Exhibit 31.0

           AMENDED AND RESTATED PROMISSORY NOTE AND SECURITY AGREEMENT

         This Amended and Restated Promissory Note and Security Agreement is
given effect January 2, 2001("the Note"), and amends and restates in its
entirety, including any amendments thereto, the Promissory Note and Security
Agreement dated January 17, 2000 ("the Old Note"), BY Jon S. Saltzman, an
individual having an address at 435 Dreshertown Road, Forth Washington,
Pennsylvania, hereinafter referred to as "Borrower", IN FAVOR OF, Penn-America
Insurance Company, a Pennsylvania corporation, with offices located at 420 S.
York Road, Hatboro, Pennsylvania, hereinafter referred to as "Lender". The word
"Lender" means the original Lender and anyone else who takes this Note by
transfer.

1. Sole Purpose of the Loan. This credit evidenced hereby is given by the Lender
pursuant to Section 1502 of the Pennsylvania Corporation Law and the Unanimous
Consent of the Directors of the Lender, dated January 1, 2000. Any funds
provided under this Note may solely be used by Borrower to purchase $.001 par
value common stock of the Lender (the "Common Stock"), including brokerage
commissions and transaction costs. Such funds will be provided by Lender to
Borrower by way of Borrower's authorized broker, Gruntal & Company, who will
relay Borrower's request for funds from Lender and who will then receive said
funds from Lender and apply them towards the purchase of $.001 par value PNG
common stock as directed by Borrower.

2. Borrower's Promise to Pay Principal and Interest. In return for the funds
loaned by Lender to Borrower for the acquisition of PNG common stock, Borrower
promises to pay $146,370 (the "Principal"), plus interest to the order of the
Lender. Interest, at an annual rate of (6.08%) , will be charged on that part of
the Principal which has not been paid from the date of this Note until all
Principal has been paid in full, with interest to be accrued semi-annually. See
Addendum A, attached hereto and incorporated herein, for specifics of the
transaction(s), which generated the principal due and owing herein. All accrued
and unpaid interest under the Old Note shall carry forward and be due and
payable under this Note under the same terms and conditions of the Old Note.

3. Payments.

     (a)  Unless otherwise specifically set forth herein, Borrower will pay all
          principal, interest, costs and charges due and owing under this Note
          no later than January 17, 2005. All payments will be made to Lender at
          the address shown above or to such other address as Lender may notify
          Borrower of, in writing. Notwithstanding the foregoing, Borrower may
          instruct Lender to sell some or all of the Common Stock, which is the
          subject of this Promissory Note and Security Agreement. The proceeds
          from such sale will be used by Lender towards repayment of Borrower's
          loan and shall be applied by Lender to repay an amount equal to the
          cost basis for the shares of Common Stock sold, including commissions,



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          costs and interest incurred. Such repayment shall be entered onto
          Lender's books within five (5) business days of the receipt of
          settlement proceeds by Lender.

     (b)  Acceleration: Lender may not accelerate repayment by Borrower under
          this Note, unless Borrower's employment with Lender is terminated
          prior to January 17, 2005 due to fraud, embezzlement, conviction of a
          crime or grossly negligent conduct on the part of Borrower that
          results in injury or damage to Lender. In the event of such an
          occurrence(s), Lender shall accelerate the loan and require immediate
          payment from Borrower of all principal, interest, costs and charges
          due and owing under this Note. Repayment by Borrower under this Note
          will not accelerate, other than as a result of the above.

4. Early Payments. Borrower has the right to make payments at any time before
they are due. These early payments will mean that this Note will be paid in less
time.

5. Late Charge for Overdue Payments. If the Lender has not received any payment
within fifteen (15) days after its due date, Borrower will pay the Lender a late
charge of (4%) percent of the payment. This charge will be paid with the late
payment.

6. Default. If Borrower fails to make any payment required by this Note within
fifteen (15) days after its due date, or if Borrower fails to keep any other
promises that Borrower makes in this Note, or if those promises made in the
Security Agreement bearing even date herewith are not kept, Lender may declare
that Borrower is in default on this Note and the Security Agreement. Upon
default, Borrower must immediately pay the full amount of all unpaid principal,
interest, other amounts due on this Note and the Security Agreement and the
Lender's costs of collection and reasonable attorney fees.

7. Waivers. Borrower gives up its right to require that the Lender do the
following: (a) to demand payment (called "presentment"); (b) to notify Borrower
of nonpayment (called "notice of dishonor"); and (c) to obtain an official
certified statement showing nonpayment (called a "protest"). The Lender may
exercise any right under this Note or the Security Agreement or under any law,
even if Lender has delayed in exercising that right or has agreed in an earlier
instance not to exercise that right. Lender does not waive its right to declare
that Borrower is in default by making payments or incurring expenses on
Borrower's behalf.

8. Pledge of Collateral. In order to protect the Lender if the promises made in
this Note are not kept, and as security for the Borrower's repayment of its
obligations as set forth in this Note (the "Obligations"), the Borrower hereby
grants to the Lender a security interest in and a lien on the Common Stock (the
"Collateral") purchased in accordance with this Note and held by Lender in its
safe at Penn-America Insurance Company, under the control of the General
Counsel. The parties intend that this Note shall constitute a "security
agreement" within the meaning and for purposes of, and as defined in the
Pennsylvania Uniform Commercial Code, 13 PACSA Section 4101 et seq. (the
"Code").


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9. Escrow of Collateral.

         A. Simultaneously with the Borrower's execution of this Note, the
Borrower shall execute and deliver to Lender any and all forms, instruments,
certificates and other documents required by Lender that are sufficient for
Lender to establish possession or control of the Common Stock to be purchased in
order to perfect the Lender's lien on such Common Stock, together with such
other reasonable terms and conditions to preserve the Collateral and to protect
the rights of Lender in the Collateral.

         B. Lender shall hold the Collateral and the Assignment thereof in
escrow in accordance with the following provisions:

          (1)  If Borrower is in Default, Lender shall liquidate the Collateral
               and shall first apply the proceeds therefrom against all fees and
               expenses incurred by Lender in connection with liquidating the
               Collateral, then second shall apply any remaining proceeds
               therefrom against all accrued and unpaid interest (including any
               late payment charges incurred pursuant to Section 5 hereof), then
               third against outstanding principal.

          (2)  When the Obligations have been paid in full or satisfied, the
               Lender shall release the remainder of the Collateral, in any, to
               the order of the Borrower.

10. Rights Retained by the Borrower.

         A. Until the Lender exercises its rights under this Agreement to the
Collateral, the Borrower shall retain any voting rights, rights to receive cash
dividends, liquidating stock dividends and dividends paid in stock, new
securities or other property which the Borrower is entitled to receive by virtue
of such dividend, and all other rights associated with the Collateral, except
those expressly limited in this Agreement.

         B. In addition, the Borrower shall, at all times until the Collateral
is sold and title thereto is actually transferred, have the absolute right to
redeem the Collateral upon payment to the Lender of the then outstanding balance
of the Obligations.

11. Borrower's Default. If the Borrower defaults in the payment of its
Obligations pursuant to this Note, upon the Lender's demand, the Borrower will
execute any other assignment or document necessary or advisable to liquidate or
assign the Collateral to the Lender, make payment pursuant to this Note, and to
carry out the purposes of this Agreement.

12. Lender's Rights. The rights, powers and remedies given to the Lender by this
Agreement are in addition to all rights, powers and remedies given to the Lender
by statute or rule of law, unless otherwise limited in this Agreement. A
forbearance or failure or a delay by the Lender in exercising any one or more of
its rights, powers or remedies is not a waiver of any such right, power or


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<PAGE>

remedy, and any exercise of a right, power or remedy does not preclude its
further exercise. Until the Obligations of the Borrower are fully satisfied, the
rights, powers and remedies of the Lender continue to exist and may be exercised
by the Lender at any time not limited in this Agreement.

13. Change in Control. In the event of a "change in control" of Lender, as
defined in Addendum B and incorporated herein by reference, all obligations of
Borrower under this Note are immediately forgiven and satisfied, effective as of
the date of the change in control.

14. Further Assurances. The Borrower and the Lender hereby agree to execute and
deliver in the future any and all assignments, agreements, instruments and/or
documents as may reasonably be required and as may be necessary or expedient to
effect or facilitate the transfer of the Collateral in order to effect the
intents and purposes of this Agreement.

15. Miscellaneous.

         A. This Agreement applies to and shall inure to the benefit of the
Lender's successors and assigns and binds the Borrower's heirs and assigns.

         B. This Agreement may not be modified except by a written agreement
executed by both the Borrower and the Lender.

         C. This Agreement contains the entire agreement between the parties as
to the subject matter set forth therein and supersedes any and all prior written
or oral understandings or agreements with respect to the subject matter hereof,
including but not limited to the Old Note.

         D. This Agreement may not be assigned by the Borrower. Lender may
assign this Promissory Note and Security Agreement and shall provide written
notification thereof to Borrower.

         E. Any and all notices and other correspondence required or permitted
to be given hereunder shall be in writing and shall either be (i) personally
delivered; (ii) transmitted by telefax and followed by sending same via United
States first class mail; or (iii) sent by United States certified or registered
mail, return receipt requested, with full postage prepaid, and addressed to the
parties at their respective addresses herein set forth (or to such other address
as the parties may from time to time designate by notice to the others given in
the foregoing manner. All notices shall be deemed effective when given.

         F. This Agreement shall be governed by and construed in accordance with
the laws of the Commonwealth of Pennsylvania unless preempted by Federal law,
without regard to its principles of conflict of laws.

         G. In the event that any provision or part thereof set forth herein is



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held to be invalid by a court of competent jurisdiction, or otherwise conflicts
with applicable law, such provision or part hereof shall be deemed to be deleted
from this Agreement, and this Agreement shall be construed to give effect to the
remaining provisions hereof.

         H. Captions in this Agreement are included herein for convenience of
reference only and shall not constitute a part hereof for any other purpose.

         IN WITNESS WHEREOF, the parties hereto have hereunto set their hands
and seals the day and year first above written.




PENN-AMERICA INS. CO.


By:
   -----------------------------------------

BORROWER:





WITNESS:





STATE OF PENNSYLVANIA                                 )
                                                      )ss.
COUNTY OF                                             )

         BE IT REMEMBERED, that I hereby certify that on this ______ day of
_________ , 2002, before me, the undersigned authority, personally appeared Jon
S. Saltzman, who I am satisfied is the person mentioned in the within
instrument, and he acknowledged that he signed, sealed and delivered the same as
his voluntary act and deed.




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


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<PAGE>


STATE OF PENNSYLVANIA                                 )
                                                                         )ss.
COUNTYOF                                              )


          BE IT REMEMBERED, that on this _____ day of__________, 2002, before
me, the subscriber, a Notary Public of the State of Pennsylvania, personally
appeared Garland P. Pezzuolo, to me known, who, being by me duly sworn upon her
oath according to law, did depose and say that she is the Vice President,
Secretary and General Counsel of Penn-America Insurance Company, the Lender in
the within Pledge Agreement, and that in her capacity aforesaid she executed the
within Pledge Agreement on behalf of the said corporation; she did duly
acknowledge to me that she signed, sealed and delivered the same as her
voluntary act and deed and as such officer of the said corporation; that the
within instrument is the voluntary act and deed of the said corporation, by
virtue of authority granted by its Board of Directors; that this person knows
the proper seal of the corporation which was affixed to his Pledge Agreement.


Notary Public of Pennsylvania
                                                        NOTARIALSEAL


My Commission Expires ______________




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<PAGE>


                                   Addendum A

This Addendum forms a part of the Note, as amended and restated effective
January 2, 2001, by and between Jon S. Saltzman ("Borrower") and Penn-America
Insurance Company ("Lender").

         The common stock acquired by Borrower, which gives rise to the Note in
         the amount of $146,370 (which is the principal amount of the loan plus
         brokerage commissions and transaction costs) is the result of the
         acquisition by Borrower: (a) on January 19, 2000 of 500 shares of PNG
         common stock at a price of $6.75 per share; (b) on January 19, 2000 of
         3,900 shares of PNG common stock at a price of $7.125 per share; (c) on
         January 19, 2000 of 600 shares of PNG common stock at a price of $7.00
         per share; and, (d) on January 20, 2000 of 15,000 shares of PNG common
         stock at a price of $7.3675 per share. See Confirmation Notice from
         Gruntal & Co., attached











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<PAGE>


                                   Addendum B

For purposes of the within Note, "change in control" shall be deemed to have
occurred upon the earliest to occur of the following events:

         (i)      the date the shareholders of the Company (or the Board of
                  Directors, if shareholder action is not required) approve a
                  plan or other arrangement pursuant to which the Penn-America
                  Insurance Company will be dissolved or liquidated, or

         (ii)     the date the shareholders of the Company (or the Board of
                  Directors, if shareholder action is not required) approve a
                  definitive agreement to sell or otherwise dispose of
                  substantially all of the assets of the Company,

         (iii)    the date the shareholders of the Company (or the Board of
                  Directors, if shareholder action is not required) and the
                  shareholders of the other constituent corporation (or its
                  board of directors, if shareholder action is not required)
                  have approved a definitive agreement to merge or consolidate
                  the Company with or into such other corporation, other than,
                  in either case, a merger or consolidation of the Company in
                  which holders of shares of the Company's Common Stock
                  immediately prior to the merger or consolidation will have at
                  least a majority of the ownership of common stock of the
                  surviving corporation (and, if one class of common stock is
                  not the only class of voting securities entitled to vote on
                  the election of directors of the surviving corporation, a
                  majority of the voting power of the surviving corporation's
                  voting securities) immediately after the merger or
                  consolidation, which common stock (and, if applicable, voting
                  securities) is to be held in the same proportion as such
                  holders' ownership of Common Stock of the Company immediately
                  before the merger or consolidation, or

         (iv)     the date any entity, person or group, other than Penn-America
                  Group, Inc., its subsidiaries Penn Independent Corporation or
                  those individuals and trusts who comprise the shareholders of
                  Penn Independent Corporation, shall have become the beneficial
                  owner of, or shall have obtained voting control over, more
                  than thirty percent (30%) of the outstanding Shares of the
                  Company's Common Stock, or

         (v)      the first day when directors are elected such that a majority
                  of the Board of Directors shall have been members of the Board
                  of Directors for less than two (2) years, unless the
                  nomination for election of each new director who was not a
                  director at the beginning of such two (2) year period was
                  approved by a vote of at least two-thirds of the directors
                  then still in office who were directors at the beginning of
                  such period.


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