SECOND AMENDMENT TO CREDIT AGREEMENT

             THIS SECOND AMENDMENT TO CREDIT AGREEMENT (this “Amendment”) is made as of the 28th day of October, 2008, between ATLANTIC AMERICAN CORPORATION, a Georgia corporation (the “Borrower”) and WACHOVIA BANK, NATIONAL ASSOCIATION (the “Bank”).

             The Borrower and the Bank have entered into that certain Credit Agreement dated as of December 22, 2006 as amended by that certain First Amendment to Credit Agreement and Pledge Agreement dated March 28, 2008 (as so amended the “Credit Agreement”). The Borrower and the Bank desire (a) to provide for an acknowledgement and consent to a certain redemption of Borrower’s Series B Preferred Stock and the payment of a dividend in connection therewith, and (b) to amend the Credit Agreement in respect thereof, as hereinafter provided.

             NOW, THEREFORE, in consideration of the Recitals and the mutual promises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Bank, intending to be legally bound hereby, agree as follows:

             SECTION 1.     Recitals.   The Recitals are incorporated herein by reference and shall be deemed to be a part of this Amendment.

             SECTION 2.     Definitions.   Capitalized terms used herein which are not otherwise defined herein shall have the respective meanings assigned to them in the Credit Agreement.

             SECTION 3.     Acknowledgement and Consent.

(a)       The Borrower has requested that the Bank consent to, and subject to the conditions stated herein, the Bank does hereby consent to, the Borrower's intention to (a) redeem all shares of its Series B Preferred Stock (the "Planned Redemption") at par value for an amount not to exceed $13,400,000 (the "Planned Redemption Limit") and pay a dividend in connection therewith (the "Planned Dividend") in an amount not to exceed $1,675,000 (the "Planned Dividend Limit"). Pursuant to Section 5.12 of the Agreement, the Borrower is currently prohibited from making a redemption of the nature of the Planned Redemption. Pursuant to 5.06 of the Agreement, the Borrower is currently prohibited from making a Restricted Payment of the nature of the Planned Dividend.

(b)       The Bank expressly reserves all of its rights and remedies with respect to any present or future Default arising under the Credit Agreement.

             SECTION 4.     Amendments to Credit Agreement.   The Credit Agreement is amended as set forth in this Section 4.

(a)        New Definitions.    Article I of the Credit Agreement is hereby amended to add the following new definitions in alpha order:

             Planned Dividend” has the meaning ascribed to such term in the second Amendment to Credit Agreement between the Borrower and the Bank dated as of October 28, 2008 (the “Second Amendment”).

              "Planned Dividend Limit" has the meaning ascribed to such term in the Second Amendment.

              "Planned Redemption" has the meaning ascribed to such term in the Second Amendment.

              "Planned Redemption Limit” has the meaning ascribed to such term in the Second Amendment.

(b)        Amendment to Section 5.06.    Section 5.06 of the Credit Agreement is hereby amended and restated in its entirety to read as follows:

             Section 5.06 Restricted Payments     The Borrower will not declare or make any Restricted Payment during any Fiscal Year; provided that: (1) the Borrower may redeem shares of the Borrower’s capital stock for the purpose of satisfying the Borrower’s obligations under its 401K plan and stock options provided by the Borrower to its executive officers, in the ordinary course of business and consistent with practices existing on the Closing Date; (2) the total number of shares of the Borrower’s capital stock redeemed pursuant to the preceding subsection (1) shall not exceed five hundred thousand in the aggregate in any Fiscal Year; and (3) the aggregate amount expended by the Borrower in connection with the redemptions made pursuant to the preceding subsection (1) shall not exceed $2,000,000 in the aggregate in any Fiscal Year; and provided further that the Borrower may make Restricted Payments on or in connection with the Series D Preferred Stock, so lo