Exhibit 31.0.2

           AMENDED AND RESTATED PROMISSORY NOTE AND SECURITY AGREEMENT

         This Amended and Restated Promissory Note and Security Agreement, given
effect January 2, 2001("Note"), amends and restates in its entirety, including
any amendments thereto, the Promissory Note and Security Agreement dated
September 19, 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, Fahnstock and 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 $55,147.50 (the "Principal"), plus interest to the order of the
Lender. Interest, at an annual rate of (6.22%) percent 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 attached Addendum A, incorporated herein by reference, 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 September 19, 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


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                  sold, including commissions, 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 September 19, 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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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:
   -----------------------------------------


BORROWERS:




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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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 Joe Morris, to me known, who, being by me duly sworn upon her oath
according to law, did depose and say that he is the Chief Financial Officer of
Penn-America Insurance Company, the Lender in the within Pledge Agreement, and
that in his capacity aforesaid he executed the within Pledge Agreement on behalf
of the said corporation; he did duly acknowledge to me that he signed, sealed
and delivered the same as his 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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                                   Addendum A

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

         The common stock acquired by Borrower, which gives rise to the Note in
         the amount of $55,147.50 (which is the principal amount of the loan
         plus brokerage commissions and transaction costs) is the result of the
         acquisition by Borrower on September 19, 2000 of 7,500 shares of PNG
         common stock at a price of $7.3125 per share. A copy of the
         confirmation notice is attached hereto and incorporated herein by
         reference.








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                                   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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