<PAGE>   1
                                                                   EXHIBIT 10.43





                            ASSET PURCHASE AGREEMENT

                                    BETWEEN

                        AMERICAN EAGLE INSURANCE COMPANY
                                   AS SELLER

                                      AND

                          HDR INSURANCE MANAGERS, LLC
                                    AS BUYER

                           DATED AS OF APRIL 23, 1997
<PAGE>   2
                               TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                            Page
                                                                            ----
<S>                                                                           <C>
INTRODUCTORY STATEMENT  . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

STATEMENT OF AGREEMENT  . . . . . . . . . . . . . . . . . . . . . . . . . . .  1

ARTICLE 1  TRANSFER OF ASSETS AND LIABILITIES . . . . . . . . . . . . . . . .  1
       Section 1.1 Assets to be Sold  . . . . . . . . . . . . . . . . . . . .  1
       Section 1.2 Consideration  . . . . . . . . . . . . . . . . . . . . . .  2
       Section 1.3 Excess Cash Flow Audit   . . . . . . . . . . . . . . . . .  2
       Section 1.4 Proration of Taxes   . . . . . . . . . . . . . . . . . . .  3
       Section 1.5 Proration of Lease Payments, Utility Charges and Other
                     Payments   . . . . . . . . . . . . . . . . . . . . . . .  3
       Section 1.6 Closing  . . . . . . . . . . . . . . . . . . . . . . . . .  4
       Section 1.7 Deliveries by Seller   . . . . . . . . . . . . . . . . . .  4
       Section 1.8 Deliveries by Buyer  . . . . . . . . . . . . . . . . . . .  4
       Section 1.9 Allocation of Purchase Price   . . . . . . . . . . . . . .  5

ARTICLE 2  ASSIGNMENT OF TRADE AND BUSINESS NAMES . . . . . . . . . . . . . .  5
       Section 2.1 Use of Names   . . . . . . . . . . . . . . . . . . . . . .  5
       Section 2.2 Assignment of Names  . . . . . . . . . . . . . . . . . . .  5

ARTICLE 3  EMPLOYEES AND EMPLOYEE PLANS . . . . . . . . . . . . . . . . . . .  5
       Section 3.1 Employee Offers  . . . . . . . . . . . . . . . . . . . . .  5
       Section 3.2 Benefit Reserves   . . . . . . . . . . . . . . . . . . . .  5
       Section 3.3 Wages  . . . . . . . . . . . . . . . . . . . . . . . . . .  5
       Section 3.4 Termination of Employment Agreements   . . . . . . . . . .  5

ARTICLE 4  REPRESENTATIONS AND WARRANTIES OF SELLER . . . . . . . . . . . . .  6
       Section 4.1 Incorporation, Etc.  . . . . . . . . . . . . . . . . . . .  6
       Section 4.2 Authorization.   . . . . . . . . . . . . . . . . . . . . .  7
       Section 4.3 No Violation   . . . . . . . . . . . . . . . . . . . . . .  7
       Section 4.4 Title to Property, Encumbrances  . . . . . . . . . . . . .  7
       Section 4.5 Consents and Approvals   . . . . . . . . . . . . . . . . .  7
       Section 4.6 Good Title Conveyed, Etc.  . . . . . . . . . . . . . . . .  7

ARTICLE 5  REPRESENTATIONS AND WARRANTIES OF BUYER  . . . . . . . . . . . . .  7
       Section 5.1 Organization, Etc.   . . . . . . . . . . . . . . . . . . .  7
       Section 5.2 Authorization  . . . . . . . . . . . . . . . . . . . . . .  7
       Section 5.3 No Violation   . . . . . . . . . . . . . . . . . . . . . .  8
       Section 5.4 Consents and Approvals   . . . . . . . . . . . . . . . . .  8
       Section 5.5 Full Disclosure  . . . . . . . . . . . . . . . . . . . . .  8
</TABLE>





                                       i
<PAGE>   3
<TABLE>
<S>                                                                           <C>
ARTICLE 6  SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION . . . . . . . . . . .  9
       Section 6.1 Survival of Representations  . . . . . . . . . . . . . . .  9
       Section 6.2 Seller's Agreement to Indemnify  . . . . . . . . . . . . .  9
       Section 6.3 Seller's Limitation of Liability   . . . . . . . . . . . .  9
       Section 6.4 Buyer's Agreement to Indemnify   . . . . . . . . . . . . .  9
       Section 6.5 Buyer's Limitation of Liability  . . . . . . . . . . . . . 10
       Section 6.6 Conditions of Indemnification  . . . . . . . . . . . . . . 10

ARTICLE 7  OTHER OBLIGATIONS OF SELLER AND BUYER  . . . . . . . . . . . . . . 11
       Section 7.1 Buyer's Licenses   . . . . . . . . . . . . . . . . . . . . 11
       Section 7.2 Consents   . . . . . . . . . . . . . . . . . . . . . . . . 11
       Section 7.3 Governmental Filings   . . . . . . . . . . . . . . . . . . 11
       Section 7.4 Conduct of Business  . . . . . . . . . . . . . . . . . . . 11
       Section 7.5 Covenant to Satisfy Conditions   . . . . . . . . . . . . . 11
       Section 7.6 Resale Exemption Certificates  . . . . . . . . . . . . . . 12
       Section 7.7 Damage or Destruction  . . . . . . . . . . . . . . . . . . 12
       Section 7.8 Financial and Strategic Reporting  . . . . . . . . . . . . 12
       Section 7.9 Noncompetition   . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE 8  CONDITIONS TO OBLIGATIONS OF BUYER . . . . . . . . . . . . . . . . 12
       Section 8.1 Representations and Warranties   . . . . . . . . . . . . . 12
       Section 8.2 Performance  . . . . . . . . . . . . . . . . . . . . . . . 13
       Section 8.3 No Injunction  . . . . . . . . . . . . . . . . . . . . . . 13
       Section 8.4 Officer's Certificate  . . . . . . . . . . . . . . . . . . 13
       Section 8.5 Consents and Approvals   . . . . . . . . . . . . . . . . . 13
       Section 8.6 Deliveries by Seller   . . . . . . . . . . . . . . . . . . 13
       Section 8.7 Services Agreement   . . . . . . . . . . . . . . . . . . . 13
       Section 8.8 Underwriting Services Agreement  . . . . . . . . . . . . . 13
       Section 8.9 Buyer Financing  . . . . . . . . . . . . . . . . . . . . . 13
       Section 8.10 Insurance License   . . . . . . . . . . . . . . . . . . . 13
       Section 8.11 Noncompetition Agreement  . . . . . . . . . . . . . . . . 13

ARTICLE 9  CONDITIONS TO OBLIGATIONS OF SELLER  . . . . . . . . . . . . . . . 14
       Section 9.1 Representations and Warranties   . . . . . . . . . . . . . 14
       Section 9.2 Performance  . . . . . . . . . . . . . . . . . . . . . . . 14
       Section 9.3 Officer's Certificate  . . . . . . . . . . . . . . . . . . 14
       Section 9.4 No Injunction  . . . . . . . . . . . . . . . . . . . . . . 14
       Section 9.5 INSCORP Reinsurance Agreement  . . . . . . . . . . . . . . 14
       Section 9.6 Services Agreement   . . . . . . . . . . . . . . . . . . . 14
       Section 9.7 Underwriting Services Agreement  . . . . . . . . . . . . . 14
       Section 9.8 Consents and Approvals   . . . . . . . . . . . . . . . . . 14
       Section 9.9 Buyer's Deliveries   . . . . . . . . . . . . . . . . . . . 15
       Section 9.10 Management Employment Agreements  . . . . . . . . . . . . 15
       Section 9.11 Buyer Financing   . . . . . . . . . . . . . . . . . . . . 15
       Section 9.12 Insurance License   . . . . . . . . . . . . . . . . . . . 15
       Section 9.13 Noncompetition Agreement  . . . . . . . . . . . . . . . . 15
       Section 9.14 Profit Sharing Agreement.   . . . . . . . . . . . . . . . 15
</TABLE>





                                       ii
<PAGE>   4
<TABLE>
<S>                                                                           <C>
ARTICLE 10  TERMINATION OF AGREEMENT  . . . . . . . . . . . . . . . . . . . . 15
       Section 10.1 Termination of Agreement  . . . . . . . . . . . . . . . . 15
       Section 10.2 Procedure Upon Termination  . . . . . . . . . . . . . . . 15

ARTICLE 11  MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . 16
       Section 11.1 Mail Received After Closing   . . . . . . . . . . . . . . 16
       Section 11.2 Access to Books and Records   . . . . . . . . . . . . . . 16
       Section 11.3 Commissions   . . . . . . . . . . . . . . . . . . . . . . 16
       Section 11.4 Expenses, Taxes, Etc.   . . . . . . . . . . . . . . . . . 17
       Section 11.5 Further Assurances  . . . . . . . . . . . . . . . . . . . 17
       Section 11.6 Parties in Interest   . . . . . . . . . . . . . . . . . . 17
       Section 11.7 Entire Agreement, Amendments and Waiver   . . . . . . . . 17
       Section 11.8 Headings  . . . . . . . . . . . . . . . . . . . . . . . . 17
       Section 11.9 Notices   . . . . . . . . . . . . . . . . . . . . . . . . 18
       Section 11.10 GOVERNING LAW  . . . . . . . . . . . . . . . . . . . . . 18
       Section 11.11 Third Parties  . . . . . . . . . . . . . . . . . . . . . 18
       Section 11.12 Counterparts   . . . . . . . . . . . . . . . . . . . . . 18
       Section 11.13 Specific Performance   . . . . . . . . . . . . . . . . . 18
       Section 11.14 Waiver of Bulk Sales Act Compliance  . . . . . . . . . . 18

                       Appendices, Schedules, and Exhibits
                       -----------------------------------

Appendix I    Certain Definitions
Appendix II   Schedule of Division Assets
Appendix III  Schedule of Assumed Liabilities

Schedule 2.1 Assigned Names
Schedule 3.1 Employee Matters
Schedule 4.4 Permitted Encumbrances
Schedule 4.5 Required Consents

Exhibit A     Form of Bill of Sale
Exhibit B     Form of Subordinated Promissory Note
Exhibit C     Form of Assumption Agreement
Exhibit D     Form of Assignment of Names
Exhibit E     Form of Excess Cash Flow Worksheet
Exhibit F     Form of Managing General Agency Agreement
Exhibit G     Form of Noncompetition Agreement
</TABLE>





                                      iii
<PAGE>   5
                            ASSET PURCHASE AGREEMENT


       THIS ASSET PURCHASE AGREEMENT is dated as of April 23, 1997 by and
between American Eagle Insurance Company, a Texas corporation ("SELLER"), and
HDR Insurance Managers, LLC, a California limited liability company ("BUYER").


                             INTRODUCTORY STATEMENT

       This Agreement sets forth the terms and conditions upon which Buyer
agrees to purchase from Seller, and Seller agrees to sell to Buyer,
substantially all of the property and assets of Seller's Property and Casualty
Division business (the "DIVISION BUSINESS"), currently conducted by the
Property and Casualty Division of Seller (the "DIVISION").  Except as otherwise
expressly provided or unless the context otherwise requires (in addition to the
definitions contained elsewhere herein) the terms defined in Appendix I hereto
shall have the meanings therein specified for all purposes of this Agreement,
applicable to both the single and plural forms of such terms.

       Accordingly, for and in consideration of the premises and the mutual
agreements, representations, warranties, covenants and conditions herein set
forth and for other good, valuable and binding consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:


                             STATEMENT OF AGREEMENT

                                   ARTICLE 1

                       TRANSFER OF ASSETS AND LIABILITIES

       Section 1.1   Assets to be Sold.

              (a)    Subject to the terms and conditions of this Agreement, at
the Closing provided for in Section 1.7 hereof (the "CLOSING"), Seller shall
sell, convey, assign, transfer and deliver to Buyer the property and assets of
the Division Business listed and described in Appendix II hereto (collectively,
the "DIVISION ASSETS").  Other property and assets of the Division Business,
such as policy and claim files, are not Division Assets to be sold, conveyed,
assigned, transferred and delivered to Buyer even though physical possession of
such property and assets may be transferred to Buyer.

              (b)    Such sale, conveyance, assignment, transfer and delivery
shall be effected by delivery by Seller to Buyer of (i) a duly executed bill of
sale in substantially the form of Exhibit A hereto (the "BILL OF SALE"), (ii)
instruments of assignment with respect to all trade or service names and marks
and all applications therefor included in the Division Assets in which Seller
has any interest, all in recordable form (collectively, the "INSTRUMENTS OF
ASSIGNMENT"),





<PAGE>   6
(iii) the Assignment of Names (as hereinafter defined) and (iv) such other good
and sufficient instruments of conveyance and transfer as shall be necessary to
vest in Buyer good and valid title to the Division Assets.

       Section 1.2   Consideration.  In consideration of the aforesaid sale,
conveyance, assignment, transfer and delivery of the Division Assets, Buyer
shall deliver at the Closing the following:

              (a)    the purchase price for the Division Assets in the
       aggregate amount of $3,275,000 (the "PURCHASE PRICE") payable as
       follows: (i) a wire transfer of immediately available funds in the
       amount of $1,025,000; (ii) a Subordinated Promissory Note (the "NOTE")
       made payable to Seller in the principal amount of $2,250,000 in the form
       attached hereto as Exhibit B;

              (b)    an Assumption Agreement (the "ASSUMPTION AGREEMENT")
       substantially in the form of Exhibit C hereto, whereby Buyer shall
       assume and agree to perform, pay and discharge the liabilities and
       obligations of Seller relating to the Division Business specified in
       Appendix III hereto (the "ASSUMED LIABILITIES") and such other
       instruments, documents or agreements as Seller may reasonably request to
       evidence Buyer's assumption of and agreement to perform, pay and
       discharge the Assumed Liabilities (collectively, the "INSTRUMENTS OF
       ASSUMPTION").

       Section 1.3   Excess Cash Flow Audit.

              (a)    Audits.  Within 30 days after the end of each ECFR Period
(as defined in the Note), Buyer shall deliver to Seller an Excess Cash Flow
worksheet in the form of Exhibit E attached hereto (the "WORKSHEET").  Upon
receipt of any Worksheet, Seller shall have 30 days to perform an audit of the
data presented in the Worksheet and all necessary supporting data (each, an
"AUDIT").

              (b)    Arbitration of Audit Disputes.  If Buyer disputes the
results in any Audit, determined by Seller's accountants ("SELLER'S
ACCOUNTANTS") pursuant to paragraph (a) of this Section, it shall so notify
Seller in writing within ten (10) business days after the date upon which it
shall have received the Audit (a "NOTICE OF DISPUTE"), specifying in reasonably
complete detail the points of disagreement and demanding that a review (a
"REVIEW") of such points of disagreement be conducted.  Upon receipt of a
Notice of Dispute, Seller shall promptly cause Seller's Accountants to consult
with Buyer's accountants ("BUYER'S ACCOUNTANTS") with respect to such points of
disagreement in an effort to resolve such dispute.  If any such dispute cannot
be resolved by Seller's Accountants and Buyer's Accountants within ten (10)
business days after Seller receives a Notice of Dispute from Buyer, Seller's
Accountants and Buyer's Accountants shall jointly select a nationally
recognized firm of independent public accountants which has not performed any
material services within the last eighteen (18) months for either Buyer or
Seller or any of their respective Affiliates, to act as an arbitrator (the
"ACCOUNTING ARBITRATOR") to determine all points of remaining disagreement with
respect to the Audit.  Buyer and Seller understand and agree that, in resolving
any dispute with respect to the Audit, the Accounting Arbitrator shall apply
generally accepted accounting principles in a manner consistent with prior





                                       2
<PAGE>   7
periods.  ALL DETERMINATIONS MADE BY THE ACCOUNTING ARBITRATOR SHALL BE FINAL,
CONCLUSIVE AND BINDING WITH RESPECT TO THE AUDIT.

              (c)    Access to Books and Records.  After the Closing, Buyer
shall afford Seller and Seller's Accountants such access to Buyer's assets,
books and records as Seller deems necessary or desirable in connection with the
Audits.  Buyer and Seller agree to use their best efforts to cause Buyer's
Accountants and Seller's Accountants to cooperate fully with each other in
effecting the final determination of the amount of any Audits.

              (d)    Accounting Arbitrator Expenses.  The fees and expenses of
Buyer's accountants and Seller's accountants incurred in connection with the
final determination of the amount of any Audit shall be paid by Buyer and
Seller, respectively.  The fees and expenses of the Accounting Arbitrator
incurred in connection with the final determination of any Audit shall be
allocated between Buyer and Seller as follows:  (i) Seller shall pay all or a
portion of the Accounting Arbitrator's fees and expenses, as determined in
accordance with the following formula:


                                SE = AE x AA
                                          --
                                          BA


where: SE equals Seller's share of the Accounting Arbitrator's fees and
expenses; AE equals the Accounting Arbitrator's total fees and expenses; AA
equals the aggregate adjustment to the Audit made by the Accounting Arbitrator;
and BA equals the aggregate adjustment to the Audit that would have resulted
from resolution in Buyer's favor of all points of disagreement raised by Buyer
to the Accounting Arbitrator; and (ii) Buyer shall pay the balance of the
Accounting Arbitrator's fees and expenses, if any.

              (e)    Interest.  Any payment required to be made by Buyer
pursuant to paragraph (d) of this Section shall bear interest from the payment
date through the date of payment at an interest rate of 8% per annum.

       Section 1.4   Proration of Taxes.  All property taxes and special
assessments payable but not yet due with respect to any of the Division Assets
shall be prorated between Seller and Buyer on the basis of actual days elapsed
between the commencement of the current fiscal tax year and the Closing Date,
based on a 365-day year.  In the event that actual tax figures for the year of
Closing are not available at the Closing Date, an estimated, provisional
proration of taxes shall be made using tax figures from the preceding year.

       Section 1.5   Proration of Lease Payments, Utility Charges and Other
Payments.  In any case where the Closing Date shall fall on a date other than
the date on which payments are due with respect to (i) any leases or (ii)
utility or similar regular periodic charges respecting the Division Assets for
which a final billing has not been received by Seller, any installment of
rental payments and any such utility or similar charge payable with respect to
the current period in which the Closing Date occurs shall be prorated between
Seller and Buyer on the basis of the actual number of days elapsed from the
first day of such period to the Closing Date.





                                       3
<PAGE>   8
       Section 1.6   Closing.  Subject to Section 10.1 of this Agreement, the
Closing of the transactions contemplated by this Agreement shall occur at a
place and in a manner mutually agreed to by the parties hereto on the later of
(i) April 30, 1997, or (ii) the third business day following the date on which
all of the conditions contained in Articles 8 and 9 hereof, to the extent not
waived, are satisfied.  The Closing may be postponed to such other date as
Buyer and Seller may agree.  The date on which the Closing actually occurs is
hereinafter referred to as the "CLOSING DATE".

       Section 1.7   Deliveries by Seller.  At the Closing, Seller shall
deliver to Buyer (unless delivered previously) the following:

              (a)    the Bill of Sale;

              (b)    the Instruments of Assignment;

              (c)    the Assignment of Names;

              (d)    the certificate of Seller's President referred to in
       Section 8.4 hereof;

              (e)    copies of any consents required to be obtained by Seller
       which are referred to in Section 8.5 hereof.

       Section 1.8   Deliveries by Buyer.  At the Closing, Buyer shall deliver
to Seller (unless delivered previously) the following:

              (a)    the wire transfer of  immediately available funds referred
       to in Section 1.2(a)(i) hereof;

              (b)    the Note;

              (c)    the Assumption Agreement and the Instruments of
       Assumption;

              (d)    the officer's certificate of Buyer's President or Vice
       President referred to in Section 9.3 hereof;

              (e)    the Managing General Agency Agreement referred to in
       Section 9.7;

              (f)    evidence of capitalization of Buyer satisfactory to
       Seller, including a copy of Buyer's balance sheet as of the Closing Date
       and copies of any promissory notes contributed to Buyer as capital;

              (g)    an executed Services Agreement (as described in Section
       9.6 hereof);

              (h)    letters from each of George C. Hill III and David O.
       Daniels, in a form satisfactory to Seller, submitting their respective
       resignations as officers and/or employees of Seller.





                                       4
<PAGE>   9
       Section 1.9   Allocation of Purchase Price.  The Purchase Price and the
Assumed Liabilities (collectively, the "BASIS") shall be allocated among the
Division Assets in accordance with the allocation established by Buyer.  Such
allocation of the Basis shall be conclusive and binding on both Buyer and
Seller for purposes of their federal and, where applicable, state and local tax
returns and filings.  Buyer and Seller shall prepare and timely file all such
reports and returns as may be required by Section 1060 of the Internal Revenue
Code of 1986 to report such allocation of the Basis.


                                   ARTICLE 2

                     ASSIGNMENT OF TRADE AND BUSINESS NAMES

       Section 2.1   Use of Names.  After the Closing, Seller will not use or
permit any of its Subsidiaries or Affiliates to use the names listed in
Schedule 2.1 hereto.

       Section 2.2   Assignment of Names.  At the Closing, Seller will deliver
to Buyer a written assignment, in the form of Exhibit D hereto (the "ASSIGNMENT
OF NAMES"), evidencing the assignment to Buyer of its rights to the names
listed in Schedule 2.1 hereto.


                                   ARTICLE 3

                          EMPLOYEES AND EMPLOYEE PLANS

       Section 3.1   Employee Offers.  Buyer shall offer to employ, on terms
and conditions to be established by Buyer prior to making such offer to employ,
all of the Division's current employees other than those identified on Schedule
3.1 hereto.  Buyer shall not offer employment after Closing to persons
identified on Schedule 3.1 hereto.

       Section 3.2   Benefit Reserves.  Seller shall pay or cause to be paid
when due to employees of Seller engaged in the Division Business all amounts
due under any employee benefit plan or program of Seller in respect of all
periods ending on the Closing Date.

       Section 3.3   Wages.  Seller shall pay or cause to be paid when due to
employees of Seller engaged in the Division Business the amount of all wages,
bonuses, commissions and other compensation (including, without limitation, all
vacation and sick pay) due in respect of all periods ending on the Closing
Date.

       Section 3.4   Termination of Employment Agreements.  At Closing, the
employment agreements between the Seller and each of David O. Daniels and
George C. Hill III shall be terminated and Seller shall have no liability or
obligation whatsoever arising from such employment agreements or such
terminations.





                                       5
<PAGE>   10
                                   ARTICLE 4

                    REPRESENTATIONS AND WARRANTIES OF SELLER

       Seller hereby represents and warrants to Buyer as follows:

       Section 4.1   Incorporation, Etc. Seller is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Texas and has the corporate power and authority to carry on the Division
Business as it is now being conducted and to own and lease the property and
assets that it now owns and leases in connection with the Division Business.

       Section 4.2   Authorization.

              (a)    Seller has all requisite corporate power and authority to
enter into, execute, deliver and consummate the transactions contemplated by
this Agreement and any instruments and agreements contemplated herein required
to be executed and delivered by it pursuant to this Agreement (collectively,
the "RELATED INSTRUMENTS").  At or prior to Closing, the Board of Directors of
Seller will have taken all action required by law, the Articles of
Incorporation and Bylaws of Seller or otherwise to authorize the execution and
delivery of this Agreement and the consummation of the transactions
contemplated hereby, including the execution, delivery and consummation of the
Related Instruments.  No other corporate act or proceeding on the part of
Seller is necessary to authorize this Agreement or any of the Related
Instruments or the transactions contemplated hereby or thereby.  This Agreement
is, and each of the Related Instruments, when executed and delivered to Buyer
by Seller at the Closing, will be, a valid and binding obligation of Seller
enforceable against it in accordance with their terms, subject to bankruptcy,
insolvency, reorganization and other laws and judicial decisions of general
applicability relating to or affecting creditors' rights and to general
principles of equity.

              (b)    At or prior to Closing, Seller will have delivered to
Buyer true and complete copies, certified by the Secretary or an Assistant
Secretary of Seller, of the resolutions duly and validly adopted by the Board
of Directors of Seller evidencing its authorization of the execution and
delivery of this Agreement and the Related Instruments and the consummation of
the transactions contemplated hereby and thereby (which resolutions have not
been modified, revoked or rescinded in any respect).

       Section 4.3   No Violation.  Subject to obtaining the consents and
approvals set forth in Section 4.5 hereof, neither the execution and delivery
by Seller of this Agreement or any of the Related Instruments, nor the
consummation by Seller, of the transactions contemplated hereby or thereby will
violate any material provision of the Articles of Incorporation or Bylaws of
Seller, or, violate, or be in conflict with, or constitute a default (or an
event or condition which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or cause the acceleration of the maturity of any
liability or obligation pursuant to, or result in the creation or imposition of
any encumbrance upon any of the Division Assets (other than Permitted
Encumbrances) under any material agreement or, violate any statute or law or
any judgment, decree, order, writ, injunction, regulation or rule of any court
or governmental authority.





                                       6
<PAGE>   11
       Section 4.4   Title to Property, Encumbrances.  Seller has, or on the
Closing Date will have, good and valid title to all the Division Assets which
it purports to own.  The Division Assets are free and clear of all security
interests, liens, encumbrances and restrictions (collectively, "ENCUMBRANCES")
except (i) the Encumbrances set forth in Schedule 4.4 hereto, (ii) statutory
and contractual landlord's liens, and (iii) all other Encumbrances, if any,
which individually or in the aggregate, do not materially impair the use of the
property subject thereto for its current use, or materially impair the
operations of the Division taken as a whole (collectively, "PERMITTED
ENCUMBRANCES").

       Section 4.5   Consents and Approvals.  Except as set forth in Schedule
4.5 hereto,  Seller is not required to obtain, transfer or cause to be
transferred any material consent, approval, license, permit or authorization
of, or make any declaration, filing or registration with, any third party in
connection with (a) the execution and delivery by Seller of this Agreement or
the Related Instruments or (b) the consummation by Seller of the transactions
contemplated hereby or thereby.

       Section 4.6   Good Title Conveyed, Etc.  Except as otherwise provided
herein, Seller has the unqualified right to sell, assign, transfer and deliver
to Buyer and, upon consummation of the transactions contemplated by this
Agreement, Buyer will acquire good and valid title to the Division Assets, free
and clear of all Encumbrances except Permitted Encumbrances and Assumed
Liabilities.  The Bill of Sale and the Related Instruments, when duly executed
and delivered by Seller to Buyer at the Closing, and the delivery of the
Division Assets, will effectively vest in Buyer good and valid title to all of
the Division Assets subject only to Permitted Encumbrances and Assumed
Liabilities.


                                   ARTICLE 5

                    REPRESENTATIONS AND WARRANTIES OF BUYER

       Buyer hereby represents and warrants to Seller as follows:

       Section 5.1   Organization, Etc.  Buyer is a limited liability company
duly organized, validly existing and in good standing under the laws of the
State of California.  The copies of the Articles of Organization and Operating
Agreement of Buyer (certified, in the case of the Articles of Organization by
the Secretary of State of the State of California, and, in the case of the
Operating Agreement, by the Secretary of Buyer), as heretofore delivered by
Buyer to Seller are complete and correct copies of such instruments as
currently in effect.

       Section 5.2   Authorization.

              (a)    Buyer has all requisite corporate power and authority to
enter into, execute, deliver and consummate the transactions contemplated by
this Agreement and the Related Agreements.  At or prior to Closing, the members
of Buyer have taken all action required by law, the Articles of Organization
and Operating Agreement of Buyer or otherwise to





                                       7
<PAGE>   12
authorize the execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby, including the execution, delivery and
consummation of the Related Instruments.  No other corporate act or proceeding
on the part of Buyer is necessary to authorize this Agreement or any of the
Related Instruments or the transactions contemplated hereby or thereby.  This
Agreement is, and each of the Related Instruments when executed and delivered
to Seller by Buyer at the Closing, will be, valid and binding obligations of
Buyer enforceable against it in accordance with their terms, subject to
bankruptcy, insolvency, reorganization and other laws and judicial decision of
general applicability relating to or affecting creditors' rights and to general
principles of equity.

              (b)    At or prior to Closing, Buyer will have delivered to
Seller true and complete copies, certified by the Secretary or Assistant
Secretary of Buyer, of the resolutions duly and validly adopted by the members
of Buyer evidencing its authorization of the execution and delivery of this
Agreement and the Related Instruments and the consummation of the transactions
contemplated hereby and thereby (which resolutions have not been modified,
revoked or rescinded in any respect).

       Section 5.3   No Violation.  Subject to obtaining the consent and
approvals set forth in Section 5.4, neither the execution and delivery by Buyer
of this Agreement or any of the Related Instruments nor the consummation by
Buyer of the transactions contemplated hereby or thereby will violate any
provision of the Articles of Organization or Operating Agreement of Buyer or
violate, or be in conflict with, or constitute a default (or an event or
condition which, with notice or lapse of time or both, would constitute a
default) under, or result in the termination of, or accelerate the performance
required by, or cause the acceleration of the maturity of any liability or
obligation pursuant to any material note, bond, mortgage, indenture, deed of
trust, license, lease, contract, commitment, understanding, arrangement,
agreement or restriction of any kind or character to which Buyer is a party or
by which Buyer may be bound or affected, or violate any statute or law or any
judgment, decree, order, writ, injunction, regulation or rule of any court or
governmental authority.

       Section 5.4   Consents and Approvals.  Except for the licenses described
in Section 7.1, Buyer is not required to obtain any consent, approval, license,
permit or authorization of, or make any declaration, filing or registration
with, any third party or any public body or authority in connection with the
execution and delivery by Buyer of this Agreement, the Note or the Instruments
of Assumption, if any, or the consummation by Buyer of the transactions
contemplated hereby or thereby.

       Section 5.5   Full Disclosure.  No representation or warranty of Buyer
made in this Agreement, nor any written statement furnished to Seller pursuant
hereto or in connection with the transactions contemplated hereby, contains or
will contain any untrue statement of a material fact which affects the business
or financial condition of Buyer, or omits or will omit to state a material fact
necessary to make the statements or facts contained herein or therein not
misleading.





                                       8
<PAGE>   13
                                   ARTICLE 6

                  SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION

       Section 6.1   Survival of Representations.  All representations,
warranties, covenants and agreements made by any party to this Agreement or
pursuant hereto shall be true, complete and correct as of the date hereof and
at and as of the Closing Date as though such representations, warranties,
covenants and agreements were made at and as of the Closing Date.  Each
representation and warranty shall survive the Closing hereunder for the period
of time during which indemnification may be sought for a breach of such
representation or warranty pursuant to Sections 6.2 or 6.4 hereof.

       Section 6.2   Seller's Agreement to Indemnify.  Subject to the terms and
conditions of this Article 6, Seller agrees to indemnify, defend and hold
harmless Buyer at any time after consummation of the Closing, from and against
any damage, claim, liability, assessment, judgment, fine, obligation, loss,
cost, expense or deficiency (including, but not limited to, reasonable
attorneys' fees, and other costs and expenses incident to proceedings or
investigations or the defense or settlement of any claim) (collectively
"DAMAGES") arising out of or resulting from:

              (a)    any inaccuracy in or breach of any representation or
       warranty of Seller pursuant to this Agreement, including schedules
       delivered pursuant hereto;

              (b)    any failure of Seller to duly perform or observe any term,
       provision or covenant to be performed or observed by Seller pursuant to
       this Agreement or documents contemplated by this Agreement; and

              (c)    operation of the Division Business or Division Assets
       prior to Closing except for the Assumed Liabilities; and

              (d)    any liability or obligation of Seller or any claim, suit,
       charge or proceeding against Seller, whether arising or accruing before
       or after the Closing Date, except an Assumed  Liability.

       Section 6.3   Seller's Limitation of Liability.  Anything in this
Agreement to the contrary notwithstanding, the liability of Seller to indemnify
Buyer pursuant to Section 6.2(a) and (b) hereof against any Damages sustained
by reason of any claim shall be limited to claims as to which Buyer has given
to Seller written notice thereof on or prior to one year after the Closing
Date.  The provisions for indemnity contained in Section 6.2 hereof shall be
effective only after the aggregate amount of all Damages for which Seller is
liable under the indemnity exceeds $25,000, and then only to the extent that
such amounts exceed $25,000, but in no event in excess of the Purchase Price.
Seller may offset any amounts due under this section against amounts due to
Seller under the Note.

       Section 6.4   Buyer's Agreement to Indemnify.  Subject to the terms and
conditions of this Article 6, Buyer agrees to indemnify, defend and hold
harmless Seller at any time after





                                       9
<PAGE>   14
consummation of the Closing, from and against all Damages incurred by Seller by
reason of or resulting from:

              (a)    any inaccuracy in or breach of any representation or
       warranty of Buyer pursuant to this Agreement, including schedules
       delivered pursuant hereto;

              (b)    any failure of Buyer to duly perform or observe any term,
       provision or covenant to be performed or observed by Buyer pursuant to
       this Agreement or documents contemplated by this Agreement;

              (c)    operation of the Division Business or  Division Assets
       after Closing; and

              (d)    any Assumed Liability.

       Section 6.5   Buyer's Limitation of Liability.  Anything in this
Agreement to the contrary notwithstanding, the liability of Buyer to indemnify
the Seller pursuant to Section 6.4(a) and (b) hereof against any Damages
sustained by reason of any claim shall be limited to claims as to which Seller
has given to Buyer written notice thereof on or prior to one year after the
Closing Date.  The provisions for indemnity contained in Section 6.4 hereof
shall be effective only after the aggregate amount of all Damages for which
Buyer is liable under the indemnity exceeds $25,000, and then only to the
extent that such amounts exceed $25,000, but in no event in excess of the
Purchase Price.

       Section 6.6   Conditions of Indemnification.  The obligations and
liabilities of Seller and Buyer with respect to Claims made by third parties
shall be subject to the following terms and conditions:

              (a)    The indemnified party will give the indemnifying party
       prompt notice of any such claim, and the indemnifying party shall have
       the right to undertake the defense thereof by representatives chosen by
       it;

              (b)    if the indemnifying party, within a reasonable time after
       notice of any such claim, fails to defend the indemnified party against
       which such claim has been asserted, the indemnified party shall (upon
       further notice to the indemnifying party) have the right to undertake
       the defense, compromise or settlement of such claim on behalf of and for
       the account and risk of the indemnifying party subject to the right of
       the indemnifying party to assume the defense of such claim at any time
       prior to settlement, compromise or final determination thereof; and

              (c)    Anything in this Article 6 to the contrary
       notwithstanding; (i) if there is a reasonable probability that a claim
       may materially and adversely affect the indemnified party other than as
       a result of money damages or other money payments, the indemnified party
       shall have the right, at its own cost and expense, to defend, compromise
       or settle such claim; provided, however, that if such claim is settled
       without the indemnifying party's consent (which consent shall not be
       unreasonably withheld), the indemnified party shall be deemed to have
       waived all rights hereunder against the indemnifying party for





                                       10
<PAGE>   15
       money damages arising out of such claim, and (ii) the indemnifying party
       shall not, without the written consent of the indemnified party, settle
       or compromise any claim or consent to the entry of any judgment which
       does not include as an unconditional term thereof the giving by the
       claimant or the plaintiff to the indemnified party a release from all
       liability in respect to such claim.


                                   ARTICLE 7

                     OTHER OBLIGATIONS OF SELLER AND BUYER 

       Section 7.1   Buyer's Licenses.  Buyer or its officers or employees
shall obtain prior to Closing all licenses necessary for it to conduct its
business in the State of California.

       Section 7.2   Consents.

              (a)    Seller shall use its best efforts to obtain prior to the
Closing all consents necessary in connection with the consummation of the
transactions contemplated hereby, including, without limitation, (i) the
consent of each lessor of real or personal property leased by Seller included
in the Division Assets or the consent of any other third party to the
assignment of Seller's interest under the lease of such property to Buyer at
the Closing in consideration of the assumption of Seller's liability thereunder
by Buyer; and (ii) each of the other consents, approvals, licenses, permits and
authorizations listed or referred to in Schedule 4.5 hereto.  Seller's
obligation to use its best efforts to obtain such consents shall not include
any obligation with respect to the renegotiation of the terms of any agreement
including, but not limited to, any obligation to alter the provisions of such
agreement or to pay any fee to any party for the purpose of obtaining such
consent.  Buyer agrees to assist and cooperate with Seller in obtaining such
consents, including, without limitation, by way of furnishing financial and
other information as may reasonably be requested by Seller or any lessor or
other third party.

              (b)    In the event Seller shall fail to obtain prior to the
Closing all consents necessary in connection with the consummation of the
transactions contemplated hereby, Buyer shall negotiate in good faith with
Seller to attempt to achieve a mutually acceptable resolution.

       Section 7.3   Governmental Filings.  As soon as practicable, Seller and
Buyer shall make any and all filings and submissions to any governmental agency
which are required to be made in connection with the transactions contemplated
hereby.  Seller shall furnish to Buyer and Buyer shall furnish to Seller such
information and assistance as the other party or parties may reasonably request
in connection with the preparation of any such filings or submissions.

       Section 7.4   Conduct of Business.  From the date hereof to the Closing,
Seller shall, and shall cause its Subsidiaries to, conduct the business,
operations, activities and practices of the Division Business only in the
ordinary course of business, in accordance with past practice.

       Section 7.5   Covenant to Satisfy Conditions.  Seller, on the one hand,
and Buyer, on the other hand, shall each use their respective best efforts to
insure that the conditions set forth in





                                       11
<PAGE>   16
Articles 8 and 9 hereof, respectively, are satisfied, insofar as such matters
are within their respective control.

       Section 7.6   Resale Exemption Certificates.  At the Closing, Seller and
Buyer shall remit to each other such properly completed resale exemption
certificates and other similar certificates or instruments as are necessary to
claim available exemptions from the payment of sales or use taxes under
applicable laws.

       Section 7.7   Damage or Destruction.  If a material amount of the
Division Assets shall be damaged or destroyed prior to the time of Closing,
Seller may elect (i) to restore or replace the Division Assets to their
condition on the date of this Agreement, or (ii) to cancel, without liability
to Buyer or Seller, the transactions contemplated hereby.

       Section 7.8   Financial and Strategic Reporting.  During the term of
this Agreement and any Related Instrument, unless the Seller shall otherwise
consent in writing:

              (i)    Buyer shall maintain, for itself and each subsidiary, a
       system of accounting established and administered in accordance with
       GAAP, and furnish to the Seller within 45 days after the close of each
       of its first three fiscal quarters and 90 days after the close of its
       fiscal year, a report (certified by independent certified public
       accountants, acceptable to the Seller for each fiscal year end),
       prepared in accordance with GAAP on a consolidated and consolidating
       basis (consolidating statements need not be certified by such
       accountants) for itself and its subsidiaries, if any, including balance
       sheets as of the end of such period, related profit and loss and
       reconciliation of surplus statements, and a statement of cash flows,
       accompanied by any management letter prepared by said accountants; and

              (ii)   Buyer shall also prepare and deliver to Seller a strategic
       and financial plan within 30 days after the end of each fiscal year.

       Section 7.9   Noncompetition.  During the term of the Note, and except
as otherwise contemplated by this Agreement or the Note, neither Seller nor any
of its Subsidiaries shall directly or indirectly own, manage, operate, control,
participate in or be connected in any manner with any business or enterprise
that is competitive with the artisan contractor insurance business of the types
and in the states conducted by Seller on the Closing Date.

                                   ARTICLE 8

                       CONDITIONS TO OBLIGATIONS OF BUYER

       The obligations of Buyer under this Agreement are subject to the
satisfaction or, unless prohibited by law, the waiver by Buyer, at or before
the Closing, of each of the following conditions:

       Section 8.1   Representations and Warranties.  The representations and
warranties of Seller contained herein shall be true, complete and accurate in
all material respects as of the date





                                       12
<PAGE>   17
when made and at and as of the Closing Date as though such representations,
warranties and statements were made at and as of such date, except for any
changes expressly permitted by the terms of this Agreement.

       Section 8.2   Performance.  Seller shall have performed and complied in
all material respects with all agreements, obligations and conditions required
by this Agreement to be so performed or complied with by it at or prior to the
Closing.

       Section 8.3   No Injunction.  On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any order of any
nature issued by a court of competent jurisdiction restraining or prohibiting
the consummation of the transactions contemplated hereby.

       Section 8.4   Officer's Certificate.  Seller shall have delivered to
Buyer a certificate, dated the Closing Date, executed by the President of Buyer
certifying the fulfillment of the conditions specified in Sections 8.1 and 8.2
hereof.

       Section 8.5   Consents and Approvals.  All material licenses, permits,
consents, approvals and authorizations of all third parties and governmental
bodies and agencies shall have been obtained which are necessary in connection
with the execution and delivery by Buyer and Seller of this Agreement or the
Related Instruments, and the consummation by Buyer and Seller of the
transactions contemplated hereby or thereby.

       Section 8.6   Deliveries by Seller.  Seller shall have made the
deliveries required by Section 1.8 hereof.

       Section 8.7   Services Agreement.  Buyer and Seller shall have executed
an agreement in the form attached hereto as Exhibit F (the "SERVICES
AGREEMENT") whereby Buyer agrees to manage the "run-off" of certain of Seller's
operations.

       Section 8.8   Underwriting Services Agreement.  Buyer and INSCORP shall
have executed an agreement, on terms satisfactory to Buyer, whereby Buyer will
act as managing general agent for artisan contractor policies written by
INSCORP.

       Section 8.9   Buyer Financing.  Buyer shall have entered into agreements
with Citibank on terms satisfactory to Buyer whereby Citibank shall provide a
$500,000 term loan and a $250,000 revolving line of credit to Buyer.

       Section 8.10  Insurance License.  Buyer shall have the obtained licenses
described in Section 7.1 of this Agreement.

       Section 8.11  Noncompetition Agreement.   The Noncompetition Agreement
shall have been executed by the parties thereto.





                                       13
<PAGE>   18
                                   ARTICLE 9

                      CONDITIONS TO OBLIGATIONS OF SELLER

       The obligations of Seller under this Agreement are subject to the
satisfaction or, unless prohibited by law, the waiver by Seller at or before
the Closing, of each of the following conditions:

       Section 9.1   Representations and Warranties.  The representations and
warranties of Buyer contained herein shall be true, complete and accurate in
all material respects as of the date when made and at and as of the Closing
Date as though such representations and warranties made at and as of such date,
except for any changes expressly permitted by the terms of this Agreement.

       Section 9.2   Performance.  Buyer shall have performed and complied in
all material respects with all agreements, obligations and conditions required
by this Agreement to be so performed or complied with by it at or prior to the
Closing.

       Section 9.3   Officer's Certificate.  Buyer shall have delivered to
Seller a certificate, dated the Closing Date and executed by the President or a
Vice President of Buyer, certifying the fulfillment of the conditions specified
in Sections 9.1 and 9.2 hereof.

       Section 9.4   No Injunction.  On the Closing Date, there shall be no
effective injunction, writ, preliminary restraining order or any order of any
nature issued by a court of competent jurisdiction restraining or prohibiting
consummation of the transactions contemplated hereby.

       Section 9.5   INSCORP Reinsurance Agreement.  Seller and Insurance
Corporation of New York ("INSCORP") shall have executed an agreement pursuant
to which INSCORP agrees to provide reinsurance to Seller and pursuant to which
INSCORP assumes 100% of the net underwriting risk on Seller's artisan
contractor book of business for occurrences on or after March 1, 1997.

       Section 9.6   Services Agreement.  Buyer and Seller shall have executed
the Services Agreement.

       Section 9.7   Underwriting Services Agreement.  Buyer and INSCORP shall
have executed an agreement, on terms satisfactory to Seller, whereby Buyer will
act as managing general agent for artisan contractor policies written by
INSCORP.

       Section 9.8   Consents and Approvals.  All material licenses, permits,
consents, approvals and authorizations of all third parties and governmental
bodies and agencies shall have been obtained which are necessary in connection
with the execution and delivery by Buyer and Seller of this Agreement or the
Related Agreements and the consummation by Buyer and Seller of the transaction
contemplated hereby or thereby.





                                       14
<PAGE>   19
       Section 9.9   Buyer's Deliveries.  Buyer shall have made the deliveries
required by Section 1.9 hereof.

       Section 9.10  Management Employment Agreements.  Each of George C. Hill
III, David O. Daniels and Lenard F. Robinson shall have executed an employment
agreement with Buyer on terms satisfactory to Seller.

       Section 9.11  Buyer Financing.  Buyer shall have entered into agreements
with Citibank on terms satisfactory to Seller whereby Citibank shall provide a
$500,000 term loan and a $250,000 revolving line of credit to Buyer.

       Section 9.12  Insurance License.  Buyer shall have the obtained licenses
described in Section 7.1 of this Agreement.

       Section 9.13  Noncompetition Agreement.  Buyer shall have made the
payments required by the Noncompetition Agreement.

       Section 9.14  Profit Sharing Agreement.  Seller and INSCORP shall have
entered into a profit sharing agreement on terms mutually acceptable to Seller
and INSCORP.


                                   ARTICLE 10

                            TERMINATION OF AGREEMENT

       Section 10.1  Termination of Agreement.  This Agreement may be
terminated at any time prior to the Closing:

              (a)    by mutual agreement of Seller and Buyer;

              (b)    by Buyer, on or after June 30, 1997, if any of the
       conditions provided in Article 8 of this Agreement have not been met and
       have not been waived in writing by Buyer prior to such date; or

              (c)    by Seller on or after June 30, 1997, if any of the
       conditions provided in Article 9 of this Agreement have not been met and
       have not been waived in writing by Seller prior to such date.

       Section 10.2  Procedure Upon Termination.  In the event of termination
by Seller or Buyer pursuant to Section 10.1 hereof, written notice thereof
shall forthwith be given to the other party and the transactions contemplated
by this Agreement shall be terminated, without further action by either party.
If the transactions contemplated by this Agreement are terminated as provided
herein:





                                       15
<PAGE>   20
              (a)    Each of Seller and Buyer shall return all documents, work
       papers and other material of any other party relating to the
       transactions contemplated hereby, whether so obtained before or after
       the execution hereof, to the party furnishing the same;

              (b)    all confidential information received by Seller or Buyer
       with respect to the business of any other party or its Subsidiaries or
       Affiliates shall be treated as confidential;

              (c)    such termination shall not in any way limit or restrict
       the rights and remedies of any party hereto against any other party
       which has willfully breached any of the agreements or other provisions
       of this Agreement prior to termination hereof; and

              (d)    if Seller has begun to issue artisan contractor policies
       on behalf of INSCORP, Seller shall immediately cease binding such
       policies.


                                   ARTICLE 11

                                 MISCELLANEOUS

       Section 11.1  Mail Received After Closing.  On and after the Closing,
Buyer may receive and open all mail addressed to Seller or the Division and
deal with the contents thereof in its discretion to the extent that such mail
and the contents thereof relate to the Division Business or any of the Assumed
Liabilities.  Buyer agrees to deliver or to cause to be delivered to Seller all
other mail received which is addressed to Seller, any Subsidiary of Seller or
the Division and does not relate to the Division Business or the Assumed
Liabilities.

       Section 11.2  Access to Books and Records.  Seller and Buyer agree that
on and after the Closing Date each will permit the other and their respective
representatives (including their counsel, accountants and auditors), during
reasonable hours, to have reasonable access to and examine and make copies of
all books and records in their respective possession or the possession of any
of their respective Subsidiaries pertaining to the Division Business.  Prior to
Buyer's destruction or disposition of any such books or records pertaining to
the Division Business, Buyer shall provide no less than thirty (30) days prior
written notice to Seller of any such proposed destruction or disposal.  If
Seller desires to obtain any of such documents, it may do so by notifying Buyer
in writing at any time prior to the scheduled date for such destruction or
disposal.  The parties shall then promptly arrange for the delivery of such
documents.  All out-of-pocket costs associated with the preparation,
duplication and delivery of the requested documents shall be paid Seller.

       Section 11.3  Commissions.  Each of the parties hereto represents and
warrants that no broker or finder is entitled to any brokerage or finder's fee
or other commission in connection with the transactions contemplated hereby.
Each of the parties hereto shall pay or discharge, and shall indemnify and hold
the other harmless from and against, any and all claims or liabilities for
brokerage commissions or finder's fees incurred by reason of any action taken
by it.





                                       16
<PAGE>   21
       Section 11.4  Expenses, Taxes, Etc.

              (a)    Except as otherwise provided herein, each of the parties
hereto shall pay all fees and expenses incurred by it or any of its Affiliates
or Subsidiaries in connection with the transactions contemplated by this
Agreement; provided, however, that Seller shall pay all sales taxes in
connection with the transactions contemplated hereby, and all transfer, gains,
stamp, documentary and similar taxes and recording fees in connection with the
transfer and delivery of all real and personal property included in the
Division Assets.

              (b)    Notwithstanding the foregoing, Buyer shall be fully
responsible for and shall indemnify Seller (to the extent Seller is liable to
any taxing authority) for all sales taxes applicable as a result of the
transactions contemplated by this Agreement that could have been avoided by
Buyer's proper and timely completion, delivery, and filing of resale exemption
certificates and any other exemption certificates or instruments as are
necessary to claim available exemptions from the payment of sales taxes under
applicable laws.

       Section 11.5  Further Assurances.

              (a)    From time to time (including after the Closing Date), at
Buyer's request and without further consideration, Seller shall execute and
deliver to Buyer such documents and take such other action as Buyer may
reasonably request in order to consummate more effectively the transactions
contemplated hereby.

              (b)    From time to time (including after the Closing Date), at
Seller's request and without further consideration, Buyer shall execute and
deliver such documents and take such other action as Seller may reasonably
request in order to consummate more effectively the transactions contemplated
hereby.

       Section 11.6  Parties in Interest.  This Agreement shall be binding
upon, inure to the benefit of, and be enforceable by the respective successors
and permitted assigns of the parties hereto.  The rights and obligations of
Buyer and Seller hereunder may not be assigned without the consent of the
other.

       Section 11.7  Entire Agreement, Amendments and Waiver.  This Agreement,
the exhibits, the schedules and other writings referred to herein or delivered
pursuant hereto which form a part hereof contain the entire understanding of
the parties with respect to its subject matter.  This Agreement supersedes all
prior agreements and understandings between the parties with respect to its
subject matter.  This Agreement may be amended only by a written instrument
duly executed by the parties.  Any condition to a party's obligations hereunder
may be waived in writing by such party to the extent permitted by law.

       Section 11.8  Headings.  The Article and Section headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.





                                       17
<PAGE>   22
       Section 11.9  Notices.  Any notices or other communications required or
permitted to be given hereunder or otherwise in connection herewith shall be in
writing and shall be sent to the parties at the following addresses or at such
other addresses as shall be specified by the parties by like notice:

       If to Buyer:  HDR Insurance Managers, LLC
                     655 University, Ste. 100
                     Sacramento, CA 95825
                     ATTENTION:  President

       If to Seller: AMERICAN EAGLE INSURANCE COMPANY
                     12801 N. Central Expressway, Ste. 800
                     Dallas, TX 75243
                     ATTENTION:  M. Philip Guthrie

Such notices or other communications shall be deemed to have been duly given
and received (i) on the day of sending if sent by personal delivery, cable,
telegram, facsimile transmission or telex, (ii) for overnight delivery, on the
next business day after the day of sending if sent by Federal Express or other
similar express delivery service or (iii) on the fifth calendar day after the
day of sending if sent by registered or certified mail (return receipt
requested).

       SECTION 11.10 GOVERNING LAW.  THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF TEXAS,
WITHOUT REGARD TO THE CONFLICTS OF LAW RULES THEREOF.

       Section 11.11 Third Parties.  Nothing herein expressed or implied is
intended or shall be construed to confer upon or give to any person other than
the parties hereto and their successor or permitted assigns, any rights or
remedies under or by reason of this Agreement.

       Section 11.12 Counterparts.  This Agreement may be executed
simultaneously in several counterparts, each of which shall be deemed an
original, but all of which together shall constitute one and the same
instrument.

       SECTION 11.13 SPECIFIC PERFORMANCE.  SELLER AND BUYER EACH ACKNOWLEDGE
THAT, IN VIEW OF THE UNIQUENESS OF THE DIVISION BUSINESS, NEITHER BUYER NOR
SELLER WOULD HAVE AN ADEQUATE REMEDY AT LAW FOR MONEY DAMAGES IN THE EVENT OF A
BREACH ANY OF THE TERMS OF THIS AGREEMENT AND, THEREFORE, AGREE THAT EITHER
PARTY SHALL BE ENTITLED TO SPECIFIC ENFORCEMENT OF THE TERMS HEREOF IN ADDITION
TO ANY OTHER REMEDY TO WHICH IT MAY BE ENTITLED, AT LAW OR IN EQUITY.

       Section 11.14 Waiver of Bulk Sales Act Compliance.  Buyer hereby waives
compliance by Seller with the provisions of Article 6 of the Uniform Commercial
Code of the State of Texas and with any similar article or section under the
Uniform Commercial Code enacted in any other jurisdiction in which any of the
Division Assets are located.





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<PAGE>   23
              IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered by the duly authorized officers of the parties hereto on the date
first above written.



                                         AMERICAN EAGLE INSURANCE COMPANY



                                         By:                                    
                                            ------------------------------------
                                            Print Name:                         
                                                       -------------------------
                                            Print Title:                        
                                                        ------------------------


                                         HDR INSURANCE MANAGERS, LLC


                                         By:                                    
                                            ------------------------------------
                                            Print Name:                         
                                                       -------------------------
                                            Print Title:                        
                                                        ------------------------





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