March 30, 2000


Acceptance Insurance Companies Inc.
222 S. 15th Street
Suite 600 North
Omaha, Nebraska 68102

Ladies and Gentlemen:

         This letter constitutes an agreement by and between COMERICA BANK, a
Michigan banking corporation (herein called "Bank"), and ACCEPTANCE INSURANCE
COMPANIES INC., a Delaware corporation (herein called "Company"), pertaining to
certain credit which Bank has made and/or may from time to time hereafter make
available to Company.

         In consideration of the issuance by Bank of the letter of credit
described in attached Exhibit "A" (the "Letter of Credit"), and in
consideration of all present and future liabilities, obligations and
indebtedness of Company to Bank, howsoever created, evidenced, existing or
arising, whether direct or indirect, absolute or contingent, joint or several,
now or hereafter existing or arising, or due or to become due (herein
collectively called the "Liabilities"), Company represents, warrants, covenants
and agrees as follows:

         This Agreement supercedes and replaces the Amended and Restated Credit
Agreement dated December 22, 1999 between Company, Comerica Bank, as Agent and
the lenders party thereto ("Credit Agreement"). Upon the execution of this
Agreement, the Credit Agreement, the Guaranty, the Pledge Agreements and the
Subordination and Contribution Agreement (each as defined in the Credit
Agreement) shall be terminated and Bank in its capacity as Agent shall arrange
for the prompt return to Company of the Revolving Credit Notes marked
"Cancelled" and the Pledged Surplus Notes and pledged stock collateral.

         1.       Company hereby represents and warrants, and such
representations and warranties shall be deemed to be continuing representations
and warranties during the entire life of this Agreement, and thereafter, so
long as any Liabilities remain unpaid and outstanding:

         (a)      It is a corporation duly organized, validly existing and in
                  good standing under the laws of the State of Delaware, it is
                  duly qualified and authorized to do business in each
                  jurisdiction where the character of its assets or the nature
                  of its activities makes such qualification necessary, and it
                  has the legal power and authority to own its properties and
                  assets and to carry out its business in each such
                  jurisdiction wherein such qualification is necessary and
                  where the failure to so qualify would have a material adverse
                  effect on the Company; execution, delivery and performance of
                  this Agreement, the Standby Letter of Credit Application and
                  Agreement dated December 20, 1999 and the Security Agreement
                  (Negotiable Collateral) dated March 30, 2000 by Company in
                  favor of Bank (collectively the "Loan Documents") are within
                  Company's corporate powers and authorities, have been duly
                  authorized by all requisite corporate or other necessary or
                  appropriate action, and are not in contravention or violation
                  of law or the terms of Company's Articles of Incorporation or
                  Bylaws, and do not require the consent or approval of any
                  governmental body, agency or authority; and this Agreement,
                  and any other Loan Documents contemplated hereby, when
                  executed, issued and/or delivered by  Company, or by which
                  Company is otherwise bound, will be valid and binding and
                  legally enforceable against Company in accordance with their
                  terms.

         (b)      The execution, delivery and performance of this Agreement,
                  and any other Loan Documents required under or contemplated
                  by this Agreement to which Company is a party or by which it
                  is otherwise bound, and the issuance of this Agreement and
                  any such other Loan Documents by Company, and the
                  transactions contemplated hereby and thereby, are not in
                  contravention or violation of the unwaived terms of any
                  indenture, agreement or undertaking to which Company is a
                  party or by which it or any of its property or assets is
                  bound, and will not result in the creation or imposition of
                  any lien or encumbrance of any nature whatsoever upon any of
                  the property or assets of Company, except to or in favor of
                  Bank.

         (c)      There exists no Event of Default (as hereinafter defined), or
                  any condition or event which, with the giving of notice or
                  the passage of time, or both, would constitute an Event of
                  Default (any such condition or event is herein called a
                  "Default") under any of the Liabilities. The term
                  "Liabilities" shall not include liabilities under the Credit
                  Agreement.

<PAGE>

         2.       So long as the Letter of Credit is outstanding and so long as
any Liabilities remain unpaid and outstanding, Company covenants and agrees
that it shall:

         (a)      Furnish to Bank, or cause to be furnished to Bank, in each
                  case, in form and detail and on a reporting basis
                  satisfactory to Bank, the following:

                  (i)      As soon as available and in any event within 45 days
                           after the end of each of the first three fiscal
                           quarters of each fiscal year of the Company, the
                           consolidated balance sheet of the Company and its
                           Subsidiaries as of the end of such quarter, and the
                           related consolidated statements of income, retained
                           earnings and cash flows of the Company and its
                           Subsidiaries for the period commencing at the end of
                           the previous fiscal year and ending with the end of
                           such quarter, setting forth in each case in
                           comparative form the corresponding figures for the
                           corresponding date or period of the preceding fiscal
                           year, all in reasonable detail and duly certified
                           (subject to year-end audit adjustments)by the chief
                           financial officer of the Company as having been
                           prepared in accordance with generally accepted
                           accounting principles;

                  (ii)     As soon as available and in any event within 120
                           days after the end of each fiscal year of the
                           Company, a copy of the consolidated balance sheets
                           of the Company and its Subsidiaries as of the end of
                           such fiscal year and the related consolidated
                           statements of income, retained earnings and cash
                           flows of the Company and its Subsidiaries for such
                           fiscal year, with an audit report of Deloitte &
                           Touche, or other independent certified public
                           accountants of comparable standing selected by the
                           Company, with respect to such consolidated
                           statements, which report shall be without
                           qualifications unacceptable to the Bank;

                  (iii)    as soon as possible, and in any event within three
                           (3) Business Days after becoming aware of the
                           occurrence or existence of any Default or Event of
                           Default, a written statement of an authorized
                           officer of Company setting forth the details of such
                           Default or Event of Default and the action which
                           Company has taken or caused to be taken, or proposes
                           to take or cause to be taken with respect thereto.

         (b)      Do or cause to be done all things necessary to preserve and
                  keep in full force and effect Company's corporate existence,
                  rights and franchises.

         3.       So long as the Letter of Credit is outstanding, and so long
as any Liabilities remain unpaid and outstanding, Company covenants and agrees
that it shall not, without the prior written consent of Bank:

         (a)      Consolidate with or merge into any other corporation or
                  permit any other corporation to merge into it, except for any
                  merger in which Company is the survivor.

         (b)      Furnish Bank with any certificate or other document that
                  contains any untrue statement of a material fact or omits to
                  state a material fact necessary to make such certificate or
                  document not misleading in light of the circumstances under
                  which it was furnished.

<PAGE>

         4.       The Company shall pay to the Bank Letter of Credit fees as
                  follows:

         (a)      A per annum Letter of Credit fee with respect to the undrawn
                  amount of the Letter of Credit equal to 1% per annum
                  multiplied by the undrawn amount of the Letter of Credit,
                  exclusive of the issuance fee of one-quarter of one
                  percentage point (1/4%)per annum on the face amount thereof
                  to be paid to Bank under paragraph 4(c)hereof.

         (b)      If any change in any law or regulation or in the
                  interpretation thereof by any court or administrative or
                  governmental authority charged with the administration
                  thereof shall either (i) impose, modify or cause to be
                  deemed applicable any reserve, special deposit, limitation or
                  similar requirement against letters of credit issued by, or
                  assets held by, or deposits in or for the account of, Bank or
                  any of the lenders having a risk participation in the Letter
                  of Credit (each a "Participant") or (ii) impose on Bank or
                  any Participant any other condition regarding this Agreement
                  or the Letter of Credit, and the result of any event referred
                  to in clause (i) or (ii) above shall be to increase in an
                  amount deemed material by Bank or any Participant the cost or
                  expense to Bank or any Participant of issuing or maintaining
                  or participating in the Letters of Credit (which increase in
                  cost or expense shall be determined by the Bank's or such
                  Participant's reasonable allocation of the aggregate of such
                  cost increases and expense resulting from such events), then,
                  upon demand by the Bank or such Participant, as the case may
                  be, the Company shall, within ten days following demand for
                  payment, pay to Bank or such Participant, as the case may be,
                  from time to time as specified by the Bank or such
                  Participant, additional amounts which shall be sufficient to
                  compensate the Bank or such Participant for such increased
                  cost and expense, together with interest on each such amount
                  from ten days after the date demanded until payment in full
                  thereof at the Bank's Prime Rate. A certificate as to such
                  increased cost or expense incurred by the Bank or such
                  Participant, as the case may be, as a result of any event
                  mentioned in clause (i) or (ii) above, shall be promptly
                  submitted to the Company and shall be conclusive, absent
                  manifest error, as to the amount thereof. The Bank shall give
                  the Company reasonable notice of any change contemplated by
                  this paragraph if the Bank has advance notice of such change.

         (c)      All payments by the Company to the Bank or any Participant
                  under this paragraph 4 shall be made in United States Dollars
                  and in immediately available funds at the Bank's office
                  located in Detroit, Michigan or such other office of the Bank
                  as may be designated from time to time by written notice to
                  the Company by the Bank. The aforesaid fees shall be
                  nonrefundable under all circumstances, shall be payable
                  quarter annually in arrears on the 1st day of each January,
                  April, July and October (commencing January 1, 2000) and on
                  the expiry date of the Letter of Credit, and shall be
                  calculated on the basis of a 360 day year and assessed for
                  the actual number of days from the date of the issuance
                  thereof to the stated expiration thereof.

         (d)      In connection with the Letter of Credit, the Company shall
                  pay to Bank a letter of credit issuance fee of one-quarter
                  percentage point (1/4%) per annum on the face amount of the
                  Letter of Credit. In addition to the Letter of Credit fees,
                  the Company shall pay, for the sole account of the Bank,
                  standard documentation, administration, payment and
                  cancellation charges assessed by Bank or its issuing office,
                  at the times, in the amounts and on the terms set forth or to
                  be set forth from time to time in the standard fee schedule
                  of Bank's issuing office in effect from time to time.

<PAGE>

         5.       An "Event of Default" shall be deemed to have occurred or
exist under this Agreement upon the occurrence and/or existence of any
"Default" or "Event of Default", as the case may be, set forth in any other
Loan Document, as such term is defined in paragraph 1(a) hereof.

         6.       Upon the occurrence and at any time during the continuance or
existence of any Event of Default, Bank may give notice to Company declaring
all outstanding Liabilities to be due and payable, whereupon all such
Liabilities then outstanding shall immediately become due and payable, without
further notice or demand, and any commitment or obligation, if any, on the part
of Bank to extend credit to or in favor of Company shall immediately terminate.
Further, upon the occurrence or at any time during the continuance or existence
of any Event of Default hereunder, Bank may collect, deal with and dispose of
all or any part of any security in any manner permitted or authorized by the
Michigan Uniform Commercial Code or other applicable law (including public or
private sale), and after deducting expenses (including, without limitation,
reasonable attorneys' fees and expenses), Bank may apply the proceeds thereof
in part or full payment of any of the Liabilities, whether due or not, in any
manner or order Bank elects.  In addition to the foregoing, upon the occurrence
and at any time during the continuance or existence of any Event of Default
hereunder, Bank may exercise any and all rights and remedies available to it as
a result thereof, whether by agreement, by law, or otherwise.

         7.       No forbearance on the part of the Bank in enforcing any of
its rights or remedies under this Agreement or any other Loan Document, nor any
renewal, extension or rearrangement of any payment or covenant to be made or
performed by Company hereunder or any such other Loan Document, shall
constitute a waiver of any of the terms of this Agreement or such Loan Document
or of any such right or remedy.

         8.       This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Michigan.

         9.       All covenants, agreements, representations and warranties by
or on behalf of Company made in connection with this Agreement and any other
Loan Documents shall survive the borrowing hereunder or thereunder and shall be
deemed to have been relied upon by Bank.  All statements contained in any
certificate or other document delivered to Bank at any time by or on behalf of
Company pursuant hereto shall constitute representations and warranties by
Company.

         10.      Company agrees that it will pay all costs and expenses
incurred by Bank in connection with the preparation of this Agreement and any
other Loan Documents contemplated hereby, including, without limitation,
reasonable attorneys' fees and distributions of counsel for the Bank.

         11.      This Agreement shall inure to the benefit of and shall be
binding upon the parties hereto and their respective successors and assigns;
provided, however, that Company shall not assign or transfer any of its rights
or obligations hereunder or otherwise in respect of any of the Liabilities
without the prior written consent of Bank.

<PAGE>
         12.      COMPANY AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY
JURY IS A CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED.  EACH PARTY, AFTER
CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF THEIR
CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT, WAIVE ANY
RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING THE PERFORMANCE OR
ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS AGREEMENT OR THE LIABILITIES.

         13.      Company agrees that any legal action or proceeding with
respect to this Agreement or any other Loan Document or the transactions
contemplated hereby may be brought in any court of the State of Michigan, or in
any court of the United States of America sitting in Michigan, and Company
hereby submits to and accepts generally and unconditionally the non-exclusive
jurisdiction of those courts with respect to its person and property, and
irrevocably consents to the service of process in connection with any such
action or proceeding by personal delivery to Company or by the mailing thereof
by registered or certified mail, postage prepaid to Company, at the address set
forth above. Nothing in this paragraph shall affect the right of the Bank to
serve process in any other manner permitted by law or limit the right of the
Bank to bring any such action or proceeding against Company or property in the
courts of any other jurisdiction. Company hereby irrevocably waives any
objection to the laying of venue of any such suit or proceeding in the above
described courts.

         If the foregoing is acceptable to Company, please indicate such with
the authorized signature(s) of Company as provided below.

                                             Very truly yours,

                                             COMERICA BANK



                                              By:

                                              Its: Vice President
ACCEPTED AND AGREED:

ACCEPTANCE INSURANCE
  COMPANIES INC.


    /S/ Georgia M. Mace
By:______________________

        CFO
Its:______________________

Dated: March 30, 2000


[GRAPHIC OMITTED]

Security Agreement
(Negotiable Collateral)


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



As of March 30, 2000, for value received, the undersigned ("Debtor") grants to
Comerica Bank ("Bank"), a Michigan banking corporation, a continuing security
interest in the Collateral (as defined below) to secure payment when due,
whether by stated maturity, demand acceleration or otherwise, of all existing
and future indebtedness ("Indebtedness") to the Bank of Debtor arising under or
in connection with the Standby Letter of Credit Application and Agreement dated
December 20, 1999 by Debtor in favor of Bank, the letter of credit issued
pursuant thereto, the letter agreement dated March 30, 2000 between Debtor and
Bank or this Agreement (collectively, the "Loan Documents"). Indebtedness
includes without limit any and all obligations or liabilities of Debtor to the
Bank, whether absolute or contingent, direct or indirect, voluntary or
involuntary, liquidated or unliquidated, joint or several, known or unknown;
any and all obligations or liabilities for which Debtor would otherwise be
liable to the Bank were it not for the invalidity or unenforceability of them
by reason of any bankruptcy, insolvency or other law, or for any other reason;
any and all amendments, modifications, renewals and/or extensions of any of the
above; all costs incurred by Bank in establishing, determining, continuing, or
defending the validity or priority of its security interest, or in pursuing its
rights and remedies under this Agreement or under any other agreement between
Bank and Debtor or in connection with any proceeding involving Bank as a result
of any financial accommodation to Debtor; and all other costs of collecting
Indebtedness, including without limit attorney fees. Debtor agrees to pay Bank
all such costs incurred by the Bank, immediately upon demand, and until paid
all costs shall bear interest at the highest per annum rate applicable to any
of the Indebtedness, but not in excess of the maximum rate permitted by law.
Any reference in this Agreement to attorney fees shall be deemed a reference to
reasonable fees, costs, and expenses of both in-house and outside counsel and
paralegals, whether or not a suit or action is instituted, and to court costs
if a suit or action is instituted, and whether attorney fees or court costs are
incurred at the trial court level, on appeal, in a bankruptcy, administrative
or probate proceeding or otherwise.
<PAGE>

1.       Collateral shall mean all of the following property Debtor now or
         later owns or has an interest in, wherever located:

         (a)      specific items listed below:

          time deposit accounts # 385103874363, 385103874371, 385103874397,
          385103874389, 385103874058 in the name of Debtor maintained with
          Bank; and

         (b)      all additions, replacements, substitutions, renewals,
                  interest, distributions, products, and proceeds of or
                  pertaining to the above including, without limit, cash or
                  other property which were proceeds and are recovered by a
                  bankruptcy trustee or otherwise as a preferential transfer
                  by Debtor.

2.       Warranties, Covenants and Agreements. Debtor warrants, covenants and
         agrees as follows:

         2.1      Debtor shall furnish to Bank, in form and at intervals as
                  Bank may request, any information Bank may reasonably request
                  and allow Bank to examine, inspect, and copy any of Debtor's
                  books and records with respect to the Collateral.  Debtor
                  shall, at the request of Bank, mark its records to clearly
                  indicate the security interest of Bank under this Agreement.

         2.2      At the time any Collateral becomes, or is represented to be,
                  subject to a security interest in favor of Bank, Debtor shall
                  be deemed to have warranted that (a) Debtor is the lawful
                  owner of the Collateral and has the right and authority to
                  subject it to a security interest granted to Bank; (b) none
                  of the Collateral is subject to any security interest other
                  than that in favor of Bank and there are no financing
                  statements on file, other than in favor of Bank.

         2.3      Debtor will keep the Collateral free at all times from all
                  claims, liens, security interests and encumbrances other than
                  those in favor of Bank. Debtor will not, without the prior
                  written consent of Bank, sell or transfer, or permit to be
                  sold or transferred, any or all of the Collateral.

         2.4      Debtor will do all acts and will execute or cause to be
                  executed all writings requested by Bank to establish,
                  maintain and continue a perfected and first security interest
                  of Bank in the Collateral.

<PAGE>
         2.5      Debtor will pay within the time that they can be paid without
                  interest or penalty all taxes, assessments and similar
                  charges which at any time are or may become a lien, charge,
                  or encumbrance upon any Collateral, except to the extent
                  contested in good faith and bonded in a manner satisfactory
                  to Bank. If Debtor fails to pay any of these taxes,
                  assessments, or other charges in the time provided above,
                  Bank has the option (but not the obligation) to do so and
                  Debtor agrees to repay all amounts so expended by Bank
                  immediately upon demand, together with interest at the
                  highest lawful default rate which could be charged by Bank on
                  any Indebtedness.

         2.6      [Intentionally Left Blank]

         2.7      If Bank, acting in its sole discretion, redelivers Collateral
                  to Debtor or Debtor's designee for the purpose of (a) the
                  ultimate sale or exchange thereof; or (b) presentation,
                  collection, renewal, or registration of transfer thereof;
                  such redelivery shall be in trust for the benefit of Bank and
                  shall not constitute a release of Bank's security interest in
                  it or in the proceeds or products of it unless Bank
                  specifically so agrees in writing. If Debtor requests any
                  such redelivery, Debtor will deliver with such request a duly
                  executed financing statement in form and substance
                  satisfactory to Bank. Any proceeds of Collateral coming into
                  Debtor's possession as a result of any such redelivery shall
                  be held in trust for Bank and immediately delivered to Bank
                  for application on the Indebtedness. Bank may (in its sole
                  discretion) deliver any or all of the Collateral to Debtor,
                  and such delivery by Bank shall discharge Bank from all
                  liability or responsibility for such Collateral.  Bank, at
                  its option, may require delivery of any Collateral to Bank at
                  any time with such endorsements or assignments of the
                  Collateral as Bank may request.

         2.8      At any time after the occurrence of an Event of Default and
                  without notice, Bank may (a) cause any or all of the
                  Collateral to be transferred to its name or to the name of
                  its nominees; (b) receive or collect by legal proceedings or
                  otherwise all dividends, interest, principal payments and
                  other sums and all other distributions at any time payable or
                  receivable on account of the Collateral, and hold the same as
                  Collateral, or apply the same to the Indebtedness, the manner
                  and distribution of the application to be in the sole
                  discretion of Bank; (c) enter into any extension,
                  subordination, reorganization, deposit, merger or
                  consolidation agreement or any other agreement relating to or
                  affecting the Collateral, and deposit or surrender control of
                  the Collateral, and accept other property in exchange for the
                  Collateral and hold or apply the property or money so
                  received pursuant to this Agreement.

         2.9      Bank may assign any of the Indebtedness and deliver any or
                  all of the Collateral to its assignee, who then shall have
                  with respect to Collateral so delivered all the rights and
                  powers of Bank under this Agreement, and after that Bank
                  shall be fully discharged from all liability and
                  responsibility with respect to Collateral so delivered.

         2.10     Debtor shall defend, indemnify and hold harmless Bank, its
                  employees, agents, shareholders, affiliates, officers, and
                  directors from and against any and all claims, damages,
                  fines, expenses, liabilities or causes of action of whatever
                  kind, including without limit consultant fees, legal
                  expenses, and attorney fees, suffered by any of them as a
                  direct or indirect result of any actual or asserted violation
                  by Debtor of any law.

<PAGE>

3.       Collection of Proceeds.  Debtor agrees to collect and enforce payment
         of all Collateral until Bank shall direct Debtor to the contrary.
         Immediately upon notice to Debtor by Bank and at all times after that,
         Debtor agrees to fully and promptly cooperate and assist Bank in the
         collection and enforcement of all Collateral and to hold in trust for
         Bank all payments received in connection with Collateral and from the
         sale, lease or other disposition of any Collateral, all rights by way
         of suretyship or guaranty and all rights in the nature of a lien or
         security interest which Debtor now or later has regarding Collateral.
         Immediately upon and after such notice, Debtor agrees to (a) endorse
         to Bank and immediately deliver to Bank all payments received on
         Collateral or from the sale or other disposition of any Collateral or
         arising from any other rights or interests of Debtor in the
         Collateral, in the form received by Debtor without commingling with
         any other funds, and (b) immediately deliver to Bank all property in
         Debtor's possession or later coming into Debtor's possession through
         enforcement of Debtor's rights or interests in the Collateral.  Debtor
         irrevocably authorizes Bank or any Bank employee or agent to endorse
         the name of Debtor upon any checks or other items which are received
         in payment for any Collateral, and to do any and all things necessary
         in order to reduce these items to money.  Bank shall have no duty as
         to the collection or protection of Collateral or the proceeds of it,
         nor as to the preservation of any related rights, beyond the use of
         reasonable care in the custody and preservation of Collateral in the
         possession of Bank. Debtor agrees to take all steps necessary to
         preserve rights against prior parties with respect to the Collateral.
         Nothing in this Section 3 shall be deemed a consent by Bank to any
         sale or other disposition of any Collateral.

4.       Defaults, Enforcement and Application of Proceeds.

         4.1      Upon the occurrence of any of the following events (each an
                  "Event of Default"), Debtor shall be in default under this
                  Agreement:

                  (a)      Any failure to pay the Indebtedness or any other
                           indebtedness when due, or such portion of it as may
                           be due, by acceleration or otherwise; or

                  (b)      Any failure or neglect to comply with, or breach of
                           or default under, any term of this Agreement, or any
                           of the other Loan Documents; or

                  (c)      Any warranty, representation, financial statement,
                           or other information made, given or furnished to
                           Bank by or on behalf of Debtor shall be, or shall
                           prove to have been, false or materially misleading
                           when made, given, or furnished; or

                  (d)      The issuance or filing of any attachment, levy,
                           garnishment or the commencement of any proceeding
                           in connection with any Collateral or of any other
                           judicial process of, upon or in respect of Debtor or
                           any Collateral; or

                  (e)      Voluntary suspension of the transaction of business
                           by Debtor, or dissolution, termination of existence,
                           merger, consolidation, insolvency, business failure,
                           or assignment for the benefit of creditors of or by
                           Debtor; or commencement of any proceedings under any
                           state or federal bankruptcy or insolvency laws or
                           laws for the relief of debtors by or against Debtor;
                           or the appointment of a receiver, trustee, court
                           appointee, sequestrator or otherwise, for all or
                           any part of the property of Debtor; or

                  (f)      Bank deems the margin of Collateral insufficient or
                           itself insecure, in good faith believing that the
                           prospect of payment of the Indebtedness or
                           performance of this Agreement is impaired.

<PAGE>

         4.2      Upon the occurrence of any Event of Default, Bank may at its
                  discretion and without prior notice to Debtor declare any or
                  all of the Indebtedness to be immediately due and payable,
                  and shall have and may exercise any one or more of the
                  following rights and remedies:

                  (a)      Exercise all the rights and remedies upon default,
                           in foreclosure and otherwise, available to secured
                           parties under the provisions of the Uniform
                           Commercial Code and other applicable law;

                  (b)      Institute legal proceedings to foreclose upon the
                           lien and security interest granted by this
                           Agreement, to recover judgment for all amounts then
                           due and owing as Indebtedness, and to collect the
                           same out of any Collateral or the proceeds of any
                           sale of it;

                  (c)      Institute legal proceedings for the sale, under the
                           judgment or decree of any court of competent
                           jurisdiction, of any or all Collateral; and/or

                  (d)      Take possession of all or any of the Collateral; and
                           without being responsible for loss to such
                           Collateral, sell or dispose of all or any Collateral
                           at one or more public or private sales or other
                           dispositions, at places and times and on terms and
                           conditions as Bank may deem fit, without any
                           previous demand or advertisement; and except as
                           provided in this Agreement, all notice of sale or
                           other disposition, and advertisement, and other
                           notice or demand, any right or equity of redemption,
                           and any obligation of a prospective purchaser or
                           lessee to inquire as to the power and authority of
                           Bank to sell or otherwise dispose of the Collateral
                           or as to the application by Bank of the proceeds
                           of sale or otherwise, which would otherwise be
                           required by, or available to Debtor under,
                           applicable law are expressly waived by Debtor to the
                           fullest extent permitted.

                           At any sale pursuant to this Section 4.2, whether
                           under the power of sale, by virtue of judicial
                           proceedings or otherwise, it shall not be necessary
                           for Bank or a public officer under order of a court
                           to have present physical or constructive possession
                           of Collateral to be sold. The recitals contained
                           in any conveyances and receipts made and given by
                           Bank or the public officer to any purchaser at
                           any sale made pursuant to this Agreement shall, to
                           the extent permitted by applicable law, conclusively
                           establish the truth and accuracy of the matters
                           stated (including, without limit, as to the amounts
                           of the principal of and interest on the
                           Indebtedness, the accrual and nonpayment of it and
                           advertisement and conduct of the sale); and all
                           prerequisites to the sale shall be presumed to have
                           been satisfied and performed. Upon any sale of any
                           Collateral, the receipt of the officer making the
                           sale under judicial proceedings or of Bank shall be
                           sufficient discharge to the purchaser for the
                           purchase money, and the purchaser shall not be
                           obligated to see to the application of the money.
                           Any sale of any Collateral under this Agreement
                           shall be a perpetual bar against Debtor with respect
                           to that Collateral.

<PAGE>
         4.3      The proceeds of any sale or other disposition of Collateral
                  authorized by this Agreement shall be applied by Bank first
                  upon all expenses authorized by the Uniform Commercial Code
                  and all reasonable attorney fees and legal expenses incurred
                  by Bank; the balance of the proceeds of the sale or other
                  disposition shall be applied in the payment of the
                  Indebtedness, first to interest, then to principal, then to
                  remaining Indebtedness and the surplus, if any, shall be paid
                  over to Debtor or to such other person(s) as may be entitled
                  to it under applicable law. Debtor shall remain liable for
                  any deficiency, which it shall pay to Bank immediately upon
                  demand.

         4.4      Nothing in this Agreement is intended, nor shall it be
                  construed, to preclude Bank from pursuing any other remedy
                  provided by law for the collection of the Indebtedness or for
                  the recovery of any other sum to which Bank may be entitled
                  for the breach of this Agreement by Debtor. Nothing in this
                  Agreement shall reduce or release in any way any rights or
                  security interests of Bank contained in any existing
                  agreement between Debtor and Bank.

         4.5      No waiver of default or consent to any act by Debtor shall be
                  effective unless in writing and signed by an authorized
                  officer of Bank. No waiver of any default or forbearance on
                  the part of Bank in enforcing any of its rights under this
                  Agreement shall operate as a waiver of any other default or
                  of the same default on a future occasion or of any rights.

         4.6      Debtor irrevocably appoints Bank or any agent of Bank (which
                  appointment is coupled with an interest) the true and lawful
                  attorney of Debtor (with full power of substitution) in the
                  name, place and stead of, and at the expense of, Debtor:

                  (a)      to demand, receive, sue for, and give receipts or
                           acquittances for any moneys due or to become due
                           with respect to any Collateral and to endorse any
                           item representing any payment on or proceeds of
                           the Collateral;

                  (b)      to execute and file in the name of and on behalf of
                           Debtor all financing statements or other filings
                           deemed necessary or desirable by Bank to evidence,
                           perfect, or continue the security interests
                           granted in this Agreement; and

                  (c)      to do and perform any act on behalf of Debtor
                           permitted or required under this Agreement.

5.       Miscellaneous.

         5.1      Until Bank is advised in writing by Debtor to the contrary,
                  all notices, requests and demands required under this
                  Agreement or by law shall be given to, or made upon, Debtor
                  at the first address indicated in Section 5.13 below.

         5.2      Debtor will give Bank not less than 90 days prior written
                  notice of all contemplated changes in Debtor's name, chief
                  executive office location, and/or location of any Collateral,
                  but the giving of this notice shall not cure any Event of
                  Default caused by this change.

         5.3      Bank assumes no duty of performance or other responsibility
                  under any contracts contained within the Collateral.

         5.4      Bank has the right to sell, assign, transfer, negotiate or
                  grant participations or any interest in, any or all of the
                  Indebtedness and any related obligations, including without
                  limit this Agreement. In connection with the above,
                  but without limiting its ability to make other disclosures to
                  the full extent allowable, Bank may disclose all documents
                  and information which Bank now or later has relating to
                  Debtor, the Indebtedness or this Agreement, however obtained.
                  Debtor further agrees that Bank may provide information
                  relating to this Agreement or relating to Debtor to the
                  Bank's parent, affiliates, subsidiaries, and service
                  providers.

         5.5      In addition to Bank's other rights, any indebtedness owing
                  from Bank to Debtor can be set off and applied by Bank on any
                  Indebtedness at any time(s) either before or after maturity
                  or demand without notice to anyone.

<PAGE>

         5.6      Debtor waives any right to require the Bank to: (a) proceed
                  against any person or property; (b) give notice of the terms,
                  time and place of any public or private sale of personal
                  property security held from Borrower or any other person, or
                  otherwise comply with the provisions of Section 9-504 of the
                  Uniform Commercial Code; or (c) pursue any other remedy in
                  the Bank's power.  Debtor waives notice of acceptance of this
                  Agreement and presentment, demand, protest, notice of
                  protest, dishonor, notice of dishonor, notice of default,
                  notice of intent to accelerate or demand payment of any
                  Indebtedness, any and all other notices to which the
                  undersigned might otherwise be entitled, and diligence in
                  collecting any Indebtedness.

         5.7      In the event that applicable law shall obligate Bank to give
                  prior notice to Debtor of any action to be taken under this
                  Agreement, Debtor agrees that a written notice given to
                  Debtor at least five days before the date of the act shall be
                  reasonable notice of the act and, specifically, reasonable
                  notification of the time and place of any public sale or of
                  the time after which any private sale, lease, or other
                  disposition is to be made, unless a shorter notice period is
                  reasonable under the circumstances. A notice shall be deemed
                  to be given under this Agreement when delivered to Debtor or
                  when placed in an envelope addressed to Debtor and deposited,
                  with postage prepaid, in a post office or official depository
                  under the exclusive care and custody of the United States
                  Postal Service or delivered to an overnight courier. The
                  mailing shall be by overnight courier, certified, or first
                  class mail.

         5.8      Notwithstanding any prior revocation, termination, surrender,
                  or discharge of this Agreement in whole or in part, the
                  effectiveness of this Agreement shall automatically continue
                  or be reinstated in the event that any payment received or
                  credit given by Bank in respect of the Indebtedness is
                  returned, disgorged, or rescinded under any applicable law,
                  including, without limitation, bankruptcy or insolvency laws,
                  in which case this Agreement, shall be enforceable against
                  Debtor as if the returned, disgorged, or rescinded payment or
                  credit had not been received or given by Bank, and whether or
                  not Bank relied upon this payment or credit or changed its
                  position as a consequence of it.  In the event of
                  continuation or reinstatement of this Agreement, Debtor
                  agrees upon demand by Bank to execute and deliver to Bank
                  those documents which Bank determines are appropriate to
                  further evidence (in the public records or otherwise) this
                  continuation or reinstatement, although the failure of Debtor
                  to do so shall not affect in any way the reinstatement or
                  continuation.

         5.9      This Agreement and all the rights and remedies of Bank under
                  this Agreement shall inure to the benefit of Bank's
                  successors and assigns and to any other holder who derives
                  from Bank title to or an interest in the Indebtedness or any
                  portion of it, and shall bind Debtor and the heirs, legal
                  representatives, successors, and assigns of Debtor.  Nothing
                  in this Section 5.9 is deemed a consent by Bank to any
                  assignment by Debtor.

         5.10     If there is more than one Debtor, all undertakings,
                  warranties and covenants made by Debtor and all rights,
                  powers and authorities given to or conferred upon Bank are
                  made or given jointly and severally.

         5.11     Except as otherwise provided in this Agreement, all terms in
                  this Agreement have the meanings assigned to them in Article
                  9 (or, absent definition in Article 9, in any other Article)
                  of the Uniform Commercial Code, as of the date of this
                  Agreement.  "Uniform Commercial Code" means Act No. 174 of
                  the Michigan Public Acts of 1962, as amended.

         5.12     No single or partial exercise, or delay in the exercise, of
                  any right or power under this Agreement, shall preclude other
                  or further exercise of the rights and powers under this
                  Agreement.  The unenforceability of any provision of this
                  Agreement shall not affect the enforceability of the
                  remainder of this Agreement.  This Agreement constitutes the
                  entire agreement of Debtor and Bank with respect to the
                  subject matter of this Agreement.  No amendment or
                  modification of this Agreement shall be effective unless the
                  same shall be in writing and signed by Debtor and an
                  authorized officer of Bank.  This Agreement shall be governed
                  by and construed in accordance with the internal laws of the
                  State of Michigan, without regard to conflict of laws
                  principles.

<PAGE>

         5.13     Debtor's chief executive office is located and shall be
                  maintained at   Suite 600 North, 222 S.15th Street
                                  __________________________________
                                        STREET ADDRESS

                  Omaha          Nebraska         68102
                  __________________________________________________________
                  CITY           STATE        ZIP CODE            COUNTY

         5.14     A carbon, photographic or other reproduction of this
                  Agreement shall be sufficient as a financing statement under
                  the Uniform Commercial Code and may be filed by Bank in any
                  filing office.

         5.15     This Agreement shall be terminated only by the filing of a
                  termination statement in accordance with the applicable
                  provisions of the Uniform Commercial Code, but the
                  obligations contained in Section 2.10 of this Agreement shall
                  survive termination.

         5.16     The security interest granted under this Agreement is a
                  continuation of the security interest in the Collateral
                  granted by Debtor to Bank under the terms of the Amended and
                  Restated Credit Agreement dated December 22, 1999 and nothing
                  contained herein shall be deemed to adversely affect such
                  security interest (which remains in full force and effect).

6.       DEBTOR AND BANK ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A
         CONSTITUTIONAL ONE, BUT THAT IT MAY BE WAIVED. EACH PARTY, AFTER
         CONSULTING (OR HAVING HAD THE OPPORTUNITY TO CONSULT) WITH COUNSEL OF
         THEIR CHOICE, KNOWINGLY AND VOLUNTARILY, AND FOR THEIR MUTUAL BENEFIT
         WAIVES ANY RIGHT TO TRIAL BY JURY IN THE EVENT OF LITIGATION REGARDING
         THE PERFORMANCE OR ENFORCEMENT OF, OR IN ANY WAY RELATED TO, THIS
         AGREEMENT OR THE INDEBTEDNESS.


                                          Debtor:



                                          ACCEPTANCE INSURANCE COMPANIES INC.
                                          DEBTOR NAME TYPED/PRINTED


                                          By: /S/ Georgia M. Mace
                                             ______________________
                                                 SIGNATURE OF


                                          Its:    CFO
                                              ________________________
                                               TITLE (If applicable)