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                                                                    EXHIBIT 10.1

                             SUBSCRIPTION AGREEMENT

            This Subscription Agreement (this "Agreement") is made and entered
into as of June 30, 2005 between Affirmative Investment LLC, a Delaware limited
liability company (the "Company"), J.C. Flowers I LP, a Delaware limited
partnership ("JCF"), and The Enstar Group, Inc., a Georgia corporation ("Enstar"
and collectively with JCF, the "Investors").

            WHEREAS, JCF and Enstar have caused the Company to be formed as a
limited liability company under the Delaware Limited Liability Company Act as in
effect on the date of this Agreement (currently Chapter 18 of Title 6, Sections
18-101 through 18-1109 of the Delaware Code).

            WHEREAS, the Company has been formed for the purpose of (i)
acquiring shares of common stock of Affirmative Insurance Holdings, Inc.
("Affirmative Common Stock"), (ii) contributing such shares of Affirmative
Common Stock and additional funds to New Affirmative LLC ("New Affirmative") in
exchange for Membership Units of New Affirmative pursuant to the subscription
agreement, dated as of June 13, 2005, by and among New Affirmative, Delaware
Street Capital Master Fund, L.P. and JCF (the "New Affirmative Subscription
Agreement") and (iii) acquiring and holding the Membership Units of New
Affirmative purchased pursuant to the Subscription Agreement.

            WHEREAS, New Affirmative has been formed for the purpose of
acquiring and holding the shares of common stock of Affirmative Insurance
Holdings, Inc. ("Affirmative") to be purchased pursuant to the Stock Purchase
Agreement, dated as of June 14, 2005 (the "Vesta Stock Purchase Agreement"), by
and among New Affirmative, Vesta Insurance Group, Inc., and for certain sections
thereof, Delaware Street Capital Master Fund, L.P. and JCF as well as the shares
of common stock of Affirmative to be contributed by the Company at the Closing
under the Vesta Stock Purchase Agreement (the "Vesta Closing").

            WHEREAS, JCF has entered into the New Affirmative Subscription
Agreement, dated June 13, 2005, pursuant to which, among other things, JCF
agreed to subscribe for membership units of New Affirmative in exchange for the
JCF Investment Amount (as described therein).

            WHEREAS, the Investors desire that JCF's obligation to invest the
JCF Investment Amount (as defined in the New Affirmative Subscription Agreement)
in New Affirmative pursuant to the New Affirmative Subscription Agreement be
assumed by the Company and that JCF's rights under the New Affirmative
Subscription Agreement be assigned to and assumed by the Company.

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            WHEREAS, (i) JCF desires to invest cash in the Company in exchange
for the Flowers Membership Interest (as defined herein) and (ii) Enstar desires
to invest cash in the Company in exchange for the Enstar Membership Interest (as
defined herein).

            NOW, THEREFORE, in consideration of the mutual promises, covenants,
representations and warranties herein contained, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
Company and the Investors, intending to be legally bound, hereby agree as
follows:

            1. Definitions. As used in this Agreement, the following terms shall
have the meanings set forth below:

      "Cost Basis" means, with respect to the shares of Affirmative Common
Stock, the cost basis of such shares, including brokerage fees.

      "Expenses" means all of the Company Expenses incurred on or at any time
prior to the Vesta Closing; provided, that "Expenses" hereunder shall include
JCF's pro rata portion of the Expenses under the New Affirmative Subscription
Agreement.

      "Governmental Entity" means any (A) nation, principality, state,
commonwealth, province, territory, county, municipality, district or other
jurisdiction of any nature, (B) governmental or quasi-governmental entity of any
nature, including any governmental division, subdivision, department, agency,
bureau, branch, office, commission, council, board, instrumentality, officer,
official, representative, organization, taxing authority or unit and any court
or other tribunal (foreign, federal, state or local), (C) Person, or body
exercising, or entitled to exercise, any executive, legislative, judicial,
administrative, regulatory, police, military or taxing authority or power of any
nature, or (D) arbitrator or arbitration panel or similar person or body.

      "Laws" means applicable laws (including common law), statutes, codes,
rules, regulations, orders, ordinances, judgments or decrees or other
pronouncements having the effect of law in the United States or any foreign
country or any state, county, city or other subdivision of any Governmental
Entity.

      "Market Purchase Subscription" means the funding by (i) JCF of at least
eighty-six percent (86%) of any purchase and (ii) Enstar of up to fourteen
percent (14%) of any purchase in the event that the Company purchases shares of
Affirmative Common Stock in the open-market or through one or more negotiated
transactions (any such transaction, a "Market Transaction").

      "Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations in effect from time to time thereunder.

      "Subscription Closing Investment Amount" means the JCF Investment Amount
less the aggregate value of the Cost Basis of the shares of Affirmative Common
Stock purchased by the Company prior to the Subscription Closing. For the
purposes of this

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definition, the per share value of shares of Affirmative Common Stock shall be
equal to the Cost Basis of the Company for each such share, unless otherwise
agreed to in writing by the parties hereto and to the New Affirmative
Subscription Agreement.

      "Vesta Closing Subscription" means, collectively, (i) the investment by
JCF of the Flowers Closing Investment Amount (as defined herein) in the Company
in exchange for the Flowers Closing Membership Interest (as defined herein) and
(ii) the investment by Enstar of the Enstar Closing Investment Amount (as
defined herein) in the Company in exchange for the Enstar Closing Membership
Interest (as defined herein).

            2. Closings.

                  (a) Time and Place.

                        (i) The closing of any Market Purchase Subscription (a
      "Market Purchase Closing") shall occur at such time and place as shall be
      determined by JCF (with prior notice to Enstar).

                        (ii) The closing of the Vesta Closing Subscription (the
      "Subscription Closing") shall occur at the place of the Vesta Closing
      concurrently with or immediately prior to the Vesta Closing or at such
      earlier time and at such place as mutually determined by JCF (with prior
      notice to Enstar).

                  (b) Subscription; Purchase Price. Upon the terms and subject
to the conditions hereinafter set forth:

                        (i) Market Purchase Subscription

                              (1) Except as otherwise as specifically set forth
            herein, at any Market Purchase Closing, Enstar shall have the right,
            but not the obligation, to subscribe for and purchase an additional
            interest in the Company for a purchase price equal to an amount of
            up to fourteen percent (14%) of the Cost Basis plus all other fees
            and expenses of the Affirmative Common Stock purchased by the
            Company in such Market Transaction (any such amount, the "Enstar
            Market Investment Amount"); and the Company shall issue and sell to
            Enstar a membership interest in the Company in an amount that
            reflects such Enstar Market Investment Amount based on the fair
            market value of the Interests (as such term is defined in the LLC
            Agreement) as of such date (any such Interest, an "Enstar Market
            Membership Interest"). Enstar shall notify the Company within two
            (2) business days of receipt of notice of a Market Transaction (A)
            whether it intends to participate in the Market Transaction, (B) to
            what extent it intends to participate in the Market Transaction and
            (C) the amount of the Enstar Market Investment Amount.
            Notwithstanding any of the foregoing of this Section 2(b)(i)(1),
            Enstar acknowledges and agrees that it shall subscribe for and
            purchase an interest of fourteen percent (14%) of the Market
            Purchase of the 1,183,000 shares of Affirmative

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            Common Stock that occurred on June 28, 2005 (i.e., $2,614,344.82)
            (such Market Purchase, the "June 28 Market Purchase," and the
            applicable Enstar Market Investment Amount with respect to the June
            28 Market Purchase, is sometimes referred to herein as the "Enstar
            June 28 Market Investment Amount").

                              (2) At any Market Purchase Closing (including at
            the closing of the June 28 Market Purchase), JCF hereby subscribes
            for and shall purchase, an additional interest in the Company for a
            purchase price equal to (i) the Cost Basis plus all other fees and
            expenses of the Affirmative Common Stock purchased by the Company in
            a Market Transaction minus (ii) the Enstar Market Investment Amount
            (any such amount, the "Flowers Market Investment Amount"); and the
            Company shall issue and sell to JCF, a membership interest in the
            Company in an amount that reflects such Flowers Market Investment
            Amount based on the fair market value of the Interests of the
            Company as of such date (any such interest, a "Flowers Market
            Membership Interest").

                        (ii) Subscription Closing Investment Amount

                              (1) At the Subscription Closing, JCF hereby
            subscribes for and shall purchase, and the Company shall issue and
            sell to JCF, an Interest in the Company (the "Flowers Closing
            Membership Interest" and collectively with each Flowers Market
            Membership Interest, the "Flowers Membership Interest") for a
            purchase price equal to eighty-six percent (86%) of the Subscription
            Closing Investment Amount (such amount the "Flowers Closing
            Investment Amount").

                              (2) At the Subscription Closing, Enstar hereby
            subscribes for and shall purchase, and the Company shall issue and
            sell to Enstar, an Interest in the Company (the "Enstar Closing
            Membership Interest" and collectively with each Enstar Market
            Membership Interest, the "Enstar Membership Interest") for a
            purchase price equal to fourteen percent (14%) of the Subscription
            Closing Investment Amount (such amount the "Enstar Closing
            Investment Amount").

                              (3) Immediately following the Subscription
            Closing, each of JCF and Flowers shall have received Interests in
            the Company in a proportion equal to such parties' Percentage
            Interest (as defined in the LLC Agreement) measured as at such time.

                  (c) Limited Liability Company Agreement. Concurrently with the
execution of this Agreement, the Investors shall execute the limited liability
company agreement in the form attached hereto as Exhibit B (the "LLC
Agreement").

                  (d) Delivery.

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<PAGE>

                        (i) At or prior to each Market Purchase Closing, (A) (1)
      JCF shall deliver to the Company the Flowers Market Investment Amount by
      wire transfer of immediately available funds to an account designated by
      the Company and (2) Enstar shall deliver to the Company the Enstar Market
      Investment Amount, if any, by wire transfer of immediately available funds
      to an account designated by the Company, and (B) the Company shall cause
      (1) the Flowers Market Membership Interest to be reflected in the records
      of the Company and (2) the Enstar Market Membership Interest to be
      reflected in the records of the Company; provided, that in the event that
      Enstar (x) determined to participate in a Market Transaction and (y) does
      not deliver to the Company the Enstar Market Investment Amount at such
      Market Purchase Closing due to the fact that it was not provided notice of
      such Market Transaction at least two (2) business days prior to the Market
      Purchase Closing, JCF shall advance the Enstar Market Investment Amount to
      the Company at the time of any such Market Purchase Closing and, in such
      event, within two (2) business days of written notice of such Market
      Transaction, Enstar shall pay to the Company the Enstar Market Investment
      Amount (without interest) by wire transfer of immediately available funds
      and the Company shall promptly pay to JCF the full amount of the Enstar
      Market Investment Amount. Notwithstanding the foregoing, Enstar shall pay
      to the Company the Enstar June 28 Market Investment Amount by wire
      transfer of immediately available funds on or prior to July 1, 2005.

                        (ii) At or prior to the Subscription Closing, (A) (1)
      JCF shall deliver to the Company the Flowers Closing Investment Amount by
      wire transfer of immediately available funds to an account designated by
      the Company and (2) Enstar shall deliver to the Company the Enstar Closing
      Investment Amount by wire transfer of immediately available funds to an
      account designated by the Company, and (B) the Company shall cause (1) the
      Flowers Closing Membership Interest to be reflected in the records of the
      Company and (2) the Enstar Closing Membership Interest to be reflected in
      the records of the Company; provided, that in the event that Enstar (x)
      determined to participate in a Market Transaction and (y) does not deliver
      to the Company the Enstar Market Investment Amount at such Market Purchase
      Closing due to the fact that it was not provided notice of such Market
      Transaction at least two (2) business days prior to the Market Purchase
      Closing, JCF shall advance the Enstar Market Investment Amount to the
      Company at the time of any such Market Purchase Closing and, in such
      event, within two (2) business days of written notice of such Market
      Transaction, Enstar shall pay to the Company the Enstar Market Investment
      Amount (without interest) by wire transfer of immediately available funds
      and the Company shall promptly pay to JCF the full amount of the Enstar
      Market Investment Amount.

            3. Representations and Warranties and Other Agreements.

                                       5
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                  (a) Representations and Warranties and Agreements of the
Investors. Each Investor, with respect to itself and not the other Investor,
hereby represents and warrants the following to the Company and to the other
Investor:

                        (i) Such Investor, pursuant to this Agreement, is making
      the investment in the Company for investment for its own account and not
      with a view to, or for sale in connection with, any distribution thereof.
      Such Investor (either alone or together with its advisors) has sufficient
      knowledge and experience in financial and business matters so as to be
      capable of evaluating the merits and risks of its investment and is
      capable of bearing the economic risks of such investment. Such Investor is
      an "accredited investor" as defined in Rule 501 of Regulation D
      promulgated under the Securities Act. Such Investor acknowledges that its
      membership interest in the Company is not registered pursuant to the
      Securities Act and that such membership interests may not be transferred,
      except pursuant to an applicable exemption under the Securities Act.

                        (ii) Such Investor is a limited partnership duly
      organized and validly existing under the laws of the State of Delaware or
      a corporation duly organized and validly existing under the laws of the
      State of Georgia, as the case may be, and has all requisite organizational
      power and authority to conduct its business as it is now being conducted
      and to own, lease and operate its property and assets, except where the
      failure to be in good standing or to have such power or authority would
      not, in the aggregate, be reasonably likely to have a material adverse
      effect on the ability of such Investor to perform its obligations
      hereunder.

                        (iii) Such Investor has all requisite authority and
      power to execute and deliver this Agreement and to consummate the
      transactions contemplated hereby. The execution and delivery of this
      Agreement has been, and, as of the Subscription Closing, the consummation
      of the transactions contemplated hereby will have been, duly and validly
      authorized by all required company and other action on the part of such
      Investor and no other company proceedings on the part of such Investor are
      necessary to authorize the execution and delivery of this Agreement. This
      Agreement has been duly and validly executed and delivered by such
      Investor and, assuming this Agreement constitutes the valid and binding
      obligation of the Company, constitutes the valid and binding obligations
      of such Investor, enforceable against each Investor in accordance with its
      terms, except as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or other similar laws now or hereafter in
      effect relating to or affecting creditors' rights generally, including the
      effect of statutory and other laws regarding fraudulent conveyances and
      preferential transfers, and subject to the limitations imposed by general
      equitable principles (regardless whether such enforceability is considered
      in a proceeding at law or in equity).

                        (iv) Neither the execution and delivery of this
      Agreement by such Investor nor the consummation by each Investor of the
      transactions contemplated hereby, in any case will (x) violate any
      provision of

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<PAGE>

      such Investor's organizational documents, in each case as presently in
      effect or (y) require any consent, waiver, approval, license,
      authorization or permit of, or filing with or notification to, any
      Governmental Entity.

                        (v) Except as set forth herein (including pursuant to
      the transactions set forth in the recitals hereto), the Investor has no
      present intention of selling, granting any participation in, or otherwise
      distributing its membership interest in the Company or, to the extent
      applicable, its interest in the Affirmative Common Stock. By executing
      this Agreement, the Investor further represents that, except as set forth
      herein (including pursuant to the transactions set forth in the recitals
      hereto), it does not presently have any contract, undertaking, agreement
      or arrangement with any person to sell, transfer or grant participations
      to such person or to any third person, any of the membership interests or,
      to the extent applicable, its interest in the Affirmative Common Stock
      (other than any such arrangement as may be agreed upon by and between JCF
      and Kevin Callahan).

                  (b) Representations and Warranties of the Company. The Company
represents and warrants to each of the Investors the following:

                        (i) The Company is a limited liability company duly
      organized, validly existing and in good standing under the laws of the
      State of Delaware and has all requisite power and authority to conduct its
      business as it is now being conducted in all material respects and to own,
      lease and operate its property and assets, except where the failure to be
      in good standing or to have such power or authority would not, in the
      aggregate, have a material adverse effect on the Company.

                        (ii) As of the date hereof, no other person has made any
      investment in the Company, and the Company has not engaged in any business
      activities or conducted any operation other than in connection with the
      transactions contemplated hereby. As of the date hereof, there are no
      outstanding rights, options, or warrants to subscribe for, purchase or
      otherwise acquire membership interests in the Company (including
      conversion or preemptive rights and rights of first refusal) or agreements
      for the purchase or acquisition from the Company of any membership
      interests in the Company. There are no outstanding contractual obligations
      of the Company to repurchase, redeem or otherwise acquire any membership
      interests in the Company.

                        (iii) The Company has all requisite authority and power
      to execute and deliver this Agreement and to consummate the transactions
      contemplated hereby. The execution and delivery of this Agreement has
      been, and, as of the Subscription Closing, the consummation of the
      transactions contemplated hereby will have been, duly and validly
      authorized by all required corporate action on the part of the Company and
      no other proceedings on the part of the Company are necessary to authorize
      the execution and delivery of this Agreement. This Agreement has been duly
      and validly executed and delivered by the Company and, assuming this
      Agreement constitutes the valid and binding

                                       7
<PAGE>

      obligation of the Investors, constitutes the valid and binding obligations
      of the Company, enforceable against the Company in accordance with its
      terms, except as limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or other similar laws now or hereafter in
      effect relating to or affecting creditors' rights generally, including the
      effect of statutory and other laws regarding fraudulent conveyances and
      preferential transfers, and subject to the limitations imposed by general
      equitable principles (regardless whether such enforceability is considered
      in a proceeding at law or in equity).

                        (iv) Neither the execution and delivery of this
      Agreement by the Company nor the consummation by the Company of the
      transactions contemplated hereby, in any case will (a) violate any
      provision of the Company's certificate of formation or limited liability
      company agreement, in each case as presently in effect, (b) require any
      consent, waiver, approval, license, authorization or permit of, or filing
      with or notification to, any Governmental Entity.

                        (v) Subject in part to the truth and accuracy of the
      Investors' representations set forth in this Agreement, the offer, sale
      and issuance of the membership interests as contemplated by this Agreement
      are exempt from the registration requirements of the Securities Act.

                        (vi) As of the Subscription Closing, the Company will
      have good title to 50% of the membership interests of New Affirmative,
      free and clear of any material liens, pledges, charges, encumbrances,
      transfer restrictions, options, rights of first refusal, mortgages, deeds
      of trust, easements, leases, servitudes, security interests, restrictions
      and claims of any kind or other encumbrances of any nature whatsoever
      (other than those set forth in the LLC Agreement or the Limited Liability
      Company Agreement of New Affirmative LLC, dated June 13, 2005, as amended
      (a copy of which is attached hereto as Exhibit C)).

            4. Conditions to Performance. The obligations of the Company and the
Investors to effect the transaction contemplated hereby shall be subject to the
fulfillment, or written waiver by the Company or each Investor, at or prior to
the Market Purchase Closing or the Subscription Closing, as applicable, of each
of the following conditions:

                  (a) The Investors' and the Company's representations and
warranties set forth in Section 3(a) and 3(b) hereof, respectively, shall be
true and correct in all material respects as of the Marked Purchase or Closing
Subscription Closing, as applicable, and no statute, rule, regulation or order
of any Governmental Entity shall be in effect which prohibits the Company or
either of the Investors from consummating the transactions contemplated hereby.

            5. Covenants

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                  (a) Further Assurances. Upon the terms and subject to the
conditions herein provided, each of the parties hereto agrees to use its
reasonable best efforts to take or cause to be taken all action, to do or cause
to be done, and to assist and cooperate with the other party hereto in doing,
all things necessary, proper or advisable under applicable Laws and regulations
to consummate and make effective, in the most expeditious manner practicable,
the transactions contemplated by this Agreement, including, but not limited to,
(i) the satisfaction of the conditions precedent to the obligations of any of
the parties hereto; (ii) the defending of any lawsuits or other legal
proceedings, whether judicial or administrative, challenging this Agreement or
the performance of the obligations hereunder or thereunder; and (iii) the
execution and delivery of such instruments, and the taking of such other actions
as the other party hereto may reasonably require in order to carry out the
intent of this Agreement.

                  (b) Guaranty Reimbursement. Enstar agrees that, to the extent
that JCF is required to pay the JCF Percentage (as defined in the Vesta Stock
Purchase Agreement) pursuant to Section 1.1(b) of the Vesta Stock Purchase
Agreement, then JCF shall notify Enstar that it has paid the JCF Percentage, and
Enstar shall pay, within two (2) business days of such notice, to JCF an amount
equal to fourteen percent (14%) of the JCF Percentage by wire transfer in
immediately available funds to an account designated by JCF.

                  (c) Expenses. Each of the Investors and the Company agree that
all Expenses shall be borne in proportion to each such Investor's respective
Percentage Interest in the Company as set forth in the Limited Liability Company
Agreement of Affirmative Investment LLC. Each Investor shall submit to the
Company a detailed account of its Expenses, with supporting documentation
(including evidence of payment of any such Expense by an Investor if any such
payment has been made), within a reasonable period of time of incurring any such
expenses. The Company shall reasonably promptly reimburse each Investor for any
such documented and reasonable Expenses. To the extent that the Company pays any
Expenses, either directly or by reimbursing an Investor, the Company shall
notify the Investors of such payment (setting forth the amounts so paid) and the
Investors shall make a capital contribution to the Company (in accordance with
Section 2.1 of the LLC Agreement) for such payment of Expenses within ten (10)
days of such payment by the Company.

                  (d) Amendments to Other Agreements. Prior to the Vesta
Closing, JCF shall not consent to, or cause, any amendment or modification to
the New Affirmative Subscription Agreement or the Limited Liability Company
Agreement of New Affirmative LLC in a manner that materially and adversely
affects the rights and obligations of Enstar vis-a-vis JCF, without the prior
written consent of Enstar which shall not be unreasonably withheld.

            6. Miscellaneous.

                  (a) Amendments and Modifications; Waivers. This Agreement may
be amended, modified or supplemented, and any provision hereof may be waived, at
any time only by an instrument in writing duly executed by the Investors and the

                                       9
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Company. At any time prior to the Subscription Closing, the Investors, with
respect to any term or provision hereof to which it is entitled to the benefits,
and the Company, with respect to any term or provision hereof to which it is
entitled to the benefits, may (i) extend the time for the performance of any of
the obligations or other acts of the other parties hereto, (ii) waive any
inaccuracies in the representations and warranties contained herein or in any
document, certificate or writing delivered pursuant hereto or (iii) waive
compliance with any obligation, covenant, agreement or condition contained
herein.

                  (b) Effectiveness; Entire Agreement; Assignability. This
Agreement and the LLC Agreement shall constitute the entire agreement among the
parties hereto with respect to the subject matter hereof and shall supersede all
prior agreements and understandings, both written and oral, among such parties
or any of them with respect to the subject matter hereof. This Agreement shall
not be assigned by operation of Law or otherwise; provided, however, that each
of the Investors may its their rights and obligations to any wholly owned
subsidiary of the Investors (unless to do so would restrict or delay the
consummation of the transactions contemplated by this Agreement), but no such
assignment shall relieve such Investors of its obligations hereunder.

                  (c) Applicable Law. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Delaware, regardless of
the Laws that might otherwise govern under applicable principles of conflict or
choice of Law.

                  (d) Submission to Jurisdiction. Each of the parties hereto
hereby irrevocably submit in any action, suit or proceeding arising out of this
Agreement or any of the transactions contemplated hereby to the exclusive
jurisdiction of the United States District Court for the Southern District of
New York and the jurisdiction of any court of the State of New York located in
the City of New York, Borough of Manhattan. The parties hereto waive any and all
objections to the laying of venue of any such litigation in such jurisdiction
and agree not to plead or claim in any such litigation that such litigation has
been brought in an inconvenient forum.

                  (e) Specific Performance. The parties hereto agree that if any
of the provisions of this Agreement were not performed in accordance with their
specific terms or were otherwise breached, irreparable damage would occur, no
adequate remedy at Law would exist and damages would be difficult to determine,
and that the parties hereto shall be entitled to specific performance of the
terms hereof, in addition to any other remedy available at Law or in equity.

                  (f) Notices. All notices, requests, claims, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to have been duly given (i) when received, if delivered
personally, (ii) when transmitted, if by facsimile (which is confirmed) (iii)
upon receipt, if by registered or certified mail (postage prepaid, return
receipt requested) or (iv) the day after it is sent, if sent for next-day
delivery to a domestic address by overnight mail, to the relevant parties hereto
at the following addresses:

                                       10
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            If to JCF, to:

                  J.C. Flowers I LP
                  717 Fifth Avenue, 26th Floor
                  New York, New York 10022
                  Telephone: (212) 404-6808
                  Facsimile: (646) 304-6424
                  Attention: Avshalom Kalichstein, Principal

            If to Enstar, to:

                  The Enstar Group, Inc.
                  401 Madison Avenue
                  Montgomery, Alabama 36104
                  Telephone: (334) 834-5483
                  Facsimile: (334) 834-2530
                  Attention: Cheryl D. Davis

            with a copy to:

                  King & Spalding LLP
                  191 Peachtree Street
                  Atlanta, GA 30303
                  Telephone: (404) 572-4600
                  Facsimile: (404) 572-5100
                  Attention: Janet Taylor, Esq.

            If to the Company, to:

                  Affirmative Investment LLC

                  c/o J.C. Flowers I LP
                  717 Fifth Avenue, 26th Floor
                  New York, New York 10022
                  Telephone: (212) 404-6808
                  Facsimile: (646) 304-6424
                  Attention:  Avshalom Kalichstein, Principal

                  The Enstar Group, Inc.
                  401 Madison Avenue
                  Montgomery, Alabama 36104
                  Telephone: (334) 834-5483
                  Facsimile: (334) 834-2530
                  Attention: Cheryl D. Davis

            with a copy to:

                                       11
<PAGE>

                  Skadden, Arps, Slate, Meagher & Flom LLP
                  Four Times Square
                  New York, New York 10036
                  Telephone: (212) 735-3000
                  Facsimile: (212) 735-2000
                  Attention: Lou R. Kling, Esq.
                           Thomas W. Greenberg, Esq.

or to such other address as the Person to whom notice is given may have
previously furnished to the others in writing in the manner set forth above
(provided that notice of any change of address shall be effective only upon
receipt thereof).

                  (g) Counterparts. This Agreement may be executed in two or
more counterparts, each of which shall be deemed to be an original, but all of
which shall constitute one and the same instrument.

                  (h) Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, each of which shall remain in full force
and effect. If any one or more of the provisions contained in this Agreement or
in any other instrument referred to herein shall, for any reason, be held to be
invalid, illegal or unenforceable in any respect, then to the maximum extent
permitted by Law, such invalidity, illegality or unenforceability shall not
affect any other provision of this Agreement or any other such instrument.
Furthermore, in lieu of any such invalid or unenforceable term or provision, the
parties hereto intend that there shall be added as a part of this Agreement a
valid and enforceable provision as similar in terms and commercial effect to
such invalid or unenforceable provision as shall be possible.

                  (i) Parties in Interest. This Agreement shall be binding upon
and inure solely to the benefit of each party hereto and nothing in this
Agreement, express or implied, is intended by or shall confer upon any other
Person or Persons any rights, benefits or remedies of any nature whatsoever
under or by reason of this Agreement. Any Person who is a beneficiary of any of
the aforementioned provisions shall be entitled to enforce his rights
thereunder.

                  (j) Third Party Beneficiaries. Nothing expressed or implied in
this Agreement is intended or shall be construed to confer upon or give to any
third party any rights or remedies against any party hereto.

                  [Remainder of Page Intentionally Left Blank]

                                       12
<PAGE>

IN WITNESS WHEREOF, JCF, Enstar and the Company have executed this Agreement as
of the date first above written.

                                      AFFIRMATIVE INVESTMENT LLC

                                      By: /s/ Avshalom Kalichstein
                                          --------------------------
                                          Name: Avshalom Kalichstein
                                          Title: Authorized Person

                                      J.C. FLOWERS I LP

                                      By:  JCF Associates I LLC,
                                           its General Partner

                                      By: /s/ Avshalom Kalichstein
                                          --------------------------
                                          Name: Avshalom Kalichstein
                                          Title: Principal

                                      THE ENSTAR GROUP, INC.

                                      By: /s/ Nimrod T. Frazer
                                          --------------------------
                                          Name: Nimrod T. Frazer
                                          Title: Chairman & CEO

<PAGE>

                                   EXHIBIT A
                               INVESTMENT AMOUNTS

<TABLE>
<CAPTION>
       INVESTOR          INVESTMENT AMOUNT   PERCENTAGE INTEREST
----------------------   -----------------   -------------------
<S>                      <C>                 <C>
J.C. Flowers I LP        $   16,059,546.78            86%
The Enstar Group, Inc.   $    2,614,344.82            14%
</TABLE>

<PAGE>

                                   EXHIBIT B
                                 LLC AGREEMENT