LOAN AGREEMENT


          LOAN AGREEMENT dated as of September  14, 1998 between
MOTOR CLUB OF AMERICA, a New Jersey corporation (the "Borrower"),
and DRESDNER BANK AG, acting through its New York and Grand
Cayman Branches (the "Bank").


                           ARTICLE I

               DEFINITIONS; RULES OF CONSTRUCTION

          SECTION 1.1  Definitions.  The capitalized terms used
in this Agreement shall have the following meanings, unless
otherwise defined herein.

          "Additional Costs" shall have the meaning assigned to
such term in Section 4.1 of this Agreement.

          "Affiliate" of a referenced Person shall mean
(a) another Person controlling, controlled by or under common
control with such referenced Person, (b) any other Person
beneficially owning or controlling ten percent (10%) or more of
the outstanding voting securities or rights of or the interest in
the capital, distributions or profits of the referenced Person,
or (c) any officer (exclusive of a "ministerial officer" with no
authority to bind a Person) or, director of, or partner in, the
referenced Person.  The terms "control", "controlling",
"controlled" and the like shall mean the direct or indirect
possession of the power to direct or cause the direction of the
management or policies of a Person or the disposition of its
assets or properties, whether through ownership, by contract,
arrangement or understanding, or otherwise.

          "Agreement" shall mean this Loan Agreement, as the same
from time to time may be extended, amended, supplemented, waived
or modified.

          "Applicable Law" shall mean (i) all applicable laws and
treaties, judgments, decrees, injunctions, writs and orders of
any court, arbitrator or governmental agency or authority and
rules, regulations, orders, licenses and permits of any
governmental body, instrumentality, agency or authority, and
(ii) any of the foregoing.

          "Applicable Margin Rate" shall mean, in respect of the
calculation of interest on any Eurodollar Loans, 2.00%.
          "Authorized Control Level Risk-Based Capital" shall
mean, with respect to any Subsidiary of the Borrower which is an
insurance company, the number which appears on page 21 (Five-Year
Historical Data, first of two pages), line 26, column 1 of such
Person's most recently filed Convention Statement.

          "Base Rate"  shall mean a fluctuating rate of interest
per annum equal to the higher of:

          (a)  the rate of interest most recently announced by
     the Bank at its Booking Office as its base rate; and

          (b)  the Federal Funds Rate, plus 1/2 of 1% per annum.

The Base Rate is not necessarily intended to be the lowest rate
of interest determined by the Bank in connection with extensions
of credit.  Changes in the rate of interest on any Loan
maintained as a Base Rate Loan shall take effect simultaneously
with each change in the Base Rate.  The Bank shall give notice
promptly to the Borrower of changes in the Base Rate.

          "Base Rate Loan" shall mean a Loan bearing interest
based on the Base Rate.

          "Booking Office" shall mean, with respect to any
Eurodollar Loans or Base Rate Loans, the office of the Bank or an
Affiliate designated as its "Eurodollar Lending Office" or "Base
Rate Lending Office", respectively, in Schedule 1 to this
Agreement; provided, the Bank may designate a different Booking
Office with respect to its Eurodollar Loans or Base Rate Loans
from time to time upon notice to the Borrower.

          "Borrower" shall have the meaning assigned to such term
in the introduction to this Agreement.

          "Business Day" shall mean any day other than a
Saturday, Sunday or a day when banks are authorized or required
by law to close in New York, New York and, if such day relates to
a borrowing of, a payment or prepayment of principal of, or
interest on, or a conversion of or into, or an Interest Period
for, a Eurodollar Loan or a notice by the Borrower with respect
to any such borrowing, payment, prepayment, conversion or
Interest Period, any day which is also a London Banking Day.

          "Capital Lease" shall mean as applied to any Person,
any lease of any property (whether real, personal or mixed) by
such Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of such
Person.

          "Capital Stock" shall mean with respect to any Person,
any capital stock of such Person, regardless of class or
designation, and all warrants, options, purchase rights,
conversion or exchange rights, voting rights, calls or claims of
any character with respect thereto.
          "Change of Control" shall mean a state of facts where
Mr. Archer McWhorter, Mr. William E. Lobeck and Mr. Alvin E.
Swanner, directly or indirectly, shall cease to own in the
aggregate at least 25% of the issued and outstanding shares of
Capital Stock of the Borrower having ordinary voting power (other
than stock having such power only by reason of contingency) to
elect directors of the Borrower.
          "Code" shall mean the Internal Revenue Code of 1986, as
amended.

          "Commitment" means the commitment of the Bank to make
Loans hereunder in an aggregate amount outstanding equal to
$3,000,000, as the same may be lowered in accordance with the
terms hereof.

          "Commitment Expiration Date" shall mean September  14,
2001, or such later date as shall be agreed to in writing by the
Borrower and the Bank.

          "Commitment Fee" shall have the meaning assigned to
such term in Section 10.1 hereof.

          "Commitment Fee Percentage" shall mean 0.35% per annum.
          "Consolidated Leverage Ratio" shall mean the quotient
of (i) the aggregate outstanding Indebtedness of the Borrower and
its Subsidiaries divided by (ii) the sum of (x) the aggregate of
all Indebtedness of the Company and its Subsidiaries plus (y) the
aggregate stockholder equity of the Borrower and its Subsidiaries
computed in accordance with GAAP (in all cases, after elimination
of all duplicative and intercompany items).
          "Convention Statement" shall mean the financial
statements and accompanying schedules and exhibits filed by any
insurance company Subsidiary of the Borrower with its applicable
state insurance regulators, substantially in the form heretofore
filed by such Person (or such other form as may in the future be
required by applicable state insurance regulatory authorities),
and prepared in accordance with statutory accounting principles. 
References to line items on a Convention Statement shall be
deemed changed to the appropriate line items in the event of a
change on the format of such Convention Statement from that in
existence on the date hereof.
          "Contingent Obligation" shall mean any contractual
obligation, contingent or otherwise, of one Person with respect
to any Indebtedness, obligation or liability of another,
including, without limitation, direct or indirect guaranties,
endorsements (except for collection or deposit in the ordinary
course of business), notes co-made or discounted, recourse
agreements, keep-well agreements, agreements to purchase or
repurchase such Indebtedness, obligation or liability or any
security therefor or to provide funds for the payment or
discharge thereof, agreements to maintain solvency, assets, level
of income, or other financial condition, and agreements to make
payment other than for value received.

          "Credit Expiration Date" shall mean the Commitment
Expiration Date or such earlier date as provided in Section 9.

          "Default" shall mean an event which with notice or
lapse of time, or both, would constitute an Event of Default.

          "Dollars" and "$" shall mean lawful money of the United
States of America.

          "Effective Date" shall mean the first date on which the
conditions precedent set forth in Section 5 have been satisfied.

          "Environmental Laws" means any and all applicable
Federal, state, and local statutes, laws, regulations,
ordinances, rules, judgments, orders or decrees relating to
pollution and the protection of the environment or the release of
any materials into the environment, including but not limited to
those related to hazardous substances or wastes, air emissions
and discharges to public water or sewer systems.

          "ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.

          "ERISA Affiliate" shall mean (i) any corporation which
is a member of the same controlled group of corporations (within
the meaning of Section 414(b) of the Code) as the Borrower;
(ii) a trade or business (whether or not incorporated) which is
under common control (within the meaning of Section 414(c) of the
Code) with the Borrower; and (iii) a member of the same
affiliated service group (within the meaning of Section 414(m) of
the Code) as the Borrower, as any corporation described in clause
(i) above or as any trade or business described in clause (ii)
above.

          "Eurodollar Loan" shall mean a Loan bearing interest
based on the Eurodollar Rate.

          "Eurodollar Rate" shall mean, with respect to any
Interest Period for any Eurodollar Loan, the rate per annum
determined by the Bank to be equal to the quotient (rounded
upwards, if necessary, to the next higher 1/16 of 1%) of (y) the
rate per annum at which deposits in Dollars are offered by the
Bank in immediately available funds at its Eurodollar Lending
Office specified in Schedule 1 to this Agreement in an amount
comparable to the principal amount of such Eurodollar Loan for a
period equal to such Interest Period at approximately 10:00 A.M.,
New York City time, on the date two Business Days before the
first day of such Interest Period, divided by (z) a number equal
to 1.00 minus the Eurodollar Reserve Percentage.  

          "Eurodollar Reserve Percentage" shall mean, for any
day, the maximum percentage (expressed as a decimal) specified
from time to time by the Board of Governors of the Federal
Reserve System (or any successor) for determining the maximum
reserve requirements (including, but not limited to,
supplemental, marginal and emergency reserves) with respect to
eurocurrency funding (currently referred to as "Eurocurrency
Liabilities") of a member bank in such System.  The Eurodollar
Rate shall be adjusted automatically with respect to any
Eurodollar Loan outstanding on the effective date of any change
in the Eurodollar Reserve Percentage, as of such effective date.

          "Event of Default" shall mean any of the Events of
Default described in Section 9 of this Agreement.

          "Facility Documents" shall mean this Agreement, the
Note and each other agreement, document or instrument delivered
in connection herewith or therewith.

          "Federal Bankruptcy Code" shall mean Title 11 of the
United States Code, Sections 101, et seq., and the rules and
regulations promulgated thereunder, as amended from time to time. 

          "Federal Funds Rate" shall mean, for any period, a
fluctuating interest rate per annum equal for each day during
such period to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers, as published for such
day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the Bank from three Federal funds
brokers of recognized standing selected by it.

          "GAAP" shall mean generally accepted accounting
principles in the United States of America in effect from time to
time.

          "Governmental Authority" shall mean any nation or
government, any state or other political subdivision thereof and
any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to
government.

          "Hazardous Material" means any and all toxic or
hazardous substances, materials, wastes, pollutants or
contaminants regulated, restricted or controlled under any
Environmental Law.

          "Highest Lawful Rate" shall mean, the maximum
nonusurious interest rate, if any, that at any time or from time
to time may be contracted for, taken, reserved, charged or
received on the Loans or on any of the Borrower's obligations
under this Agreement under laws applicable to the Bank which are
presently in effect or, to the extent allowed by law, under such
applicable laws which may hereafter be in effect and which allow
a higher maximum nonusurious interest rate than applicable laws
now allow.

          "Indebtedness" shall mean with respect to any Person,
at any time, (a) all indebtedness, obligations or other
liabilities of such Person (i) for borrowed money or evidenced by
debt securities, debentures, acceptances, notes or other similar
instruments, (ii) under profit payment agreements (other than
profit-sharing or bonus plans or agreements for employees) or in
respect of obligations to redeem, repurchase or exchange any
securities of such Person or to pay dividends in respect of any
stock, (iii) with respect to letters of credit issued for such
Person's account, (iv) to pay the deferred purchase price of
property or services, (v) in respect of Capital Leases or
(vi) which are Contingent Obligations, (b) all indebtedness,
obligations or other liabilities of such Person or others secured
by a Lien on any property of such Person, whether or not such
indebtedness, obligations or liabilities is or are assumed by
such Person, all as of such time, (c) all indebtedness,
obligations or other liabilities of such Person in respect of
currency hedging agreements, repurchase agreements, swap
agreements and similar arrangements, in each case net of
liabilities owed to such Person by the counterparties thereon,
and (d) all preferred stock and hybrid securities subject (upon
the occurrence of any contingency or otherwise) to mandatory
redemption, puts or calls.

          "Interest Period" shall mean with respect to any
Eurodollar Loan, each period commencing on the date such
Eurodollar Loan is made or converted from a Base Rate Loan or the
last day of the next preceding Interest Period with respect to
such Eurodollar Loan and ending on the same day in the first,
second, third, sixth, ninth (if available) or twelfth (if
available) (as selected by the Borrower) calendar month
thereafter, except that each such Interest Period which commences
on the last Business Day of a calendar month (or on any day for
which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last
Business Day of the appropriate subsequent calendar month.

          Notwithstanding the foregoing, (i) no Interest Period
may extend beyond the Credit Expiration Date; (ii) each Interest
Period which would otherwise end on a day which is not a Business
Day shall end on the next succeeding Business Day (or, if such
next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); (iii) each
Interest Period which would otherwise commence before and end
after the Credit Expiration Date shall end on the Credit
Expiration Date; and (iv) notwithstanding clauses (i) and (iii)
above, if any Interest Period would have a duration of less than
one month, such Eurodollar Loans shall be Base Rate Loans during
such period.

          "Lien" shall mean any mortgage, deed of trust, pledge,
security interest, encumbrance, lien or charge of any kind
(including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in
the nature thereof, and the filing of or agreement to give any
financing statement under the UCC of any jurisdiction in
connection with any of the foregoing).

          "Loan" shall mean each loan made pursuant to Section
2.1 hereof.

          "Loan Request" shall have the meaning assigned to such
term in Section 2.2 of this Agreement.

          "London Banking Day" shall mean any day on which
dealings in Dollar deposits are carried out in the London
interbank markets.

          "Material Adverse Effect" means, (a) a material adverse
effect on the assets, business, operations, properties or
condition (financial or otherwise) of the Borrower and its
Subsidiaries, taken as a whole, (b) a material adverse effect on
the ability of the Borrower to perform any of its obligations
under this Agreement or any Facility Document, or (c) an adverse
effect on the validity or enforceability of this Agreement or any
Facility Document (including the rights and remedies of the Bank
hereunder and thereunder).

          "Multiemployer Plan" shall mean a "multiemployer plan"
as defined in Section 4001(a)(3) of ERISA which is, or was at any
time during the five preceding years, contributed to by the
Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
for the benefit of its employees.

          "Note" shall mean the promissory note issued by the
Borrower and payable to the order of the Bank evidencing the
Loans, made by the Bank as provided herein, in substantially the
form attached as Exhibit A to this Agreement.

          "Notice of Conversion or Continuation" shall mean a
written notice, in substantially the form of Exhibit D to this
Agreement, delivered by the Borrower to the Bank pursuant to
Section 3.1(c) of this Agreement.

          "PBGC" shall mean Pension Benefits Guaranty Corporation
or any successor thereto.

          "Person" shall mean an individual, a corporation, a
partnership, a joint venture, a limited liability company, a
trust or unincorporated organization, a joint stock company or
other similar organization, a government or any political
subdivision thereof, a court, or any other legal entity whether
acting in an individual, fiduciary or other capacity.

          "Plan" shall mean any "employee benefit pension plan"
as defined in Section 3(2) of ERISA (including a Multiemployer
Plan) established or maintained, as to which contributions have
been made, by the Borrower, any Subsidiary or any ERISA Affiliate
for its respective employees .

          "Post-Default Rate" shall mean the Base Rate as in
effect from time to time plus two percent (2.0%).

          "Property" shall mean all types of real, personal
tangible, intangible or mixed property, including fixtures.

          "Regulatory Change" shall mean any change in United
States federal, state or foreign laws or the making of any
interpretations, directives or requests applying to a class of
banks, including the Bank, under any United States federal,
state, or foreign laws or regulations (whether or not having the
force of law) by any court or governmental or monetary authority
charged with the interpretation or administration thereof.

          "Reportable Event" shall mean any event described in
Section 4043(c) of ERISA.

          "Subsidiary" shall mean as to any Person, (i) a
corporation of which shares of stock or other ownership interests
having ordinary voting power (other than stock having such power
only by reason of the happening of a contingency) to elect a
majority of the board of directors or other managers of such
corporation are at the time owned, or the management of which is
otherwise controlled, directly or indirectly, through one or more
intermediaries, or both, by such Person, (ii) a limited or
general partnership of which such Person or any of its
subsidiaries is a general partner, or (iii) a business trust or
limited liability company in which such Person holds a majority
interest comparable to that for a corporation as described above.

          "Taxes" shall mean all taxes, levies, imposts, duties,
or other charges of whatsoever nature imposed by any government
or any political subdivision or taxing authority thereof, and any
liability (including penalties and interest) arising therefrom or
with respect thereto, except for any taxes (other than United
States withholding taxes) on the overall net income of the Bank
or any similar tax in lieu of an overall net income tax on the
Bank imposed by any jurisdiction with respect to which such
Lender is subject to such tax without regard to the transactions
contemplated by the Facility Documents.

          "Termination Event" shall mean (i) any Reportable Event
with respect to a Plan, as to which the requirements of Section
4043(a) of ERISA have not been waived by the PBGC (provided that
a failure to meet the minimum funding standard of Section 302 of
ERISA shall be a reportable event regardless of the issuance of
any waivers by the PBGC); (ii) the filing of a notice of intent
to terminate any Plan under Section 4041 of ERISA or any other
event or condition which might constitute grounds under Section
4042 of ERISA for the termination of, or for the appointment of a
trustee to administer, any Plan; (iii) the complete or partial
withdrawal of the Borrower or any Subsidiary or any ERISA
Affiliate from a Multiemployer Plan or the receipt by the
Borrower or any Subsidiary or any ERISA Affiliate of notice from
a Multiemployer Plan that it is in reorganization or insolvency
pursuant to Section 4241 or 4245 of ERISA or that it intends to
terminate or has terminated under Section 4041A of ERISA; (iv)
the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Borrower or any Subsidiary or any
ERISA Affiliate to enforce Section 515 of ERISA; or (v) any event
or circumstance under which the Borrower or any Subsidiary or any
ERISA Affiliate may reasonably be expected to incur any liability
under Title IV of ERISA with respect to any Plan other than
liabilities to make contributions and pay premiums in the
ordinary course.

          "Total Adjusted Capital" shall mean, with respect to
each Subsidiary of the Borrower which is an insurance company, at
the time of any determination thereof, the number which appears
on page 21 (Five-year Historical Data, first of two pages), line
25, column 1 of such Person's most recently filed Convention
Statement.

          "Year 2000 Problem" shall mean any significant risk
that computer hardware, software or equipment containing embedded
microchips essential to the business or operations of the
Borrower or any of its Subsidiaries will not, in the case of
dates or time periods occurring after December 31, 1999, function
at least as effectively and reliably as in the case of times or
time periods occurring before January 1, 2000, including the
making of accurate leap year calculations.

          SECTION 1.2. Rules of Construction.  For all purposes
of this Agreement, except as otherwise expressly provided or
unless the context otherwise requires (a) each use in this
Agreement of a singular version of a pronoun shall be deemed to
include references to the plural, and vice versa, (b) Article and
Section headings are for convenience of reference only and shall
not affect the construction of this Agreement, and (c) references
to "this section" or words of similar import shall be deemed to
refer to the entire section and not to a particular subsection,
and references to "hereunder", "herein" or words of similar
import shall be deemed to refer to this entire Agreement and not
to the particular section or subsection.


                           ARTICLE II

                           THE LOANS

          SECTION 2.1  Loans.  (a) Subject to the terms and
conditions set forth in this Agreement, the Bank hereby agrees
that it will, from time to time prior to the Credit Expiration
Date, make Loans to the Borrower.  Anything contained herein to
the contrary notwithstanding, the Bank shall not be obligated in
any manner to make any Loan in a principal amount which together
with any other Loans to be made by the Bank on such day, would
exceed the positive result of (i) the Commitment, less (ii) the
aggregate principal amount of all Loans outstanding on the
proposed date of the making of such Loan, after giving effect to
all other proposed Loans on such day.  The Bank shall, subject to
the terms and conditions of this Agreement, make the proceeds of
such borrowing available to the Borrower not later than
4:00 P.M., New York City time, by disbursing such funds in
Dollars to the Borrower in accordance with the disbursement
instructions set forth in the Loan Request delivered to the Bank.


          (b)  Each Loan Request, to be effective, shall include
a computation demonstrating compliance with the limits set forth
in the second sentence of paragraph (a) hereof.

          SECTION 2.2  Loan Requests.  The Borrower shall in
respect of all Loans deliver to the Bank a written request, in
substantially the form of Exhibit C to this Agreement (a "Loan
Request") (i) for a Eurodollar Loan, not later than 11:00 A.M.,
New York City time, at least three Business Days prior to the
date of the proposed borrowing and (ii) for a Base Rate Loan, not
later than 10:00 A.M., New York City time, on the day of the
proposed borrowing.  The Loan Request shall specify (i) the date
of the proposed borrowing (which shall be a Business Day),
(ii) the principal amount of the Loan to be made on that date,
(iii) whether such Loan is a Base Rate Loan or a Eurodollar Loan,
(iv) if a Eurodollar Loan, the Interest Period requested by the
Borrower therefor (which shall be one, two, three, six, nine or
twelve months), and (v) the disbursement instructions for the
proceeds of such Loan.  Each Loan Request submitted by the
Borrower shall be an affirmation by the Borrower that (x) the
representations and warranties of the Borrower set forth in
Article VI of this Agreement are on the date of such Loan
Request, and will be on the date of the proposed borrowing, true
and correct as if made on and as of such dates (other than with
respect to financial statement information which shall be true
and correct as of the date indicated), and (y) no Default or
Event of Default shall have occurred and be continuing on such
dates.  Any Loan Request given pursuant hereto shall be
irrevocable.

          SECTION 2.3  Notes.  Each Loan made by the Bank shall
be evidenced by, and recorded on, the Note.  The Borrower hereby
authorizes the Bank to make the appropriate notations on the
schedule annexed to the Note for purposes of recording any Loan
made thereon and any payments or prepayments made with respect
thereto (provided that any failure by the Bank to make any such
notation shall not affect the obligations of the Borrower
hereunder or under the Note in respect of any Loan).  The
Borrower agrees that each notation made by the Bank on the
schedule annexed to a Note shall constitute prima facie evidence
of the accuracy of such information.  The aggregate principal
amount of the Loans made by the Bank outstanding at any time
shall constitute the principal amount owing on the Note payable
to the Bank at such time.

          SECTION 2.4  Reductions of the Commitment.  (a) The
Borrower may from time to time reduce the Commitment by
$1,000,000 or a multiple thereof upon two Business Days' written
notice to the Bank.  Any such reduction shall be permanent and
irrevocable, provided that the amount of the Commitment after
giving effect to such reduction of the Commitment shall at no
time be less than the aggregate principal amount of all
outstanding Loans.

          (b)  Upon the occurrence of the Credit Expiration Date,
the Commitment shall be reduced to zero.

          (c)  After the effective date of any reduction pursuant
to Section 2.4(a) hereof, the term "Commitment" shall mean the
Commitment in effect immediately prior to such reduction less the
amount of such reduction of the Commitment.

          SECTION 2.5  Mandatory Prepayments.  If at any time the
principal amount of outstanding Loans shall exceed the aggregate
Commitment, then the Borrower shall immediately prepay the Loans
in an amount equal to such excess.


                          ARTICLE III

                   TERMS APPLICABLE TO LOANS

          SECTION 3.1  Payments and Prepayments.  (a) Payments
Generally.  Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by
the Borrower hereunder and under each Note shall be made in
Dollars, in immediately available funds, to such account as the
Bank may advise the Borrower in writing from time to time.  Such
payments shall be made no later than 1:00 P.M., New York City
time, on the date on which such payment shall become due (each
such payment made after such time on such due date to be deemed
to have been made on the next succeeding Business Day).  If the
due date of any payment hereunder or under the Note would
otherwise fall on a day which is not a Business Day, such due
date shall be extended to the next succeeding Business Day and
interest shall be payable for any principal so extended for the
period of such extension; provided, that, with respect to
Eurodollar Loans, if such next succeeding Business Day falls in
the next succeeding calendar month, such due date shall be the
next preceding Business Day.

          (b)  Borrower's Obligations Absolute.  The Borrower's
obligations to pay the Bank hereunder and under the Note shall be
absolute, unconditional and irrevocable, and shall be paid
strictly in accordance with the terms hereof and thereof, under
any and all circumstances and irrespective of any setoff,
counterclaim or defense to payment which the Borrower may have or
have had against the Bank.

          (c)  Optional Conversions.  The Borrower may, at its
option, (i) on the last day of any Interest Period, convert a
Eurodollar Loan into a Base Rate Loan, (ii) on the last day of
any Interest Period, continue a Eurodollar Loan as a Eurodollar
Loan, and (iii) on any Business Day, convert a Base Rate Loan
into a Eurodollar Loan; provided, that, except as otherwise
provided in this Agreement to the contrary, the Borrower shall
deliver to the Bank a Notice of Conversion or Continuation by
11:00 A.M., New York City time, (A) in the case of clauses (ii)
and (iii) above, not less than three Business Days prior to the
date of each such conversion or continuation, and (B) in the case
of clause (i) above, on or prior to the date of such conversion. 
Each Notice of Conversion or Continuation shall specify (x) the
amount of each Loan to be continued or converted, (y) the date of
such continuation or conversion, and (z) the type of Loan to be
continued or converted (and in the case of a conversion, the type
of Loan to result from such conversion and, if such Loan is to be
converted into a Eurodollar Loan, the Interest Period).  If the
Borrower shall fail to timely send a Notice of Conversion or
Continuation in respect of any Eurodollar Loan, such Loan shall
automatically be converted into a Base Rate Loan as of the end of
the applicable Interest Period for such Eurodollar Loan.

          (d)  Optional Prepayments.  The Borrower may, at its
option, without penalty or premium, (i) on the last day of any
Interest Period with respect to a Eurodollar Loan, prepay all or
any portion of the principal of such Eurodollar Loan, and (ii) on
any Business Day, prepay all or any portion of the principal of
the Base Rate Loans; provided, in each case, that any such
prepayment, if a partial prepayment, shall be an integral
multiple of $500,000 with a minimum amount of $500,000.  The
Borrower shall deliver to the Bank notice of such prepayment by
11:00 A.M., New York City time on the Business Day immediately
preceding such prepayment date, specifying the amount and type of
each Loan to be prepaid on such date.

          (e)  Mandatory Prepayments.  The Borrower shall prepay,
without premium or penalty,
               (i)  Loans in an aggregate principal amount equal
          to 100% of the net cash proceeds (on an after-tax
          basis) of any sale of assets by the Company or any
          Subsidiary of the Company outside of the ordinary
          course of business on the date which is five Business
          Days following the occurrence of such sale; and
               (ii)  Loans in an aggregate principal amount equal
          to 50% of the net proceeds received by the Company or
          any Subsidiary of the Company from the issuance of any
          new or refinanced debt or hybrid securities on the date
          which is five Business Days following the date of such
          issuance.
          (f)  Payments of Principal.  The principal amount of
each Loan, together with all accrued and unpaid interest thereon,
shall be payable on the Credit Expiration Date.

          (g)  Payment of Interest. (i) The Borrower hereby
          promises to pay to the Bank interest on the unpaid
          principal amount of each Loan for the period commencing
          on the date of such Loan until but not including the
          stated maturity thereof (whether by acceleration or
          otherwise) or the date of prepayment thereof (a) during
          the periods such Loan is a Base Rate Loan, at the Base
          Rate and (b) during the periods such Loan is a
          Eurodollar Loan, at the Eurodollar Rate plus the
          Applicable Margin Rate per annum; provided, however,
          that after the occurrence and during the continuance of
          an Event of Default, all outstanding Loans shall bear
          interest at the Post-Default Rate.

               (ii)  Notwithstanding the foregoing, the Borrower
          hereby promises to pay interest on any Loan or any
          installment thereof and (to the extent that the payment
          of such interest shall be legally enforceable) on any
          overdue installment of interest, and on any other
          amount payable by the Borrower hereunder which shall
          not be paid in full when due (whether at stated
          maturity, by acceleration or otherwise), for the period
          commencing on the due date thereof until but not
          including the date the same is paid in full at the
          Post-Default Rate.
               (iii) Except as provided in the next sentence,
          accrued interest on each Loan shall be payable (x) in
          respect of each Base Rate Loan, quarterly, on the last
          Business Day of each calendar quarter, (y) in respect
          of each Eurodollar Loan on the last day of each
          Interest Period (and, in the case of Eurodollar Loans
          with interest periods of over three months, at three-month 
          intervals following the first day of such
          Interest Period) and (z) in the case of all Loans
          together with each repayment of principal thereof. 
          Interest payable at the Post-Default Rate shall be
          payable from time to time on demand of the Bank.
          (h)  Application of Payments.  If the amount of any
payment or prepayment received by the Bank in respect of a Loan
is less than the principal of and interest accrued on such Loan
and required to be paid on the date of payment or prepayment, the
amount paid or prepaid on such Loan shall be applied first to
accrued interest and then to principal.

               (i)  Net Payments.  (i) All payments made by the
          Borrower under this Agreement or any other Facility
          Document shall be made free and clear of, and without
          reduction or withholding for or on account of, any
          present or future Taxes now or hereafter imposed,
          levied, collected, withheld or assessed by any
          Governmental Authority, and all liabilities related
          thereto.  If any Taxes are required to be withheld or
          deducted from any amounts payable under this Agreement
          or any other Facility Document, the Borrower shall pay
          the relevant amount of such Taxes and the amounts so
          payable to the shall be increased to the extent
          necessary to yield to the Bank (after payment of all
          Taxes) interest or any such other amounts payable
          hereunder at the rates or in the amounts specified in
          this Agreement and the other Facility Documents. 
          Whenever any Taxes are paid by the Borrower with
          respect to payments made in connection with this
          Agreement or any other Facility Document, as promptly
          as possible thereafter, the Borrower shall send to the
          Bank a certified copy of an original official receipt
          received by the Borrower showing payment thereof.

               (ii)  The Borrower hereby agrees to indemnify the
          Bank for the full amount of all Taxes attributable to
          payments by or on behalf of the Borrower hereunder or
          under any other Facility Document, any Taxes paid by
          the Bank and any present or future claims, liabilities
          or losses with respect to or resulting from any
          omission to pay or delay in paying such Taxes
          (including, without limitation, any incremental Taxes,
          interest or penalties that may become payable by the
          Bank as a result of any failure to pay such Taxes),
          whether or not such Taxes were correctly or legally
          asserted.  Such indemnification shall be made within
          three (3) days from the date the Bank makes written
          demand therefor.

         SECTION 3.2  Maximum Interest.  Anything in this
Agreement or the Note to the contrary notwithstanding, the
interest rate on any Loan shall in no event be in excess of the
maximum permitted by Applicable Law.  

          SECTION 3.3  Computations.  Interest on all Loans and
the Commitment Fee shall be computed on the basis of the actual
number of days elapsed in the period during which interest
accrues and a year of 365/366 days, in the case of Base Rate
Loans and the Commitment Fee, and a year of 360 days, in the case
of Eurodollar Loans.  In computing interest on any Loan, the date
of the making of the Loan or the first day of an Interest Period,
as the case may be, shall be included and the date of payment or
the expiration date of an Interest Period, as the case may be,
shall be excluded; provided, that if a Loan is repaid on the same
day on which it is made, one day's interest shall be paid on such
Loan.  All computations made by the Bank under this Agreement
shall be conclusive absent manifest error.

          SECTION 3.4  Minimum Amounts.  Except for conversions
or prepayments made pursuant to Sections 2.5 and 4.4 hereof, each
borrowing, conversion and prepayment of principal of Loans shall
be an integral multiple of $500,000 with a minimum amount of
$500,000 (borrowings, prepayments or conversions of or into Loans
of different types or with different Interest Periods, at the
same time hereunder are to be deemed separate borrowings,
conversions and prepayments for purposes of the foregoing, one
for each type).


                           ARTICLE IV

                YIELD PROTECTION AND ILLEGALITY

          SECTION 4.1  Additional Costs.  (a) The Borrower shall
pay directly to the Bank from time to time within 10 days of
demand such amounts as the Bank may reasonably determine to be
necessary to compensate it (or any Booking Office) for any costs
incurred by the Bank (or any Booking Office) or any reduction of
the rate of return on assets or equity of the Bank (or any
Booking Office) to a level below that which the Bank (or any
Booking Office) could have achieved, which it determines are
attributable to its making or maintaining of any Loans hereunder
or its obligation to make or maintain any Loans hereunder, or any
reduction in any amount receivable by the Bank (or any Booking
Office) hereunder in respect of any Loans or such obligation
(such increases in costs and reductions in amounts receivable or
rate of return being herein called "Additional Costs"), resulting
from any Regulatory Change which (i) changes the basis of
taxation of any amounts payable to the Bank under this Agreement
or any Note payable to it (other than taxes imposed on the
overall net income of the Bank unless such tax is imposed solely
as a result of the transactions contemplated by the Facility
Documents); (ii) imposes or modifies any reserve, special
deposit, capital adequacy, capital maintenance or similar
requirements, or results in any change in the interpretation or
administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or
administration thereof, or the compliance by the Bank (or any
Booking Office) or the Bank's with any request or directive
regarding capital adequacy or capital maintenance (whether or not
having the force of law) or with any such authority, central bank
or comparable agency, other than such reserves as are included in
the determination of the Eurodollar Rate (but excluding
consequences of the Bank's gross negligence or willful disregard
of law or regulation); or (iii) imposes any other condition
affecting the Bank's return under this Agreement (or any of such
extensions of credit or liabilities).  The Bank will notify the
Borrower of any event which will entitle the Bank to compensation
pursuant to this Section 4.1(a) as promptly as practicable after
it obtains knowledge thereof and determines to request such
compensation; provided, that the failure of the Bank to so notify
the Borrower shall not affect the obligations of the Borrower
hereunder in respect of such Additional Costs.  The Bank will
furnish the Borrower with a notice setting forth the basis and
amount of each request by the Bank for compensation under this
Section 4.1(a) setting forth in reasonable detail the calculation
of the additional amount or amounts to be paid to it hereunder
and certifying that such claim is consistent with the Bank's
treatment of similar customers having similar provisions
generally in their agreements with the Bank. 

          (b)  Without limiting the effect of the foregoing
provisions of this Section 4.1, in the event that, by reason of
any Regulatory Change, the Bank either (i) incurs Additional
Costs based on or measured by the excess above a specified level
of the amount of a category of deposits or other liabilities of
the Bank which includes deposits by reference to which the
interest rate on Eurodollar Loans is determined as provided in
this Agreement or a category of extensions of credit or other
assets of the Bank which includes Eurodollar Loans, or
(ii) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if the
Bank so elects by notice to the Borrower, the obligation of the
Bank to make, and to convert Base Rate Loans into, Eurodollar
Loans hereunder shall be suspended until the date such Regulatory
Change ceases to be in effect (and all Eurodollar Loans held by
the Bank then outstanding shall be converted into Base Rate Loans
in accordance with Section 4.4 hereof).

          (c)  Determinations by the Bank for purposes of this
Section 4.1 of the effect of any Regulatory Change on its costs
of making or maintaining the Loans, the Commitment or on amounts
receivable by it hereunder or under the Note, and of the
additional amounts required to compensate the Bank in respect of
any Additional Costs, shall be conclusive absent manifest error.

          SECTION 4.2  Limitation on Types of Loans.  Anything
herein to the contrary notwithstanding, if, on or prior to the
determination of any interest rate for any Eurodollar Loan for
any Interest Period therefor:

               (a)  the Bank determines in good faith (which
          determination shall be conclusive) that quotations of
          interest rates for the relevant deposit referred to in
          the definition of the Eurodollar Rate in Section 1.1
          hereof are not being provided in the relevant amounts
          or for the relevant maturities for purposes of
          determining the rate of interest for such Eurodollar
          Loan as provided in this Agreement; or

               (b)  the Bank determines in good faith (which
          determination shall be conclusive) that the relevant
          rates of interest referred to in the definition of the
          Eurodollar Rate in Section 1.1 hereof upon the basis of
          which the rate of interest for such Eurodollar Loan for
          such Interest Period is to be determined do not
          accurately reflect the cost to the Bank of making or
          maintaining such Eurodollar Loan for such Interest
          Period;

then the Bank shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, (i) the Bank shall
be under no obligation to make Eurodollar Loans or to convert
Base Rate Loans into Eurodollar Loans, (ii) each request for a
Eurodollar Loan from the Bank shall instead be deemed to be a
request for a Base Rate Loan, and (iii) the Borrower shall, on
the last day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Eurodollar Loans
or convert such Eurodollar Loans into Base Rate Loans in
accordance with Section 4.4 hereof.

          SECTION 4.3  Illegality.  Notwithstanding any other
provision in this Agreement, in the event that it becomes
unlawful for the Bank or its Booking Office to (a) honor its
obligation to make Eurodollar Loans hereunder, or (b) maintain
Eurodollar Loans hereunder, then the Bank shall promptly notify
the Borrower thereof, and all obligations to make Eurodollar
Loans and to convert Base Rate Loans into Eurodollar Loans
hereunder shall be suspended until such time as the Bank may
again make and maintain Eurodollar Loans, and all outstanding
Eurodollar Loans shall be converted into Base Rate Loans in
accordance with Section 4.4 hereof.

          SECTION 4.4  Certain Conversions.  If a Eurodollar Loan
(such Eurodollar Loan being herein called "Affected Loan") is to
be converted pursuant to Sections 4.1, 4.2 or 4.3 hereof, such
Affected Loan shall be automatically converted into a Base Rate
Loan on the last day(s) of the then current Interest Period for
the Affected Loan (or, in the case of a conversion required by
Section 4.3 hereof, on such earlier date as the Bank may specify
to the Borrower) and, unless and until the Bank gives notice that
the circumstances specified in Sections 4.1, 4.2 or 4.3 hereof
which gave rise to such conversion no longer exist, to the extent
that the Affected Loan has been so converted, all payments and
prepayments of principal which would otherwise be applied to the
Affected Loans shall be applied instead to its Base Rate Loans.

          SECTION 4.5  Compensation.  The Borrower shall pay to
the Bank, upon request, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Bank) to compensate
it for any loss, cost or expense incurred by it as a result of:

               (a)  any payment, prepayment or conversion of a
          Eurodollar Loan on a date other than the last day of an
          Interest Period for such Eurodollar Loan; or

               (b)  any failure by the Borrower to borrow,
          convert or prepay a Eurodollar Loan on the date for
          such borrowing, conversion or prepayment specified in
          the relevant Loan Request, Notice of Conversion or
          Continuation or notice of prepayment delivered under
          Section 3.1(d) hereof, respectively;

such compensation to include, without limitation, an amount equal
to the excess, if any, of (i) the amount of interest which would
have accrued on the principal amount so paid, prepaid or
converted or not borrowed for the period from the date of such
payment, prepayment or conversion or failure to borrow to the
last day of the then current Interest Period for such Eurodollar
Loan (or, in the case of a failure to borrow, the Interest Period
for such Eurodollar Loan which would have commenced on the date
of such failure to borrow) at the applicable rate of interest for
such Eurodollar Loan provided for herein over (ii) the interest
component (as reasonably determined by the Bank) of the amount
(as reasonably determined by the Bank) the Bank would have bid in
the Eurocurrency market for Dollar deposits of amounts comparable
to such principal amount and maturities comparable to such
period.


                           ARTICLE V

                      CONDITIONS PRECEDENT

          Each borrowing of a Loan pursuant to this Agreement may
be made only if the following conditions precedent are met and
each request for a Loan shall constitute a representation and
warranty that such conditions precedent have been met:

          SECTION 5.1  No Default.  On the date of each
borrowing, no Default or Event of Default shall have occurred and
be continuing. 

          SECTION 5.2  Opinion of Counsel.  On or prior to the
date of the initial borrowing, the Bank shall have received the
favorable written opinion of counsel to the Borrower (which may
be in-house counsel), addressed to and reasonably satisfactory in
form, scope and substance to the Bank.

          SECTION 5.3  Other Supporting Documents.  On or prior
to the date of the initial borrowing, the Borrower shall deliver,
or cause to be delivered, to the Bank:

          (a)  this Agreement, executed by each of the
     parties hereto, together with all schedules hereto;

          (b)  an executed Note payable to the Bank; 

          (c)  good standing certificates as of dates no
     more than ten days prior to the date of such initial
     borrowing, with respect to each of the Borrower and
     each Subsidiary, from the Secretary of State,
     Department of the Treasury, Commissioner of Insurance
     or other appropriate officer or office  of the state of
     its incorporation and from the Secretary of State of
     each state in which each of the Borrower or such
     Subsidiary, as applicable, is qualified to do business;

          (d)  a certificate of the Secretary or an
     Assistant Secretary and President or Chief Financial
     Officer of the Borrower substantially in the form
     attached hereto as Exhibit B;

          (e)  a copy of the consolidated annual audited
     financial statements of the Borrower and its
     Subsidiaries for the fiscal year ended December 31,
     1997, including therein the consolidated balance sheet
     of the Borrower and such Subsidiaries as at the end of
     such year and the related consolidated statements of
     income and cash flows of the Borrower and such
     Subsidiaries for such year, certified by the Borrower's
     independent accountants as fairly presenting the
     financial position and the results of operations of the
     Borrower and such Subsidiaries as at and for such year
     and as having been prepared in accordance with GAAP; 

          (f)  an actuarial reserve study, made by an
     independent auditor reasonably satisfactory to the
     Bank, of the sufficiency of loss reserves of the
     Borrower's operating insurance company Subsidiaries,
     which study shall be in form, scope and substance
     reasonably satisfactory to the Bank; and

          (g)  such other documents as the Bank or its
     counsel may reasonably request.

          SECTION 5.4  Loan Request.  The Borrower shall have
delivered to the Bank a Loan Request complying with the
provisions of Section 2.2.

          SECTION 5.5  Fees Paid.  There shall have been paid to
the Bank the fees due and payable under Section 10 hereof on the
date or through the date of such borrowing.

          SECTION 5.6  Representations and Warranties.  The
representations and warranties of the Borrower set forth herein
and in the Facility Documents shall be true and correct in all
material respects.

          
                           ARTICLE VI

                 REPRESENTATIONS AND WARRANTIES

          The Borrower represents and warrants to the Bank on the
date hereof and on each borrowing of a Loan that:

          SECTION 6.1  Organization, Powers, etc.  The Borrower
and each of its Subsidiaries is a corporation duly incorporated,
validly existing and in good standing under the laws of its
jurisdiction of organization and is duly qualified and licensed
to do business as a foreign corporation in each other
jurisdiction in which the conduct of its business requires such
qualification.  The Borrower and each of its Subsidiaries has all
requisite corporate power and authority to conduct its business
as reasonably contemplated to be conducted, to own its
properties, and in the case of the Borrower to execute, deliver,
and perform all of its obligations under this Agreement and the
other Facility Documents to which it is a party.  

          SECTION 6.2  Corporate Authority, etc.  The execution,
delivery and performance by the Borrower of this Agreement and
the other Facility Documents to which it is a party have been
duly authorized by all necessary corporate action on its part and
do not and will not (i) violate any provision of any Applicable
Law or of its certificate of incorporation or by-laws,
(ii) result in a breach of or constitute a default under any
indenture or loan or credit agreement or any other agreement,
lease or instrument to which it is a party or by which it is
bound, or (iii) result in, or require, the creation or imposition
of any mortgage, deed of trust, assignment, pledge, Lien,
security interest or other charge or encumbrance of any nature
upon or with respect to any of its properties except as otherwise
provided by this Agreement or the other Facility Documents; nor
is it in violation of any Applicable Law or in default under any
such indenture, agreement, lease or instrument.  

          SECTION 6.3  Government Approvals.  No authorization,
consent, approval, license, exemption of or filing or
registration with any Governmental Authority or other Person, is
or will be necessary to the valid execution, delivery or
performance by the Borrower of this Agreement and the other
Facility Documents to which it is a party.

          SECTION 6.4  Government Regulation.  The Borrower is
not subject to regulation under the Investment Company Act of
1940, as amended, or any other federal or state statute or
regulation which limits the ability of the Borrower to incur
indebtedness or the ability of the Borrower to consummate the
transactions contemplated by this Agreement and the other
Facility Documents.

          SECTION 6.5  Valid and Binding Obligations.  This
Agreement and the other Facility Documents to which the Borrower
is a party are the legal, valid and binding obligations of the
Borrower enforceable against the Borrower in accordance with
their terms.

          SECTION 6.6  Litigation. There are no actions, suits or
proceedings pending or, to the knowledge of the Borrower,
threatened against or affecting the Borrower or any Subsidiary of
the Borrower, the business or any property of any of them, or
involving the legality, validity or enforceability of any
Facility Document at law or in equity before any Governmental
Authority, which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect.

          SECTION 6.7  Use of Proceeds.  The Borrower shall use
the proceeds of the Loans for general corporate purposes and as
set forth on Schedule 6.7 hereto.  No part of the proceeds of any
Loan will be used to purchase or carry any "margin stock" (as
defined in Federal Reserve Regulation U) or to extend credit to
others for such purpose.  The Borrower does not engage in, nor
have as one of its important activities, the business of
extending credit for the purpose of purchasing or carrying any
margin stock.

          SECTION 6.8  Accuracy of Information.  All information,
financial or otherwise, written or verbal, furnished or to be
furnished at any time by or on behalf of the Borrower to the Bank
is and will be true, complete and accurate in all material
respects as of its date, and does not or will not contain any
untrue statement of a material fact or omit to state a material
fact as of such date.

          SECTION 6.9  Accuracy of Representations and
Warranties. The representations and warranties of the Borrower
contained in each Facility Document to which it is a party are
and will be true and correct as of the date given.

          SECTION 6.10  Financial Position.  The consolidated
balance sheets of the Borrower and its consolidated Subsidiaries
as at December 31, 1997 and the related statements of income and
shareholders' equity of the Borrower and its consolidated
Subsidiaries for the fiscal year then ended, audited by its
independent accountants, copies of which have been furnished to
the Bank, present the consolidated financial position of the
Borrower and its consolidated Subsidiaries as at such date and
the consolidated results of the operations of the Borrower and
its consolidated Subsidiaries for the period ended on such date,
all in accordance with GAAP.

          SECTION 6.11  Tax Returns.  Except for taxes being
contested in good faith by appropriate proceedings diligently
pursued and for which adequate reserves have been established,
the Borrower and each Subsidiary (i) has filed all federal tax
returns and state tax returns for the state in which it is
incorporated and the state in which it has its principal place of
business, and all other state and local tax returns required to
be filed by it (or has obtained extensions as to any not so
filed), and (ii) has not failed to pay any taxes, or interest and
penalties relating thereto, due on or before the date hereof.  To
the Borrower's knowledge, there are no federal, state or local
tax liabilities of the Borrower or any Subsidiary due or to
become due for any tax year ended on or prior to the date of
execution of this Agreement relating to the Borrower or such
Subsidiary, whether incurred in respect of or measured by the
income of the Borrower or such Subsidiary, which are required to
be reflected in accordance with GAAP in the financial statements
delivered pursuant to Section 7.06 and have not been so
reflected, and to the Borrower's knowledge there are no claims
pending, proposed or threatened against the Borrower or any
Subsidiary for past federal, state or local taxes, except those,
if any, as to which proper reserves in accordance with GAAP are
reflected in such financial statements.

          SECTION 6.12  ERISA.  Each Plan of the Borrower or any
Subsidiary is in material compliance with all of the applicable
provisions of ERISA, and each such Plan intended to be qualified
under Section 401(a) of the Code is so qualified.  No Plan of the
Borrower, any Subsidiary or any ERISA Affiliate has incurred an
"accumulated funding deficiency" (within the meaning of Section
302 of ERISA or Section 412 of the Code) whether or not waived. 
Neither the Borrower nor any ERISA Affiliate (i) has incurred or
expects to incur any liability under Title IV of ERISA with
respect to any Plan which could give rise to a Lien in favor of
the PBGC, other than liability for the payment of premiums, all
of which have been timely paid when due in accordance with
Section 4007 of ERISA, (ii) has incurred or expects to incur any
withdrawal liability, within the meaning of Section 4201 of
ERISA, except as set forth in Schedule 6.7, (iii) is subject to
any Lien under Section 412(n) of the Code or Sections 302(f) or
4068 of ERISA or arising out of any action brought under Sections
4070 or 4301 of ERISA, or (iv) is required to provide security to
a Plan under Section 401(a)(29) of the Code.  The PBGC has not
instituted proceedings to terminate any Plan or to appoint a
trustee or administrator of any such Plan and no circumstances
exist that constitute grounds under Section 4042 of ERISA to
commence any such proceedings.

          SECTION 6.13  No Material Adverse Change.  Since
December 31, 1997, there has occurred no event which has or had,
or could reasonably be expected to have, a Material Adverse
Effect.

          SECTION 6.14  Compliance with Laws.  (a) The Borrower
is in compliance in all material respects with all Applicable
Laws; and 

          (b)  Each Subsidiary of the Borrower is in compliance
in all material respects with all Applicable Laws; 

except in each case where the failure to so comply would not have
a Material Adverse Effect.

          SECTION 6.15  Franchises, Licenses.  The Borrower and
its Subsidiaries have all material franchises, permits, licenses
and other authority as are necessary to enable them to conduct
their respective businesses as currently being conducted and as
proposed to be conducted, and none of them is in default under
any of such material franchises, permits, licenses or other
authority.

          SECTION 6.16  No Default.  The Borrower is in
compliance with all of the terms and provisions contained herein
and in the other Facility Documents and no Default or Event of
Default has occurred and is continuing.

          SECTION 6.17  Subsidiaries.  Set forth on Schedule 6.17
is a listing of all Subsidiaries of the Borrower, setting forth
the jurisdiction of origination of each thereof and the
percentage ownership of each thereof by the Borrower.
          SECTION 6.18.  Year 2000 Problem.  The Borrower has a
reasonable basis to believe that no Year 2000 Problem will cause
a Material Adverse Effect.
          Section 6.19.  Environmental Matters.  Except as set
forth on Schedule 6.19, neither the Borrower nor any existing
Subsidiary has knowledge of any claim or has received any notice
of any claim, and no proceeding has been instituted raising any
claim against the Borrower or any of its Subsidiaries or any of
their respective real properties now or formerly owned, leased or
operated by any of them or other assets, alleging any damage to
the environment or violation of any Environmental Laws, except,
in each case, such as could not reasonably be expected to result
in a Material Adverse Effect.  Except as otherwise disclosed to
the Bank in writing,

     (a)  neither the Borrower nor any Subsidiary has knowledge
     of any facts which would give rise to any claim, public or
     private, of violation of Environmental Laws or damage to the
     environment emanating from, occurring on or in any way
     related to real properties now or formerly owned, leased or
     operated by any of them or to other assets or their use,
     except, in each case, such as could not reasonably be
     expected to result in a Material Adverse Effect;

     (b)  to the Borrower's knowledge, neither the Borrower nor
     any of its Subsidiaries has stored any Hazardous Materials
     on real properties now or formerly owned, leased or operated
     by any of them and has not disposed of any Hazardous
     Materials in a manner contrary to any Environmental Laws in
     each case in any manner that could reasonably be expected to
     result in a Material Adverse Effect; and

     (c)  to the Borrower's knowledge all buildings on all real
     properties now owned, leased or operated by the Borrower or
     any of its Subsidiaries are in compliance with applicable
     Environmental Laws, except where failure to comply could not
     reasonably be expected to result in a Material Adverse
     Effect.

                          ARTICLE VII

                     AFFIRMATIVE COVENANTS

          The Borrower covenants and agrees with the Bank that
from and after the Effective Date and so long as this Agreement
shall remain in effect or any Loans or any other amounts owing
under this Agreement or any Facility Document shall be unpaid, it
shall:

          SECTION 7.1  Payment of Taxes, etc.  Pay and discharge,
and cause each of its Subsidiaries to pay and discharge, all
taxes imposed upon it or such Subsidiary or upon its or such
Subsidiary's income or profits, prior to the date on which
penalties attach thereto; provided, however, that neither the
Borrower nor any Subsidiary shall be required to pay or discharge
any taxes which are being contested in good faith by appropriate
proceedings diligently pursued and for which adequate reserves
have been established.  

          SECTION 7.2  Preservation of Existence.  Continue to
engage, and cause each of is Subsidiaries to continue to engage,
in business of the same general type as now conducted and
preserve and maintain its corporate existence in the jurisdiction
of its incorporation, and its rights, franchises and privileges
material to the conduct of its business as now being conducted.

          SECTION 7.3  Compliance with Laws, etc.  Comply, and
cause each of its Subsidiaries to comply, in all material
respects with the requirements of all Applicable Laws of any
Governmental Authority.

          SECTION 7.4  Inspection Rights.  At any time and from
time to time, upon reasonable prior notice from the Bank, during
normal business hours permit the Bank or any of its agents or
representatives to examine and make copies of the records and
books of account of the Borrower and its Subsidiaries and to
visit its properties, and to discuss its affairs, finances and
accounts with any of its authorized agents or officers designated
by the Borrower.

          SECTION 7.5  Maintenance of Approvals, Filings and
Registrations.  At all times maintain in effect, renew and comply
with, and cause each of its Subsidiaries to maintain in effect,
renew and comply with, all the terms and conditions of all
consents, licenses, approvals and authorizations as may be
necessary or appropriate under any Applicable Law (i) for the
execution, delivery and performance of the Facility Documents,
(ii) to make the Facility Documents legal, valid, binding and
enforceable against the Borrower, and (iii) to conduct its
business.

          SECTION 7.6  Reporting Requirements.  Furnish or cause
to be furnished to the Bank:

          (a)  as soon as available, but, in any event not
     later than ninety (90) days after the end of each
     fiscal year of the Borrower, a copy of the annual
     audited consolidated reports for the Borrower and its
     Subsidiaries for such year, including therein the
     consolidated and consolidating balance sheets of the
     Borrower and its Subsidiaries as at the end of such
     year and the related consolidated and consolidating
     statements of income and cash flows of the Borrower and
     its Subsidiaries for such year, or statements providing
     substantially similar information, in each case
     certified without qualification by an independent
     public accountant of recognized national standing as
     fairly presenting the financial condition of the
     Borrower and its Subsidiaries as of the dates indicated
     and results of operation of the Borrower and its
     Subsidiaries for the periods indicated and having been
     prepared in accordance with GAAP; and

          (b)  as soon as available, but in any event not
     later than forty-five (45) days after the end of each
     of the first three quarterly periods of each fiscal
     year of the Borrower, the unaudited consolidated
     balance sheets of the Borrower and its Subsidiaries as
     at the end of each such quarter and the related
     unaudited consolidated and consolidating statements of
     income and cash flows of the Borrower and its
     Subsidiaries for such quarter and the portion of the
     fiscal year through such date, certified by a
     responsible officer of the Borrower as fairly
     presenting the financial position and the results of
     operations of the Borrower and its Subsidiaries in all
     material respects as at and for the quarter ending on
     its date and as having been prepared in accordance with
     GAAP (subject to normal year-end audit adjustments);

          (c)  concurrently with the delivery of the
     financial statements referred to in Sections 7.6(a) and
     (b) above, (i) a certificate of a duly authorized
     officer of the Borrower stating that such officer has
     reviewed the terms of this Agreement and the other
     Facility Documents to which the Borrower is a party and
     has made, or caused to be made under his supervision, a
     review in reasonable detail of the transactions and
     condition of the Borrower during the accounting period
     covered by such financial statements and that such
     review has not disclosed the existence during or at the
     end of such accounting period, and that such officer
     does not have knowledge of the existence as at the date
     of such certificate, of any Default or Event of Default
     except as specified in such certificate and (ii) a
     certificate of the chief financial officer of the
     Borrower demonstrating in detail satisfactory to the
     Agent compliance by the Borrower and its Subsidiaries
     with the financial covenants set forth in Section 7.12
     hereof;

          (d)  promptly and in any event within five (5)
     Business Days after the same are publicly available,
     copies of all regular and periodic financial
     information, proxy materials and other information and
     reports, if any, which the Borrower or any of its
     Subsidiaries shall file with the Securities and
     Exchange Commission, any securities exchange or any
     state insurance regulatory authority; and

          (e)  such other information with respect to the
     business, condition or operations of the Borrower or
     any of its Subsidiaries, financial or otherwise, as the
     Bank may from time to time reasonably request.

          SECTION 7.7  Performance of Agreements.  Duly and
punctually pay and perform each of its obligations under this
Agreement and the other Facility Documents.

          SECTION 7.8  Notices.  Promptly give notice to the Bank
of:

          (a)  the occurrence of any Default or Event of Default;

          (b)  any (i) default or event of default under any
contractual obligation of the Borrower or any of its Subsidiaries
or (ii) litigation, investigation or proceeding to which the
Borrower or any of its Subsidiaries is a party, including any
which may exist at any time between the Borrower or any of its
Subsidiaries and any Governmental Authority, which in either
case, if not cured or if adversely determined, as the case may
be, could reasonably be expected to have a Material Adverse
Effect;

          (c)  the occurrence of any event which could reasonably
be expected to have a Material Adverse Effect;

          (d)  any material regulatory action with respect to the
Borrower or any Subsidiary, together with a copy of any notice of
such action, within ten days after such action is taken or such
notice given; and

          (e)  the release of the triennial examination of the
Borrower and each of its Subsidiaries that is an insurance
company, together with a copy of that report, within 30 days
after the release of such report; and

          (f)  any written agreement or letter of intent that
involves the sale or merger of the Borrower or the Borrower's
acquisition of any Person.

Each notice pursuant to this subsection shall be accompanied by a
statement of a responsible officer setting forth details of the
occurrence referred to therein and stating what action are being
taken with respect thereto.

          SECTION 7.9  Books and Records.  Keep, and cause its
Subsidiaries to keep, adequate records and books of account, in
which complete entries are to be made reflecting its business and
financial transactions and its performance under the Facility
Documents, such entries to be made in accordance with GAAP as in
effect in the United States consistently applied in the case of
financial transactions or as otherwise required by Applicable
Laws.

          SECTION 7.10  Year 2000 Matters.  The Borrower has
reviewed, or will expeditiously review, its operations and those
of its Subsidiaries with a view to assessing whether its
businesses, or the businesses of any of its Subsidiaries, will be
vulnerable to a Year 2000 Problem.  The Borrower shall take all
actions necessary and commit adequate resources to assure that
its computer-based and other systems (and those of all
Subsidiaries) are able to effectively process data, including
dates before, on and after January 1, 2000, without experiencing
any Year 2000 Problem that could reasonably be expected to cause
a Material Adverse Effect.  At the request of the Bank the
Borrower will provide the Bank with assurances and
substantiations (including but not limited to, the results of
internal or external audit reports prepared in the ordinary
course of business) reasonably acceptable to the Bank as to the
capability of the Borrower and its Subsidiaries to conduct its
and their business and operations before, on and after January 1,
2000 without experiencing a Year 2000 Problem causing a Material
Adverse Effect.
          SECTION 7.11  Other Agreements.  Comply in all material
respects with all indentures, loan or credit agreements and any
other agreement, lease or instrument to which the Borrower is a
party.

          SECTION 7.12  Financial Covenants.


               (a)  Maintain at all times a Consolidated Leverage
          Ratio of not greater than 20%; and
               (b)  Cause each of its Subsidiaries which is an
          operating insurance company
                         (x)  to maintain an A.M. Best rating of
          "B+" or better; and
                         (y)  to maintain a ratio of (I) Total
          Adjusted Capital to (II) Authorized Control Level Risk-Based Capital
          of at least 3 to 1; provided, that for
          the fiscal year ending December 31, 1998 such ratio
          with respect to Motor Club of America Insurance Company
          shall be at least 2.5 to 1.
          SECTION 7.13  Maintenance of Properties.  Maintain,
preserve, protect and keep its properties in good repair, working
order and condition, and make necessary and proper repairs,
renewals and replacements so that its business carried on in
connection therewith may be properly conducted at all times
unless the Borrower determines in good faith that the continued
maintenance of any of its properties is no longer economically
desirable, and maintain with reputable insurers adequate
insurance coverage for all of its properties and operations as is
customarily carried by businesses similarly situated.

                          ARTICLE VIII

                       NEGATIVE COVENANTS

          The Borrower covenants and agrees with the Bank that,
from and after the Effective Date and so long as this Agreement
shall remain in effect or Loans or any other amounts owing under
this Agreement or any other Facility Document shall be unpaid, it
shall not, directly or indirectly:

          SECTION 8.1  Use of Proceeds.  Use the proceeds of the
Loans for any purpose other than to pay fees and transaction
expenses incurred in connection with the transactions
contemplated by the Facility Documents and provide funds for
general corporate purposes and as set forth on Schedule 6.7
hereto in accordance with the terms of this Agreement. 

          SECTION 8.2  Prohibition of Fundamental Changes. 
Except as set forth on Schedule 6.7 hereto, wind-up, liquidate or
dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or
agree to do any of the foregoing at any future time), whether in
one or a series of transactions, all or substantially all of its
assets, or  permit any of its Subsidiaries to do any of the
foregoing.

          SECTION 8.3  Business.  Make or permit any material
change in the character of its or its Subsidiaries' business or
operations which could reasonably be expected to adversely affect
the rights and remedies of the Bank under the Facility Documents.

          SECTION 8.4  Liens.  Contract for, create, incur,
assume or suffer to exist any Lien, security interest, charge or
other encumbrance of any nature upon any of its assets, except:
          (a)  Liens for taxes, assessments or other governmental
     charges or levies not at the time delinquent or thereafter
     payable without penalty or being diligently contested in
     good faith by appropriate proceedings and for which adequate
     reserves in accordance with GAAP shall have been set aside
     on its books:
          (b)  Liens incurred in the ordinary course of business
     in connection with workers' compensation, unemployment
     insurance or other forms of governmental insurance or
     benefits, or to secure performance of tenders, statutory
     obligations, leases and contracts (other than for borrowed
     money) entered into in the ordinary course of business or to
     secure obligations on surety or appeal bonds; 
          (c)  judgment Liens in existence less than 15 days
     after the entry thereof or with respect to which execution
     has been stayed or the payment of which is covered in full
     (subject to a customary deductible) by insurance maintained
     with responsible insurance companies;
          (d)  statutory Liens of landlords and Liens of
     carriers, warehousemen, mechanics, materialmen, repairmen,
     workmen and other similar Liens imposed by law created in
     the ordinary course of business for amounts which are not
     past due for more than 60 days and which are being contested
     in good faith by appropriate proceedings and with respect to
     which the Borrower has maintained adequate reserves in
     accordance with GAAP; and
          (e)  Liens identified on Schedule 8.4 hereto.
          SECTION 8.5  Transactions with Affiliates.  Make any
sale to, make any purchase from, make payment (including, without
limitation, any management fee payment) for services rendered by,
or enter into any other transaction with, any Affiliate unless as
a whole such sales, purchases, payments and other transactions
are (at the time such sale, purchase, rendition of services, or
other transaction is entered into) on terms and conditions
reasonably fair in all material respects to the Borrower or such
Subsidiary.

          SECTION 8.6  Dividends to the Borrower by Subsidiaries. 
Permit any Subsidiary to issue any securities or enter into any
agreements (other than with or as required by applicable
regulatory authorities) that will either (i) limit such
Subsidiary's ability to declare or pay or set apart any funds for
the payment of any dividend or make any distribution to the
Borrower or (ii) prevent such Subsidiary from paying to the
Borrower the entire amount available to be paid as dividends or
distributions by such Subsidiary; provided, that in no event
shall any Subsidiary be permitted to transfer assets to the
Borrower or another Subsidiary in excess of such Subsidiary's
surplus (computed in accordance with statutory accounting
principles).

          SECTION 8.7  Debt.  

          (a)  Permit any Subsidiary which is an operating
insurance company to incur or suffer to exist any Indebtedness in
excess of $500,000 at any time outstanding; and

          (b)  Incur or suffer to exist any Indebtedness which is
senior to or pari-passu with the Loans.


                           ARTICLE IX

                       EVENTS OF DEFAULT

          SECTION 9.1  Events of Default.  In case of the
happening of any of the following events (herein sometimes called
"Events of Default"):

          (a)  the principal amount of any Loan or any Note, any
     interest payable thereon, the Commitment Fee or any other
     fees or expenses related to this Agreement or the
     transactions contemplated hereby or any other amount payable
     under this Agreement shall not be paid in full within one
     Business Day after the date due and payable; or

          (b)  any representation or warranty made or deemed to
     be made or reaffirmed by the Borrower or any other Person
     herein or in any Facility Document, certificate, agreement,
     instrument or statement made or delivered pursuant to or in
     connection herewith, shall prove to have been materially
     incorrect when made or deemed made; or

          (c)  the Borrower shall fail to perform or observe any
     term, covenant or agreement contained in this Agreement or
     any other Facility Document, and (in the case of any such
     failure with respect to Sections 7.1, 7.3, 7.4, 7.5, 7.6,
     7.7, 7.9, 7.10, 7.11 and 7.13) such failure is not cured
     within 30 days after the occurrence thereof; or

          (d)  any Facility Document shall, at any time after its
     execution and delivery, for any reason cease to be in full
     force and effect (unless such occurrence is in accordance
     with its terms or after payment thereof) or shall be
     declared to be null and void or the validity or
     enforceability thereof shall be contested by the Borrower,
     or the Borrower shall deny that it has any or further
     liability or obligation thereunder; or

          (e)  the Borrower or any Subsidiary shall (i) apply for
     or consent to the appointment of, or the taking of
     possession by, a receiver, custodian, trustee or liquidator
     of itself or of all or a substantial part of its property,
     (ii) admit in writing its inability, or be generally unable,
     to pay its debts as they become due, (iii) make a general
     assignment for the benefit of its creditors, (iv) commence a
     voluntary case under the Federal Bankruptcy Code (as now or
     hereafter in effect), (v) be adjudicated a bankrupt or
     insolvent, (vi) commence a voluntary case under, or file a
     petition seeking to take advantage, of any other law
     relating to bankruptcy, insolvency, reorganization,
     winding-up or composition or adjustment of debts, (vii) 
     acquiesce in writing to, any allegations, or any petition
     filed, against it in an involuntary case under such Federal
     Bankruptcy Code or other law, or (viii) take any corporate
     action for the purpose of effecting any of the foregoing; or

          (f)  a proceeding or case shall be commenced without
     the application or consent of the Borrower or any Subsidiary
     of any of them in any court of competent jurisdiction,
     seeking (i) the liquidation, reorganization, dissolution or
     winding-up, or the composition or readjustment of debts, of
     the Borrower or any Subsidiary, (ii) the appointment of a
     trustee, receiver, custodian, liquidator, supervisor or the
     like of the Borrower or any Subsidiary or of all or any
     substantial part of their respective assets or (iii) similar
     relief in respect of the Borrower or any Subsidiary under
     any law relating to bankruptcy, insolvency, reorganization,
     winding-up or composition or adjustment of debts, and such
     proceeding or case shall continue undismissed, or an order,
     judgment or decree approving or ordering any of the
     foregoing shall be entered and continue unstayed and in
     effect, for a period of sixty consecutive days, or an order
     for relief against the Borrower or any Subsidiary shall be
     entered in an involuntary case under the Federal Bankruptcy
     Code (as now or hereafter in effect); or any judgment, writ,
     warrant of attachment or execution or similar process shall
     be issued or levied in respect of an obligation (alleged or
     otherwise) of the Borrower or any Subsidiary against a
     substantial part of its respective properties and such
     judgment, writ, or similar process shall not be released,
     vacated, stayed or fully bonded within thirty days after its
     issue or levy; or

          (g)  the Borrower or any Subsidiary shall fail to pay
     when due any amount in respect of any obligation in excess
     of $500,000 in the aggregate for money borrowed or for the
     deferred purchase price of property created, issued,
     guaranteed, incurred or assumed by such Person or any other
     event shall occur or any condition shall exist in respect of
     any such the effect of which is to cause (or permit any
     holder thereof or a trustee to cause), without giving effect
     to the giving of notice or the lapse of time, or both, such
     to become due prior to its stated maturity; or


          (h)  a final judgment or judgments for the payment of
     money in excess of $250,000 in the aggregate shall be
     rendered by a court or courts against the Borrower or any
     Subsidiary (exclusive of any judgment amount fully covered
     by insurance), and the same shall not be discharged (or
     provision shall not be made for such discharge), or a stay
     of execution thereof shall not be procured, within thirty
     (30) days from the date of entry thereof; or 

          (i)  except as provided in Schedule 9.1(i),a
     Termination Event shall have occurred with respect to a
     Plan, resulting in the imposition of material liability
     against the Borrower or any Subsidiary or any ERISA
     Affiliate; or 

          (j)  a Material Adverse Effect shall occur; or

          (k)  a Change of Control shall occur;

then, at any time after the occurrence of such event, the Bank
may take one or more of the following actions: (i) give notice
(which may be telephone notice confirmed in writing) to the
Borrower of the occurrence of an Event of Default, and the date
of the giving of such notice shall become the Credit Expiration
Date and the Bank's obligation to make Loans shall be terminated;
(ii) by notice to the Borrower (except that in the case of the
occurrence of any Event of Default described in Section 9.1(e) or
9.1(f), no such notice shall be required and such termination and
acceleration shall be automatic) declare the unpaid principal
amount and interest under the Note, the Loans and all other
amounts payable to the Bank hereunder to be forthwith due and
payable, whereupon such amounts shall become forthwith due and
payable, both as to principal and interest, without presentment,
demand, protest or any other notice of any kind, all of which are
hereby expressly waived, anything contained herein or in the Note
to the contrary notwithstanding; and (iii) any and all other and
further acts and actions which the Bank may take pursuant to
Applicable Law.


                           ARTICLE XI

                              FEES

          SECTION 10.1  Fees.  As consideration for incurring the
obligation to make the Loans, the Borrower shall pay to the Bank
from and as of the date hereof:
          (a)  a Facility Origination Fee in an amount and at the
time set forth in a separate letter agreement as of even date
herewith between the Borrower and the Bank; and
          (b)  a fee (the "Commitment Fee") equal to the product
of the Commitment Fee Percentage and the difference between
(i) the Commitment and (ii) the outstanding principal amount of
the Loans from time to time, computed on a daily basis and
payable quarterly in arrears on the first day of each calendar
quarter, commencing October 1, 1998, and on the Credit Expiration
Date.
          SECTION 10.2  Expenses.  The Borrower shall pay, no
later than five (5) days after its receipt of a statement
therefor, all reasonable out-of-pocket costs and expenses
incurred by the Bank (including, without limitation, the
reasonable fees and out-of-pocket expenses of counsel to the
Bank) (i) in connection with the preparation of this Agreement
and the other Facility Documents (whether or not the transactions
hereby or thereby contemplated shall be consummated), (ii) in
connection with any waivers, amendments or extensions with
respect to any of the foregoing documents, (iii) in connection
with the Loans hereunder, and (iv) in connection with the
administration of this Agreement and the other Facility
Documents.  The Borrower will also pay all costs and expenses
incurred by the Bank (including the reasonable fees and out-of-pocket
expenses of counsel) in connection with the enforcement
and protection of the rights of the Bank, as the case may be,  in
connection with this Agreement and the other Facility Documents.


                           ARTICLE XI

                        INDEMNIFICATION

          SECTION 11.1  Indemnification by Borrower.  Without
limiting any other rights which the Bank and its officers,
directors, employees, agents and affiliates may have hereunder or
under Applicable Law, the Borrower hereby agrees to indemnify
such parties and hold them harmless from and against any and all
damages, losses, claims, liabilities and related costs and
expenses (including reasonable attorneys' fees and disbursements)
incurred by any of them arising out of or resulting from the
transactions contemplated by this Agreement and the other
Facility Documents (other than in respect of any of the foregoing
arising out of the gross negligence or willful misconduct of such
indemnified party, including, without limitation:

          (a)  the reliance by the Bank on any representation or
warranty made by the Borrower (or any of its officers) under or
in connection with this Agreement or any other Facility Document
which was incorrect when made;

          (b)  the failure by the Borrower to comply with any
covenant set forth in this Agreement or in any other Facility
Document; or

          (c)  the use of proceeds of the Loans.

If and to the extent that the foregoing undertaking may be
unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment of the amounts
indemnified against in this Section which is permissible under
applicable law.


                          ARTICLE XII

                         MISCELLANEOUS

          SECTION 12.1  Notices.  Except where telephonic (which
shall be confirmed in writing promptly) instructions or notices
are authorized herein to be given, all notices, demands,
instructions and other communications required or permitted to be
given under this Agreement shall be in writing and shall be
personally delivered or sent by registered, certified or express
mail, postage prepaid, return receipt requested, or by facsimile
(with telephone confirmation of such transmission), or telegram
(with messenger delivery specified in the case of a telegram),
and shall be deemed to be given for purposes of this Agreement on
the date on which such writing is personally delivered or sent by
facsimile or four (4) days after being sent by mail to the
intended recipient thereof in accordance with the provisions of
this Section 12.1.  Unless otherwise specified in a notice sent
or delivered in accordance with the foregoing provisions of this
Section 12.1, notices, demands, instructions and other
communications in writing shall be given to or made upon the
respective parties hereto at their respective addresses (or to
their respective facsimile numbers) indicated below, and, in the
case of telephonic instructions or notices, by calling the
telephone number or numbers indicated for such party below:

          (a)  with respect to the Borrower:

                    Motor Club of America
                    95 Route 17 South
                    Paramus, New Jersey  07653-0931

                    Attention:  Mr. Patrick J. Haveron,
Executive
                                Vice President, Chief
Financial
                                Officer and
                                Treasurer
                    Telephone:  (201) 291-2112
                    Facsimile:  (201) 291-2125

                    with a copy to:     
                    Sills Cummis Zuckerman Radin Tischman
                      Epstein & Gross, P.A.
                    One Riverfront Plaza
                    Newark, New Jersey  07102-5400
                    Attention:  Stanley U. North, III, Esq.
                    Telephone:  (973) 643-7000
                    Facsimile:  (973) 643-6500

          (b)  with respect to the Bank:

                    Dresdner Bank AG,
                    New York and Grand Cayman Branches
                    75 Wall Street
                    New York, New York 10005
                    Attention:  Mr. Robert P. Donohue,
                    Vice President
                    Telephone: (212)429-3256
                    Facsimile: (212)429-2524

                    with a copy to:
                    Dresdner Bank AG,
                      New York Branch
                    75 Wall Street
                    New York, New York 10005
                    Attention:  Credit Services Department

Any party may designate a different or additional address for the
delivery of notices by providing notice thereof to the other
parties.  Except as provided to the contrary above, all notices,
demands, and other communications shall be effective upon
personal delivery or upon the date of receipt by the addressee as
shown on the return receipt.  Rejection or other refusal to
accept notices, demands, or other communications shall be of no
effect, and all notices, demands, and other communications which
are rejected or acceptance of which is refused shall be deemed to
be effective upon the date on which the same were rejected or
refused.

          SECTION 12.2  Survival and Termination of Agreement. 
All covenants, agreements, representations and warranties made
herein and in the certificates and other documents delivered
pursuant hereto shall survive (i) the making by the Bank of the
Loans herein contemplated, (ii) the execution and delivery to the
Bank of the Note, and (iii) the making of any investigation, and
shall continue in full force and effect to the Credit Expiration
Date or so long as any Loan or any amount payable to any Bank in
connection with this Agreement or any other Facility Document is
unpaid, whichever is later, at which time this Agreement shall
terminate, it being expressly understood that the obligations of
the Borrower under Article IV, X and XI hereof shall survive any
termination of this Agreement.

          SECTION 12.3  Applicable Law.  THIS AGREEMENT AND THE
NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE
LAWS OF THE STATE OF NEW YORK.

          SECTION 12.4  Waiver; Modifications in Writing.  No
failure or delay on the part of the Bank in exercising any right,
power or remedy hereunder or under the Note or with respect to
the Loans shall operate as a waiver thereof, nor shall any single
or partial exercise of any such right, power or remedy preclude
any other or further exercise thereof or the exercise of any
other right, power or remedy.  The remedies provided for herein
are cumulative and are not exclusive of any remedies that may be
available to the Bank at law or in equity.  No amendment,
modification, supplement, termination or waiver of or to any
provision of this Agreement, nor consent to any departure by the
Borrower therefrom, shall be effective unless the same shall be
in writing and signed by the Bank.  Any waiver of any provisions
of this Agreement, and any consent to any departure by the
Borrower from the terms of any provision of this Agreement, shall
be effective only in the specific instance and for the specific
purpose for which given.  No notice to or demand on the Borrower
in any case shall entitle the Borrower to any other or further
notice or demand in similar or other circumstances.

          SECTION 12.5  Non-Waiver of Rights.  Neither any
failure nor any delay on the part of the Bank in exercising any
right, power or privilege hereunder or under the Facility
Documents shall operate as a waiver thereof, nor shall a single
or partial exercise thereof preclude any other or further
exercise of any other right, power or privilege.

          SECTION 12.6   Successors and Assigns.  (a) This
Agreement shall be binding upon and inure to the benefit of each
party hereto and its respective successors and assigns, except
that the Borrower shall not assign or transfer (by operation of
law or otherwise) all or any part of its rights or obligations
hereunder without the prior written consent of the Bank.

          (b)  Notwithstanding the foregoing, the Bank may at any
time change the Booking Office designated by it on Schedule 1. 
The Bank shall give prompt notice to the Borrower of any change
in any Booking Office.

          SECTION 12.7  Right to Grant Assignments and
Participations.  The Borrower and the Bank agree that the Bank
may, from time to time, with the prior written consent of the
Borrower (which consent shall not be unreasonably withheld), sell
a portion of the Bank's obligation to make Loans hereunder and of
the Bank's rights hereunder, or grant participations herein, to
financial institutions.  Any such financial institution shall
have the same rights as the Bank in respect of the rights granted
to the Bank under Sections 4.1, 4.5, 10 and 11.  In such
connection, it is agreed that the Bank shall not be responsible
for a failure by any such financial institution, and that each
such financial institution shall not be responsible for a failure
by the Bank (or another such financial institution), to make or
fund, as the case may be, any Loan or its pro rata portion of any
Loan.  The Bank may furnish any information concerning the
Borrower in its possession from time to time to such financial
institutions (including prospective purchasers of assignments and
participations hereunder).

          SECTION 12.8  Captions.  Captions and section headings
appearing herein are included solely for convenience of reference
and are not intended to affect the interpretation of any
provision of this Agreement.

          SECTION 12.9  Counterparts.  This Agreement may be
executed in counterparts which, taken together, shall constitute
a single document.

          SECTION 12.10  Severability.  In case any one or more
of the provisions contained in this Agreement or any Note 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.

          SECTION 12.11  Waiver of Trial by Jury; Consent to
Jurisdiction; Certain Waivers.  THE PARTIES HERETO, TO THE EXTENT
PERMITTED BY LAW, WAIVE TRIAL BY JURY IN ANY LITIGATION IN ANY
COURT WITH RESPECT TO, IN CONNECTION WITH, OR ARISING OUT OF,
THIS AGREEMENT OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT
TO THIS AGREEMENT, OR THE VALIDITY, PROTECTION, INTERPRETATION,
COLLECTION OR ENFORCEMENT THEREOF.  The Borrower irrevocably
consents that any legal action or proceeding against it under,
arising out of or in any manner relating to this Agreement or any
instrument or document delivered pursuant to this Agreement may
be brought in the Supreme Court of the State of New York, County
of New York, or in the United States District Court for the
Southern District of New York.  The Borrower, by its execution
and delivery of this Agreement, expressly and irrevocably assents
and submits to the personal jurisdiction of any of such courts in
any such action or proceeding.  The Borrower has irrevocably
appointed Sills, Cummis, Zuckerman, Radin, Tischman, Epstein &
Gross, P.A., 712 Fifth Avenue, New York, New York  10019 as its
agent to receive, accept and acknowledge for and on its behalf,
service of any and all legal process, summons, notices and
documents which may be served in any proceeding brought in any
court which may be made on such agent.  If for any reason such
agent shall cease to be available to act as such, the Borrower
agrees to designate a new agent in The City of New York on the
terms and for the purposes of this Section 12.11 satisfactory to
the Bank.  The Borrower further irrevocably consents to the
service of summons, notice, or other process relating to any such
action or proceeding by delivery thereof to it by hand or by mail
in the manner provided for in Section 12.1 hereof.  The Borrower
hereby expressly and irrevocably waives any claim or defense in
any such action or proceeding in either such court based on any
alleged lack of personal jurisdiction, improper venue or forum
non conveniens or any similar basis.  Nothing in this Section
12.11 shall affect or impair in any manner or to any extent the
right of the Bank to commence legal proceedings or otherwise
proceed against the Borrower in any jurisdiction or to serve
process in any manner permitted by law.  The Borrower hereby
waives, to the fullest extent permitted by applicable law, the
right to seek punitive or consequential damages against the Bank
arising out of the transaction contemplated by this Agreement or
the Facility Documents.

          SECTION 12.12  Set-off.  Upon the occurrence and during
the continuance of an Event of Default, the Bank (including any
of its branches) is hereby authorized at any time or from time to
time, without notice to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to
appropriate any and all deposits (general or special, matured or
unmatured, time or demand, in whatever currency) and any other at
any time held or owing by the Bank to or for the credit or the
account of the Borrower against and on account of the obligations
and liabilities of the Borrower to the Bank under this Agreement
or any other Facility Document, irrespective of whether or not
the Bank shall have made any demand hereunder and although said
obligations, liabilities or claims, or any of them, shall be
contingent or unmatured.
          SECTION 12.13  Confidentiality.  The Bank shall hold
all information which the Bank reasonably understands to be non-public
information obtained pursuant to the requirements of this
Agreement confidential in accordance with its customary
procedures for handling confidential information of this nature
and in accordance with safe and sound banking practices; provided
that in any event the Bank shall have the right to make
disclosure to any of its examiners, Affiliates, outside auditors,
counsel and other professional advisors in connection with this
Agreement or as reasonably required by any bonafide transferee,
participant or assignee or as required or requested by any
governmental agency or representative thereof or pursuant to
legal process; provided, however, that
          (a)  unless specifically prohibited by applicable law
     or court order, the Bank shall notify the Borrower of any
     request by any governmental agency or representative thereof
     (other than any such request in connection with an
     examination of the financial condition of the Bank by such
     governmental agency) for disclosure of any such non-public
     information prior to disclosure of such information;
          (b)  prior to any such disclosure pursuant to this
     Section 12.13, the Bank shall require any such bona fide
     transferee, participant and assignee receiving a disclosure
     of non-public information to agree in writing
               (i)  to be bound by this Section 12.13, and
               (ii) to require such Person to require any other
    Person to whom such Person discloses such non-public
    information to be similarly bound by this Section 12.13; and
          (c)  except (i)as may be required by an order of a
     court of competent jurisdiction and to the extent set forth
     therein or (ii) to the extent not needed by the Bank for
     archival purposes, the Bank shall not be obligated or
     required to return any materials furnished by the Borrower.
          SECTION 12.14.  Acknowledgements.  The Borrower hereby
acknowledges that:
          (a)  it has been advised by counsel in the negotiation,
     execution and delivery of this Agreement and the other
     Facility Documents;
          (b)  the Bank has no fiduciary relationship with or
     fiduciary duty to the Borrower arising out of or in
     connection with this Agreement or any of the other Facility
     Documents, and the relationship between the Bank, on the one
     hand, and the Borrower, on the other hand, in connection
     herewith or therewith is solely that of debtor and creditor;
     and
          (c)  no joint venture is created hereby or by the other
     Facility Documents or otherwise exists by virtue of the
          transactions contemplated hereby.

          IN WITNESS WHEREOF, 
        the parties hereto and the Agent
     have caused this Agreement to be duly executed by their duly
     authorized officers, all of the day and year first above written.


                           MOTOR CLUB OF AMERICA,
                             as Borrower
                         
                           
                           By:s/Patrick J. Haveron
                              Authorized Signatory
                           
                           
                           DRESDNER BANK AG, New York and 
                           Grand Cayman Branches
                           
                           
                           By:s/Robert P. Donohue 
                              Authorized Signatory
                           
                           
                           By:s/J. Curtin Beaudouin
                              Authorized Signatory
                           
                           



<PAGE>
                                             Schedule I
                                        to the Loan
Agreement


                           Booking Offices


Base Rate and Eurodollar Rate Lending Offices:

Dresdner Bank AG, New York and Grand Cayman Branches
75 Wall Street
New York, New York 10005







































                                                  EXHIBIT A
                                             to the Loan Agreement

                          [Form of Note]

$3,000,000                                   September  __, 1998

          FOR VALUE RECEIVED, the undersigned hereby promises
to pay to the order of DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES (the "Bank"), the principal sum of Three
Million Dollars ($3,000,000), and the aggregate unpaid
principal amount from time to time outstanding of all Loans
made by the Bank to the undersigned pursuant to Section 2.1 of
the Loan Agreement (defined below), in immediately available
funds and in lawful money of the United States of America on
the dates and in the principal amount provided in the Loan
Agreement, and to pay interest on the unpaid balance of said
principal sum from time to time outstanding, from the date
hereof, until the principal sum shall become due (whether by
acceleration or otherwise), in like funds and money, at the
office of the Bank set forth in the Loan Agreement, at the
rates per annum and on the dates provided in said Loan
Agreement.

          This promissory note is the Note referred to in the
Loan Agreement dated as of September  __, 1998 (as the same
may from time to time be amended, the "Loan Agreement"),
between the undersigned, and the Bank, to which Loan Agreement
reference is made for a description of the rights of
prepayment, the Events of Default and the rights of
acceleration of maturity upon the occurrence of an Event of
Default.  All advances made by the Bank to the undersigned in
respect of Loans pursuant to the Loan Agreement and all
payments made on account of principal hereof shall be recorded
by the Bank and, prior to any transfer hereof, endorsed on the
grid attached hereto which is part of this promissory note
(provided that any failure by the Bank to make any such
endorsement shall not affect the obligations of the
undersigned under this Note in respect of any such advance).

THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND 
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.

                              MOTOR CLUB OF AMERICA


                              By:_________________________
                                   Authorized Signatory






             [REVERSE OF NOTE OR SCHEDULE THERETO]




          This Note evidences the Loans made by the Bank under
Section 2.3 of the Loan Agreement dated as of September  __,
1998, as from time to time amended, between Motor Club of America
and Dresdner Bank AG, New York and Grand Cayman Branches, in the
principal amounts and on the dates set forth below, subject to
the payments and prepayments of principal set forth below:

                PRINCIPALPRINCIPAL         PRINCIPAL
                 AMOUNTAMOUNT PAID          BALANCE       TYPE
OF
DATE             LOANED  OR PREPAID        OUTSTANDING                
LOAN  
































                                                  EXHIBIT B
                                             to the Loan Agreement



                     [Form of Certificate]

                     MOTOR CLUB OF AMERICA

                          Certificate

          I, the undersigned, Secretary of MOTOR CLUB OF AMERICA,
a ____________ corporation (the "Borrower"), DO HEREBY CERTIFY
that:

          1.   This Certificate is furnished pursuant to Section
     5.3(d) of that certain Loan Agreement dated as of
     September __, 1998 (the "Agreement") among the Borrower and
     Dresdner Bank AG, New York and Grand Cayman Branches. 
     Unless otherwise defined herein, capitalized terms used in
     this Certificate have the meanings assigned to those terms
     in the Agreement.

          2.   Attached hereto as Exhibit A is a copy of the
     Certificate of Incorporation of the Borrower, certified by
     the Secretary of State of the State of __________.

          3.   There have been no amendments to the Certificate
     of Incorporation of the Borrower since __________, 199_.1

          4.   Attached hereto as Exhibit B is a true and correct
     copy of the by-laws of the Borrower as in effect on the date
     hereof.

          5.   Attached hereto as Exhibit C is a true and correct
     copy of resolutions duly adopted by the Board of Directors
     of the Borrower on _____________, 1998, which resolutions
     have not been revoked, modified, amended or rescinded and
     are still in full force and effect.
___________________
(1) Insert the date of the Secretary of State's Certificate
furnished pursuant to paragraph 2.

          6.   The below-named persons have been duly elected,
     have duly qualified as of and at all times since
     ___________, 1998(2) (to and including the date hereof) have
     been officers of the Borrower, holding the respective
     offices below set opposite their names, and the signatures
     below set opposite their names are their genuine signatures.

          Name                Office         Signatures

_______________________     [Title]    _____________________

_______________________     [Title]    _____________________

_______________________     [Title]    _____________________

          7.   There are no proceedings pending for the
dissolution or liquidation of the Borrower.

          WITNESS my hand and the seal of the Borrower this ___
day of ________________, 1998.


                              ________________________
                                     Secretary
























__________________
(2) Insert the date next preceding the effective date of adoption
of the resolutions referred to in paragraph 4 above.

          I, the undersigned, [title] of the Borrower, DO HEREBY
CERTIFY that:

          1.   [Name of Secretary] is the duly elected and
qualified Secretary of the Borrower and the signature above is
[his/her] genuine signature.

          2.   Each of the Loan Agreement and each other Facility
Document to which the undersigned is a party is in existence and
is in full force and effect on the date hereof.

          3.   The representations and warranties on the part of
the Borrower contained or reaffirmed and repeated in the Loan
Agreement and in each other Facility Document to which the
undersigned is a party are true and correct at and as of the date
hereof as though made on and as of the date hereof.

          4.   No Event of Default or Default (or event which
with the passage of time or notice or both would constitute an
Event of Default) has occurred and is continuing, or would result
from the consummation of the initial borrowing on this date.

          WITNESS my hand on this _____ day of ____________,
1998.


                              __________________________
                                   Authorized Signatory
































                                                  EXHIBIT C
                                             to the Loan Agreement


                     [Form of Loan Request]


Dresdner Bank AG, New York and Grand Cayman Branches
75 Wall Street
New York, New York  10005

Attention:   [Name]
          [Title]

          This Loan Request is delivered to you pursuant to
Section 2.2 and Section 5.4 of the Loan Agreement dated as of
September  __, 1998 (as it may be amended, supplemented, restated
or otherwise modified from time to time, the "Agreement") between
Motor Club of America (the "Borrower") and Dresdner Bank AG, New
York and Grand Cayman Branches (the "Bank").  Unless otherwise
defined herein or the context otherwise requires, all capitalized
terms used herein will have the respective meanings assigned to
them in the Agreement.

          The Borrower hereby requests that Loans be made in the
aggregate principal amount of $___________ on ___________, 199_
as [a Eurodollar Loan/a Base Rate Loan].  [The Borrower requests
that the Interest Period for the Eurodollar Loan requested hereby
be [1/2/3/6/9/12] month(s).]

          The Borrower hereby affirms that (i) the
representations and warranties of the Borrower set forth in
Section 6 of the Agreement are on the date hereof, and will be on
the date of the proposed borrowing, true and correct as if made
on and as of each such date, (ii) no Event of Default has
occurred and is continuing on the date hereof or shall have
occurred and be continuing on the date of the proposed borrowing,
and (iii) after giving effect to the making of the Loans
requested hereby, the aggregate principal amount of all Loans
outstanding will not exceed the Commitment.

          The Borrower agrees that if, prior to the time that the
borrowing requested hereby is made, any matter affirmed herein
shall no longer be true and correct, it will immediately so
notify the Bank.  Except to the extent, if any, that prior to the
time that the borrowing requested hereby is made the Bank shall
receive written notice to the contrary from the Borrower each
matter affirmed herein shall be deemed once again to be affirmed as true 
and correct as of the date of such borrowing as if then
made.

     Please wire transfer the proceeds of the requested
borrowing to the account(s) of the following Persons at the
financial institution(s) indicated below:

Amount to be         Person to be Paid       Name,
Address, etc.
Transferred         Name        Account No.  of Payee
Bank      

$__________    _____________     _________   __________________
                                             __________________
                                             ABA
#_____________
                                             Attention: _______

$__________    _____________     _________   __________________
                                             __________________
                                             ABA
#_____________
                                             Attention: _______

          The Borrower has caused this Loan Request to be
executed and delivered, and the affirmations and warranties
contained herein to be made, by its duly authorized officer this
____ day of __________, 199_.

                              MOTOR CLUB OF AMERICA


                              By:_________________________
                                 Name:
                                 Title: 








          EXHIBIT D
                                             to the Loan Agreement


         [Form of Notice of Conversion or Continuation]

Dresdner Bank AG, New York and Grand Cayman Branches
75 Wall Street
New York, New York  10005

Attention:   [Name]
             [Title]

          This Notice of Conversion or Continuation is delivered
to you pursuant to Section 3.1(c) of the Loan Agreement dated as
of September  __, 1998 (as it may be amended, supplemented,
restated or otherwise modified from time to time, the
"Agreement") between Motor Club of America (the "Borrower") and
Dresdner Bank AG, New York and Grand Cayman Branches (the
"Bank").  Unless otherwise defined herein or the context
otherwise requires, all capitalized terms used herein will have
the respective meanings assigned to them in the Agreement.

          The Borrower hereby requests that on ____________,
199_, 

          (1)  $_________ of the currently outstanding
          principal amount of the Loans originally made on
          __________, 199_, 

          (2)  all currently being maintained as [Base Rate
          Loans/Eurodollar Loans], 

          (3)  be [converted into/continued as] [Base Rate
          Loans/Eurodollar Loans].  

          The Borrower hereby certifies that (i) the
representations and warranties of the Borrower set forth in
Section 6 of the Agreement are on the date hereof, and will be on
the date of the proposed [conversion/continuation], true and
correct as if made on and as of such dates, and (ii) no Default
or Event of Default has occurred and is continuing on the date
hereof or shall have occurred and be continuing on the date of
the proposed [conversion/continuation].

          The Borrower agrees that if, prior to the time that the
[conversion/continuation] requested hereby is made, any matter
certified to herein shall no longer be true and correct, it will
immediately so notify the Bank.  Except to the extent, if any,
that prior to the time that the [conversion/continuation]
requested hereby is made the Bank shall receive written notice to
the contrary from the Borrower, each matter certified to herein
shall be deemed once again to be certified as true and correct as
of the date of such [conversion/continuation] as if then made.

          The Borrower has caused this Notice of Conversion or
Continuation to be executed and delivered, and the certifications
and warranties contained herein to be made, by its duly
authorized officer this ____ day of __________, 199_.

                              MOTOR CLUB OF AMERICA


                              By:_________________________
                                 Name:
                                 Title: 










                                                 Schedule 6.17
                                             to the Loan Agreement
          COMPANY NAME                         DOMICILE     %OWN
Motor Club of America Insurance Company               NJ        100%
Preserver Insurance Company                           NJ        51%1
___________________________________
1    The remaining 49% ownership resides with Motor Club of
          America Insurance Company.

                                                Schedule 6.7
                                             to the Loan Agreement
          Borrower may enter into one or more of the following
transactions:

1.   The Motor Club of America Employees Retirement Plan (a
     defined benefit plan which was partially terminated in 1992)
     may be fully terminated by the Borrower prior to the
     termination of the Loan Agreement.

2.   Preserver Insurance Company ("Preserver") is 51% owned by
     Motor Club of America, a public New Jersey corporation (the
     "Borrower") and 49% owned by Motor Club of America Insurance
     Company ("MCAIC").  Subject to New Jersey Department of
     Insurance approval (which is expected to be received in
     September 1998), the Borrower will purchase from MCAIC the
     49% of Preserver not owned by Borrower for a purchase price
     of up to $3,000,000 in a transaction which is expected to
     close prior to December 31, 1998.
3.   In the ordinary course of business, MCAIC shall distribute
     to Borrower a dividend of $500,000 in September 1998.
4.   After acquiring 100% ownership of Preserver, the Borrower is
     expected to make a $5,000,000 cash contribution to the
     capital and surplus of Preserver on or before December 31,
          1998.
                                                 Schedule 6.19
                                             to the Loan Agreement
None.
                                                Schedule 8.4
                                             to the Loan Agreement
None.

                                                Schedule 9.1(i)
                                             to the Loan Agreement

The following liabilities against the Borrower or any Subsidiary
or any ERISA Affiliate arising from a Termination Event shall not
in and of themselves constitute an Event of Default:

     The liabilities arising due to the immediate vesting of
     participants in the Motor Club of America Employees
     Retirement Plan (the "Plan") due the cession of
     participation in the Plan by the employees of the Borrower
     or any Subsidiary or former Subsidiary which is or could be
     determined to be a partial termination under Section
     411(d)(3) of the Code; and

     The liabilities associated with any immediate vesting and
     with the purchase of annuities or the payment of benefits
     upon the termination of the Plan and the liabilities
     associated with any penalty tax due on amounts that revert
     to the Borrower upon such termination; provided, however,
     that such termination is initiated by the board of directors
     of the Borrower.