EXHIBIT 10.1


                                CREDIT AGREEMENT

                                   dated as of

                                February 28, 2006

                                     between

                          ATLANTIC AMERICAN CORPORATION

                                       and

                       WACHOVIA BANK, NATIONAL ASSOCIATION




<PAGE>


<table>
<caption>

                                TABLE OF CONTENTS


                                                                                                               Page




                                                                                                             <c>
ARTICLE I DEFINITIONS.............................................................................................1
     Section 1.01 Definitions.....................................................................................1
                  -----------
     Section 1.02 Accounting Terms and Determinations............................................................13
                  -----------------------------------
     Section 1.03 Use of Defined Terms...........................................................................14
                  --------------------
     Section 1.04 Terminology....................................................................................14
                  -----------
     Section 1.05 References.....................................................................................14
                  ----------

ARTICLE II THE CREDITS...........................................................................................14
     Section 2.01 Commitment to Make the Loan....................................................................14
                  ---------------------------
     Section 2.02 Conversion and Continuation of Loan............................................................14
                  -----------------------------------
     Section 2.03 Notes..........................................................................................15
                  -----
     Section 2.04 Mandatory Repayment of Loan....................................................................16
                  ---------------------------
     Section 2.05 Interest Rates.................................................................................16
                  --------------
     Section 2.06 Optional Prepayments...........................................................................18
                  --------------------
     Section 2.07 General Provisions as to Payments..............................................................18
                  ---------------------------------
     Section 2.08 Computation of Interest........................................................................19
                  -----------------------

ARTICLE III CONDITIONS TO LOAN...................................................................................20
     Section 3.01 Conditions to Loan.............................................................................20
                  ------------------

ARTICLE IV REPRESENTATIONS AND WARRANTIES........................................................................21
     Section 4.01 Corporate Existence and Power..................................................................21
                  -----------------------------
     Section 4.02 Corporate and Governmental Authorization; No Contravention.....................................21
                  ----------------------------------------------------------
     Section 4.03 Binding Effect.................................................................................21
                  --------------
     Section 4.04 Financial Information..........................................................................22
                  ---------------------
     Section 4.05 Litigation.....................................................................................22
                  ----------
     Section 4.06 Compliance with ERISA..........................................................................22
                  ---------------------
     Section 4.07 Taxes..........................................................................................22
                  -----
     Section 4.08 Subsidiaries...................................................................................23
                  ------------
     Section 4.09 Not an Investment Company......................................................................23
                  -------------------------
     Section 4.10 Public Utility Holding Company Act.............................................................23
                  ----------------------------------
     Section 4.11 Ownership of Property; Liens...................................................................23
                  ----------------------------
     Section 4.12 No Default.....................................................................................23
                  ----------
     Section 4.13 Full Disclosure................................................................................23
                  ---------------
     Section 4.14 Environmental  Matters.........................................................................24
                  ----------------------
     Section 4.15 Compliance with Laws...........................................................................24
                  --------------------
     Section 4.16 Capital Stock..................................................................................24
                  -------------
     Section 4.17 Margin Stock...................................................................................24
                  ------------
     Section 4.18 Insolvency.....................................................................................25
                  ----------
     Section 4.19 Insurance......................................................................................25
                  ---------
     Section 4.20 Debt and Redeemable Preferred Stock............................................................25
                  -----------------------------------

                                                        -i-

ARTICLE V COVENANTS..............................................................................................25
     Section 5.01 Information....................................................................................25
                  -----------
     Section 5.02 Inspection of Property, Books and Records......................................................27
                  -----------------------------------------
     Section 5.03 Ratio of Funded Debt to Consolidated Total Capitalization......................................27
                  ---------------------------------------------------------
     Section 5.04 Ratio of Funded Debt to EBITDA.................................................................27
                  ------------------------------
     Section 5.05 Minimum Consolidated Tangible Net Worth........................................................27
                  ---------------------------------------
     Section 5.06 Restricted Payments............................................................................27
                  -------------------
     Section 5.07 Capital Expenditures...........................................................................28
                  --------------------
     Section 5.08 Loans or Advances..............................................................................28
                  -----------------
     Section 5.09 Investments....................................................................................28
                  -----------
     Section 5.10 Negative Pledge................................................................................29
                  ---------------
     Section 5.11 Maintenance of Existence.......................................................................29
                  ------------------------
     Section 5.12 Dissolution....................................................................................30
                  -----------
     Section 5.13 Consolidations, Mergers and Sales of Assets....................................................30
                  -------------------------------------------
     Section 5.14 Use of Proceeds................................................................................30
                  ---------------
     Section 5.15 Compliance with Laws; Payment of Taxes.........................................................30
                  --------------------------------------
     Section 5.16 Insurance......................................................................................31
                  ---------
     Section 5.17 Change in Fiscal Year..........................................................................31
                  ---------------------
     Section 5.18 Maintenance of Property........................................................................31
                  -----------------------
     Section 5.19 Environmental Notices..........................................................................31
                  ---------------------
     Section 5.20 Environmental Matters..........................................................................31
                  ---------------------
     Section 5.21 Environmental Release..........................................................................31
                  ---------------------
     Section 5.22 Additional Covenants, Etc......................................................................31
                  -------------------------
     Section 5.23 Transactions with Affiliates...................................................................32
                  ----------------------------
     Section 5.24 Risk-Based Capital Ratio.......................................................................32
                  ------------------------
     Section 5.25 Maintenance of Statutory Surplus...............................................................32
                  --------------------------------
     Section 5.26 Minimum Investment in NAIC Rated Bonds;  Maximum Investment in Investment Properties...........32
                  ------------------------------------------------------------------------------------
     Section 5.27 Senior Indebtedness under Indenture............................................................33
                  -----------------------------------
     Section 5.28 Other Obligations of Borrower..................................................................33
                  -----------------------------

ARTICLE VI DEFAULTS..............................................................................................33
     Section 6.01 Events of Default..............................................................................33
                  -----------------

ARTICLE VII CHANGE IN CIRCUMSTANCES; COMPENSATION................................................................36
     Section 7.01 Basis for Determining Interest Rate Inadequate or Unfair.......................................36
                  --------------------------------------------------------
     Section 7.02 Illegality.....................................................................................36
                  ----------
     Section 7.03 Increased Cost and Reduced Return..............................................................37
                  ---------------------------------
     Section 7.04 Base Rate Loans Substituted for Affected Euro-Dollar Loans.....................................38
                  ----------------------------------------------------------
     Section 7.05 Compensation...................................................................................39
                  ------------

ARTICLE VIII MISCELLANEOUS.......................................................................................39
     Section 8.01 Notices........................................................................................39
                  -------
     Section 8.02 No Waivers.....................................................................................39
                  ----------
     Section 8.03 Expenses; Documentary Taxes; Indemnification; Increased Cost and Reduced Return................40
                  -------------------------------------------------------------------------------
     Section 8.04 CONSEQUENTIAL DAMAGES..........................................................................40
                  ---------------------
     Section 8.05 Setoffs........................................................................................40
                  -------

                                                        -ii-




     Section 8.06 Amendments and Waivers.........................................................................41
                  ----------------------
     Section 8.07 Successors and Assigns.........................................................................41
                  ----------------------
     Section 8.08 Confidentiality................................................................................42
                  ---------------
     Section 8.09 Survival of Certain Obligations................................................................43
                  -------------------------------
     Section 8.10 Georgia Law....................................................................................43
                  -----------
     Section 8.11 Severability...................................................................................43
                  ------------
     Section 8.12 Interest.......................................................................................43
                  --------
     Section 8.13 Interpretation.................................................................................43
                  --------------
     Section 8.14 Consent to Jurisdiction........................................................................43
                  -----------------------
     Section 8.15 Counterparts...................................................................................44
                  ------------

</table>

EXHIBIT A                  Note
EXHIBIT B                  [Reserved]
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



                                                        -iii-



<PAGE>




                                CREDIT AGREEMENT
                                ----------------

         CREDIT AGREEMENT dated as of February 28, 2006 between ATLANTIC
AMERICAN CORPORATION and WACHOVIA BANK, NATIONAL ASSOCIATION.

          The Borrower has  requested a term loan in the amount of Three Million
     and  No/100  Dollars  ($3,000,000.00)  to be  used  for  general  corporate
     purposes of the Borrower, and the Bank has agreed to make such term 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 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 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).

          "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).

          "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.


                                                        -2-
<page>




          "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.

          "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 Loan" means a Loan 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.  ss.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.

          "Closing Certificate" has the meaning set forth in Section 3.01(c).

          "Closing Date" means February 28, 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 $3,000,000.

          "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.



                                                        -3-

<page>


          "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

               (A) Any change in equity  resulting  from any  write-up of assets
          subsequent  to December  31, 2002 (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.


                                                        -4-

<page>

          "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.

          "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.

          "Dividend   Ability"   means,  at  any  time  and  for  any  Insurance
     Subsidiary, the greater of (i) 10% of Statutory Surplus or (ii) (a) if such
     Insurance  Subsidiary is a life insurer,  the "Net Gain from Operations" of
     such Insurance  Subsidiary as set forth on the most recent Annual Statement
     or Quarterly Statement of such Insurance Subsidiary, prepared in accordance
     with statutory accounting principles or (b) if such Insurance Subsidiary is
     not a life insurer,  the "Net Income" of such  Insurance  Subsidiary as set
     forth on the most recent  Annual  Statement or Quarterly  Statement of such
     Insurance  Subsidiary,  prepared in accordance  with  statutory  accounting
     principles; provided, however, that (i) realized capital gains shall not be
     included in such calculations; and (ii) any extraordinary dividend approved
     by the  appropriate  regulatory  authorities  shall  be  included  in  such
     calculation.

          "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.


                                                        -5-

<page>
          "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.

          "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.


                                                        -6-

<page>



          "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.

          "Euro-Dollar  Loan" means a Loan 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.

          "Final Maturity Date" means April 1, 2007.

          "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.


                                                        -7-

<page>



          "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 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.

          "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.

                                                        -8-

<page>

          "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.  ss.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.

          "Holding  Company  Expense"  means, as applied to the Borrower for any
     period,  the aggregate  amount of expenses  incurred by the Borrower and/or
     payments made by the Borrower on behalf of the Borrower's  Subsidiaries  in
     connection with services provided by the Borrower to its Subsidiaries.

          "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.

          "Intercompany  Billing"  means  amounts  received by the Borrower from
     Subsidiaries  and/or  payments  made  by  the  Borrower  on  behalf  of the
     Borrower's Subsidiaries as payment for services provided by the Borrower to
     such Subsidiaries.

          "Interest  Coverage"  for any  period  means  (a) the sum of  Dividend
     Ability,  Intercompany  Billing and Tax Sharing  Payments minus (b) Holding
     Company Expense, all determined with respect to the Borrower.

          "Interest  Period" means,  with respect to each Euro-Dollar  Loan, the
     period  commencing  on the date that such  Euro-Dollar  Loan 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
          Final  Maturity Date and would  otherwise end after the Final Maturity
          Date.

                                                        -9-

<page>

          "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.

          "Loan" means the term loan advanced to the Borrower in accordance with
     Section 2.01(a).

          "Loan Documents" means this Agreement, the Note, the Pledge Agreement,
     any other  document  evidencing,  relating to or securing the Loan, and any
     other document or instrument delivered from time to time in connection with
     this Agreement, the Note or the Loan, 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.

                                                        -10-

<page>


          "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 Loan.

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

          "Officer's Certificate" has the meaning set forth in Section 3.01(d).

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

          "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.

                                                        -11-

<page>

          "Pledge  Agreement"  means the Amended and Restated  Pledge  Agreement
     dated as of June 30, 2003  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.

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

          "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 Final Maturity 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 C Preferred  Stock"  means the  Borrower's  Series C 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.

                                                        -12-

<page>



          "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.

          "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 2.07(c).

          "Tax Sharing Agreement" means, that Tax Allocation Agreement among the
     Borrower and certain Subsidiaries of the Borrower, including, among others,
     the following:  (i) American Southern Insurance Company,  effective January
     1, 1996; (ii) American Safety Insurance Company, effective January 1, 1996;
     (iii) Banker's Fidelity Life Insurance Company, effective January 28, 1994;
     (iv) Georgia Casualty and Surety Company,  effective  January 28, 1994; and
     (v) Association Casualty Insurance Company, effective July 1, 1999.

          "Tax Sharing  Payments" means those payments  received by the Borrower
     from its Subsidiaries as a result of the Tax Sharing Agreement.

          "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).

          "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.

                                                        -13-

<page>



          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 the Loan.
                       ---------------------------

               (a) The Bank hereby agrees, on the terms and conditions set forth
          herein,  to  establish a term loan  facility by making the Loan to the
          Borrower on the Closing Date in an aggregate principal amount equal to
          the Commitment. The Commitment shall terminate on the Closing Date and
          the Bank  shall have no further  obligation  to advance  moneys to the
          Borrower.

          Section 2.02 Conversion and Continuation of Loan.
                       -----------------------------------

               (a) The Loan shall  initially be a Euro-Dollar  Loan in an amount
          equal to the  Commitment  with an  Interest  Period  of three  months.
          Thereafter,  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  the   Euro-Dollar   Loan  to  convert  such
          Euro-Dollar Loan into a Base Rate Loan or to continue such Euro-Dollar
          Loan for an additional  Interest Period, or (B) at any time to convert
          a Base Rate Loan to a Euro-Dollar  Loan.  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 Loan, 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 Loan,  specifying (x) in the case of a conversion to or
          continuation of a Euro-Dollar Loan, 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
          Loan and a Domestic Business Day in the case of a conversion to a Base
          Rate Loan); 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  Loan 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 Loan shall be converted automatically into a Base Rate
          Loan.

                                                        -14-

<page>



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

               (c)  Notwithstanding  anything to the contrary  contained in this
          Agreement,  the Loan  may not be  continued  as,  or  converted  to, a
          Euro-Dollar  Loan 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 2.03 Note.
                       -----

               (a) The Loan shall be evidenced by a 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.

               (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 Loan 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
          Bank's 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.

                                                        -15-

<page>



          Section 2.04 Mandatory  Repayment of Loan.  Unless due sooner pursuant
     to the provisions of Article VI, the Borrower agrees to repay the principal
     of the Loan on the Final  Maturity  Date in an amount  equal to the  unpaid
     principal balance of, and accrued but unpaid interest on, the Loan. 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:

<table>
<caption>

              Ratio of Funded Debt to
         Consolidated Total Capitalization               Base Rate Loan          Euro-Dollar Loan
        ----------------------------------              ----------------        ------------------

                                                           <c>                    <c>
Greater than 45%                                               0%                     2.50%
Greater  than  or  equal  to 40% but  less  than or            0%                     2.00%
equal to 45%
Less than 40%                                                  0%                     1.75%

</table>


               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 a Base Rate Loan and 2.50% for a
          Euro-Dollar Loan (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 the  Loan
          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.

                                                        -16-

<page>


               (b) Each Base Rate Loan shall bear  interest  on the  outstanding
          principal amount thereof, for each day from the date such Loan 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 Loan is outstanding, on the date such Base Rate Loan is converted
          to a Euro-Dollar Loan and, if a Base Rate Loan is then outstanding, on
          the Final Maturity  Date. Any overdue  principal of and, to the extent
          permitted by applicable  law,  overdue  interest on any Base Rate Loan
          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 Loan 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  Loan 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  Loan shall
          bear interest  during such Interest  Period at the rate  applicable to
          Base Rate Loans during such period.  Interest on each Euro-Dollar Loan
          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 Loan 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 Loan
     means for the Interest Period of such  Euro-Dollar  Loan 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  Loan
     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.

                                                        -17-

<page>



          "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  Loans 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.

               (d) The Bank shall determine the interest rates applicable to the
          Loan  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) After the occurrence and during the continuance of a Default,
          the  principal  amount of the Loan (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 Prepayments.
                       --------------------

               (a) The Borrower  may,  upon at least 1 Domestic  Business  Day's
          notice to the Bank, prepay any Base Rate Loan 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  Loan prior to the last day of an
          Interest Period applicable thereto,  unless the Borrower complies with
          Section 7.05.

          Section 2.07 General Provisions as to Payments.
                       ---------------------------------

               (a) The Borrower  shall make each  payment of  principal  of, and
          interest  on, the Bank's  Loan 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  Loan  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 Loan 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.


                                                        -18-

<page>

               (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 Loan 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 Loan 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 Loan 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.

          In the event  the Bank  receives  a refund  of any  Taxes  paid by the
     Borrower  pursuant to this  Section  2.07,  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  2.07 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  2.08  Computation  of  Interest.  Interest on Base Rate Loans
     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 Loans 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.

                                                        -19-

<page>


                                  ARTICLE III

                               CONDITIONS TO LOAN
          Section 3.01  Conditions to Loan.  The  obligation of the Bank to make
     the Loan 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  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;

               (d)  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, if requested by Bank,  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;

               (e) receipt by the Bank of UCC  Financing  Statements in form and
          substance  satisfactory to the Bank in its sole discretion,  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);

               (f) if requested by Bank, 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;

                                                        -20-

<page>


               (g) the fact that, immediately before and after the making of the
          Loan, no Default shall have occurred and be continuing;

               (h) 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; and

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

                                   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.

          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.

                                                        -21-

<page>


          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, 2004 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, 2005,  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, 2004,
          and the Quarterly  Statements of the Insurance  Subsidiaries  together
          with supplemental  schedules thereto,  dated as of September 30, 2005,
          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  September  30,  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.

          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.

               (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.  United  States income tax returns of the Borrower and
     its  Subsidiaries  have been  examined  and closed  through the Fiscal Year
     ended December 31, 1983.

                                                        -22-

<page>


          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.

          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  which  could  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.

                                                        -23-

<page>


          Section 4.14 Environmental Matters.

               (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 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 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.

          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 Loan 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.

                                                        -24-

<page>


          Section 4.18  Insolvency.  After giving  effect to the  execution  and
     delivery  of the Loan  Documents  and the  making  of the Loan  under  this
     Agreement, the Borrower will not be "insolvent," within the meaning of such
     term as used in O.C.G.A.  ss.  18-2-22 or as defined in ss. 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 the Note remains unpaid:

          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  100 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;

                                                        -25-

<page>


               (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   consolidated   balance   sheet  of  the  Borrower  and  its
          Consolidated Subsidiaries as of the end of such Fiscal Quarter and the
          related  statement  of income  and  statement  of cash  flows for 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 corresponding Fiscal Quarter and the corresponding
          portion of 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;

               (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;

                                                        -26-

<page>


               (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) 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.

          Section   5.03   Ratio   of   Funded   Debt  to   Consolidated   Total
     Capitalization.   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 $59,500,000 plus 50% of the
     cumulative  Consolidated  Net Income  during any period after  December 31,
     2002 (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 C Preferred
     Stock, so long as, (a) the dividend rate payable on such Series C Preferred
     Stock  shall not exceed nine  percent  (9%) per annum,  (b) the  redemption
     value of the Series C Preferred  Stock shall not be greater than $2,000,000
     and (c) no Event of Default  shall be in existence or shall result from the
     making of such Restricted Payment.

                                                        -27-

<page>

          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.

          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.

                                                        -28-

<page>


          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 in an aggregate  principal
          amount not exceeding $25,000,000;

               (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, provided that such Lien attaches
          to such  asset  concurrently  with  or  within  18  months  after  the
          acquisition or completion of construction thereof;

               (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.

                                                        -29-

<page>

          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.

               (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 Loan
     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.

                                                        -30-

<page>

          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.

          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.

                                                        -31-

<page>


          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 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
     (A) 50% of the Aggregate Value of Total Investments  during the period from
     May 2,  2005  to and  including  December  31,  2005,  and  (B)  70% of the
     Aggregate Value of Total  Investments at all other times and any time after
     December 31, 2005; or (ii) the aggregate value of Investment  Properties to
     exceed 5% of the Aggregate Value of Total Investments.  Prior to January 1,
     2006,  neither the Borrower nor any Consolidated  Subsidiary shall purchase
     or make any Investments that are not bonds rated "2" or better by NAIC.

                                                        -32-

<page>


          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.

                                   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 the
          Loan or shall fail to pay any  interest  on the Loan 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

                                                        -33-

<page>

               (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

               (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;  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;  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; 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

                                                        -34-

<page>


               (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 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

               (m) the occurrence of any event,  act or condition which the Bank
          determines  either  does  cause  or has a  reasonable  probability  of
          causing a Material  Adverse Effect and failure by the Borrower to cure
          the same within 60 days following notice from the Bank to the Borrower
          identifying such event, act or condition; or

               (n) 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

               (o) 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

               (p) 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

               (q)  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;

          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.




                                                        -36-

<page>


                                   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  Loan 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  Loan  specified in such notice shall be
          suspended  and such Loan  shall  instead be  continued  as a Base Rate
          Loan.  Unless  the  Borrower  notifies  the Bank at  least 2  Domestic
          Business  Days  before  the date of any  Euro-Dollar  Loan for which a
          Notice of Continuation or Conversion has previously been given that it
          elects  not to  borrow  on such  date,  such  Loan  shall  instead  be
          continued as a Base Rate Loan.

          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  Loans 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  Loans  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 Loans 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 Loan, together with accrued interest thereon and any amount due
     the Bank pursuant to Section 7.05(a). Concurrently with prepaying each such
     Euro-Dollar  Loan,  the Borrower  shall borrow a Base Rate Loan in an equal
     principal  amount  from the Bank,  and the Bank shall make such a Base Rate
     Loan.

                                                        -36-

<page>


          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:

                    (i) shall  subject the Bank (or its  Lending  Office) to any
               tax, duty or other charge with respect to Euro-Dollar  Loans, the
               Note or its obligation to maintain  Euro-Dollar  Loans,  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
               Loans or any other amounts due under this Agreement in respect of
               Euro-Dollar  Loans or its  obligation to make  Euro-Dollar  Loans
               (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 Loan 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  Loans,  the  Note  or  its  obligation  to  maintain
               Euro-Dollar Loans;

          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  Loan, 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.

                                                        -37-

<page>


               (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.

               (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 Loans  Substituted  for  Affected  Euro-Dollar
     Loans.  If (i) the  obligation of the Bank to make or maintain  Euro-Dollar
     Loans 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  Loans  which  would  otherwise  be  made by the  Bank as
          Euro-Dollar Loans shall be made instead as Base Rate Loans, and

               (b) after each Euro-Dollar Loan has been repaid,  all payments of
          principal which would otherwise be applied to repay  Euro-Dollar Loans
          shall be applied to repay Base Rate Loans 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  Loans   resulting   from  the   Borrower's   election.

                                                        -38-

<page>





          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 Loan on a date other
          than the last day of an Interest Period for such Euro-Dollar Loan;

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

     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 Loan
     (or, in the case of a failure to prepay or borrow,  the Interest Period for
     such  Euro-Dollar  Loan  which  would  have  commenced  on the date of such
     failure to prepay or borrow) at the  applicable  rate of interest  for such
     Euro-Dollar Loan 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 Loan is a Euro-Dollar Loan).

                                  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.

                                                        -39-

<page>


          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.

               (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.

                                                        -40-

<page>


               (b) The Borrower agrees, to the fullest extent it may effectively
          do so under  applicable law, that any holder of a participation in the
          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.

          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 Loan 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 Loan
          or Loans, (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
          Loan,  (iii) the change of the principal of the Loan,  (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
          Loan, or (vi) the release of any guaranty given to support  payment of
          the Loan.  If the Bank  sells a  participating  interest  in the Loan,
          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.

                                                        -41-

<page>


               (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
          Loan 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.

               (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 Loan 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  Loan 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  Loans
          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 Loans;  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).

                                                        -42-

<page>

          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
     the Loan.

          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.

                                                        -43-

<page>

          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.














                          [The remainder of this page intentionally left blank]


                                                        -44-



<PAGE>


          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.

<table>
<caption>

    
                                        <c>
     ATTEST:                                   ATLANTIC AMERICAN CORPORATION



      /s/ Janie L. Ryan                        By:/s/John G. Sample, Jr.  (SEAL)
     ---------------------------------            ------------------------------
        Janie L. Ryan      , Secretary            Name:  John G. Sample, Jr.
     ----------------------                            -------------------------
                                                  Title: Senior Vice President &
           [CORPORATE SEAL]                             ------------------------
                                                        Chief Financial Officer
                                                        ------------------------

                                               4370 Peachtree Street, 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.
                                               Mail Code:  GA 4568
                                               Atlanta, Georgia 30363-1032
                                               Attention:  Ron Edwards
                                               Telecopy number:    (404) 877-6641
                                               Telephone number:  (404) 877-6635

</table>



                                                        -45-



<PAGE>




                                  SCHEDULE 4.05
                                  -------------

                                   LITIGATION
                                   ----------

          Bankers Fidelity Life Insurance Company ("Bankers"),  prior to October
     2002,  retained  the  services  of an  independent  "lead  card"  marketing
     organization  based in Dallas,  Texas.  That  organization has subsequently
     been closed. In connection  therewith,  the Office of the Inspector General
     served Bankers a subpoena.  The subpoena requested documents related to the
     Company's  use of  certain  "lead  cards"  which the OIG  believes  violate
     Section 1140 of the Social Security Act. To date,  Bankers has met with OIG
     attorneys  who  indicated  that the matter  could take as long as a year to
     resolve. Bankers has not been sued, received any complaints related to such
     "lead cards," or had any further conversations with OIG attorneys.





<PAGE>



                                 SCHEDULE 4.08A

                         EXISTING INSURANCE SUBSIDIARIES

          Name of Subsidiary                      Jurisdiction of Incorporation
       -------------------------                --------------------------------
       American Southern Insurance Company                     Kansas

       American Safety Insurance Company                       Georgia

       Association Casualty Insurance Company                  Texas

       Bankers Fidelity Life Insurance Company                 Georgia

       Georgia Casualty & Surety Company                       Georgia




<PAGE>




                                 SCHEDULE 4.08B

                           EXISTING SUBSIDIARIES WHICH
                         ARE NOT INSURANCE SUBSIDIARIES

                                                     Jurisdiction of
                                                    Incorporation or
          Name of Subsidiary                          Organization
       ----------------------                    -------------------------
       Self-Insurance Administrators, Inc.              Georgia

       Association Risk Management
       General Agency Inc.                              Texas

       Atlantic American Statutory Trust I.             Connecticut

       Atlantic American Statutory Trust II             Connecticut


       The following companies are 100%
       -----------------------------------------
       owned by American Southern
       --------------------------
       Insurance Company:
       -----------------

       Premier Adjusting and Claim Services, Inc.       Georgia

       Automobile Safety Management, Inc.               Delaware

       Automated Systems of Georgia, Inc.               Georgia




<PAGE>




                                  SCHEDULE 4.20

                       REDEEMABLE PREFERRED STOCK AND DEBT
                            EXISTING ON CLOSING DATE

<table>
<caption>


                            Principal Amount
      Holder                  Outstanding            Interest Rate        Maturity Date        Amortization
   ------------           --------------------     -----------------    -----------------    ---------------

                         <c>                         <c>                <c>                   <c>
Privately held              $18,042,000                 Variable rate      December 4, 2033       None

Privately held              $23,196,000                 Variable rate      May 15, 2034           None

J. Mack Robinson            $13,400,000 of              9.00%              Not                    None
and Family                  Series B Preferred                            redeemable(1)
                            Stock

Wachovia Bank,              $10,250,000                 Variable rate      June 30, 2008
National
Association
</table>


1  Series B Preferred Stock is redeemable only by the Borrower.




<PAGE>




                                    EXHIBIT A

                                      NOTE

$3,000,000                                                     Atlanta, Georgia
                                                               February 28, 2006

          For  value  received,   ATLANTIC  AMERICAN   CORPORATION,   a  Georgia
     corporation  (the  "Borrower"),  promises  to pay to the order of  WACHOVIA
     BANK,  NATIONAL  ASSOCIATION  (the "Bank"),  for the account of its Lending
     Office, the principal sum of Three Million and No/100 Dollars ($3,000,000),
     or such  lesser  amount as shall equal the unpaid  principal  amount of the
     Loan made by the Bank to the  Borrower  pursuant  to the  Credit  Agreement
     referred to below,  on the dates and in the amounts  provided in the Credit
     Agreement.  The Borrower  promises to pay interest on the unpaid  principal
     amount of this Note on the dates and at the rate or rates  provided  for in
     the Credit  Agreement.  Interest  on any overdue  principal  of and, to the
     extent  permitted by law,  overdue  interest on the principal amount hereof
     shall bear  interest at the  Default  Rate,  as provided  for in the Credit
     Agreement.  All such  payments of principal  and interest  shall be made in
     lawful money of the United States in Federal or other immediately available
     funds at the office of the Bank located at 171 17th Street,  N.W.  Atlanta,
     Georgia 30363,  or such other address as may be specified from time to time
     pursuant to the Credit Agreement.

          The Loan made by the Bank,  the maturity  thereof,  the interest rates
     from time to time  applicable  thereto and all  repayments of the principal
     thereof  shall be recorded by the Bank and,  prior to any transfer  hereof,
     endorsed by the Bank on the schedule  attached hereto, or on a continuation
     of such  schedule  attached to and made a part hereof;  provided,  that the
     failure of the Bank to make,  or any error of the Bank in making,  any such
     recordation or endorsement shall not affect the obligations of the Borrower
     hereunder or under the Credit Agreement.

          This Note is the Note referred to in the Credit  Agreement dated as of
     February  28, 2006  between the  Borrower  and the Bank (as the same may be
     amended or  modified  from time to time,  the  "Credit  Agreement").  Terms
     defined in the Credit  Agreement  are used herein  with the same  meanings.
     Reference is made to the Credit Agreement for provisions for the prepayment
     and the repayment hereof and the acceleration of the maturity hereof.

          The Borrower hereby waives  presentment,  demand,  protest,  notice of
     demand,  protest  and  nonpayment  and any  other  notice  required  by law
     relative  hereto,  except  to the  extent  as  otherwise  may be  expressly
     provided for in the Credit Agreement.

          The Borrower agrees, in the event that this Note or any portion hereof
     is  collected  by law or through an attorney at law, to pay all  reasonable
     costs of collection,  including, without limitation,  reasonable attorneys'
     fees.


                                       A-1




<PAGE>


          IN WITNESS  WHEREOF,  the  Borrower  has  caused  this Note to be duly
     executed under seal, by its duly authorized  officer as of the day and year
     first above written.

                                               ATLANTIC AMERICAN CORPORATION



                                               By:                        (SEAL)
                                                  ------------------------------
                                                  Title:
                                                        ------------------------

                                      A-2







<PAGE>




                                  Note (cont'd)

                         LOANS AND PAYMENTS OF PRINCIPAL
--------------------------------------------------------------------------------



Amount   Amount of    Type of   Interest of   Principal    Maturity     Notation
Date     Loan(1)      Rate      Loan          Repaid       Date         Made By
----     -------      ----      ----          ------       ----         -------



2 i.e., a Base Rate or Euro-Dollar Loan


                                      A-3
<PAGE>



                                     B - 1
                                    EXHIBIT B

                                   [RESERVED]

                                      B-1

<PAGE>




                                    EXHIBIT C

                               CLOSING CERTIFICATE
                                       OF
                          ATLANTIC AMERICAN CORPORATION

          Reference is made to the Credit  Agreement  (the  "Credit  Agreement")
     dated as of February 28, 2006,  between Atlantic American  Corporation (the
     "Borrower")  and  Wachovia  Bank,   National   Association   (the  "Bank").
     Capitalized  terms used herein have the  meanings  ascribed  thereto in the
     Credit Agreement.

          Pursuant    to   Section    3.01(c)    of   the   Credit    Agreement,
     ___________________,   the  duly  authorized  ____________________  of  the
     Borrower,  hereby  certifies to the Bank that:  (i) no Default has occurred
     and is  continuing  on the date hereof;  and (ii) the  representations  and
     warranties of the Borrower  contained in Article IV of the Credit Agreement
     are true on and as of the date hereof.

          Certified as of the ___ day of February, 2006.

                                               ATLANTIC AMERICAN CORPORATION



                                               By:                        (SEAL)
                                                   -----------------------------
                                                   Title:
                                                         -----------------------



                                      C-1



<PAGE>




                                    EXHIBIT D

                          ATLANTIC AMERICAN CORPORATION
                             SECRETARY'S CERTIFICATE
                             -----------------------

          The undersigned, _____________, _______ Secretary of Atlantic American
     Corporation, a Georgia corporation (the "Borrower"),  hereby certifies that
     he has been duly  elected,  qualified  and is acting in such  capacity  and
     that, as such,  he is familiar with the facts herein  certified and is duly
     authorized to certify the same, and hereby further certifies, in connection
     with the  Credit  Agreement  dated as of  February  28,  2006 (the  "Credit
     Agreement")  between the Borrower and Wachovia Bank,  National  Association
     that:

          1. Attached  hereto as Exhibit A is a complete and correct copy of the
     Certificate of Incorporation of the Borrower as in full force and effect on
     the date  hereof as  certified  by the  Secretary  of State of the State of
     Georgia, the Borrower's state of incorporation.

          2. Attached  hereto as Exhibit B is a complete and correct copy of the
     Bylaws of the Borrower as in full force and effect on the date hereof.

          3. Attached  hereto as Exhibit C is a complete and correct copy of the
     resolutions  duly  adopted by the Board of  Directors  of the  Borrower  on
     ___________ __, 2006 approving,  and authorizing the execution and delivery
     of, the Credit  Agreement,  the Note (as such term is defined in the Credit
     Agreement)  and the other  Loan  Documents  (as such term is defined in the
     Credit  Agreement) to which the Borrower is a party.  Such resolutions have
     not been repealed or amended and are in full force and effect, and no other
     resolutions  or consents have been adopted by the Board of Directors of the
     Borrower in connection therewith.

          4.  ____________,  who as  ________________________  of  the  Borrower
     signed the Credit Agreement, the Note and the other Loan Documents to which
     the Borrower is a party, was duly elected,  qualified and acting as such at
     the time he signed the Credit Agreement,  the Note and other Loan Documents
     to which the Borrower is a party, and his signature appearing on the Credit
     Agreement, the Note and the other Loan Documents to which the Borrower is a
     party is his genuine signature.

          IN WITNESS  WHEREOF,  the  undersigned has hereunto set his hand as of
     the ___ day of February, 2006.

                                               ATLANTIC AMERICAN CORPORATION



                                               By:                        (SEAL)
                                                   -----------------------------
                                                   Title:
                                                         -----------------------





                                      D-1

<PAGE>




                                    EXHIBIT E

                         FORM OF COMPLIANCE CERTIFICATE
                         ------------------------------

            To be provided by the Borrower prior to the Closing Date.



                                      E-1

<PAGE>




                                    EXHIBIT F

                            ASSIGNMENT AND ACCEPTANCE
                            -------------------------

                         Dated ________________ __, ____

          Reference  is made to the Credit  Agreement  dated as of February  28,
     2006 (together with all amendments and modifications  thereto,  the "Credit
     Agreement")  between Atlantic American  Corporation,  a Georgia corporation
     (the  "Borrower")  and Wachovia Bank,  National  Association  (the "Bank").
     Terms  defined  in the  Credit  Agreement  are  used  herein  with the same
     meaning.

          Wachovia   Bank,    National    Association   (the   "Assignor")   and
     ____________________ (the "Assignee") agree as follows:

          1. The  Assignor  hereby  sells and assigns to the  Assignee,  without
     recourse to the  Assignor,  and the Assignee  hereby  purchases and assumes
     from the  Assignor,  a  ______%  interest  in and to all of the  Assignor's
     rights and obligations  under the Credit Agreement as of the Effective Date
     (as defined  below)  (including,  without  limitation,  a ______%  interest
     (which on the Effective Date hereof is  $_______________) in the Assignor's
     Commitment  and a ______%  interest  (which on the Effective Date hereof is
     $_______________) in the Loans owing to the Assignor and a ______% interest
     in the Note held by the  Assignor  (which on the  Effective  Date hereof is
     $------------------).

          2. The Assignor (i) makes no representation or warranty and assumes no
     responsibility   with   respect   to   any   statements,    warranties   or
     representations  made in or in connection  with the Credit  Agreement,  any
     other instrument or document  furnished  pursuant thereto or the execution,
     legality, validity,  enforceability,  genuineness,  sufficiency or value of
     the Credit  Agreement,  any other Loan Document or any other  instrument or
     document  furnished  pursuant thereto,  other than that it is the legal and
     beneficial owner of the interest being assigned by it hereunder,  that such
     interest  is free and  clear of any  adverse  claim and that as of the date
     hereof the Commitment  (without giving effect to assignments  thereof which
     have not yet become  effective)  is  $_________________  and the  aggregate
     outstanding  principal  amount of the  Loans  owing to it  (without  giving
     effect to  assignments  thereof  which  have not yet become  effective)  is
     $_________________; (ii) makes no representation or warranty and assumes no
     responsibility  with respect to the financial  condition of the Borrower or
     the  performance  or observance  by the Borrower of any of its  obligations
     under the Credit Agreement, any other Loan Document or any other instrument
     or  document  furnished  pursuant  thereto;  and  (iii)  attaches  the Note
     referred to in paragraph 1 above and requests  that the Bank  exchange such
     Note as follows: [a new Note dated  _______________,  ____ in the principal
     amount of  $________________  payable  to the order of the  Assignee]  [new
     Notes as follows:  a Note dated  _________________,  ____ in the  principal
     amount of $_______________  payable to the order of the Assignor and a Note
     dated  ______________,  ____ in the  principal  amount  of  $______________
     payable to the order of the Assignee].

          3. The Assignee (i) confirms that it has received a copy of the Credit
     Agreement,  together with copies of the financial statements referred to in
     Section  4.04(a)  thereof (or any more recent  financial  statements of the
     Borrower  delivered  pursuant to Section  5.01(a) or (b)  thereof) and such
     other  documents and  information as it has deemed  appropriate to make its
     own  credit  analysis  and  decision  to enter  into  this  Assignment  and
     Acceptance;  (ii) agrees that it will,  independently  and without reliance
     upon the Bank and based on such documents and  information as it shall deem
     appropriate  at the time,  continue  to make its own  credit  decisions  in
     taking or not taking action under the Credit Agreement; (iii) confirms that
     it is a bank or financial institution;  (iv) agrees that it will perform in
     accordance  with their terms all of the  obligations  which by the terms of
     the Credit  Agreement  are required to be performed by it as an assignee of
     the Bank; (v) specifies as its Lending Office (and address for notices) the
     office set forth  beneath  its name on the  signature  pages  hereof,  (vi)
     represents  and warrants that the  execution,  delivery and  performance of
     this  Assignment and  Acceptance  are within its corporate  powers and have
     been duly authorized by all necessary corporate action[, and (vii) attaches
     the forms  prescribed by the Internal  Revenue Service of the United States
     certifying  as  to  the  Assignee's  status  for  purposes  of  determining
     exemption from United States withholding taxes with respect to all payments
     to be made to the Assignee under the Credit  Agreement and the Note or such
     other  documents as are  necessary to indicate  that all such  payments are
     subject to such taxes at a rate reduced by an applicable tax treaty].(1)

          4. The Effective  Date for this  Assignment  and  Acceptance  shall be
     _______________  (the "Effective  Date").  [Following the execution of this
     Assignment  and  Acceptance,  it  will be  delivered  to the  Borrower  for
     execution by the Borrower](1).

          5.  [Upon such  execution  by the  Borrower](2),  [F]rom and after the
     Effective  Date, (i) the Assignee shall be a party to the Credit  Agreement
     and, to the extent rights and  obligations  have been  transferred to it by
     this  Assignment  and  Acceptance,  have the rights and  obligations  of an
     assignee of the Bank  thereunder and (ii) the Assignor shall, to the extent
     its rights and  obligations  have been  transferred to the Assignee by this
     Assignment and Acceptance,  relinquish its rights (other than under Section
     8.03 of the Credit  Agreement) and be released from its  obligations  under
     the Credit Agreement.

          6. [Upon such  execution by the  Borrower](2),  [F]rom and after the
     Effective  Date,  the  Borrower  shall make all  payments in respect of the
     interest  assigned hereby to the Assignee.  The Assignor and Assignee shall
     make all  appropriate  adjustments  in payments  for periods  prior to such
     acceptance by the Borrower directly between themselves.

          7. This Assignment and Acceptance  shall be governed by, and construed
     in accordance with, the laws of the State of Georgia.


     3 If the Assignee is organized under the laws of a jurisdiction outside the
     United States.

     4 If the  Assignee  is not an  Affiliate  of the Bank and a Default has not
     occurred and is continuing..


                                      F-2
<PAGE>




                                             WACHOVIA BANK, NATIONAL ASSOCIATION



                                             By:
                                                --------------------------------
                                                Title:
                                                      --------------------------

                                             [NAME OF ASSIGNEE]



                                             By:
                                                --------------------------------
                                                Title:
                                                      --------------------------

                                             Lending Office:
                                             [Address]

                                             ATLANTIC AMERICAN CORPORATION(1)



                                             By:
                                                --------------------------------
                                                Title:
                                                      --------------------------




1 If the  Assignee  is not an  Affiliate  of the Bank and a Default has not
     occurred and is continuing..


                                      F-3
<PAGE>




                                    EXHIBIT G

                  FORM OF NOTICE OF CONTINUATION OR CONVERSION
                  --------------------------------------------

                          _____________________, 20____



     Wachovia Bank, National Association
     171 17th Street, N.W.
     Mail Code: GA 4568
     Atlanta, Georgia 30363-1032

          Re:  Credit  Agreement (the "Credit  Agreement")  dated as of February
               28, 2006, between Atlantic American  Corporation (the "Borrower")
               and Wachovia Bank, National Association (the "Bank")

     Gentlemen:

          Unless otherwise  defined herein,  capitalized terms used herein shall
     have the meanings attributable thereto in the Credit Agreement.

          This Notice of Continuation or Conversion is delivered to you pursuant
     to Section 2.02 of the Credit Agreement.

          With  respect  to the  [Base  Rate  Loan]  [Euro-Dollar  Loan]  in the
     aggregate  amount of  $___________  [which has an Interest Period ending on
     _____________],  the Borrower  hereby requests that such loan be [converted
     to a] [Base Rate Loan]  [Euro-Dollar  Loan]  [continued as a]  [Euro-Dollar
     Loan] in the aggregate  principal  amount of $__________ to be made on such
     date,  and for interest to accrue  thereon at the rate  established  by the
     Credit Agreement for [Base Rate Loans]  [Euro-Dollar  Loans]. [The duration
     of the Interest  Period with respect  thereto shall be [1 month] [2 months]
     [3 months] [6 months]].

          The Borrower has caused this Notice of  Continuation  or Conversion to
     be executed and delivered by its duly authorized officer this ______ day of
     ____________, 20___.


                                               ATLANTIC AMERICAN CORPORATION



                                               By: _______________________(SEAL)

                                                   Title:_______________________

                                      G-1