PLACEMENT AGENT AGREEMENT

                                 April 13, 1998


Sanders Morris Mundy Inc.
3100 Chase Tower
Houston, Texas  77002

Dear Sirs:

         1. Introductory. Capital Title Group, Inc., a Delaware corporation (the
"Company"),  proposes  to sell  3,703,703  shares (the  "Shares")  of its Common
Stock,  $.001 par value (the  "Common  Stock") at a purchase  price of $1.35 per
share.

         2.   Representations  and  Warranties  of  the  Company.   The  Company
represents, warrants, and agrees that:

               (i) A Private  Placement  Memorandum  dated  April 13,  1998 (the
          "Memorandum"),  with respect to the Common Stock, copies of which have
          heretofore been delivered to you, has been prepared by the Company.

               (ii)  At the  date  of the  Memorandum,  the  Memorandum  did not
          include  any untrue  statement  of a material  fact or omit to state a
          material fact  required to be stated  therein or necessary to make the
          statements therein in light of the circumstances under which they were
          made  not  misleading;  at  all  times  subsequent  thereto  up to and
          including  the  Closing  Date (as  hereinafter  defined)  neither  the
          Memorandum,  nor any amendment or supplement thereto, will include any
          untrue statement of a material fact or omit to state any material fact
          necessary to make the statements therein in light of the circumstances
          under which they were made not misleading;  and neither the Memorandum
          nor any  supplemental  written sales material  supplied or approved in
          writing by the Company (when read in conjunction  with the Memorandum,
          whether  designated  only for  broker-dealer  use or  otherwise)  will
          include  any untrue  statement  of a material  fact or omit to state a
          material fact necessary to make the statements therein in the light of
          the circumstances under which they were made not misleading; provided,
          however,   that  the  foregoing   representations,   warranties,   and
          agreements shall not apply to information contained in or omitted from
          the Memorandum, any such amendment or supplement or supplemental sales
          material  in  reliance  upon,  and  in  conformity  with,  information
          furnished  to  the  Company  by  you   specifically  for  use  in  the
          preparation thereof.

               (iii) Subsequent to the respective dates as of which  information
          is given in the Memorandum, and except as set forth or contemplated in
          the  Memorandum,  including  the  financial  statements  and the notes
          thereto,(a) neither the Company nor any subsidiary of

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          the Company  (individually,  a "Subsidiary")  and,  collectively,  the
          "Subsidiaries") has incurred any material  liabilities or obligations,
          direct or  contingent,  which are required to be reflected or reserved
          in a  balance  sheet or the notes  thereto  under  generally  accepted
          accounting principles, but which are not reflected in the Exchange Act
          Documents,  nor  entered  into any  material  transactions,  except in
          either case in the ordinary course of business, (b) there has not been
          any material adverse change,  or to the knowledge of the Company,  any
          development involving a prospective material adverse change (so far as
          the  Company  may  now  foresee),   in  the  condition  (financial  or
          otherwise),  business,  prospects,  or  results of  operations  of the
          Company and the  Subsidiaries or any change in the capital or increase
          in the long-term debt of the Company,  (c) neither the Company nor any
          Subsidiary has sustained any material loss, including, but not limited
          to any loss on account of theft, fire, flood,  explosion,  accident or
          other  calamity,  whether or not  insured,  which has  materially  and
          adversely interfered,  or may materially and adversely interfere, with
          the operation of the Company's or any  Subsidiary's  business,  (d) to
          the best  knowledge  of the Company,  no event,  condition or state of
          facts,  including,  without  limitation,  the  enactment,  adoption or
          promulgation  of any law,  rule or  regulation,  has  occurred,  which
          materially   and  adversely  does  or  would  affect  the  results  of
          operations  or the business or  financial  condition of the Company or
          any  Subsidiary,  (e) the Company has not declared,  paid, or made any
          dividend or distribution of any kind on its capital stock,  and (f) to
          the Company's  knowledge there has not been any material change in the
          ownership of the capital stock of the Company.  As of the date hereof,
          the Company has no dividends declared but not paid or in arrears.

               (iv) The financial  statements,  together with the related notes,
          set forth in the Memorandum and the Exchange Act Documents (as defined
          below) fairly present,  on the basis stated therein and on the date of
          the Memorandum or the date of the respective  Exchange  Document,  the
          financial position of the Company and its consolidated Subsidiaries at
          the respective dates therein specified and their consolidated  results
          of operations  and cash flows for the periods then ended,  subject to,
          in the case of financial statements respecting interim periods, normal
          year-end  adjustments.  To the best  knowledge  of the  Company,  such
          statements  and related notes have been  prepared in  accordance  with
          generally accepted accounting principles applied on a consistent basis
          except as may be set forth in the Memorandum.

               (v) Ernst & Young LLP,  which has  expressed  its  opinion on the
          audited   financial   statements  of  the  Company   included  in  the
          Memorandum,  are,  with  respect to the  Company,  independent  public
          accountants  within the  meaning  of the  Securities  Act of 1933,  as
          amended  (the "1933  Act") and the rules and  regulations  promulgated
          thereunder (the "Rules and Regulations").

               (vi)  All  action  required  to be  taken  by  the  Company  as a
          condition to the due and proper  authorization,  issuance,  sale,  and
          delivery of the Common Stock of the Company to subscribers therefor in
          accordance with the terms of this Agreement, and the

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          Memorandum has been, or prior to the Closing Date (as herein defined),
          will have been,  taken; and upon the payment of the  consideration for
          the Common Stock specified in the Memorandum, the Common Stock will be
          duly and validly issued, fully paid and non- assessable.

               (vii) The Company has been duly organized and is validly existing
          and in good standing as a  corporation  under the laws of the State of
          Delaware,  with power and author ity  (corporate  and other) to own or
          lease its  properties  and to conduct its business as described in the
          Exchange  Act  Documents;  each  of the  Subsidiaries  has  been  duly
          organized and is validly  existing as a  corporation  in good standing
          under  the  laws  of  the  jurisdiction  of  its  incorporation,  with
          corporate  power and authority to own or lease its  properties  and to
          conduct its business as described in the Exchange Act  Documents;  the
          Company and each of the Subsidiaries are duly qualified to do business
          and  in  good   standing   as  foreign   corporations   in  all  other
          jurisdictions  in which their  ownership or leasing of properties,  or
          the  conduct  of  their   business   requires  or  may  require   such
          qualification  where  the  failure  to be so  qualified  would  have a
          material   adverse  effect  on  the  Company;   the  Company  and  the
          Subsidiaries  are in  possession of and operating in compliance in all
          material  respects  with  all  franchises,   grants,   authorizations,
          licenses,  permits,  easements,  consents,  certificates,  and  orders
          required  for the  conduct  of  their  business  as  described  in the
          Exchange  Act  Documents,  where  the  failure  to  possess  or comply
          therewith  would have a material  adverse  effect  upon the  Company's
          consolidated condition (financial or otherwise),  business, or results
          of operations of the Company and the Subsidiaries taken as a whole

               (viii) At April 1, 1998, the authorized,  issued, and outstanding
          shares of capital stock of the Company are as follows:

                                 Par                Shares             Shares
            Title               Value            Authorized         Outstanding
            -----               -----            ----------         -----------
         Common Stock          $0.001            50,000,000          12,168,029

               The  outstanding  shares of Common  Stock of the Company are duly
          authorized,  validly issued,  fully paid, and non-assessable,  with no
          personal  liability  attaching to the  ownership  thereof,  except for
          personal liability that may attach to shareholders pursuant to Section
          164 of the Delaware  General  Corporation Law (the "DGCL").  Except as
          set forth on Schedule  2(viii)  attached  hereto or in the Memorandum,
          the Company  has not  granted or issued,  or agreed to grant or issue,
          any options,  warrants or similar  rights to acquire or receive any of
          the  authorized  but  unissued  shares  of its  capital  stock  or any
          securities  convertible  into shares of its capital  stock.  No person
          holds  of  record  or,  to  the  best  of  the  Company's   knowledge,
          beneficially,  5% or more of the  outstanding  shares  of the  capital
          stock of the Company except as set forth in the Memorandum.  Except as
          set  forth  above  or in the  Memorandum,  there  are  no  outstanding
          agreements or understandings

                                      - 3 -
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          to which the Company is a party with respect to the sale of any shares
          of the Common Stock of the Company.  The capital  stock of the Company
          conforms in all material respects to the description thereof contained
          in the Memorandum.

               (ix) Except as disclosed in the Memorandum, there are no legal or
          governmental  proceedings pending to which the Company or a Subsidiary
          is a party or of which any of its properties  are the subject,  which,
          if  determined  adversely  to  the  Company  or  a  Subsidiary,  would
          individually or in the aggregate  result in a material  adverse change
          in the  condition  (financial  or  otherwise),  business or results of
          operations of the Company and its Subsidiaries  taken as a whole; and,
          to the best  knowledge  of the  Company  after  due  inquiry,  no such
          proceedings are threatened, except as set forth in the Memorandum.

               (x) Neither the Company nor any Subsidiary is in violation of its
          certificate of incorporation or bylaws, and is not in default, or with
          the  giving  of  notice  or  lapse of time or  both,  would  not be in
          default, in the performance of any material obligation,  agreement, or
          condition  contained  in  any  lease,   license,   material  contract,
          indenture,  or loan agreement or in any bond, debenture,  note, or any
          other evidence of indebtedness,  except for such defaults as would not
          have a material  adverse  effect on the Company  and the  Subsidiaries
          taken as a whole.  The  execution,  delivery and  performance  of this
          Agreement,   the  incurrence  of  the   obligations   herein  and  the
          consummation of the transactions contemplated herein will not conflict
          with or result in a breach of, or default  under,  the  certificate of
          incorporation  or  bylaws  of  the  Company,   or  any  material  loan
          agreement,  mortgage,  deed of trust, indenture, or other agreement or
          instrument  to which the  Company or any  Subsidiary  is a party or by
          which it is bound,  except to the extent  that the same have been,  or
          prior to the Closing  Date will be,  waived or cured,  or, to the best
          knowledge of the Company,  any material  law,  statute,  order,  rule,
          administrative  regulation,  or decree of any court,  or  governmental
          agency or body having  jurisdiction over the Company or any Subsidiary
          or their  properties  or result in the creation or  imposition  of any
          material lien,  charge,  claim,  or  encumbrance  upon any property or
          asset of the Company or any Subsidiary.

               (xi) There are no pre-emptive rights or other rights to subscribe
          for or to purchase, or any restriction upon the voting or transfer of,
          any such shares of Common Stock pursuant to the Company's  certificate
          of  incorporation,  by-laws,  or any agreement or other  instrument to
          which the Company is a party,  except as set forth in the  Memorandum.
          The  offering  or sale of the  Common  Stock as  contemplated  in this
          Agreement  will not give rise to any  rights  for or  relating  to the
          registration  of any  such  shares  of  Common  Stock  other  than the
          registration rights of the holders of Common Stock and the Warrant (as
          hereinafter  defined) to be issued to you as provided in Section  4(h)
          hereof.

               (xii)  This  Agreement  has  been  duly and  validly  authorized,
          executed and delivered by or on behalf of the Company and  constitutes
          a legal, valid, and binding

                                      - 4 -
<PAGE>
          obligation  of  the  Company   enforceable   against  the  Company  in
          accordance  with  its  terms,  except  as such  enforceability  may be
          limited   by   bankruptcy,    fraudulent    conveyance,    insolvency,
          reorganization,      moratorium,      rearrangement,      liquidation,
          conservatorship,   receivership,   or  similar  laws  relating  to  or
          affecting  creditors' rights generally and except as enforceability of
          the indemnity and contribution  provisions  contained in Section 6 may
          be limited by applicable law or principles of public policy.

               (xiii) Except as otherwise  stated in the  Memorandum  (including
          the financial  statements  and notes thereto  included  therein),  the
          Company and each of its Subsidiaries has good title, free and clear of
          all liens and  encumbrances,  to all of the personal property referred
          to  in  the   Memorandum  as  being  owned  by  it  except  liens  and
          encumbrances  that  are  not  material  in  the  aggregate  and do not
          materially  interfere  with the conduct of the business of the Company
          and  the  Subsidiaries,   and,  except  as  otherwise  stated  in  the
          Memorandum,  has valid and binding leases to the real and/or  personal
          property  described in the  Memorandum  as under lease to it with such
          exceptions  as do not  materially  interfere  with the  conduct of the
          business  of,  or the use of such  property  by,  the  Company  or any
          Subsidiary.

               (xiv)  Neither the Company nor any  Subsidiary is in violation of
          any law, ordinance, governmental rule, regulation, or permit, or court
          decree to which it may be  subject  and has not  failed to obtain  any
          license,  permit,  franchise,  or  other  governmental   authorization
          necessary  to the  ownership  of its property or to the conduct of its
          business, which violation or failure to obtain would have any material
          adverse  effect on the condition  (financial or other),  properties or
          results of operations of the Company and its  Subsidiaries  taken as a
          whole.

               (xv) No consent, approval, authorization or order of any court or
          governmental  authority or agency is required for the  consummation by
          the Company of the transactions contemplated by this Agreement, except
          such as may be  required by the  National  Association  of  Securities
          Dealers,  Inc.,  the 1933 Act or the  Rules and  Regulations  or state
          securities or Blue Sky laws.

               (xvi)  Except as described  in Schedule  2(xvi)  hereto or in the
          Memorandum,  the Company has not made during the past six months,  and
          will not make  throughout the Offering  Period (as herein  defined) or
          during the six-month period  commencing on the Closing Date, any offer
          to sell any security to be issued by it or any  security  issued or to
          be issued by any other  corporation,  partnership,  or similar  entity
          formed  or to be  formed  by it,  which  security  is of the same or a
          similar  class as the Common Stock or the Common Stock of the Company,
          other than  offers of  securities  under an employee  benefit  plan as
          defined  in  Rule  405  under  the  1933  Act,  securities  issued  in
          connection  with the Warrant,  securities  issued in  connection  with
          acquisitions,  or  other  securities  that  will  not  invalidate  the
          exemption  from  registration  relied on to offer and sell the  Common
          Stock.

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               (xvii) All  reports  and  statements  required to be filed by the
          Company  under the  Securities  Exchange Act of 1934,  as amended (the
          "Exchange Act"), and the rules and regulations  thereunder,  due at or
          prior to the date of this  Agreement  have been  made.  Such  filings,
          together with all documents  incorporated  by reference  therein,  are
          referred to as "Exchange  Act  Documents."  Each Exchange Act Document
          conformed  in all  material  respects at the time of its filing to the
          requirements  of the  Exchange  Act  and  the  rules  and  regulations
          thereunder, and no Exchange Act Document includes any untrue statement
          of a material  fact or omits to state any material fact required to be
          stated therein or necessary to make the statements  therein,  in light
          of the circumstances under which they were made, not misleading.

               (xviii) Except as indicated in Schedule 2(xviii) attached hereto,
          each of the Company and the  Subsidiaries  has filed all United States
          federal,  state,  county,  local and foreign national,  provincial and
          local  returns and reports which were required to be filed on or prior
          to the date herein in respect of all income,  withholding,  franchise,
          payroll, excise,  property,  sales, use, value-added or other taxes or
          levies,  imposts,  duties,  license and  registration  fees,  charges,
          assessments  or  withholdings  of  any  nature  whatsoever  (together,
          "Taxes"), and has paid all Taxes (and any related penalties, fines and
          interest) which have become due pursuant to such returns or reports or
          pursuant to any assessment which has become payable, or, to the extent
          its  liability  for any Taxes (and any  related  penalties,  fines and
          interest) has not been fully  discharged,  adequate  reserves therefor
          have been established.  All such returns and reports filed on or prior
          to the date hereof have been properly  prepared and are true,  correct
          (and to the extent such returns reflect  judgments made by the Company
          or a Subsidiary,  as the case may be, such judgments  were  reasonable
          under the circumstances) and complete in all material respects.

               (xix)  Except as set forth in Schedule  2(xix)  attached  hereto,
          since December 31, 1997, each of the Company and the  Subsidiaries has
          conducted its business, maintained its real property and equipment and
          kept its books of  account,  records and files,  substantially  in the
          same manner as previously conducted,  maintained or kept and solely in
          the ordinary course.

         3.   Representations  and  Warranties  of  Sanders  Morris  Mundy.  You
represent and warrant to, and agree with, the Company that:

               (i) You have been duly organized and are validly  existing and in
          good standing as a  corporation  under the laws of the State of Texas,
          with  power  and  authority  (corporate  and  other) to  perform  your
          obligations under this Agreement;  you are a broker-dealer  registered
          and in good  standing  under the  Securities  Exchange Act of 1934, as
          amended,  and under the  securities  or Blue Sky laws of each state in
          which the  Shares  are  being  offered  or sold by you,  and you are a
          member in good  standing of the  National  Association  of  Securities
          Dealers,  Inc.;  you are in  possession of and operating in compliance

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          with all authorizations, licenses, permits, consents, certificates and
          orders  required  for  the  performance  of  your  duties  under  this
          Agreement.

               (ii) There are no legal or  governmental  proceedings  pending to
          which  you are a party  or of  which  any of  your  properties  is the
          subject,  which, if determined adversely to you, would individually or
          in the  aggregate  materially  and  adversely  affect your  ability to
          perform your obligations under this Agreement.

               (iii)  There  are no  facts  or  circumstances  relating  to your
          directors  or  officers  which  would  give rise to a  prohibition  or
          restriction under the terms of Rule  502(b)(2)(iii)  adopted under the
          1933 Act.

               (iv)  This  Agreement  has  been  duly  and  validly  authorized,
          executed and delivered by you or on your behalf and  constitutes  your
          legal,   valid,  and  binding  obligation   enforceable   against  you
          accordance  with  its  terms,  except  as such  enforceability  may be
          limited   by   bankruptcy,    fraudulent    conveyance,    insolvency,
          reorganization,      moratorium,      rearrangement,      liquidation,
          conservatorship,   receivership,   or  similar  laws  relating  to  or
          affecting  creditors' rights generally and except as enforceability of
          the indemnity and contribution  provisions  contained in Section 6 may
          be limited by applicable law or principles of public policy.

               (v) No consent, approval,  authorization or order of any court or
          governmental  authority or agency is required for the  performance  by
          you of your  obligations  under this Agreement,  except such as may be
          required by the National  Association of Securities  Dealers,  Inc. or
          under Regulation D or state securities or Blue Sky laws.

         4.  Offering  and  Sale  of  Common  Stock.  (a)  On the  basis  of the
representations,  warranties, and covenants herein contained, but subject to the
terms and upon the  conditions  herein set forth,  you are hereby  appointed the
exclusive  selling agent of the Company  during the term herein  specified  (the
"Offering  Period") for the purpose of finding  subscribers for the Shares, on a
best-efforts  all-or-none basis for the account of the Company through a private
offering (the "Offering") to an unlimited  number of "accredited  investors" (as
such term is defined in the Rules and  Regulations)  and up to 35 investors  who
are not accredited investors.  Subject to the perfor mance by the Company of all
its obligations to be performed hereunder,  and to the completeness and accuracy
of all the  representations  and warranties  contained herein, you hereby accept
such agency and agree on the terms and  conditions  herein set forth to use your
best efforts during the Offering Period to find subscribers for the Common Stock
at a price of $1.35 per share.  Your agency  hereunder,  which is  terminable as
provided in Section 10 hereof,  shall continue until not later than May 4, 1998;
provided that such termination date (the "Termination  Date") may be extended up
to and including until May 19, 1998, by mutual agreement of the parties.

         (b) In connection with the performance of your  obligations  under this
Agreement,  you may engage, for the account of the Company,  the services of one
or more  broker-dealers  ("Addi tional  Agents") who are members of the National
Association of Securities  Dealers,  Inc. and who are acceptable to the Company,
and, as compensation for their services, shall pay to such Addi tional Agents an
amount to be negotiated between you and such Additional Agents. Such amount will
be paid to the Additional Agents by you only out of the commissions  received by
you in respect of sales of Common Stock as  described  in paragraph  (f) of this
Section 4, and the Company  shall have no  obligation  to any  Additional  Agent
respecting any such payment. The arrangements, if any, between the Company, you,
and any  Additional  Agent shall be set forth in an Additional  Agent  Agreement
("Additional Agent Agreement"),  which shall provide,  among other things,  that
such  Additional  Agent  shall be deemed to have agreed to the matters set forth
herein as if the Additional Agent were a signatory hereof.  Nothing contained in
this  Agreement  or in  the  Additional  Agent  Agreement  shall  be  deemed  to
constitute the Additional  Agents, if any, as your agents,  and you shall not be
liable to the Company in respect of the performance by the Additional Agents, if
any, of any  representations,  warranties or covenants of such Additional Agents
contained herein or in the Additional Agent Agreement.

         (c)  Each   subscriber   must  complete  and  execute  a  copy  of  the
Subscription Agreement. Upon receipt, you shall hold the Subscription Agreements
for  safekeeping  and  deposit  all  funds  delivered  to you into a  segregated
subscription escrow account as described in the Memorandum.

         (d) In the event that  subscriptions  for a minimum of 3,703,703 shares
of Common Stock shall not have been  received and accepted by the Company by the
Termination Date, all funds received from subscribers (if any) shall be returned
in full, and your agency and this Agreement shall terminate  without  obligation
on your part or on the part of the Company, except as provided in Sections 6 and
7 hereof.

         (e) If, by the  Termination  Date or such earlier time as may be agreed
upon by you and the  Company,  you have  received  subscriptions  for all of the
Shares, you shall notify the Company of the aggregate amount of Common Stock for
which you have  received  subscriptions.  Payment of the purchase  price for the
Common Stock for which you have found subscribers, and delivery, with respect to
each subscriber for Common Stock, of a copy of a Subscription  Agreement  signed
by such  subscriber,  shall then be made at the offices of Sanders Morris Mundy,
3100 Chase  Tower,  Houston,  Texas 77002 or such other place as shall be agreed
upon between you and the Company, at 10:00 A.M., Houston Time, on the fifth full
business  day after the day on which you so notify the  Company of the amount of
Common  Stock  subscribed  for,  or such  other day and time (not later than ten
business  days  thereafter)  as shall be agreed upon between you and the Company
(the "Closing Date"),  in accordance with the terms and provisions of the Escrow
Agreement dated as of April 13, 1998, among you, the Company, and Sterling Bank.

         (f) As compensation  for your services,  a cash commission will be paid
to you with  respect to  subscriptions  received by you as to which the payments
and deliveries provided for in this Section 4 are made at the Closing Date equal
to 6.0% of the purchase  price of each share of Common Stock.  In addition,  the
Company agrees to pay you $50,000 as a non-accountable expense allowance and, in
addition,  to reimburse  you for your  reasonable  expenses in  accordance  with

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<PAGE>
Section 6 hereof. Such commissions and  non-accountable  expense allowance shall
be paid to you on the  Closing  Date by bank wire  transfer  payable  in Federal
Funds (same day funds).

         (g) Neither you, the Company, nor any Additional Agent shall,  directly
or indirectly, pay or award any finder's fees, commissions or other compensation
to any person  engaged  by a  potential  investor  for  investment  advice as an
inducement  to such  advisor to advise the purchase of Common  Stock;  provided,
however,  that,  subject to Section 4(b), normal sales commissions  payable to a
registered  broker-dealer  or other properly  licensed person for selling Common
Stock shall not be prohibited hereby.

         (h) If the Offering closes, as further  consideration for your services
hereunder,  the Company will issue to you on the Closing  Date a stock  purchase
warrant (the  "Warrant") in the form attached  hereto as Exhibit II granting you
the right to  purchase  from the  Company  for a period of three  years  308,642
shares of Common Stock for a cash consideration per share equal to $1.62 subject
to standard antidilution  adjustments.  The Warrant shall be deemed fully earned
upon its issuance.

         (i) You will prepare and file such statements and reports as are or may
be  required  to enable  the  Common  Stock to be  qualified  for sale under the
securities laws of such jurisdictions as you may designate.

         (j) You will  advise the  Company if you become  aware of any  material
change in the facts and  circumstances  subsequent to the date of the Memorandum
relating  to the  offer  and  sale of the  Common  Stock,  as  described  in the
Memorandum.

         (k) You  will not  make a  general  solicitation  with  respect  to the
Offering.

         5. Covenants and Agreements of the Company.  The Company  covenants and
agrees with you that:

         (a) Neither the Company nor any of its Subsidiaries  will, prior to the
Closing Date incur any material  liability or obligation,  direct or contingent,
or enter into any material  transaction,  other than in the  ordinary  course of
business, except as contemplated by the Memorandum. The Company will not declare
or pay any  dividend or make any  distribution  on the Common  Stock  payable to
shareholders of record on a date prior to the Closing Date.

         (b) The Company will use the net proceeds  received by it from the sale
of the Common Stock in the manner  specified in the Memorandum under the caption
"Use of Proceeds."

         (c) If at any time  after the date of the  Memorandum  and prior to the
Termination  Date,  any event  relating to or affecting the Company  occurs as a
result of which the Memorandum  would include an untrue  statement of a material
fact,  or omit to state  any  material  fact  necessary  to make the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading,

                                      - 8 -
<PAGE>
the Company  will  promptly  notify you  thereof and will  prepare an amended or
supplemented  offering memorandum which will correct such statement or omission.
For purposes of this para graph (a),  the Company will furnish such  information
with respect to itself as you may from time to time reasonably request.

         (d) It will deliver to you, at or before the date  hereof,  an original
of the  Memorandum  suitable for  duplication  by you,  including such financial
statements.  It will  deliver to you,  from time to time  until the  Termination
Date, an original of such  amendments or supplements to the Memorandum  that may
be prepared by the Company suitable for duplication by you.

         (e) It will  cooperate  with  you to  enable  the  Common  Stock  to be
qualified for sale under the securities  laws of such  jurisdictions  as you may
designate,  subject to approval by the  Company,  and at your  request will make
such applications and furnish such information as may be required of it for that
purpose;  provided,  however,  that it shall not be  required  to  qualify to do
business  or to file a  general  consent  to  service  of  process  in any  such
jurisdiction.  It will, from time to time,  prepare and file such statements and
reports as are or may be required to continue such  qualifications in effect for
so long a period  as you may  reasonably  request  for the  distribution  of the
Common Stock.

         (f) It will file all reports  required by  Regulation  D with regard to
sales of the Common Stock and use of the proceeds  therefrom;  provided that you
provide all  information  as to purchasers of the Common Stock required for such
filings.

         (g) For a period of three years from the Closing Date, the Company will
deliver to you (i) copies of the financial  statements  furnished by the Company
to stockholders  and each other report furnished by the Company to stockholders,
(ii) as soon as they are  available,  copies of any other reports  (financial or
other) which the Company shall publish or otherwise make generally  available to
the Company's  security holders as such and (iii) as soon as they are available,
copies of any reports and  financial  statements  furnished to or filed with the
Commission.

         (h) The Company  agrees to nominate  for  election as a director of the
Company one individual designated by you for so long as purchasers of the Common
Stock offered and sold pursuant to Section 4(a) of this Agreement retain, in the
aggregate,  at least 50% of the  aggregate  number  of  shares  of Common  Stock
offered and sold pursuant to Section 4(a).

         (i) The Company  will not offer or sell any  securities  of the Company
that are of the same or a similar  class as the Common  Stock  offered  and sold
pursuant to this  Agreement  for a period of six months after the Closing  Date,
other than those offers or sales of securities under an employee benefit plan as
defined in Rule 405 under the 1933 Act, unless the Company  provides you with an
opinion  of  counsel  acceptable  to you that any such offer or sale will not be
integrated  with the offering of the Common Stock pursuant to this Agreement for
purposes of the  exemptions  under  Regulation D and the condition  contained in
Rule 502(a) of Regulation D.

                                      - 9 -
<PAGE>
         (j) The  Company  will cause each of Donald R. Head,  Andrew A.  Johns,
Theo F. Lamb, and Rudy R. Miller to deliver to you on or before the Closing Date
an agreement satisfactory in form and substance to you, whereby each agrees, for
a period of one year after the Closing  Date,  not to sell,  offer or  otherwise
dispose  of any  shares of Common  Stock  without  your  prior  written  consent
("Lock-Up Letters");  provided,  however,  that Messrs Head, Johns, and Lamb may
sell up to five  percent of the shares of Common Stock that they  currently  own
and Mr.  Miller may sell up to 25% of the shares that he currently  owns without
your consent. In addition, during the lock-up period, Messrs. Head, Johns, Lamb,
and  Miller  may sell  their  shares  on a pro rata  basis  with  other  selling
shareholders,  if any,  in any  underwritten  public  offering,  subject  to the
discretion  of the  underwriters  in any such  offering  to limit the  shares of
selling shareholders that may be sold in such offering.

         (k) The  Company  agrees  that,  until  the  Company  has  successfully
completed an underwritten  public offering of Common Stock pursuant to which the
Company realizes proceeds of at least $12,000,000 and the price to the public is
at least $5.00 per share (a "Qualified  Offering"),  the number of shares of the
Common  Stock  collectively  issued or  issuable  by the  Company  as  incentive
compensation,  directly  or  pursuant  to the grant and  exercise  of options or
warrants,  to its employees (both full and part-time),  directors,  consultants,
agents  (excluding  you), or any others  persons under any plan,  agreement,  or
otherwise  will not, in the  aggregate,  exceed  2,770,000  without your written
consent. In addition, the issuance of such shares,  options, or warrants will be
subject to the  following  limitations:  (i) no more than 30,000 shares shall be
issued to employees of each new branch  office  opened in Arizona  subsequent to
the Closing Date,  (ii) no more than 150,000 shares shall be issued to employees
located in each new county in  California  in which the Company  opens an office
subsequent  to the Closing Date  (provided  that the  relocation  of an existing
office shall not be considered  the opening of a new office),  and (iii) no more
than 50,000  shares shall be issued for any other  purpose.  The Company  agrees
that no shares issued  pursuant to this paragraph (k) will be issued or issuable
at a per share  price less than the  greater of $2.50 or  Current  Market  Value
except for up to 150,000  shares to be issued in  connection  with the Company's
proposed  expansion into San Diego County,  California  which may be issued at a
price of not less than $2.00.

         (l) The Company  hereby  grants you a right of first refusal to act as,
at least,  co-manager  on the next  succeeding  offering  by the  Company of its
securities  commenced  within the 24 months  following  the  Closing  Date.  The
foregoing right of first refusal shall not apply if, in the reasonable  judgment
of counsel for the lead underwriter  selected by the Company,  your inclusion as
an  underwriter  would  cause  the  offering  to  violate  applicable  rules and
regulations of federal or state governmental  agencies,  including the Corporate
Financing  Rules  of  the  National  Association  of  Securities  Dealers,  Inc.
Notwithstanding  the foregoing,  the Company shall not be required to employ any
specific  underwriter that you suggest that is not acceptable to the Company nor
shall you be required to co-manage any offering with an underwriter suggested by
the Company that is not acceptable to you.


                                     - 10 -
<PAGE>
         (m) The  Company  hereby also  grants to the  purchasers  of the Common
Stock offered pursuant to Section 4(a) hereof  (individually a "Purchaser" and ,
collectively,  the  "Purchasers")  a  pre-emptive  right to purchase any and all
additional shares of Common Stock, or securities  convertible into or containing
an option or warrant to purchase Common Stock ("Derivative Securities"),  as may
hereafter be issued from time to time by the Company (including shares of Common
Stock or  Derivative  Securities  offered,  sold,  or  granted to  officers  and
employees of the Company) if such shares are offered  and/or sold for a purchase
price or such Derivative  Securities have a conversion or exercise price that is
less than the lesser of (i) $1.35 per share or (ii) the Current  Market Price of
the Common Stock. Such pre-emptive  rights shall exist with respect to shares of
Common Stock originally  authorized,  shares hereafter  authorized,  or treasury
shares,  but shall not exist with  respect to: (a) shares of Common Stock issued
by the Company in a firm commitment  underwritten offering, (b) shares of Common
Stock  issued by the  Company  upon the  exercise  or  conversion  of  currently
outstanding Derivative  Securities,  or (c) shares of Common Stock issued by the
Company upon the exercise of stock options permitted under paragraph (k) above.

         Each  Purchaser  shall be entitled to purchase  the number of shares of
Common  Stock  equal to the  number of shares of  Common  Stock  offered  by the
Company  multiplied by a fraction the numerator of which is the number of shares
of  Common  Stock  owned  by the  Purchaser  and the  denominator  of  which  is
3,703,703.  The Board of Directors  of the Company  shall  establish  the price,
terms,  and conditions on which such  pre-emptive  rights may be exercised on an
equitable basis. Adjustments may be made in the number of shares offered to each
holder  in order to  eliminate  fractional  shares.  The time of  expiration  of
pre-emptive  rights may be established by the Board of Directors but each holder
shall  have a  minimum  of 45 days in which to  consider  exercising  his or her
pre-emptive right.

         The foregoing  pre-emptive  right shall  terminate on the date that the
Company successfully completes a Qualified Offering.

         (n) The "Current Market Price" as used in this Agreement shall mean, as
of any  date,  5% of the sum of the  average,  for  each  of the 20  consecutive
Trading Days  immediately  prior to such date,  of either:  (i) the high and low
sales  prices  of the  Common  Stock  on such  Trading  Day as  reported  on the
composite  tape for the  principal  national  securities  exchange  on which the
Common  Stock may then be listed,  or (ii) if the Common  Stock  shall not be so
listed on any such Trading Day, the high and low sales prices of Common Stock in
the over-the-counter  market as reported by the Nasdaq National Market, or (iii)
if the Common Shares shall not be included in the Nasdaq  National Market on any
such  Trading Day,  the  representative  bid and asked prices at the end of such
Trading Day in such market as  reported  by the Nasdaq  Stock  Market or (iv) if
there be no such representative  prices reported by the Nasdaq Stock Market, the
lowest  bid and  highest  asked  prices  at the end of such  Trading  Day in the
over-the-counter  market as reported on the OTC Electronic  Bulletin Board or by
the National Quotation Bureau, Inc., or any successor organization. For purposes
of determining  Current Market Price, the term "Trading Day" shall mean a day on
which  an  amount greater than zero can be calculated with respect to the Common

                                     - 11 -
<PAGE>
Stock under any one or more of the foregoing  categories  (i),  (ii),  (iii) and
(iv),  and the "end"  thereof,  for the purposes of  categories  (iii) and (iv),
shall  mean the exact  time at which  trading  shall  end on the New York  Stock
Exchange.  If the Current  Market  Price cannot be  determined  under any of the
foregoing  methods,  Current Market Price shall mean the fair value per share of
Common  Stock on such date  determined  by the Board of Directors in good faith,
irrespective of any accounting treatment.

         6. Payment of Expenses.  If this  Agreement  becomes  effective and the
transactions  contemplated  by this Agreement are  consummated or this Agreement
terminates  or is  terminated,  the  Company  will pay all  reasonable  expenses
incident  to the  performance  of the  obligations  of the  Company  under  this
Agreement, including (but not limited to) all expenses and taxes incident to the
sale and delivery of the Common Stock, all expenses  incident to the printing of
copies of the Memorandum,  any supplemental  sales material supplied or approved
in writing by the Company, any amendments or supplements thereto, any "Blue Sky"
memorandum,  and this  Agreement and  furnishing the same to you, all filing and
printing  fees and  expenses  (including  legal fees and  disbursements  of your
counsel) incurred in connection with  qualification of the Common Stock for sale
under  the  laws of  such  jurisdictions  as you may  designate,  the  fees  and
disbursements  of  counsel  and  accountants  for  the  Company,  and  all  your
out-of-pocket  expenses  (including  fees  and  disbursements  of  your  counsel
incurred  in  connection  with this  Agreement  and the  Offering)  incurred  in
connection  with this Agreement,  preparing to market,  and marketing the Common
Stock,  up to a  maximum  of  $75,000  (the  non-accountable  expense  allowance
provided in Section 4(f) shall not count against such expense limitation).

         7.  Indemnification  and  Contribution.   (a)  The  Company  agrees  to
indemnify and hold harmless you, each Additional Agent and each person,  if any,
who  controls you or such  Additional  Agent within the meaning of the 1933 Act,
against any losses, claims, damages, liabilities, or expenses (including, unless
the Company elects to assume the defense as hereinafter provided, the reasonable
cost of investigating and defending against any claims therefor and counsel fees
incurred in connection therewith),  joint or several, which (i) are based on the
ground or alleged  ground that the  Memorandum  (as from time to time amended or
supplemented) or any written supplemental sales material supplied or approved in
writing  by the  Company  provided  that such  supplemental  sales  material  is
accompanied with or preceded by the Memorandum,  includes or allegedly  includes
an untrue statement of material fact or omits to state a material fact necessary
in order to make the statements  therein,  in light of the  circumstances  under
which they were made, not misleading,  unless such statement or omission (i) was
made in reliance  upon,  and in conformity  with,  information  furnished to the
Company by you or any Additional  Agent  specifically for use in the preparation
thereof,  (ii) arise out of the acts or omissions of broker-dealers  retained by
the Company in connection with the Offering other than you or Additional  Agents
retained by you, or (iii) arise out of the Company's  breach of a representation
or warranty or covenant or agreement contained in this Agreement;  provided that
in no case is the Company to be liable with  respect to any claims made  against
you,  such  Additional  Agent or any such  controlling  person  unless you, such
Additional Agent or such  controlling  person shall have notified the Company in
writing within  a reasonable time after the summons or other first legal process

                                     - 12 -
<PAGE>
giving  information  of the nature of the claim shall have been served upon you,
such Additional  Agent, or such  controlling  person,  but failure to notify the
Company of any such claim  shall not relieve it from any  liability  that it may
have to you, such Additional Agent, or such controlling person otherwise than on
account of the indemnity agreement contained in this paragraph. The Company will
be  entitled  to  participate  at its own  expense in the  defense,  or if it so
elects, to assume the defense of any suit brought to enforce any such liability,
but,  if the  Company  elects to  assume  the  defense,  such  defense  shall be
conducted by counsel chosen by it. In the event the Company elects to assume the
defense of any such suit and retain such counsel, you, such Additional Agent, or
such  controlling  person or persons,  defendant or defendants in the suit,  may
retain  additional  counsel but shall bear the fees and expenses of such counsel
unless (i) the Company shall have specifically  authorized the retaining of such
counsel or (ii) the parties to such suit include you, such Additional  Agent, or
such  controlling  person or persons,  and the Company and you, such  Additional
Agent, or such  controlling  person or persons have been advised by counsel that
one or more material legal defenses may be available to you or them that may not
be available  to the Company in which case the Company  shall not be entitled to
assume  the  defense of such suit  notwithstanding  its  obligation  to bear the
reasonable  fees and expenses of such counsel.  In no event shall the Company be
liable for the fees and  expenses of more than one  counsel for all  indemnified
parties in  connection  with any one action or  separate  but similar or related
actions in the same jurisdiction  arising out of the same general allegations or
circumstances.  The Company  shall not be liable to indemnify any person for any
settlement  of any such claim  effected  without its consent  which shall not be
unreasonably  withheld.  This  indemnity  agreement  will be in  addition to any
liability which the Company might otherwise have.

         (b) You and each Additional  Agent agree to indemnify and hold harmless
the Company, each of the Company's officers,  directors,  and each other person,
if any, who controls the Company within the meaning of the 1933 Act, against any
losses, claims, damages, liabilities, or expenses (including, unless you or such
Additional  Agent  elects  to  assume  the  defense,   the  reasonable  cost  of
investigating  and  defending  against  any claims  therefor  and  counsel  fees
incurred in connection  therewith),  joint or several, which (1) may be based on
the ground or alleged  ground that the  Memorandum (as from time to time amended
and  supplemented)  or any  supplemental  sales  material  used  by you or  such
Additional  Agent,  includes  or  allegedly  includes an untrue  statement  of a
material fact or omits to state a material  fact  necessary in order to make the
statements  therein,  in light of the circumstances under which it was made, not
misleading,  but only  insofar as such  statement  or  omission  (i) was made in
reliance  upon, and in conformity  with,  written  information  furnished to the
Company by you or an Additional  Agent  specifically  for use in the preparation
thereof or (ii) relates to any such supplemental  sales material not supplied by
the Company or approved by it in writing, (2) arise out of any acts or omissions
by you that cause the Offering to involve a public  offering  under Section 4(2)
of the 1933 Act or your failure to be properly  licensed to sell the Shares,  or
(3) arise out of your  breach of a  representation  or  warranty  or covenant or
agreement contained in this Agreement;  provided,  however,  that in no case are
you or any Additional Agent to be liable with respect to any claims made against
the Company or any such  person  against  whom the action is brought  unless the
Company or such person shall have notified you or such Additional  Agent, as the

                                     - 13 -
<PAGE>
case may be, in writing  within a  reasonable  time  after the  summons or other
first legal  process  giving  information  of the nature of the claim shall have
been served upon the Company or such  person,  but failure to notify you or such
Additional  Agent of such claim shall not relieve you or such  Additional  Agent
from any liability that you or such Additional  Agent may have to the Company or
such person  otherwise than on account of the indemnity  agreement  contained in
this paragraph. You or such Additional Agent shall be entitled to participate at
your or its  expense  in the  defense,  or if you or such  Additional  Agent  so
elects, to assume the defense of any suit brought to enforce any such liability,
but, if you or such Additional Agent elects to assume the defense,  such defense
shall be conducted by counsel  chosen by you or such  Additional  Agent,  as the
case may be. In the event that you or such Additional Agent elects to assume the
defense of any such suit and retain such counsel, the Company, said officers and
directors and any person or persons,  defendant or  defendants in the suit,  may
retain  additional  counsel but shall bear the fees and expenses of such counsel
unless (i) you shall have specifically  authorized the retaining of such counsel
or (ii) the parties to such suit  include  you,  such  Additional  Agent or such
controlling  person or persons,  and the Company and you, such Additional Agent,
or such  controlling  person or persons have been advised by counsel that one or
more  material  legal  defenses  may be available to the Company that may not be
available  to you or them in which case you shall not be  entitled to assume the
defense of such suit notwithstanding your obligation to bear the reasonable fees
and expenses of such counsel.  You or such Additional  Agent shall not be liable
to indemnify any person for any  settlement of any such claim  effected  without
your or its consent  which  consent  shall not be  unreasonably  withheld.  This
indemnity  agreement  will be in  addition  to any  liability  which  you or any
Additional Agent might otherwise have.

         (c)  If  the  indemnification   provided  for  in  this  Section  7  is
unavailable, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such losses,  claims,  damages,
liabilities or expenses (or actions in respect thereof) in such proportion as is
appropriate to reflect not only the relative benefits received by the Company on
one  hand and you and the  Additional  Agents,  if any,  on the  other  from the
Offering, but also the relative fault of the Company on the one hand and you and
the Additional Agents, if any, on the other in connection with the statements or
omissions  which  resulted in such  losses,  claims,  damages,  liabilities,  or
expenses  (or  actions  in  respect  thereof),  as  well as any  other  relevant
equitable  considerations.  The relative benefits received by the Company on the
one hand and you and the  Additional  Agents,  if any,  on the  other,  shall be
deemed to be in the same  proportion  as the total maximum net proceeds from the
Offering (before deducting expenses) received by the Company,  bear to the total
selling  commissions  and  the  value  of the  Warrant  received  by you and the
Additional  Agents,  if any. The relative fault shall be determined by reference
to,  among other  things,  whether the untrue or alleged  untrue  statement of a
material  fact or the  omission  or alleged  omission  to state a material  fact
relates to information  supplied by the Company, you or an Additional Agent, the
parties'  relative intent,  knowledge,  access to information and opportunity to
correct or prevent such  statement or omission,  and whether a party  breached a
representation or warranty or covenant or agreement contained in this Agreement.
The  Company  and  you  agree  that  it  would  not be  just  and  equitable  if
contribution  were  determined by pro rata  allocation or by any other method of
allocation  which does not take account of the equitable considerations referred

                                     - 14 -
<PAGE>
to above. The amount paid or payable by an indemnified  party as a result of the
losses, claims, damages, liabilities or expenses (or actions in respect thereof)
referred  to above  shall be  deemed  to  include  any  legal or other  expenses
reasonably  incurred by such indemnified party in connection with  investigating
or defending any such claim.  Notwithstanding  the  provisions of this paragraph
(c), you shall not be required to contribute any amount in excess  $350,000 less
the amount of any  damages  which you have  otherwise  been  required  to pay by
reason of an untrue or alleged untrue  statement or omission or alleged omission
by the  Company.  Notwithstanding  the  provisions  of this  paragraph  (c), the
Company shall not be required to  contribute  any amount in excess of $5,000,000
less the amount of any damages which the Company has otherwise  been required to
pay by reason of an untrue or alleged  untrue  statement  or omission or alleged
omission by you. No person  guilty of fraudulent  misrepresentation  (within the
meaning of Section 11(f) of the 1933 Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.

         8.  Survival of  Indemnities,  Representations,  Warranties,  etc.  The
respective indemnities, covenants, agreements, representations,  warranties, and
other  statements of you and the Company as set forth in this  Agreement or made
by them respectively, pursuant to this Agreement, shall remain in full force and
effect, regardless of any investigation made by or on behalf of you, the Company
or any of the officers or directors  of the Company or any  controlling  person,
and shall survive delivery of and payment for the Common Stock.

         9.  Conditions  of Your  Obligations.  Your  obligations  hereunder are
subject to the  accuracy in all  material  respects at and (except as  otherwise
stated  herein) as of the date hereof and at and as of the Closing  Date, of the
representations  and warranties made herein by the Company, to the compliance in
all  material  respects  at and as of the Closing  Date by the Company  with its
covenants and  agreements  herein  contained and other  provisions  hereof to be
satisfied  at or  prior to the  Closing  Date  and to the  following  additional
conditions:

         (a) You shall not have stated in writing  prior to the Closing  Date to
the Company that the Memorandum, or any amendment or supplement thereto contains
an untrue  statement of fact which,  in your opinion,  is material,  or omits to
state a fact  which,  in your  opinion,  is  necessary  to make  the  statements
therein,  in  light  of the  circumstances  under  which  they  were  made,  not
misleading.

         (b) You shall have  received  from  Squire,  Sanders & Dempsey  L.L.P.,
counsel for the Company,  an opinion,  dated the Closing Date,  substantially to
the effect set forth in Exhibit II hereto.

         (c) You shall have received from Snell & Smith, P.C., your counsel,  an
opinion or opinions  dated the Closing  Date with respect to such matters as you
may  reasonably  request,  and the Company shall have  furnished to such counsel
such documents as they may  reasonably  request for the purpose of enabling them
to pass upon such matters.


                                     - 15 -
<PAGE>
         (d) You shall have received a  certificate,  dated the Closing Date, of
the  Chief  Executive  Officer  or the  President  and the  chief  financial  or
accounting officer of the Company to the effect that:

                  (i) No  injunction  preventing  or  suspending  the use of the
         Memorandum  has been issued,  and, to the best of the  knowledge of the
         signers,  no proceedings  for that purpose have been  instituted or are
         pending or contemplated under the 1933 Act or any
         State securities laws;

                  (ii) The representations and warranties of the Company in this
         Agreement  are true and correct in all  material  respects at and as of
         the Closing Date, and the Company has complied in all material respects
         with all the agreements and satisfied in all material  respects all the
         conditions  on its part to be performed or satisfied at or prior to the
         Closing Date;

                  (iii) No litigation has been instituted or threatened  against
         the Company of a character  required to be disclosed in the  Memorandum
         that is not so disclosed; and

                  (iv) Between the date of this  Agreement and the Closing Date,
         there has not been any material adverse change,  or to the knowledge of
         the Company,  any development  involving a prospective material adverse
         change  (so far as the  Company  may  now  foresee),  in the  condition
         (financial or otherwise), business, prospects, or results of operations
         of the Company.

         (e)  The  Company   shall  have   furnished  to  you  such   additional
certificates as you may have reasonably requested as to the accuracy,  at and as
of the Closing Date, of the representations and warranties made herein by it, as
to  compliance  at and as of the  Closing  Date by it  with  its  covenants  and
agreements  herein contained and other  provisions  hereof to be satisfied at or
prior  to the  Closing  Date  and as to  other  conditions  to your  obligations
hereunder.

         (f) There shall not have been any material  adverse change in any legal
proceedings or regulatory actions pending or the commencement of similar actions
which,  if determined  adversely to the Company,  would have a material  adverse
effect on the condition (financial or otherwise), business, property, or results
of operations of the Company.

         (g) You shall  have  received  a  Lock-Up  Letter  from each  executive
officer and director of the Company.

         If any of the conditions  provided for in this Section 8 shall not have
been  satisfied  when and as required by this  Agreement,  this Agreement may be
terminated by you by notifying the Company of such  termination in writing at or
prior to the  Closing  Date,  but you  shall be  entitled  to waive  any of such
conditions.

                                     - 16 -
<PAGE>
         10.  Effective  Date.  This Agreement  shall become  effective at 11:00
A.M., Houston Time, on the date hereof.

         11.  Termination.  In the event of any  termination  of this  Agreement
under this or any other provision of this Agreement, there shall be no liability
of any party to this  Agreement  to any other  party,  other than as provided in
Sections 6, 7, and 8.

         This Agreement may be terminated after it becomes  effective by (A) the
Company for any reason by notice to you and (B) you by notice to the Company (i)
if at or prior to the  Closing  Date  trading  in  securities  on the New  York,
American  Stock  Exchange,  or Nasdaq Stock Market shall have been  suspended or
minimum or maximum prices shall have been established on either such exchange or
stock  market,  or a banking  moratorium  shall have been  declared  by Texas or
United States authorities  (unless such suspension is made pending completion of
the sale of the Shares, at which time, such suspension will be lifted);  (ii) if
at or prior to the Closing Date there shall have been an outbreak of hostilities
between the United States and any foreign power, or of any other insurrection or
armed conflict  involving the United States which, in your reasonable  judgment,
makes it impracticable  or inadvisable to offer or sell the Common Stock;  (iii)
if there shall have been any  development or prospective  development  involving
particularly  the business or  properties  or  securities  of the Company or the
transactions contemplated by this Agreement, which, in your reasonable judgment,
makes it  impracticable  or  inadvisable to offer or deliver the Common Stock on
the  terms  contemplated  by the  Memorandum,  or (iv)  if  there  shall  be any
litigation or regulatory action,  pending or threatened against or involving the
Company,  which,  in  your  reasonable  judgment,   makes  it  impracticable  or
inadvisable  to offer or deliver the Common Stock on the terms  contemplated  by
the Memorandum.

         If, and only if, the Company terminates this Agreement after it becomes
effective for any reason or the Offering fails to close because of the Company's
breach of any  representations or warranties  contained in this Agreement or the
Company's  failure to fulfill its  covenants  and  agreements  contained in this
Agreement,  the Company  shall pay you a fee of $100,000,  plus actual  expenses
incurred as provided in Section 6 hereof,  less the amounts  previously  paid to
you by the  Company  pursuant  to Section 6, which  shall be in  addition to all
amounts  previously  paid to you and any  amounts  payable  to you  pursuant  to
Section 7 or 8 hereof.

         12. Notices.  All communications  hereunder shall be in writing and, if
sent to you or any  Additional  Agent shall be mailed,  delivered or telegraphed
and confirmed to you, at 3100 Chase Tower,  Houston,  Texas 77002, or if sent to
the Company  shall be mailed,  delivered  or  telegraphed  and  confirmed to the
Company, to 14555 North Scottsdale Road, Suite 320, Scottsdale, Arizona 85254.

         13.  Successors.  This  Agreement  shall inure to the benefit of and be
binding  upon you,  any  Additional  Agents,  the Company  and their  respective
successors  and legal  representatives.  Nothing  expressed or mentioned in this
Agreement  is intended or shall be  construed  to give any person other than the
persons mentioned in the preceding sentence any legal or equitable right,

                                     - 17 -
<PAGE>
remedy or claim under or in respect of this Agreement,  or any provisions herein
contained,  this  Agreement  and all  conditions  and  provisions  hereof  being
intended to be and being for the sole and exclusive  benefit of such persons and
for the benefit of no other person; except that the representations, warranties,
covenants, agreements and indemnities of the Company contained in this Agreement
shall also be for the benefit of the person or persons,  if any, who control you
or any  Additional  Agent  within the meaning of Section 15 of the 1933 Act, and
your and any  Additional  Agent's  indemnities  shall also be for the benefit of
each officer and director of the Company and the person or persons,  if any, who
control the Company within the meaning of Section 15 of the 1933 Act.

         14.  Applicable  Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas.

         If the foregoing correctly sets forth our understanding please indicate
your acceptance thereof in the space provided below for that purpose,  whereupon
this letter and your acceptance shall constitute a binding agreement between us.

                                         Very truly yours,

                                         CAPITAL TITLE GROUP, INC.


                                         By: /s/ Donald R. Head
                                             -----------------------------------
                                             Name: Donald R. Head
                                             Title: President



Accepted and delivered in Houston,
  Texas as of the date first
  above written

SANDERS MORRIS MUNDY INC.


By: /s/ Charles L. Davis
    ------------------------------
    Charles L. Davis, Vice President

                                     - 18 -
<PAGE>
                                    EXHIBIT I

                        OPINION OF COUNSEL TO THE COMPANY


         (i) The Company has been duly organized and is validly  existing and in
good  standing as a  corporation  under the laws of the State of Delaware and is
qualified to do business as a foreign corporation in the State of Arizona,  with
corporate  power and authority to own or lease its properties and to conduct its
business as described in the Memorandum.

         (ii) All action  required to be taken by the Company as a condition  to
the due and proper  authorization,  issuance,  sale,  and delivery of the Common
Stock of the Company to subscribers therefor in accordance with the terms of the
Placement Agent Agreement and the Memorandum has been taken;  and,  assuming the
due and valid execution and delivery by subscribers of Subscription  Agreements,
and the  payment  of the  consideration  for the  Common  Stock  of the  Company
specified  in the  Memorandum,  the  Common  Stock  of  the  Company  issued  to
subscribers will be duly and validly issued, fully paid, and non-assessable.

         (iii) The  authorized  and, to our  knowledge,  issued and  outstanding
shares of capital stock of the Company as of April 13, 1998, are as follows:

                                Par           Shares          Shares
             Title             Value        Authorized     Outstanding
             -----             -----        ----------     -----------
         Common Stock          $0.001       50,000,000     12,168,029

The  outstanding  shares of Common  Stock of the  Company  are duly  authorized,
validly  issued,  fully paid,  and  nonassessable,  with no  personal  liability
attaching  to the  ownership  thereof,  except for personal  liability  that may
attach  to  shareholders  pursuant  to  Section  164  of  the  Delaware  General
Corporation  Law (the  "DGCL").  Except as described in the  Memorandum  and the
Placement  Agent  Agreement,  to our  knowledge,  the Company has not granted or
issued, or agreed to grant or issue, any options, warrants, or similar rights to
acquire any of the authorized but unissued  shares of its capital stock.  Except
as set forth above and in the Memorandum and the Placement Agent  Agreement,  to
our knowledge,  there are no outstanding  agreements or  understandings to which
the  Company  is a party with  respect to the sale of any shares of the  capital
stock of the Company.

         (iv) To our knowledge, the capital stock of the Company conforms in all
material respects to the description thereof contained in the Memorandum.

         (v) The  execution,  delivery and  performance  of the Placement  Agent
Agreement,  the  incurrence  of  the  obligations  therein  set  forth  and  the
consummation  of the  transactions  contemplated  therein and in the  Memorandum
(assuming approval of the Offering by the

                                      - 1 -
<PAGE>
Company's  shareholders)  will not  conflict  with or result in a breach  of, or
default under, the cer tificate of incorporation or bylaws of the Company, or to
our  knowledge  result  in a breach  of, or  default  under  any  material  loan
agreement,  mortgage,  deed of trust, indenture or other agreement or instrument
relating  to  borrowed  money  known to us to which the Company is a party or by
which it is bound, except to the extent that the same have been waived or cured,
or any material law, statute,  rule or administrative  regulation  applicable to
the Company or its properties.

         (vi) There are no  pre-emptive  rights or other rights to subscribe for
or to purchase, or any restriction upon the voting or transfer of, any shares of
Common Stock pursuant to the Company's certificate of incorporation, by-laws or,
to such  counsels's  knowledge,  any agreement or other  instrument to which the
Company is a party, except as set forth in the Memorandum.

         (vii)  The  Placement   Agent  Agreement  has  been  duly  and  validly
authorized,  executed  and  delivered  by  or  on  behalf  of  the  Company  and
constitutes a legal,  valid and binding  obligation  of the Company  enforceable
against the Company in accordance  with its terms except as such  enforceability
may be limited by bankruptcy, fraudulent conveyance, insolvency, reorganization,
moratorium,  rearrangement,  liquidation,   conservatorship,   receivership,  or
similar laws relating to or affecting  creditors' rights generally and except as
enforceability of the indemnity and contribution provisions contained in Section
7 of  the  Placement  Agent  Agreement  may  be  limited  by  applicable  law or
principles of public policy.

         (viii) If the  Placement  Agent and the Company  offer the Common Stock
only to  "accredited  investors"  (as such  term is  defined  in the  Rules  and
Regulations) and up to 35 investors who are not accredited investors, and do not
generally  solicit  purchasers of the Common Stock, the offering and sale of the
Common Stock in accordance  with the Purchase  Agreement will be exempt from the
registration  provisions  of  the  1933  Act  under  Section  4(2)  thereof  and
Regulation D promulgated thereunder.

         (ix) To such counsel's knowledge, no consent,  approval,  authorization
or order of any court or  governmental  authority  or agency is required for the
consummation  by the Company of the  transactions  contemplated by the Placement
Agent Agreement,  except such as may be required by the National  Association of
Securities  Dealers,  Inc.,  the 1933 Act, the Rules and  Regulations,  or state
securities or Blue Sky laws.

         (x) To such counsel's knowledge, except as set forth in the Memorandum,
there are no legal or governmental proceedings pending to which the Company is a
party or to which  any of its  properties  are  subject,  which,  if  determined
adversely to the Company  would  individually  or in the  aggregate  result in a
material  adverse change in the condition  (financial or  otherwise),  business,
properties,  or results of  operation  of the  Company,  and, to such  counsel's
knowledge, no such proceedings have been threatened by governmental  authorities
or others.

                                      - 2 -
<PAGE>
         In  addition,   such   counsel   shall  state  that  such  counsel  has
participated in telephone conferences with officers and other representatives of
the Company, and representatives of the Placement Agent at which the contents of
the Memorandum were discussed and, although such counsel is not passing upon and
does not assume responsibility for the accuracy, completeness or fairness of the
statements  contained in the Memorandum,  on the basis of the foregoing  nothing
has come to the  attention  of such counsel that causes them to believe that the
Memorandum (as amended and  supplemented) as of its date and at the Closing Date
contained an untrue  statement of a material fact or omitted to state a material
fact required to be stated therein or necessary to make the  statements  therein
not, in light of the  circumstances  under which they were made,  not misleading
(it being  understood  that such counsel need express no opinion with respect to
the financial  statements and schedules and other financial and statistical data
included  in or omitted  from the  Memorandum  or any  supplement  or  amendment
thereto).

                                      - 3 -