EXHIBIT 10(p)

SALE  AND LEASEBACK AGREEMENT BETWEEN 21ST CENTURY INSURANCE COMPANY AND GENERAL
ELECTRIC  CAPITAL  CORPORATION

                             MASTER LEASE AGREEMENT

                   dated as of December 31, 2002 ("AGREEMENT")


     THIS AGREEMENT, is between GENERAL ELECTRIC CAPITAL CORPORATION, FOR ITSELF
AND  AS  AGENT  FOR  CERTAIN  PARTICIPANTS ("LESSOR") and 21ST CENTURY INSURANCE
COMPANY ("LESSEE").  Lessor has an office at 4 NORTH PARK DRIVE, SUITE 500, HUNT
VALLEY, MD 21030.  Lessee is a corporation organized and existing under the laws
of  the  State  of  California.  Lessee's  mailing  address  and  chief place of
business  is  6301  OWENSMOUTH AVENUE, WOODLAND HILLS, CA 91367.  This Agreement
contains the general terms that apply to the leasing of Equipment from Lessor to
Lessee.  Additional  terms  that  apply  to  the Equipment (term, rent, options,
etc.)  shall  be  contained  on  a  schedule  ("SCHEDULE").


1.     LEASING:

     (a)     Lessor  agrees  to lease to Lessee, and Lessee agrees to lease from
Lessor,  the equipment, software and other property  (collectively, "EQUIPMENT")
described  in  any  Schedule  signed  by  both  parties.

     (b)     Lessor  shall  purchase Equipment from the manufacturer or supplier
("SUPPLIER")  and  lease  it  to  Lessee  if on or before the Last Delivery Date
(specified  in  the  Schedule) Lessor receives (i) a Schedule for the Equipment,
(ii)  evidence  of  insurance which complies with the requirements of Section 8,
and  (iii)  such  other documents as Lessor may reasonably request.  Each of the
documents  required  above must be in form and substance satisfactory to Lessor.
Lessor  hereby  appoints  Lessee  its agent for inspection and acceptance of the
Equipment  from  the  Supplier.  Once the Schedule is signed, the Lessee may not
cancel  the  Schedule.


2.     TERM,  RENT  AND  PAYMENT:

     (a)     The  rent  payable  for the Equipment and Lessee's right to use the
Equipment  shall  begin on the earlier of (i) the date when the Lessee signs the
Schedule  and  accepts  the  Equipment  or  (ii)  when  Lessee  has accepted the
Equipment  under  a  Certificate of Acceptance ("LEASE COMMENCEMENT DATE").  The
term of this Agreement shall be the period specified in the applicable Schedule.
The  word  "term"  shall  include  all  basic  and  any  renewal  terms.


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     (b)     Lessee shall pay rent to Lessor at its address stated above, except
as otherwise directed by Lessor.  Rent payments shall be in the amount set forth
in,  and  due  as  stated  in  the applicable Schedule.  If any Advance Rent (as
stated  in  the  Schedule) is payable, it shall be due when the Lessee signs the
Schedule.  Advance  Rent  shall  be  applied  to  the first rent payment and the
balance,  if any, to the final rent payment(s) under such Schedule.  In no event
shall  any  Advance  Rent  or any other rent payments be refunded to Lessee.  If
rent  is  not  paid within ten (10) days of its due date, Lessee agrees to pay a
late  charge of three cents ($.03) per dollar on, and in addition to, the amount
of  such  rent  but  not  exceeding  the  lawful  maximum,  if  any.


3.     TAXES:  If  permitted  by  law,  Lessee shall report and pay promptly all
taxes,  fees  and  assessments  due,  imposed,  assessed  or  levied against any
Equipment  (or  purchase,  ownership,  delivery,  leasing,  possession,  use  or
operation  thereof),  this  Agreement  (or any rents or receipts hereunder), any
Schedule, Lessor or Lessee by any governmental entity or taxing authority during
or  related  to  the  term of this Agreement, including, without limitation, all
license  and  registration  fees, and all sales, use, personal property, excise,
gross  receipts,  franchise,  stamp or other taxes, imposts, duties and charges,
together  with  any penalties, fines or interest thereon (collectively "TAXES").
Lessee shall have no liability for Taxes imposed by the United States of America
or  any  State  or political subdivision thereof which are on or measured by the
net  income  of Lessor.  Lessee shall promptly reimburse Lessor (on an after tax
basis)  for  any Taxes charged to or assessed against Lessor.  Lessee shall send
Lessor  a copy of each report or return and evidence of Lessees payment of Taxes
upon  request.


4.     REPORTS:

     (a)  If  any  tax  or other lien shall attach to any Equipment, Lessee will
notify Lessor in writing, within ten (10) days after Lessee becomes aware of the
tax  or  lien.  The notice shall include the full particulars of the tax or lien
and  the  location  of  such  Equipment  on  the  date  of  the  notice.

     (b)  (i)  Lessee  will  deliver  to  Lessor  Lessee's  complete  financial
statements,  certified  by  a  recognized  firm of certified public accountants,
within ninety (90) days of the close of each fiscal year of Lessee.  Lessee will
deliver to Lessor copies of Lessee's quarterly financial report certified by the
chief  financial officer of Lessee, within ninety (90) days of the close of each
fiscal  quarter  of  Lessee.

          (ii)  Lessee  will  deliver  to Lessor all Forms 10-K and 10Q, if any,
filed by Lessee or Guarantor with the Securities and Exchange Commission ("SEC")
within  thirty  (30)  days  after  the date on which they are filed. Lessee will
deliver or otherwise furnish the following financial statements to Lessor within
15  days  of  the applicable statutory due dates thereof (timely availability of
such financial statements on the Lessee's website [www.21st.com] with concurrent
notice  to  Lessor  that  the  same  are available shall constitute delivery for
purposes  of  this  section):  (A)  annual and quarterly financial


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statements  as  filed by Lessee's parent, 21st Century Insurance Group, with the
SEC  on  Forms  10-K  and  10-Q,  respectively,  including  such  CFO  and  CEO
certifications  and  opinions  or  reports  of  independent  auditors  as may be
required  by  applicable securities law; and (B) such other financial statements
as  are  required  to  be  filed  by  Lessee  with  the California Department of
Insurance  or  such  other state insurance regulatory agency as may have primary
regulatory  jurisdiction regarding Lessee, including such officer certifications
as  may be required by applicable state insurance regulation or form required by
the  National  Association  of  Insurance  Commissioners.  Lessor agrees that by
furnishing  all  of  these SEC Forms, financial statements and other information
required under the preceding sentences of this paragraph (b)(ii), or making them
publicly available in electronic form in accordance therewith, Lessee shall also
be  deemed  to  have  satisfied  the  requirements  of  paragraph  (b)(i).

     (c)     Lessor may inspect any Equipment during normal business hours after
giving  Lessee  reasonable  prior notice, and Lessor will be responsible for any
costs  incurred  by  it in connection with such inspection so long as no default
has  occurred  and  is  then  continuing.

     (d)     Lessee will keep the Equipment at the Equipment Location (specified
in  the  applicable  Schedule)  and will give Lessor prior written notice of any
relocation of Equipment.  If Lessor requests, Lessee will promptly notify Lessor
in  writing  of  the  location  of  any  Equipment.

     (e)     If  any  Equipment  is  lost or damaged (where the estimated repair
costs  would  exceed  the greater of ten percent (10%) of the original Equipment
cost  or ten thousand and 00/100 dollars ($10,000)), or is otherwise involved in
an accident causing personal injury or property damage, Lessee will promptly and
fully  report  the  event  to  Lessor  in  writing.

     (f)     Within  thirty  (30)  days after any request by Lessor, Lessee will
furnish  a  certificate  of  an authorized officer of Lessee stating that he has
reviewed  the  activities  of  Lessee and that, there exists no default or event
which  with  notice  or  lapse  of  time  (or both) would become such a default.

          (g)     Lessee  shall  promptly notify Lessor of (i) any change in the
name  of  Lessee  or  (ii)  any  change  in  the  state  of its incorporation or
registration  or  type  of  its  organization.

     (h)  Lessee shall not register any of the Equipment with the U.S. Copyright
Office or the U.S. Patent and Trademark Office unless (i) Lessee provides Lessor
with written notice at least thirty (30) days prior to the effective date of any
such  registration  and (ii) at Lessee's sole cost and expense, execute, deliver
and  file any documents or filings and take any other action requested by Lessor
in order to perfect or preserve Lessor's security interest in the Equipment with
the  U.S.  Copyright  Office  or  the  U.S.  Patent  and  Trademark  Office.


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5.     DELIVERY,  USE  AND  OPERATION:

     (a)     Lessee represents that it is in possession of all of the Equipment.

     (b)     Lessee  agrees  that the Equipment will be used by Lessee solely in
the  conduct of its business and in a manner complying with all applicable laws,
regulations  and insurance policies, and Lessee shall not discontinue use of the
Equipment.  Notwithstanding  the foregoing, Lessee may discontinue using an item
of  Equipment  if  Lessee replaces such discontinued Equipment by complying with
all  of  the  following  to  Lessor's satisfaction: (i) Lessor receives ten (10)
Business  Days'  prior  written  notice thereof, (ii) on or before the date such
item  of Equipment is discontinued, Lessee duly conveys to Lessor title to, or a
first priority, perfected security interest against, an item of Equipment of the
same  make  and  model  number  as the item of Equipment being discontinued, and
(iii)  Lessee  complies  with  the  other provisions of this Section 5(b).  Such
replacement  Equipment  shall  be  free  and  clear  of all Liens, have a value,
utility,  and  useful  life  at  least  equal to, and be in as good an operating
condition  as,  the  item  of  Equipment  being  replaced, assuming such item of
Equipment  was  in  the  condition  and  repair  required  by  the  terms hereof
immediately  prior  to  its  being discontinued.  Lessee shall furnish to Lessor
such  documents  to evidence such conveyance as Lessor shall request.  Upon full
compliance  by  Lessee with the terms of this paragraph, Lessor will transfer to
Lessee all of Lessor's right, title and interest, if any, in and to such item of
Equipment  so  replaced,  which transfer shall be "AS-IS, WHERE-IS", AND WITHOUT
RECOURSE  OR  WARRANTY  OF  ANY  KIND WHATSOEVER.  Each such replacement item of
Equipment,  shall,  after  such  conveyance  to  Lessor,  be  deemed  an item of
"Equipment",  as  defined  herein.
 ---------

     (c)     Lessee  will  not move any Equipment from the location specified on
the  Schedule,  without  (i)  the  prior  written  consent  of  Lessor,  if such
relocation  is  to  a  location  not  identified  on the Schedule, or (ii) prior
written  notice  to  Lessor,  if  the  items  of  Equipment  that are then being
relocated  have  an  aggregate  Capitalized  Lessor's Cost of at least $500,000.
From time to time, but no more frequently that twice per calendar year (unless a
default  has  occurred  and  is then continuing), Lessor may request that Lessee
provide  Lessor with a written report detailing the location of the Equipment as
at the time of the report.  Lessee will deliver any such report to Lessor within
fifteen  (15)  Business  Days  of  Lessor's  request.

     (d)     Lessee  will  keep  the  Equipment  free and clear of all liens and
encumbrances  other than those which result from acts of Lessor and at all times
during  the  term  of  this  Agreement and any Schedule Lessor's interest in the
Equipment  shall  be  perfected  and  prior  to the interest of any other party.

     (e)     Lessor  shall not disturb Lessee's quiet enjoyment of the Equipment
during the term of the Agreement unless a default has occurred and is continuing
under  this  Agreement.


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6.     MAINTENANCE:

     (a)     Lessee  will,  at its sole expense, maintain each unit of Equipment
in  good  operating order and repair, normal wear and tear excepted.  The Lessee
shall  also  maintain  the  Equipment  in  accordance  with  manufacturer's
recommendations.  Lessee shall make all alterations or modifications required to
comply  with  any  applicable  law,  rule  or regulation during the term of this
Agreement.   If  Lessor  requests,  Lessee  shall  affix  plates,  tags or other
identifying  labels  showing  ownership  thereof by Lessee and Lessor's security
interest therein.  The tags or labels shall be placed in a prominent position on
each  unit  of  Equipment.

     (b)     Lessee  will  not  attach or install anything on the Equipment that
will  impair  the  originally intended function or use of such Equipment without
the  prior  written  consent  of  Lessor.  All  additions,  parts,  supplies,
accessories,  and equipment ("ADDITIONS") furnished or attached to any Equipment
that  are not readily removable shall become subject to the lien of Lessor.  All
Additions shall be made only in compliance with applicable law.  Lessee will not
attach  or  install  any  Equipment to or in any other personal or real property
without  the  prior  written  consent  of  Lessor.


7.     STIPULATED  LOSS  VALUE:  If for any reason any unit of Equipment becomes
worn  out,  lost,  stolen, destroyed, irreparably damaged or unusable ("CASUALTY
OCCURRENCES"), Lessee shall promptly and fully notify Lessor in writing.  Lessee
shall  pay Lessor the sum of (i) the Stipulated Loss Value (see Schedule) of the
affected  unit  determined  as  of  the  rent payment date prior to the Casualty
Occurrence;  and  (ii)  all rent and other amounts which are then due under this
Agreement  on  the  Payment  Date  (defined  below) for the affected unit.   The
Payment  Date shall be the next rent payment date after the Casualty Occurrence.
Upon  payment  of all sums due hereunder, the term of this lease as to such unit
shall  terminate.

8.     INSURANCE:

     (a)     As  between Lessee and Lessor, Lessee shall bear the entire risk of
any  loss,  theft,  damage to, or destruction of, any unit of Equipment from any
cause  whatsoever  from  the  time  the  Equipment  is  shipped  to  Lessee.

     (b)     Lessee  agrees,  at  its own expense, to keep all Equipment insured
for such amounts and against such hazards as Lessor may reasonably require.  All
such  policies shall be with companies, and on terms, reasonably satisfactory to
Lessor.  The  insurance  shall  include  coverage  for  damage to or loss of the
Equipment,  liability  for  personal injuries, death or property damage.  Lessor
shall  be  named  as  additional  insured with a loss payable clause in favor of
Lessor,  as  its  interest may appear, irrespective of any breach of warranty or
other  act  or  omission  of  Lessee.  The insurance shall provide for liability
coverage in an amount equal to at least ONE MILLION U.S. DOLLARS ($1,000,000.00)
total  liability  per  occurrence, unless otherwise stated in any Schedule.  The
casualty/property  damage  coverage shall be in an amount equal to the higher of
the


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Stipulated  Loss  value  or  the  full  replacement  cost  of  the Equipment. No
insurance  shall  be  subject to any co-insurance clause. The insurance policies
shall  provide  that the insurance may not be altered or canceled by the insurer
until  after thirty (30) days written notice to Lessor. Lessee agrees to deliver
to  Lessor  evidence  of  insurance  reasonably  satisfactory  to  Lessor.

     (c)     Lessee  hereby appoints Lessor as Lessee's attorney-in-fact to make
proof of loss and claim for insurance, and to make adjustments with insurers and
to  receive payment of and execute or endorse all documents, checks or drafts in
connection  with insurance payments with respect to the Equipment.  Lessor shall
not  act  as  Lessees  attorney-in-fact  unless  Lessee is in default under this
Agreement  or  any Schedule.  Lessee shall pay any reasonable expenses of Lessor
in  adjusting  or  collecting  insurance  with  respect  to  the  transactions
contemplated herein.  Lessee will not make adjustments with insurers except with
respect to claims for damage to any unit of Equipment where the repair costs are
less  than the lesser of ten percent (10%) of the original Equipment cost or ten
thousand  and  00/100  dollars  ($10,000).  Lessor  may,  at  its  option, apply
proceeds  of  insurance, in whole or in part, to (i) repair or replace Equipment
or any portion thereof, or (ii) satisfy any obligation of Lessee to Lessor under
this  Agreement.


9.     RETURN  OF  EQUIPMENT:

     (a)     At the expiration or termination of this Agreement or any Schedule,
unless  Lessee  has  exercised its purchase option pursuant to Sections 17 or 18
hereof, Lessee shall perform any testing and repairs required to place the units
of  Equipment  in  the  same condition and appearance as when received by Lessee
(reasonable  wear  and tear excepted) and in good working order for the original
intended  purpose of the Equipment.  If required the units of Equipment shall be
deinstalled,  disassembled  and  crated  by  an  authorized  manufacturer's
representative  or  such  other  service person as is reasonably satisfactory to
Lessor.  Lessee  shall  remove installed markings that are not necessary for the
operation,  maintenance  or  repair  of  the  Equipment.  All  Equipment will be
cleaned,  cosmetically  acceptable,  and  in such condition (reasonable wear and
tear  excepted)  as  to  permit its immediate installation into use in a similar
environment  for  which  the  Equipment was originally intended to be used.  All
waste  material  and fluid must be removed from the Equipment and disposed of in
accordance with then current waste disposal laws.  Lessee shall return the units
of  Equipment to a location within the continental United States as Lessor shall
direct.  Lessee  shall  obtain and pay for a policy of transit insurance for the
redelivery  period in an amount equal to the replacement value of the Equipment.
The  transit insurance must name Lessor as the loss payee.  The Lessee shall pay
for  all  costs  to  comply  with  this  section  (a).

     (b)     Until  Lessee  has  fully complied with the requirements of Section
9(a)  above,  Lessee's  rent  payment obligation and all other obligations under
this Agreement shall continue from month to month notwithstanding any expiration
or  termination  of the lease term.  After the expiration or termination of this
Agreement  or  any  Schedule, Lessor may terminate the Lessee's right to use the
Equipment  upon  ten  (10)  days  notice  to  Lessee.


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     (c)     Lessee  shall  provide  to  Lessor  a  detailed  inventory  of  all
components  of  the Equipment in such detail as Lessor may request provided such
details  are  recorded  in Lessee's asset management records.  Lessee shall also
provide  an  up-to-date  copy  of  all  other  documentation  pertaining  to the
Equipment  within  fifteen  (15) Business Days of Lessor's request.  All service
manuals,  blue  prints,  process flow diagrams, operating manuals, inventory and
maintenance  records  shall be given to Lessor at least ninety (90) days and not
more  than  one  hundred  twenty  (120)  days prior to lease termination, unless
Lessee  has  exercised its purchase option pursuant to Sections 17 or 18 hereof.

     (d)     Lessee  shall  make the Equipment available for on-site operational
inspections by potential purchasers at least one hundred twenty (120) days prior
to  and  continuing  up  to  lease  termination, unless Lessee has exercised its
purchase  option  pursuant  to  Sections  17 or 18 hereof.  Lessor shall provide
Lessee  with  reasonable  notice  prior to any inspection.  Lessee shall provide
personnel,  power  and  other  requirements necessary to demonstrate electrical,
hydraulic  and  mechanical  systems  for  each  item  of  Equipment.

     (e)  At  the  expiration  or termination of this Agreement or any Schedule,
unless  Lessee  has  exercised its purchase option pursuant to Sections 17 or 18
hereof,  Lessee  shall,  at  its expense, comply with the following on or before
such  expiration  or  termination:  (i)  upon the request of Lessor, immediately
disable  the  Software  and deliver to Lessor all media containing the Software,
any  related source codes and all related manuals (Lessee agrees that Lessor may
enter  Lessee's  premises to confirm that Lessee has complied with the foregoing
request),  (ii)  upon  the  request of Lessor revoking Lessee's right to use the
Software,  shall immediately cease using the Software (Lessee agrees that Lessor
may  enter  Lessee's  premises  to  confirm  that  Lessee  has complied with the
foregoing  demand),  (iii) upon the request of Lessor, cause the licensor or the
original software consulting firm of any Software to deinstall the Software in a
commercially  reasonable  manner in accordance with the vendor's recommendations
and  reinstall  the Software for use by Lessor or in a third party's system in a
commercially  reasonable manner in accordance with the vendor's recommendations,
(iv)  execute  and deliver to Lessor an assignment agreement assigning to Lessor
all  of  Lessee's  rights  as  licensee or otherwise under each Software License
Agreement  relating  to  Software, and (v) deliver to Lessor a consent from each
licensor  of  Software whereby the licensor consents to the aforesaid assignment
and the sublicense of the related Software to any third party selected by Lessor
who  agrees, in a written statement delivered to the licensor, that all Software
shall  remain  the property of the licensor or its supplier, and that such third
party's use of the Software shall be subject to, and that such third party shall
abide  by,  all  relevant license or other provisions applicable to the Software
contained  in  the  Software  License  Agreement.

10.     DEFAULT  AND  REMEDIES:

     (a)     Lessor  may  in  writing  declare this Agreement in default if: (i)
Lessee  breaches  its obligation to pay rent or any other sum when due and fails
to  cure  the  breach  within  ten  (10)  days;  (ii) Lessee breaches any of its
insurance  obligations  under  Section 8; (iii) Lessee breaches any of its other
obligations  and fails to cure that breach within thirty (30)


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days  after written notice from Lessor; (iv) any representation or warranty made
by  Lessee in connection with this Agreement shall be false or misleading in any
material  respect; (v) Lessee or any guarantor or other obligor for the Lessee's
obligations  hereunder  ("GUARANTOR") becomes insolvent or ceases to do business
as  a  going  concern; (vi) any Equipment is illegally used; (vii) a petition is
filed  by  or against Lessee or any Guarantor under any bankruptcy or insolvency
laws  and in the event of an involuntary petition, the petition is not dismissed
within  forty-five (45) days of the filing date; (viii) there is a default in or
a  revocation  or  anticipatory repudiation of any Guarantor's obligations under
any  guaranty  issued  in  connection  with  this  Agreement; (ix) Lessee or any
guarantor  shall  be in default under any obligation for borrowed money, for the
deferred  purchase  price  of property or any lease agreement and the applicable
grace  period  with  respect  thereto  shall  have  expired;  (x)  Lessee or any
guarantor shall have terminated its existence, consolidated with, merged into or
conveyed  or leased substantially all of its assets as an entirety to any person
(such  actions being referred to as an "EVENT"), unless not less than sixty (60)
days  prior  to  such Event: (A) such person is organized and existing under the
laws  of  the United States or any state, and executes and delivers to Lessor an
agreement  containing  an  effective  assumption  by  such person of the due and
punctual  performance of this Lease or guaranty thereof, as the case may be, and
(B)  Lessor  is reasonably satisfied as to the credit worthiness of such person;
or (xi) there is a change in controlling ownership of the issued and outstanding
capital  stock  of  Lessee  or  any  Guarantor at any time, including, by way of
example,  and  not  limitation,  if  American  International Group Inc. fails to
directly  or  indirectly  own  fifty  percent (50%) or more, or have controlling
ownership  of,  the  issued  and  outstanding  capital  stock  of  Lessee or any
Guarantor  at  any  time.  Any  provision  of  this  Agreement  to  the contrary
notwithstanding,  Lessor  may  exercise  all  rights  and  remedies  hereunder
independently  with  respect  to  each  Schedule.

     (b)     AFTER  A  DEFAULT HEREUNDER, AT THE REQUEST OF LESSOR, LESSEE SHALL
COMPLY  WITH THE PROVISIONS OF SECTION 9(A).  LESSEE HEREBY AUTHORIZES LESSOR TO
PEACEFULLY  ENTER ANY PREMISES WHERE ANY EQUIPMENT MAY BE AND TAKE POSSESSION OF
THE EQUIPMENT.  LESSEE SHALL IMMEDIATELY PAY TO LESSOR WITHOUT FURTHER DEMAND AS
LIQUIDATED  DAMAGES  FOR  LOSS OF A BARGAIN AND NOT AS A PENALTY, THE STIPULATED
LOSS VALUE OF THE EQUIPMENT (CALCULATED AS OF THE RENT PAYMENT DATE PRIOR TO THE
DECLARATION  OF  DEFAULT),  AND  ALL  RENTS  AND  OTHER SUMS THEN DUE UNDER THIS
AGREEMENT  AND  ALL SCHEDULES.  LESSOR MAY TERMINATE THIS AGREEMENT AS TO ANY OR
ALL  OF  THE  EQUIPMENT.  A  TERMINATION SHALL OCCUR ONLY UPON WRITTEN NOTICE BY
LESSOR  TO  LESSEE  AND  ONLY AS TO THE UNITS OF EQUIPMENT SPECIFIED IN ANY SUCH
NOTICE.  LESSOR  MAY, BUT SHALL NOT BE REQUIRED TO, SELL EQUIPMENT AT PRIVATE OR
PUBLIC  SALE,  IN BULK OR IN PARCELS, WITH OR WITHOUT NOTICE, AND WITHOUT HAVING
THE  EQUIPMENT  PRESENT AT THE PLACE OF SALE.  LESSOR MAY ALSO, BUT SHALL NOT BE
REQUIRED  TO,  LEASE,  OTHERWISE  DISPOSE  OF  OR  KEEP  IDLE ALL OR PART OF THE
EQUIPMENT.  LESSOR MAY USE LESSEE'S PREMISES FOR A REASONABLE PERIOD OF TIME FOR
ANY  OR  ALL  OF  THE  PURPOSES  STATED ABOVE WITHOUT LIABILITY FOR RENT, COSTS,
DAMAGES OR OTHERWISE.  THE PROCEEDS OF SALE, LEASE OR OTHER DISPOSITION, IF ANY,
SHALL  BE  APPLIED  IN  THE  FOLLOWING  ORDER  OF PRIORITIES:  (I) TO PAY ALL OF
LESSOR'S  COSTS,  CHARGES  AND  EXPENSES  INCURRED IN TAKING, REMOVING, HOLDING,
REPAIRING  AND  SELLING, LEASING OR OTHERWISE DISPOSING OF EQUIPMENT; THEN, (II)
TO  THE  EXTENT  NOT  PREVIOUSLY PAID BY LESSEE, TO PAY LESSOR ALL SUMS DUE FROM
LESSEE  UNDER  THIS  AGREEMENT;  THEN  (III)  TO  REIMBURSE  TO  LESSEE ANY SUMS
PREVIOUSLY  PAID  BY  LESSEE  AS LIQUIDATED DAMAGES; AND THEN (IV) TO LESSEE, IF
THERE  EXISTS  ANY  SURPLUS.  LESSEE SHALL IMMEDIATELY PAY ANY DEFICIENCY IN (I)
AND  (II)  ABOVE.


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     (c)  In  addition  to  the  foregoing rights after a default hereunder or a
default  or  a  termination under any software license agreement relating to any
Equipment consisting of software that is licensed by Lessee (a "Software License
Agreement"),  Lessee  shall, at its own expense, (i) upon the request of Lessor,
immediately  disable  any  or  all  of  the  Equipment  consisting  of  software
("Software")  and  deliver  to  Lessor  all  media  containing the Software, any
related  source  codes  and  all  related manuals (Lessee agrees that Lessor may
enter  Lessee's  premises to confirm that Lessee has complied with the foregoing
request),  (ii)  upon  the  request of Lessor revoking Lessee's right to use the
Software,  shall immediately cease using the Software (Lessee agrees that Lessor
may  enter  Lessee's  premises  to  confirm  that  Lessee  has complied with the
foregoing  demand),  (iii) upon the request of Lessor, cause the licensor or the
original software consulting firm of any Software to deinstall the Software in a
commercially  reasonable  manner in accordance with the vendor's recommendations
and  reengineer  the  Software  for  use  in  a third party's system and provide
consulting  services  to Lessor and such third party regarding the installation,
engineering  and  use of the Software, and (iv) use its best efforts, subject to
the  applicable licensor's consent, to promptly take all actions and execute and
deliver  and  cause  to  be  executed  and  delivered  all  documents reasonably
requested  by  Lessor  to assign to Lessor all of Lessee's rights as licensee or
otherwise  under  the  applicable  Software  License  Agreement.  Upon  such
assignment,  Lessee's  rights  with  respect  to  such Software shall cease, and
Lessee  shall  use  its  best  efforts  to cause the licensor of the Software to
consent  to  such  assignment  and  to  consent  to  a sublicense of the related
Software  to  a  third party, in which case Lessee's rights with respect to such
Software shall cease, provided:  (i) Lessor notifies the licensor in writing and
(ii)  such third party agrees, in a written statement delivered to the licensor,
that  all Software shall remain the property of the licensor or its supplier, as
applicable, and that such third party's use of the Software shall be subject to,
and  that  such  third  party  shall  abide  by,  all  relevant license or other
provisions  applicable  to  the  Software  contained  in  the  Software  License
Agreement.

     (d)  The  foregoing  remedies are cumulative, and any or all thereof may be
exercised  instead  of  or  in addition to each other or any remedies at law, in
equity,  or  under  statute.  Lessee  waives notice of sale or other disposition
(and  the  time and place thereof), and the manner and place of any advertising.
Lessee shall pay Lessor's actual attorney's fees incurred in connection with the
enforcement,  assertion, defense or preservation of Lessor's rights and remedies
under  this  Agreement,  or  if  prohibited  by  law,  such lesser sum as may be
permitted.  Waiver  of  any  default  shall  not  be  a  waiver  of any other or
subsequent  default.

     (e)     Any  default under the terms of this or any other agreement between
Lessor  and  Lessee  may be declared by Lessor a default under this and any such
other  agreement.


11.     ASSIGNMENT:  LESSEE SHALL NOT SELL, TRANSFER, ASSIGN, ENCUMBER OR SUBLET
ANY  EQUIPMENT OR THE INTEREST OF LESSEE IN THE EQUIPMENT, THIS AGREEMENT OR ANY
SCHEDULE  WITHOUT  THE PRIOR WRITTEN CONSENT OF LESSOR.  Lessor may, without the
consent of or


<PAGE>
notice to Lessee, assign this Agreement, any Schedule or the right to enter into
a  Schedule.  Lessee  agrees  that  if  Lessee  receives  written  notice  of an
assignment  from  Lessor, Lessee will pay all rent and all other amounts payable
under  any assigned Schedule to such assignee or as instructed by Lessor. Lessee
also  agrees to confirm in writing receipt of the notice of assignment as may be
reasonably  requested by assignee. Lessee hereby waives and agrees not to assert
against any such assignee any defense, set-off, recoupment claim or counterclaim
that  Lessee  has  or  may  at  any  time  have  against  Lessor  for any reason
whatsoever.  Lessee  acknowledges  that  it  has  been  advised that (i) General
Electric  Capital  Corporation  shall  act hereunder and under certain Schedules
executed  pursuant  hereto  as  agent for certain third party participants (each
being  herein  referred  to  as  a  "PARTICIPANT"  and,  collectively,  as  the
"PARTICIPANTS")  and  (ii)  the  interest  of  Lessor  in  this  Agreement,  the
Schedules,  related  instruments  and  documents  and/or  the  Equipment  may be
conveyed  to,  in  whole  or  in part, and may be used as security for financing
obtained  from, one or more third parties or Participants without the consent of
Lessee (the "SYNDICATION"). Lessee agrees reasonably to cooperate with Lessor in
connection  with  the  Syndication, including the execution and delivery of such
other  documents,  instruments,  notices,  opinions,  certificates  and
acknowledgements  as  reasonably  may  be  required  by  Lessor  or  any  such
Participant;  provided, however, in no event shall Lessee be required to consent
to  any  change  that  would  adversely  affect any of the economic terms of the
transactions  contemplated  herein.  Subject  always  to  the  foregoing,  this
Agreement  inures  to  the  benefit  of, and is binding upon, the successors and
assigns  of  the  parties  hereto.



12.     NET  LEASE:  Lessee  is  unconditionally  obligated  to pay all rent and
other  amounts due for the entire lease term no matter what happens, even if the
Equipment is damaged or destroyed, if it is defective or if Lessee no longer can
use  it.  Lessee  is  not  entitled  to  reduce or set-off against rent or other
amounts  due to Lessor or to anyone to whom Lessor assigns this Agreement or any
Schedule  whether Lessee's claim arises out of this Agreement, any Schedule, any
statement  by Lessor, Lessor's liability or any manufacturer's liability, strict
liability,  negligence  or  otherwise.


13.     INDEMNIFICATION:

     (a)     Lessee  hereby  agrees  to  indemnify  Lessor or any Participant or
their  respective  agents,  employees,  successors  and assigns (on an after tax
basis)  from  and  against  any  and  all  losses, damages, penalties, injuries,
claims,  actions  and  suits,  including  legal expenses, of whatsoever kind and
nature  arising out of or relating to the Equipment or this Agreement, except to
the  extent  the losses, damages, penalties, injuries, claims, actions, suits or
expenses  result from Lessor's or such Participant's gross negligence or willful
misconduct  ("CLAIMS").   This  indemnity  shall include, but is not limited to,
Lessor's  strict liability in tort and Claims, arising out of (i) the selection,
manufacture,  purchase,  acceptance  or rejection of Equipment, the ownership of
Equipment  during  the  term  of  this  Agreement,  and  the  delivery,  lease,
possession,  maintenance,  uses,  condition,


<PAGE>
return  or  operation  of  Equipment  (including, without limitation, latent and
other defects, whether or not discoverable by Lessor or Lessee and any claim for
patent, trademark or copyright infringement or environmental damage) or (ii) the
condition of Equipment sold or disposed of after use by Lessee, any sublessee or
employees of Lessee. Lessee shall, upon request, defend any actions based on, or
arising  out  of,  any  of  the  foregoing.

     (b)     All  of  Lessor's  and  each  Participant's  rights, privileges and
indemnities  contained  in this Section 13 shall survive the expiration or other
termination  of this Agreement. The rights, privileges and indemnities contained
herein are expressly made for the benefit of, and shall be enforceable by Lessor
and  each  Participant  and  their  successors  and  assigns.


14.     DISCLAIMER:  LESSEE  ACKNOWLEDGES  THAT  IT  HAS  SELECTED THE EQUIPMENT
WITHOUT  ANY  ASSISTANCE  FROM LESSOR, ITS AGENTS OR EMPLOYEES.  LESSOR DOES NOT
MAKE,  HAS  NOT  MADE, NOR SHALL BE DEEMED TO MAKE OR HAVE MADE, ANY WARRANTY OR
REPRESENTATION,  EITHER EXPRESS OR IMPLIED, WRITTEN OR ORAL, WITH RESPECT TO THE
EQUIPMENT  LEASED  UNDER  THIS  AGREEMENT  OR  ANY COMPONENT THEREOF, INCLUDING,
WITHOUT  LIMITATION,  ANY WARRANTY AS TO DESIGN, COMPLIANCE WITH SPECIFICATIONS,
QUALITY  OF  MATERIALS OR WORKMANSHIP, MERCHANTABILITY, FITNESS FOR ANY PURPOSE,
USE OR OPERATION, SAFETY, PATENT, TRADEMARK OR COPYRIGHT INFRINGEMENT, OR TITLE.
All  such  risks,  as  between  Lessor  and  Lessee,  are to be borne by Lessee.
Without limiting the foregoing, Lessor shall have no responsibility or liability
to  Lessee  or  any  other  person with respect to any of the following: (i) any
liability,  loss or damage caused or alleged to be caused directly or indirectly
by  any  Equipment,  any inadequacy thereof, any deficiency or defect (latent or
otherwise)  of  the  Equipment, or any other circumstance in connection with the
Equipment;  (ii) the use, operation or performance of any Equipment or any risks
relating  to  it;  (iii)  any  interruption  of  service,  loss  of  business or
anticipated  profits  or consequential damages; or (iv) the delivery, operation,
servicing,  maintenance,  repair,  improvement  or replacement of any Equipment.
If, and so long as, no default exists under this Agreement, Lessee shall be, and
hereby  is,  authorized during the term of this Agreement to assert and enforce,
whatever claims and rights Lessor may have against any Supplier of the Equipment
at  Lessee's sole cost and expense, in the name of and for the account of Lessor
and/or  Lessee,  as  their  interests  may  appear.


15.     REPRESENTATIONS  AND  WARRANTIES  OF  LESSEE:  Lessee  makes each of the
following representations and warranties to Lessor on the date hereof and on the
date  of  execution  of  each  Schedule:


<PAGE>
     (a)     Lessee  has  adequate power and capacity to enter into, and perform
under,  this  Agreement  and  all related documents (together, the "DOCUMENTS").
Lessee  is  duly  qualified  to  do  business wherever necessary to carry on its
present  business  and  operations,  including  the  jurisdiction(s)  where  the
Equipment  is  or  is  to  be  located.

     (b)     The  Documents have been duly authorized, executed and delivered by
Lessee  and  constitute  valid,  legal  and  binding  agreements, enforceable in
accordance  with  their  terms,  except  to  the  extent that the enforcement of
remedies  may  be  limited  under  applicable  bankruptcy  and  insolvency laws.

     (c)     No  approval, consent or withholding of objections is required from
any  governmental  authority  or  entity  with  respect  to  the  entry  into or
performance  by  Lessee  of  the  Documents  except  such  as  have already been
obtained.

     (d)     The entry into and performance by Lessee of the Documents will not:
(i)  violate  any judgment, order, law or regulation applicable to Lessee or any
provision  of Lessee's Certificate of Incorporation or bylaws; or (ii) result in
any breach of, constitute a default under or result in the creation of any lien,
charge,  security  interest  or other encumbrance upon any Equipment pursuant to
any  indenture,  mortgage, deed of trust, bank loan or credit agreement or other
instrument  (other  than  this  Agreement)  to  which  Lessee  is  a  party.

     (e)     There are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Lessee,  which  if decided against Lessee will have a material adverse effect on
the  ability  of  Lessee  to  fulfill  its  obligations  under  this  Agreement.

     (f)     The  Equipment  accepted under any Certificate of Acceptance is and
will  remain  tangible  personal  property (other than any software constituting
Equipment).

     (g)     Each  financial  statement delivered to Lessor has been prepared in
accordance  with  generally  accepted accounting principles consistently applied
(or  applicable statutory accounting principles, as the case may be).  Since the
date  of the most recent financial statement, there has been no material adverse
change.

     (h)     Lessee's  exact legal name is as set forth in the first sentence of
this  Agreement  and  Lessee is and will be at all times validly existing and in
good standing under the laws of the State of its incorporation (specified in the
first  sentence  of  this  Agreement).

     (h)     The  Equipment  will  at  all  times  be  used  for  commercial  or
business purposes.

     (j) None of the Software that is owned by Lessee and not licensed by Lessee
from  a  third  party  has  been  registered  with  the U.S. Copyright Office or
recorded  with  the  U.S.  Patent  and  Trademark  Office.


<PAGE>
16.  OWNERSHIP  FOR  TAX  PURPOSES;  GRANT  OF SECURITY INTEREST; USURY SAVINGS;
SOFTWARE  LICENSE  AGREEMENTS:

     (a)     For  income tax purposes, the parties hereto agree that it is their
mutual  intention  that  Lessee  shall be considered the owner of the Equipment.
Accordingly,  Lessor agrees (i) to treat Lessee as the owner of the Equipment on
its  federal  income  tax  return,  (ii)  not  to  take  actions  or  positions
inconsistent  with  such  treatment on or with respect to its federal income tax
return,  and  (iii)  not  to claim any tax benefits available to an owner of the
Equipment  on  or  with respect to its federal income tax return.  The foregoing
undertakings  by  Lessor shall not be violated by Lessor's taking a tax position
inconsistent  with  the  foregoing  sentence  to  the  extent such a position is
required by law or is taken through inadvertence so long as such inadvertent tax
position  is reversed by Lessor promptly upon its discovery.  Lessor shall in no
event  be  liable  to  Lessee  if Lessee fails to secure any of the tax benefits
available  to  the  owner  of  the  Equipment.

     (b)     Lessee hereby grants to Lessor a first security interest in (i) the
Equipment, together with all additions, attachments, accessions, accessories and
accessions thereto whether or not furnished by the Supplier of the Equipment and
any  and  all substitutions, replacements or exchanges therefor, and any and all
insurance  and/or other proceeds of the property in and against which a security
interest  is  granted  hereunder  and  (ii)  Lessee's  rights under any Software
License Agreement relating to the Software, any upgrades of the Software and any
rights  to  indemnification, warranty or guaranty payable to Lessee from time to
time with respect to the foregoing and any insurance and other proceeds thereof.
This  security  interest  is  given to secure the payment and performance of all
debts,  obligations  and liabilities of any kind whatsoever of Lessee to Lessor,
now  existing  or  arising  in  the future under this Agreement or any Schedules
attached  hereto,  and any renewals, extensions and modifications of such debts,
obligations  and  liabilities.

     (c)     It  is  the  intention  of  the  parties  hereto to comply with any
applicable  usury  laws  to  the  extent  that  any Schedule is determined to be
subject  to  such  laws;  accordingly,  it  is  agreed that, notwithstanding any
provision  to  the contrary in any Schedule or this Agreement, in no event shall
any  Schedule require the payment or permit the collection of interest in excess
of  the maximum amount permitted by applicable law.  If any such excess interest
is  contracted for, charged or received under any Schedule or this Agreement, or
in  the  event that all of the principal balance shall be prepaid, so that under
any  of  such  circumstances  the  amount of interest contracted for, charged or
received under any Schedule or this Agreement shall exceed the maximum amount of
interest  permitted by applicable law, then in such event  (i) the provisions of
this  paragraph  shall  govern  and  control,  (ii) neither Lessee nor any other
person  or  entity  now  or  hereafter  liable  for  the payment hereof shall be
obligated  to pay the amount of such interest to the extent that it is in excess
of  the  maximum amount of interest permitted by applicable law,  (iii) any such
excess which may have been collected shall be either applied as a credit against
the  then  unpaid  principal balance or refunded to Lessee, at the option of the
Lessor,  and  (iv) the effective rate of interest shall be automatically reduced
to  the  maximum  lawful  contract  rate  allowed under applicable law as now or
hereafter  construed  by  the courts having jurisdiction thereof.  It is further
agreed that without


<PAGE>
limitation of the foregoing, all calculations of the rate of interest contracted
for, charged or received under any Schedule or this Agreement which are made for
the purpose of determining whether such rate exceeds the maximum lawful contract
rate,  shall  be made, to the extent permitted by applicable law, by amortizing,
prorating, allocating and spreading in equal parts during the period of the full
stated  term  of  the  indebtedness  evidenced  hereby, all interest at any time
contracted  for,  charged  or  received  from  Lessee  or otherwise by Lessor in
connection  with  such  indebtedness;  provided, however, that if any applicable
state  law  is  amended  or the law of the United States of America preempts any
applicable  state law, so that it becomes lawful for Lessor to receive a greater
interest  per  annum  rate than is presently allowed, the Lessee agrees that, on
the  effective  date  of  such  amendment or preemption, as the case may be, the
lawful  maximum  hereunder  shall be increased to the maximum interest per annum
rate  allowed  by  the  amended  state  law  or  the law of the United States of
America.

     (d)  Lessee  hereby  acknowledges  and  agrees  that,  notwithstanding  the
assignment  of  any  Software  License  Agreement  relating to any Software, (i)
Lessee  shall  maintain  its  interest  in such Software for the duration of the
Software  License  Agreement;  (ii) Lessee shall remain solely responsible under
the  Software License Agreement for the observance and the performance of all of
the  conditions  and  obligations  to  be  observed  and  performed  by  Lessee
thereunder,  (iii)  Lessee  shall  make  all  claims  under the Software License
Agreement  solely  against the software licensor; (iv) Lessee shall pay promptly
when  due  all  taxes,  license  fees,  assessments  and other charges levied or
assessed  on  any  of  the  Software;  and  (v)  Lessor shall not have any duty,
responsibility,  obligation or liability under any Software License Agreement by
reason  of  any  assignment  therein  to  Lessor.


17.     EARLY  PURCHASE  OPTION:

     (a)     Lessee  may  purchase on an AS IS BASIS all (but not less than all)
of  the  Equipment  on  any  Schedule  on  any Rent Payment Date after the First
Termination Date specified in the applicable Schedule but prior to the last Rent
Payment  Date of such Schedule (the "EARLY PURCHASE DATE"), for a price equal to
(i)  the  Termination  Value  (calculated as of the Early Purchase Date) for the
Equipment,  and  (ii)  all  rent  and  other sums due and unpaid as of the Early
Purchase  Date  (the  "EARLY  OPTION  PRICE"),  plus all applicable sales taxes.
Lessee  must notify Lessor of its intent to purchase the Equipment in writing at
least thirty  (30) days, but not more than two hundred seventy (270) days, prior
to  the Early Purchase Date.  If Lessee is in default or if the Schedule or this
Agreement  has  already  been terminated, Lessee may not purchase the Equipment.
(The  purchase  option granted by this subsection shall be referred to herein as
the  "EARLY  PURCHASE  OPTION").

     (b)     If  Lessee  exercises  its Early Purchase Option, then on the Early
Purchase  Date,  Lessee  shall  pay  the Early Option Price, plus all applicable
sales  taxes,  to  Lessor  in  cash.


<PAGE>
18.     END OF LEASE PURCHASE OPTION:  Lessee may, at lease expiration, purchase
all  (but  not less than all) of the Equipment on any Schedule on an AS IS BASIS
for  cash equal to the amount indicated on such Schedule (the "OPTION PAYMENT"),
plus  all applicable sales taxes.  The Option Payment, plus all applicable sales
taxes, shall be due and payable in immediately available funds on the expiration
date  of such Schedule.  Lessee must notify Lessor of its intent to purchase the
Equipment  in  writing  at  least  one  hundred  eighty  (180) days prior to the
expiration date of the Schedule.  If Lessee is in default, or if the Schedule or
this  Agreement  has  already  been  terminated,  Lessee  may  not  purchase the
Equipment.


19.     MISCELLANEOUS:

     (a)     LESSEE  AND  LESSOR  UNCONDITIONALLY  WAIVE  THEIR RIGHTS TO A JURY
TRIAL  OF  ANY  CLAIM  OR  CAUSE  OF  ACTION  BASED  UPON OR ARISING OUT OF THIS
AGREEMENT,  ANY OF THE RELATED DOCUMENTS, ANY DEALINGS BETWEEN LESSEE AND LESSOR
RELATING  TO THE SUBJECT MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS,
AND/OR  THE  RELATIONSHIP  THAT  IS BEING ESTABLISHED BETWEEN LESSEE AND LESSOR.
THE  SCOPE  OF  THIS  WAIVER  IS  INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL
DISPUTES  THAT  MAY  BE  FILED  IN ANY COURT.  THIS WAIVER IS IRREVOCABLE.  THIS
WAIVER  MAY  NOT BE MODIFIED EITHER ORALLY OR IN WRITING.  THE WAIVER ALSO SHALL
APPLY  TO  ANY  SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS  AGREEMENT,  ANY RELATED DOCUMENTS, OR TO ANY OTHER DOCUMENTS OR AGREEMENTS
RELATING  TO THIS TRANSACTION OR ANY RELATED TRANSACTION.  THIS AGREEMENT MAY BE
FILED  AS  A  WRITTEN  CONSENT  TO  A  TRIAL  BY  THE  COURT.

     (b)     All  Equipment  shall  at  all  times remain personal property even
though it may be attached to real property.  The Equipment shall not become part
of  any other property by reason of any installation in, or attachment to, other
real  or  personal  property.

     (c)     Time  is of the essence of this Agreement.  Lessor's failure at any
time  to  require  strict  performance by Lessee of any of the provisions hereof
shall  not  waive  or diminish Lessor's right at any other time to demand strict
compliance  with  this  Agreement.  Lessee  agrees,  upon  Lessor's  request, to
execute  any  instrument  necessary  or  expedient  for  filing,  recording  or
perfecting  the  interest of Lessor pursuant to the Uniform Commercial Code, the
U.S.  Copyright  Act or the U.S. patent and trademark laws.  In addition, Lessee
hereby  authorizes  Lessor  to file a financing statement and amendments thereto
describing  the  Equipment  described in any and all Schedules now and hereafter
executed  pursuant  hereto and adding any other collateral described therein and
containing  any  other information required by the applicable Uniform Commercial
Code.  Lessee  irrevocably grants to Lessor the power to sign Lessee's name, and
on  its  behalf,  to  execute  and file financing statements and other documents
pertaining  to  any  or  all  of the Equipment. All


<PAGE>
notices  required to be given hereunder shall be deemed adequately given if sent
by  registered  or certified mail to the addressee at its address stated herein,
or  at  such  other  place as such addressee may have specified in writing. This
Agreement  and  any Schedule and Annexes thereto constitute the entire agreement
of  the  parties  with  respect  to  the  subject matter hereof. NO VARIATION OR
MODIFICATION  OF  THIS  AGREEMENT  OR  ANY  WAIVER  OF  ANY OF ITS PROVISIONS OR
CONDITIONS,  SHALL  BE  VALID  UNLESS  IN  WRITING  AND  SIGNED BY AN AUTHORIZED
REPRESENTATIVE  OF  THE  PARTIES  HERETO.

     (d)     If  Lessee  does  not  comply with any provision of this Agreement,
Lessor  shall  have  the  right,  but  shall  not  be  obligated, to effect such
compliance,  in  whole or in part.  All reasonable amounts spent and obligations
incurred  or  assumed  by  Lessor  in effecting such compliance shall constitute
additional rent due to Lessor.  Lessee shall pay the additional rent within five
business  days  after  the  date  Lessee  receives notice from Lessor requesting
payment.  Lessor's  effecting  such compliance shall not be a waiver of Lessee's
default.

     (e)     Any  rent  or  other  amount not paid to Lessor when due shall bear
interest,  from the due date until paid, at the lesser of eighteen percent (18%)
per  annum or the maximum rate allowed by law.  Any provisions in this Agreement
and  any  Schedule that are in conflict with any statute, law or applicable rule
shall  be  deemed  omitted,  modified  or  altered  to  conform  thereto.

     (f)     Lessee  hereby  irrevocably  authorizes  Lessor  to  adjust  the
Capitalized  Lessor's  Cost  up or down by no more than ten percent (10%) within
each  Schedule  to  account  for  equipment  change  orders,  equipment returns,
invoicing  errors, and similar matters.  Lessee acknowledges and agrees that the
rent  shall  be  adjusted  as a result of the change in the Capitalized Lessor's
Cost.  Lessor shall send Lessee a written notice stating the final Lessors Cost,
if  it  has  changed.

     (g)     THIS  AGREEMENT  AND  THE  RIGHTS  AND  OBLIGATIONS  OF THE PARTIES
HEREUNDER SHALL IN ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH,
THE  INTERNAL  LAWS OF THE STATE OF NEW YORK     (WITHOUT REGARD TO THE CONFLICT
OF  LAWS  PRINCIPLES  OF  SUCH  STATE),  INCLUDING  ALL MATTERS OF CONSTRUCTION,
VALIDITY  AND  PERFORMANCE,  REGARDLESS  OF  THE  LOCATION  OF  THE  EQUIPMENT.

     (h)     Any  cancellation  or  termination  by  Lessor,  pursuant  to  the
provisions  of  this Agreement, any Schedule, supplement or amendment hereto, of
the  lease  of  any  Equipment hereunder, shall not release Lessee from any then
outstanding  obligations  to  Lessor  hereunder.


<PAGE>
     (i)     This  Agreement, the Schedule and all of the other Documents may be
executed  in  counterparts.  To  the  extent  that any Schedule would constitute
chattel  paper,  as  such  term  is defined in the Uniform Commercial Code as in
effect  in  any  applicable  jurisdiction,  no  security interest therein may be
created  through  the  transfer or possession of this Agreement in and of itself
without  the  transfer  or  possession  of  the  original of a Schedule executed
pursuant to this Agreement and incorporating this Agreement by reference; and no
security  interest  in  this  Agreement  and  a  Schedule  may be created by the
transfer  or  possession  of  any  counterpart  of  the  Schedule other than the
original  thereof, which shall be identified as the document marked Original and
all  other  counterparts  shall  be  marked  Duplicate.

     IN  WITNESS  WHEREOF,  Lessee  and  Lessor have caused this Agreement to be
executed  by  their  duly  authorized representatives as of the date first above
written.

LESSOR:                                           LESSEE:

GENERAL ELECTRIC CAPITAL CORPORATION, FOR ITSELF  21ST CENTURY INSURANCE COMPANY
AND AS AGENT FOR CERTAIN PARTICIPANTS
By:_____________________________________
                                                  By:___________________________

Name:___________________________________
                                                  Name:_________________________

Title:____________________________________
                                                  Title:________________________


<PAGE>
001  (6/87)

                               CORPORATE LESSEE'S
                          BOARD OF DIRECTORS RESOLUTION


     The  undersigned hereby certifies: (i) that she/he is the Secretary of 21ST
CENTURY INSURANCE COMPANY (THE "CORPORATION"); (ii) that the following is a true
and  correct  copy  of  resolutions  duly  adopted  at a meeting of the Board of
Directors  of  the  Corporation  duly  held  on  the ____________________ day of
____________________,  2002;  and  (iii)  that  said  resolutions  have not been
amended,  rescinded,  modified  or  revoked,  and  are in full force and effect:


     "RESOLVED,  that  each  of  the  officers  of  this Corporation, whose name
appears  below:



__________________________________                ______________________________
__________________________________
President                                         Treasurer



__________________________________                ______________________________
_____
Vice President                                    Secretary

or  the duly elected or appointed successor in office of any or all of them, be,
and  hereby  is,  authorized  and  empowered  in  the name and on behalf of this
Corporation  to  enter  into,  execute and deliver a master lease agreement with
GENERAL  ELECTRIC  CAPITAL  CORPORATION,  FOR  ITSELF  AND  AS AGENT FOR CERTAIN
PARTICIPANTS  (together  with  its  successors and assigns, if any, "LESSOR") as
Lessor,  providing  for  the  leasing  to  (or  sale  and  leaseback  by)  this
Corporation,  from  time  to  time,  of  certain  equipment;  and


     FURTHER  RESOLVED, that each officer of this Corporation be, and hereby is,
authorized  and empowered in the name and on behalf of this Corporation to enter
into, execute and deliver any documents and to do and perform all other acts and
deeds which may be necessary or appropriate to effectuate the lease (or sale and
leaseback) of equipment from Lessor and to secure and carry out the transactions
contemplated  thereby;  and


     FURTHER  RESOLVED,  that the Lessor may rely upon the aforesaid resolutions
until  receipt  by  it  of  written  notice  of  any  change."


<PAGE>
     IN  WITNESS  WHEREOF,  I  have  set  my  hand  and  affixed the seal of the
Corporation  this  ____________________  day  of  ____________________,  2002.






_________________________________________
(CORPORATE SEAL)                                        Secretary







<PAGE>

                               SECURITY AGREEMENT



THIS  SECURITY  AGREEMENT,  made  as  of December 31, 2002 ("AGREEMENT"), by and
between  General  Electric  Capital  Corporation,  for  itself  and as agent for
certain  Participants,  with  an  address  at 4 North Park Drive Suite 500, Hunt
Valley,  MD  21030  (together  with its successors and assigns, if any, "SECURED
PARTY"),  and  21st  Century  Insurance  Company,  a  corporation  organized and
existing  under  the  laws  of the state of California, with its chief executive
offices  located  at  6301  Owensmouth  Avenue,  Woodland  Hills,  CA  91367
("CUSTOMER").

In  consideration of the promises herein contained and of certain other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  Customer  and  Secured  Party  hereby  agree  as  follows:


1.  CREATION  OF  SECURITY  INTEREST:

Customer  hereby  gives, grants and assigns to Secured Party, its successors and
assigns  forever,  a  security  interest  in  and against any and all equipment,
software  and other property listed on the collateral schedule annexed hereto or
made a part hereof ("COLLATERAL SCHEDULE"), Customer's rights under any Software
License  Agreement  relating to any of the Collateral that consists of software,
any  upgrades  of  the Collateral and any rights to indemnification, warranty or
guaranty  payable  to  Customer from time to time with respect to the foregoing,
and  in  and  against  any  and  all  additions,  attachments,  accessories  and
accessions  thereto,  any  and  all  substitutions,  replacements  or  exchanges
therefor,  and  any  and all insurance and/or other proceeds thereof (all of the
foregoing  being  hereinafter  individually  and collectively referred to as the
"COLLATERAL").  The  foregoing  security interest is given to secure the payment
and  performance of any and all installments of rent, other amounts, obligations
and liabilities of any kind, nature or description whatsoever (whether due or to
become  due)  of  Customer  to  Secured  Party  under  that certain Master Lease
Agreement  identified  on  the  Collateral  Schedule  and the Schedules executed
pursuant thereto (collectively, the "LEASE"), this Agreement, and/or any related
documents  (the  Lease,  this  Agreement  and  all  such related documents being
hereinafter  collectively  referred  to as the "TRANSACTION DOCUMENTS"), and any
renewals,  extensions  and  modifications  of  such  debts,  obligations  and
liabilities  (all  of  the  foregoing  being  hereinafter  referred  to  as  the
"INDEBTEDNESS").


2.  REPRESENTATIONS,  WARRANTIES  AND  COVENANTS  OF  CUSTOMER:

Customer  hereby  represents, warrants and covenants that:  (a) Customer is, and
will remain, duly organized, existing and in good standing under the laws of the
State  set  forth  in  the  first  paragraph  of  this  Agreement, has its chief
executive  offices at the location set forth in such paragraph, and is, and will
remain,  duly qualified and licensed in every jurisdiction wherever necessary to
carry  on  its  business  and  operations;  (b)  Customer has adequate power and
capacity  to  enter  into,  and  to  perform  its obligations, under each of the
Transaction Documents;  (c) the Transaction Documents have been duly authorized,
executed  and  delivered  by  Customer  and  constitute legal, valid and binding
agreements enforceable under all applicable laws in accordance with their terms,
except  to  the  extent  that  the  enforcement of remedies may be limited under
applicable  bankruptcy  and  insolvency  laws;  (d)  no  approval,  consent  or
withholding  of  objections  is  required  from  any  governmental  authority or
instrumentality  with  respect to the entry into, or performance by, Customer of
any of the Transaction Documents, except such as may have already been obtained;
(e) the entry into and performance by Customer of the Transaction Documents will
not  (i)  violate  any  of  the  organizational  documents  of  Customer  or any
judgment,  order,  law  or regulation applicable to Customer, or  (ii) result in
any  breach  of,  constitute  a  default under, or result in the creation of any
lien,  claim  or  encumbrance on any of Customer's property (except for liens in
favor of Secured Party) pursuant to, any indenture mortgage, deed of trust, bank
loan,  credit agreement, or other agreement or instrument to which Customer is a
party;  (f)  there are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Customer  which  could,  in  the  aggregate,  have  a material adverse effect on
Customer,  its business or operations, or its ability to perform its obligations
under  the  Transaction  Documents;  (g)  all  financial statements delivered to
Secured  Party  in  connection  with  the  Indebtedness  have  been  prepared in
accordance  with generally accepted accounting principles, and since the date of
the  most recent financial statement, there has been no material adverse change;
(h)  the  Collateral  is  not,  and  will not be, used by Customer for personal,
family  or  household purposes;  (i) the Collateral is, and will remain, in good
condition  and  repair  and  Customer  will not be negligent in the care and use
thereof;  (j)  Customer  is,  and will remain, the sole and lawful owner, and in


                                                                              20
<PAGE>
possession  of,  the  Collateral, and has the sole right and lawful authority to
grant  the security interest described in this Agreement; (k) the Collateral is,
and  will  remain, free and clear of all liens, claims and encumbrances of every
kind,  nature  and description (except for liens in favor of Secured Party); (l)
Customer's  exact  legal  name  is  as  set  forth in the first sentence of this
Agreement;  (m)  none  of the Collateral consisting of Software that is owned by
Customer  and  not  licensed  by Customer from a third party has been registered
with  the  U.S.  Copyright Office or recorded with the U.S. Patent and Trademark
Office;  and (n) Customer shall not register any of the Collateral consisting of
software  that  is  owned  by Customer and not licensed by Customer from a third
party  with  the  U.S.  Copyright Office or the U.S. Patent and Trademark Office
unless  (i)  Customer provides Secured Party with written notice at least thirty
(30)  days  prior  to  the  effective  date of any such registration and (ii) at
Customer's  sole  cost  and  expense, execute, deliver and file any documents or
filings and take any other action requested by Secured Party in order to perfect
or  preserve  Secured  Party's  security interest in the Equipment with the U.S.
Copyright  Office  or  the  U.S.  Patent  and  Trademark  Office.


3.  COLLATERAL:

(a)  Until  the  declaration  of any default hereunder, Customer shall remain in
possession  of  the Collateral; provided, however, that Secured Party shall have
the  right  to possess  (i) any chattel paper, document, certificate of title or
instrument  that constitutes a part of the Collateral or possession of which may
be required to perfect Secured Party's interest in the Collateral, and  (ii) any
other  Collateral  which  because of its nature may require that Secured Party's
security  interest  therein  be  perfected  by  possession.  Secured  Party, its
successors  and  assigns,  and  their respective agents, shall have the right to
examine  and  inspect  any  of the Collateral at any time during normal business
hours,  and  Secured  Party  will be responsible for any costs incurred by it in
connection  with  such inspection so long as no default has occurred and is then
continuing.  Upon any request from Secured Party, Customer shall provide Secured
Party  with notice of the then current location of the Collateral.  (b) Customer
shall  (i)  use the Collateral only in its trade or business,  (ii) maintain all
of  the  Collateral in good condition and working order,  (iii) use and maintain
the  Collateral  only in compliance with all applicable laws, and  (iv) keep all
of  the  Collateral free and clear of all liens, claims and encumbrances (except
for liens in favor of Secured Party).  (c) Customer shall not, without the prior
written  consent  of  Secured  Party,  (i)  part  with  possession of any of the
Collateral (except to Secured Party or for maintenance and repair),  (ii) remove
any  of  the Collateral from the continental United States, or (iii) sell, rent,
lease,  mortgage, grant a security interest in or otherwise transfer or encumber
(except  for  liens  in  favor  of  Secured  Party)  any of the Collateral.  (d)
Customer  shall  pay  promptly when due all taxes, license fees, assessments and
public  and  private charges levied or assessed on any of the Collateral, on the
use thereof, or on this Agreement or any of the other Transaction Documents.  At
its  option,  Secured  Party  may  discharge taxes, liens, security interests or
other  encumbrances  at  any time levied or placed on the Collateral and may pay
for  the  maintenance, insurance and preservation of the Collateral or to effect
compliance  with  the  terms  of  this Agreement or any of the other Transaction
Documents.  Customer  shall  reimburse Secured Party, on demand, for any and all
costs  and expenses incurred by Secured Party in connection therewith and agrees
that such reimbursement obligation shall be secured hereby.  (e) Customer shall,
at  all times, keep accurate and complete records of the Collateral, and Secured
Party,  its  successors and assigns, and their respective agents, shall have the
right  to  examine,  inspect, and make extracts from all of Customer's books and
records relating to the Collateral at any time during normal business hours, and
such  inspecting  party  will  be  responsible  for  any costs incurred by it in
connection  with  such inspection so long as no default has occurred and is then
continuing.  (f)  Any third person at any time and from time to time holding all
or  any  portion  of  the  Collateral  shall  be  deemed to, and shall, hold the
Collateral  as  the  agent  of, and as pledge holder for, Secured Party.  At any
time  and  from  time to time, Secured Party may give notice to any third person
holding  all  or any portion of the Collateral that such third person is holding
the  Collateral  as  the  agent of, and as pledge holder for, the Secured Party.


4.  INSURANCE:

The Collateral shall at all times be held at Customer's risk, and Customer shall
keep  it  insured  against  loss or damage by fire and extended coverage perils,
theft,  burglary,  and for any or all Collateral which are vehicles, for risk of
loss  by  collision,  and  where  reasonably requested by Secured Party, against
other  risks  as  required thereby, for the full replacement value thereof, with
companies, in amounts and under policies reasonably acceptable to Secured Party.
Customer  shall, if Secured Party so requires, deliver to Secured Party policies
or  certificates  of insurance evidencing such coverage.  Each policy shall name
Secured  Party  as  loss payee thereunder, shall provide for coverage to Secured
Party  regardless  of  the  breach by Customer of any warranty or representation
made therein, shall not be subject to co-insurance, and shall provide for thirty
(30)  days  written  notice  to  Secured  Party  of the cancellation or material
modification thereof.  Customer hereby appoints Secured Party as its attorney in
fact  to  make


                                                                              21
<PAGE>
proof of loss, claim for insurance and adjustments with insurers, and to execute
or endorse all documents, checks or drafts in connection with payments made as a
result  of  any such insurance policies. Proceeds of insurance shall be applied,
at the option of Secured Party, to repair or replace the Collateral or to reduce
any  of  the  Indebtedness  secured  hereby.


5.  REPORTS:

(a) Customer shall promptly notify Secured Party in the event of  (i) any change
in  the  name  of  Customer  or  the type of organization of Customer,  (ii) any
relocation  of  its chief executive offices,  (iii) any relocation of any of the
Collateral,  (iv)  any of the Collateral being lost, stolen, missing, destroyed,
materially damaged or worn out, or  (v) any lien, claim or encumbrance attaching
or  being  made  against  any  of  the  Collateral (other than liens in favor of
Secured  Party).  (b)  Customer agrees to comply with Section 4(b) of the Lease.
Secured  Party  may  at  any  reasonable  time  examine the books and records of
Customer  and  make  copies  thereof.


6.  FURTHER  ASSURANCES:

(a) Customer shall, upon request of Secured Party, furnish to Secured Party such
further  information,  execute  and  deliver to Secured Party such documents and
instruments  (including,  without  limitation, Uniform Commercial Code financing
statements)  and do such other acts and things, as Secured Party may at any time
reasonably  request  relating  to  the  perfection or protection of the security
interest created by this Agreement or for the purpose of carrying out the intent
of  this  Agreement,  whether  pursuant to the Uniform Commercial Code, the U.S.
Copyright  Act,  the  U.S.  patent  and  trademark  laws  or otherwise.  Without
limiting  the  foregoing,  Customer  shall  cooperate  and  do  all  acts deemed
necessary or advisable by Secured Party to continue in Secured Party a perfected
first  security  interest  in  the  Collateral,  and shall obtain and furnish to
Secured  Party  any  subordinations,  releases,  landlord,  lessor, or mortgagee
waivers,  and  similar  documents  as may be from time to time requested by, and
which  are in form and substance reasonably satisfactory to, Secured Party.  (b)
Customer  hereby  grants  to Secured Party the power to sign Customer's name and
generally  to  act  on  behalf  of Customer to execute and file applications for
title,  transfers  of  title,  financing  statements,  notices of lien and other
documents  pertaining  to  any or all of the Collateral.  Customer shall, if any
certificate  of title be required or permitted by law for any of the Collateral,
obtain  such  certificate showing the lien hereof with respect to the Collateral
and  promptly  deliver  same to Secured Party.  (c) Customer shall indemnify and
defend  the  Secured Party, the Participants and their respective successors and
assigns,  and  their  respective  directors,  officers  and  employees, from and
against  any  and  all claims, actions and suits (including, without limitation,
related  attorneys' fees) of any kind, nature or description whatsoever arising,
directly  or indirectly, in connection with any of the Collateral.  (d) Customer
hereby  authorizes  Secured  Party  to file a financing statement and amendments
thereto  describing  the  Collateral  and  adding any other collateral described
therein  and containing any other information required by the applicable Uniform
Commercial  Code,  U.S.  Copyright  Act  or  U.S.  patent  and  trademark  laws.


7.  EVENTS  OF  DEFAULT:

Customer  shall  be  in  default  under  this  Agreement  and  each of the other
Transaction  Documents  upon the occurrence of any of the following "EVENT(S) OF
DEFAULT":  (a)  Customer  fails  to  pay  any installment or other amount due or
coming due under any of the Transaction Documents within ten (10) days after its
due  date;  (b)  any  attempt  by Customer, without the prior written consent of
Secured  Party, to sell, rent, lease, mortgage, grant a security interest in, or
otherwise  transfer or encumber (except for liens in favor of Secured Party) any
of  the Collateral;  (c) Customer fails to procure, or maintain in effect at all
times,  any  of  the insurance on the Collateral in accordance with Section 4 of
this Agreement;  (d) Customer breaches any of its other obligations under any of
the  Transaction  Documents  and  fails to cure the same within thirty (30) days
after  written  notice  thereof;  (e)  any warranty, representation or statement
made  by Customer in any of the Transaction Documents or otherwise in connection
with  any  of  the  Indebtedness  shall  be  false or misleading in any material
respect;  (f)  any  of  the  Collateral  being subjected to, or being threatened
with,  attachment,  execution,  levy,  seizure  or  confiscation  in  any  legal
proceeding  or  otherwise;  (g)  any  default by Customer under the Lease or any
other  Transaction  Documents.


8.  REMEDIES  ON  DEFAULT:


                                                                              22
<PAGE>
(a) Upon the occurrence of an Event of Default under this Agreement, the Secured
Party,  at  its  option,  may declare any or all of the Indebtedness (including,
without limitation, the Lease) to be immediately due and payable, without demand
or  notice  to  Customer  or  any  Guarantor.  The  obligations  and liabilities
accelerated  thereby  shall  bear  interest (both before and after any judgment)
until  paid  in  full  at  the  lower of eighteen percent (18%) per annum or the
maximum  rate  not  prohibited  by applicable law.  (b) Upon such declaration of
default,  Secured  Party  shall have all of the rights and remedies of a Secured
Party  under  the  Uniform  Commercial Code, and under any other applicable law.
Without  limiting  the  foregoing,  Secured  Party  shall have the right to  (i)
notify  any  customer  of  Customer  or  any  obligor  on  any  instrument which
constitutes  part  of the Collateral to make payment to the Secured Party,  (ii)
with  or  without  legal process, enter any premises where the Collateral may be
and  take  possession  and/or  remove said Collateral from said premises,  (iii)
sell the Collateral at public or private sale, in whole or in part, and have the
right  to bid and purchase at said sale, and/or  (iv) lease or otherwise dispose
of all or part of the Collateral, applying proceeds therefrom to the obligations
then  in  default.  If  requested  by  Secured  Party,  Customer  shall promptly
assemble  the Collateral and make it available to Secured Party at a place to be
designated  by  Secured  Party  which  is reasonably convenient to both parties.
Secured  Party  may  also  render  any  or all of the Collateral unusable at the
Customer's  premises and may dispose of such Collateral on such premises without
liability for rent or costs.  Any notice which Secured Party is required to give
to  Customer  under  the  Uniform  Commercial  Code of the time and place of any
public  sale  or  the  time  after  which  any  private  sale  or other intended
disposition  of  the  Collateral  is  to  be  made shall be deemed to constitute
reasonable  notice if such notice is given to the last known address of Customer
at  least  five  (5)  days  prior  to such action.  In addition to the foregoing
rights  after  a  default  hereunder  or  a  default  or a termination under any
software  license  agreement  relating  to any Collateral consisting of software
that  is  licensed by Customer (a "Software License Agreement"), Customer shall,
at  its  own expense, (i) upon the request of Secured Party, immediately disable
any  or  all of the Equipment consisting of software ("Software") and deliver to
Secured  Party  all  media  containing  the  Software  and  all  related manuals
(Customer  agrees  that  Secured  Party may enter Customer's premises to confirm
that Customer has complied with the foregoing request), (ii) upon the request of
Secured  Party  revoking Customer's right to use the Software, shall immediately
cease  using  the  Software  (Customer  agrees  that  Secured  Party  may  enter
Customer's  premises  to  confirm  that Customer has complied with the foregoing
demand),  (iii)  upon  the  request  of Secured Party, cause the licensor or the
original software consulting firm of any Software to deinstall the Software in a
commercially  reasonable  manner in accordance with the vendor's recommendations
and  reengineer  the  Software  for  use  in  a third party's system and provide
consulting  services  to  Secured  Party  and  such  third  party  regarding the
installation,  engineering  and  use  of  the  Software,  and  (iv) use its best
efforts,  subject  to  the  applicable  licensor's consent, to promptly take all
actions  and  execute  and  deliver  and  cause to be executed and delivered all
documents  reasonably  requested by Secured Party to assign to Secured Party all
of  Customer's  rights  as  licensee  or otherwise under the applicable Software
License Agreement.  Upon such assignment, Customer's rights with respect to such
Software  shall  cease,  and  Customer  shall  use its best efforts to cause the
licensor  of  the  Software  to  consent  to such assignment and to consent to a
sublicense  of  the  related Software to a third party, in which case Customer's
rights  with  respect to such Software shall cease, provided:  (i) Secured Party
notifies  the licensor in writing and (ii) such third party agrees, in a written
statement delivered to the licensor, that all Software shall remain the property
of  the licensor or its supplier, as applicable, and that such third party's use
of  the  Software shall be subject to, and that such third party shall abide by,
all relevant license or other provisions applicable to the Software contained in
the  Software  License  Agreement  (c)  Proceeds from any sale or lease or other
disposition  shall be applied: first, to all costs of repossession, storage, and
disposition  including  without  limitation  attorneys',  appraisers',  and
auctioneers'  fees; second, to discharge the obligations then in default; third,
to  discharge  any  other  Indebtedness of Customer to Secured Party, whether as
obligor, endorser, guarantor, surety or indemnitor; fourth, to expenses incurred
in  paying  or  settling liens and claims against the Collateral; and lastly, to
Customer,  if  there  exists any surplus. Customer shall remain fully liable for
any  deficiency.  (d)  In  the  event  that any of the Transaction Documents are
placed  in the hands of an attorney for collection of money due or to become due
or  to  obtain  performance  of any provision hereof, Customer agrees to pay all
reasonable  attorneys'  fees  incurred by Secured Party, and further agrees that
payment  of  such  fees  is secured hereunder.  Customer and Secured Party agree
that  such  fees  to the extent not in excess of twenty percent (20%) of subject
amount  owing  after  default  (if  permitted  by law, or such lesser sum as may
otherwise  be permitted by law) shall be deemed reasonable.  (e) Secured Party's
rights  and  remedies  hereunder  or otherwise arising are cumulative and may be
exercised  singularly or concurrently.  Neither the failure nor any delay on the
part  of  the  Secured Party to exercise any right, power or privilege hereunder
shall  operate  as a waiver thereof, nor shall any single or partial exercise of
any  right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.  Secured Party shall not be
deemed  to have waived any of its rights hereunder or under any other agreement,
instrument  or  paper  signed  by  Customer unless such waiver be in writing and
signed by Secured Party.  A waiver on any one occasion shall not be construed as
a bar to or waiver of any right or remedy on any future occasion.  (f)  CUSTOMER
HEREBY  UNCONDITIONALLY  WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE
OF  ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS AGREEMENT,
ANY  OF THE OTHER TRANSACTION DOCUMENTS, ANY OF THE INDEBTEDNESS SECURED HEREBY,
ANY  DEALINGS BETWEEN  CUSTOMER AND SECURED PARTY RELATING TO


                                                                              23
<PAGE>
THE  SUBJECT  MATTER OF THIS TRANSACTION OR ANY RELATED TRANSACTIONS, AND/OR THE
RELATIONSHIP  THAT  IS BEING ESTABLISHED BETWEEN CUSTOMER AND SECURED PARTY. THE
SCOPE  OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT  MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT  CLAIMS,  BREACH  OF  DUTY  CLAIMS,  AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS.)  THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY  OR  IN WRITING, AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS,  SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT, ANY OTHER TRANSACTION
DOCUMENTS,  OR TO ANY OTHER DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION
OR  ANY  RELATED  TRANSACTION. IN THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE
FILED  AS  A  WRITTEN  CONSENT  TO  A  TRIAL  BY  THE  COURT.


9.  MISCELLANEOUS:

(a)  This Agreement, the Lease and/or any of the other Transaction Documents may
     be  assigned,  in  whole  or  in  part,  by Secured Party without notice to
     Customer,  and  Customer  hereby  waives  any  defense,  counterclaim  or
     cross-complaint  by  Customer  against  any assignee, agreeing that Secured
     Party  shall be solely responsible therefor. (b) All notices to be given in
     connection  with  this Agreement shall be in writing, shall be addressed to
     the parties at their respective addresses set forth hereinabove (unless and
     until a different address may be specified in a written notice to the other
     party),  and  shall be deemed given (i) on the date of receipt if delivered
     in  hand  or by facsimile transmission, (ii) on the next business day after
     being  sent  by  express  mail,  and (iii) on the fourth business day after
     being  sent  by  regular, registered or certified mail. As used herein, the
     term  "business  day"  shall mean and include any day other than Saturdays,
     Sundays,  or other days on which commercial banks in New York, New York are
     required  or  authorized to be closed. (c) Secured Party may correct patent
     errors  herein  and fill in all blanks herein or in the Collateral Schedule
     consistent  with  the  agreement of the parties. (d) Time is of the essence
     hereof.  This  Agreement  shall be binding, jointly and severally, upon all
     parties  described as the "CUSTOMER" and their respective heirs, executors,
     representatives,  successors and assigns, and shall inure to the benefit of
     Secured  Party,  its  successors  and  assigns.  (e) This Agreement and its
     Collateral  Schedule  constitute  the  entire agreement between the parties
     with  respect  to  the  subject  matter  hereof  and  supersede  all  prior
     understandings  (whether  written, verbal or implied) with respect thereto.
     This  Agreement  and  its  Collateral  Schedule  shall  not  be  changed or
     terminated  orally or by course of conduct, but only by a writing signed by
     both parties hereto. Section headings contained in this Agreement have been
     included  for  convenience  only,  and shall not affect the construction or
     interpretation  hereof. (f) This Agreement shall continue in full force and
     effect  until all of the Indebtedness has been indefeasibly paid in full to
     Secured  Party.  This  Agreement  shall  automatically be reinstated in the
     event  that Secured Party is ever required to return or restore the payment
     of  all  or any portion of the Indebtedness (all as though such payment had
     never  been made). (g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
     PARTIES  HEREUNDER  SHALL  IN  ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
     ACCORDANCE  WITH,  THE  INTERNAL  LAWS  OF  THE STATE OF NEW YORK. (WITHOUT
     REGARD  TO  THE  CONFLICT  OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL
     MATTERS  OF  CONSTRUCTION,  VALIDITY  AND  PERFORMANCE,  REGARDLESS  OF THE
     LOCATION  OF  THE  COLLATERAL.


                                                                              24
<PAGE>
     IN  WITNESS  WHEREOF,  Customer  and Secured Party, intending to be legally
bound  hereby,  have  duly  executed this Agreement in one or more counterparts,
each  of  which  shall be deemed to be an original, as of the day and year first
aforesaid.

SECURED PARTY:                                    CUSTOMER:

GENERAL ELECTRIC CAPITAL CORPORATION, FOR ITSELF  21ST CENTURY INSURANCE COMPANY
AND AS AGENT FOR CERTAIN PARTICIPANTS
By:_____________________________________________  By:___________________________

Name:___________________________________________  Name:_________________________

Title:__________________________________________  Title:________________________


                                                                              25
<PAGE>

                               SECURITY AGREEMENT



THIS  SECURITY  AGREEMENT,  made  as  of December 31, 2002 ("AGREEMENT"), by and
between  General  Electric  Capital  Corporation,  for  itself  and as agent for
certain  Participants,  with  an  address  at 4 North Park Drive Suite 500, Hunt
Valley,  MD  21030  (together  with its successors and assigns, if any, "SECURED
PARTY"),  and  21st  Century Insurance Group, a California corporation organized
and existing under the laws of the state of California, with its chief executive
offices  located  at  6301  Owensmouth  Avenue,  Woodland  Hills,  CA  91367
("GUARANTOR").

In  consideration of the promises herein contained and of certain other good and
valuable  consideration,  the  receipt  and  sufficiency  of  which  are  hereby
acknowledged,  Guarantor  and  Secured  Party  hereby  agree  as  follows:


1.  CREATION  OF  SECURITY  INTEREST:

Guarantor  hereby gives, grants and assigns to Secured Party, its successors and
assigns  forever,  a  security  interest  in  and against any and all equipment,
software  and other property listed on the collateral schedule annexed hereto or
made  a  part  hereof  ("COLLATERAL  SCHEDULE"),  Guarantor's  rights  under any
Software  License  Agreement  relating to any of the Collateral that consists of
software,  any  upgrades  of  the  Collateral and any rights to indemnification,
warranty  or guaranty payable to Guarantor from time to time with respect to the
foregoing,  and  in  and against any and all additions, attachments, accessories
and  accessions  thereto,  any  and all substitutions, replacements or exchanges
therefor,  and  any  and all insurance and/or other proceeds thereof (all of the
foregoing  being  hereinafter  individually  and collectively referred to as the
"COLLATERAL").  The  foregoing  security interest is given to secure the payment
and  performance of any and all installments of rent, other amounts, obligations
and liabilities of any kind, nature or description whatsoever (whether due or to
become  due) of Guarantor to Secured Party under that certain Corporate Guaranty
identified  on  the Collateral Schedule (the "GUARANTY"), this Agreement, and/or
any  related  documents  (the  Guaranty,  this  Agreement  and  all such related
documents  being  hereinafter  collectively  referred  to  as  the  "TRANSACTION
DOCUMENTS"),  and  any  renewals,  extensions  and  modifications of such debts,
obligations  and liabilities (all of the foregoing being hereinafter referred to
as  the  "INDEBTEDNESS").


2.  REPRESENTATIONS,  WARRANTIES  AND  COVENANTS  OF  GUARANTOR:

Guarantor hereby represents, warrants and covenants that:  (a) Guarantor is, and
will remain, duly organized, existing and in good standing under the laws of the
State  set  forth  in  the  first  paragraph  of  this  Agreement, has its chief
executive  offices at the location set forth in such paragraph, and is, and will
remain,  duly qualified and licensed in every jurisdiction wherever necessary to
carry  on  its  business  and  operations;  (b) Guarantor has adequate power and
capacity  to  enter  into,  and  to  perform  its obligations, under each of the
Transaction Documents;  (c) the Transaction Documents have been duly authorized,
executed  and  delivered  by  Guarantor  and constitute legal, valid and binding
agreements enforceable under all applicable laws in accordance with their terms,
except  to  the  extent  that  the  enforcement of remedies may be limited under
applicable  bankruptcy  and  insolvency  laws;  (d)  no  approval,  consent  or
withholding  of  objections  is  required  from  any  governmental  authority or
instrumentality  with respect to the entry into, or performance by, Guarantor of
any of the Transaction Documents, except such as may have already been obtained;
(e)  the  entry  into  and performance by Guarantor of the Transaction Documents
will  not  (i)  violate  any of the organizational documents of Guarantor or any
judgment,  order,  law or regulation applicable to Guarantor, or  (ii) result in
any  breach  of,  constitute  a  default under, or result in the creation of any
lien,  claim  or encumbrance on any of Guarantor's property (except for liens in
favor of Secured Party) pursuant to, any indenture mortgage, deed of trust, bank
loan, credit agreement, or other agreement or instrument to which Guarantor is a
party;  (f)  there are no suits or proceedings pending or threatened in court or
before any commission, board or other administrative agency against or affecting
Guarantor  which  could,  in  the  aggregate,  have a material adverse effect on
Guarantor, its business or operations, or its ability to perform its obligations
under  the  Transaction  Documents;  (g)  all  financial statements delivered to
Secured  Party  in  connection  with  the  Indebtedness  have  been  prepared in
accordance  with generally accepted accounting principles, and since the date of
the  most recent financial statement, there has been no material adverse change;
(h)  the  Collateral  is  not,  and will not be, used by Guarantor for personal,
family  or  household purposes;  (i) the Collateral is, and will remain, in good
condition  and  repair  and


                                                                              26
<PAGE>
Guarantor  will  not be negligent in the care and use thereof; (j) Guarantor is,
and  will  remain,  the  sole  and  lawful  owner,  and  in  possession  of, the
Collateral,  and  has  the sole right and lawful authority to grant the security
interest  described  in  this Agreement; (k) the Collateral is, and will remain,
free  and  clear of all liens, claims and encumbrances of every kind, nature and
description  (except for liens in favor of Secured Party); (l) Guarantor's exact
legal  name is as set forth in the first sentence of this Agreement; (m) none of
the  Collateral  consisting  of  Software  that  is  owned  by Guarantor and not
licensed  by  Guarantor  from  a  third  party has been registered with the U.S.
Copyright  Office or recorded with the U.S. Patent and Trademark Office; and (n)
Guarantor  shall  not register any of the Collateral consisting of software that
is  owned by Guarantor and not licensed by Guarantor from a third party with the
U.S.  Copyright  Office  or  the  U.S.  Patent  and  Trademark Office unless (i)
Guarantor  provides  Secured Party with written notice at least thirty (30) days
prior  to  the  effective  date of any such registration and (ii) at Guarantor's
sole  cost  and  expense, execute, deliver and file any documents or filings and
take any other action requested by Secured Party in order to perfect or preserve
Secured  Party's  security  interest  in  the  Equipment with the U.S. Copyright
Office  or  the  U.S.  Patent  and  Trademark  Office.


3.  COLLATERAL:

(a)  Until  the  declaration of any default hereunder, Guarantor shall remain in
possession  of  the Collateral; provided, however, that Secured Party shall have
the  right  to possess  (i) any chattel paper, document, certificate of title or
instrument  that constitutes a part of the Collateral or possession of which may
be required to perfect Secured Party's interest in the Collateral, and  (ii) any
other  Collateral  which  because of its nature may require that Secured Party's
security  interest  therein  be  perfected  by  possession.  Secured  Party, its
successors  and  assigns,  and  their respective agents, shall have the right to
examine  and  inspect  any  of the Collateral at any time during normal business
hours,  and  Secured  Party  will be responsible for any costs incurred by it in
connection  with  such inspection so long as no default has occurred and is then
continuing.  Upon  any  request  from  Secured  Party,  Guarantor  shall provide
Secured  Party  with notice of the then current location of the Collateral.  (b)
Guarantor  shall  (i)  use  the  Collateral only in its trade or business,  (ii)
maintain  all  of the Collateral in good condition and working order,  (iii) use
and  maintain  the  Collateral  only in compliance with all applicable laws, and
(iv)  keep  all  of  the  Collateral  free  and  clear  of all liens, claims and
encumbrances  (except for liens in favor of Secured Party).  (c) Guarantor shall
not,  without  the  prior  written  consent  of  Secured  Party,  (i)  part with
possession  of any of the Collateral (except to Secured Party or for maintenance
and  repair),  (ii)  remove  any  of  the Collateral from the continental United
States, or (iii) sell, rent, Guaranty, mortgage, grant a security interest in or
otherwise  transfer or encumber (except for liens in favor of Secured Party) any
of the Collateral.  (d) Guarantor shall pay promptly when due all taxes, license
fees,  assessments  and  public and private charges levied or assessed on any of
the  Collateral,  on  the  use thereof, or on this Agreement or any of the other
Transaction Documents.  At its option, Secured Party may discharge taxes, liens,
security  interests  or  other  encumbrances at any time levied or placed on the
Collateral  and  may  pay for the maintenance, insurance and preservation of the
Collateral  or  to  effect compliance with the terms of this Agreement or any of
the  other  Transaction  Documents.  Guarantor shall reimburse Secured Party, on
demand,  for  any  and  all  costs  and  expenses  incurred  by Secured Party in
connection  therewith  and  agrees  that  such reimbursement obligation shall be
secured  hereby.  (e)  Guarantor shall, at all times, keep accurate and complete
records  of  the  Collateral, and Secured Party, its successors and assigns, and
their  respective  agents,  shall  have  the right to examine, inspect, and make
extracts from all of Guarantor's books and records relating to the Collateral at
any  time  during  normal  business  hours,  and  such  inspecting party will be
responsible  for  any costs incurred by it in connection with such inspection so
long as no default has occurred and is then continuing.  (f) Any third person at
any  time  and  from  time  to time holding all or any portion of the Collateral
shall  be  deemed  to,  and  shall,  hold the Collateral as the agent of, and as
pledge  holder  for,  Secured Party.  At any time and from time to time, Secured
Party  may  give  notice  to  any third person holding all or any portion of the
Collateral that such third person is holding the Collateral as the agent of, and
as  pledge  holder  for,  the  Secured  Party.


4.  INSURANCE:

The  Collateral  shall  at  all times be held at Guarantor's risk, and Guarantor
shall  keep  it  insured  against  loss  or damage by fire and extended coverage
perils,  theft,  burglary, and for any or all Collateral which are vehicles, for
risk  of  loss  by  collision,  and where reasonably requested by Secured Party,
against other risks as required thereby, for the full replacement value thereof,
with  companies,  in amounts and under policies reasonably acceptable to Secured
Party.  Guarantor  shall, if Secured Party so requires, deliver to Secured Party
policies  or  certificates  of  insurance evidencing such coverage.  Each policy
shall name Secured Party as loss payee thereunder, shall provide for coverage to
Secured  Party  regardless  of  the  breach  by  Guarantor  of  any  warranty or
representation  made  therein,  shall  not be subject to co-insurance, and shall
provide for thirty (30) days written notice to Secured


                                                                              27
<PAGE>
Party  of  the  cancellation  or material modification thereof. Guarantor hereby
appoints  Secured Party as its attorney in fact to make proof of loss, claim for
insurance  and  adjustments  with  insurers,  and  to  execute  or  endorse  all
documents,  checks or drafts in connection with payments made as a result of any
such  insurance  policies. Proceeds of insurance shall be applied, at the option
of  Secured  Party,  to repair or replace the Collateral or to reduce any of the
Indebtedness  secured  hereby.


5.  REPORTS:

(a)  Guarantor  shall  promptly  notify  Secured  Party in the event of  (i) any
change  in the name of Guarantor or the type of organization of Guarantor,  (ii)
any  relocation  of its chief executive offices,  (iii) any relocation of any of
the  Collateral,  (iv)  any  of  the  Collateral  being  lost,  stolen, missing,
destroyed,  materially  damaged  or  worn  out,  or  (v)  any  lien,  claim  or
encumbrance  attaching  or  being made against any of the Collateral (other than
liens  in  favor of Secured Party).  (b) Guarantor agrees to comply with Section
4(b)  of  the  Guaranty.  Secured  Party  may at any reasonable time examine the
books  and  records  of  Guarantor  and  make  copies  thereof.


6.  FURTHER  ASSURANCES:

(a)  Guarantor  shall,  upon  request of Secured Party, furnish to Secured Party
such  further  information,  execute and deliver to Secured Party such documents
and  instruments  (including,  without  limitation,  Uniform  Commercial  Code
financing statements) and do such other acts and things, as Secured Party may at
any  time  reasonably  request  relating  to the perfection or protection of the
security  interest  created by this Agreement or for the purpose of carrying out
the  intent  of this Agreement, whether pursuant to the Uniform Commercial Code,
the  U.S.  Copyright  Act,  the  U.S.  patent  and  trademark laws or otherwise.
Without limiting the foregoing, Guarantor shall cooperate and do all acts deemed
necessary or advisable by Secured Party to continue in Secured Party a perfected
first  security  interest  in  the  Collateral,  and shall obtain and furnish to
Secured  Party  any  subordinations, reGuarantys, landlord, lessor, or mortgagee
waivers,  and  similar  documents  as may be from time to time requested by, and
which  are in form and substance reasonably satisfactory to, Secured Party.  (b)
Guarantor  hereby grants to Secured Party the power to sign Guarantor's name and
generally  to  act  on  behalf of Guarantor to execute and file applications for
title,  transfers  of  title,  financing  statements,  notices of lien and other
documents  pertaining  to any or all of the Collateral.  Guarantor shall, if any
certificate  of title be required or permitted by law for any of the Collateral,
obtain  such  certificate showing the lien hereof with respect to the Collateral
and  promptly  deliver same to Secured Party.  (c) Guarantor shall indemnify and
defend  the  Secured Party, the Participants and their respective successors and
assigns,  and  their  respective  directors,  officers  and  employees, from and
against  any  and  all claims, actions and suits (including, without limitation,
related  attorneys' fees) of any kind, nature or description whatsoever arising,
directly or indirectly, in connection with any of the Collateral.  (d) Guarantor
hereby  authorizes  Secured  Party  to file a financing statement and amendments
thereto  describing  the  Collateral  and  adding any other collateral described
therein  and containing any other information required by the applicable Uniform
Commercial  Code,  U.S.  Copyright  Act  or  U.S.  patent  and  trademark  laws.


7.  EVENTS  OF  DEFAULT:

Guarantor  shall  be  in  default  under  this  Agreement  and each of the other
Transaction  Documents  upon the occurrence of any of the following "EVENT(S) OF
DEFAULT":  (a)  Guarantor fails to pay any amount due or coming due under any of
the  Transaction  Documents  within  ten  (10) days after its due date;  (b) any
attempt  by  Guarantor,  without  the prior written consent of Secured Party, to
sell,  rent,  mortgage,  grant  a security interest in, or otherwise transfer or
encumber  (except  for  liens  in favor of Secured Party) any of the Collateral;
(c)  Guarantor  fails to procure, or maintain in effect at all times, any of the
insurance on the Collateral in accordance with Section 4 of this Agreement;  (d)
Guarantor  breaches  any  of  its other obligations under any of the Transaction
Documents  and  fails  to  cure  the  same within thirty (30) days after written
notice thereof;  (e) any warranty, representation or statement made by Guarantor
in  any  of the Transaction Documents or otherwise in connection with any of the
Indebtedness  shall  be false or misleading in any material respect;  (f) any of
the  Collateral  being  subjected  to,  or  being  threatened  with, attachment,
execution,  levy,  seizure or confiscation in any legal proceeding or otherwise;
(g)  any  default  by  Guarantor  or 21st Century Insurance Company ("CUSTOMER")
under  the  Guaranty  or  any  other  Transaction  Documents.


8.  REMEDIES  ON  DEFAULT:


                                                                              28
<PAGE>
(a) Upon the occurrence of an Event of Default under this Agreement, the Secured
Party,  at  its  option,  may declare any or all of the Indebtedness (including,
without  limitation,  the  Guaranty)  to be immediately due and payable, without
demand  or  notice  to  Customer  or Guarantor.  The obligations and liabilities
accelerated  thereby  shall  bear  interest (both before and after any judgment)
until  paid  in  full  at  the  lower of eighteen percent (18%) per annum or the
maximum  rate  not  prohibited  by applicable law.  (b) Upon such declaration of
default,  Secured  Party  shall have all of the rights and remedies of a Secured
Party  under  the  Uniform  Commercial Code, and under any other applicable law.
Without  limiting  the  foregoing,  Secured  Party  shall have the right to  (i)
notify  Guarantor,  Customer  or any obligor on any instrument which constitutes
part  of  the  Collateral  to  make  payment to the Secured Party,  (ii) with or
without  legal  process, enter any premises where the Collateral may be and take
possession  and/or  remove  said  Collateral from said premises,  (iii) sell the
Collateral at public or private sale, in whole or in part, and have the right to
bid and purchase at said sale, and/or  (iv) lease or otherwise dispose of all or
part  of  the Collateral, applying proceeds therefrom to the obligations then in
default.  If  requested  by Secured Party, Guarantor shall promptly assemble the
Collateral and make it available to Secured Party at a place to be designated by
Secured Party which is reasonably convenient to both parties.  Secured Party may
also  render  any  or all of the Collateral unusable at the Guarantor's premises
and  may  dispose of such Collateral on such premises without liability for rent
or costs.  Any notice which Secured Party is required to give to Guarantor under
the Uniform Commercial Code of the time and place of any public sale or the time
after  which any private sale or other intended disposition of the Collateral is
to  be  made  shall  be deemed to constitute reasonable notice if such notice is
given  to  the  last  known address of Guarantor at least five (5) days prior to
such action.  In addition to the foregoing rights after a default hereunder or a
default  or  a  termination under any software license agreement relating to any
Collateral  consisting  of  software  that is licensed by Guarantor (a "SOFTWARE
LICENSE  AGREEMENT"),  Guarantor shall, at its own expense, (i) upon the request
of  Secured Party, immediately disable any or all of the Equipment consisting of
software  ("SOFTWARE")  and  deliver  to  Secured Party all media containing the
Software  and all related manuals (Guarantor agrees that Secured Party may enter
Guarantor's  premises  to confirm that Guarantor has complied with the foregoing
request),  (ii)  upon the request of Secured Party revoking Guarantor's right to
use  the  Software, shall immediately cease using the Software (Guarantor agrees
that  Secured Party may enter Guarantor's premises to confirm that Guarantor has
complied  with  the foregoing demand),  (iii) upon the request of Secured Party,
cause  the  licensor or the original software consulting firm of any Software to
deinstall  the  Software  in a commercially reasonable manner in accordance with
the  vendor's  recommendations  and  reengineer  the Software for use in a third
party's  system  and provide consulting services to Secured Party and such third
party  regarding the installation, engineering and use of the Software, and (iv)
use  its best efforts, subject to the applicable licensor's consent, to promptly
take  all actions and execute and deliver and cause to be executed and delivered
all  documents  reasonably requested by Secured Party to assign to Secured Party
all of Guarantor's rights as licensee or otherwise under the applicable Software
License  Agreement.  Upon  such  assignment,  Guarantor's rights with respect to
such Software shall cease, and Guarantor shall use its best efforts to cause the
licensor  of  the  Software  to  consent  to such assignment and to consent to a
sublicense  of  the related Software to a third party, in which case Guarantor's
rights  with  respect to such Software shall cease, provided:  (i) Secured Party
notifies  the licensor in writing and (ii) such third party agrees, in a written
statement delivered to the licensor, that all Software shall remain the property
of  the licensor or its supplier, as applicable, and that such third party's use
of  the  Software shall be subject to, and that such third party shall abide by,
all relevant license or other provisions applicable to the Software contained in
the  Software  License  Agreement.  (c) Proceeds from any sale or lease or other
disposition  shall be applied: first, to all costs of repossession, storage, and
disposition  including  without  limitation  attorneys',  appraisers',  and
auctioneers'  fees; second, to discharge the obligations then in default; third,
to  discharge  any  other Indebtedness of Guarantor to Secured Party, whether as
obligor, endorser, guarantor, surety or indemnitor; fourth, to expenses incurred
in  paying  or  settling liens and claims against the Collateral; and lastly, to
Guarantor,  if there exists any surplus. Guarantor shall remain fully liable for
any  deficiency.  (d)  In  the  event  that any of the Transaction Documents are
placed  in the hands of an attorney for collection of money due or to become due
or  to  obtain  performance of any provision hereof, Guarantor agrees to pay all
reasonable  attorneys'  fees  incurred by Secured Party, and further agrees that
payment  of  such  fees is secured hereunder.  Guarantor and Secured Party agree
that  such  fees  to the extent not in excess of twenty percent (20%) of subject
amount  owing  after  default  (if  permitted  by law, or such lesser sum as may
otherwise  be permitted by law) shall be deemed reasonable.  (e) Secured Party's
rights  and  remedies  hereunder  or otherwise arising are cumulative and may be
exercised  singularly or concurrently.  Neither the failure nor any delay on the
part  of  the  Secured Party to exercise any right, power or privilege hereunder
shall  operate  as a waiver thereof, nor shall any single or partial exercise of
any  right, power or privilege preclude any other or further exercise thereof or
the exercise of any other right, power or privilege.  Secured Party shall not be
deemed  to have waived any of its rights hereunder or under any other agreement,
instrument  or  paper  signed  by Guarantor unless such waiver be in writing and
signed by Secured Party.  A waiver on any one occasion shall not be construed as
a  bar  to  or  waiver  of  any  right  or  remedy  on any future occasion.  (f)
GUARANTOR  HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR  CAUSE  OF  ACTION BASED UPON OR ARISING OUT OF, DIRECTLY OR INDIRECTLY, THIS
AGREEMENT,  ANY  OF  THE  OTHER  TRANSACTION


                                                                              29
<PAGE>
DOCUMENTS,  ANY  OF  THE  INDEBTEDNESS  SECURED  HEREBY,  ANY  DEALINGS  BETWEEN
GUARANTOR  AND  SECURED PARTY RELATING TO THE SUBJECT MATTER OF THIS TRANSACTION
OR  ANY  RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS BEING ESTABLISHED
BETWEEN  GUARANTOR AND SECURED PARTY. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL  ENCOMPASSING  OF  ANY  AND  ALL  DISPUTES  THAT  MAY  BE FILED IN ANY COURT
(INCLUDING,  WITHOUT  LIMITATION,  CONTRACT  CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS,  AND  ALL  OTHER  COMMON  LAW  AND  STATUTORY  CLAIMS.)  THIS  WAIVER IS
IRREVOCABLE,  MEANING  THAT  IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND  THE  WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR  MODIFICATIONS  TO THIS AGREEMENT, ANY OTHER TRANSACTION DOCUMENTS, OR TO ANY
OTHER  DOCUMENTS  OR  AGREEMENTS  RELATING  TO  THIS  TRANSACTION OR ANY RELATED
TRANSACTION.  IN  THE  EVENT  OF  LITIGATION,  THIS  AGREEMENT MAY BE FILED AS A
WRITTEN  CONSENT  TO  A  TRIAL  BY  THE  COURT.


9.  MISCELLANEOUS:

(b)  This  Agreement, the Guaranty and/or any of the other Transaction Documents
     may  be  assigned,  in whole or in part, by Secured Party without notice to
     Guarantor,  and  Guarantor  hereby  waives  any  defense,  counterclaim  or
     cross-complaint  by  Guarantor  against any assignee, agreeing that Secured
     Party  shall be solely responsible therefor. (b) All notices to be given in
     connection  with  this Agreement shall be in writing, shall be addressed to
     the parties at their respective addresses set forth hereinabove (unless and
     until a different address may be specified in a written notice to the other
     party),  and  shall be deemed given (i) on the date of receipt if delivered
     in  hand  or by facsimile transmission, (ii) on the next business day after
     being  sent  by  express  mail,  and (iii) on the fourth business day after
     being  sent  by  regular, registered or certified mail. As used herein, the
     term  "business  day"  shall mean and include any day other than Saturdays,
     Sundays,  or other days on which commercial banks in New York, New York are
     required  or  authorized to be closed. (c) Secured Party may correct patent
     errors  herein  and fill in all blanks herein or in the Collateral Schedule
     consistent  with  the  agreement of the parties. (d) Time is of the essence
     hereof.  This  Agreement  shall be binding, jointly and severally, upon all
     parties described as the "GUARANTOR" and their respective heirs, executors,
     representatives,  successors and assigns, and shall inure to the benefit of
     Secured  Party,  its  successors  and  assigns.  (e) This Agreement and its
     Collateral  Schedule  constitute  the  entire agreement between the parties
     with  respect  to  the  subject  matter  hereof  and  supersede  all  prior
     understandings  (whether  written, verbal or implied) with respect thereto.
     This  Agreement  and  its  Collateral  Schedule  shall  not  be  changed or
     terminated  orally or by course of conduct, but only by a writing signed by
     both parties hereto. Section headings contained in this Agreement have been
     included  for  convenience  only,  and shall not affect the construction or
     interpretation  hereof. (f) This Agreement shall continue in full force and
     effect  until all of the Indebtedness has been indefeasibly paid in full to
     Secured  Party.  This  Agreement  shall  automatically be reinstated in the
     event  that Secured Party is ever required to return or restore the payment
     of  all  or any portion of the Indebtedness (all as though such payment had
     never  been made). (g) THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE
     PARTIES  HEREUNDER  SHALL  IN  ALL RESPECTS BE GOVERNED BY AND CONSTRUED IN
     ACCORDANCE  WITH,  THE  INTERNAL  LAWS  OF  THE STATE OF NEW YORK. (WITHOUT
     REGARD  TO  THE  CONFLICT  OF LAWS PRINCIPLES OF SUCH STATE), INCLUDING ALL
     MATTERS  OF  CONSTRUCTION,  VALIDITY  AND  PERFORMANCE,  REGARDLESS  OF THE
     LOCATION  OF  THE  COLLATERAL.


                                                                              30
<PAGE>
     IN  WITNESS  WHEREOF,  Guarantor and Secured Party, intending to be legally
bound  hereby,  have  duly  executed this Agreement in one or more counterparts,
each  of  which  shall be deemed to be an original, as of the day and year first
aforesaid.

SECURED PARTY:                                     GUARANTOR:

GENERAL ELECTRIC CAPITAL CORPORATION, FOR ITSELF   21ST CENTURY INSURANCE GROUP
AND AS AGENT FOR CERTAIN PARTICIPANTS

By:__________________________________              By:__________________________

Name:________________________________              Name:________________________

Title:_______________________________              Title:_______________________


                                                                              31
<PAGE>

                               COLLATERAL SCHEDULE


     THIS  COLLATERAL  SCHEDULE  is  annexed  to and made a part of that certain
Security  Agreement  dated  as  of  December  31, 2002, between GENERAL ELECTRIC
CAPITAL  CORPORATION, FOR ITSELF AND AS AGENT FOR CERTAIN PARTICIPANTS, together
with  its  successors  and  assigns,  if  any, as Secured Party and 21ST CENTURY
INSURANCE  GROUP,  as  Guarantor and describes collateral in which Guarantor has
granted  Secured  Party  a security interest in connection with the Indebtedness
(as defined in the Security Agreement) including without limitation that certain
Corporate Guaranty dated December 31, 2002 entered into by Guarantor in favor of
Secured  Party.

DESCRIPTION  OF  COLLATERAL:

All software now and hereafter owned or licensed by Guarantor, including but not
limited  to  the  COGEN  software  system, Guarantor's rights under any Software
License  Agreement  relating to any of the Collateral that consists of software,
any  upgrades  of  the Collateral and any rights to indemnification, warranty or
guaranty  payable  to Guarantor from time to time with respect to the foregoing,
and  in  and  against  any  and  all  additions,  attachments,  accessories  and
accessions  thereto,  any  and  all  substitutions,  replacements  or  exchanges
therefor,  and  any  and  all  insurance  and/or  other  proceeds  thereof.





SECURED PARTY:                                     GUARANTOR:

GENERAL ELECTRIC CAPITAL CORPORATION, FOR ITSELF   21ST CENTURY INSURANCE GROUP
AND AS AGENT FOR CERTAIN PARTICIPANTS

By:_____________________________________________   By:__________________________

Name:___________________________________________   Name:________________________

Title:__________________________________________   Title:_______________________

Date:___________________________________________   Date:________________________


                                                                              32
<PAGE>

                               CORPORATE GUARANTY


                                        Date: December 31, 2002



General Electric Capital Corporation, for itself and as agent for certain
participants
4 North Park Drive Suite 500
Hunt Valley, MD 21030


     To  induce  you to enter into, purchase or otherwise acquire, now or at any
time  hereafter,  any  promissory notes, security agreements, chattel mortgages,
pledge  agreements,  conditional  sale  contracts,  lease agreements, and/or any
other  documents  or  instruments  evidencing,  or relating to, any lease, loan,
extension  of  credit  or  other  financial accommodation (collectively "ACCOUNT
DOCUMENTS"  and each an "ACCOUNT DOCUMENT") to 21ST CENTURY INSURANCE COMPANY, a
corporation  organized  and  existing  under the laws of the State of California
("CUSTOMER"),  but without in any way binding you to do so, the undersigned, for
good  and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, does hereby guarantee to you, your successors and assigns, the due
regular  and punctual payment of any sum or sums of money which the Customer may
owe  to  you  now  or  at  any  time  hereafter, whether evidenced by an Account
Document,  on  open  account  or otherwise, and whether it represents principal,
interest,  rent,  late charges, indemnities, an original balance, an accelerated
balance,  liquidated damages, a balance reduced by partial payment, a deficiency
after sale or other disposition of any leased equipment, collateral or security,
or any other type of sum of any kind whatsoever that the Customer may owe to you
now  or  at  any  time hereafter, and does hereby further guarantee to you, your
successors  and  assigns, the due, regular and punctual performance of any other
duty or obligation of any kind or character whatsoever that the Customer may owe
to  you  now  or  at  any  time  hereafter  (all  such  payment  and performance
obligations  being collectively referred to as "OBLIGATIONS").  Undersigned does
hereby  further  guarantee to pay upon demand all losses, costs, attorneys' fees
and  expenses  which  may  be suffered by you by reason of Customer's default or
default  of  the  undersigned.

     This  Guaranty  is  a  guaranty  of prompt payment and performance (and not
merely  a  guaranty  of  collection).  Nothing herein shall require you to first
seek  or exhaust any remedy against the Customer, its successors and assigns, or
any  other  person  obligated  with  respect  to  the  Obligations,  or to first
foreclose, exhaust or otherwise proceed against any leased equipment, collateral
or security which may be given in connection with the Obligations.  It is agreed
that  you  may,  upon  any  breach  or  default  of the Customer, or at any time
thereafter, make demand upon the undersigned and receive payment and performance
of  the Obligations, with or without notice or demand for payment or performance
by  the  Customer,  its successors or assigns, or any other person.  Suit may be
brought  and  maintained  against  the  undersigned,  at  your election, without
joinder of the


                                                                              33
<PAGE>
Customer  or  any  other  person  as  parties  thereto.  The obligations of each
signatory  to  this  Guaranty  shall  be  joint  and  several.

     The  undersigned  agrees  that its obligations under this Guaranty shall be
primary,  absolute, continuing and unconditional, irrespective of and unaffected
by any of the following actions or circumstances (regardless of any notice to or
consent  of  the  undersigned):  (a)  the  genuineness, validity, regularity and
enforceability  of  the  Account  Documents  or  any  other  document;  (b)  any
extension,  renewal,  amendment,  change,  waiver  or  other modification of the
Account  Documents  or  any other document; (c) the absence of, or delay in, any
action  to  enforce  the Account Documents, this Guaranty or any other document;
(d)  your  failure  or  delay in obtaining any other guaranty of the Obligations
(including,  without  limitation,  your  failure  to obtain the signature of any
other guarantor hereunder); (e) the release of, extension of time for payment or
performance  by,  or  any  other indulgence granted to the Customer or any other
person with respect to the Obligations by operation of law or otherwise; (f) the
existence,  value,  condition,  loss,  subordination or release (with or without
substitution) of, or failure to have title to or perfect and maintain a security
interest  in,  or the time, place and manner of any sale or other disposition of
any  leased  equipment,  collateral  or  security  given  in connection with the
Obligations,  or  any  other  impairment  (whether  intentional or negligent, by
operation  of  law  or  otherwise)  of  the  rights  of the undersigned; (g) the
Customer's  voluntary  or  involuntary bankruptcy, assignment for the benefit of
creditors,  reorganization, or similar proceedings affecting the Customer or any
of  its  assets;  or (h) any other action or circumstances which might otherwise
constitute  a  legal or equitable discharge or defense of a surety or guarantor.

     This Guaranty, the Account Documents and the Obligations may be assigned by
you,  without the consent of the Undersigned.  The Undersigned agrees that if it
receives  written notice of an assignment from you, the Undersigned will pay all
amounts due hereunder to such assignee or as instructed by you.  The Undersigned
also  agrees to confirm in writing receipt of the notice of assignment as may be
reasonably  requested by assignee.  The Undersigned hereby waives and agrees not
to  assert  against  any  such  assignee  any  of  the defenses set forth in the
immediate  preceding  paragraph.

     This Guaranty may be terminated upon delivery to you (at your address shown
above) of a written termination notice from the undersigned.  However, as to all
Obligations  (whether  matured,  unmatured,  absolute,  contingent or otherwise)
incurred  by  the  Customer  prior  to  your receipt of such written termination
notice  (and  regardless  of  any  subsequent  amendment,  extension  or  other
modification  which may be made with respect to such Obligations), this Guaranty
shall  nevertheless  continue and remain undischarged until all such Obligations
are  indefeasibly  paid  and  performed  in  full.

     The  undersigned  agrees  that this Guaranty shall remain in full force and
effect  or  be  reinstated  (as  the  case  may  be)  if  at any time payment or
performance  of  any  of  the  Obligations  (or  any part thereof) is rescinded,
reduced  or  must  otherwise  be restored or returned by you, all as though such
payment  or  performance  had  not  been made.  If, by reason of any bankruptcy,
insolvency  or  similar  laws  effecting  the  rights of creditors, you


                                                                              34
<PAGE>
shall  be  prohibited from exercising any of your rights or remedies against the
Customer  or  any other person or against any property, then, as between you and
the undersigned, such prohibition shall be of no force and effect, and you shall
have the right to make demand upon, and receive payment from, the undersigned of
all  amounts and other sums that would be due to you upon a default with respect
to  the  Obligations.

     The  undersigned  covenants  and  agrees that:  (a) it will provide to you:
(1)  within  ninety  (90)  days  after  the end of each of its fiscal years, its
balance  sheet  and  related  statement of income and statement of cash flows of
Guarantor,  prepared in accordance with generally accepted accounting principles
consistently  applied  ("GAAP"),  all  in  reasonable  detail  and  certified by
independent  certified public accountants of recognized standing selected by the
undersigned;  (2)  within  sixty  (60) days after the end of each quarter of its
fiscal  year, its balance sheet and related statement of income and statement of
cash  flows  for  such  quarter, internally prepared in accordance with GAAP and
certified  by its chief financial officer; and (3) within thirty (30) days after
the  date on which they are filed, all regular periodic reports, forms and other
filings  required  to  be made by the undersigned to the Securities and Exchange
Commission,  including  (without  limitation)  Forms 8Q, 10K and 10Q; and (b) it
will promptly execute and deliver to you such further documents, instruments and
assurances  and take such further action as you from time to time reasonably may
request  in  order  to  carry out the intent and purpose of this Guaranty and to
establish  and protect the rights and remedies created or intended to be created
in  your  favor  hereunder.

     Notice of acceptance of this Guaranty and of any default by the Customer or
any  other  person is hereby waived.  Presentment, protest demand, and notice of
protest,  demand  and  dishonor  of  any of the Obligations, and the exercise of
possessory, collection or other remedies for the Obligations, are hereby waived.
The  undersigned warrants that it has adequate means to obtain from the Customer
on  a  continuing  basis  financial  data  and  other  information regarding the
Customer  and  is  not  relying  upon  you  to  provide  any  such data or other
information.  Without  limiting  the  foregoing, notice of adverse change in the
Customer's  financial  condition  or  of  any  other fact which might materially
increase  the  risk  of  the  undersigned  is  also  waived.  All  settlements,
compromises,  accounts stated and agreed balances made in good faith between the
Customer, its successors or assigns, and you shall be binding upon and shall not
affect  the  liability  of  the  undersigned.

     Payment  of  all  amounts  now  or hereafter owed to the undersigned by the
Customer  or any other obligor for any of the Obligations is hereby subordinated
in  right  of  payment  to  the  indefeasible  payment  in  full  to  you of all
Obligations  and  is  hereby  assigned  to  you  as  a  security  therefor.  The
undersigned  hereby  irrevocably and unconditionally waives and relinquishes all
statutory,  contractual,  common law, equitable and all other claims against the
Customer, any other obligor for any of the Obligations, any collateral therefor,
or  any other assets of the Customer or any such other obligor, for subrogation,
reimbursement,  exoneration,  contribution,  indemnification,  setoff  or  other
recourse in respect of sums paid or payable to you by the undersigned hereunder,
and  the  undersigned  hereby further irrevocably and unconditionally waives and
relinquishes  any  and  all  other benefits which it might otherwise directly or
indirectly  receive  or be entitled


                                                                              35
<PAGE>
to  receive  by reason of any amounts paid by, or collected or due from, it, the
Customer  or  any other obligor for any of the Obligations, or realized from any
of  their  respective  assets.

     THE  UNDERSIGNED HEREBY UNCONDITIONALLY WAIVES ITS RIGHT TO A JURY TRIAL OF
ANY  CLAIM  OR  CAUSE  OF  ACTION  BASED  UPON  OR  ARISING  OUT OF, DIRECTLY OR
INDIRECTLY, THIS GUARANTY, THE OBLIGATIONS GUARANTEED HEREBY, ANY OF THE RELATED
DOCUMENTS,  ANY  DEALINGS  BETWEEN  US  RELATING TO THE SUBJECT MATTER HEREOF OR
THEREOF,  AND/OR  THE  RELATIONSHIP  THAT  IS BEING ESTABLISHED BETWEEN US.  THE
SCOPE  OF THIS WAIVER IS INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES
THAT  MAY BE FILED IN ANY COURT (INCLUDING, WITHOUT LIMITATION, CONTRACT CLAIMS,
TORT  CLAIMS,  BREACH  OF  DUTY  CLAIMS,  AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS).  THIS  WAIVER IS IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY  OR  IN  WRITING, AND SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS  OR  MODIFICATIONS  TO  THIS  GUARANTY,  THE  OBLIGATIONS GUARANTEED
HEREBY, OR ANY RELATED DOCUMENTS.  IN THE EVENT OF LITIGATION, THIS GUARANTY MAY
BE  FILED  AS  A  WRITTEN  CONSENT  TO  A  TRIAL  BY  THE  COURT.

     As  used  in this Guaranty, the word "person" shall include any individual,
corporation,  partnership,  joint  venture,  association,  joint-stock  company,
trust,  unincorporated  organization,  or  any  government  or  any  political
subdivision  thereof.

     This  Guaranty  is  intended  by  the  parties as a final expression of the
guaranty  of  the  undersigned  and is also intended as a complete and exclusive
statement  of the terms thereof.  No course of dealing, course of performance or
trade  usage,  nor any paid evidence of any kind, shall be used to supplement or
modify  any  of  the  terms  hereof.  Nor  are  there any conditions to the full
effectiveness  of  this  Guaranty.  This Guaranty and each of its provisions may
only  be waived, modified, varied, released, terminated or surrendered, in whole
or  in  part, by a duly authorized written instrument signed by you.  No failure
by you to exercise your rights hereunder shall give rise to any estoppel against
you,  or  excuse  the undersigned from performing hereunder.  Your waiver of any
right to demand performance hereunder shall not be a waiver of any subsequent or
other  right  to  demand  performance  hereunder.

     This  Guaranty  shall bind the undersigned's successors and assigns and the
benefits  thereof  shall  extend to and include your successors and assigns.  In
the  event  of  default  hereunder,  you  may  at any time inspect undersigned's
records,  or  at  your  option,  undersigned  shall  furnish  you with a current
independent  audit  report.

     If  any  provisions  of  this  Guaranty are in conflict with any applicable
statute,  rule or law, then such provisions shall be deemed null and void to the
extent  that  they  may  conflict  therewith, but without invalidating any other
provisions  hereof.


                                                                              36
<PAGE>
     EACH  SIGNATORY  ON  BEHALF  OF  A CORPORATE GUARANTOR WARRANTS THAT HE HAD
AUTHORITY  TO SIGN ON BEHALF OF SUCH CORPORATION AND BY SO SIGNING, TO BIND SAID
GUARANTOR  CORPORATION  HEREUNDER.

     THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL
IN  ALL  RESPECTS BE GOVERENED BY AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PRINCIPLES
OF  SUCH STATE, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE,
REGARDLESS  OF  THE  LOCATION  OF  ANY  COLLATERAL OR THE CUSTOMER OR GUARANTOR.

     IN  WITNESS  WHEREOF,  this  Guaranty  is  executed  the day and year above
written.


                                21ST CENTURY INSURANCE GROUP

                         By:    ___________________________________
                                (Signature)

                         Title: ___________________________________
                                (Officer's Title)


ATTEST:   ___________________________________
          Secretary/Assistant Secretary


                                                                              37
<PAGE>

                              CERTIFIED RESOLUTION




     The  undersigned  hereby  certifies  that  he  is Secretary of 21ST CENTURY
INSURANCE  GROUP,  that  the following resolution was passed at a meeting of the
Board  of  Directors of said corporation held on _________________________, 2002
duly  called,  a  quorum  being present, that said resolution has not since been
revoked  or  amended,  and  that the form of guaranty referred to therein is the
form  shown  attached  hereto:



     "RESOLVED that it is to the benefit of this corporation that (a) it execute
(i)  a  guaranty of the obligations of 21ST CENTURY INSURANCE GROUP ("CUSTOMER")
to  GENERAL  ELECTRIC  CAPITAL  CORPORATION, FOR ITSELF AND AS AGENT FOR CERTAIN
PARTICIPANTS  (collectively,  "GE  CAPITAL"),  and (ii) a security agreement, in
favor  of  GE  Capital,  securing  such  guaranty  (collectively,  the "GUARANTY
DOCUMENTS"),  (b)  the  benefit  to  be  received  by this corporation from such
Guaranty  Documents,  is reasonably worth the obligations thereby guaranteed and
secured,  and  (c)  such  Guaranty Documents shall be substantially in the forms
annexed  to  these  minutes,  and further that the _________________________ and
_________________________ (Title of Officers) of this corporation are authorized
to  execute  such  Guaranty  Documents  on  the  behalf  of  this  corporation."






     WITNESS my hand and the seal of this corporation on this ___________ day of
December,  2002.









                              ___________________________________
          [Seal]                    Secretary


                                                                              38
<PAGE>

              CERTIFICATION AND REPRESENTATION BY SIGNING OFFICERS





     We,  the  undersigned,  _________________________  and
_________________________  being  the  _________________________  and
_________________________ of 21ST CENTURY INSURANCE GROUP, the corporation which
executed  each  of  the  guaranty  and  security  agreement  attached  hereto
(collectively,  the  "GUARANTY DOCUMENTS"), hereby jointly and severally certify
and  represent  to GENERAL ELECTRIC CAPITAL CORPORATION, FOR ITSELF AND AS AGENT
FOR  CERTAIN  PARTICIPANTS,  that  each of the undersigned executed the Guaranty
Documents  for  and  on  behalf of said corporation and that in so executing the
Guaranty  Documents the undersigned were duly authorized to do so in their named
capacity  as  officers  and  by  so  executing  to  hereby  bind  said guarantor
corporation  to  the  terms  of  the  Guaranty  Documents  as therein set forth.








______________________________  (L.S.)  ______________________________ (L.S.)

Date:  _______________________          Date:________________________________






                                                                              39
<PAGE>
                              PLEDGE OF SECURITIES


     This  Pledge  of Securities ("AGREEMENT") is entered into as of 12:00:01 am
PST  this  1st  day  of  January,  2003, by and between General Electric Capital
Corporation  ("GE  CAPITAL")  and  21st  Century Insurance Company ("CUSTOMER").

     WHEREAS,  Customer  and  GE  Capital have entered into or contemporaneously
will  enter  into a lease agreement, security agreement, promissory note, and/or
certain  schedules and related documents and agreements dated as of December 31,
2002  (such  instruments  together  with  all  other  documents  and instruments
executed  in  connection therewith, including but not limited to this Agreement,
are  hereinafter  referred  to  collectively  as  the  "TRANSACTION DOCUMENTS");

     WHEREAS, GE Capital requires that Customer provide, or cause to be provided
to GE Capital, additional collateral to secure the performance of Customer under
the  Transaction  Documents;

     WHEREAS,  to  satisfy the foregoing requirement, Customer proposes pledging
to  GE  Capital,  and  granting  GE  Capital  a  security  interest  in, certain
collateral;  and

     NOW  THEREFORE,  in  consideration  of  the  foregoing,  and other good and
valuable  consideration,  the  parties  agree  as  follow:

As  additional  security  for  Customer's  performance  under  the  Transaction
Documents,  Customer  hereby  pledges  to  GE  Capital  and  grants GE Capital a
security  interest in all of the right, title and interest of Customer in and to
those  certain  bonds  described  on Exhibit B, attached hereto and incorporated
                                     ---------
herein  by this reference, whether certificated or uncertificated, together with
all  interest,  dividends,  and  distributions  thereon,  additions thereto, and
replacements or substitutions therefor, other Financial Assets relating thereto,
and  all  proceeds  from the liquidation, exchange or other disposition thereof,
and  all other proceeds of the foregoing (all of the foregoing being hereinafter
referred  to  collectively  as  the "ACCOUNT ASSETS"), held by BNY Western Trust
Company  ("AGENT")  in  the  name  of  Customer,  in  account  number 000366440.
(Capitalized  terms not otherwise defined herein shall have the meaning ascribed
to  them  in  Article  8  of  the  Uniform  Commercial  Code).

The  security  interest  granted  herein shall attach upon the execution of this
Agreement  by  Customer  as  of  the  time  and  date  first  mentioned  above;
notwithstanding  anything  to  the  contrary  hereinafter, the security interest
granted  herein  and  this Agreement shall, provided there exists no Default (as
defined  below),  terminate  in accordance with Section B. 6 of the Amendment to
Schedule  No. 1, dated as of December 31, 2002, between Customer and GE Capital.
In  connection  with  any such termination, provided there exists no Default (as


                                                                              40
<PAGE>
defined below), GE Capital shall deliver to Customer and Agent a written release
of GE Capital's security interest in the remaining Account Assets as provided in
Section  5  below.

THE  INTERESTS  OF  THE  PARTIES  HERETO  IN THE ACCOUNT ASSETS ARE AND SHALL BE
SUBJECT  TO  THE  FOLLOWING  TERMS  AND  CONDITIONS:

1.     Customer shall execute and cause Agent to execute and deliver directly to
GE  Capital  a  letter  agreement  in the form of Exhibit A hereto (the "CONTROL
                                                  ---------
AGREEMENT").  At  any  time  after  a  breach  or  default  by  Customer  of its
obligations  to  GE  Capital  under  the Transaction Documents (a "DEFAULT"), GE
Capital  may  instruct  Agent to liquidate, at the then-prevailing market price,
any  or all of the Account Assets and pay the proceeds of such liquidation along
with  all  other  Account  Assets  to GE Capital or its order.  Such instruction
shall  be  in  writing  and  signed  by  an  authorized  manager  of GE Capital.

2.     Customer  agrees  that  GE Capital shall have no liability of any kind or
nature  whatsoever  with  respect to any liquidation of the Account Assets other
than  to  account  to  Customer  for  any  surplus  pursuant to Section 6 below.
Customer  agrees  that any liquidation of the Account Assets pursuant to, and in
accordance  with  the  terms  of,  Section 1 above, in bulk or in parcels, shall
constitute  a  commercially reasonable sale.  After Default, upon the request of
GE  Capital,  Customer  shall  take such further action and execute such further
documents  as  GE  Capital  shall  deem necessary to effect a liquidation of the
Account  Assets  and  the  payment  of  the  proceeds  thereof  to  GE  Capital.

3.     CUSTOMER  SHALL HAVE THE RIGHT TO RECEIVE ALL INTEREST AND DIVIDENDS PAID
BY  THE  ISSUER(S)  OF  ANY  ACCOUNT ASSETS UNTIL SUCH TIME AS AGENT RECEIVES GE
CAPITAL'S  INSTRUCTIONS TO LIQUIDATE THE ACCOUNT ASSETS AS PROVIDED HEREIN.  ANY
INTEREST  AND  DIVIDENDS  RECEIVED  BY  AGENT  AFTER AGENT RECEIVES GE CAPITAL'S
INSTRUCTION  TO  LIQUIDATE BUT BEFORE THE ACCOUNT ASSETS ARE LIQUIDATED SHALL BE
PAID  TO  GE  CAPITAL.  IF DURING THE TERM OF THIS AGREEMENT, ANY STOCK SPLIT IS
DECLARED  BY  THE ISSUER OF ANY OF THE ACCOUNT ASSETS, ALL STOCK SUBJECT TO SUCH
SPLIT AND/OR ISSUED IN CONNECTION THEREWITH SHALL BE DEEMED TO BE ACCOUNT ASSETS
PLEDGED  BY  CUSTOMER TO GE CAPITAL UNDER THIS AGREEMENT AND SHALL BE SUBJECT TO
ALL  TERMS  AND  CONDITIONS  OF  THIS  AGREEMENT.

4.     [Intentionally  omitted]

5.     If  GE  Capital  has  not previously instructed Agent to sell the Account
Assets,  then  within  ten  (10)  business  days  after  Customer  has fully and
completely  performed  its  obligations  to  GE  Capital  under  the Transaction
Documents,  GE  Capital shall deliver to Customer and Agent a written release of
GE  Capital's  security interest in the remaining Account Assets, which shall be


                                                                              41
<PAGE>
signed  by  an  authorized  manager of GE Capital, after which the terms of this
Agreement  shall  be  deemed  to  have  been  satisfied.

6.     GE  Capital  shall apply any proceeds of the liquidation pursuant to this
Agreement  of  the  Account  Assets,  first to GE Capital's reasonable costs and
expenses  incurred  as  a  result  of  a  Default,  then  to  Customer's  unpaid
obligations  due  under  the  Transaction  Documents.  Any  surplus  from  such
liquidation  of the Account Assets remaining after all of Customer's obligations
to  GE  Capital  under  the Transaction Documents are satisfied in full shall be
paid  to Customer.  Any deficiency shall be paid by Customer within ten business
days  after  receipt  of  notice from GE Capital to Customer of the existence of
such  deficiency.

7.     WAIVERS  AND  ACKNOWLEDGMENTS.  WITH  RESPECT TO THIS AGREEMENT, CUSTOMER
HEREBY  WAIVES  PRESENTMENT,  DEMAND, PROTEST AND NOTICE OF PRESENTMENT, DEMAND,
PROTEST  AND DEFAULT.  NOTHING IN THIS AGREEMENT SHALL BE CONSTRUED AS REQUIRING
GE  CAPITAL  FIRST  TO  SEEK  OR  PURSUE ANY OTHER REMEDY AGAINST ANY GUARANTOR,
CUSTOMER  OR ANY OTHER PARTY OR FIRST TO FORECLOSE, EXHAUST OR OTHERWISE PROCEED
AGAINST  ANY  EQUIPMENT,  OTHER  COLLATERAL  OR  SECURITY  WHICH MAY BE GIVEN IN
CONNECTION  WITH  THE  TRANSACTION DOCUMENTS OR OTHERWISE.  GE CAPITAL MAY, UPON
ANY  DEFAULT,  OR  AT ANY TIME THEREAFTER, EXERCISE ITS RIGHTS AND REMEDIES WITH
RESPECT  TO THE ACCOUNT ASSETS AND THIS AGREEMENT, WITH OR WITHOUT ANY NOTICE TO
OR  DEMAND  UPON  CUSTOMER,  ANY  GUARANTOR  OR  ANY  OTHER  PERSON.

8.     REPRESENTATIONS  AND  WARRANTIES  OF  CUSTOMER.  Customer  represents,
warrants  and  covenants  to  GE  Capital  that:

     (a)  Customer  is the legal and beneficial owner of the Account Assets, and
     except for the security interest granted to GE Capital herein Customer has,
     and  will  at  all  times  during the term of this Agreement have, good and
     marketable  title  to  the  Account  Assets, free and clear of any security
     interest,  lien,  pledge,  encumbrance,  option,  claim or conditional sale
     contract,  lease  or  other title retention agreement, and except as may be
     otherwise  expressly  permitted by this Agreement or required by applicable
     law  or court order, Customer shall not pledge, borrow against or otherwise
     impair  or  diminish  the value of the Account Assets or take or consent to
     any  action which would impair, diminish or dilute the value of the Account
     Assets  or  attempt  to take any such action and any attempt to do so shall
     constitute  a  material  default  under  this Agreement and the Transaction
     Documents.

     (b)  Upon  execution of this Agreement by the parties hereto, the Agreement
     shall  be  a  legal,  valid  and binding obligation of Customer enforceable
     against  Customer  according  to  its  terms  (subject  only  to the relief
     generally  available  to  creditors under the United States Bankruptcy Code
     and  other  similar  state  legislation.


                                                                              42
<PAGE>
     (c)  Upon  the  execution  and  delivery  of this Agreement by Customer and
     execution  of  the Control Agreement by Customer, GE Capital and Agent, and
     delivery  of  the same to GE Capital, GE Capital's security interest in the
     Account  Assets conferred hereby will be a valid, perfected, first priority
     security  interest  for  the  term  of  this  Agreement.

     (d)  The  execution, delivery and performance by Customer of this Agreement
     will  not  violate  any  provision  of law, any order of any court or other
     agency  of  government,  or  any indenture agreement or other instrument to
     which  Customer  is  a  party  or  by  which Customer, or any of Customer's
     property  is  bound,  or  be  in  conflict  with,  result in a breach of or
     constitute  (with due notice or lapse of time, or both) a default under any
     such indenture, agreement or other instrument, or result in the creation or
     imposition of any lien, charge or encumbrance of any nature whatsoever upon
     the  Account Assets or upon any of Customer's property or assets, except as
     contemplated  by  the  provisions  of this Agreement. No consent, approval,
     authorization,  order,  registration, or qualification of or with any court
     or regulatory authority or other governmental body having jurisdiction over
     Customer,  or  of  or  with  any  issuer  of any of the Account Assets, the
     absence  of  which  would  adversely  affect the legal and valid execution,
     delivery  and  performance by Customer of Customer's obligations under this
     Agreement, is required. There is no litigation, investigation or proceeding
     of  or  before  any  arbitrator  or  governmental  authority pending or, to
     Customer's knowledge, threatened by or against Customer which, if adversely
     determined,  would  have  a  material  adverse  effect  on  the property of
     Customer,  or  the  financial  or  other  condition  of  Customer.

     (e) Customer shall cooperate with GE Capital and shall execute and deliver,
     or  cause  to  be  executed  and delivered, to GE Capital all stock powers,
     proxies,  assignments,  financing  statement,  instruments,  and  other
     documents,  and shall take all further action (all at no cost or expense to
     GE  Capital) from time to time reasonably requested by GE Capital, in order
     to  maintain  a  continuing, first-priority, perfected security interest in
     the  Account  Assets  in  favor  of GE Capital, and to enable GE Capital to
     exercise  and enforce its rights and remedies hereunder with respect to the
     Account  Assets.

     (f)  Customer  has  the right to pledge and grant a security interest in or
     otherwise transfer the Account Assets to GE Capital free of any encumbrance
     or  right  of  third  parties.

     (g)  As  of the date of this Agreement, the Account Assets consist of those
     described  on  Exhibit  B  hereto.
                    ----------

     (h)  The  Account  Assets have not been redeemed in whole or in part by the
     issuer  thereof.

     (i)  There  is  no  pending  redemption  of  the  Account  Assets.


                                                                              43
<PAGE>
     (j)  The  redemption  value  of  the Account Assets as of the maturity date
     indicated  therefor  on the attached Exhibit B, is as described on the face
     of  the  Account  Assets  and  the  Account  Assets  represent  a valid and
     enforceable  obligation  of  the  applicable  issuer  thereof.

9.     A  breach  or  default  by  Customer  of  any  of  its  representations,
warranties,  covenants  or  agreements  under  this  Agreement shall be deemed a
Default.  Without  limiting  the  foregoing, GE Capital's receipt of notice from
Agent  that  Agent  is  terminating  the  Control  Agreement  shall constitute a
Default.  In addition to any other rights described herein, upon any Default, GE
Capital  may  in  its  sole discretion, without notice to or demand on Customer,
sell  or  redeem  any  of  the Account Assets pledged hereunder, at such asset's
applicable maturity date, or sooner if same is permitted by the Account Asset or
by agreement with the applicable issuer, and may (a) hold such Account Assets as
cash  security  without  obligation for interest thereon (and may commingle same
with  its  other funds) for performance of obligations of Customer to GE Capital
under  the  Transaction  Documents;  or  (b)  apply  such Accounts Assets to the
balance  owed  under  the  Transaction Documents in any manner permitted by such
documents  or  instruments  and applicable law. The enforcement by GE Capital of
any  rights and remedies hereunder shall not be deemed exclusive and shall be in
addition  to  and  not  in lieu of any other remedies available to GE Capital at
law,  in  equity  or pursuant to the Transaction Documents or any other contract
between  GE  Capital  and  Customer.

10.     Notices,  demands,  written  communications  and  payments  required  or
permitted  to  be  given  hereunder  shall be conclusively deemed to be properly
given  at  time  of  delivery  if  delivered (i) personally, (ii) via commercial
delivery  service capable of providing documentary evidence of delivery or (iii)
via  United  States certified mail, return receipt requested, properly addressed
and  postage  prepaid,  to  the  following  addresses:

If to GE Capital:                         If to Customer:
GENERAL ELECTRIC CAPITAL CORPORATION      21st Century Insurance Company
2400 East Katella Avenue, Suite 800       6301 Owensmouth Avenue
Anaheim, CA 92806                         Woodland Hills, CA 91367
                                          Attention: General Counsel

11.     THIS  AGREEMENT SHALL BE CONSTRUED AND ENFORCED ACCORDING TO THE LAWS OF
THE  STATE  OF  NEW  YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAWS PROVISIONS.

12.     The terms of this Agreement may not be changed, amended or waived except
by  a writing signed by the GE Capital, Customer and, if such change affects the
rights  or  obligations of Agent, by the Agent.  This Agreement, the


                                                                              44
<PAGE>
Transaction  Documents  and  the  Control Agreement contain the entire agreement
among  the  parties  relating  to  the  subject  matter  thereof,  and  no prior
agreements, understandings or offers shall be of any force or effect whatsoever.

13.     CUSTOMER AND GE CAPITAL EACH HEREBY UNCONDITIONALLY WAIVES ITS RIGHTS TO
A  JURY  TRIAL  OF  ANY  CLAIM  OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF,
DIRECTLY  OR  INDIRECTLY,  THIS  AGREEMENT,  ANY  OF  THE RELATED DOCUMENTS, ANY
DEALINGS  BETWEEN  CUSTOMER  AND GE CAPITAL OR RELATING TO THE SUBJECT MATTER OF
THIS  TRANSACTION  OR  ANY RELATED TRANSACTIONS, AND/OR THE RELATIONSHIP THAT IS
BEING  ESTABLISHED BETWEEN CUSTOMER AND GE CAPITAL.  THE SCOPE OF THIS WAIVER IS
INTENDED TO BE ALL ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY
COURT  (INCLUDING,  WITHOUT  LIMITATION, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF
DUTY  CLAIMS,  AND  ALL  OTHER COMMON LAW AND STATUTORY CLAIMS).  THIS WAIVER IS
IRREVOCABLE MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND
THE  WAIVER  SHALL  APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS  TO  THIS  AGREEMENT,  ANY  RELATED  DOCUMENTS,  OR  TO  ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THIS TRANSACTION OR ANY RELATED TRANSACTION.
IN  THE EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO
A  TRIAL  BY  THE  COURT.

CUSTOMER:                                         GE CAPITAL
21st Century Insurance Company
General Electric Capital Corporation

By:_____________________________________
     By:_____________________________________
Title:__________________________________
     Title:__________________________________


                                                                              45
<PAGE>

                          EXHIBIT A TO PLEDGE OF ACCOUNT
                         -------------------------------
                    [ATTACH COPY OF BNY COLLATERAL AGREEMENT]
                    -----------------------------------------
















                                                                              46
<PAGE>

                          EXHIBIT B TO PLEDGE AGREEMENT
                          -----------------------------

                         [Description of Account Assets]















                                                                              47
<PAGE>
                              COLLATERAL AGREEMENT

     AGREEMENT,  entered  into  as  of  12:00:01 am PST this 1st day of January,
2003, among 21st Century Insurance Company ("Pledgor"), General Electric Capital
Corporation  ("Secured  Party)  and  BNY  Western  Trust  Company ("Custodian").

     WHEREAS, Secured Party and Pledgor have entered into a Pledge of Securities
("Pledge  Agreement")  pursuant to which Pledgor has agreed to pledge Securities
(as  defined below) to Secured Party to secure Pledgor's obligations pursuant to
the  Pledge  Agreement;  and

     WHEREAS,  Secured  Party  and  Pledgor  have  requested  Custodian  to hold
Securities  and  to  perform  certain  other  functions  as more fully described
herein;  and

     WHEREAS, Custodian has agreed to act on behalf of Secured Party and Pledgor
as  custodian of Securities delivered to Custodian by Pledgor for the benefit of
the  Secured  Party;

     NOW THEREFORE, in consideration of the mutual promises set forth hereafter,
the  parties  hereto  agree  as  follows:

                                    ARTICLE I
                                   DEFINITIONS

Whenever used in this Agreement, the following words shall have the meanings set
forth  below:

     1.   "ACCOUNT"  shall  mean  a custodial account established and maintained
pursuant to this Agreement in which Securities shall be deposited by Pledgor and
pledged  to  Secured  Party  and  any  demand  deposit  account  established and
maintained  in  connection  therewith.

     2.   "AUTHORIZED  PERSON" shall be any person, whether or not an officer or
employee  of  Secured  Party  or  Pledgor,  duly  authorized by Secured Party or
Pledgor,  respectively,  to give Written Instructions on behalf of Secured Party
or  Pledgor,  respectively,  such  persons  to be designated in a Certificate of
Authorized  Persons  which  contains  a  specimen  signature  of  such  person.

     3.  "BOOK-ENTRY  SYSTEM"  shall  mean  the  Treasury/Reserve Automated Debt
Entry  System  maintained  at The Federal Reserve Bank of New York ("FRBNY") for
receiving  and  delivering  securities,  its  successors  and  nominees.

     4.   "BNY  AFFILIATE"  shall  mean  any office, branch or subsidiary of The
Bank  of  New  York  Company,  Inc.

     5.   "CERTIFICATE"  shall  mean  any notice, instruction, schedule or other
instrument  in  writing, authorized or required by this Agreement to be given to
Custodian,  which  is actually received by Custodian and signed by an Authorized
Person  or a person reasonably believed by Custodian to be an Authorized Person.

     6.   "DEPOSITORY"  shall  mean  the  Depository Trust Company and any other
clearing corporation within the meaning of Section 8-102 of the UCC or otherwise
authorized  to  act  as  a  securities  depository  or  clearing  agency.

     7.   "ORAL  INSTRUCTIONS"  shall  mean  instructions  received  verbally by
Custodian.

     8.   "SECURITIES"  shall mean those certain securities described on Annex A
hereto,  incorporated  herein,  whether  held  in  the Book-Entry System or at a
Depository,  common  stock  and  other  equity securities, bonds, debentures and
other  debt  securities,  notes,  mortgages  or  other  obligations,  and  any
instruments representing rights to receive, purchase, or subscribe for the same,
or  representing  any  other  rights  or  interests  therein.

     9.   "UCC" shall mean the Uniform Commercial Code of the State of New York.

     10.  "WRITTEN  INSTRUCTIONS"  shall  mean  written  communications actually
received  by  Custodian  by  S.W.I.F.T.,  tested  telex,  letter,  facsimile
transmission,  or other method or system specified by Custodian as available for
use  in  connection  with  the  services  hereunder.

                                   ARTICLE II


<PAGE>
                                       -2-

                            APPOINTMENT OF CUSTODIAN;
                                SECURITY INTEREST

     1.   Secured Party and Pledgor hereby appoint Custodian as Custodian of all
Securities  and  cash at any time delivered to Custodian during the term of this
Agreement,  and authorize Custodian to hold Securities in registered form in its
name  or the name of its nominees. Custodian hereby accepts such appointment and
agrees to establish and maintain the Account and appropriate records identifying
the  Securities  in  the  Account  as  pledged  by  Pledgor  to  Secured  Party.

     2.   Secured Party and Pledgor agree that it is intended that Custodian act
as  a  "securities intermediary" as such term is defined in the UCC with respect
to  Securities  pledged  hereunder.  In  addition,  the  parties intend that all
Securities in the Account shall be treated as "financial assets" as such term is
defined  in  the  UCC.

     3.   Custodian shall have no duty at any time to determine the market value
of  any  Securities  in  the  Account  or  whether  such  Securities  constitute
collateral  acceptable  to  Secured  Party  under  the  Pledge  Agreement.

ARTICLE  III  CUSTODY  OF  SECURITIES

     1.   Secured  Party  and  Pledgor hereby authorize Custodian to utilize the
Book-Entry System and Depositories to the extent possible in connection with its
performance  hereunder.  Where Securities eligible for deposit in the Book-Entry
System  or Depositories are transferred to the Account, Custodian shall identify
on  its  records as belonging to Pledgor and pledged to Secured Party a quantity
of  Securities  in a fungible bulk of securities shown on Custodian's account at
the  Book-Entry  System  or  the  appropriate  Depository.   Securities and cash
deposited  in  the  Book-Entry  System  or  a  Depository will be represented in
accounts  which  include  only  assets  held  by  Custodian  for  its customers.

     2.   The  parties  hereto  acknowledge and agree that Pledgor shall have no
authority  to  substitute  other Securities for any Securities which are held in
the  Account.

     3.   Pledgor  hereby  authorizes  Custodian  to comply with all entitlement
orders  (as  defined in the UCC) originated by Secured Party with respect to the
Securities  in  the Account without further consent or direction from Pledgor or
any other party. Custodian will not comply with any entitlement order of Pledgor
concerning  the  Securities  without  Secured  Party's  prior  written  consent.

     4.   Custodian  shall  furnish  Secured  Party  and  Pledgor with a monthly
summary  of  all  transactions  with  respect  to the Securities in the Account.
Secured  Party  and  Pledgor may each elect to receive advices, confirmations or
statements  electronically through the Internet to an email address specified by
it  for such purpose.  By electing to use the Internet for this purpose, Secured
Party  and  Pledgor  each acknowledges that such transmissions are not encrypted
and  therefore  are  insecure.   Secured  Party  and  Pledgor  each  further
acknowledges  that  there  are other risks inherent in communicating through the
Internet  such  as  the  possibility  of  virus contamination and disruptions in
service, and agrees that Custodian shall not be responsible for any loss, damage
or  expense  suffered  or incurred by Secured Party or Pledgor, respectively, or
any  person  claiming by or through Secured Party or Pledgor, respectively, as a
result  of  the  use  of  such  methods.

     5.   With  respect  to all Securities held in the Account, Custodian shall,
unless  otherwise  instructed  to  the  contrary:

     (a)  Receive  all  income  and  other  distributions  on the Securities and
advise  Pledgor as promptly as practicable of any such amounts due but not paid.
Until  such  time  that Custodian shall receive a Certificate from Secured Party
certifying  that  Pledgor  has  defaulted  in  its  obligations to Secured Party
pursuant  to  the Pledge Agreement, Custodian shall credit to Pledgor the income
and  payments other than principal payments received by Custodian. After receipt
of  such  Certificate  from Secured Party, Custodian shall credit to the Account
the  income  and  all  payments  received  by  Custodian;

     (b)  Present  for  payment  and receive the amount paid upon all Securities
which  may  mature  and credit such amounts to the Account and advise Pledgor as
promptly  as  practicable  of  any  such  amounts  due  but  not  paid;

     (c)  Forward  to Pledgor copies of all information or documents that it may
receive  from  an  issuer  of Securities which, in the opinion of Custodian, are
intended  for  the  beneficial  owner  of  Securities;

     (d)  Execute,  as  agent,  any  certificates  of  ownership,  affidavits,
declarations or other certificates under any tax laws now or hereafter in effect
in  connection  with  the  collection  of  bond  and  note  coupons;


<PAGE>
                                       -3-

     (e)  Hold  directly,  or through the Book-Entry System or a Depository, all
rights  and  similar  Securities  issued  with respect to any Securities held by
Custodian  hereunder;  and

     (f)  Endorse for collection checks, drafts or other negotiable instruments.

     6.   Upon receipt of Written Instructions from the Secured Party, Custodian
will  exchange  Securities  held  hereunder  for other Securities and/or cash in
connection  with  any  conversion  privilege,  reorganization, recapitalization,
redemption  in  kind,  consolidation,  tender  offer  or  exchange offer, or any
exercise  or  subscription,  purchase  or  other  similar  rights represented by
Securities.

     7.   Custodian  is  not  at  any  time  under  any  duty  to  supervise the
investment  of,  or to advise or make any recommendation for the purchase, sale,
retention  or  disposition  of  Securities.

     8.   In  the event that Custodian receives a Certificate from Secured Party
certifying  that  Pledgor  has  defaulted  in  its  obligations to Secured Party
pursuant to the Pledge Agreement, Custodian shall be authorized, without further
inquiry, to act upon Written Instructions from Secured Party with respect to the
disposition  of  all  or  any  part  of  the  Securities.

     9.   Custodian  hereby  represents  that  as  of the effective date of this
Agreement,  Custodian  has  received  no other notice indicating that a security
interest  has  been granted in the Securities (or any part thereof) to any other
party, and that Custodian will use reasonable efforts to notify Secured Party of
Custodian's  receipt  of  such  notice  as  soon  as  practicable.

     10.  Custodian  hereby  represents  that  the  security interest granted to
Secured  Party  in  the  Securities  shall be superior to any security interest,
lien,  right  of  set-off,  or  other  interest  which  Custodian now has or may
hereafter  have  in  such  Securities.

     11.  Custodian  hereby confirms that Custodian will not extend credit to or
make  any  margin  or  other  loans to Pledgor secured by the Securities, or any
portion  thereof.

                                   ARTICLE IV
                              CONCERNING CUSTODIAN

     1.   (a)  Except  as  otherwise  expressly provided herein, Custodian shall
not be liable for any costs, expenses, damages, liabilities or claims, including
attorneys'  and  accountants'  fees  (collectively,  "Losses")  incurred  by  or
asserted  against  Pledgor  or Secured Party, except those Losses arising out of
the  negligence  or  willful  misconduct  of  Custodian. Custodian shall have no
liability  whatsoever for the action or inaction of the Book-Entry System or any
Depository.  In  no  event  shall  Custodian  be liable for special, indirect or
consequential  damages,  or  lost  profits  or  loss  of  business,  arising  in
connection  with  this  Agreement.

     (b)  Custodian  may  enter into subcontracts, agreements and understandings
with  any  BNY  Affiliate  whenever and on such terms and conditions as it deems
necessary or appropriate to perform its services hereunder. No such subcontract,
agreement  or  understanding  shall  discharge  Custodian  from  its obligations
hereunder.

     (c)  Secured  Party  and Pledgor agree, jointly and severally, to indemnify
Custodian  and  hold  Custodian  harmless  from  and  against any and all Losses
sustained  or  incurred  by  or  asserted against Custodian by reason of or as a
result  of  any  action  or  inaction, or arising out of Custodian's performance
hereunder,  including  reasonable  fees  and  expenses  of  counsel  incurred by
Custodian  in  a  successful  defense  of  claims  by  Pledgor or Secured Party;
provided, that Pledgor and Secured Party shall not indemnify Custodian for those
Losses  arising  out  of  Custodian's  negligence  or willful misconduct.   This
indemnity  shall  be a continuing obligation of Pledgor and Secured Party, their
respective  successors  and  assigns,  notwithstanding  the  termination of this
Agreement.

     2.   Without  limiting  the generality of the foregoing, Custodian shall be
under  no  obligation  to  inquire into, and shall not be liable for, any Losses
incurred  by  Pledgor,  Secured  Party  or  any  other person as a result of the
receipt or acceptance of fraudulent, forged or invalid Securities, or Securities
which  are  otherwise not freely transferable or deliverable without encumbrance
in  any  relevant  market,

     3.   Custodian  may, with respect to questions of law, obtain the advice of
counsel, at the expense of Pledgor, and shall be fully protected with respect to
anything  done  or  omitted  by it in good faith in conformity with such advice.


<PAGE>
                                       -4-

     4.   Custodian  shall  be under no obligation to take action to collect any
amount  payable  on  Securities  in  default, or if payment is refused after due
demand  and  presentment.

     5.   Pledgor  agrees  to  pay to Custodian the fees set forth in Schedule I
attached  hereto  or  as  may  be  agreed  upon from time to time. Pledgor shall
reimburse  Custodian  for all costs associated with the conversion of Securities
hereunder  and  the  transfer  of Securities and records kept in connection with
this  Agreement.   Pledgor  shall  also  reimburse  Custodian  for out-of-pocket
expenses  which  are  a  normal  incident  of  the  services provided hereunder.

     6.   Custodian  shall  be  entitled to rely upon any Certificate or Written
Instruction  actually received by Custodian and reasonably believed by Custodian
to  be  duly  authorized  and  delivered.

     7.   Upon  reasonable  request  and  provided  Custodian  shall  suffer  no
significant  disruption of its normal activities, Secured Party or Pledgor shall
have  access  to  Custodian's  books  and records relating to the Account during
Custodian's  normal  business hours. Upon reasonable request, copies of any such
books  and records shall be provided to Secured Party or Pledgor at its expense.

     8.   It  is  understood  that  Custodian  is  authorized  to  supply  any
information  regarding  the Account which is required by any law or governmental
regulation  now  or  hereafter  in  effect.

     9.   Custodian  shall not be responsible or liable for any failure or delay
in  the  performance  of  its obligations under this Agreement arising out of or
caused,  directly or indirectly, by circumstances beyond its reasonable control,
including  without  limitation,  acts  of God; earthquakes; fires; floods; wars;
civil  or military disturbances; sabotage; epidemics; riots; interruptions, loss
or  malfunctions of utilities, computer (hardware or software) or communications
service;  accidents;  labor  disputes;  acts  of  civil  or  military authority;
governmental  actions;  inability  to  obtain  labor,  material,  equipment  or
transportation.

     10.  Custodian  shall  have no duties or responsibilities whatsoever except
such  duties  and  responsibilities  as  are  specifically  set  forth  in  this
Agreement,  and  no covenant or obligation shall be implied against Custodian in
connection  with  this  Agreement.

                                    ARTICLE V
                            DISTRIBUTION; TERMINATION

     1.   Except  as  otherwise  provided herein, including, without limitation,
the provisions of Article III, Paragraphs 3 and 8, Custodian shall transfer from
the Account and distribute the Securities and cash held in the Account only upon
receipt  of  Written  Instructions to that effect from each of Secured Party and
Pledgor.  Such  Written Instructions shall specify the Securities and cash to be
distributed  and  the  delivery  instructions  in  connection  therewith.

     2.   Either  Custodian  or  Secured  Party  may terminate this Agreement by
giving  to  the  other  parties  a notice in writing specifying the date of such
termination,  which  shall b   not I-,-, than ninety (90) days after the date of
giving  of  such  notice.   Such  notice  shall  not affect or terminate Secured
Party's  security  interest  in the Securities. Upon termination hereof, Pledgor
shall  pay  to  Custodian such compensation as may be due to Custodian as of the
date  of  such  termination  and  Custodian shall follow such reasonable Written
Instructions  of Secured Party concerning the transfer of custody of Securities,
cash,  records  and other items. Upon the date set forth in a termination notice
this  Agreement  shall  terminate  and  except  as otherwise provided herein all
obligations  of  the  parties  to  each  other  hereunder  shall  cease.

                                   ARTICLE VI
                                  MISCELLANEOUS

     1.   Secured  Party  and  Pledgor  agree  to  furnish  to  Custodian  a new
Certificate of Authorized Persons in the event of any change in the then present
Authorized Persons.   Until such new Certificate is received, Custodian shall be
fully  protected  in acting upon Written Instructions of such present Authorized
Persons.

     2.   Any  notice  or other instrument in writing, authorized or required by
this  Agreement  to  be  given  to  Custodian,  shall  be  sufficiently given if
addressed to Custodian and received by it at its offices at: Los Angeles Office:
700  South  Flower  Street, Suite 200, Los Angeles, California 90017-4104;   San
Francisco  Office:  550  Kearny St., Suite 600, San Francisco, California 94108;
Seattle  Office:  Two  Union  Square,  601  Union  Street,  Suite  520, Seattle,
Washington 98101-2321, or at such other place as Custodian may from time to time
designate  in  writing.


<PAGE>
                                       -5-

     3.   Any  notice  or other instrument in writing, authorized or required by
this  Agreement  to  be  given  to  Secured Party shall be sufficiently given if
addressed  to  Secured  Party  and  received  by  it  at  its  offices  at
________________________________________________________________________,  or at
such  other  place  as Secured Party may from time to tune designate in writing.

     4.   Any  notice  or other instrument in writing, authorized or required by
this  Agreement  to be given to Pledgor shall be sufficiently given if addressed
to  Pledgor  and  received  by  it  at  its  offices  at
________________________________________________________________________,  or at
such  other  place  as  Pledgor  may  from  time  to  time designate in writing.

     5.   Each and every right granted to Custodian hereunder or under any other
document  delivered hereunder or in connection herewith, or allowed it by law or
equity,  shall  be cumulative and may be exercised from time to time. No failure
on the part of Custodian to exercise, and no delay in exercising, any right will
operate  as  a  waiver  thereof,  nor  will  any  single  or partial exercise by
Custodian  of  any  right  preclude  any other or future exercise thereof or the
exercise  of  any  other  right.

     6.   In  case  any provision in or obligation under this Agreement shall be
invalid,  illegal  or  unenforceable in any jurisdiction, the validity, legality
and  enforceability of the remaining provisions shall not in any way be affected
thereby.   This Agreement may not be amended or modified in any manner except by
a  written  agreement  executed  by  the  parties hereto.   This Agreement shall
extend  to  and  shall  be binding upon the parties hereto, and their respective
successors  and  assigns;  provided,  however,  that this Agreement shall not be
assignable  by  any  party  without  the  written  consent of the other parties.

     7.   This  Agreement  shall be construed in accordance with the substantive
laws  of the State of California, without regard to conflicts of laws principles
thereof.  Pledgor,  Secured  Party  and  Custodian  hereby  consent  to  the
jurisdiction  of  a  state or federal court situated in California in connection
with  any  dispute arising hereunder.  Pledgor, Secured Party and Custodian each
hereby  irrevocably  waives,  to the fullest extent permitted by applicable law,
any  objection  which it may now or hereafter have to the laying of venue of any
such  proceeding  brought  in  such  a  court and any claim that such proceeding
brought  in  such  a  court  has been brought in an inconvenient forum. Pledgor,
Secured Party and Custodian each hereby irrevocably waives any and all rights to
trial  by  jury  in  any  legal  proceeding  arising  out of or relating to this
Agreement.

     8.   In  performing  hereunder,  Custodian  is  acting  solely on behalf of
Secured  Party  and  Pledgor and no contractual or service relationship shall be
deemed  to  be  established  hereby  between  Custodian  and  any  other person.

     9.   This  Agreement may be executed in any number of counterparts, each of
which  shall be deemed to be an original, but such counterparts shall, together,
constitute  only  one  instrument.


<PAGE>
                                       -6-

     IN  WITNESS  WHEREOF, Secured Party, Pledgor and Custodian have caused this
Agreement  to  be  executed  by  their  respective  officers,  thereunto  duly
authorized,  as  of  the  day  and  year  first  above  written.

                         21ST CENTURY INSURANCE COMPANY


                         By:
                            ---------------------------------------
                         Title:


                         GENERAL ELECTRIC CAPITAL CORPORATION


                         By: /s/ Brett B. Haring
                            ---------------------------------------
                         Title:


                         BNY WESTERN TRUST COMPANY


                         By:
                            ---------------------------------------
                         Title:


<PAGE>
<TABLE>
<CAPTION>
   Nominal                                                              Paydown
Interest Rate   Maturity Date  Market Value - Base   Cost - Base        Quantity      Quantity
<S>             <C>            <C>                  <C>            <C>              <C>
5.0000%              1-Dec-14         1,072,570.00   1,026,540.00     1,000,000.00  1,000,000.00
5.2500%              1-Dec-17         2,136,440.00   2,087,830.00     2,000.000.00  2,000,000.00
5.4500%              1-Jan-03         1,020,600.00   1,018,180.00     1,000,000.00  1,000,000.00
5.0000%              1-Aug-13         1,089,850.00   1,096,620.00     1,000,000.00  1,000,000.00
5.5000%              1-Oct-16         1,088,870.00   1,089,900.00     1,000,000.00  1,000,000.00
5.3750%              1-Mar-15         1,090,900.00   1,049,530.00     1,000.000.00  1,000,000.00
5.0000%              1-Nov-17         2,089,980.00   1,999,612.00     2,000,000.00  2,000,000.00
5.2500%              1-Jul-16         1,113,850.00   1,068,680.00     1,000,000.00  1,000,000.00
5.5000%             15-Jun-17         1,091,330.00   1,049,420.00     1,000.000.00  1,000,000.00
5.6250%              1-Dec-16         1,102,000.00   1,112,090.00     1,000,000.00  1,000,000.00
5.6250%              1-Dec-15         1,099,760.00  1.061,1 30.00     1,000,000.00  1,000,000.00
5.0000%              1-Aug-17         1,047,110.00   1,024,860.00     1,000,000.00  1,000,000.00
5.3750%              1-Oct-18         1,082,570.00   1,030,440.00     1,000,000.00  1,000,000.00
5.0000%              1-Deo-15         1,045,780.00   1,018,526.66     1,000,000.00  1,000,000.00
5.2500%             15-May-16         1,082,090.00   1,019,530.00     1,000,000.00  1,000,000.00
5.0000%              1-Jul-17         1,052,130.00   1,026,310.00     1,000.000.00  1,000,000.00
5.0000%              1-Jun-17         1,051,400.00   1,002,195.00     1,000.000.00  1.000.000.00
5.0000%              1-Jun-18         1,044,180.00   1,010,960.00     1,000,000.00  1,000,000.00
5.0000%              1-Aug-17         2,100,080.00   2.003,750.00     2,000,000.00  2,000,000.00
5.3750%              1-May-17         2,166,720.00   2,162,190.00     2,000,000.00  2,000,000.00
5.3500%              1-Mar-13         1,088,160.00   1,000,000.00     1,000,000.00  1,000,000.00
5.4000%              1-Mar-14         1,085,550.00     999,750.00     1,000.000.00  1,000,000.00
5.2500%              1-Dec-IO         1,116,070.00   1,071,640.00     1,000,000.00  1,000,000.00
5.2500%              1-Mar-08         1,108,960.00   1,057,370.00     1,000,000.00  1,000,000.00
5.1250%             15-May-12         1,097,790.00   1,051,800.00     1,000.000.00  1,000,000.00
5.3750%              1-Jul-15         1,129.920.00   1,114,860.00     1,000,000.00  1,000,000,00
5.0000%              1-Oct-16         1,054,580.00     997,250.00     1,000,000.00  1,000,000.00
5.2500%              1-May-15         1,087,240.00   1,039,030.00     1,000,000.00  1,000,000.00
5.1250%              1-Oct-15         2,145,500.00   2,067,760.00     2,000,000.00  2,000,000.00
5.1250%              1-Oct-16         2,133,360.00   2,057,280.00     2,000,000,00  2,000,000.00
5.2500%              1-Feb-17         2,187,840.00   2,109,960.00     2,000,000,00  2,000,000.00
5.0000%              1-Nov-18         1,047,860.00   1,000,770.00     1,000,000.00  1,000,000.00
5.5000%              1-Dec-13         1,048,660.00   1,032,360.00     1,000,000.00  1,000,000.00


<PAGE>
  Nominal                                                               Paydown
Interest Rate   Maturity Date  Market Value - Base    Cost - Base       Quantity       Quantity

5.0000%              1-Jul-07         1,104,380.00   1,052,650.00     1,000,000.00  1,000,000.00
5.2500%              1-Jun-13         1,076,720.00   1,006,490.00     1,000,000.00  1,000,000.00
5.2500%             15-Jul-15         2,205,520.00   1,104,740.00     2,000,000.00  2,000,000.00
5.1250%              1-Dec-16         1,590,015.00   1,544,250.00     1,500,000.00  1,500,000.00
5.0000%              1-Feb-17         1,053,260.00   1,027,960.00     1,000,000.00  1,000,000.00
5.2500%              1-May-15         4,223,800.00   4,116,760.00     4,000,000.00  4,000,000.00
5.1250%             15-May-14         1,056,050.00   1,023,850.00     1,000,000.00  1,000,000.00
5.0000%              1-May-16         1,048,550.00   1,022,520.00     1,000,000.00  1,000,000.00
5.1250%              1-May-16         2,110,940.00   2,048,640.00     2,000,000.00  2,000,000.00
5.2500%              1-Sep-11         1,125,200.00   1,046,680.00     1,000,000.00  1,000,000.00
5.0000%              1-Jul-11         1,068,200.00   1,020,010.00     1,000,000.00  1,000,000.00
5.0000%             15-Jun-18         2,079,620.00   2,026,500.00     2,000,000.00  2,000,000.00
7.1000%              1-Mar-04         1,067,190.00   1,078,670.00     1,000,000.00  1,000,000.00
5.1250%              1-Oct-13         1,103,040.00   1,067,340.00     1,000,000.00  1,000,000.00
5.0000%              1-Oct-15         2,094,340.00   2,018,980.00     2,000,000.00  2,000,000.00
5.0000%              1-Oct-14         2,108,820.00   2,029,860.00     2,000,000.00  2,000,000.00
5.2000%              1-Dec-15         1,051,020.00   1,014,050.00     1,000,000.00  1,000,000.00


  Nominal
Interest Rate          Asset Long Description - 1           CUSIP
<S>             <C>                                       <C>
5.0000%         PITTSBURGH PA WTR & SWR AUTH WTR & SWR     725304LC1
5.2500%         PENNSYLVANIA ST TPK COMMN OIL FRANCHISE    709221CC7
5.4500%         SEATTLE WASH MUNICIPALITY MET SEATTLE      812659T26
5.0000%         LIVERMORE-AMADOR VY WTR MGMT AGY CALIF     538152BE8
5.5000%         SOUTH CAROLINA TRANSN INFRASTRUCTURE BK    837152BM8
5.3750%         WESTERN CAROLINA REGL SWR AUTH S C SEW     957886CQ5
5.0000%         CALLEGUAS-LAS VIRGENES CALIF PUB FING      131233BJ6
5.2500%         PIMA CNTY ARIZ MET DOMESTIC WTR IMPT       72178HCC9
5.5000%         WASHINGTON CNTY ORE SCH DIST NO 015        938361HL9
5.6250%         PIERCE CNTY WASH SCH DIST NO 403 BETHEL    720611MS8
5.6250%         PIERCE CNTY WASH SCH DIST NO 403 BETHEL    720611MR0
5.0000%         KENTUCKY ST PPTY & BLDGS COMMN REVS        49151EAR4
5.3750%         HILLSBOROUGH CNTY FLA SCH DIST SALES TAX   432337BJ1
5.0000%         WHATCOM CNTY WASH SCH DIST NO 501          962506LY5
5.2500%         SANTA CLARA CNTY CALIF FING AUTH LEASE     801577CY1
5.0000%         MARICOPA CNTY ARIZ SCH DIST NO 006         567031NK1
5.0000%         SANTA CLARA VY CALIF TRANSN AUTH SALES     80168NAR0
5.0000%         SANTA CLARA VY CALIF TRANSN AUTH SALES     80168NAS8
5.0000%         SAN JOSE CALIF UNI SCH DIST SANTA CLARA    798186RC8
5.3750%         CALIFORNIA ST DEPT WTR RES PWR SUPPLY      13066YED7
5.3500%         PROVO UTAH                                 744142FH8
5.4000%         PROVO UTAH                                 744142FJ4
5.2500%         YAKIMA CNTY WASH SCH DIST NO 7 YAKIMA      984368KP4
5.2500%         PROVO UTAH                                 744142FC9
5.1250%         SAN DIEGO CALIF PUB FAGS FINQ AUTH SWR     79730ADM7
5.3750%         ELSINORE VALLEY CALIF MUN WTR DIST CTFS    290319CW0
5.0000%         UNIVERSITY ALA UNIV REVS                   914031CH0
5.2500%         WISCONSIN ST                               977056V23
5.1250%         WASHINGTON CNTY ORE CLEAN WTR SVCS SEW     938240AP3
5.1250%         WASHINGTON CNTY ORE CLEAN WTR SVCS SEW     938240AQ1
5.2500%         CENTRAL PUGET SOUND WASH REGL TRAN AUTH    155048AX9
5.0000%         PALOS VERDES PENINSULA CALIF UNI SCH       697634TQ6
5.5000%         PALM BEACH CNTY FLA                        696497LP9


<PAGE>
  Nominal
Interest Rate          Asset Long Description - 1         CUSIP

5.0000%         UTAH ST                                    917542HS4
5.2500%         WASATCH CNTY UTAH SCH DIST                 936784DS3
5.2500%         RICHMOND VA                                76541VBQ9
5.1250%         CALIFORNIA ST DEPT WTR RES CENT VY PROJ    13066KJM2
5.0000%         CHARLESTON CNTY S C SCH DIST               160075QB6
5.2500%         CALIFRONIA ST DEPT WTR RES PWR SUPPLY      13066YCF4
5.1250%         VIRGINIA ST TRASN BRD TRANSN CONTRACT      928184HA1
5.0000%         SAN DIEGO CNTY CALIF WTR AUTH WTR REV      797415DW3
5.1250%         SAN DIEGO CNTY CALIF WTR AUTH WTR REV      797415EN2
5.2500%         MILWAUKEE WIS                              602364Z61
5.0000%         MARICOPA CNTY ARIZ UNI SCH DIST NO 097     567438LN4
5.0000%         NAPA CNTY CALIF FLOOD PROTN & WATERSHED    63035LAQ3
7.1000%         TRAVIS CNTY TEX                            89438VHR0
5.1250%         PRINCE GEORGES CNTY MD                      74170KA3
5.0000%         DALLAS TEX WTRWKS & SWR SYS REV            235416PE8
5.0000%         DALLAS TEX WTRWKS & SWR SYS REV            235416PD0
5.2000%         KING CNTY WASH                             494748W69
</TABLE>


<PAGE>
                        EXHIBIT A TO COLLATERAL SCHEDULE


              EQUIPMENT DESCRIPTION
        (AS FURTHER DESCRIBED IN ANNEX 1)      APPRAISED VALUE
     ----------------------------------------  ---------------

     LEGACY  SOFTWARE  GROUPS

     Billings  and  Claims  System  Software
     (BUCS)                                    $ 9,900,000.00

     Auto  Marketing  Software  System
     (CARS)                                    $11,800,000.00
     Underwriting                              $21,200,000.00
     Claims                                    $35,400,000.00
     Commissions                               $   600,000.00
     Vendor                                    $ 3,800,000.00
     Bank  Reconciliation                      $ 2,700,000.00
                                               --------------
                                               $85,400,000.00

          CUSTOMER  RELATIONSHIP
        MANAGEMENT  SOFTWARE  PROJECTS
               (CRM)

     Legacy  Replacement  System               $   292,967.00
                                               --------------
                                               $   292,967.00
                                               --------------

     Total  appraised  items                   $85,692,967.00



     Leasehold  Improvements,  at  net  book
     Value,  equal  to  agreed  fair  value    $ 2,566,360.00


                        Grand  Total           $88,259,327.00
                                               ==============


ASSETS  LOCATED  AT: 6301 OWENSMOUTH AVENUE, WOODLAND HILLS, LOS ANGELES COUNTY,
CA  91367


<PAGE>
                Annex 1 to Exhibit A to Collateral Schedule No. 1

SOFTWARE  SYSTEM  DESCRIPTIONS

BILLING  AND  CLAIMS  (BUCS)

BUCS  is a legacy system handling all aspects of customer billing for California
and  Arizona.  The  billing  functions  include the processing of: Statements of
Account,  Billing  Notices,  Cancellation  Letters,  Return  Premium Checks, and
Installment  Notices. The main billing file contains all the billing information
history  for  that  policy/module  (1  term). The Coverage History file contains
information that can be combined with data from the master policy to display the
written  premium  amounts  for  each  vehicle  by  coverage,  create  date,  and
transaction  type.  Other  key features of this system include: 1) acceptance of
both  automatic  and  manual  premium  payments  for  all CA and AZ policies, 2)
ability  for  user  to  enter  premium  adjustments  and money transfers between
policies,  3)  establishment  of  policies  for future installments, notices and
non-pay  cancels,  4)  the  update  and  control  of  both  notice  history  and
installment  history, 5) the printing of installment notices, pre cancel notices
and all cancel letters, 6) the creation and archiving of coverage history detail
for  each  policy  transaction,  7)  the  addition  /  reversal of fees for late
payments,  insured  cancels  and  bounced  checks,  and 8) the reconstruction of
billing  schedules  depending  on  amount  of  payment made on any installments.
Recent significant system enhancements include Arizona State billing rules, Year
2000  changes,  and  adding  new  fees  to  the California book of business. The
system's  341,000  lines  of  code are written in COBOL. BUCS was 100% developed
in-house  by  a  team of ten software developers over the course of one year and
initially  released  for  use  in  1993.  A  team of two to three developers did
maintenance  and enhancement of the BUCS system over the software system's life.

The  With  Cash  /  Suspense  Assignment (WC/SA) is a subsystem to BUCS that: 1)
provides  a  repository  to  store  information  on  payments made with a policy
application  and  2)  Holds  the amount paid to be credited to the policy of the
Insured when the application becomes a New Business Policy. With Cash is for the
regular Auto policies in both CA and AZ. Suspense Assignment is for the Assigned
Risk  policies.  Both  function  the  same  way  but  are  separate  systems for
accounting  purposes.  The  major  features  of  the WC/SA subsystem are: 1) the
acceptance  of  both  automatic  and  manual  application  payments for Auto and
Assigned  Risk  (CA and AZ policies), 2) enable users to enter cash adjustments,
3) verifies application for refund due and prints refund checks when application
is  rejected,  4) the transfers of money from application to policy when the New
Business policy is created, 5) the reporting of receivables to General Ledger at
month  end. The WC component of WC/SA was completely developed in-house over the
course  of  six months by three developers and was initially released for use in
1994  while  the SA module was released in 1997. A team of one to two developers
performs maintenance on the WC/SA subsystem. The major enhancements to the WC/SA
system  are  the  addition  of  Arizona  State  processing  and  Y2K  changes.

E-BUCS provides California and Arizona customers with account status information
such  as  payment  history,  current  amount due, future installments and payoff
amount  on  the  Internet utilizing jacada to retrieve information from the BUCS
billing  system.  The  reason  behind  this  project was to reduce the amount of
billing  related  calls  to  the  call  center  and  provide more convenience to
customers.  E-BUCS  went  live  in  October  2000.

                                                                     Page 1 of 9

<PAGE>
AUTO  MARKETING  SYSTEM  (CARS)

Developed  in  1990,  CARS  is  a system that generates on-line customer quotes,
printed  quotations,  statistical reports and letters. Marketing representatives
collect  necessary  information from customers on-line to produce quotes. Quotes
can  be  mailed  to prospective customers to provide them with coverage options.
Additionally,  at  the  customer's  request, CARS can fax a potential customer a
quote.  This system interfaces with the Underwriting Paperless System (UPS). The
Auto  Marketing  department  is  the  primary  user  of  CARS.

There  are  a  number  of  batch  production  cycles for CARS. On a daily basis,
information collected through the on-line screens and from telemarketing vendors
is  processed,  quotes  and  letters  are  created  and  printed, statistics are
calculated  and  updated,  and reports are printed. On a weekly basis, re-quotes
are processed and printed, statistics are calculated, updated, and reported, and
files  are  purged  of old data. On a monthly basis, customers that are selected
for  future  re-quotes  are  cycled,  statistics  are  calculated,  updated, and
reported, and statistical files are re-initialized. On a quarterly basis, system
files  are  sorted,  merged and purged. On an annual basis, the Activity file is
processed  to  accurately  reflect all applications accepted to become a policy.
This  annual  activity feeds into the Community Service reporting for Department
of  Insurance.

CARS also supports direct mail marketing campaigns. As part of this effort, CARS
keeps  track  of  people  who  do  not  wish  to  receive  marketing.

The  on-line  functions  available  in  CARS  allow  the  user to perform Entry,
Display,  and  Update operations for all vital information necessary to prepare,
review,  or  update  quote  information  for the customer. This includes general
applicant  information,  specific  driver  information,  specific  vehicle
information,  and  rating coverage information. The system also has capabilities
to  generate  faxed  and  remotely  printed  quotes.

The  system also has user maintenance capabilities such as Table Maintenance and
Message  Updates.  There  is  also activity tracking through Production Activity
Inquiry  capabilities.

CARS  was  originally  developed  in  1990  and the current code size is 350,000
lines.  From  the total code amount, about 30% is new when initially created and
70%  is  comprised  of  maintenance,  which includes the increase in application
functionality.

UNDERWRITING

Underwriting  is  supported  by  three  sub-module  applications:  Underwriting
Paperless  System (UPS); Underwriter Information System (UWIN); and Policy Input
Processing (PIP). UPS is an on-line system that processes auto applications from
initial  entry  to  final  approval.  It  provides the capability to order MVR's
(Motor  Vehicle  Records  via  third party software from each U.S. State DMV and
Canada  DMV),  follow up on missing information, and determine status and review
for  approval.  This  system  also  provides  on-line  document  handling  and
productivity/performance  statistics.  This  system  supports  New Business Auto
Underwriting  and  Data  Entry.

Underwriting  Paperless  System (UPS) Batch production consists of daily, weekly
and  monthly cycles. On a daily basis, information collected through the on-line
screens  and  received  from CLUE (Comprehensive Loss Underwriting Exchange) and
MVR  is  processed  to  generate  productivity/performance  statistics  reports,
application  closed/bypass  reports,  MVR  reports,  queue  balancing  and aging
reports,  worksheets, postcards and letters. In a weekly processing new business
aging, weekly application decline, call type, balancing reports are printed, rep
statistics  files are initialized. On monthly basis the system produces approval
status  activity  reports  and  rep  statistics  monthly  files are initialized.


                                                                     Page 2 of 9
<PAGE>
UWIN is a claim summary system that provides for on-line inquiry of losses for a
given  policy  and allows for updating of accident information including driver,
vehicle,  and  accident  coding.  The  UWIN / Cash Out system allows the user to
follow  up  on claim payments made to the Insured, and Proof of Repair requests.
Total  Loss  provides  update  and  closure  capabilities  for automobiles being
salvaged or totaled. In addition, Management Reporting and Table Maintenance are
covered under this umbrella. They include Rep tracking and evaluation, and table
update  and  logging.

The  batch  portion  of the system is for Cash Out and Total Loss only. The Cash
Out  portion processes reversals, loss updates, duplicate removal, and exception
reporting.  Total Loss processes salvage extracts, updates, duplicates, letters,
and  vehicle  removal.  The Claim Summary batch portion is broken into UWIN / UW
Review  and  UWIN  /  Surcharge.

UWIN  also  has  screens  and  reports  that  support  Underwriting  and Premium
Accounting  to  reinstate  Cancelled  Policies.

For  in-force policy review, UWIN determines which policies require review. On a
weekly  basis,  policies  expiring  in one and one half month are processed. The
Underwriter  Review  system  produces  reports listing policies that fall within
Underwriter  Review  criteria.  The  criteria  consist of examining claims for a
policy  that  meet  specific  conditions.

PIP  is  a  bridge  between CARS, UPS, and PMS. Its main function is to maintain
in-force policy files. Data is retrieved from the respective file and written to
the  Entry  Pending  Files (EPF) for further processing. On-line edits eliminate
error at the point of entry. It is also used for rewrites such as split policies
or  changes  in  term  dates.  Data  entry  is  the  sole  user  of this system.

In  aggregate,  the  three  sub-modules  that  comprise  Underwriting consist of
650,000  lines  of  code  written  in  COBOL.

CLAIMS

The Claims system is a large set of subsystems that handle all claims management
at  21st Century Insurance. The major sub-systems include: Claims Administrative
System  (CAD);  Loss  Reporting;  File  Handling;  Vehicle  Inspection;  Salvage
Tracking;  Communication;  and  Claims  Vendor.  Claims Financials System (CFS),
Claims  Summary,  Comprehensive  Loss  Underwriting Exchange (CLUE), Catastrophe
Reporting System, Forms & Letters (FLS), Reserve History, Loss Master Reporting,
and  Suit  Tracking  System  are other subsystems that operate under Claims. The
system  has  1,100,000  lines  of  code  written  in  COBOL.

The CAD system is part of the menu driven Claim Management System (CMS or TCIC),
which  was developed, in the early 1990's. There are three main areas in the CAD
system.  The  first  component  of  the  CAD  system  handles  Menu  Driver file
maintenance. A generic menu driver program uses these files to provide flexible,
table-driven control of menu displays and screen-to-screen navigation throughout
CMS  environment.  CAD  also  provides  centralized  user  registration  and
security/access  checking  via  RACF.

The  second  area  of the CAD system is used for Claims table maintenance, which
records  and  maintains  various  information  files  needed  by  other  Claim
subsystems.


                                                                     Page 3 of 9
<PAGE>
The  data  includes  Catastrophe  Code,  Claims Facilities, Facility Directions,
Claims Organization Structure, Miscellaneous Codes, and Claim Territories by zip
code.

The  third  part of the CAD system is the print subsystem. This subsystem allows
Loss  Reports,  Vehicle Inspection system and Salvage Tracking system documents,
File  Handling diaries and other standard documents used in claim handling to be
printed  on  demand  via  PC-connected  laser  printers at remote Claim offices.
Status  of  completed  jobs  is communicated back to the initiating application.

The  Loss  Reporting  System  forms  the basis for documenting claim information
taken  from  an  insured  or  claimant.  The  Loss  Report is used by the Office
Adjuster or Examiner to develop an investigative plan and to contact all parties
involved  in  the incident. It may also be used to update, display, or print the
Loss  Report  information,  or  to  create  a  new  version  of the Loss Report.

The File Handling System provides the tools for handling the claim from creation
to  closure. It provides claim-level administrative functions, diary facilities,
assignment  and  classification  capabilities,  as well as overviews of relevant
coverages  and financial details. As the system, which integrates all components
of  the  Claims  Management  System,  File  Handling  provides links to the Loss
Reporting,  Policy  Management  System,  Claims Summary, Vehicle Inspection, and
Calendaring  and  Suspense  systems.  Both  Loss Reporting and File Handling are
capable  of  handling  Auto,  Motorcycle  and  Homeowner/Condominium  losses.

The Vehicle Inspection System (VIS) is a part of the CMS. This system is used to
schedule  all  types  of vehicle inspections and maintain a history of canceled,
rescheduled,  and  reassigned inspections. Inspections may be made at a Drive-in
(DRI),  Direct  Repair  Program (DRP) facility, Vehicle Inspection Center (VIC),
Stereo Direct Repair vendor (STR), Glass Inspection (GLS) facility, or through a
Field  Inspection  (FLD).  Inspections can also be Waved (WAV) or assigned to an
Independent  Adjuster  (IND). CARCO inspections, mandatory auto inspections that
are  a  result  of  the  California  Automobile  Pre-Inspection  Law,  are  also
scheduled.

CCC Information Services, Inc. (CCC), a Chicago based company is used for repair
estimates.  Through  the  mainframe, data are sent to CCC regarding a particular
vehicle  and  the  adjuster  who  is  to  do  the  estimate.  CCC then sends the
assignment  to  the adjuster's mailbox and using laptops connected to CCC do the
estimate  of  repairs  and sends it back to CCC. After processing, CCC sends the
estimate  results  back  to  the  21st  Century  Insurance  mainframe.

VIS is also responsible for the maintenance and activation of Drive-in Locations
to  include  their  daily  time  of  operations.  Using  the PMS vendors, Claims
maintain  a  list  of  authorized  vendors  used  for  repairs.


                                                                     Page 4 of 9
<PAGE>
Salvage  Tracking  is  an  on-line  sub-application  that keeps track of salvage
records.  It  tracks  vehicles  belonging  to 21st Century Insurance, for either
theft  or  total loss cases. Total loss or salvage tracking is established right
from  the  stage  of "request for pickup of salvage" through" sale of salvage at
auction".  It  helps  adjusters  maintain  salvage  pools,  track daily cost for
vehicles stored at various locations etc. The sub-system also generates a unique
sequence-id for each salvage record for which there is a claim. Salvage Tracking
extracts  the claim number as its input. Salvage Tracking was initially released
in  October,  1991.

Claim  Communication  System (CCS) - The Claims Department has always been posed
with  a  challenge  for  a way to deliver timely and on-demand reports that will
serve  the needs of its staff that are mostly working in different locations far
from  the  Home  Office.  In  1992,  upon  the  Menu  Driver platform, the Claim
Communication  System  was  developed.

The  Claim  Communication  System  is  also  referred  to as the Remote Printing
System. It is useful in providing reports submitted by the different application
programs  using the Menu Driver as well as process jobs that have been submitted
by  batch  programs.

The  printed output from CCS ranges from formatted reports such as Loss Reports,
letters  sent  by  claims adjusters to forms such as the Property Insurance Loss
register. Even though most of the application systems may have different printed
output,  the procedure in using the CCS is still standard across these different
application  systems.

Besides  the  on-demand  and immediate access feature of documents printed using
CCS,  the  end  product  printed using a personal computer is with merits. These
documents  may  be  designed  using  different fonts, style and formatting which
simulate  forms  or  letters  that  used  to be individually hand or typewritten
within  the  Claims  department.

The  Claims  Vendor  System  (CVS)  is a part of the CMS. This system is used to
create vendors that will be used by the claims department. Vendors must first be
accredited  PMS  vendors  before they can make claims vendors. There are several
types  of  vendors from A01 to A52 and H01 to H05. This system is just concerned
with  types  A01  to A06, which are being used by the Vehicle Inspection System.
When VIS needs a vehicle to be inspected and assigned to a Direct Repair Program
(DRP),  a  list  is provided to select the vendor to be used. CVS is responsible
for  the  maintenance  of  the  list  of  authorized  vendors  used for repairs,
activation  to  include  their  status  of being active or inactive and removal.

Claims Financials is the claims portion of the PMS purchased in 1979 from Policy
Management  System  Corp.  CFS  provides  for  data  entry  and  verification of
transactions  for  opening  and  closing reserves, producing payment checks, and
recording  cash  receipts.  The  software was initially released in 1979 and has
been  maintained  by  a  staff  of  twenty  people.


                                                                     Page 5 of 9
<PAGE>
The  primary  function  of  the Claim Summary system is to capture and summarize
loss  data.  This data is then used by the Underwriting department during policy
renewal  review  processing.  Additionally,  this  data  may  be  used by claims
whenever  there is a need to access summarized claims data. There is a daily and
a weekly batch production cycle. The daily batch processing applies daily losses
to  the  Claim Summary file. Source of data applied to the Claim Summary file is
from  Policy  Management  System, specifically from daily PMS020 file. This file
contains all policy modules updated during the daily PMS cycle. The weekly batch
processing  reorganizes  the  Claim  Summary  file. Additionally, there are G103
audit  reports  generated  for  Claims  management.  These reports notify Claims
Management  as  to disposition of G103 "At Fault" letter processing. The on-line
functions  consist  of  a  series of screen designed to allow the user to browse
summarized  loss  data and assorted Policy In-force (PIF) segments. There is the
capability  for  an Underwriter to add a comment, which is stored into the Claim
Summary  File.  There  is  also capability to add and update Total Loss data via
on-line screens. Claims Summary was initially released in 1980 and is maintained
by  a  team  of  twenty-five  developers.

The  CLUE  service  is  used to exchange loss information with Choicepoint. On a
monthly  basis, loss related data for policyholders is sent to them via tape. It
stores  a  five-year history and is used by the Underwriting Claims Departments.
The  initial  date  of  release  of  CLUE  was  1990.

The  Catastrophe Reporting System is a batch system designed to report homeowner
and  auto  policy  information  for  a  specified  catastrophe code. Reserve and
payment  data  is  extracted  off  the monthly loss master file, the weekly loss
master  file,  and the daily PMS019 file and merged to create the daily reports.
There  are  a  series  of  three  sets of reports created. This system was first
utilized  in  1994.

The FLS is a Vendor Software Package that allows Claims users to view and select
from On-line screens a list of letters. The users are able to build and edit the
letters  that  they  choose.  The variable data is pulled from a Claims database
behind the scenes. There are no Batch processing jobs involved in generating the
letters.  There  are  a  few batch procedures that are used to back-up the data.
This  system  was  released  in  1997.

RESERVE  HISTORY/CASELOAD  tracks  and  reports  reserve  level  changes,  claim
assignments  and  reassignments  at  the  division  and  unit  level. The system
provides  an  audit  trail  of  changes  to  reserve,  claims  assignments  and
reassignments.

The  LOSS  MASTER REPORTING system is a batch system that captures claims losses
from  the  Policy Management System. This system was developed by 21st Insurance
as  a  vehicle  to  report  claims  losses  in  a variety of views as well as to
maintain  data for use by the Statistical and Insurance Office Service reporting
systems.  A  small  portion of the Loss Master System passes data to the General
Ledger  system.  There  are also many one time statistical runs against the Loss
Master  files  for  reporting


                                                                     Page 6 of 9
<PAGE>
views  that  are not offered in the regular Loss Master reports. The Loss Master
system  reports  losses  exclusively or in various combinations by the following
categories:  coverage, accident date, company, policy type, loss type (reserves,
payments,  expenses,  salvage,  subrogation),  examiner,  adjuster,  division,
transaction  date,  reinsurance  company,  claim  status (open, closed with pay,
closed  no  pay).

Suit  Tracking  System  allows  Users to access and view individual Suit records
online.  It  tracks three types of lawsuits for 21st Century Insurance: 1) Third
party  suits  -  An outside party sues 21st Century Insurance insured for bodily
injury  and/or property damage liability, 2) First party suits - An insured sues
21st  Century Insurance for damages under the Uninsured Motorist coverage on his
policy,  3)  Subrogation  suits  -  21st Century Insurance sues another party to
recover  damages  paid  by  Company  under  any  coverage.

An  accident  can give rise to one or more suits. Each suit can have one or more
claimants. If several suits are filed, they often are consolidated after filing.
Assignment  information  could  be  different  on  suit associated with the same
claims  file, because different legal counsel must be assigned to avoid conflict
of  interest.  The  reserve  remains  open  on  claims lines in suit until final
judgment.  If  21st  Century Insurance wins the case, the insured or claimant is
awarded,  21st must pay the amount awarded plus allowable costs. A final payment
will  be  issued,  which  closes  the  reserve.

COMMISSIONS

The  Commissions  custom  system  is  an  operational  legacy  system  that  is
responsible  for  the  processing  for all agent commissions related to the 21st
Century  Casualty  Company assigned risk policies. Daily, the PMS system sets up
new  business  policies, renewals, and policy changes, and the Commission System
calculates  commissions  according to the rules contained in Section 2462 of the
California Insurance Plan. The commissions are then captured into the Commission
master  file.  New  vendors  are  added  to  the  Vendor  file  as needed and an
assignment  record  is  created  on the Assignment file to relate the PMS policy
number  to  the  vendor  number.

At  midmonth  the  commission  checks  and offset statements are printed and the
Commission  master  file  is  updated with the checks, minimum earned commission
transactions,  and  offsets. The closeout and balancing are not done until month
end. The midmonth cycle was added in July 1996, to satisfy the state requirement
that  insurance companies pay commissions to the agent within 30 days of receipt
of  the  application.  The  Commission system is not designed to do closeout and
balancing other than at month end because it does its calculations based on full
months.  In addition, Accounting wants the closeout and balancing done only once
a  month,  at  month  end.

At  month end the closeout and balancing are done. The checks and all statements
are  printed  and the Commission master file is updated with the checks, minimum
earned


                                                                     Page 7 of 9
<PAGE>
views  that  are not offered in the regular Loss Master reports. The Loss Master
system  reports  losses  exclusively or in various combinations by the following
categories:  coverage, accident date, company, policy type, loss type (reserves,
payments,  expenses,  salvage,  subrogation),  examiner,  adjuster,  division,
transaction  date,  reinsurance  company,  claim  status (open, closed with pay,
closed  no  pay).

Suit  Tracking  System  allows  Users to access and view individual Suit records
online.  It  tracks three types of lawsuits for 21st Century Insurance: 1) Third
party  suits  -  An outside party sues 21st Century Insurance insured for bodily
injury  and/or property damage liability, 2) First party suits - An insured sues
21st  Century Insurance for damages under the Uninsured Motorist coverage on his
policy,  3)  Subrogation  suits  -  21st Century Insurance sues another party to
recover  damages  paid  by  Company  under  any  coverage.

An  accident  can give rise to one or more suits. Each suit can have one or more
claimants. If several suits are filed, they often are consolidated after filing.
Assignment  information  could  be  different  on  suit associated with the same
claims  file, because different legal counsel must be assigned to avoid conflict
of  interest.  The  reserve  remains  open  on  claims lines in suit until final
judgment.  If  21st  Century Insurance wins the case, the insured or claimant is
awarded,  21st must pay the amount awarded plus allowable costs. A final payment
will  be  issued,  which  closes  the  reserve.

COMMISSIONS

The  Commissions  custom  system  is  an  operational  legacy  system  that  is
responsible  for  the  processing  for all agent commissions related to the 21st
Century  Casualty  Company assigned risk policies. Daily, the PMS system sets up
new  business  policies, renewals, and policy changes, and the Commission System
calculates  commissions  according to the rules contained in Section 2462 of the
California Insurance Plan. The commissions are then captured into the Commission
master  file.  New  vendors  are  added  to  the  Vendor  file  as needed and an
assignment  record  is  created  on the Assignment file to relate the PMS policy
number  to  the  vendor  number.

At  midmonth  the  commission  checks  and offset statements are printed and the
Commission  master  file  is  updated with the checks, minimum earned commission
transactions,  and  offsets. The closeout and balancing are not done until month
end. The midmonth cycle was added in July 1996, to satisfy the state requirement
that  insurance companies pay commissions to the agent within 30 days of receipt
of  the  application.  The  Commission system is not designed to do closeout and
balancing other than at month end because it does its calculations based on full
months.  In addition, Accounting wants the closeout and balancing done only once
a  month,  at  month  end.

At  month end the closeout and balancing are done. The checks and all statements
are  printed  and the Commission master file is updated with the checks, minimum
earned  commission  transactions,  offsets, and charge offs. The system's 20,000
lines  of  code  are  written  in  COBOL.


                                                                     Page 8 of 9
<PAGE>
VENDOR

The  IRS  requires  21st  Century  Insurance  to report payments to vendors. The
Vendor  custom  system  is  a legacy system for handling 1099 processing for all
company  vendors.  The Internal Revenue Service requires 21 Century Insurance to
report  payments  to  vendors.  The  Vendor  system is used to keep track of the
payments  made  to  vendors and is also used to create the 1099's. There are two
main  files.  One  is the Vendor Master file, which contains information such as
name  and  address  for each vendor, and the other is the Vendor accounting file
that  contains  all  the  payments  made  to  each  vendor.

New  vendors  are  added to the master vendor file as needed. If a CDS vendor is
created,  modified or deleted, and ABC table accounting vendor record is created
and  processed by the ABC accounting system. This way the master vendor file and
the  ABC  vendor  accounting  file  contain  the  same  vendor  information.

A PMS assignment record is created for new PMS policies, relating the PMS policy
number  to  the  vendor  number.  A CDS assignment record is created for new CDS
accounting  vendors,  relating  the  CDS vendor number to the vendor number. CDS
keeps  its  own  set  of vendor numbers. Daily the Vendor system extracts claims
vendor payments from the PMS system and adds them to the Vendor Accounting file.
Weekly the vendor system extracts vendor payments from the CDS accounting system
and  adds  them to the Vendor accounting file. Weekly the Vendor system extracts
commission  payments  from  the  Commission  System  and adds them to the Vendor
accounting  file.  Monthly  the  Vendor  system  extracts  commission  and  CDS
accounting  data  that  was not picked up by the weekly cycles (for the last few
days  of  the  month)  and  adds  the  data  to  the Vendor Accounting file. The
Corporate  Accounting  department  can make adjustments to the Vendor Accounting
file  by  adding  and offsetting data. Annually, vendor payments are reported to
the  IRS  in accordance with the Department of Treasury Internal Revenue Service
Publication  1220.

The  system's  146,000  lines  of  code  are  written  in  COBOL.

BANK  RECONCILIATION

This  is  a  bank  accounting system that handles cash, premium refunds, claims,
commissions,  and  proposition  103  checks.  Each  banking day, processed check
status  is  sent  via  ftp transmission and updates the Check Master File on the
mainframe  and Peoplesoft. Claims stop pays are collected daily and sent through
Bank  of  America's  BAMTRAC  system.  PMS  and  Accounting systems are balanced
against  each  other daily. Escheat processing is done annually at October month
end.  The  system's  85,000  lines  of  code  are  written  in  COBOL.

The  Legacy  Replacement initiative is the fifth among the CRM projects.  Legacy
Replacement refers to the migration to the Enterprise Billing system, which acts
as  a  single  billing,  accounts  receivable and payable system. This system is
designed  to  support  the  future  growth of 21st Century Insurance in terms of
additional  states  and  lines  of  business. This system is flexible to provide
multi-channel  billing/payment  options  and is designed using up-to-date system
architecture.  This  system  will  replace  BUCS  and  COGEN.


                                                                     Page 9 of 9
<PAGE>