Exhibit 10.46

                                                       Policy Number:
                                                       483-54-02

                                                       Renewal of: 
                                                       445-40-00

                        American International Companies

          Directors, Officers and Corporate Liability Insurance Policy

___ AIU Insurance Company
___ American International South Insurance Company
___ Birmingham Fire Insurance Company of Penns.
___ Granite State Insurance Company
___ Illinois National Insurance Company
_X_ National Union Fire Insurance Company of Pitts., PA
___ National Union Fire Insurance Company of Louisiana
___ New Hampshire Insurance Company

--------------------------------------------------------------------------------
                (each of the above being a capital stock company)

     NOTICE:  EXCEPT TO SUCH EXTENT AS MAY  OTHERWISE  BE PROVIDED  HEREIN,  THE
COVERAGE OF THIS POLICY IS GENERALLY  LIMITED TO LIABILITY FOR ONLY THOSE CLAIMS
THAT ARE FIRST MADE AGAINST THE INSUREDS  DURING THE POLICY  PERIOD AND REPORTED
IN WRITING TO THE INSURER  PURSUANT TO THE TERMS HEREIN.  PLEASE READ THE POLICY
CAREFULLY  AND DISCUSS THE  COVERAGE  THEREUNDER  WITH YOUR  INSURANCE  AGENT OR
BROKER. NOTICE: THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS
SHALL BE REDUCED BY AMOUNTS  INCURRED FOR LEGAL  DEFENSE.  AMOUNTS  INCURRED FOR
LEGAL DEFENSE SHALL BE APPLIED AGAINST THE RETENTION AMOUNT.

     NOTICE:  THE  INSURER  DOES NOT  ASSUME ANY DUTY TO  DEFEND;  HOWEVER,  THE
INSURER MUST ADVANCE  DEFENSE COSTS PAYMENTS  PURSUANT TO THE TERMS HEREIN PRIOR
TO THE FINAL DISPOSITION OF A CLAIM.

                                  DECLARATIONS

ITEM 1.   NAMED CORPORATION:   NORTH AMERICAN MORTGAGE COMPANY

MAILING ADDRESS:               3883 AIRWAY DRIVE
                               SANTA ROSA, CA 95403

STATE OF INCORPORATION OF THE NAMED CORPORATION:
                               California

ITEM 2. SUBSIDIARY COVERAGE: any past, present or future Subsidiary of the Named
Corporation

ITEM 3. POLICY PERIOD: From: July 08, 1996 To: July 08, 1997 (12:01 A.M.
standard time at the address stated in Item 1.)

ITEM 4. LIMIT OF LIABILITY: $10,000,000 aggregate for Coverages A and B combined
(including Defense Costs)

ITEM 5. RETENTION:

        SECURITIES CLAIMS:

        Judgments & Settlements (all coverages)   None

        Defense Costs (non-indemnifiable Loss)    None

        Defense Costs (Coverage B(i) and          $   250,000
        Indemnifiable Loss)                        for Loss arising from Claims
                                                   alleging the same Wrongful
                                                   Act or related Wrongful Acts
                                                   (waivable) under Clause 6 in
                                                   certain circumstances)

        OTHER CLAIMS:

        Judgments, Settlements and Defense
        Costs (non-indemnifiable Loss)            None

        Judgments, Settlements and Defense
        Costs (Indemnifiable Loss)                $  250,000
                                                   for Loss arising from Claims
                                                   alleging the same Wrongful
                                                   Act or related Wrongful Acts

ITEM 6. CONTINUITY DATES:

        A.   Coverages A and B(ii):                  July 08,1992

        B.   Coverage B(i):                          July 08, 1996

        C.   Coverages A and B:
             Outside Entity Coverage (Per Outside Entity)
                          See Endorsement #62790

ITEM 7. PREMIUM:                                  $  385,000


ITEM 8. NAME AND ADDRESS OF INSURER ("Insurer"):

        (This policy is issued only by the insurance company indicated below.)

        National Union Fire Insurance Company of Pittsburgh, Pa
        70 Pine Street
        New York, NY 10270

     IN WITNESS WHEREOF,  the Insurer has caused this policy to be signed on the
Declarations  Page  by  its  President,   a  Secretary  and  a  duly  authorized
representative of the Insurer.


      /s/ Elizabeth M. Tuck                            /s/ Kristian Moor
      ---------------------                            -----------------
            SECRETARY                                     PRESIDENT


                             -----------------------------
                               AUTHORIZED REPRESENTATIVE

        ------------------------                  ------------------------
         COUNTERSIGNATURE DATE                        COUNTERSIGNED AT



Marsh & McLennan of S.F.
Three Embarcadero Center
P.O. Box 193880
San Francisco, CA  94119


                        American International Companies

          DIRECTORS, OFFICERS AND CORPORATE LIABILITY INSURANCE POLICY

     In  consideration  of the payment of the premium,  and in reliance upon the
statements  made to the  Insurer by  application  forming a part  hereof and its
attachments  and  the  material  incorporated  therein,  the  insurance  company
designated in Item 8 of the Declarations, herein called the "Insurer", agrees as
follows:

1.    INSURING AGREEMENTS

      COVERAGE A: DIRECTORS AND OFFICERS INSURANCE

     This policy shall pay the Loss of each and every Director or Officer of the
Company arising from a Claim first made against the Directors or Officers during
the Policy Period or the Discovery  Period (if  applicable)  and reported to the
Insurer  pursuant to the terms of this policy for any actual or alleged Wrongful
Act in their  respective  capacities  as  Directors  or Officers of the Company,
except when and to the extent that the Company has  indemnified the Directors or
Officers. The Insurer shall, in accordance with and subject to Clause 8, advance
Defense Costs of such Claim prior to its final disposition.

      COVERAGE B: CORPORATE LIABILITY INSURANCE

      This policy shall pay the Loss of the Company arising from a:

                  (i)    Securities Claim first made against the Company, or

                  (ii)   Claim first made against the Directors or Officers,

     during the  Policy  Period or the  Discovery  Period  (if  applicable)  and
     reported to the Insurer pursuant to the terms of this policy for any actual
     or alleged  Wrongful Act, but, in the case of (ii) above,  only when and to
     the extent that the Company has  indemnified  the Directors or Officers for
     such Loss pursuant to law, common or statutory, or contract, or the Charter
     or By-laws of the Company duly  effective  under such law which  determines
     and defines such rights of indemnity. The Insurer shall, in accordance with
     and subject to Clause 8, advance  Defense  Costs of such Claim prior to its
     final disposition.

2.   DEFINITIONS

      (a)  "Claim" means:

          (1) a written demand for monetary or non-monetary relief; or
          (2) a civil, criminal, or administrative proceeding for monetary or
non-monetary relief which is commenced by:

              (i)   service of a complaint or similar pleading; or
              (ii)  return of an indictment (in the case of a criminal
                    proceeding); or
              (iii) receipt or filing of a notice of charges.

     The term "Claim" shall include a Securities Claim; provided,  however, that
with respect to Coverage B(i) only,  Claim or Securities  Claim shall not mean a
criminal or administrative proceeding against the Company.

     (b)  "Company"  means the  Named  Corporation  designated  in Item 1 of the
Declarations and any Subsidiary thereof.

     (c) "Continuity Date" means the date set forth in:

          (1) Item 6A of the Declarations with respect to Coverages A and B
(ii); or
          (2) Item 6B of the Declarations with respect to Coverage B(i); or

          (3) Item 6C of the Declarations  with respect to Coverages A and B for
a Claim  against an Insured  arising out of such Insured  serving as a director,
officer, trustee or governor of an Outside Entity.

     (d) "Defense Costs" means reasonable and necessary fees, costs and expenses
consented to by the Insurer (including premiums for any appeal bond,  attachment
bond or similar  bond,  but without any  obligation  to apply for or furnish any
such bond)  resulting  solely from the  investigation,  adjustment,  defense and
appeal of a Claim  against the Insureds,  but excluding  salaries of Officers or
employees of the Company.

     (e) "Director(s) or Officer(s)" or "Insured(s)" means:

         (1) with respect to Coverages A and B (ii), any past, present or future
duly elected or appointed directors or officers of the Company. In the event the
Named  Corporation or a Subsidiary  thereof  operates outside the United States,
then the terms  "Director(s)  or  Officer(s)"  or  "Insured(s)"  also mean those
titles,  positions or capacities in such foreign Named Corporation or Subsidiary
which  is  equivalent  to  the  position  of  Director(s)  or  Officer(s)  in  a
corporation  incorporated within the United States.  Coverage will automatically
apply to all new Directors and Officers after the inception date of this policy;

         (2) with respect to Coverage B(i) only, the Company.

     (f) "Listed Event" means any of the following events:

         (1) any event for which the  Company  has  reported  or is  required to
report on Form 8-K filed with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934; or

         (2) any restatement or correction of a Company financial statement
contained in any document filed with the Securities and Exchange Commission; or

         (3) any statement or disclosure made by or on the behalf of the Company
relating to a prior forecast,  estimate or projection of the Company's  earnings
or sales made by or on behalf of the  Company,  which  statement  or  disclosure
represents  a greater  than 15% change  from such prior  forecast,  estimate  or
projection.

     (g)  "Loss"  means  damages,  judgments,  settlements  and  Defense  Costs;
however,  Loss shall not include civil or criminal fines or penalties imposed by
law,  punitive  or  exemplary  damages,  the  multiplied  portion of  multiplied
damages,  taxes, any amount for which the Insureds are not financially liable or
which are without legal recourse to the Insureds, or matters which may be deemed
uninsurable under the law pursuant to which this policy shall be construed.

     Further,  with respect to Coverage B only, Loss shall not include  damages,
judgments or  settlements  arising out of a Claim alleging that the Company paid
an  inadequate  or unfair  price or  consideration  for the  purchase of its own
securities or the securities of a Subsidiary.

     Notwithstanding  the  foregoing,  with  respect to  Coverage  B(i) only and
subject to the other terms,  conditions and exclusions of the policy, Loss shall
include punitive damages (if insurable by law) imposed upon the Company.

     (h) "No  Liability"  means with respect to a Securities  Claim made against
the Insured(s): (1) a final judgment of no liability obtained prior to trial, in
favor of all Insureds,  by reason of a motion to dismiss or a motion for summary
judgment,  after the  exhaustion of all appeals;  or (2) a final  judgment of no
liability  obtained after trial, in favor of all Insureds,  after  exhaustion of
all  appeals.  In no event shall the term "No  Liability"  apply to a Securities
Claim made against an Insured for which a settlement has occurred.

     (i) "Outside Entity" means:

         (1) a not-for-profit organization under section 501(c)(3) of the
Internal Revenue Code of 1986 (as amended); or

         (2)  any  other  corporation,   partnership,  joint  venture  or  other
organization listed by endorsement to this policy.

     (j) "Policy  Period" means the period of time from the inception date shown
in Item 3 of the  Declarations  to the earlier of the  expiration  date shown in
Item 3 of the Declarations or the effective date of cancellation of this policy;
however,  to the extent that  coverage  under this policy  replaces  coverage in
other  policies  terminating at noon standard time on the inception date of such
coverage  hereunder,  then such coverage as is provided by this policy shall not
become effective until such other coverage has terminated.

     (k) "Securities  Claim" means a Claim made against an Insured which alleges
a violation  of the  Securities  Act of 1933 or the  Securities  Exchange Act of
1934, rules or regulations  promulgated  thereunder,  the securities laws of any
state,  or any  foreign  jurisdiction,  and  which  alleges  a  Wrongful  Act in
connection with the claimant's  purchase or sale of, or the offer to purchase or
sell to the claimant, any securities of the Company,  whether on the open market
or arising from a public or private offering of securities by the Company.

     (l) "Subsidiary" means:

         (1) any  corporation of which the Named  Corporation  owns on or before
the inception of the Policy  Period more than 50% of the issued and  outstanding
voting  stock  either  directly,  or  indirectly  through  one  or  more  of its
Subsidiaries;

         (2)  automatically  any corporation whose assets total less than 10% of
the total  consolidated  assets of the Company as of the inception  date of this
policy,  which corporation  becomes a Subsidiary  during the Policy Period.  The
Named  Corporation  shall provide the Insurer with full  particulars  of the new
Subsidiary before the end of the Policy Period;

         (3) any corporation which becomes a Subsidiary during the Policy Period
(other than a  corporation  described in paragraph  (2) above) but only upon the
condition that within 90 days of its becoming a Subsidiary the Named Corporation
shall have provided the Insurer with full  particulars of the new Subsidiary and
agreed to any  additional  premium  and/or  amendment of the  provisions of this
policy  required  by the  Insurer  relating  to such  new  Subsidiary.  Further,
coverage as shall be  afforded to the new  Subsidiary  is  conditioned  upon the
Named Corporation paying when due any additional premium required by the Insurer
relating to such new Subsidiary.

         A corporation becomes a Subsidiary when the Named Corporation owns more
than 50% of the  issued  and  outstanding  voting  stock,  either  directly,  or
indirectly through one or more of its Subsidiaries. A corporation ceases to be a
Subsidiary when the Named Corporation  ceases to own more than 50% of the issued
and outstanding voting stock either directly,  or indirectly through one or more
of its Subsidiaries.

         In all events,  coverage as is afforded  under this policy with respect
to any Claim made against a Subsidiary or any Director or Officer  thereof shall
only  apply  for  Wrongful  Acts  committed  or  allegedly  committed  after the
effective  time that such  Subsidiary  became a Subsidiary and prior to the time
that such Subsidiary ceased to be a Subsidiary.

     (m) "Wrongful Act" means:

         (1) with respect to  individual  Directors  or Officers,  any breach of
duty, neglect, error, misstatement, misleading statement, omission or act by the
Directors or Officers of the Company in their respective  capacities as such, or
any matter claimed against them solely by reason of their status as Directors or
Officers of the Company, or any matter claimed against them arising out of their
serving as a director, officer, trustee or governor of an Outside Entity in such
capacities,  but only if such  service  is at the  specific  written  request or
direction of the Company,

         (2) with respect to the Company,  any breach of duty,  neglect,  error,
misstatement,  misleading statement,  omission or act by the Company, but solely
as respects a Securities Claim.

3.   EXTENSIONS

     Subject otherwise to the terms hereof, this policy shall cover Loss arising
from any Claims made against the estates,  heirs,  or legal  representatives  of
deceased  Directors or Officers,  and the legal  representatives of Directors or
Officers  in the  event of  incompetency,  insolvency  or  bankruptcy,  who were
Directors or Officers at the time the  Wrongful  Acts upon which such Claims are
based were committed.

     Subject otherwise to the terms hereof, this policy shall cover Loss arising
from all Claims made against the lawful  spouse  (whether such status is derived
by  reason  of  statutory  law,  common  law  or  otherwise  of  any  applicable
jurisdiction  in the world) of an individual  Director or Officer for all Claims
arising solely out of his or her status as the spouse of an individual  Director
or  Officer,  including  a Claim that seeks  damages  recoverable  from  marital
community property,  property jointly held by the individual Director or Officer
and the spouse, or property  transferred from the individual Director or Officer
to the spouse; provided,  however, that this extension shall not afford coverage
for any Claim for any actual or alleged  Wrongful  Act of the spouse,  but shall
apply only to Claims  arising out of any actual or alleged  Wrongful  Acts of an
individual  Director or Officer,  subject to the policy's terms,  conditions and
exclusions.

4.   EXCLUSIONS

     The Insurer  shall not be liable to make any payment for Loss in connection
with a Claim made against an Insured:

         (a) arising out of, based upon or attributable to the gaining in fact
of any profit or advantage to which an Insured was not legally entitled;

         (b) arising out of, based upon or attributable  to: (1) profits in fact
made from the purchase or sale by an Insured of securities of the Company within
the  meaning  of  Section  16(b)  of the  Securities  Exchange  Act of 1934  and
amendments  thereto or similar  provisions  of any state  statutory  law; or (2)
payments to an Insured of any remuneration  without the previous approval of the
stockholders of the Company,  which payment without such previous approval shall
be held to have been illegal;

         (c) arising out of, based upon or attributable to the committing in
fact of any criminal or deliberate fraudulent act;

         [The  Wrongful Act of a Director or Officer shall not be imputed to any
other Director or Officer for the purpose of determining  the  applicability  of
the foregoing exclusions 4(a) through 4(c)]

         (d) alleging,  arising out of, based upon or  attributable to the facts
alleged,  or to the same or related  Wrongful Acts alleged or contained,  in any
claim which has been reported,  or in any circumstances of which notice has been
given,  under any policy of which this  policy is a renewal  or  replacement  or
which it may succeed in time;

         (e) alleging, arising out of, based upon or attributable to any pending
or prior  litigation as of the Continuity  Date, or alleging or derived from the
same or  essentially  the  same  facts  as  alleged  in such  pending  or  prior
litigation;

         (f) alleging,  arising out of, based upon or  attributable  to a Listed
Event  that  occurs no later than 90 days  subsequent  to the  Continuity  Date;
provided, however, that this exclusion shall only apply with respect to coverage
which would have otherwise been afforded under Coverage B(i) of the policy;

         (g) with respect to serving as a director, officer, trustee or governor
of an Outside  Entity,  for any Wrongful Act occurring  prior to the  Continuity
Date if the Insured knew or could have  reasonably  foreseen  that such Wrongful
Act could lead to a Claim under this policy;

         (h) alleging,  arising out of, based upon or attributable to any actual
or  alleged  act or  omission  of the  Directors  or  Officers  serving in their
capacities  as  directors,  officers,  trustees or governors of any other entity
other than the  Company or an Outside  Entity,  or by reason of their  status as
directors, officers, trustees or governors of such other entity;

         (i) which is brought  by any  Insured  or by the  Company;  or which is
brought by any security holder of the Company, whether directly or derivatively,
unless  such  security  holder's  Claim  is  instigated  and  continued  totally
independent  of, and totally without the  solicitation  of, or assistance of, or
active  participation  of, or  intervention  of,  any  Insured  or the  Company;
provided,  however,  this exclusion shall not apply to a wrongful termination of
employment  Claim brought by a former  employee other than a former employee who
is or was a Director of the Company.

         (j) for any  Wrongful  Act  arising  out of the  Insured  serving  as a
director,  officer,  trustee or governor  of an Outside  Entity if such Claim is
brought by the Outside Entity or by any director,  officer,  trustee or governor
thereof;  or which is  brought by any  security  holder of the  Outside  Entity,
whether  directly  or  derivatively,  unless  such  security  holder's  Claim is
instigated  and  continued  totally  independent  of, and  totally  without  the
solicitation of, or assistance of, or active  participation  of, or intervention
of, the Outside Entity, any director, officer, trustee, or governor thereof, any
Insured or the Company.

         (k) for bodily injury,  sickness,  disease, death or emotional distress
of any person, or damage to or destruction of any tangible  property,  including
the loss of use thereof,  or for injury from libel or slander or  defamation  or
disparagement, or for injury from a violation of a person's right of privacy;

         (1) alleging, arising out of, based upon, attributable to, or in any
way involving, directly or indirectly:

             (1) the actual, alleged or threatened discharge, dispersal, release
or escape of pollutants; or

             (2) any direction or request to test for, monitor, clean up,
remove, contain, treat, detoxify or neutralize pollutants,

             including,  but not  limited  to, a Claim  alleging  damage  to the
Company or its securities  holders.  Pollutants include (but are not limited to)
any solid, liquid, gaseous or thermal irritant or contaminant,  including smoke,
vapor, soot, fumes, acids, alkalis,  chemicals and waste. Waste includes (but is
not limited to) materials to be recycled, reconditioned or reclaimed;

         (m) for  violation(s)  of any of the  responsibilities,  obligations or
duties imposed upon fiduciaries by the Employee  Retirement  Income Security Act
of 1974, or amendments  thereto or any similar provisions of state statutory law
or common law.

5.   LIMIT OF LIABILITY - (FOR ALL LOSS - INCLUDING DEFENSE COSTS)

     The Limit of Liability stated in Item 4 of the Declarations is the limit of
the Insurer's  liability for all Loss, under Coverage A and Coverage B combined,
arising  out of all Claims  first made  against the  Insureds  during the Policy
Period and the Discovery Period (if applicable); however, the Limit of Liability
for the Discovery  Period shall be part of, and not in addition to, the Limit of
Liability for the Policy Period.  Further, any Claim which is made subsequent to
the Policy Period or Discovery  Period (if applicable)  which pursuant to Clause
7(b) or 7(c) is  considered  made during the Policy  Period or Discovery  Period
shall also be subject to the one aggregate  Limit of Liability  stated in Item 4
of the Declarations.

     Defense  Costs are not  payable by the  Insurer in addition to the Limit of
Liability.  Defense  Costs are part of Loss and as such are subject to the Limit
of Liability for Loss.

6.   RETENTION CLAUSE

     The  Insurer  shall only be liable for the  amount of Loss  arising  from a
Claim  which  is in  excess  of the  Retention  amount  stated  in Item 5 of the
Declarations,  such  Retention  amount  to be borne by the  Company  and/or  the
Insureds and shall remain uninsured, with regard to all Loss under: (i) Coverage
A or B(ii) for which the Company has  indemnified or is permitted or required to
indemnify the Director(s) or Officer(s) ("Indemnifiable Loss"); or (ii) Coverage
B(i).  A single  Retention  amount  shall apply to Loss  arising from all Claims
alleging the same Wrongful Act or related Wrongful Acts.

     Notwithstanding  the foregoing,  solely with respect to a Securities  Claim
under this policy,  the Retention  shall only apply to Defense Costs;  provided,
however,  no  Retention  shall  apply for a  Securities  Claim even as  respects
Defense Costs in the event of a  determination  of No Liability of all Insureds,
and the  Insurer  shall  thereupon  reimburse  such  Defense  Costs  paid by the
Insured.

7.   NOTICE/CLAIM REPORTING PROVISIONS

     Notice  hereunder  shall be given in writing to the Insurer named in Item 8
of the Declarations at the address indicated in Item 8 of the  Declarations.  If
mailed, the date of mailing shall constitute the date that such notice was given
and proof of mailing shall be sufficient proof of notice.

         (a) The Company or the Insureds shall, as a condition  precedent to the
obligations of the Insurer under this policy, give written notice to the Insurer
of any Claim made against an Insured as soon as practicable and either:

             (1) any time during the Policy Period or during the Discovery
Period (if applicable); or

             (2)  within  30 days  after  the end of the  Policy  Period  or the
Discovery  Period (if  applicable),  as long as such Claim is  reported no later
than 30 days after the date such Claim was first made against an Insured.

         (b) If written notice of a Claim has been given to the Insurer pursuant
to Clause 7(a)  above,  then any Claim which is  subsequently  made  against the
Insureds  and  reported to the Insurer  alleging,  arising out of, based upon or
attributable  to the facts  alleged in the Claim for which such  notice has been
given,  or  alleging  any  Wrongful  Act which is the same as or  related to any
Wrongful Act alleged in the Claim of which such notice has been given,  shall be
considered made at the time such notice was given.

         (c) If during the  Policy  Period or during  the  Discovery  Period (if
applicable) the Company or the Insureds shall become aware of any  circumstances
which may  reasonably be expected to give rise to a Claim being made against the
Insureds and shall give written notice to the Insurer of the  circumstances  and
the reasons for  anticipating  such a Claim,  with full particulars as to dates,
persons,  and  entities  involved,  then any Claim  which is  subsequently  made
against the Insureds and reported to the Insurer alleging, arising out of, based
upon or attributable to such circumstances or alleging any Wrongful Act which is
the  same as or  related  to any  Wrongful  Act  alleged  or  contained  in such
circumstances,  shall  be  considered  made  at the  time  such  notice  of such
circumstances was given.

8.   DEFENSE COSTS, SETTLEMENTS, JUDGMENTS (INCLUDING THE
     ADVANCEMENT OF DEFENSE COSTS)

     Under both Coverage A and Coverage B of this policy,  except as hereinafter
stated,  the  Insurer  shall  advance,  at the written  request of the  Insured,
Defense Costs prior to the final  disposition of a Claim. Such advanced payments
by the  Insurer  shall be repaid to the  Insurer by the  Insureds or the Company
severally  according  to their  respective  interests,  in the  event and to the
extent that the  Insureds or the Company  shall not be entitled  under the terms
and conditions of this policy to payment of such Loss.

     The  Insurer  does not,  however,  under  this  policy,  assume any duty to
defend.  The Insureds  shall defend and contest any Claim made against them. The
Insureds  shall not admit or assume any  liability,  enter  into any  settlement
agreement,  stipulate to any  judgment,  or incur any Defense  Costs without the
prior  written  consent  of the  Insurer.  Only  those  settlements,  stipulated
judgments and Defense Costs which have been consented to by the Insurer shall be
recoverable as Loss under the terms of this policy.  The Insurer's consent shall
not be  unreasonably  withheld,  provided  that the Insurer shall be entitled to
effectively  associate in the defense and the  negotiation  of any settlement of
any Claim.

     The Insurer shall have the right to effectively  associate with the Company
and the Insureds in the defense of any Claim that appears  reasonably  likely to
involve the Insurer,  including but not limited to negotiating a settlement. The
Company  and the  Insureds  shall give the  Insurer  full  cooperation  and such
information as it may reasonably require.

     The Insurer may make any  settlement of any Claim it deems  expedient  with
respect to any Insured subject to such Insured's written consent. If any Insured
withholds  consent to such settlement,  the Insurer's  liability for all Loss on
account of such Claim  shall not exceed the amount for which the  Insurer  could
have  settled  such  Claim  plus  Defense  Costs  incurred  as of the date  such
settlement was proposed in writing by the Insurer.

     The Company is not covered in any respect under  Coverage A; the Company is
covered, subject to the policy's terms and conditions,  only with respect to its
indemnification  of its Directors or Officers under Coverage B(ii) as respects a
Claim against such Directors and Officers, and subject to the policy's terms and
conditions, under Coverage B(i) for a Securities Claim made against the Company.
Accordingly,  the Insurer has no obligation  under this policy for Defense Costs
incurred by,  judgments  against or settlements by the Company  arising out of a
Claim made against the Company  other than a covered  Securities  Claim,  or any
obligation to pay Loss arising out of any legal  liability  that the Company has
to the  claimant  except as  respects a covered  Securities  Claim  against  the
Company.

     With  respect to (i)  Defense  Costs  jointly  incurred  by, (11) any joint
settlement made by, and/or (iii) any  adjudicated  judgment of joint and several
liability  against the Company and any Director or Officer,  in connection  with
any Claim other than a  Securities  Claim,  the Company and the  Director(s)  or
Officer(s)  and the Insurer  agree to use their best efforts to determine a fair
and proper  allocation of the amounts as between the Company and the Director(s)
or  Officers(s)  and the Insurer,  taking into  account the  relative  legal and
financial  exposures of and the relative  benefits obtained by the Directors and
Officers and the Company.  In the event that a determination as to the amount of
Defense  Costs to be  advanced  under the policy  cannot be agreed to,  then the
Insurer shall advance such Defense Costs which the Insurer states to be fair and
proper until a different  amount shall be agreed upon or determined  pursuant to
the provisions of this policy and applicable law.

9.   PRE-AUTHORIZED SECURITIES DEFENSE ATTORNEYS

     Only with respect to a Securities Claim:

     Affixed as  Appendix  A hereto and made a part of this  policy is a list of
Panel Counsel law firms ("Panel Counsel Firms"). The list provides the Insured a
choice of law firms from which a  selection  of legal  counsel  shall be made to
conduct the defense of any Securities Claim made against them.

     The Insureds shall select a Panel Counsel Firm to defend a Securities Claim
made against the Insureds in the  jurisdiction in which the Securities  Claim is
brought.  In the event a  Securities  Claim is  brought  in a  jurisdiction  not
included on the list,  the  Insureds  shall  select a Panel  Counsel Firm in the
listed  jurisdiction  which is the nearest  geographical  jurisdiction to either
where the Securities Claim is brought or where the corporate headquarters of the
Named  Corporation is located.  In such instance the Insureds also may, with the
consent of the Insurer, which consent shall not be unreasonably withheld, select
a non-Panel  Counsel Firm in the  jurisdiction in which the Securities  Claim is
brought to function as "local  counsel"  on the  Securities  Claim to assist the
Panel  Counsel  Firm which will  function as "lead  counsel" in  conducting  the
defense of the Securities Claim.

     With the  express  prior  written  consent of the  Insurer,  an Insured may
select a Panel  Counsel  Firm  different  from that  selected  by other  Insured
defendants if such  selection is required due to an actual  conflict of interest
or is otherwise reasonably justifiable.

     The list of Panel  Counsel  Firms may be  amended  from time to time by the
Insurer.  However, no change shall be made to the specific list attached to this
policy during the Policy Period without the consent of the Named Corporation. At
the  request  of the  Insured,  the  Insurer  may in its  discretion  add to the
attached  list of Panel Counsel Firms for the purposes of defending a Securities
Claim made  against  the  Insured in any  specified  jurisdiction  (including  a
jurisdiction not originally  included in the Panel Counsel list) a Panel Counsel
Firm  not  originally  listed  for such  jurisdiction.  The  Insurer  may in its
discretion waive, in part or in whole, the provisions of this clause as respects
a particular Securities Claim.

10.  DISCOVERY CLAUSE

     Except as indicated  below, if the Insurer or the Named  Corporation  shall
cancel or refuse to renew  this  policy,  the Named  Corporation  shall have the
right,  upon  payment  of an  additional  premium  of 75% of  the  "full  annual
premium",  to a  period  of one  year  following  the  effective  date  of  such
cancellation or non-renewal  (herein  referred to as the "Discovery  Period") in
which to give to the Insurer  written  notice of Claims  first made  against the
Insureds during said one year period for any Wrongful Act occurring prior to the
end of the Policy Period and otherwise  covered by this policy.  As used herein,
"full annual premium" means the premium level in effect immediately prior to the
end of  the  Policy  Period.  The  rights  contained  in  this  paragraph  shall
terminate,  however,  unless written  notice of such election  together with the
additional  premium  due is  received  by the  Insurer  within  30  days  of the
effective date of cancellation or non-renewal.

     In the  event  of a  Transaction,  as  defined  in  Clause  12,  the  Named
Corporation  shall have the right,  within 30 days  before the end of the Policy
Period, to request an offer from the Insurer of a Discovery Period (with respect
to Wrongful Acts occurring prior to the effective time of the Transaction) for a
period of no less than three years or for such  longer or shorter  period as the
Named  Corporation  may request.  The Insurer shall offer such Discovery  Period
pursuant to such  terms,  conditions  and premium as the Insurer may  reasonably
decide. In the event of a Transaction, the right to a Discovery Period shall not
otherwise exist except as indicated in this paragraph.

     The  additional  premium for the Discovery  Period shall be fully earned at
the inception of the Discovery  Period.  The Discovery Period is not cancelable.
This clause and the rights  contained herein shall not apply to any cancellation
resulting from nonpayment of premium.

11.  CANCELLATION CLAUSE

     This policy may be canceled  by the Named  Corporation  at any time only by
mailing  written  prior  notice to the Insurer or by surrender of this policy to
the Insurer or its authorized  agent.  This policy may also be canceled by or on
behalf of the Insurer by  delivering to the Named  Corporation  or by mailing to
the Named Corporation,  by registered,  certified, or other first class mail, at
the Named Corporation's address as shown in Item 1 of the Declarations,  written
notice stating when, not less than 60 days thereafter, the cancellation shall be
effective.  The mailing of such notice as aforesaid shall be sufficient proof of
notice.  The Policy  Period  terminates  at the date and hour  specified in such
notice, or at the date and time of surrender.

     If this  policy  shall be canceled  by the Named  Corporation,  the Insurer
shall retain the customary short rate proportion of the premium herein.

     If this policy shall be canceled by the Insurer,  the Insurer  shall retain
the pro rata proportion of the premium herein.

     Payment or tender of any  unearned  premium by the  Insurer  shall not be a
condition precedent to the effectiveness of cancellation, but such payment shall
be made as soon as practicable.

     If the period of limitation  relating to the giving of notice is prohibited
or made void by any law controlling the construction  thereof, such period shall
be deemed to be amended so as to be equal to the  minimum  period of  limitation
permitted by such law.

12.  CHANGE IN CONTROL OF NAMED CORPORATION

     If during the Policy Period:

     a. the Named Corporation shall consolidate with or merge into, or sell all
or substantially all of its assets to any other person or entity or group of
persons and/or entities acting in concert; or

     b. any  person or  entity or group of  persons  and/or  entities  acting in
concert shall acquire an amount of the outstanding securities  representing more
than  50% of the  voting  power  for the  election  of  Directors  of the  Named
Corporation, or acquires the voting rights of such an amount of such securities;

     (either of the above events herein referred to as the "Transaction")

     then this  policy  shall  continue  in full force and effect as to Wrongful
Acts occurring prior to the effective time of the  Transaction,  but there shall
be no  coverage  afforded  by any  provision  of this  policy  for any actual or
alleged Wrongful Act occurring after the effective time of the Transaction. This
policy may not be canceled after the effective time of the  Transaction  and the
entire premium for this policy shall be deemed earned as of such time. The Named
Corporation  shall also have the right to an offer by the Insurer of a Discovery
Period described in Clause 10 of the policy.

     The  Named  Corporation  shall  give  the  Insurer  written  notice  of the
Transaction  as soon  as  practicable,  but not  later  than 30 days  after  the
effective date of the Transaction.

13.  SUBROGATION

     In the event of any  pavement  under  this  policy,  the  Insurer  shall be
subrogated to the extent of such pavement to all the Company's and the Insureds'
rights of recovery  thereof,  and the Company and the Insureds shall execute all
papers  required  and shall do  everything  that may be necessary to secure such
rights including the execution of such documents necessary to enable the Insurer
to effectively bring suit in the name of the Company and/or the Insureds.  In no
event, however,  shall the Insurer exercise its rights of subrogation against an
Insured under this policy  unless such Insured has been  convicted of a criminal
act, or been  judicially  determined to have  committed a deliberate  fraudulent
act, or obtained  any profit or  advantage to which such Insured was not legally
entitled.

14.  OTHER INSURANCE AND INDEMNIFICATION

     Such  insurance  as is provided  by this policy  shall apply only as excess
over any other valid and collectible insurance.

     In the event of a Claim against a Director or Officer arising out of his or
her serving as  director,  officer,  trustee or  governor of an Outside  Entity,
coverage  as is  afforded  by  this  policy  shall  be  specifically  excess  of
indemnification  provided by such Outside  Entity and any insurance  provided to
such  Outside  Entity  with  respect to its  directors,  officers,  trustees  or
governors. Further, in the event such other Outside Entity insurance is provided
by the  Insurer or any member  company of  American  International  Group,  Inc.
("AIG") (or would be provided but for the  application of the retention  amount,
exhaustion  of the limit of  liability or failure to submit a notice of a Claim)
then the maximum aggregate Limit of Liability for all Losses combined covered by
virtue of this policy as  respects  any such Claim shall be reduced by the limit
of liability (as set forth on the declarations  page) of the other AIG insurance
provided to such Outside Entity.

15.  NOTICE AND AUTHORITY

     It is  agreed  that  the  Named  Corporation  shall  act on  behalf  of its
Subsidiaries  and all  Insureds  with  respect to the giving  notice of Claim or
giving and  receiving  notice of  cancellation,  the payment of premiums and the
receiving  of any return  premiums  that may become due under this  policy,  the
receipt and acceptance of any endorsements  issued to form a part of this policy
and the exercising or declining to exercise any right to a Discovery Period.

16.   ASSIGNMENT

     This policy and any and all rights hereunder are not assignable without the
written consent of the Insurer.

17.  ARBITRATION

     It is hereby  understood and agreed that all disputes or differences  which
may arise under or in connection  with this policy,  whether  arising  before or
after  termination of this policy,  including any determination of the amount of
Loss, shall be submitted to the American  Arbitration  Association  under and in
accordance  with  its  then  prevailing   commercial   arbitration   rules.  The
arbitrators shall be chosen in the manner and within the time frames provided by
such  rules.  If  permitted  under  such  rules the  arbitrators  shall be three
disinterested individuals having knowledge of the legal, corporate management or
insurance issues relevant to the matters in dispute.

     Any party may commence such arbitration  proceeding in either New York, New
York; Atlanta, Georgia; Chicago,  Illinois; or Denver, Colorado. The arbitrators
shall give due  consideration  to the general  principles of Delaware law in the
construction  and  interpretation  of the  provisions of this policy;  provided,
however,  that the terms,  conditions,  provisions and exclusions of this policy
are to be construed in an evenhanded  fashion as between the parties,  including
without limitation, where the language of this policy is alleged to be ambiguous
or otherwise unclear,  the issue shall be resolved in the manner most consistent
with the relevant  terms,  conditions,  provisions  or  exclusions of the policy
(without  regard to the  authorship of the language,  the doctrine of reasonable
expectation   of  the  parties  and  without  any   presumption   or   arbitrary
interpretation  or  construction  in favor of either  party or  parties,  and in
accordance with the intent of the parties.)

     The written  decision of the arbitrators  shall be provided to both parties
and shall be binding on them. The arbitrators'  award shall not include attorney
fees or other costs.

     Each party shall bear equally the expenses of the arbitration.

18.  ACTION AGAINST INSURER

     Except as provided in Clause 17 of the policy,  no action shall lie against
the Insurer unless, as a condition precedent thereto, there shall have been full
compliance  with all of the terms of this  policy,  nor until the  amount of the
Insureds'  obligation  to pay  shall  have  been  finally  determined  either by
judgment against the Insureds after actual trial or by written  agreement of the
Insureds, the claimant and the Insurer.

     Any person or  organization  or the legal  representative  thereof  who has
secured  such  judgment or written  agreement  shall  thereafter  be entitled to
recover  under  this  policy to the  extent of the  insurance  afforded  by this
policy. No person or organization shall have any right under this policy to join
the  Insurer as a party to any action  against  the  Insureds  or the Company to
determine  the  Insureds'  liability,  nor shall the Insurer be impleaded by the
Insureds or the Company or their legal representatives. Bankruptcy or insolvency
of the Company or the Insureds or of their estates shall not relieve the Insurer
of any of its obligations hereunder.

19.   HEADINGS

     The descriptions in the headings of this policy are solely for convenience,
and form no part of the terms and conditions of coverage.

<PAGE>

                                   APPENDIX A

                                  PANEL COUNSEL


CALIFORNIA
Los Angeles
-----------

Gibson, Dunn & Crutcher
333 South Grand Avenue
Los Angeles, CA 90071-3197
Contact Persons:
Robert S. Warren (213) 229-7326
Wayne W. Smith (213) 229-7464
John H. Sharer (213) 229-7476

Heller, Ehrman, White & McAuliffe
601 South Fiqueroa Street - 40th Floor
Los Angeles, CA 90017-5758
Contact Person:
Miles N. Ruthberg (213) 689-0200

Irell & Manelia
1800 Avenue of the Stars - Suite 900
Los Angeles, CA 90067
Contact Person:
Richard Borow (310) 277-1010

Kirkland & Ellis
300 South Grand Avenue
Los Angeles, CA 90071
Contact Persons:
Jeffrey S. Davidson or
Stephen C. Neal (213) 680-8400

Latham & Watkins  633 West  Fifth  Avenue Los  Angeles,  CA  90071-2007  Contact
Person:
Hugh Steven Wilson (213) 485-1234

Morrison & Foerster
555 West 5th Street - Suite 3500
Los Angeles, CA 90013-1024
Contact Person:
Robert Stern (213) 892-5484

Munger, Tolles & Olson
355 South Grand Avenue - 35th Floor
Los Angeles, CA 90071-1560
Contact Persons:
Dennis Kinnaird (213) 683-9264 or
John W. Spiegel (213) 683-9152

O'Melveny & Myers
400 South Hope Street
Los Angeles, CA 90071-2899
Contact Persons:
Seth Aronson or
Robert Vanderet (213) 669-6000

Skadden, Arps, Slate, Meagher & Flom
300 South Grand Avenue - Suite 3400
Los Angeles, CA 90071
Contact Persons:
James E. Lyons or
Frank Rothman (213) 687-5000

Palo Alto
---------

Wilson, Sonsini, Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Contact Persons:
Bruce Vanyo or
Steven M. Schatz (415) 493-9300

Heller, Ellman, White & McAuliffe
525 University Avenue
Palo Alto, CA 94301
Contact Person:
Norman J. Blears (415) 324-7000

San Francisco
-------------

Brobeck, Phleger & Harrison
Spear Street Tower
One Market
San Francisco, CA 94105
Contact Person:
Tower C. Snow Jr. (415) 442-0900

Heller, Ellman, White & McAuliffe
333 Bush Street
San Francisco, CA 94104
Contact Persons:
Douglas Schwab or
M. Laurence Popofsky (415) 772-6000

McCutchen, Doyle, Brown & Enersen
3 Embarcadero Center - 18th Floor
San Francisco, CA 94111
Contact Persons:
David Balabanian or
Philip R. Rotner (415) 393-2000

Morrison & Foerster
345 California Street
San Francisco, CA 94104-2675
Contact Persons:
Melvin R. Goldman (415) 677-7311
Paul T. Friedman (415) 677-7444

Orrick Herrington & Sutcliffe
Old Federal Reserve Bank Bldg.
400 Sansome Street
San Francisco, CA 94111
Contact Persons:
James A. Hughes,
W. Reece Bader or
Richard J. Lucas (415) 392-1122

Pillsbury, Madison & Sutro
P.O. Box 7880
235 Montgomery Street
San Francisco, CA 94104
Contact Person:
Gary H. Anderson (415) 983-1341

Shearman &  Sterling  555  California  Street San  Francisco,  CA 94104  Contact
Person:
Susan Samuels Mark (415) 616-1198

DISTRICT OF COLUMBIA
Washington
----------

Arnold & Porter
555 Twelfth Street N.W.
Washington, DC 20004-1202
Contact Person:
Scott Schreiber (202) 942-5672

Davis, Polk & Wardwell
1300 I Street, N.W. - Suite 1100
Washington, DC 20005
Contact Persons:
Scott W. Muller or
Michael P. Carroll (202) 962-7000

Gibson, Dunn & Crutcher
1050 Connecticut Avenue, N.W. - Suite 900
Washington, DC 20036-5306
Contact Person:
F. Joseph Warin (202) 887-3609

Mudge, Rose, Guthrie, Alexander & Ferdon
212 K Street, N.W.
Washington, DC 20037
Contact Persons:
Leonard Garment or
I. Lewis Libby (202) 429-9355

Patton Boggs, L.L.P.
2550 M Street N.W. - Suite 900
Washington, DC 20037
Contact Persons:
C. Allen Foster (202) 457-6320 or
Charles H. Camp (202) 457-5265

Shearman & Sterling
801 Pennsylvania Avenue N.W.
Washington, DC 20004-2604
Contact Persons:
Thomas S. Martin or
Jonathan L. Greenblatt (202) 508-8000

Willkie Farr & Gallagher
Three Lafayette Centre
1155 21st Street N.W.
Washington, DC 20036-3384
Contact Person:
Kevin B. Clark (202) 328-8000

GEORGIA
Atlanta
-------

Alston & Bird
One Atlantic Center
1201 West Peachtree Street
Atlanta, GA 30309
Contact Persons:
Peter Q. Basset (404) 881-7343
Mary C. Gill (404) 881-7276

King & Spalding
191 Peachtree Street N.W.
Atlanta, GA 30303-1763
Contact Persons:
Michael R. Smith or
Griffin Bell (404) 572-4600

Long, Aldridge & Norman
One Peachtree Center
303 Peachtree Street - Suite 5300
Atlanta, GA 30308
Contact Persons:
J. Allen Maines (404) 527-8340
Sharon Glenn (404) 527-8391

Smith, Gambrell & Russel
3343 Peachtree Road N.E. - Suite 1800
Atlanta, GA 30326-1010
Contact Persons:
David Handley (404) 264-2671
Robert C. Schwartz (404) 264-2658

ILLINOIS
Chicago
-------

Jenner & Block One IBM Plaza Chicago, IL 60611 Contact Person:
Jerold Solovy (312) 222-9350

Freeborn & Peters
311 South Wacker Drive - Suite 3000
Chicago, IL 60606-6677
Contact Person:
David H. Kistenbroker (312) 360-6567

Kirkland & Ellis
200 East Randolph Drive
Chicago, IL 60601
Contact Persons:
Garrett B. Johnson or
Robert J. Kopecky (312) 861-2000

Sidley & Austin
One First National Plaza
Chicago, IL 60603
Contact Persons:
Robert Downing (312) 853-7434
Eugene Schoon (312) 853-7279
Walter C. Carlson (312) 853-7734

Skadden, Arps, Slate, Meagher & Flom
333 West Wacker Drive - Suite 2100
Chicago, IL 60606
Contact Persons:
Timothy Nelsen or
Susan Getzendanner (312) 407-0700


Sonnenschein, Nath & Rosenthal
8000 Sears Tower
Chicago, IL 60606-6404
Contact Person:
Harold D. Shapiro (312) 876-8035

MASSACHUSETTS
Boston
------

Goodwin, Proctor & Hoar
Exchange Place
Boston, MA 02109
Contact Person:
Don M. Kennedy (617) 570-1000

Hale & Dorr
60 State Street
Boston, MA 02109
Contact Person:
Jeffery Rudman or
John Batter (617) 742-9100

Ropes & Gray
One International Plaza
Boston, MA 02110-2624
Contact Person:
John Donovan, Jr. (617) 951-7566

Skadden, Arps, Slate, Meagher & Flom
1 Beacon Street
Boston, MA 02108
Contact Persons:
Thomas A. Dougherty or
George J. Skelley (617) 573-4800

Palmer & Dodge
1 Beacon Street
Boston, MA 02108
Contact Persons:
Peter Terris or
Peter Saparoff (617) 573-0100

Testa, Hurwitz & Thibeault
High Street Tower
125 High Street
Boston, MA 02110
Contact Person:
Brian E. Pastuszenski (617) 248-7253

NEW YORK
New York
--------

Arnold & Porter
399 Park Avenue
New York, NY 10022-4690
Contact Persons:
Kenneth V. Handal (212) 715-1020 or
Scott Schreiber (212) 701-1000

Cahill Gordon & Reindel
80 Pine Street
New York, NY 10005
Contact Persons:
Charles A. Gilman,
Thomas J. Kavaler or
Immanuel Kohn (212) 701-3000

Davis, Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Contact Persons:
Henry King or
Dan Kolb (212) 450-4000

Fried, Frank, Harris, Shriver & Jacobson
1 New York Plaza - 27th Floor
New York, NY 10004
Contact Person:
Sheldon Raab (212) 859-8090

Kaye, Scholer, Fiernan, Hays & Handler
425 Park Avenue
New York, NY 10022
Contact Person:
Frederic W. Yerman (212) 836-8663

Kirkland & Ellis
Citicorp Center
153 East 53rd Street
New York, NY 10022-4675
Contact Persons:
Yosef J. Riemer or
Frank M. Holozubiec (212) 446-4800

Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, NY 10005
Contact Person:
Russell E. Brooks (212) 530-5554

Mudge, Rose, Guthrie, Alexander & Ferdon
180 Maiden Lane
New York, NY 10038
Contact Persons:
Kenneth Conboy, John J. Kirby, Jr., or
Laurence V. Senn, Jr. (212) 510-7000

Shearman & Sterling
Citicorp Center
153 E. 53rd Street
New York, NY 10022-4676
Contact Person:
Dennis Orr (212) 848-8000

Simpson, Thacher & Bartlett
425 Lexington Avenue
New York, NY 10017
Contact Persons:
Roy L. Reardon, James Hagan or
Michael J. Chepiga (212) 455-2000

Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, NY 10022
Contact Persons:
Barry H. Garfinkel or
Jonathan Lerner (212) 735-3000

Stroock, Stroock & Lavan
Seven Hanover Square
New York, NY 10004-2696
Contact Persons:
Melvin A. Brosterman,
Laurence Greenwald or
Alvin K. Hellerstein (212) 806-5400

Sullivan & Cromwell
125 Broad Street
New York, NY 10004-2498
Contact Persons:
John L. Warden or
Philip L. Grahman, Jr. (212) 558-4000

Teitelbaum, Hiller, Rodman, Paden &
Hibsher, P.C.
260 Madison Avenue
New York, NY 10016
Contact Person:
Herbert Teitelbaum (212) 213-1010

Wachtell, Lipton, Rosen & Katz
51 West 57th Street
New York, NY 10019
Contact Person:
Norman Redlich (212) 371-9200

Willkie, Farr & Gallagher
One Citicorp Center
153 East 53rd Street
New York, NY 10022-4677
Contact Persons:
Michael R. Young, David L. Foster or
Richard L. Posen (212) 821-8000

Weil, Gotshal & Manges
767 Fifth Avenue
New York, NY 10153
Contact Person:
Dennis J. Block (212) 310-8000

PENNSYLVANIA
Philadelphia
------------

Blank, Rome, Comisky & McCauley
1200 Four Penn Center
Philadelphia, PA 19103
Contact Persons:  Alexander D. Bono,
Richard P. McElroy or
Jerome R. Richter (215) 569-5500

Cozen & O'Connor
The Atrium
1900 Market Street
Philadelphia, PA 19103
Contact Persons:
Patrick J. O'Connor, Thomas C. Zielinski or
H. Robert Fiebach (215) 665-2000

Dechert, Prince & Rhoads
4000 Bell Atlantic Tower
1717 Arch Street
Philadelphia, PA 19103-2793
Contact Persons:
Seymour Kurland or
Jeffrey G. Weil (215) 994-4000

Morgan, Lewis & Bockius
2000 One Logan Square
Philadelphia, PA 19103-6993
Contact Persons:
Gregory M. Harvey, Marc J. Sonnenfeld or
Elizabeth Hoop Fay (215) 963-5000

Pepper, Hamilton & Scheetz
3000 Two Logan Square
Eighteenth & Arch Streets
Philadelphia, PA 19103-2799
Contact Persons:
Jon A. Baughman or
Laurence Z. Shiekman (215) 981-4000

Wolf, Block, Schorr & Solis-Cohen
12th Floor - Packard Building
S.E. Corner 15th & Chestnut Streets
Philadelphia, PA 19102-2678
Contact Person:
Jay A. Dubow (215) 977-2058


TEXAS
Dallas
------

Akin, Gump, Strauss, Hauer & Feld, L.L.P.
1700 Pacific Avenue - Suite 4100
Dallas, TX 75201-4618
Contact Persons:
Michael Lowenberg P.C. or
Louis P. Bickel (214) 969-2800

Fulbright & Jaworski
2200 Ross Avenue - Suite 2800
Dallas, TX 75201
Contact Person:
Karl G. Dial (214) 855-8000

Locke, Purnell, Rain & Harrell
2200 Ross Avenue - Suite 2200
Dallas, TX 75201-6776
Contact Persons:
John McElhaney (214) 740-8458
Peter Flynn (214) 740-8654
Morris Harrell (214) 740-8404

Thompson & Knight, P.C.
1700 Pacific Avenue - Suite 3300
Dallas, TX 75201
Contact Person:
Schuyler B. Marshall (214) 969-1246

Baker & Botts, L.L.P.
2001 Ross Avenue
Dallas, TX 75201-2916
Contact Person:
Ronald L. Palmer (214) 953-6500

Haynes & Boone, L.L.P.
3100 Nations Bank Plaza
901 Main Street
Dallas, TX 75202-3789
Contact Persons:
Michael Boone, George Bramblett or
Noel Hensley (214) 651-5000

Houston
-------

Akin, Gump, Strauss, Hauer & Feld, L.L.P.
Pennzoil Place - South Tower
711 Louisiana Street - Suite 1900
Houston, TX 77002
Contact Persons:
Charles Moore or
Paula Hinton (713) 220-5800

Fulbright & Jaworski, L.L.P.
1301 McKinney - Suite 5100
Houston, TX 77010
Contact Persons:
Richard Carrell or
Frank Jones (713) 651-5151

Vinson & Elkins 2500 First City Tower 1001 Fannin Houston, TX 77002-6760 Contact
Person:
David T. Hedges, Jr. (713) 758-2676

Baker & Botts, L.L.P.
910 Louisiana Street
Houston, TX 77002-4995
Contact Persons:
William C. Slusser or
Harold Metts (713) 229-1234

<PAGE>

                                 ENDORSEMENT# 1

     This  endorsement,  effective 12:01 AM July 08, 1996 forms a part of policy
number 483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY


by      National Union Fire Insurance Company of Pittsburgh, Pa.

PROFESSIONAL ERRORS AND OMISSIONS WITH MANAGEMENT LIABILITY

     In consideration of the premium charged, it is hereby understood and agreed
that the Insurer  shall not be liable to make any payment for Loss in connection
with any claim or claims  made  against the  Directors  or  Officers,  alleging,
arising out of, based upon or  attributable  to the  Company's,  or an Insured's
performance of  professional  services for others for a fee, or any alleged act,
error or omission  relating  thereto,  including  but not  limited to,  services
rendered in the following areas:  mortgage banker,  mortgage broker, real estate
syndicate;  or  services  rendered in the  Company's  Trust  Department  or as a
trustee or other fiduciary or agent for individuals, partnerships,  corporations
or other governmental  bodies; or any function similar to those mentioned above;
or any other professional services.

     Provided,  however, that the foregoing exclusion shall not be applicable to
any derivative or shareholder  class action claims against Directors or Officers
alleging a failure to  supervise  those who  performed or failed to perform such
professional services.

<PAGE>

                                 ENDORSEMENT # 2


     This  endorsement,  effective 12:01 AM July 08, 1996 forms a part of policy
number 483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by       National Union Fire Insurance Company of Pittsburgh, Pa.


                       CALIFORNIA CANCELLATION/NONRENEWAL
                                   ENDORSEMENT


     Wherever used in this endorsement: 1) "we", "us", "our", and "Insurer" mean
the insurance  company which issued this policy;  and 2) "you",  "your",  "named
Insured", "First Named Insured", and "Insured" mean the Named Corporation, Named
Organization,   Named  Sponsor,   Named  Insured,   or  Insured  stated  in  the
declarations page; and 3) "Other Insured(s)" means all other persons or entities
afforded coverage under the policy.

     In consideration of the premium charged, it is hereby understood and agreed
that the cancellation clause is replaced with the following:

CANCELLATION
------------

     The First Named Insured shown in the  declarations may cancel the policy by
mailing or delivering to the Insurer advance written notice of cancellation.

     If the  policy has been in effect for more than sixty (60) days or if it is
a renewal,  effective immediately,  the Insurer may not cancel the policy unless
such cancellation is based on one or more of the following reasons:

     1. Nonpayment of premium, including payment due on a prior policy issued by
the Insurer and due during the current policy term covering the same risks.

     2. A  judgment  by a court or an  administrative  tribunal  that the  named
Insured has violated any law of this state of or of the United  States having as
one of its necessary elements an act which materially increases any of the risks
insured against.

     3. Discovery of fraud or material misrepresentation by either of the
following:

         a. The Insured or Other Insured(s) or his or her representative in
obtaining the insurance; or

         b. The named Insured or his or her representative in pursuing a claim
under the Policy.

     4. Discovery of willful or grossly  negligent acts or omissions,  or of any
violations of state laws or regulations  establishing  safety standards,  by the
named Insured or Other Insured(s) or a representative  of same, which materially
increase any of the risks insured against.

     5. Failure by the named Insured or Other Insured(s) or a representative  of
same to implement  reasonable loss control  requirements which were agreed to by
the Insured as a condition of policy issuance or which were conditions precedent
to the use by the  Insurer of a  particular  rate or rating  plan if the failure
materially increases any of the risks insured against.

     6. A determination by the commissioner  that the loss of, or changes in, an
insurer's  reinsurance  covering  all or part of the  risk  would  threaten  the
financial integrity or solvency of the Insurer.

     7. A determination  by the  commissioner  that a continuation of the policy
coverage  could place the Insurer in  violation of the laws of this state or the
state of its domicile or that the  continuation  of coverage  would threaten the
solvency of the Insurer.

     8. A change by the Named Insured or Other Insured(s) or a representative of
same in the  activities or property of the  commercial or industrial  enterprise
which  results  in a material  added  risk,  a  materially  increased  risk or a
materially  changed  risk,  unless the  added,  increased,  or  changed  risk is
included in the policy.

     Notice of  cancellation  shall be  delivered  or mailed to the  producer of
record and the named  Insured at least  thirty (30) days prior to the  effective
date of cancellation.  Where cancellation is for nonpayment of premium or fraud,
notice shall be given no less than ten (10) days prior to the effective  date of
cancellation.

NONRENEWAL
----------

     If the Insurer  decides not to renew the policy,  the Insurer shall mail or
deliver to the producer of record and the named Insured  notice of nonrenewal at
least  sixty  (60) days but no more than 120 days prior to the end of the policy
period. The notice shall contain the reason for nonrenewal of the policy.

RENEWAL

     If a policy  has been in  effect  for more than  sixty  (60) days or if the
policy is a renewal,  effective immediately no increase in premium, reduction in
limits,  or change in the conditions of coverage  shall be effective  during the
policy period unless based upon one of the following reasons:

     1. Discovery of willful or grossly  negligent acts or omissions,  or of any
violations of state laws or  regulations  establishing  safety  standards by the
named Insured or Other Insured(s) which materially  increase any of the risks or
hazards insured against.

     2. Failure by the named Insured or Other Insured(s) to implement reasonable
loss control  requirements which were agreed to by the Insured as a condition of
policy issuance or which were conditions  precedent to the use by the Insurer of
a particular rate or rating plan, if the failure materially increases any of the
risks insured against.

     3. A  determination  by the  commissioner  that  loss of or  changes  in an
Insurer's  reinsurance  covering  all or part of the risk  covered by the policy
would  threaten the  financial  integrity or solvency of the Insurer  unless the
change in the terms or  conditions  or rate upon  which the  premium is based is
permitted.

     4. A change by the named Insured or Other  Insured(s) in the  activities or
property  of  the  commercial  or  industrial  enterprise  which  results  in  a
materially added risk, a materially  increased risk, or materially changed risk,
unless the added, increased, or changed risk is included in the policy.

     Written  notice shall be mailed or  delivered to the named  Insured and the
producer of record at least thirty (30) days prior to the effective  date of any
increase, reduction or change.

     All other terms, conditions and exclusions of the policy remain the same.





                                                   
<PAGE>

                                 ENDORSEMENT # 3

     This  endorsement,  effective 12:01 AM July 08, 1996 forms a part of policy
number 483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by     National Union Fire Insurance Company of Pittsburgh, Pa.



                           OUTSIDE ENTITY ENDORSEMENT
                                      (2x)


     In consideration of the premium charged, it is hereby understood and agreed
that the following  entities  shall be deemed an "Outside  Entity",  but only as
respects the Outside Entity's respective Continuity Date below:

          OUTSIDE ENTITY                                    CONTINUITY DATE

1)  A not-for-profit organization under section
501(c) (3) of the Internal Revenue Code of 1986              July 08, 1996
(as amended).



ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED
<PAGE>
                                 ENDORSEMENT# 4


     This  endorsement,  effective 12:01 AM July 08, 1996 forms a part of policy
number 483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY


by       National Union Fire Insurance Company of Pittsburgh, Pa.

                 NUCLEAR ENERGY LIABILITY EXCLUSIONS ENDORSEMENT
                                  (BROAD FORM)

     In consideration of the premium charged, it is hereby understood and agreed
that the Insurer  shall not be liable to make any payment for Loss in connection
with any Claim made against any Insured(s):

     A. alleging, arising out of, based upon, attributable to, or in any way
involving, directly or indirectly the hazardous properties of nuclear material,
including but not limited to:

         (1) nuclear material located at any nuclear facility owned by, or
operated by or on behalf of, the Company, or discharged or dispersed therefrom;
or

         (2) nuclear  material  contained in spent fuel or waste which was or is
at any time possessed, handled, used, processed, stored, transported or disposed
of by or on behalf of the Company; or

         (3) the furnishing by an Insured or the Company of services, materials,
parts or equipment in connection with the planning,  construction,  maintenance,
operation or use of any nuclear facility; or

         (4)  claims  for  damages  to the  Company  or its  shareholders  which
alleges,  arises from,  is based upon,  is attributed to or in any way involves,
directly or indirectly, the hazardous properties of nuclear material.

B.       (1) which is insured under a nuclear energy liability policy issued by
Nuclear Energy Liability Insurance  Association,  Mutual Atomic Energy Liability
Underwriters,  or Nuclear  Insurance  Association of Canada, or would be insured
under any such  policy but for its  termination  or  exhaustion  of its Limit of
Liability; or,

         (2) with respect to which (a) any person or organization is required to
maintain financial  protection pursuant to the Atomic Energy Act of 1954, or any
law  amendatory  thereof,  or (b) the  Insured  is, or had this  policy not been
issued would be entitled to indemnity from the United States of America,  or any
agency thereof,  under any agreement  entered into the United States of America,
or any agency thereof, with any person or organization.

As used in this endorsement:

"hazardous properties" include radioactive, toxic or explosive properties;

"nuclear material" means source material, special nuclear material or byproduct
material;

"source material", "special nuclear material", and "byproduct material" have the
meanings  given them in the Atomic  Energy Act of 1954 or in any law  amendatory
thereof;

"spent fuel" means any fuel element or fuel  component,  solid or liquid,  which
has been used or exposed to radiation in a nuclear reactor;

" waste" means any waste  material  (1)  containing  byproduct  material and (2)
resulting  from the  operation  by any  person or  organization  of any  nuclear
facility  included within the definition of nuclear facility under paragraph (a)
or (b) thereof;

"nuclear facility" means --

(a) any nuclear reactor;

(b) any equipment or device  designed or used for (1) separating the isotopes of
uranium or plutonium,  (2) processing or utilizing  spent fuel, or (3) handling,
processing or packaging waste;

(c) any equipment or device used for the processing,  fabricating or alloying of
special nuclear material if at any time the total amount of such material in the
custody of the insured at the premises where such equipment or device is located
consists of or contains  more than 25 grams of  plutonium  or uranium 233 or any
combination thereof, or more than 250 grams of uranium 235;

(d) any structure, basin, excavation, premises or place prepared or used for the
storage  or  disposal  of  waste,  and  includes  the site on  which  any of the
foregoing  is located,  all  operations  conducted on such site and all premises
used for such operations;

"nuclear  reactor"  means any  apparatus  designed  or used to  sustain  nuclear
fission in a  self-supporting  chain  reaction or to contain a critical  mass of
fissionable material.

All other terms, conditions and exclusions remain unchanged.


                                                   
<PAGE>

                                 ENDORSEMENT # 5


     This  endorsement,  effective 12:01 AM July 08, 1996 forms a part of policy
number 483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by     National Union Fire Insurance Company of Pittsburgh, Pa.

                              PRIOR ACTS EXCLUSION

     In consideration of the premium charged, it is hereby understood and agreed
that the Insurer shall not be liable to make any payment for Loss arising from a
Claim alleging a Wrongful Act which  occurred  prior to December 22, 1991.  This
policy only provides  coverage for Loss arising from a Claim alleging a Wrongful
Act  occurring on or after  December 22, 1991 and prior to the end of the Policy
Period and otherwise covered by this policy. Loss(es) arising out of the same or
related  Wrongful  Act(s)  shall be deemed to arise  from the first such same or
related Wrongful Act.


ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.



                                                     
<PAGE>

                                 ENDORSEMENT# 6


     This  endorsement,  effective 12:01 AM July 08, 1996 forms a part of policy
number 483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by       National Union Fire Insurance Company of Pittsburgh, Pa.

                                   SUBSIDIARY

     In consideration of the premium charged, it is hereby understood and agreed
that  definition (f),  "Subsidiary",  is deleted in its entirety and replaced by
the following:

     (f) "Subsidiary" means a corporation of which the Named Corporation owns on
or before the inception  date of the Policy Period more than fifty percent (50%)
of the issued and outstanding voting stock either directly or indirectly through
one or more of its Subsidiaries.

     "Subsidiary" also automatically means any corporation with assets less than
$150,000,000  which becomes a Subsidiary  during the Policy Period and for which
the Named  Corporation  provides  the Insurer with full  particulars  of the new
Subsidiary before the end of the Policy Period.

     "Subsidiary" also means any corporation with assets of $150,000,000 or more
which  becomes  a  Subsidiary,  during  the  Policy  Period,  but only  upon the
condition  that within  ninety (90) days of its becoming a Subsidiary  the Named
Corporation  shall have  provided the Insurer with full  particulars  of the new
Subsidiary  and  agreed  to  any  additional  premium  and/or  amendment  of the
provisions  of  this  policy  required  by the  Insurer  relating  to  such  new
Subsidiary.  Further,  coverage as shall be afforded  to the new  Subsidiary  is
conditioned upon the Named  Corporation  paying when due any additional  premium
required by the Insurer relating to such new Subsidiary.

     A corporation  becomes a Subsidiary  when the Named  Corporation  owns more
than fifty  percent  (50%) of the issued and  outstanding  voting  stock  either
directly or indirectly through one or more of its Subsidiaries.


All other terms and conditions remain unchanged.



                                                  
<PAGE>

                                 ENDORSEMENT # 7


     This rider,  effective 12:01 AM, July 8, 1996 forms a part of policy number
483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by       National Union Fire Insurance Company of Pittsburgh, Pa.


                                 SECURITIES PLUS

     In consideration of the premium charged, it is hereby understood and agreed
that the policy is amended as follows:


     1. Definition (a), "Claim", is deleted in its entirety and replaced by the
following:

         (a) "Claim" means:

             (1) a written demand for monetary or non-monetary relief; or

             (2) a civil, criminal, administrative or arbitration proceeding for
          monetary or non-monetary relief which is commenced by:

                 (i)  service of a complaint or similar pleading; or
                 (ii) return of an indictment (in the case of a criminal
                      proceeding); or
                 iii) receipt or filing of a notice of charges.

             The term  "Claim"  shall  include  a  Securities  Claim;  provided,
however,  that with respect to Coverage  B(i) only,  Claim or  Securities  Claim
shall not mean an administrative proceeding against the Company.

     2. Definition (f), "Listed Event", is deleted in its entirety.

     3. Definition (k), "Securities Claim", is deleted in its entirety and
replaced by the following:

         (k)  "Securities  Claim" means a Claim  (including  a civil  lawsuit or
criminal  proceeding  brought  by the  Securities  & Exchange  Commission)  made
against an Insured and brought anywhere in the world alleging a violation of any
law, regulation or rule, whether statutory or common law, which is:

<PAGE>

                           ENDORSEMENT #7 (continued)


     This rider,  effective 12:01 AM, July 8, 1996 forms a part of policy number
483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by     National Union Fire Insurance Company of Pittsburgh, Pa.

     (1) brought by any person or entity alleging, arising out of, based upon or
attributable  to,  in part or in  whole,  the  purchase  or  sale,  or  offer or
solicitation of an offer to purchase or sell, any securities of the Company, or

     (2) brought by a securities  holder of the Company,  whether  directly,  by
class  action,  or  derivatively  on the behalf of the  Company,  or  otherwise,
alleging any Wrongful Act of an Insured.

4. With respects to Securities  Claims only,  Definition  (e),  "Director(s)  or
Officer(s)" or "Insured(s)" is amended to add a new subparagraph (3) as follows:

     (3) any past, present or future employee of the Company (other than one who
is  already an Insured by virtue of  subparagraph  (1) of this  definition  (e))
whether such employee is full- time, part-time, seasonal, permanent or temporary
and  shall  include  employees  in  a  supervisory,   managerial,  co-worker  or
subordinate position or otherwise.

5. Definition (g), "Loss", is amended by deleting the last two paragraphs
thereof and inserting the following in place thereof:

     Further,  with respect to Coverage B only, Loss shall not include  damages,
judgments or  settlements  arising out of a Claim alleging that the Company paid
an inadequate price or  consideration  for the purchase of its own securities or
the securities of a Subsidiary.

     Notwithstanding  the  foregoing,  with  respect to  Coverage  B(i) only and
subject to the other terms,  conditions and exclusions of the policy, Loss shall
include  punitive or  exemplary  damages (if  insurable by law) imposed upon the
Company.

6.   Exclusion (f) is deleted in its entirety.

<PAGE>

                           Endorsement #7 (continued)


     This rider,  effective 12:01 AM, July 8, 1996 forms a part of policy number
483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by     National Union Fire Insurance Company of Pittsburgh, Pa.


7.   Exclusion (i) is amended by adding the following at the end thereof:

     Provided, further, that this exclusion shall not apply to any Claim brought
by or against an Insured as defined in Definition (e)(3).

     8. Clause 6, Retention, is amended by deleting the last paragraph thereof
and inserting the following in place thereof:

     Notwithstanding  the foregoing,  solely with respect to a Securities  Claim
under this policy,  the Retention  shall only apply to Defense Costs;  provided,
however,  no  Retention  shall  apply for a  Securities  Claim even as  respects
Defense Costs, and therefore the Insurer shall reimburse such Defense Costs paid
by the Insured, in the event of:

         (1) a determination of No Liability of all Insureds, or

         (2) a dismissal or a stipulation to dismiss the Claim without prejudice
and without the payment of any consideration by any Insured;

         provided,  however,  that in the case of (2) above, such  reimbursement
shall occur 90 days after the date of  dismissal or  stipulation  as long as the
Claim (or any other  Claim  which is subject  to the same  single  retention  by
virtue of Clause 6 is not  brought)  is not  re-brought  within  that time,  and
further  subject to an  undertaking  by the Company in a form  acceptable to the
Insurer that such reimbursement shall be paid back by the Company to the Insurer
in the event the Claim (or any other  Claim  which is subject to the same single
retention by virtue of Clause 6) is brought  after such 90 day period and before
the expiration of the statute of limitations for such Claim.

         9. Clause 8,  Defense  Costs,  Settlements,  Judgments  (including  the
advancement  of  Defense  Costs) is  amended by  deleting  the fourth  paragraph
thereof.

<PAGE>


                           ENDORSEMENT # 7 (continued)



     This rider,  effective 12:01 AM, July 8, 1996 forms a part of policy number
483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by     National Union Fire Insurance Company of Pittsburgh, Pa.


10.  Clause 17, Arbitration, is deleted in its entirety and replaced by the
following:

17.  ALTERNATIVE DISPUTE RESOLUTION PROCESS

     It is hereby  understood and agreed that all disputes or differences  which
may arise under or in connection  with this policy,  whether  arising  before or
after  termination of this policy,  including any determination of the amount of
Loss, shall be subject to the alternative dispute resolution process ("ADR") set
forth in this clause.

     Either the  Insurer  or the  Insureds  may elect the type of ADR  discussed
below;  provided,  however, that the Insureds shall have the right to reject the
Insurer's choice of ADR at any time prior to its commencement, in which case the
Insureds' choice of ADR shall control.

     The Insurer and Insureds agree that there shall be two choices of ADR:

     (1)  non-binding   mediation   administered  by  the  American  Arbitration
Association, in which the Insurer and Insureds shall try in good faith to settle
the  dispute  by  mediation  under or in  accordance  with  its then  prevailing
Commercial Mediation Rules; or

     (2) arbitration submitted to the American Arbitration  Association under or
in accordance with its  then-prevailing  Commercial  Arbitration Rules, in which
the arbitration panel shall be composed of three disinterested individuals.

     In either  mediation or arbitration,  the mediator(s) or arbitrators  shall
have knowledge of the legal, corporate management,  or insurance issues relevant
to the matters in dispute.  The  mediator(s) or arbitrators  shall also give due
consideration to the general  principles of the law of the state where the Named
Corporation  is  incorporated  in  the  construction  or  interpretation  of the
provisions  of this  policy;  provided,  however,  that the  terms,  conditions,
provisions  and  exclusions of this policy are to be construed in an even-handed
fashion in the manner  most  consistent  with the  relevant  terms,  conditions,
provisions and exclusions of the policy.

<PAGE>

                           Endorsement #7 (continued)



     This rider,  effective 12:01 AM, July 8, 1996 forms a part of policy number
483-54-02 issued to NORTH AMERICAN MORTGAGE COMPANY

by     National Union Fire Insurance Company of Pittsburgh, Pa.


     In the event of arbitration, the decision of the arbitrators shall be final
and binding and provided to both parties,  and the arbitrators'  award shall not
include attorneys fees or other costs.

     In the event of mediation,  either party shall have the right to commence a
judicial proceeding;  provided,  however, that no such judicial proceeding shall
be commenced  until the mediation  shall have been  terminated  and at least 120
days shall have elapsed from the date of the demand for mediation.

     In all events, each party shall share equally the expenses of the ADR.

     The mediation or arbitration may be commenced in either New York, New York;
Atlanta, Georgia; Chicago, Illinois; Denver, Colorado; or in the state indicated
in  Item 1 of the  Declaration's  page as the  mailing  address  for  the  Named
Corporation.  The Named  Corporation  shall act on  behalf  of all  Insureds  in
deciding to proceed with ADR under this clause.



ALL OTHER TERMS, CONDITIONS AND EXCLUSIONS REMAIN UNCHANGED.



                                                 
<PAGE>

                                 National Union
                             Fire Insurance Company
                               of Pittsburgh, PA.

                                 70 Pine Street
                            New York, N.Y. 10270-0150
                           (Herein Called the Insurer)

       DIRECTORS AND OFFICERS INSURANCE AND COMPANY REIMBURSEMENT RENEWAL
                                   APPLICATION

            IF A POLICY IS ISSUED, IT WILL BE ON A CLAIMS-MADE BASIS

NOTICE: THE POLICY PROVIDES THAT THE LIMIT OF LIABILITY AVAILABLE TO PAY
JUDGMENTS OR SETTLEMENTS SHALL BE REDUCED BY AMOUNTS INCURRED FOR LEGAL DEFENSE.
FURTHER NOTE THAT AMOUNTS INCURRED FOR LEGAL DEFENSE SHALL BE APPLIED AGAINST
THE RETENTION AMOUNT.

1. (a) Corporation Name: NORTH AMERICAN MORTGAGE COMPANY

   (b) State of Incorporation: Delaware

2. Address: 3883 Airway Drive Santa Rosa, California 95403

3. (a) Amount of Insurance Presently Carried $ 10,000,000.00

       Retention Presently Carried $   250,000.00

   (b) Amount of Insurance desired on renewal $_______________

       Self-Insured Retention desired on renewal $______________

4. (a) Nature of Business        Mortgage Banking

   (b) Annual Sales              $274,144,000*

   (c) Net Worth                 $193,144,000*

   (d) Total Assets              $746,368,000*

5. Corporation has continually been operating since   1992**

*As of December 31, 1995
**See Attachment 5
<PAGE>
6. Attach copies of the following.

   (a) Latest annual report     See Attachment 6(a)

   (b) Latest 10K report filed with SEC (if Company is publicly traded)
                See Attachment 6(b)

   (c) Latest Dun & Bradstreet report      See Attachment 6(c)

   (d) Latest interim financial statement available    See Attachment 6(d)

   (e)  If there has been a change,  copy (certified by Corporate  Secretary) of
        the  indemnification  provisions  of the charter and the  by-laws.  Also
        attach a copy of any corporate standard indemnification agreement.

                     None.

7. Stock ownership

   (a)  Total number of common shares outstanding   15,021,600 (approximately)*

   (b)  Total number of common stock shareholders   933*

   (c)  Total number of common shares owned by its Directors (direct and
        beneficial)   434,822*

   (d)  Total number of common shares owned by its Officers (direct and
        beneficial) who are not Directors          240,089*

                           See Attachment 7(d)

   (e) In the event any shareholder  owns 5 percent or more of the common shares
       directly or beneficially, designate name and percentage of holdings.

                           See Attachment 7(e)

   (f) Please designate if there are any other securities convertible to common
       stock.  If so, describe fully.

                           See Attachment 7(f)

8. Complete list of all Directors of parent company by name and affiliations
   with other Corporations.

                           See Attachment 8

9. Complete list of all Officers of parent company by name and affiliations with
   other Corporations.

                           See Attachment 9

10. (a) List of Subsidiaries

                   Business or          Percentage        Date       Domestic
       Name     Type of Operation      of Ownership     Acquired    or Foreign
       ----      -----------------     ------------     --------    ----------

                              See Attachment 10(a)

*As of March 15, 1996
<PAGE>

     (b)  Coverage  to  include  all  Subsidiaries?  Yes X No If "Yes,"  Include
          complete list of Directors and Officers of each  Subsidiary.  If "No",
          Include complete list of Directors and Officers of each Subsidiary for
          which coverage is requested.

                           See Attachment 10(b)

     (a)  Are any plans for merger, acquisition or consolidation being
          considered? Yes No X

                           See Attachment 11(a)

     (b)  If so, have they been approved by the Board of Directors? Yes     No

     (c)  If so, have they been submitted to the shareholders for approval?
          Yes        No

12.  It  is  agreed  that  this  renewal  application  is a  supplement  to  the
     application(s)  which  are part of the  expiring  policy,  and  that  those
     application(s)  together  with this  renewal  application,  constitute  the
     complete application that shall be the basis of the contract and shall form
     part of the policy should a policy be issued.

13. It is agreed that the  Corporation  will file with the  Insurer,  as soon as
    they become available,  a copy of each registration  statement and annual or
    Interim  report  which the  Corporation  may from time to time file with the
    Securities and Exchange Commission.

THE UNDERSIGNED AUTHORIZED OFFICER OF THE APPLICANT DECLARES THAT THE STATEMENTS
SET FORTH HEREIN ARE TRUE. THE UNDERSIGNED AUTHORIZED OFFICER AGREES THAT IF THE
INFORMATION  SUPPLIED  ON THIS  APPLICATION  CHANGES  BETWEEN  THE  DATE OF THIS
APPLICATION AND THE EFFECTIVE DATE OF THE INSURANCE,  HE/SHE  (UNDERSIGNED) WILL
IMMEDIATELY NOTIFY THE INSURER OF SUCH CHANGES,  AND THE INSURER MAY WITHDRAW OR
MODIFY ANY OUTSTANDING  QUOTATIONS AND/OR AUTHORIZATION OR AGREEMENT TO BIND THE
INSURANCE.

SIGNING  OF THIS  APPLICATION  DOES NOT BIND THE  APPLICANT  NOR THE  INSURER TO
COMPLETE  THE  INSURANCE,  BUT IT IS AGREED THAT THIS FORM SHALL BE THE BASIS OF
THE  CONTRACT  SHOULD A POLICY BE ISSUED,  AND IT WILL BE ATTACHED TO AND BECOME
PART OF THE POLICY.

ALL WRITTEN STATEMENTS AND MATERIALS FURNISHED TO THE INSURER IN CONJUNCTION
WITH THIS APPLICATION ARE HEREBY INCORPORATED BY REFERENCE INTO THIS APPLICATION
AND MADE A PART HEREOF.

NOTICE TO NEW YORK  APPLICANTS:  ANY PERSON  WHO  KNOWINGLY  AND WITH  INTENT TO
DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN APPLICATION FOR INSURANCE
CONTAINING  ANY FALSE  INFORMATION,  OR CONCEALS  FOR THE PURPOSE OF  MISLEADING
INFORMATION CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE
ACT, WHICH IS A CRIME.

Signed:    /s/Terrance G. Hodel
          ---------------------

Date:     July 16, 1996
          -------------

Title:     President
           ---------
          Must be Signed by Chairman of
            the Board or President           Corporation _______________________
                                                            (Corporate Seal)


Attest:


Broker:

Address:


IF AN ORDER IS RECEIVED,  THE APPLICATION IS ATTACHED TO AND BECOMES PART OF THE
POLICY SO IT IS NECESSARY THAT ALL QUESTIONS BE ANSWERED IN DETAIL.

                             IMPORTANT - SEE FURTHER

PLEASE READ. THE FOLLOWING STATEMENT CAREFULLY AND SIGN BELOW WHERE INDICATED.
IF A POLICY IS ISSUED, THIS SIGNED STATEMENT WILL BE ATTACHED TO THE POLICY.

     The insured hereby  acknowledges  that he/she/it is aware that the limit of
liability  contained  in this  policy  shall be reduced,  and may be  completely
exhausted,  by the costs of legal defense and, in such event,  the Insurer shall
be liable for the costs of legal  defense or for the amount of any  judgment  or
settlement  to the  extent  that such  exceeds  the limit of  liability  of this
policy.

     The insured hereby further  acknowledges that he/she/it is aware that legal
defense costs that are incurred shall be applied against the retention amount.



                                         Signed:    /s/Terrance G. Hodel
                                                    ---------------------

                                         Date:     July 16, 1996
                                                   -------------

                                         Title:     President
                                                    ---------
                                                 Must be Signed by Chairman of
                                                    the Board or President