PAULA FINANCIAL
EXHIBIT 10.48
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<TYPE>EX-10.48
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<DESCRIPTION>EXHIBIT 10.48
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">EXHIBIT 10.48</font></b></p>

<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SECOND AMENDMENT TO
CREDIT AGREEMENT</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">THIS SECOND
AMENDMENT TO CREDIT AGREEMENT (the &#147;Amendment&#148;) is made and dated as of the
31st day of December, 2001 by and between PAULA FINANCIAL, a Delaware
corporation (the &#147;Borrower&#148;), and UNITED CALIFORNIA BANK, formerly known as
Sanwa Bank California, a California banking corporation (&#147;the Lender&#148;).</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RECITALS</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Pursuant to that
certain Credit Agreement dated as of March 31, 1997 by and between the Borrower
and the Lender (as amended, extended and replaced from time to time, the
&#147;Credit Agreement,&#148; and with capitalized terms used herein and not otherwise
defined used with the meanings given such terms in the Credit Agreement), the
Lender agreed to extend credit to the Borrower on the terms and subject to the
conditions set forth therein.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">B.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Pursuant to that
certain First Amendment to Credit Agreement and Waiver dated as of January 30,
2001 (the &#147;First Amendment&#148;) the Borrower and the Lender agreed to amend the
Credit Agreement in certain respects, including, without limitation, to modify
the amortization schedule for the Term Loan and to make the Term Loan Payable
in full on December 31, 2001.&#160; In
addition, the Lender agreed to waive, on a one time basis, certain Events of
Default existing thereunder.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">C.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Borrower has
requested the Lender to extend the final maturity date for the Term Loan and
the Lender has agreed to do so on the terms and subject to the conditions set
forth herein.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOW,
THEREFORE, in consideration of the above Recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the parties hereto hereby agree as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:.5in;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">AGREEMENT</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Modification of
Amortization Schedule</u>.&#160; The Lender
and the Borrower hereby agree that notwithstanding anything contained in
Paragraph 1(b) of the Credit Agreement, as amended by the First Amendment, the
outstanding principal balance of the Term Loan as of December 31, 2001, which
is $4,375,500.00, shall be payable in consecutive quarterly installments as
follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<div align="center">

<table border="0" cellspacing="0" cellpadding="0" width="50%" style="border-collapse:collapse;width:50.0%;">
 <tr>
  <td width="48%" valign="bottom" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:48.36%;">
  <p style="margin:0in 0in .0001pt;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Payment Date</font></b></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:3.98%;">
  <p align="center" style="font-size:1.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>
  </td>
  <td width="46%" colspan="2" valign="bottom" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:46.74%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="1" face="Times New Roman" style="font-size:8.0pt;font-weight:bold;">Required
  Principal Payment</font></b></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:.92%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="48%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:48.36%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">December 31, 2001</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:3.98%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;border:none;padding:0in .7pt 0in .7pt;width:2.58%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="44%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;border:none;border-top:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:44.16%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;325,000.00</font></p>
  </td>
  <td width="0%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" valign="top" style="padding:0in .7pt 0in .7pt;width:48.36%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">March 31, 2002</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:3.98%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.58%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="44%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:44.16%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;325,000.00</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:48.36%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">June 30, 2002</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:3.98%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.58%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="44%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:44.16%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;325,000.00</font></p>
  </td>
  <td width="0%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" valign="top" style="padding:0in .7pt 0in .7pt;width:48.36%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">September 30, 2002</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:3.98%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:2.58%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="44%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:44.16%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;325,000.00</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" valign="top" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:48.36%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">December 31, 2002</font></p>
  </td>
  <td width="3%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:3.98%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="2%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:2.58%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">$</font></p>
  </td>
  <td width="44%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:44.16%;">
  <p align="right" style="margin:0in 0in .0001pt;text-align:right;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160;325,000.00</font></p>
  </td>
  <td width="0%" valign="bottom" bgcolor="#cceeff" style="background:#CCEEFF;padding:0in .7pt 0in .7pt;width:.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
 <tr>
  <td width="48%" valign="top" style="padding:0in .7pt 0in .7pt;width:48.36%;">
  <p style="margin:0in 0in .0001pt 10.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">January 1, 2003</font></p>
  </td>
  <td width="3%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:3.98%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="46%" colspan="2" valign="bottom" style="padding:0in .7pt 0in .7pt;width:46.74%;">
  <p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Remaining Principal Balance</font></p>
  </td>
  <td width="0%" valign="bottom" style="padding:0in .7pt 0in .7pt;width:.92%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:1.0pt;">&nbsp;</font></p>
  </td>
 </tr>
</table>

</div>

<p style="margin:0in 0in .0001pt .2in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Reporting
Requirements</u>.&#160; To reflect the
agreement of the Borrower to provide certain additional information to the
Lender from time to time:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Subparagraph (5) of
Paragraph 5(a) of the Credit Agreement is hereby amended to delete the
parenthetical immediately preceding the semi-colon at the end of said
subparagraph which was added pursuant to the First Amendment and to replace the
same with the </font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


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<hr size="2" width="100%" noshade color="gray" align="left">

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<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- ZEQ.=1,SEQ=1,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=878817,FOLIO='',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">following
proviso, &#147;:provided, however that the annual budgets and projections provided
for fiscal year 2002 shall be delivered by January 31, 2002 and shall be broken
down by fiscal quarter&#148;.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Subparagraphs (10)
and (11) of Paragraph 5(a) of the Credit Agreement are hereby amended to read
in their entirely as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;(10)&#160;&#160;&#160;&#160;&#160;&#160; Within
sixty (60) days after the last day of each of the calendar months ending
December 31, 2001, January 31, 2002 and February 28, 2002, and thirty (30) days
after the last day of each subsequent calendar month, consolidated statements
of income and changes in financial position for such calendar month and balance
sheets as of the end of each such calendar month for the Borrower and its
consolidated Subsidiaries, accompanied in each case by a certificate of the
chief financial officer of the Borrower stating that such financial statements
are presented fairly in accordance with GAAP;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(11)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Concurrently
with the delivery of the quarterly financial statements pursuant to <u>subparagraph
(a)(2)</u> above, a certificate of the chief financial officer of the Borrower,
in form and detail reasonably satisfactory to the Lender, setting forth
calculations certified to be true, complete and correct comparing losses and
loss expenses incurred and net income of the Borrower and its consolidated
Subsidiaries for such fiscal quarter and for the fiscal year to date, against
such items as set forth in the budget for such fiscal year delivered pursuant
to <u>subparagraph (a)(5)</u> above (as such budget shall be permitted to be
adjusted by the Company following the end of each fiscal quarter to reflect
actual performance of the Borrower and its consolidated Subsidiaries during
such fiscal quarter and other anticipated changes in such budget, such revised
budgets, accompanied by backup information supporting the bases for the
adjustments reflected therein, to be delivered no later than forty five (45)
days following the end of each fiscal quarter);&#148;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Modification of
Financial Covenants</u>.&#160; To reflect the
agreement of the Lender and the Borrower to modify certain of the financial
covenants set forth in the Credit Agreement, Paragraph 6(o) of the Credit
Agreement is hereby amended as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Subparagraph (1) of
Paragraph 6(o) is hereby amended to read in its entirety as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;(1)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; PICO&#146;s
ratio, determined in accordance with SAP, of net premiums written during the
most recent ending four fiscal quarters to surplus plus excess statutory
reserves as of the last day of the most recent ending fiscal quarter, to exceed
7.00:1.00; or&#148;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Subparagraph (2) of
Paragraph 6(o) is hereby amended to read in its entirety as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;(2)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; At
and as of the end of any fiscal quarter, PICO&#146;s surplus at such date plus
excess statutory reserves, to be less than one hundred fifty percent (150%) of
the outstanding principal balance of the Term Loan at such date; or&#148;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>


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<!-- ZEQ.=1,SEQ=2,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=543337,FOLIO='2',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Reaffirmation of
Loan Documents</u>.&#160; The Borrower hereby
affirms and agrees that (a) the execution and delivery by the Borrower of and
the performance of its obligations under this Amendment shall not in any manner
or to any extent amend, impair, invalidate or otherwise affect any of the
obligations of the Borrower or the rights of the Lender under the Credit
Agreement or any other Loan Document, including, without limitation, the Stock
Pledge Agreement, except as expressly set forth herein, (b) the term
&#147;Obligations&#148; as used in the Loan Documents includes, without limitation, the
Obligations of the Borrower under the Credit Agreement as amended hereby,
including, without limitation, under the Stock Pledge Agreement, and (c) the
Credit Agreement as amended hereby and the other Loan Documents remain in full
force and effect.</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Release</u>.&#160; The Borrower, on behalf of itself and each
of its successors and assigns, agrees as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Borrower hereby
forever releases, discharges and acquits the Lender and its parent, subsidiary
and affiliate corporations, and their officers, directors, shareholders,
agents, representatives and employees, and their successors, heirs, and
assigns, and each of them (collectively and severally, the &#147;Releasees&#148;), of and
from any and all of the following (collectively and severally, &#147;Claims&#148;): All
claims, demands, obligations, liabilities, indebtedness, breaches of contract,
breaches of duty or any relationship, acts, omissions, misfeasance,
malfeasance, cause or causes of actions, debts, sums of money, accounts,
compensations, contracts, controversies, promises, damages, costs, losses and
expenses, of every type, kind, nature, description or character, and irrespective
of how, why, or by reason of what facts, whether heretofore, now existing or
hereafter arising, or which could, might, or may be claimed to exist, or
whatever kind or name, whether known or unknown, suspected or unsuspected,
liquidated or unliquidated, each as though fully set forth herein at length,
which in any way arise out of, are connected with or relate to the Credit
Agreement and the other Loan Documents and the transactions contemplated
thereby, including, without limitation, any action or inaction of any of the
Releasees.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Borrower hereby
agrees, represents and warrants that the matters released herein are not
limited to matters which are known or disclosed, and the Borrower hereby waives
any and all rights and benefits which it now has, or in the future may have,
conferred upon it by virtue of the provisions of Section 1542 of the Civil Code
of the State of California which provides as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In this connection, the
Borrower hereby agrees, represents, and warrants that it realizes and
acknowledges that factual matters now unknown to it may have given or may
hereafter give rise to causes of action, claims, demands, debts, controversies,
damages, costs, losses and expenses which are presently unknown, unanticipated
and unsuspected, and it further agrees, represents and warrants that this
release has been negotiated and agreed upon in light of that realization and
that it nevertheless hereby intends to release, discharge and acquit the
Releasees from any such unknown claims which would be Claims if known on the date
hereof.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Borrower hereby
acknowledges and agrees that the acceptance of delivery of this Amendment,
including, without limitation, the release set forth in this Paragraph 5, shall
not be deemed or construed as an admission of liability by any Releasee, and
each</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- ZEQ.=1,SEQ=3,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=504062,FOLIO='3',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Releasee shall
be automatically be deemed to have expressly denied liability of any nature
whatsoever arising from or related to the subject of this release.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Borrower hereby
represents and warrants that it has had advice of counsel of its own choosing
in negotiations for and the preparation of this Amendment, that, in particular,
it has read this Paragraph 5, that it has had this release fully explained by
such counsel and that it is fully aware of its contents and legal effect.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">6.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Amendment
Effective Date</u>.&#160; This Amendment
shall be effective as of the day and year first above written on the date (the
&#147;Amendment Effective Date&#148;) that there has been delivered to Lender each of the
following:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; A copy of this
Amendment, duly executed by each of the Lender and the Borrower;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; A copy of a
Reaffirmation of Guaranties and Guarantor Subordination Agreements in the form
of that attached hereto as <u>Amendment Exhibit A,</u> duly executed by each of
the Guarantors;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; A non-refundable
amendment fee in the amount of $44,000.00;</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.8in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The fees and
expenses of Morrison &amp; Foerster LLP incurred by the Lender and payable by
the Borrower pursuant to Paragraph 5(f) of the Credit Agreement; and</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.8in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(e)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Such corporate resolutions,
incumbency certificates and other authorizing documentation for the Borrower
and the Guarantors as the Lender may request.</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.8in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">7.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Representations
and Warranties</u>.&#160; The Borrower hereby
represents and warrants to the Lender that at the date hereof and at and as of
the Amendment Effective Date:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Borrower has the
corporate power and authority and the legal right to execute, deliver and
perform this Amendment and other documents, instruments and agreements required
to be delivered by it hereunder (the &#147;Amendment Documents&#148;) and has taken all
necessary corporate action to authorize the execution, delivery and performance
of the Amendment Documents.&#160; The
Amendment Documents have been duly executed and delivered on behalf of the
Borrower and constitute the legal, valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective
terms.</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.8in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The representations
and warranties of the Borrower contained in the Loan Documents are accurate and
complete in all respects, and there has not occurred an Event of Default or
Potential Default which has not been waived pursuant to the First Amendment.</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.8in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The Guarantors
executing the Reaffirmation of Guaranties and Guarantor Subordination
Agreements are all of the Subsidiaries of the Borrower existing at the date
hereof.</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.8in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">8.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>No Other
Amendment</u>.&#160; Except as expressly
amended hereby, the Loan Documents shall remain in full force and effect as
written and amended to date.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">9.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Counterparts</u>.&#160; This Amendment may be executed in any number
of counterparts, each of which when so executed shall be deemed to be an
original and all of which when taken together shall constitute one and the same
agreement.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- ZEQ.=1,SEQ=4,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=763577,FOLIO='4',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN WITNESS
WHEREOF, the parties hereto have caused this Amendment to be executed as of the
day and year first above written.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="58%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:58.7%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAULA
  FINANCIAL, a Delaware corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="58%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:58.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By </font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0in .7pt 0in .7pt;width:18.96%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0in .7pt 0in .7pt;width:18.96%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0in .7pt 0in .7pt;width:18.96%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="58%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:58.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="58%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:58.7%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">UNITED
  CALIFORNIA BANK, formerly known as Sanwa Bank California</font></p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="58%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:58.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ Jerry
  McDermott</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0in .7pt 0in .7pt;width:18.96%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Jerry
  McDermott</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0in .7pt 0in .7pt;width:18.96%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="41%" valign="top" style="padding:0in .7pt 0in .7pt;width:41.3%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" valign="top" style="padding:0in .7pt 0in .7pt;width:5.38%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">V.P.</font></p>
  </td>
  <td width="18%" valign="top" style="padding:0in .7pt 0in .7pt;width:18.96%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">SCHEDULE OF EXHIBITS</font></b></p>

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<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">EXHIBIT</font></p>
  </td>
  <td width="50%" valign="top" style="padding:0in .7pt 0in .7pt;width:50.0%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">DOCUMENT</font></p>
  </td>
 </tr>
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  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <p style="margin:0in 0in .0001pt 20.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#160; A</font></p>
  </td>
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  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Form of
  Reaffirmation of Guaranties and<br>
  Guarantor Subordination Agreements</font></p>
  </td>
 </tr>
</table>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


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</font></div>

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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">AMENDMENT EXHIBIT A</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">FORM OF:</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">REAFFIRMATION OF<br>
GUARANTIES AND GUARANTOR SUBORDINATION AGREEMENT</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">THIS
REAFFIRMATION OF GUARANTIES AND GUARANTOR SUBORDINATION AGREEMENTS (the &#147;Reaffirmation&#148;)
is made and dated as of the 31<sup>st</sup> day of December, 2001, by the
undersigned (the &#147;Guarantors&#148;) in favor of UNITED CALIFORNIA BANK, formerly
known as Sanwa Bank California (the &#147;Lender&#148;).</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">&nbsp;</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RECITALS</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Pursuant to that
certain Credit Agreement dated as of March&nbsp;31, 1997 by and between PAULA
FINANCIAL, a Delaware corporation (the &#147;Borrower&#148;), and the Lender (as amended,
extended and replaced from time to time, the &#147;Credit Agreement,&#148; and with
capitalized terms not otherwise defined herein used with the meanings given
such terms in the Credit Agreement), the Lender agreed to extend credit to the
Borrower on the terms and subject to the conditions set forth therein,
including, without limitation, the condition that each of the undersigned
execute and deliver to the Lender a Guaranty and a Guarantor Subordination
Agreement.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">B.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; In connection with
the execution and delivery of that certain Second Amendment and Waiver to the
Credit Agreement dated concurrently herewith (the &#147;Second Amendment&#148;) and as a
condition to the effectiveness of such Second Amendment, the undersigned are
required to reaffirm the continuing effectiveness of the Guaranties and
Guarantor Subordination Agreements executed by them.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOW,
THEREFORE, in consideration of the above Recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned hereby agrees as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">AGREEMENT</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Approval of
Second Amendment</u>.&#160; Each of the
Guarantors hereby confirms that it has reviewed and approved the Second
Amendment.</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Reaffirmation of
Guaranties and Guarantor Subordination Agreements</u>.&#160; Each of the Guarantors hereby affirms and
agrees that:</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The execution and
delivery by the Borrower of the Second Amendment and the performance by the
Borrower of its obligations under the Credit Agreement as amended to thereby,
shall not in any way amend, impair, invalidate or otherwise affect any of the
obligations of the Guarantors under its respective Guaranty and Guarantor
Subordination Agreement or any other document or instrument made or given by it
in connection therewith;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The term
&#147;Obligations&#148; as used in each Guaranty and Guarantor Subordination Agreement
include, without limitation, the &#147;Obligations&#148; of the Borrower under </font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
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<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the Credit
Agreement as amended to date, including, without limitation, pursuant to the
Second Amendment;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each Guaranty and
each Guarantor Subordination Agreement remains in full force and effect; and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each Guaranty
continues to constitute an absolute and unconditional guaranty of the
Obligations of the Borrower as set forth more particularly therein.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Release</u>.&#160; Each of the Guarantors, on behalf of itself
and each of its successors and assigns, agrees as follows:</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each
of the Guarantors hereby forever releases, discharges and acquits the Lender
and its parent, subsidiary and affiliate corporations, and their officers,
directors, shareholders, agents, representatives and employees, and their
successors, heirs, and assigns, and each of them (collectively and severally,
the &#147;Releasees&#148;), of and from any and all of the following (collectively and
severally, &#147;Claims&#148;):&#160; All claims,
demands, obligations, liabilities, indebtedness, breaches of contract, breaches
of duty or any relationship, acts, omissions, misfeasance, malfeasance, cause
or causes of actions, debts, sums of money, accounts, compensations, contracts,
controversies, promises, damages, costs, losses and expenses, of every type,
kind, nature, description or character, and irrespective of how, why, or by
reason of what facts, whether heretofore, now existing or hereafter arising, or
which could, might, or may be claimed to exist, or whatever kind or name,
whether known or unknown, suspected or unsuspected, liquidated or unliquidated,
each as though fully set forth herein at length, which in any way arise out of,
are connected with or relate to the Credit Agreement and the other Loan
Documents and the transactions contemplated thereby, including, without
limitation, any action or inaction of any of the Releasees.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each of the
Guarantors hereby agrees, represents and warrants that the matters released
herein are not limited to matters which are known or disclosed, and each of the
Guarantors hereby waives any and all rights and benefits which it now has, or
in the future may have, conferred upon it by virtue of the provisions of
Section 1542 of the Civil Code of the State of California which provides as
follows:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In this connection, each of the
Guarantors hereby agrees, represents, and warrants that it realizes and acknowledges
that factual matters now unknown to it may have given or may hereafter give
rise to Claims which are presently unknown, unanticipated and unsuspected, and
it further agrees, represents and warrants that this release has been
negotiated and agreed upon in light of that realization and that it
nevertheless hereby intends to release, discharge and acquit the Releasees from
any such unknown claims which would be Claims if known on the date hereof.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each of the
Guarantors hereby acknowledges and agrees that the acceptance of delivery of
this Amendment, including, without limitation, the release set forth in this
Paragraph 3, shall not be deemed or construed as an admission of liability by
any Releasee, and each Releasee shall be automatically be deemed to have
expressly denied liability of any nature whatsoever arising from or related to
the subject of this release.</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each of the
Guarantors hereby represents and warrants that it has had advice of counsel of
its own choosing in negotiations for and the preparation of this Amendment,
that, in particular, it has read this Paragraph 3, that it has had this release
fully explained by such counsel and that it is fully aware of its contents and
legal effect.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Representations
and Warranties</u>.&#160; Each of the
Guarantors hereby represents and warrants to the Lender that:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Such Person has the
corporate power and authority and the legal right to execute, deliver and
perform this Reaffirmation and has taken all necessary corporate action to
authorize the execution, delivery and performance of it;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; This Reaffirmation
has been duly executed and delivered on behalf of such Person and constitutes a
legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms subject to the effect of applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally and the effect of equitable
principles whether applied in an action at law or a suit in equity; and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Such Person has no
claim, by way of direct claim, counterclaim, offset or otherwise, against the
Lender or any of its directors, officers, affiliates or representatives,
arising out of or relating to the Credit Agreement or the transactions
contemplated thereby, including without limitation, under such Person&#146;s
Guaranty or Guarantor Subordination Agreement.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Counterparts</u>.&#160; This Reaffirmation may be executed in
counterparts, all of which taken together shall constitute one and the same
agreement.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN WITNESS
WHEREOF, each of the Guarantors have caused this Reaffirmation to be executed
as of the day and year first above written. </font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[Signature Pages Following]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAN AMERICAN
  UNDERWRITERS, INC.,</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">a Nevada
  Corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAN AMERICAN
  UNDERWRITERS INSURANCE</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AGENTS &amp;
  BROKERS, INC., an Arizona corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AGRI-COMP
  INSURANCE AGENCY, INC.,</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">an Oregon
  corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="61%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:61.46%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAN PACIFIC
  BENEFIT ADMINISTRATORS,</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">INC., a
  California corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="61%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:61.46%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAULA
  TRADING COMPANY INSURANCE</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AGENTS &amp;
  BROKERS, INC., a California corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:5.28%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.74%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:4.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="4" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr height="0">
  <td width="191" style="border:none;"></td>
  <td width="24" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
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  <td width="0" style="border:none;"></td>
  <td width="197" style="border:none;"></td>
  <td width="152" style="border:none;"></td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- ZEQ.=1,SEQ=10,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=616848,FOLIO='',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">REAFFIRMATION OF<br>
GUARANTIES AND GUARANTOR SUBORDINATION AGREEMENTS</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">THIS
REAFFIRMATION OF GUARANTIES AND GUARANTOR SUBORDINATION AGREEMENTS (the
&#147;Reaffirmation&#148;) is made and dated as of the 31st day of December, 2001, by the
undersigned (the &#147;Guarantors&#148;) in favor of UNITED CALIFORNIA BANK, formerly
known as Sanwa Bank California (the &#147;Lender&#148;).</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">RECITALS</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Pursuant to that
certain Credit Agreement dated as of March 31, 1997 by and between PAULA
FINANCIAL, a Delaware corporation (the &#147;Borrower&#148;), and the Lender (as amended,
extended and replaced from time to time, the &#147;Credit Agreement,&#148; and with
capitalized terms not otherwise defined herein used with the meanings given
such terms in the Credit Agreement), the Lender agreed to extend credit to the
Borrower on the terms and subject to the conditions set forth therein, including,
without limitation, the condition that each of the undersigned execute and
deliver to the Lender a Guaranty and a Guarantor Subordination Agreement.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">B.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; In connection with
the execution and delivery of that certain Second Amendment and Waiver to the
Credit Agreement dated concurrently herewith (the &#147;Second Amendment&#148;) and as a
condition to the effectiveness of such Second Amendment, the undersigned are
required to reaffirm the continuing effectiveness of the Guaranties and
Guarantor Subordination Agreements executed by them.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOW,
THEREFORE, in consideration of the above Recitals and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the undersigned hereby agrees as follows:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">AGREEMENT</font></b></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">1.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Approval of
Second Amendment</u>.&#160; Each of the
Guarantors hereby confirms that it has reviewed and approved the Second
Amendment.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Reaffirmation of
Guaranties and Guarantor Subordination Agreements</u>.&#160; Each of the Guarantors hereby affirms and
agrees that:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The execution and
delivery by the Borrower of the Second Amendment and the performance by the
Borrower of its obligations under the Credit Agreement as amended to thereby,
shall not in any way amend, impair, invalidate or otherwise affect any of the
obligations of the Guarantors under its respective Guaranty and Guarantor
Subordination Agreement or any other document or instrument made or given by it
in connection therewith;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; The term
&#147;Obligations&#148; as used in each Guaranty and Guarantor Subordination Agreement
include, without limitation, the &#147;Obligations&#148; of the Borrower under </font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- ZEQ.=1,SEQ=11,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=882110,FOLIO='',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">the Credit
Agreement as amended to date, including, without limitation, pursuant to the
Second Amendment;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each Guaranty and
each Guarantor Subordination Agreement remains in full force and effect; and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each Guaranty
continues to constitute an absolute and unconditional guaranty of the
Obligations of the Borrower as set forth more particularly therein.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">3.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Release</u>.&#160; Each of the Guarantors, on behalf of itself
and each of its successors and assigns, agrees as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each
of the Guarantors hereby forever releases, discharges and acquits the Lender
and its parent, subsidiary and affiliate corporations, and their officers,
directors, shareholders, agents, representatives and employees, and their
successors, heirs, and assigns, and each of them (collectively and severally,
the &#147;Releasees&#148;), of and from any and all of the following (collectively and
severally, &#147;Claims&#148;);&#160; All claims, demands,
obligations, liabilities, indebtedness, breaches of contract, breaches of duty
or any relationship, acts, omissions, misfeasance, malfeasance, cause or causes
of actions, debts, sums of money, accounts, compensations, contracts,
controversies, promises, damages, costs, losses and expenses, of every type,
kind, nature, description or character, and irrespective of how, why, or by
reason of what facts, whether heretofore, now existing or hereafter arising, or
which could, might, or may be claimed to exist, or whatever kind or name,
whether known or unknown, suspected or unsuspected, liquidated or unliquidated,
each as though fully set forth herein at length, which in any way arise out of,
are connected with or relate to the Credit Agreement and the other Loan
Documents and the transactions contemplated thereby, including, without
limitation, any action or inaction of any of the Releasees.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each of the
Guarantors hereby agrees, represents and warrants that the matters released
herein are not limited to matters which are known or disclosed, and each of the
Guarantors hereby waives any and all rights and benefits which it now has, or
in the future may have, conferred upon it by virtue of the provisions of
Section 1542 of the Civil Code of the State of California which provides as
follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt .5in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT
KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE
DEBTOR.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">In this connection, each of the
Guarantors hereby agrees, represents, and warrants that it realizes and
acknowledges that factual matters now unknown to it may have given or may
hereafter give rise to Claims which are presently unknown, unanticipated and
unsuspected, and it further agrees, represents and warrants that this release
has been negotiated and agreed upon in light of that realization and that it
nevertheless hereby intends to release, discharge and acquit the Releasees from
any such unknown claims which would be Claims if known on the date hereof.</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each of the
Guarantors hereby acknowledges and agrees that the acceptance of delivery of
this Amendment, including, without limitation, the release set forth in this
Paragraph 3, shall not be deemed or construed as an admission of liability by
any Releasee, and each Releasee shall be automatically be deemed to have
expressly denied liability of any nature whatsoever arising from or related to
the subject of this release.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- ZEQ.=1,SEQ=12,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=158639,FOLIO='',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(d)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Each of the
Guarantors hereby represents and warrants that it has had advice of counsel of
its own choosing in negotiations for and the preparation of this Amendment,
that, in particular, it has read this Paragraph 3, that it has had this release
fully explained by such counsel and that it is fully aware of its contents and
legal effect.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">4.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Representations
and Warranties</u>.&#160; Each of the
Guarantors hereby represents and warrants to the Lender that:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(a)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Such Person has the
corporate power and authority and the legal right to execute, deliver and
perform this Reaffirmation and has taken all necessary corporate action to
authorize the execution, delivery and performance of it;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(b)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; This Reaffirmation
has been duly executed and delivered on behalf of such Person and constitutes a
legal, valid and binding obligation of such Person, enforceable against such
Person in accordance with its terms subject to the effect of applicable
bankruptcy, insolvency, reorganization, moratorium and other similar laws
affecting the rights of creditors generally and the effect of equitable
principles whether applied in an action at law or a suit in equity; and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">(c)&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; Such Person has no
claim, by way of direct claim, counterclaim, offset or otherwise, against the
Lender or any of its directors, officers, affiliates or representatives,
arising out of or relating to the Credit Agreement or the transactions
contemplated thereby, including without limitation, under such Person&#146;s
Guaranty or Guarantor Subordination Agreement.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">5.&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160;&#160; <u>Counterparts.</u>&#160; This Reaffirmation may be executed in counterparts,
all of which taken together shall constitute one and the same agreement.</font></p>

<p style="margin:0in 0in .0001pt .2in;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN WITNESS
WHEREOF, each of the Guarantors have caused this Reaffirmation to be executed
as of the day and year first above written. </font></p>

<p style="margin:0in 0in .0001pt;text-indent:1.0in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">[Signature Pages Following]</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


<div style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">

<hr size="2" width="100%" noshade color="gray" align="left">

</font></div>

<font size="2" face="Times New Roman" style="font-size:10.0pt;">
<!-- ZEQ.=1,SEQ=13,EFW="2074801",CP="PAULA FINANCIAL",DN="3",CHK=132679,FOLIO='',FILE="DISK020:[02BHL3.02BHL1403.EDGAR]EX10-48_1403.CHC",USER="MCREED",CD='Mar 28 09:50 2002' -->
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</font>

<p align="center" style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;">&nbsp;</p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAN AMERICAN
  UNDERWRITERS, INC.,</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">a Nevada
  Corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAN AMERICAN
  UNDERWRITERS INSURANCE</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AGENTS &amp;
  BROKERS, INC., an Arizona corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AGRI-COMP
  INSURANCE AGENCY, INC.,</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">an Oregon
  corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="61%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:61.46%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAN PACIFIC
  BENEFIT ADMINISTRATORS,</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">INC., a
  California corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.82%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:4.46%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.56%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="4" valign="top" style="padding:0in .7pt 0in .7pt;width:5.2%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="61%" colspan="3" valign="top" style="padding:0in .7pt 0in .7pt;width:61.46%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">PAULA
  TRADING COMPANY INSURANCE</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">AGENTS &amp;
  BROKERS, INC., a California corporation</font></p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="66%" colspan="7" valign="top" style="padding:0in .7pt 0in .7pt;width:66.66%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in .7pt 0in .7pt;width:3.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By:</font></p>
  </td>
  <td width="36%" colspan="5" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:36.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/ James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="5%" colspan="5" valign="top" style="padding:0in .7pt 0in .7pt;width:5.28%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Name:</font></p>
  </td>
  <td width="34%" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:34.74%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">James A.
  Nicholson</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="33%" valign="top" style="padding:0in .7pt 0in .7pt;width:33.34%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="4%" colspan="2" valign="top" style="padding:0in .7pt 0in .7pt;width:4.36%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Title:</font></p>
  </td>
  <td width="35%" colspan="4" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in .7pt 0in .7pt;width:35.66%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sr. Vice
  President/CFO/Treasurer/Secretary</font></p>
  </td>
  <td width="26%" valign="top" style="padding:0in .7pt 0in .7pt;width:26.64%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr height="0">
  <td width="191" style="border:none;"></td>
  <td width="24" style="border:none;"></td>
  <td width="7" style="border:none;"></td>
  <td width="1" style="border:none;"></td>
  <td width="5" style="border:none;"></td>
  <td width="0" style="border:none;"></td>
  <td width="197" style="border:none;"></td>
  <td width="152" style="border:none;"></td>
 </tr>
</table>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>


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