interest and fees and all other  amounts to be made by the  Borrower  pursuant to this  Agreement
with respect to any Advances or fee relating thereto shall be paid without deduction for, and free from, any tax, imposts,
levies, duties, deductions, or withholdings of any nature now or at anytime hereafter imposed by any governmental authority
or by any taxing authority thereof or therein excluding in the case of the Bank, taxes imposed on or measured by its net
income, and franchise taxes imposed on it, by the jurisdiction under the laws of which the Bank is organized or any
political subdivision thereof and, in the case of the Bank, taxes imposed on its income, and franchise taxes imposed on it,
by the jurisdiction of the Bank's applicable Lending Office or any political subdivision thereof (all such non-excluded
taxes, imposts, levies, duties, deductions or withholdings of any nature being "Taxes"). In the event that the Borrower is
required by applicable law to make any such withholding or deduction of Taxes with respect to any Advances or fee or other
amount, the Borrower shall pay such deduction or withholding to the applicable taxing authority, shall promptly furnish to
the Bank in respect of which such deduction or withholding is made all receipts and other documents evidencing such payment
and shall pay to the Bank additional amounts as may be necessary in order that the amount received by the Bank after the
required withholding or other payment shall equal the amount the Bank would have received had no such withholding or other
payment been made. If no withholding or deduction of Taxes are payable in respect of any Advances or fee relating thereto,
the Borrower shall furnish the Bank, at the Bank's request, a certificate from each applicable taxing authority or an
opinion of counsel acceptable to the Bank, in either case stating that such payments are exempt from or not subject to
withholding or deduction of Taxes. If the Borrower fails to provide such original or certified copy of a receipt evidencing
payment of Taxes or certificate(s) or opinion of counsel of exemption, the Borrower hereby agrees to compensate the Bank
for, and indemnify it with respect to, the tax consequences of the Borrower's failure to provide evidence of tax payments or
tax exemption.









-20-



















	 	        In
the event the Bank receives a refund of any Taxes paid by the Borrower pursuant
to this Section 2.09, it will pay to the Borrower the amount of such refund
promptly upon receipt thereof; provided, however, if at any time
thereafter it is required to return such refund, the Borrower shall promptly
repay to it the amount of such refund. 






	 	        Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 2.09 shall
be applicable with respect to any Participant, Assignee or other Transferee, and
any calculations required by such provisions (i) shall be made based upon the
circumstances of such Participant, Assignee or other Transferee (provided that
each Participant shall not be entitled to any compensation greater than that
which would have been received by the Bank under similar circumstances), and
(ii) constitute a continuing agreement and shall survive the termination of this
Agreement and the payment in full or cancellation of the Note. 






        
Section 2.10   Computation of Interest. Interest on Base Rate Advances shall be computed on the basis
of a year of 365 days and paid for the actual number of days elapsed (including
the first day but excluding the last day). Interest on Euro-Dollar Advances
shall be computed on the basis of a year of 360 days and paid for the actual
number of days elapsed, calculated as to each Interest Period from and including
the first day thereof to but excluding the last day thereof. 

        
Section 2.11   Conversion and Continuation of Advances. 


	 	
          (a)          On the terms and subject to the  conditions of this  Agreement,  the Borrower may elect (A) at the end of any Interest  Period
with respect to any Euro-Dollar Advance to convert such Euro-Dollar Advance into a Base Rate Advance or to continue such
Euro-Dollar Advance for an additional Interest Period, or (B) at any time to convert a Base Rate Advance to a Euro-Dollar
Advance. The Borrower shall make each such election by delivering to the Bank a notice in the form of Exhibit G (a "Notice
of Continuation or Conversion") prior to 11:00 a.m. (Atlanta, Georgia time) at least 3 Euro-Dollar Business Days prior to
the effective date of any conversion to or continuation of a Euro-Dollar Advance, and prior to 10:00 a.m. (Atlanta, Georgia
time) on the same Domestic Business Day as the effective date of any conversion to a Base Rate Advance, specifying (x) in
the case of a conversion to or continuation of a Euro-Dollar Advance, the Interest Period; (y) the date of conversion or
continuation (which shall be a Euro-Dollar Business Day, in the case of a conversion to or continuation of a Euro-Dollar
Advance and a Domestic Business Day in the case of a conversion to a Base Rate Advance); and (z) the amount and type of
conversion or continuation. Upon timely receipt of a Notice of Continuation or Conversion, the Bank shall promptly notify
the Borrower of the applicable interest rate for the Interest Period selected in such Notice of Continuation or Conversion;
provided that the failure by the Bank to provide any such notice shall not, in any way, affect or diminish the Borrower's
obligations to the Bank or the Bank's rights under this Agreement, the Notes or any of the other Loan Documents. If, within
the time period required under this Section, the Bank shall not have received a Notice of Continuation or Conversion with
respect to a Euro-Dollar Advance from the Borrower of an election to continue such loans for an additional Interest Period,
then, upon the expiration of the Interest Period therefor, such Advance shall be converted automatically into a Base Rate
Advance.














-21-


















	 	
          (b)          No more than one Interest Period shall be applicable to the Advances made on any day.




	 	
          (c)          Notwithstanding  anything to the contrary  contained in this  Agreement,  no Advance may be continued  as, or converted  to, a
         Euro-Dollar  Advance if at the time of continuation or conversion  there shall have occurred an Event of Default,  which Event
         of Default shall not have been cured or waived in writing.




        
Section 2.12   Unused
Fees. The Borrower shall pay to the Bank a commitment fee, calculated on the
average daily amount of the Unused Commitment at the rate of 0.25% per annum.
Such commitment fees shall accrue from and including the Closing Date to but
excluding the Termination Date and shall be payable on each Quarterly Payment
Date and on the Termination Date. 


ARTICLE III
CONDITIONS TO ADVANCES


        
Section 3.01   Conditions
to Closing. The effectiveness of this Agreement and obligation of the Bank
to make the first Advance, which shall be applied as set forth in Section 8.16
hereof, is subject to the following conditions: 


	 	
          (a)          receipt by the Bank from the Borrower of  a duly executed counterpart of this Agreement signed by the Borrower;





	 	
          (b)          receipt by the Bank of the duly executed Note for the account of the Bank complying with the provisions of Section 2.03;





	 	
          (c)          receipt by the Bank of an opinion  (together with any opinions of local counsel  relied on therein) of Jones Day,  counsel for
         the  Borrower,  dated as of the Closing  Date,  substantially  in the form of Exhibit B hereto and  covering  such  additional
         matters relating to the transactions  contemplated hereby as the Bank may reasonably request,  including,  but not limited to,
         an opinion that the Advances constitute "Senior Indebtedness" as defined in the 2002 and 2003 Indentures;















-22-
















	 	
          (d)          receipt by the Bank of a  certificate  (the  "Closing  Certificate"),  dated the Closing  Date,  substantially  in the form of
         Exhibit C hereto,  signed by a principal  financial  officer of the Borrower,  to the effect that (i) no  Default has occurred
         and is  continuing on the Closing Date and (ii) the  representations  and  warranties of the Borrower  contained in Article IV
         are true on and as of the Closing Date;





	 	
          (e)          receipt by the Bank of all documents  which the Bank may  reasonably  request  relating to the existence of the Borrower,  the
         corporate  authority for and the validity of this Agreement,  the Note, and any other matters relevant hereto, all in form and
         substance  satisfactory  to the Bank,  including  without  limitation a  certificate  of  incumbency  from the  Borrower  (the
         "Officer's  Certificate"),  signed by the  Secretary or an Assistant  Secretary of the Borrower  substantially  in the form of
         Exhibit D hereto,  certifying  as to the names,  true  signatures  and  incumbency  of the officer or officers of the Borrower
         authorized  to execute and deliver the Loan  Documents to which it is a party,  and certified  copies of the  following  items
         with respect to the Borrower:  (i) Certificate of  Incorporation,  (ii) Bylaws,  (iii) a certificate of the Secretary of State
         of the state of  organization  of the Borrower as to the good  standing of the Borrower as a corporation  organized  under the
         laws of such  state,  and  (iv) the  action  taken by the  Board of  Directors  of the  Borrower  authorizing  the  Borrower's
         execution, delivery and performance of the Loan Documents to which it is a party;





	 	
          (f)          receipt by the Bank of the Pledge  Agreement and UCC Financing  Statements in form and substance  satisfactory  to the Bank in
         its sole discretion,  granting to the Bank a first priority  security  interest in the stock or other equity interests held by
         the Borrower in all  Subsidiaries of the Borrower,  and receipt of any stock  certificates or evidence of the  registration of
         the Bank's  security  interest  in the  corporate  records of such  Subsidiaries,  all as  required  by the Pledge  Agreement,
         providing for a continuation  of the Bank's first priority  security  interest in the stock or other equity  interests held by
         the Borrower in all  Subsidiaries  of the Borrower  (which such UCC Financing  Statements the Borrower  hereby  authorizes the
         Bank to file);





	 	
          (g)          receipt by the Bank from each Insurance  Subsidiary of a certificate  signed by the Chief Actuary or Chief  Financial  Officer
         of such  Insurance  Subsidiary  to the effect that the reserves of such  Insurance  Subsidiary  are adequate  under  statutory
         accounting  principles  and the applicable  laws of the state under the laws of which such Insurance  Subsidiary was organized
         or incorporated as of December 31, 2005;





	 	
          (h)          receipt by the Bank of evidence that the Borrower  shall have notified the Insurance  Commissioner  from the State of Georgia,
         or other  appropriate  state agency,  that the Borrower intends to pledge the capital stock of its direct  subsidiaries to the
         Bank as security for the Advances;





	 	
          (i)          Bank shall be satisfied  that A.M. Best Company (the  "Agency"),  after giving effect to the $7,000,000  capital  contribution
         provided by J. Mack Robinson, re-affirmed or upgraded the ratings the Agency assigned to each of the Borrower's Subsidiaries;









-23-

















	 	
          (j)          the Bank shall be satisfied in its sole discretion that the Borrower is in compliance with NASDAQ listing standards;





	 	
          (k)          the fact that the  representations  and warranties of the Borrower  contained in Article IV of this Agreement shall be true on
and as of the Closing Date;





	 	
          (l)          receipt by the Bank of an  origination  fee in the amount of  $5,625.00,  which shall be deemed  fully  earned by the Bank and
         non-refundable as of the Closing Date;





	 	
          (m)          payment by the Borrower of the reasonable fees and expenses of Womble Carlyle  Sandridge & Rice,  special counsel to the Bank,
         in connection with the negotiation, preparation, execution and delivery of this Agreement and the Advances hereunder; and





	 	
          (n)          satisfactory completion by the Bank of all credit and legal due diligence.






        
Section 3.02   Conditions
to All Borrowings. The obligation of the Bank to make any Advance is subject
to the satisfaction of the following conditions: 

	 	
          (a)          receipt by the Bank of a Notice of Borrowing as required by Section 2.02;





	 	
          (b)          the fact that, immediately after such Advance, no Default shall have occurred and be continuing;





	 	
          (c)          the fact that the  representations  and warranties of the Borrower contained in Article IV shall be true on and as of the date
         of such Advance, except as to those which expressly relate to an earlier date; and






	 	
          (d)          the fact that,  immediately  after such Advance,  the aggregate  outstanding  principal amount of the Advances will not exceed
         the amount of the  Commitment.  Each Advance  hereunder shall be deemed to be a  representation  and warranty by each Borrower
         on the date of such Advance as to the facts specified in clauses (b), (c) and (d) of this Section 3.02.







ARTICLE IV

                                                    REPRESENTATIONS AND WARRANTIES



        The
Borrower represents and warrants that: 


        
Section 4.01   Corporate
Existence and Power. The Borrower is a corporation duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
incorporation, is duly qualified to transact business in every jurisdiction
where, by the nature of its business, such qualification is necessary, and has
all corporate powers and all governmental licenses, authorizations, consents and
approvals required to carry on its business as now conducted, if the failure to
be so qualified or to have such powers, licenses, authorizations, consents or
approvals could reasonably be expected, alone or in the aggregate, to have or
cause a Material Adverse Effect. 













-24-




















        
Section 4.02   Corporate
and Governmental Authorization; No Contravention. The execution, delivery
and performance by the Borrower of this Agreement, the Note and the other Loan
Documents (i) are within the Borrower’s corporate powers,
(ii) have been duly authorized by all necessary corporate action,
(iii) require no action by or in respect of, or filing with, any
governmental body, agency or official, which has not been obtained, (iv) do
not contravene, or constitute a default under, any provision of applicable law
or regulation or of the certificate of incorporation or by-laws of the Borrower
or of any material agreement, judgment, injunction, order, decree or other
instrument binding upon the Borrower or any of its Subsidiaries, and (v) do
not result in the creation or imposition of any Lien on any asset of the
Borrower or any of its Subsidiaries other than as provided therein. 


        
Section 4.03   Binding
Effect. This Agreement constitutes a valid and binding agreement of the
Borrower enforceable in accordance with its terms, and the Note and the other
Loan Documents, when executed and delivered in accordance with this Agreement,
will constitute valid and binding obligations of the Borrower enforceable in
accordance with their respective terms, provided that the enforceability
hereof and thereof is subject in each case to general principles of equity and
to bankruptcy, insolvency and similar laws affecting the enforcement of
creditors’ rights generally. 

        
Section 4.04   Financial Information.

	 	
          (a)          As of the Closing Date, the consolidated  balance sheet of the Borrower and its  Consolidated  Subsidiaries as of December 31,
         2005 and the related  consolidated  statements of income,  shareholders' equity and cash flows for the Fiscal Year then ended,
         reported on by an independent public accounting firm of nationally  recognized  standing,  copies of which have been delivered
         to the Bank, and the unaudited  consolidated  financial  statements of the Borrower for the interim period ended September 30,
         2006,  copies of which have been delivered to the Bank,  fairly present,  in conformity with GAAP, the consolidated  financial
         position of the Borrower and its Consolidated  Subsidiaries as of such dates and their consolidated  results of operations and
         cash flows for such periods stated.






	 	
          (b)          The Annual Statements of the Insurance  Subsidiaries  together with supplemental  schedules thereto,  dated as of December 31,
         2005, and the Quarterly Statements of the Insurance  Subsidiaries  together with supplemental  schedules thereto,  dated as of
         September 30, 2006,  copies of which have been delivered to the Bank,  fairly present the  respective  financial  positions of
         the Insurance Subsidiaries as of such dates.






	 	
          (c)          Since December 31, 2005 there has been no event, act, condition or occurrence having a Material Adverse Effect.






        
Section 4.05   Litigation. Except as provided as Schedule 4.05 attached hereto, there is
no action, suit or proceeding pending, or to the knowledge of the Borrower
threatened, against or affecting the Borrower or any of its Subsidiaries before
any court or arbitrator or any governmental body, agency or official which could
have a Material Adverse Effect or which in any manner draws into question the
validity or enforceability of, or could impair the ability of the Borrower to
perform its obligations under, this Agreement, the Note or any of the other Loan
Documents. 










-25-


















        
Section 4.06   Compliance with ERISA.


	 	
          (a)          The Borrower and each member of the Controlled Group have fulfilled their  obligations  under the minimum funding standards of
         ERISA and the Code with respect to each Plan and are in  compliance in all material  respects  with the  presently  applicable
         provisions of ERISA and the Code,  and have not incurred any material  liability to the PBGC or a Plan under Title IV of ERISA
         that could reasonably be expected to have a Material Adverse Effect.





	 	
          (b)          Neither the Borrower nor any member of the Controlled  Group is or ever has been obligated to contribute to any  Multiemployer
         Plan.





        
Section 4.07   Taxes.
There have been filed on behalf of the Borrower and its Subsidiaries all
Federal, state and local income, excise, property and other tax returns which
are required to be filed by them and all taxes due pursuant to such returns or
pursuant to any assessment received by or on behalf of the Borrower or any
Subsidiary have been paid. The charges, accruals and reserves on the books of
the Borrower and its Subsidiaries in respect of taxes or other governmental
charges are, in the opinion of the Borrower, adequate.

        
Section 4.08   Subsidiaries.







	 	
          (a)          Each of the  Borrower's  Subsidiaries  is a corporation  or other business  entity or other  business  entity duly  organized,
         validly existing and in good standing under the laws of its  jurisdiction of incorporation or organization,  is duly qualified
         to transact business in every  jurisdiction  where, by the nature of its business,  such  qualification is necessary,  and has
         all corporate powers and all governmental licenses,  authorizations,  consents and approvals required to carry on its business
         as now conducted, if the failure to be so qualified, or to have such powers, licenses,  authorizations,  consents or approvals
         could reasonably be expected, alone or in the aggregate, to have or cause a Material Adverse Effect.







	 	        
(b)     As of the Closing Date, the Borrower has no Insurance  Subsidiaries  except those Subsidiaries listed on Schedule 4.08A, which
         accurately sets forth each such Insurance Subsidiary's complete name and jurisdiction of incorporation.








	 	        
(c)     Schedule  4.08B  accurately  sets forth the complete  name of each  Subsidiary of the Borrower as of the Closing Date which is
         not an Insurance Subsidiary, as well as its jurisdiction of incorporation.







        
Section 4.09   Not an
Investment Company. Neither the Borrower nor any of its Subsidiaries is an
“investment company” within the meaning of the Investment Company Act
of 1940, as amended. 

        
Section 4.10   Public
Utility Holding Company Act. Neither the Borrower nor any of its
Subsidiaries is a “holding company”, or a “subsidiary
company” of a “holding company”, or an “affiliate” of a
“holding company” or of a “subsidiary company” of a
“holding company”, as such terms are defined in the Public Utility
Holding Company Act of 1935, as amended.









-26-




















        
Section 4.11   Ownership
of Property; Liens. Each of the Borrower and its Consolidated Subsidiaries
has title to its properties sufficient for the conduct of its business, and none
of such property is subject to any Lien (including tax liens) except as
permitted in Section 5.10.


        
Section 4.12   No
Default. Neither the Borrower nor any of its Consolidated Subsidiaries is in
default under or with respect to any agreement, instrument or undertaking to
which it is a party or by which it or any of its property is bound that could
reasonably be expected to have or cause a Material Adverse Effect. No Default or
Event of Default has occurred and is continuing.

        
Section 4.13   Full
Disclosure. All information heretofore furnished by the Borrower to the Bank
for purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all such information hereafter furnished by the
Borrower to the Bank will be, true, accurate and complete in every material
respect or based on reasonable estimates on the date as of which such
information is stated or certified. As of the Closing Date, the Borrower has
disclosed to the Bank in writing any and all facts specific to the
Borrower’s business and finances and known to the Borrower which could
reasonably be expected to have or cause a Material Adverse Effect and are not
generally known by or available to the Bank. 

        
Section 4.14   Environmental  Matters.

        
Except
for those items that could not reasonably be expected to have a Material Adverse
Effect: 


	 	
          (a)          Neither  the  Borrower  nor any  Subsidiary  is subject to any  Environmental  Liability  which could have or cause a Material
         Adverse  Effect and neither the Borrower nor any  Subsidiary  has been  designated  as a potentially  responsible  party under
         CERCLA or under any state statute  similar to CERCLA.  None of the Properties  has been  identified on any current or proposed
         (i) National  Priorities List under 40 C.F.R.ss. 300, (ii) CERCLIS list or (iii) any list arising from a state statute similar
         to CERCLA.





	 	
          (b)          No Hazardous Materials have been or are being used, produced,  manufactured,  processed, treated, recycled, generated, stored,
         disposed of, managed or otherwise  handled at, or shipped or  transported  to or from the Properties or are otherwise  present
         at,  on, in or under the  Properties,  or, to the best of the  knowledge  of the  Borrower,  at or from any  adjacent  site or
         facility,  except for  Hazardous  Materials,  such as  cleaning  solvents,  pesticides  and other  materials  used,  produced,
         manufactured,  processed,  treated,  recycled,  generated,  stored,  disposed of, and managed or otherwise  handled in minimal
         amounts in the  ordinary  course of  business  in  compliance  in all  material  respects  with all  applicable  Environmental
         Requirements.





	 	
          (c)          The Borrower,  and each of its Subsidiaries and Affiliates,  has procured all Environmental  Authorizations  necessary for the
         conduct of its business,  and is in material  compliance with all Environmental  Requirements in connection with the operation
         of the Properties and the Borrower's, and each of its Subsidiary's and Affiliate's, respective businesses.













-27-



















        
Section 4.15   Compliance
with Laws. The Borrower and each Subsidiary is in compliance with all
applicable laws, including, without limitation, all Environmental Laws, except
where any failure to comply with any such laws would not, alone or in the
aggregate, have a Material Adverse Effect. 

        
Section 4.16   Capital
Stock. All Capital Stock, debentures, bonds, notes and all other securities
of the Borrower and its Subsidiaries presently issued and outstanding are
validly and properly issued in accordance with all applicable laws, including,
but not limited to, the “Blue Sky” laws of all applicable states and
the federal securities laws. The issued shares of Capital Stock of the
Borrower’s Wholly Owned Subsidiaries are directly or indirectly owned by
the Borrower free and clear of any Lien or adverse claim, other than Liens
arising under the Loan Documents. At least a majority of the issued shares of
voting capital stock of each of the Borrower’s other Subsidiaries (other
than Wholly Owned Subsidiaries) is owned by the Borrower free and clear of any
Lien or adverse claim, other than Liens arising under the Loan Documents.

        
Section 4.17   Margin
Stock. Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of
purchasing or carrying any Margin Stock, and no part of the proceeds of any
Advances will be used to purchase or carry any Margin Stock or to extend credit
to others for the purpose of purchasing or carrying any Margin Stock, or be used
for any purpose which violates, or which is inconsistent with, the provisions of
Regulation X. 

        
Section 4.18   Insolvency. After giving effect to the execution and delivery of the Loan
Documents and the making of the Advances under this Agreement, the Borrower will
not be “insolvent,” within the meaning of such term as used in
O.C.G.A. § 18-2-22 or as defined in § 101 of Title 11 of the United
States Code or Section 2 of the Uniform Fraudulent Transfer Act, or any other
applicable state law pertaining to fraudulent transfers, as each may be amended
from time to time, or be unable to pay its debts generally as such debts become
due, or have an unreasonably small capital to engage in any business or
transaction, whether current or contemplated. 

        
Section 4.19   Insurance. The Borrower maintains and each Subsidiary maintains (either
in the name of the Borrower or in such Subsidiary’s own name), with
financially secure and reputable insurance companies, insurance on all its
Properties in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies of established
repute engaged in the same or similar business.

        
Section 4.20   Debt and
Redeemable Preferred Stock. As of the Closing Date, the Borrower has no Debt
or Redeemable Preferred Stock outstanding except as described on Schedule 4.20
attached hereto. 






ARTICLE V

                                                               COVENANTS


        The
Borrower agrees that, so long as the Bank has any Commitment hereunder or any
amount payable under any Note remains unpaid: 















-28-


















        
Section 5.01   Information. The Borrower will deliver to the Bank (or, in the case of
clauses (a), (b), (e) and (f) of this Section, make available on a continuous
basis on “EDGAR” (the Electronic Data Gathering, Analysis, and
Retrieval system of the Securities and Exchange Commission) at
www.edgar-online.com or on the website of the SEC at
“http://www.sec.gov/edgarhp.htm”):


	 	
          (a)          (i) as soon as available  and in any event within 120 days after the end of each Fiscal Year, a  consolidated  balance  sheet
         of the Borrower and its Consolidated  Subsidiaries as of the end of such Fiscal Year and the related  consolidated  statements
         of income,  shareholders'  equity and cash flows for such Fiscal  Year,  setting  forth in each case in  comparative  form the
         figures for the previous  Fiscal Year,  all  certified by an  independent  public  accounting  firm of  nationally  recognized
         standing,  with such  certification to be free of exceptions and  qualifications  not acceptable to the Bank, and (ii) as soon
         as available  and in any event within 70 days after the end of each fiscal year of each  Insurance  Subsidiary,  a copy of the
         Annual Statement of each such Insurance  Subsidiary,  together with all supplemental  schedules thereto, as of the end of such
         Fiscal Year, all prepared in accordance with statutory accounting principles;





	 	
          (b)          (i) as  soon as  available  and in any event  within 50 days  after  the end of each of the first 3 Fiscal  Quarters  of each
         Fiscal Year, (A) a consolidated  balance sheet of the Borrower and its Consolidated  Subsidiaries as of the end of such Fiscal
         Quarter and the related  statement of income for such Fiscal  Quarter and the statement of cash flows for the portion of the
         Fiscal  Year ended at the end of such  Fiscal  Quarter,  setting  forth in each case in  comparative  form the figures for the
         corresponding  Fiscal Quarter and the  corresponding  portion of the previous  Fiscal Year, as applicable, all certified  (subject to normal
         year-end  adjustments)  as to fairness of  presentation,  GAAP and  consistency  by the chief  financial  officer or the chief
         accounting  officer of the  Borrower,  and (B) a balance sheet of the Borrower  (unconsolidated)  as of the end of such Fiscal
         Quarter and the related  statement of income for such Fiscal Quarter and the statement of cash flows for each calendar month in such Fiscal  Quarter and for the portion of the
         Fiscal  Year ended at the end of such  Fiscal  Quarter,  setting  forth in each case in  comparative  form the figures for the previous  Fiscal Year,  all certified  (subject to normal
         year-end  adjustments)  as to fairness of  presentation,  GAAP and  consistency  by the chief  financial  officer or the chief
         accounting  officer  of the  Borrower,  and (ii) as soon as  available  and in any event  within 70 days after the end of each
         fiscal  quarter of each fiscal year of each  Insurance  Subsidiary,  a copy of the Quarterly  Statement of each such Insurance
         Subsidiary,  together with all supplement  schedules thereto, as of the end of such fiscal quarter, all prepared in accordance
         with statutory accounting principles;





	 	
          (c)          simultaneously  with  the  delivery  of each  set of  financial  statements  referred  to in  clauses  (a) and  (b)  above,  a
         certificate,  substantially  in the form of Exhibit E (a  "Compliance  Certificate"),  of the chief  financial  officer or the
         chief  accounting  officer of the Borrower  (i) setting  forth in  reasonable  detail the  calculations  required to establish
         whether the Borrower was in compliance with the  requirements of Sections 5.03 through 5.07,  inclusive,  5.10, 5.24, 5.25 and
         5.26 on the date of such  financial  statements and (ii) stating  whether any Default  exists on the date of such  certificate
         and, if any Default then  exists,  setting  forth the details  thereof and the action which the Borrower is taking or proposes
         to take with respect thereto;














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          (d)          within 5 Domestic  Business Days after the Borrower  becomes  aware of the  occurrence  of any Default,  a certificate  of the
         chief  financial  officer or the chief  accounting  officer of the Borrower  setting forth the details  thereof and the action
         which the Borrower is taking or proposes to take with respect thereto;





	 	
          (e)          promptly upon the mailing thereof to the shareholders of the Borrower generally,  copies of all financial statements,  reports
         and proxy statements so mailed;





	 	
          (f)          promptly  upon  the  filing  thereof,  copies  of all  registration  statements  (other  than  the  exhibits  thereto  and any
         registration  statements on Form S-8 or its  equivalent)  and annual,  quarterly or monthly  reports which the Borrower  shall
         have filed with the Securities and Exchange Commission;





	 	
          (g)          if and when the  Borrower  or any member of the  Controlled  Group (i) gives or is  required to give notice to the PBGC of any
         "reportable  event" (as defined in  Section 4043  of ERISA)  with  respect to any Plan which  might  constitute  grounds for a
         termination of such Plan under Title IV of ERISA,  or knows that the plan  administrator  of any Plan has given or is required
         to give notice of any such reportable  event, a copy of the notice of such  reportable  event given or required to be given to
         the PBGC;  (ii) receives  notice of complete or partial  withdrawal  liability under Title IV of ERISA, a copy of such notice;
         or  (iii) receives  notice from the PBGC under  Title IV of ERISA of an intent to terminate or appoint a trustee to administer
         any Plan, a copy of such notice;





	 	
          (h)          promptly after the Borrower knows of the commencement  thereof,  notice of any litigation,  dispute or proceeding  involving a
         claim against the Borrower  and/or any Subsidiary  for  $1,000,000 or more in excess of amounts  covered in full by applicable
         insurance;





	 	
          (i)          promptly after the Borrower knows of the commencement, notice of any Forfeiture Proceeding; and





	 	
          (j)          within sixty (60) days after the end of each Fiscal Year, an annual  consolidated  budget for each of the Fiscal  Quarters for
         the upcoming Fiscal Year; and





	 	
          (k)          from time to time  such  additional  information  regarding  the  financial  position  or  business  of the  Borrower  and its
         Subsidiaries as the Bank may reasonably request.






        
Section 5.02   Inspection
of Property, Books and Records. The Borrower will (i) keep, and will cause
each Subsidiary to keep, proper books of record and account in which full, true
and correct entries in conformity with GAAP (and, in the case of Insurance
Subsidiaries, statutory accounting principles) shall be made of all dealings and
transactions in relation to its business and activities; and (ii) permit, and
will cause each Subsidiary to permit, representatives of the Bank at the
Bank’s expense prior to the occurrence of an Event of Default and at the
Borrower’s expense after the occurrence of an Event of Default to visit and
inspect any of their respective properties, to examine and make abstracts from
any of their respective books and records and to discuss their respective
affairs, finances and accounts with their respective officers, employees and
independent public accountants. The Borrower agrees to cooperate and assist in
such visits and inspections, in each case at such reasonable times and as often
as may reasonably be desired. 












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Section 5.03   Ratio of
Funded Debt to Consolidated Total Capitalization. As of the end of each
Fiscal Quarter, the ratio of Funded Debt to Consolidated Total Capitalization
will not at any time exceed 50%. 

        
Section 5.04   Ratio of
Funded Debt to EBITDA. As of the end of each Fiscal Quarter, the ratio of
Funded Debt as of the end of such Fiscal Quarter to EBITDA for the period of 4
consecutive Fiscal Quarters then ended shall be less than 3.10 to 1.0. 


        
Section 5.05   Minimum
Consolidated Tangible Net Worth. Consolidated Tangible Net Worth will at no
time be less than $75,000,000 plus 50% of the cumulative Consolidated Net Income
during any period after December 31, 2006 (taken as one accounting period),
calculated quarterly at the end of each Fiscal Quarter, but excluding from such
calculations of Consolidated Net Income for purposes of this Section, any Fiscal
Quarter in which Consolidated Net Income is negative. 

        
Section 5.06   Restricted
Payments. The Borrower will not declare or make any Restricted Payment
during any Fiscal Year; provided that: (1) the Borrower may redeem shares of the
Borrower’s capital stock for the purpose of satisfying the Borrower’s
obligations under its 401K plan and stock options provided by the Borrower to
its executive officers, in the ordinary course of business and consistent with
practices existing on the Closing Date; (2) the total number of shares of
the Borrower’s capital stock redeemed pursuant to the preceding subsection
(1) shall not exceed five hundred thousand in the aggregate in any Fiscal Year;
and (3) the aggregate amount expended by the Borrower in connection with the
redemptions made pursuant to the preceding subsection (1) shall not exceed
$2,000,000 in the aggregate in any Fiscal Year; and provided further that the
Borrower may make Restricted Payments on or in connection with the Series D
Preferred Stock, so long as, (a) the dividend rate payable on such Series D
Preferred Stock shall not exceed seven and one quarter of one percent (7.25%) per annum, (b) the redemption
value of the Series D Preferred Stock shall not be greater than $1,000,000 per Fiscal Yeay, and
(c) no Event of Default shall be in existence or shall result from the making of
such Restricted Payment. 

        
Section 5.07   Capital
Expenditures. Capital Expenditures will not exceed in the aggregate in any
Fiscal Year the sum of $2,000,000; provided that after giving effect to the
incurrence of any Capital Expenditures permitted by this Section, no Default
shall have occurred and be continuing. 

        
Section 5.08   Loans or
Advances. Neither the Borrower nor any of its Subsidiaries shall make loans
or advances to any Person except: (i) advances made to insurance agents of the
Borrower’s Subsidiaries, with respect to such agent’s commissions,
made in the ordinary course of business and consistently with practices existing
on the Closing Date; (ii) deposits required by government agencies or public
utilities; (iii) loans and advances made by the Statutory Trust I to the
Borrower in connection with the 2002 Trust Preferred Transaction and Investments
made by the Borrower in the Statutory Trust I to the extent allowed in Section
5.09; and (iv) loans and advances made by the Statutory Trust II to the Borrower
in connection with the 2003 Trust Preferred Transaction and Investments made by
the Borrower in the Statutory Trust II to the extent allowed in Section 5.09;
provided that after giving effect to the making of any loans, advances or
deposits permitted by clause (i) and (ii) of this Section, no Default shall have
occurred and be continuing. 












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Section 5.09   Investments. Neither the Borrower nor any of its Subsidiaries shall make
Investments in any Person except as permitted by Section 5.08 and except
Investments (i) in direct obligations of the United States Government maturing
within one year, (ii) in certificates of deposit issued by a commercial bank
whose credit is satisfactory to the Bank, (iii) in commercial paper rated A-1 or
the equivalent thereof by Standard & Poor’s Corporation or P-1 or the
equivalent thereof by Moody’s Investors Service, Inc. and in either case
maturing within 6 months after the date of acquisition, (iv) in tender bonds the
payment of the principal of and interest on which is fully supported by a letter
of credit issued by a United States bank whose long-term certificates of deposit
are rated at least AA or the equivalent thereof by Standard & Poor’s
Corporation and AA or the equivalent thereof by Moody’s Investors Service,
Inc., (v) with respect to the 2002 Trust Preferred Transaction, Investments by
the Borrower in the Statutory Trust I, Investments by the Statutory Trust I in
the Borrower, the Borrower’s guaranty of the Statutory Trust I’s
obligations, and other Investments made by the Borrower and the Statutory Trust
I, (vi) with respect to the 2003 Trust Preferred Transaction, Investments by the
Borrower in the Statutory Trust II, Investments by the Statutory Trust II in the
Borrower, the Borrower’s guaranty of the Statutory Trust II’s
obligations, and other Investments made by the Borrower and the Statutory Trust
II, (vii) constituting Permitted Acquisitions in an aggregate amount not
exceeding $3,000,000; provided, however, that this Section 5.09 shall not
prohibit Investments made in the ordinary course of business involving the
investment portfolio of any Insurance Subsidiary. 

        
Section 5.10   Negative
Pledge. Neither the Borrower nor any Consolidated Subsidiary will create,
assume or suffer to exist any Lien on any asset now owned or hereafter acquired
by it, except: 





	 	
          (a)          Liens  existing  on the date of this  Agreement  securing  Debt  outstanding  on the date of this  Agreement  as set  forth on
         Schedule 4.20;





	 	
          (b)          any Lien  existing  on any  specific  fixed  asset of any  corporation  at the time such  corporation  becomes a  Consolidated
         Subsidiary and not created in contemplation of such event;





	 	
          (c)          any Lien on any specific  fixed asset  securing  Debt  incurred or assumed for the purpose of financing all or any part of the
         cost of acquiring or  constructing  such asset as a permitted  Capital  Expenditure  under Section 5.07 hereof,  provided that
          such Lien attaches to such asset  concurrently  with or within 18 months after the  acquisition or completion of  construction
         thereof;














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          (d)          any Lien on any specific fixed asset of any corporation  existing at the time such corporation is merged or consolidated  with
         or into the Borrower or a Consolidated Subsidiary and not created in contemplation of such event;





	 	
          (e)          any Lien existing on any specific fixed asset prior to the  acquisition  thereof by the Borrower or a Consolidated  Subsidiary
         and not created in contemplation of such acquisition;





	 	
          (f)          any Lien arising out of the refinancing,  extension,  renewal or refunding of any Debt secured by any Lien permitted by any of
         the foregoing  paragraphs of this Section,  provided that (i) such Debt is not secured by any additional  assets, and (ii) the
         amount of such Debt secured by any such Lien is not increased;





	 	
          (g)          Liens  incidental  to the conduct of its business or the  ownership of its assets which (i) do not secure Debt and (ii) do not
         in the  aggregate  materially  detract from the value of its assets or  materially  impair the use thereof in the operation of
         its business;





	 	
          (h)          any Lien on Margin Stock;





	 	
          (i)          Debt owing to the Borrower or another Subsidiary;





	 	
          (j)          Liens created under the Pledge Agreement and the other Loan Documents; and





	 	
          (k)          Liens not otherwise  permitted by the foregoing  clauses of this Section  securing Debt (other than  indebtedness  represented
         by the Note) in an aggregate principal amount at any time outstanding not to exceed $100,000.





        
Section 5.11   Maintenance
of Existence. The Borrower shall, and shall cause each Subsidiary to (a)
maintain its corporate existence and carry on its business in substantially the
same manner and in substantially the same fields as such business is now carried
on and maintained; and (b) preserve, renew and keep in full force and effect
their respective rights, privileges, licenses (including, without limitation,
insurance licenses) and franchises necessary or desirable in the normal conduct
of business; provided that the Borrower may dissolve or cause the dissolution of
the Statutory Trust I after the redemption of all of the Statutory Trust
I’s Capital Stock and the Borrower may dissolve or cause the dissolution of
the Statutory Trust II after the redemption of all of the Statutory Trust
II’s Capital Stock. 

        
Section 5.12   Dissolution. Neither the Borrower nor any of its Subsidiaries shall
suffer or permit dissolution or liquidation either in whole or in part or redeem
or retire any shares of its own stock or that of any Subsidiary, except through
corporate reorganization to the extent permitted by Section 5.13 or as
permitted in Section 5.11.

        
Section 5.13   Consolidations, Mergers and Sales of Assets.

	 	
          (a)          The Borrower will not, nor will it permit any  Subsidiary  to,  consolidate  or merge with or into any other Person,  provided
         that (i) the Borrower may merge with another  Person if (x) such Person was  organized  under the laws of the United States of
         America or one of its states,  (y) the  Borrower is the  corporation  surviving such merger and (z)  immediately  after giving
         effect to such merger,  no Default  shall have occurred and be  continuing;  and (ii)  Subsidiaries  of the Borrower may merge
         with one another.














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          (b)          The Borrower  will not, and will not permit any  Subsidiary  to, sell,  lease,  transfer,  or otherwise  dispose of in any one
         transaction or series of transactions  (excluding  sales in the ordinary course of business of investment  securities that are
         part of a  Subsidiary's  investment  portfolio)  any assets,  if the Book Value of such assets when  aggregated  with the Book
         Value of all assets sold,  leased,  transferred  or otherwise  disposed of after the Closing Date exceeds 10% of  Consolidated
         Total  Assets  of the  Borrower  and its  Consolidated  Subsidiaries  as of the last  day of the  Fiscal  Quarter  immediately
         preceding the date of such sale,  lease,  transfer or other  disposition  without the prior written consent of the Bank (which
         consent shall not be unreasonably withheld).





        
Section 5.14   Use of
Proceeds. No portion of the proceeds of the Advances will be used by the
Borrower or any Subsidiary (i) in connection with any tender offer for, or other
acquisition of, stock of any corporation with a view toward obtaining control of
such other corporation (other than any Permitted Acquisition), (ii) directly or
indirectly, for the purpose, whether immediate, incidental or ultimate, of
purchasing or carrying any Margin Stock, or (iii) for any purpose in
violation of any applicable law or regulation. 

        
Section 5.15   Compliance
with Laws; Payment of Taxes. The Borrower will, and will cause each of its
Subsidiaries and each member of the Controlled Group to, comply with applicable
laws (including but not limited to ERISA), regulations and similar requirements
of governmental authorities (including but not limited to PBGC), except where
the necessity of such compliance is being contested in good faith through
appropriate proceedings diligently pursued. The Borrower will, and will cause
each of its Subsidiaries to, pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a lien against the property of the Borrower or
any Subsidiary, except liabilities being contested in good faith by appropriate
proceedings diligently pursued and against which, if requested by the Bank, the
Borrower shall have set up reserves in accordance with GAAP. 

        
Section 5.16   Insurance. The Borrower will maintain, and will cause each of its
Subsidiaries to maintain (either in the name of the Borrower or in such
Subsidiary’s own name), with financially sound and reputable insurance
companies, insurance on all its Property in at least such amounts and against at
least such risks as are usually insured against in the same general area by
companies of established repute engaged in the same or similar business. 

        
Section 5.17   Change in Fiscal Year.  The Borrower will not change its Fiscal Year without the consent of the Bank.

        
Section 5.18   Maintenance
of Property. The Borrower shall, and shall cause each Subsidiary to,
maintain all of its properties and assets in good condition, repair and working
order, ordinary wear and tear excepted. 









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Section 5.19   Environmental Notices. The Borrower shall furnish to the Bank prompt
written notice of all material Environmental Liabilities, pending, threatened or
anticipated Environmental Proceedings, Environmental Notices, Environmental
Judgments and Orders, and Environmental Releases at, on, in, under or in any way
affecting the Properties or any adjacent property, and all facts, events, or
conditions that could reasonably be expected to lead to any of the foregoing.

        
Section 5.20   Environmental Matters. The Borrower and its Subsidiaries will not, and
will not permit any Third Party to, use, produce, manufacture, process, treat,
recycle, generate, store, dispose of, manage at, or otherwise handle or ship or
transport to or from the Properties any Hazardous Materials except for Hazardous
Materials such as cleaning solvents, pesticides and other similar materials
used, produced, manufactured, processed, treated, recycled, generated, stored,
disposed, managed or otherwise handled in minimal amounts in the ordinary course
of business in compliance with all applicable Environmental Requirements. 

        
Section 5.21   Environmental Release. The Borrower agrees that upon the occurrence of a
material Environmental Release at or on any of the Properties it will act
immediately to investigate the extent of, and to take appropriate remedial
action to eliminate, such Environmental Release, whether or not ordered or
otherwise directed to do so by any Environmental Authority.

        
Section 5.22   Additional
Covenants, Etc. In the event that at any time this Agreement is in effect or
the Note remains unpaid the Borrower shall enter into any agreement, guarantee,
indenture or other instrument governing, relating to, providing for commitments
to advance, guaranteeing, providing for security interests or liens to secure,
or otherwise affording any credit support or credit enhancement for, any
Financing or to amend any terms and conditions applicable to any Financing,
which agreement, guarantee, indenture or other instrument includes covenants,
warranties, representations, defaults or events of default (or any other type of
restriction which would have the practical effect of any of the foregoing,
including, without limitation, any “put” or mandatory prepayment of
such debt) or other terms or conditions or provides for security interests,
liens or guarantees, credit support or credit enhancement (whether provided by
the Borrower or any other Person) not substantially as, or in addition to those,
provided in this Agreement or any other Loan Document, or more favorable to the
lender or other counterparty thereunder than those provided in this Agreement or
any other Loan Document, the Borrower shall promptly so notify the Bank.
Thereupon, if the Bank shall request by written notice to the Borrower, the
Borrower and the Bank shall enter into an amendment to this Agreement and if
requested by the Bank, the Borrower shall cause any Person providing such other
guarantees, credit support or credit enhancement to deliver such documentation
as the Bank may reasonably request, all providing for substantially the same
such covenants, warranties, representations, defaults or events of default,
security interests, liens or other guarantees, credit support or credit
enhancement (in which the Bank shall participate on a pari passu
basis with such other lender), or other terms or conditions as those provided
for in such agreement, guarantee, indenture or other instrument, to the extent
required and as may be selected by the Bank, such amendment and other
documentation to remain in effect, unless otherwise specified in writing by the
Bank, for the entire duration of the stated term to maturity of such Financing
(to and including the date to which the same may be extended at the
Borrower’s option), notwithstanding that such Financing might be earlier
terminated by prepayment, refinancing, acceleration or otherwise,
provided that if any such agreement, guarantee, indenture or other
instrument shall be modified, supplemented, amended or restated so as to modify,
amend or eliminate from such agreement, guarantee, indenture or other instrument
any such covenant, warranty, representation, default or event of default,
security interest, lien, or other credit support or enhancement or other term or
condition so made a part of this Agreement, then unless required by the Bank
pursuant to this Section, such modification, supplement or amendment shall not
operate to modify, amend or eliminate such covenant, warranty, representation,
default or event of default, security interest, lien or other credit support or
enhancement or other term or condition as so made a part of this Agreement.







-35-
















        
Section 5.23   Transactions with Affiliates. Neither the Borrower nor any of its
Subsidiaries shall enter into, or be a party to, any transaction with any
Affiliate of the Borrower or such Subsidiary (which Affiliate is not the
Borrower or a Subsidiary), except as permitted by law and in the ordinary course
of business and pursuant to reasonable terms, and are no less favorable to the
Borrower or such Subsidiary than would be obtained in a comparable arm’s
length transaction with a Person which is not an Affiliate. 

        
Section 5.24   Risk-Based
Capital Ratio. The Borrower shall maintain, or cause to be maintained, at
all times the Adjusted Capital for the Insurance Subsidiaries on a consolidated
basis in an amount equal to or greater than 200% of the Company Action Level for
the Insurance Subsidiaries on a consolidated basis. 

        
Section 5.25   Maintenance
of Statutory Surplus. The Borrower shall maintain or cause to be maintained
at all times the Statutory Surplus of each of its Insurance Subsidiaries in an
amount equal to or greater than the sum of (i) the Statutory Surplus required
under applicable law for such Insurance Subsidiary, plus (ii) $1,000,000.

        
Section 5.26   Minimum
Investment in NAIC Rated Bonds; Maximum Investment in Investment Properties.
The Borrower will not at any time permit: (i) the Aggregate Value of NAIC
Rated Bonds to be less than 70% of the Aggregate Value of Total Investments; or
(ii) the aggregate value of Investment Properties to exceed 5% of the
Aggregate Value of Total Investments. 

        
Section 5.27   Senior
Indebtedness under Indenture. The Borrower hereby covenants that the
obligations of the Borrower to the Bank under this Agreement shall at all times
constitute “Senior Indebtedness” as that term is defined in each of
the 2002 Indenture and the 2003 Indenture.  

        
Section 5.28   Other
Obligations of Borrower. The Borrower hereby agrees that the Borrower shall
be and at all times shall remain the obligated party under the Debentures and
shall be the party responsible for the payment of all obligations under the
Debentures. 

        
Section 5.29   Depository  Relationship.  The Borrower hereby agrees that it shall maintain its primary deposit  account(s) with the
Bank.










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ARTICLE VI

                                                               DEFAULTS


        
Section 6.01   Events of  Default.  If one or more of the  following  events  ("Events  of  Default")  shall  have  occurred  and be
continuing:


	 	
          (a)          the Borrower  shall fail to pay when due any principal of any Advance or shall fail to pay any interest on any Advance  within
         5 Business Days after such interest  shall become due, or shall fail to pay any fee or other amount payable  hereunder  within
         5 Business Days after such fee or other amount becomes due; or





	 	
          (b)          the Borrower shall fail to observe or perform any covenant contained in Sections 5.02(ii),  5.03 to 5.14,  inclusive,  Section
         5.17, Section 5.22 or Sections 5.24 to 5.28, inclusive; or






	 	
          (c)          the  Borrower  shall fail to observe or perform any  covenant or  agreement  contained  or  incorporated  by reference in this
         Agreement  (other  than those  covered by clause  (a) or (b) above or clause (n) below) for thirty  days after the  earlier of
         (i) the first day on which the Borrower has  knowledge  of such failure or (ii) written  notice  thereof has been given to the
         Borrower by the Bank; or






	 	
          (d)          any  representation,  warranty,  certification  or  statement  made or  deemed  made by the  Borrower  in  Article  IV of this
         Agreement,  the Loan  Documents or in any  certificate,  financial  statement  or other  document  delivered  pursuant to this
         Agreement shall prove to have been incorrect or misleading in any material respect when made (or deemed made); or






	 	
          (e)          the Borrower or any Subsidiary  shall fail to make any payment in respect of Debt  outstanding in an aggregate amount equal to
         or in excess of $1,000,000 (other than the Note) when due or within any applicable grace period; or






	 	
          (f)          any event or condition  shall occur which  results in the  acceleration  of the maturity of Debt  outstanding  in an aggregate
         amount equal to or in excess of $1,000,000 of the Borrower or any  Subsidiary or the mandatory  prepayment or purchase of such
         Debt by the Borrower (or its designee) or such  Subsidiary  (or its  designee)  prior to the scheduled  maturity  thereof,  or
         enables the holders of such Debt or any Person acting on such holders'  behalf to accelerate  the maturity  thereof or require
         the mandatory  prepayment or purchase thereof prior to the scheduled maturity thereof,  without regard to whether such holders
         or other Person shall have exercised or waived their right to do so; or






	 	
          (g)          the Borrower or any Subsidiary  shall commence a voluntary case or other proceeding  seeking  liquidation,  reorganization  or
         other relief with respect to itself or its debts under any  bankruptcy,  insolvency  or other  similar law now or hereafter in
         effect or seeking the  appointment  of a trustee,  receiver,  liquidator,  custodian  or other  similar  official of it or any
         substantial  part of its property,  or shall consent to any such relief or to the  appointment of or taking  possession by any
         such official in an involuntary  case or other  proceeding  commenced  against it, or shall make a general  assignment for the
         benefit of creditors,  or shall fail generally,  or shall admit in writing its inability, to pay its debts as they become due,
         or shall take any corporate action to authorize any of the foregoing; or












-37-















	 	
          (h)          an  involuntary  case or other  proceeding  shall be commenced  against the Borrower or any  Subsidiary  seeking  liquidation,
         reorganization  or other relief with respect to it or its debts under any  bankruptcy,  insolvency or other similar law now or
         hereafter in effect or seeking the appointment of a trustee, receiver,  liquidator,  custodian or other similar official of it
         or any substantial part of its property,  and such involuntary case or other proceeding shall remain  undismissed and unstayed
         for a period of 60 days;  or an order for relief  shall be entered  against the Borrower or any  Subsidiary  under the federal
         bankruptcy laws as now or hereafter in effect; or






	 	
          (i)          the Borrower or any member of the Controlled  Group shall fail to pay when due any material  amount which it shall have become
         liable  to pay to the PBGC or to a Plan  under  Title IV of ERISA if such  failure  could  reasonably  be  expected  to have a
         Material  Adverse  Effect;  or notice of intent to  terminate a Plan or Plans  shall be filed  under  Title IV of ERISA by the
         Borrower,  any member of the Controlled  Group,  any plan  administrator  or any  combination of the foregoing and such filing
         could  reasonably  be expected to have or cause a Material  Adverse  Effect;  or the PBGC shall  institute  proceedings  under
         Title IV of ERISA to  terminate or to cause a trustee to be  appointed  to  administer  any such Plan or Plans or a proceeding
         shall be  instituted  by a  fiduciary  of any such  Plan or Plans to  enforce  Section 515  or  4219(c)(5)  of ERISA  and such
         proceeding  shall not have been dismissed  within 30 days  thereafter;  or a condition shall exist by reason of which the PBGC
         would be entitled to obtain a decree  adjudicating  that any such Plan or Plans must be terminated if such  termination  could
         reasonably be expected to have a Material  Adverse Effect;  or the Borrower or any other member of the Controlled  Group shall
         enter into,  contribute or be obligated to  contribute  to,  terminate or incur any  withdrawal  liability  with respect to, a
         Multiemployer  Plan if such  termination  or withdrawal  liability  could  reasonably  be expected to have a Material  Adverse
         Effect; or





	 	
          (j)          one or more  judgments  or orders for the  payment of money in an  aggregate  amount in excess of  $500,000  shall be rendered
         against the Borrower or any Subsidiary and such judgment or order shall continue  unsatisfied  and unstayed for a period of 30
         days; or






	 	
          (k)          a federal tax lien shall be filed  against the Borrower  under  Section 6323  of the Code or a lien of the PBGC shall be filed
         against the Borrower or any  Subsidiary  under  Section 4068  of ERISA in either case with respect to an amount owed in excess
         of $1,000,000, and in either case such lien shall remain undischarged for a period of 25 days after the date of filing; or





	 	
          (l)          (i) any Person or two or more Persons  (other than J. Mack  Robinson and members of his family)  acting in concert  shall have
         acquired  beneficial  ownership  (within the  meaning of  Rule 13d-3  of the  Securities  and  Exchange  Commission  under the
         Securities  Exchange Act of 1934) of 20% or more of the outstanding shares of the voting stock of the Borrower;  or (ii) as of
         any date a majority of the Board of Directors of the Borrower  consists of  individuals  who were not either (A)  directors of
         the Borrower as of the  corresponding  date of the previous year,  (B) selected or nominated to become  directors by the Board
         of  Directors  of the  Borrower of which a majority  consisted of  individuals  described  in clause (A), or  (C) selected  or
         nominated  to become  directors  by the Board of  Directors  of the  Borrower  of which a majority  consisted  of  individuals
         described in clause (A) and individuals described in clause (B); or















-38-


















	 	
          (m)          the  Borrower  shall fail to observe or perform any  obligation  under the Pledge  Agreement or the Bank shall cease to have a
         first priority perfected security interest in the Collateral (as defined in the Pledge Agreement); or






	 	
          (n)          Georgia  Casualty & Surety Company,  Bankers  Fidelity Life Insurance  Company,  American  Southern  Insurance  Company or any
         Subsidiary of American Southern Insurance Company shall fail to maintain an AM Best rating of "B+" or better; or






	 	
          (o)          the  Borrower  shall at any time or times and for any reason  cease to own  (either  directly or  indirectly  through a Wholly
         Owned  Subsidiary)  at least 80% of the Capital Stock and other  ownership  interests of each of American  Southern  Insurance
         Company,  Georgia  Casualty & Surety  Company,  Bankers  Fidelity Life  Insurance  Company and Associated  Casualty  Insurance
         Company; or






	 	
          (p)          either (i) any  Forfeiture  Proceeding  shall have been  commenced or the Borrower shall have given the Bank written notice of
the commencement or threatened commencement of any Forfeiture Proceeding as provided in Section 5.01(i); or (ii) the Bank
has a good faith basis to believe that a Forfeiture Proceeding has been threatened or commenced; or






	 	
          (q)          the Insurance  Commissioner  of the State of Georgia or other  appropriate  agency of the State of Georgia shall have objected
         to the pledge of the capital stock of Borrower's direct subsidiaries to the Bank as security for the Obligations;






then, and in every such
event, the Bank may (i) terminate the Commitment and it shall thereupon
terminate, and (ii) by notice to the Borrower declare the Note (together with
accrued interest thereon) and all other amounts payable hereunder and under the
other Loan Documents to be, and the Note (together will all accrued interest
thereon) and all other amounts payable hereunder and under the other Loan
Documents shall thereupon become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by the Borrower; provided that if any Event of Default
specified in clause (g) or (h) above occurs with respect to the Borrower or any
Subsidiary, without any notice to the Borrower or any other act by the Bank, the
Commitment shall thereupon automatically terminate and the Note (together with
accrued interest thereon) and all other amounts payable hereunder and under the
other Loan Documents shall automatically become immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Borrower. Notwithstanding the foregoing, the Bank shall
have available to it all other remedies at law or equity. 







-39-



















ARTICLE VII

                                                 CHANGE IN CIRCUMSTANCES; COMPENSATION



        
Section 7.01   Basis for Determining Interest Rate Inadequate or Unfair.  If on or prior to the first day of any Interest Period:



	 	
          (a)          the Bank  determines  that deposits in Dollars (in the  applicable  amounts) are not being offered in the relevant  market for
         such Interest Period, or





	 	
          (b)          the Bank  determines that the London  Interbank  Offered Rate as determined by the Bank will not adequately and fairly reflect
         the cost to the Bank of funding any  Euro-Dollar  Advance  for such  Interest  Period,  the Bank shall  forthwith  give notice
         thereof  to the  Borrower,  whereupon  until  the Bank  notifies  the  Borrower  that the  circumstances  giving  rise to such
         suspension no longer exist,  the  obligations of the Bank to make the  Euro-Dollar  Advance  specified in such notice shall be
         suspended  and such  Advance  shall  instead be  continued as a Base Rate  Advance.  Unless the Borrower  notifies the Bank at
         least 2 Domestic  Business  Days  before the date of any  Euro-Dollar  Advance  for which a Notice of  Borrowing  or Notice of
         Continuation  or Conversion  has previously  been given that it elects not to borrow on such date,  such Advance shall instead
         be continued as a Base Rate Advance.







        
Section 7.02   Illegality. If, after the date hereof, the adoption of any applicable
law, rule or regulation, or any change in any existing or future law, rule or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof (any such authority, bank or agency
being referred to as an “Authority” and any such event being referred
to as a “Change of Law”), or compliance by the Bank (or its Lending
Office) with any request or directive (whether or not having the force of law)
of any Authority shall make it unlawful or impossible for the Bank (or its
Lending Office) to maintain or fund the Euro-Dollar Advances and the Bank shall
so notify the Borrower, whereupon until the Bank notifies the Borrower that the
circumstances giving rise to such suspension no longer exist, the obligation of
the Bank to maintain Euro-Dollar Advances shall be suspended. Before giving any
notice to the Borrower pursuant to this Section, the Bank shall designate a
different Lending Office if such designation will avoid the need for giving such
notice and will not, in the judgment of the Bank, be otherwise disadvantageous
to the Bank. If the Bank shall determine that it may not lawfully continue to
maintain and fund any outstanding Euro-Dollar Advances to maturity and shall so
specify in such notice, the Borrower shall immediately prepay in full the then
outstanding principal amount of each Euro-Dollar Advance, together with accrued
interest thereon and any amount due the Bank pursuant to Section 7.05(a).
Concurrently with prepaying each such Euro-Dollar Advance, the Borrower shall
borrow a Base Rate Advance in an equal principal amount from the Bank, and the
Bank shall make such a Base Rate Advance.



        
Section 7.03   Increased Cost and Reduced Return.



	 	
          (a)          If after the date  hereof,  a Change of Law or  compliance  by the Bank (or its Lending  Office) with any request or directive
         (whether or not having the force of law) of any Authority:
















-40-
















	 	
               (i)          shall subject the Bank (or its Lending  Office) to any tax,  duty or other charge with respect to  Euro-Dollar  Advances,  the
                  Note or its  obligation to maintain  Euro-Dollar  Advances,  or shall change the basis of taxation of payments to the
                  Bank (or its Lending  Office) of the principal of or interest on Euro-Dollar  Advances or any other amounts due under
                  this Agreement in respect of Euro-Dollar  Advances or its obligation to make Euro-Dollar Advances (except for changes
                  in the rate of tax on the overall net income of the Bank or its Lending Office imposed by the  jurisdiction  in which
                  the Bank's principal executive office or Lending Office is located); or





	 	
               (ii)          shall impose, modify or deem applicable any reserve,  special deposit or similar requirement  (including,  without limitation,
                  any such requirement  imposed by the Board of Governors of the Federal Reserve System,  but excluding with respect to
                  any Euro-Dollar  Advance any such  requirement  included in an applicable  Euro-Dollar  Reserve  Percentage)  against
                  assets of, deposits with or for the account of, or credit extended by, the Bank (or its Lending Office); or





	 	
               (iii)          
shall impose on the Bank (or its Lending  Office) or the London  interbank  market any other condition  affecting  Euro-Dollar
                  Advances, the Note or its obligation to maintain Euro-Dollar Advances;







and
the result of any of the foregoing is to increase the cost to the Bank (or its
Lending Office) of maintaining any Euro-Dollar Advance, or to reduce the amount
of any sum received or receivable by the Bank (or its Lending Office) under this
Agreement or under the Note with respect thereto, by an amount deemed by the
Bank to be material, then, within 15 days after demand by the Bank, the Borrower
shall pay to the Bank such additional amount or amounts as will compensate the
Bank for such increased cost or reduction which accrued within 90 days
immediately prior to such notice.



	 	
          (b)          If the Bank  shall have  determined  that after the date  hereof  the  adoption  of any  applicable  law,  rule or  regulation
         regarding  capital  adequacy,  or any  change  in any  existing  or  future  law,  rule or  regulation,  or any  change in the
         interpretation  or  administration  thereof,  or compliance by the Bank (or its Lending  Office) with any request or directive
         regarding  capital  adequacy  (whether  or not  having  the force of law) of any  Authority,  has or would  have the effect of
         reducing the rate of return on the Bank's  capital as a consequence of its  obligations  hereunder to a level below that which
         the Bank could have achieved but for such adoption,  change or compliance  (taking into consideration the Bank's policies with
         respect to capital  adequacy)  by an amount  deemed by the Bank to be material,  then from time to time,  within 15 days after
         demand by the Bank,  the Borrower  shall pay to the Bank such  additional  amount or amounts as will  compensate  the Bank for
         such reduction which accrued or occurred within 90 days immediately prior to such notice.





	 	
          (c)          The Bank will promptly  notify the Borrower of any event of which it has  knowledge,  occurring  after the date hereof,  which
         will  entitle the Bank to  compensation  pursuant  to this  Section and will  designate  a  different  Lending  Office if such
         designation  will avoid the need for, or reduce the amount of, such  compensation  and will not, in the  judgment of the Bank,
         be otherwise  disadvantageous  to the Bank. A  certificate  of the Bank claiming  compensation  under this Section and setting
         forth the additional  amount or amounts to be paid to it hereunder  shall be conclusive in the absence of manifest  error.  In
         determining such amount, the Bank may use any reasonable averaging and attribution methods.














-41-



















	 	
          (d)          The provisions of this Section 7.03 shall be applicable with respect to any  Participant,  Assignee or other  Transferee,  and
         any calculations  required by such provisions  shall be made based upon the  circumstances  of such  Participant,  Assignee or
         other Transferee.






        
Section 7.04   Base Rate
Advances Substituted for Affected Euro-Dollar Advances. If (i)the obligation
of the Bank to make or maintain Euro-Dollar Advances has been suspended pursuant
to Section 7.02 or (ii) any Bank has demanded compensation under Section 7.03,
and the Borrower shall, by at least 5 Euro-Dollar Business Days’ prior
notice to the Bank, have elected that the provisions of this Section shall apply
to the Bank, then, unless and until the Bank notifies the Borrower that the
circumstances giving rise to such suspension or demand for compensation no
longer apply:


	 	
          (a)          all Advances which would  otherwise be made by the Bank as  Euro-Dollar  Advances shall be made instead as Base Rate Advances,
and





	 	
          (b)          after each  Euro-Dollar  Advance  has been  repaid,  all  payments of  principal  which  would  otherwise  be applied to repay
Euro-Dollar Advances shall be applied to repay Base Rate Advances instead.






In the event that the
Borrower shall elect that the provisions of this Section shall apply to the
Bank, the Borrower shall remain liable for, and shall pay to the Bank as
provided herein, all amounts due the Bank under Section 7.03 in respect of the
period preceding the date of conversion of the Advances resulting from the
Borrower’s election. 


        
Section 7.05   Compensation. Upon the request of the Bank, delivered to the Borrower,
the Borrower shall pay to the Bank such amount or amounts as shall compensate
the Bank for any actual loss, cost or expense incurred by the Bank as a result
of:

	 	
          (a)          any payment or prepayment  (pursuant to Section 2.05, Section 2.06,  Section 7.02 or otherwise) of a Euro-Dollar  Advance on a
date other than the last day of an Interest Period for such Euro-Dollar Advance;





	 	
          (b)          any failure by the Borrower to prepay a Euro-Dollar  Advance on the date for such prepayment  specified in the relevant notice
of prepayment hereunder; or





	 	
          (c)          any failure by the Borrower to borrow a Euro-Dollar  Advance on the date such  Euro-Dollar  Advance is a part specified in the
applicable Notice of Borrowing delivered pursuant to Section 2.02 or Notice of Continuation or Conversion;















-42-

















such compensation to
include, without limitation, an amount equal to the excess, if any, of (x) the
amount of interest which would have accrued on the amount so paid or prepaid or
not prepaid or borrowed for the period from the date of such payment, prepayment
or failure to prepay or borrow to the last day of the then current Interest
Period for such Euro-Dollar Advance (or, in the case of a failure to prepay or
borrow, the Interest Period for such Euro-Dollar Advance which would have
commenced on the date of such failure to prepay or borrow) at the applicable
rate of interest for such Euro-Dollar Advance provided for herein (excluding,
however, the Applicable Margin) over (y) the amount of interest (as reasonably
determined by the Bank) the Bank would have paid on deposits in Dollars of
comparable amounts having terms comparable to such period placed with it by
leading banks in the London interbank market (if such Advances is a Euro-Dollar
Advance). 


ARTICLE VIII

                                                             MISCELLANEOUS



        
Section 8.01   Notices. All notices, requests and other communications to any party
hereunder shall be in writing (including facsimile transmission or similar
writing) and shall be given to such party at its address or telecopy number set
forth on the signature pages hereof or such other address or telecopy number as
such party may hereafter specify for the purpose by notice to each other party.
Each such notice, request or other communication shall be effective (i) if given
by telecopier, when such telecopy is transmitted to the telecopy number
specified in this Section and the telecopy machine used by the sender provides a
written confirmation that such telecopy has been so transmitted or receipt of
such telecopy transmission is otherwise confirmed, (ii) if given by mail,
72 hours after such communication is deposited in the mails with first
class postage prepaid, addressed as aforesaid, and (iii) if given by any other
means, when delivered at the address specified in this Section; provided
that notices to the Bank under Article II shall not be effective until
received.

        
Section 8.02   No
Waivers. No failure or delay by the Bank in exercising any right, power or
privilege hereunder or under the Note or other Loan Document shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law. 

        
Section 8.03   Expenses; Documentary Taxes; Indemnification; Increased Cost and Reduced Return.

	 	
          (a)          The Borrower shall pay (i) all  out-of-pocket  expenses of the Bank,  including  reasonable fees and  disbursements of counsel
         for the Bank actually  incurred,  in connection  with the  preparation  of this  Agreement and the other Loan  Documents,  any
         waiver or consent  hereunder or thereunder or any amendment  hereof or thereof or any Default or alleged Default  hereunder or
         thereunder and (ii) if a Default  occurs,  all  out-of-pocket  expenses  incurred by the Bank,  including  reasonable fees and
         disbursements of counsel actually incurred,  in connection with such Default and collection and other enforcement  proceedings
         resulting therefrom, including out-of-pocket expenses incurred in enforcing this Agreement and the other Loan Documents.












-43-



















	 	
          (b)          The Borrower  shall  indemnify the Bank against any transfer  taxes,  documentary  taxes,  assessments  or charges made by any
         Authority by reason of the execution and delivery of this Agreement or the other Loan Documents.





	 	
          (c)          The Borrower shall  indemnify the Bank and each Affiliate  thereof and their  respective  directors,  officers,  employees and
         agents from, and hold each of them harmless against, any and all losses,  liabilities,  claims or damages to which any of them
         may  become  subject,  insofar  as such  losses,  liabilities,  claims or  damages  arise out of or result  from any actual or
         proposed  use by the Borrower of the  proceeds of any  extension of credit by the Bank  hereunder or breach by the Borrower of
         this  Agreement or any other Loan Document or from  investigation,  litigation  (including,  without  limitation,  any actions
         taken by the Bank to enforce this  Agreement  or any of the other Loan  Documents)  or other  proceeding  (including,  without
         limitation,  any threatened  investigation  or proceeding)  relating to the  foregoing,  and the Borrower shall  reimburse the
         Bank,  and each  Affiliate  thereof and their  respective  directors,  officers,  employees  and  agents,  upon demand for any
         expenses  (including,  without limitation,  legal fees) incurred in connection with any such investigation or proceeding;  but
         excluding any such losses,  liabilities,  claims,  damages or expenses  incurred by reason of the gross  negligence or willful
         misconduct of the Person to be indemnified.





        
Section 8.04   CONSEQUENTIAL DAMAGES. THE BANK SHALL NOT BE RESPONSIBLE OR LIABLE TO THE
BORROWER OR ANY OTHER PERSON OR ENTITY FOR ANY PUNITIVE, EXEMPLARY OR
CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF THIS AGREEMENT, THE
OTHER LOAN DOCUMENTS, OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY. 


        
Section 8.05   Setoffs. 

	 	
          (a)          The Borrower  hereby grants to the Bank, as security for the full and punctual  payment and  performance of the obligations of
         the Borrower under this Agreement,  a continuing  lien on and security  interest in all deposits and other sums credited by or
         due from the Bank to the Borrower or subject to withdrawal by the Borrower;  and  regardless of the adequacy of any collateral
         or other means of  obtaining  repayment  of such  obligations,  the Bank may at any time upon or after the  occurrence  of any
         Event of  Default,  and  without  notice to the  Borrower,  set off the whole or any  portion or  portions  of any or all such
         deposits  and other sums against  such  obligations,  whether or not any other  Person or Persons  could also  withdraw  money
         therefrom.






	 	
          (b)          The Borrower  agrees,  to the fullest extent it may effectively do so under applicable law, that any holder of a participation
         in a Note may exercise rights of set-off or counterclaim  and other rights with respect to such  participation  as fully as if
         such holder of a participation were a direct creditor of the Borrower in the amount of such participation.





        
Section 8.06   Amendments and Waivers. Any provision of this Agreement, the Note or any other Loan
Document may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by the Borrower and the Bank.











-44-

















        
Section 8.07   Successors and Assigns.

	 	
          (a)          The  provisions of this Agreement  shall be binding upon and inure to the benefit of the parties  hereto and their  respective
         successors  and  assigns;  provided  that the  Borrower  may not assign or  otherwise  transfer  any of its rights  under this
         Agreement.





	 	
          (b)          The Bank may at any time sell to one or more Persons (each a "Participant")  participating  interests in any Advances owing to
         the Bank,  any Note held by the Bank, any Commitment  hereunder or any other interest of the Bank  hereunder.  In the event of
         the sale by the Bank of a participating  interest to a Participant,  the Bank's  obligations under this Agreement shall remain
         unchanged,  the Bank shall remain solely  responsible  for the  performance  thereof,  the Bank shall remain the holder of any
         such Note for all purposes  under this  Agreement,  and the Borrower  shall continue to deal solely and directly with the Bank
         in connection  with the Bank's rights and  obligations  under this  Agreement.  In no event shall the Bank be obligated to the
         Participant  to take or refrain  from taking any action  hereunder  except that the Bank may agree that it will not (except as
         provided  below),  without  the  consent  of the  Participant,  agree to (i) the  change of any date fixed for the  payment of
         principal of or interest on the related Advance,  (ii) the change of the amount of any principal,  interest or fees due on any
         date fixed for the payment  thereof  with respect to the related  Advance,  (iii) the  change of the  principal of the related
         Advance,  (iv) any change in the rate at which either  interest is payable  thereon or (if the  Participant is entitled to any
         part thereof)  commitment fee is payable  hereunder from the rate at which the Participant is entitled to receive  interest or
         commitment  fee (as the  case  may be) in  respect  of such  participation,  (v) the  release  or  substitution  of all or any
         substantial  part of the collateral  (if any) held as security for the Advances,  or (vi) the release of any guaranty given to
         support  payment of the  Advances.  If the Bank sells a  participating  interest in any  Advances,  Note,  Commitment or other
         interest  under this  Agreement,  it shall within 10 Domestic  Business  Days of such sale,  provide the Borrower with written
         notification  stating  that such sale has  occurred  and  identifying  the  Participant  and the  interest  purchased  by such
         Participant.





	 	
          (c)          The Bank may at any time assign to one or more banks or financial  institutions  (each an "Assignee")  all, or a proportionate
         part of all, of its rights and  obligations  under this Agreement,  the Note and the other Loan  Documents,  and such Assignee
         shall  assume all such rights and  obligations,  pursuant to an  Assignment  and  Acceptance  in the form  attached  hereto as
         Exhibit F,  executed by such  Assignee and the Bank (and,  in the case of an Assignee that is not an Affiliate of the Bank, by
         the Borrower);  provided that (i) the amount of the Advances or Commitment  subject to such  assignment  (determined as of the
         effective  date of the  assignment)  shall be equal to or  greater  than  $1,000,000,  and (ii)  unless a Default  shall  have
         occurred and be  continuing, no  interest may be sold by the Bank  pursuant to this  paragraph (c) to any Assignee that is not
         then an Affiliate of the Bank without the consent of the  Borrower,  which consent shall not be  unreasonably  withheld.  Upon
         (A) execution  of the Assignment and Acceptance by the Bank, such Assignee and (if  applicable) the Borrower,  (B) delivery of
         an executed copy of the  Assignment  and  Acceptance to the  Borrower,  (C) payment  by such Assignee to the Bank of an amount
         equal to the purchase price agreed  between the Bank and such  Assignee,  such Assignee shall for all purposes be the party to
         this  Agreement and shall have pro rata share of all the rights and  obligations  of the Bank under this Agreement to the same
         extent as if it were an original party hereto with a Commitment as set forth in such  instrument of  assumption,  and the Bank
         shall be released from its obligations  hereunder to a corresponding  extent, and no further consent or action by the Borrower
         or the Bank shall be required.  Upon the  consummation  of any  transfer to an Assignee  pursuant to this  paragraph  (c), the
         Bank and the  Borrower  shall  make  appropriate  arrangements  so that,  if  required,  a new Note is  issued to each of such
         Assignee and the Bank.










-45-


















	 	
          (d)          Subject to the  provisions of  Section 8.08,  the Borrower  authorizes  the Bank to disclose to any  Participant,  Assignee or
         other  transferee  (each a  "Transferee")  and any prospective  Transferee any and all financial and other  information in the
         Bank's  possession  concerning the Borrower which has been delivered to the Bank by the Borrower pursuant to this Agreement or
         which has been delivered to the Bank by the Borrower in connection  with the Bank's credit  evaluation  prior to entering into
         this Agreement.





	 	
          (e)          Anything  in this  Section  8.07 to the  contrary  notwithstanding,  the Bank may assign and pledge all or any  portion of the
         Advances  and/or  obligations  owing to it to any Federal  Reserve Bank or the United States  Treasury as collateral  security
         pursuant to  Regulation  A of the Board of Governors  of the Federal  Reserve  System and  Operating  Circular  issued by such
         Federal Reserve Bank,  provided that any payment in respect of such assigned Advances and/or  obligations made by the Borrower
         to the  assigning  and/or  pledging  Bank in  accordance  with the  terms  of this  Agreement  shall  satisfy  the  Borrower's
         obligations  hereunder  in respect of such  assigned  Advances  and/or  obligations  to the  extent of such  payment.  No such
         assignment shall release the assigning and/or pledging Bank from its obligations hereunder.





        
Section 8.08   Confidentiality. The Bank agrees to exercise its best efforts to keep any
information delivered or made available by the Borrower to it which is clearly
indicated to be confidential information, confidential from anyone other than
persons employed or retained by such Bank who are or are expected to become
engaged in evaluating, approving, structuring or administering the Advances;
provided, however, that nothing herein shall prevent the Bank from
disclosing such information (i) upon the order of any court or administrative
agency, (ii) upon the request or demand of any regulatory agency or authority
having jurisdiction over the Bank, (iii) which has been publicly disclosed, (iv)
to the extent reasonably required in connection with any litigation to which the
Bank or its respective Affiliates may be a party, (v) to the extent reasonably
required in connection with the exercise of any remedy hereunder, (vi) to the
Bank’s legal counsel and independent auditors and (vii) to any actual or
proposed Participant, Assignee or other Transferee of all or part of its rights
hereunder which has agreed in writing to be bound by the provisions of this
Section 8.08; provided, further, that to the extent practicable
under the circumstances, prior to disclosing such information pursuant to clause
(i) or (ii) of this Section, the Bank will provide notice to the Borrower of
such disclosure and, if reasonably requested by the Borrower, shall cooperate
with any attempt by the Borrower to overturn or invalidate any request for such
information (provided that the Bank shall not be required to cooperate with any
such attempt if the Bank determines, in its sole discretion, that it would be
materially prejudicial to the Bank or its interests to so cooperate). 












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Section 8.09   Survival of
Certain Obligations. Section 8.03 and the obligations of the Borrower
thereunder, shall survive, and shall continue to be enforceable notwithstanding,
the termination of this Agreement and the Commitment and the payment in full of
the principal of and interest on all Advances. 

        
Section 8.10   Georgia Law. This  Agreement and the Note shall be construed in accordance  with and governed by the law of the State
of Georgia.

        
Section 8.11   Severability. In case any one or more of the provisions contained in this
Agreement, the Note or any of the other Loan Documents should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.

        
Section 8.12   Interest. In no event shall the amount of interest due or payable
hereunder or under the Note exceed the maximum rate of interest allowed by
applicable law, and in the event any such payment is inadvertently made to the
Bank by the Borrower or inadvertently received by the Bank, then such excess sum
shall be credited as a payment of principal, unless the Borrower shall notify
the Bank in writing that it elects to have such excess sum returned forthwith.
It is the express intent hereof that the Borrower not pay and the Bank not
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may legally be paid by the Borrower under applicable law.

        
Section 8.13   Interpretation. No provision of this Agreement or any of the other Loan
Documents shall be construed against or interpreted to the disadvantage of any
party hereto by any court or other governmental or judicial authority by reason
of such party having or being deemed to have structured or dictated such
provision. 

        
Section 8.14   Consent to
Jurisdiction. The Borrower (a) submits to personal jurisdiction in the State
of Georgia, the courts thereof and the United States District Courts sitting
therein, for the enforcement of this Agreement, the Note and the other Loan
Documents, (b) waives any and all personal rights under the law of any
jurisdiction to object on any basis (including, without limitation,
inconvenience of forum) to jurisdiction or venue within the State of Georgia for
the purpose of litigation to enforce this Agreement, the Note or the other Loan
Documents, and (c) agrees that service of process may be made upon it in the
manner prescribed in Section 8.01 for the giving of notice to the Borrower.
Nothing herein contained, however, shall prevent the Bank from bringing any
action or exercising any rights against any security and against the Borrower
personally, and against any assets of the Borrower, within any other state or
jurisdiction. 

        
Section 8.15   Counterparts. This Agreement may be signed in any number of counterparts,
each of which shall be an original, with the same effect as if the signatures
thereto and hereto were upon the same instrument. 

        
Section 8.16   Termination
of Existing Credit Facilities. Upon the effectiveness of this Agreement, the
parties hereto agree that the Amended and Restated Credit Agreement between the
Borrower and the Bank dated June 30, 2003 and Credit Agreement between the
Borrower and the Bank dated February 28, 2006 shall be terminated and all
amounts due and payable thereunder shall be repaid by the first Advance made
hereunder on the Closing Date.










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        IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, under seal, by their respective authorized officers as of the day and
year first above written. 



	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
	 
	 	WACHOVIA BANK, NATIONAL
ASSOCIATION
	 
	 	By:
                     /s/  
Ron Edwards               (SEAL)
	 	
Name:                      
Ron Edwards             
                

	 	
Title:                      
Senior Vice President  
                

	 
	 	Lending Office
Wachovia Bank, National Association

171 17th Street, N.W., 5th Floor
Mail Code: GA 4507
Atlanta, Georgia 30363-1032
Attention: Ron Edwards
Telecopy number:  (404) 214-7309

Telephone number:  (404)877-6635










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