<PAGE>   1
                                                                    EXHIBIT 10.7


                                                                  EXECUTION COPY

         =================================================================


                               CLARK/BARDES, INC.




                                   $8,900,000

                      11.00% SECOND PRIORITY SENIOR SECURED
                            NOTES DUE AUGUST 9, 2004

                                       AND

                         COMMON STOCK PURCHASE WARRANTS



                                 ---------------

                       NOTE AND WARRANT PURCHASE AGREEMENT

                                 ---------------


                          DATED AS OF SEPTEMBER 8, 1997


        =================================================================





<PAGE>   2



                                TABLE OF CONTENTS

                             (Not Part of Agreement)

<TABLE>
<CAPTION>
                                                                                               Page
                                                                                               ----
<S>                                                                                              <C>
  1.       AUTHORIZATION OF ISSUE OF SECURITIES        ...........................................1

           1A.      Authorization of Issues of Notes   ...........................................1
           1B.      Authorization of Issues of Warrants         ..................................1

  2.       PURCHASE AND SALE OF SECURITIES    ....................................................2

           2A.      Purchase and Sale of Notes         ...........................................2
           2B.      Purchase and Sale of Warrants      ...........................................2
           2C.      Allocation of Total Consideration  ...........................................2

  3.       CONDITIONS PRECEDENT      .............................................................3

           3A.      Conditions to Closing     ....................................................3
           3B.      Certain Documents         ....................................................3
           3C.      Representations and Warranties; No Default; No Material Adverse Change .......5
           3D.      Purchase Permitted By Applicable Laws       ..................................6
           3E.      Completion of Due Diligence        ...........................................6
           3F.      Information with Respect to Contemplated Sale of Common Stock         ........6
           3G.      Other Information         ....................................................6
           3H.      Related Proceedings       ....................................................6
           3I.      Consummation of Acquisition, Share Repurchases and Settlement of Litigation;
                    Satisfaction of Conditions Precedent to the Shareholders' Agreement   ........7
           3J.      Repurchase of Common Stock         ...........................................7
           3K.      Termination of Existing Bank Facility       ..................................7
           3L.      Sale of Securities to Other Purchasers      ..................................7
           3M.      Proceedings      .............................................................7
           3N.      Fees     .....................................................................8

  4.       PREPAYMENTS       .....................................................................8

           4A.      Required Prepayments      ....................................................8
           4B.      Optional Prepayment of Notes without Yield Maintenance Amount         ........8
           4C.      Offer to Prepay Notes in the Event of a Change in Control or a Revenue
                    Maintenance Event    .........................................................9
           4D.      Partial Payments Pro Rata ...................................................10
</TABLE>


<PAGE>   3


<TABLE>
<S>                                                                                             <C>
           4E.      Retirement of Notes       ...................................................10

  5.       AFFIRMATIVE COVENANTS     ............................................................11

           5A.      Financial Statements      ...................................................11
           5B.      Information Required by Rule 144A  ..........................................14
           5C.      Inspection of Property    ...................................................14
           5D.      Covenant to Secure Notes Equally   ..........................................14
           5E.      Corporate Existence, Licenses and Permits; Maintenance of Properties  .......15
           5F.      Maintenance of Material Contracts  ..........................................15
           5G.      Maintenance of Insurance  ...................................................15
           5H.      Payment of Taxes and Other Claims  ..........................................15
           5I.      ERISA Compliance ............................................................16
           5J.      Compliance with Laws      ...................................................16
           5K.      Collateral       ............................................................16
           5L.      Enforcement of Acquisition Documents, Share Repurchase Documents, the 
                    Settlement Agreement and the Shareholders' Agreement   ......................16
           5M.      Lockbox Account  ............................................................17
           5N.      Performance of Obligations         ..........................................17
           5O.      Maintenance of Key Sales Force     ..........................................17
           5P.      Pledge of Notes Payable   ...................................................17
           5Q.      Offering of Common Stock  ...................................................17
           5R.      Maintenance of Key Man and Shareholder Life Insurance Policies        .......17
           5S.      Creation and Maintenance of Working Capital Facility         ................18
           5T.      Reincorporation Merger    ...................................................18
           5U.      Conversion to a C Corporation.     ..........................................18
           5V.      Certain Redemptions of Common Stock         .................................18
           5W.      BCS Service Corporation   ...................................................18
           5X.      Matters Related to Qualification and Licensure  .............................18

  6.       NEGATIVE COVENANTS        ............................................................18

           6A.      Total Debt to Annualized Cash Flow Ratio    .................................19
           6B.      Limitation on Restricted Payments  ..........................................19
           6C.      Maintenance of Minimum Consolidated Net Worth and Consolidated Net Income ...19
           6D.      Discounted Commission Fees to Total Debt Ratio       ........................19
           6E.      Interest Coverage Ratio   ...................................................19
           6F.      Fixed Charge Coverage Ratio        ..........................................20
           6G.      Liens, Indebtedness, and Other Restrictions          ........................20
           6H.      Change of Fiscal Year     ...................................................24
           6I.      Change of Business        ...................................................24
           6J.      Certificates of Incorporation; Bylaws; Trade Names   ........................24
           6K.      Other Agreements ............................................................24
           6L.      Limitation on Certain Restrictive Agreements         ........................25
           6M.      ERISA Matters    ............................................................25
           6N.      Only One Class of Capital Stock    ..........................................25
</TABLE>



<PAGE>   4


<TABLE>
<S>                                                                                             <C>
           6O.      Prohibition Against Payments and Prepayments of Certain Indebtedness ........25
           6P.      AAA Distribution          ...................................................25
           6Q.      No Subsidiaries  ............................................................26
           6R.      Restrictions on Issuances of Common Stock   .................................26
           6S.      Restrictions Upon the Amendment of Certain Documents         ................26
           6T.      Limitation on Amount of S Corporation Tax Distributions      ................27
           6U.      Prohibition Against Phantom Stock  ..........................................27
           6V.      Reincorporation Merger    ...................................................27
           6W.      Restrictions Upon Stock Options    ..........................................27

  7.       EVENTS OF DEFAULT         ............................................................27

           7A.      Acceleration     ............................................................27
           7B.      Rescission of Acceleration         ..........................................31
           7C.      Notice of Acceleration or Rescission        .................................31
           7D.      Right of Set-off ............................................................31
           7E.      Notice to Holders of Subordinated Debt; Payment Block        ................32
           7F.      Other Remedies   ............................................................32

  8.       REPRESENTATIONS, COVENANTS AND WARRANTIES   ..........................................32

           8A.      Organization and Qualification     ..........................................32
           8B.      Financial Statements      ...................................................33
           8C.      Actions Pending  ............................................................33
           8D.      Outstanding Indebtedness  ...................................................34
           8E.      Title to Properties       ...................................................34
           8F.      Possession of Franchises, Licenses, Patents and Trademarks   ................34
           8G.      Taxes    ....................................................................34
           8H.      Conflicting Agreements and Other Matters    .................................35
           8I.      Authorized Capital Stock  ...................................................36
           8J.      Offering of the Securities         ..........................................36
           8K.      Use of Proceeds  ............................................................36
           8L.      ERISA    ....................................................................37
           8M.      Governmental Consent      ...................................................37
           8N.      Environmental Compliance  ...................................................38
           8O.      Fiscal Year      ............................................................38
           8P.      Disclosure       ............................................................38
           8Q.      Investment Company Act    ...................................................38
           8R.      Other Regulation ............................................................38
           8S.      Acquisition, Share Repurchase, Settlement Agreement and Shareholders' 
                    Agreement Representations and Warranties     ................................38
           8T.      Solvency ....................................................................39
           8U.      Employment Agreements, Non-Competition Agreements and Principal Office
                    Agreements    ...............................................................39
</TABLE>



<PAGE>   5


<TABLE>
<S>                                                                                             <C>
           8V.      Insurance Licenses        ...................................................39
           8W.      Undisclosed Liabilities            ..........................................39
           8X.      Legal Compliance          ...................................................39
           8Y.      Certain Tax Matters       ...................................................39
           8Z.      Sales Representatives     ...................................................39
           8AA.     Contracts        ............................................................40
           8BB.     Assignment of Insurance Contracts           .................................41
           8CC.     Satisfaction of Conditions Precedent to the Acquisition, the Share
                    Repurchases, the Settlement Agreement and the Shareholders' Agreement .......41
           8DD.     Compliance with Laws      ...................................................41
           8EE.     Condition of Property     ...................................................41
           8FF.     Books and Records         ...................................................41
           8GG.     Issuance and Exercise of the Warrants       .................................41
           8HH.     Additional Disclosure     ...................................................42
           8II.     Reincorporation Merger    ...................................................42
           8JJ.     Satisfaction of Conditions Precedent        .................................42
           8KK.     Certain Affiliates        ...................................................42

  9.       REPRESENTATIONS OF EACH PURCHASER  ...................................................42

           9A.      Nature of Purchase        ...................................................42
           9B.      Source of Funds  ............................................................43

  10.      DEFINITIONS       ....................................................................44

           10A.     Yield Maintenance Terms   ...................................................44
           10B.     Other Terms      ............................................................45
           10C.     Accounting Principles, Terms and Determinations      ........................61

  11.      MISCELLANEOUS     ....................................................................61

           11A.     Note Payments    ............................................................61
           11B.     Expenses ....................................................................62
           11C.     Consent to Amendments     ...................................................62
           11D.     Form, Registration, Transfer and Exchange of Notes; Lost Notes        .......63
           11E.     Persons Deemed Owners; Participations       .................................63
           11F.     Survival of Representations and Warranties; Entire Agreement          .......63
           11G.     Successors and Assigns    ...................................................64
           11H.     Disclosure to Other Persons        ..........................................64
           11I.     Notices  ....................................................................64
           11J.     Payments Due on Non-Business Days  ..........................................65
           11K.     Satisfaction Requirement  ...................................................65
           11L.     Governing Law    ............................................................65
           11M.     Waiver of Jury Trial; Consent to Jurisdiction; Limitation of Remedies  ......65
           11N.     Indemnification  ............................................................66
</TABLE>



<PAGE>   6


<TABLE>
<S>                                                                                             <C>
           11O.     Release  ....................................................................68
           11P.     Relationship of the Parties        ..........................................68
           11Q.     Final Agreement  ............................................................69
           11R.     Construction     ............................................................69
           11S.     Severability     ............................................................69
           11T.     Descriptive Headings      ...................................................69
           11U.     Maximum Interest Payable  ...................................................69
           11V.     Counterparts     ............................................................70
           11W.     Severalty of Obligations  ...................................................70
           11X.     Adjustments Related to Number of Shares of Common Stock      ................70
</TABLE>



<PAGE>   7



<TABLE>
<CAPTION>
PURCHASER SCHEDULE
<S>                           <C>
SCHEDULE 3I          -        SELLING STOCKHOLDERS PURSUANT TO SHARE REPURCHASES
SCHEDULE 6G(4)       -        CERTAIN LOANS, ADVANCES AND INVESTMENTS
SCHEDULE 6M          -        DESCRIPTION OF BENEFITS PROVIDED BY PLANS
SCHEDULE 8C          -        LITIGATION
SCHEDULE 8D          -        INDEBTEDNESS
SCHEDULE 8H(1)       -        AGREEMENTS RESTRICTING INDEBTEDNESS
SCHEDULE 8I          -        RIGHTS TO PURCHASE OR ACQUIRE COMMON STOCK
SCHEDULE 8U          -        MATERIAL EMPLOYMENT AGREEMENTS, NON-COMPETITION 
                                 AGREEMENTS AND PRINCIPAL OFFICE AGREEMENTS
SCHEDULE 8V          -        INSURANCE LICENSES
SCHEDULE 8AA         -        CONTRACTS
SCHEDULE 8HH(1)      -        PERFORMANCE BONUSES
SCHEDULE 8HH(2)      -        PLANS AND MULTIEMPLOYER PLANS
SCHEDULE 8HH(3)      -        INTELLECTUAL PROPERTY
SCHEDULE A           -        COMPETITORS

EXHIBIT A            -        FORM OF NOTE
EXHIBIT B            -        FORM OF WARRANT
EXHIBIT C-1          -        FORM OF OPINION OF COMPANY'S COUNSEL
EXHIBIT C-2          -        FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
EXHIBIT D            -        FORM OF OFFICER'S CERTIFICATE
EXHIBIT E            -        FORM OF COMPLIANCE CERTIFICATE
EXHIBIT F            -        FORM OF PARTICIPATION RIGHTS AGREEMENT
EXHIBIT G            -        FORM OF PUT RIGHTS AGREEMENT
EXHIBIT H            -        FORM OF REGISTRATION RIGHTS AGREEMENT
</TABLE>



<PAGE>   8


                               CLARK/BARDES, INC.
                          2121 SAN JACINTO, SUITE 2200
                               DALLAS, TEXAS 75201




                                                         As of September 8, 1997



To Each of the Purchasers
Named on the Purchaser Schedule
Attached Hereto

                 $8,900,000 11.00% SECOND PRIORITY SENIOR SECURED NOTES DUE 2004
                 COMMON STOCK PURCHASE WARRANTS

Ladies and Gentlemen:

         The undersigned, Clark/Bardes, Inc., a Texas corporation (the
"COMPANY"), hereby agrees with the purchasers named in the Purchaser Schedule
attached hereto (the "PURCHASERS") as follows:

1.       AUTHORIZATION OF ISSUE OF SECURITIES.

A.                  AUTHORIZATION OF ISSUES OF NOTES. The Company will authorize
the issue of its 11.00% second priority senior secured promissory notes in the
aggregate principal amount of $8,900,000, to be dated the date of issue thereof,
to mature August 9, 2004, to bear interest on the unpaid balance thereof from
the date thereof until the principal thereof shall have become due and payable
at a rate of 11.00% per annum and on overdue payments at the rate specified
therein; such 11.00% second priority senior secured promissory notes shall be
substantially in the form of Exhibit A attached hereto. The term "NOTES" as used
herein shall include each such 11.00% second priority senior secured promissory
note delivered pursuant to any provision of this Agreement and each such 11.00%
second priority senior secured promissory note delivered in substitution or
exchange for any other Note pursuant to any such provision. Capitalized terms
used herein have the meanings specified in paragraph 10.

B.                  AUTHORIZATION OF ISSUES OF WARRANTS. The Company will also
authorize the issue of its Common Stock Purchase Warrants (any such Common Stock
Purchase Warrants which have been issued pursuant to this Agreement, and any
such Common Stock Purchase Warrants which may be issued in substitution or
exchange therefor, herein collectively called the "WARRANTS") evidencing rights
to purchase from the Company an aggregate of 3,050,847 shares of the Company's
common stock, no par value



<PAGE>   9

per share (the "COMMON STOCK"), at an initial exercise price per share of $2.95,
at any time or from time to time after the Date of Closing and prior to 5:00
p.m., New York City time, on August 9, 2004 or August 9, 2007, as provided in
the Warrants, all subject to the terms, conditions and adjustments set forth in
the Warrants; such Warrants shall be substantially in the form of Exhibit B
attached hereto.

2.       PURCHASE AND SALE OF SECURITIES.

A.                PURCHASE AND SALE OF NOTES. The Company hereby agrees to sell
to each Purchaser and, subject to the terms and conditions herein set forth,
each Purchaser agrees to purchase from the Company the aggregate principal
amount of Notes set forth opposite such Purchaser's name in the Purchaser
Schedule attached hereto at 100% of such aggregate principal amount. The Company
will deliver to each Purchaser, at the offices of Baker & Botts, L.L.P. at 2001
Ross Avenue, Dallas, Texas 75201, one or more Notes registered in such
Purchaser's name, evidencing the aggregate principal amount of Notes to be
purchased by such Purchaser and in the denomination or denominations specified
with respect to each Purchaser in the Purchaser Schedule attached hereto,
against payment of the purchase price thereof by transfer of immediately
available funds for credit to the Company's account no. 7831016873 at Comerica
Bank - Texas, Dallas, Texas, ABA No. 111000753, Attn: Bill Rolley, (214)
818-2113, on the date of closing, which shall be September 8, 1997 or any other
date on or before September 11, 1997 upon which the Company and the Purchasers
may mutually agree (the "CLOSING" or the "DATE OF CLOSING").

B.                PURCHASE AND SALE OF WARRANTS. The Company hereby agrees to
sell to each Purchaser and, subject to the terms and conditions herein set
forth, each Purchaser agrees to purchase from the Company Warrants evidencing
rights to purchase the aggregate number of shares of Common Stock set forth
opposite such Purchaser's name in the Purchaser Schedule. The aggregate purchase
price for the Warrants shall be $100,000. The Company will deliver to each
Purchaser, at the offices of Baker & Botts, L.L.P. at 2001 Ross Avenue, Dallas,
Texas 75201 one or more Warrants, registered in such Purchaser's name,
evidencing rights to purchase the aggregate number of shares of Common Stock to
be purchased by such Purchaser, such Warrant or Warrants to evidence rights to
purchase the number of shares of Common Stock specified with respect to such
Purchaser in the Purchaser Schedule attached hereto, against payment of the
purchase price for the Warrants by transfer of immediately available funds for
credit to the Company's account no. 7831016873 at Comerica Bank - Texas, Dallas,
Texas, ABA No. 111000753, Attn: Bill Rolley, (214) 818-2113, on the Date of
Closing.

C.                ALLOCATION OF TOTAL CONSIDERATION. The Company and each of the
Purchasers agree that the relative aggregate fair market values of the Notes and
the Warrants are $8,900,000 and $100,000, respectively. The Company and each of
the Purchasers further agree (i) for tax and financial accounting reporting
purposes, $8,900,000 of the total purchase price to be paid by the Purchasers
hereunder is properly allocable to the Notes and the remaining $100,000 of the
total purchase price is properly 



<PAGE>   10

allocable to the Warrants, (ii) to file their respective tax returns in a manner
consistent with the treatment described in clause (i) above and in the preceding
sentence, and (iii) that they will not file any amended tax return or refund
claim, or take any position in any contest, which is inconsistent with the
treatment described in this paragraph 2C.

3.       CONDITIONS PRECEDENT.

A.                CONDITIONS TO CLOSING.  Each Purchaser's obligation to 
purchase and pay for the Securities to be purchased by such Purchaser hereunder
is subject to the satisfaction, on or before the Date of Closing, of the 
following conditions:

B.                CERTAIN DOCUMENTS.  Each Purchaser shall have received the 
following, each dated the Date of Closing (unless a different date is indicated
below), and each in form, scope and substance satisfactory to such Purchaser:

                  a) the Notes to be purchased by such Purchaser, duly executed
         and delivered by the Company;

                  b) the Warrants to be purchased by such Purchaser, duly
         executed and delivered by the Company;

                  c) a certified copy of the resolutions of the Board of
         Directors of the Company approving each of the Second Priority Note
         Documents to which it is a party, and certified copies of all documents
         evidencing other necessary corporate action and governmental approvals,
         if any, with respect to each of the Second Priority Note Documents to
         which it is a party;

                  d) a certificate of the Secretary or an Assistant Secretary of
         the Company certifying the names and true signatures of the officers of
         the Company authorized to sign the Second Priority Note Documents to
         which it is a party and the other documents to be delivered hereunder
         by the Company;

                  e) a certified copy of the Articles of Incorporation
         (certified by the Secretary of State of the State of Texas) and bylaws,
         each as amended to date, of the Company;

                  f) favorable opinions of Vedder, Price, Kaufman & Kammholz,
         counsel to the Company, and Keith Staudt, General Counsel to the
         Company, substantially in the form of Exhibit C-1 and Exhibit C-2
         attached hereto, respectively;

                  g) a favorable opinion of Baker & Botts, L.L.P., who are
         acting as special counsel for the Purchasers in connection with this
         transaction, as to such matters incident to the matters herein
         contemplated as such Purchaser may reasonably request;



<PAGE>   11


                  h) reliance letters in respect of any other legal opinions
         (such legal opinions to be in form, scope and substance satisfactory to
         such Purchaser) delivered in connection with the Acquisition, the Share
         Repurchases, the settlement of the Litigation and the other
         transactions related thereto;

                  i) certified copies of Requests for Information or Copies
         (Form UCC-11) or equivalent reports listing all effective financing
         statements which name the Company or the Acquired Company (under any of
         their present names and any previous names) as debtor and which are
         filed in all jurisdictions in which the Company or the Acquired Company
         owns property or conducts business, together with copies of such
         financing statements;

                  j) the Collateral Agency Agreement, duly executed and
         delivered by the Collateral Agent, the Company and the holders of the
         Medium Term Notes;

                  k) the Registration Rights Agreement, duly executed and
         delivered by the Company;

                  l) the Put Rights Agreement, duly executed and delivered by
         the Company;

                  m) the Participation Rights Agreement, duly executed and
         delivered by the Company and the Company's stockholders listed in
         Schedule I thereto;

                  n) the Non-Compete Agreement, duly executed and delivered by
         W.T. Wamberg, the terms and conditions of which shall be in full force
         and effect and shall not have been amended, modified or waived except
         with such Purchaser's prior written consent;

                  o) the Perfection Certificate, duly executed and delivered by
         the Company;

                  p) the Assignment of Life Insurance Policy, each duly executed
         and delivered by the Company and W. T. Wamberg;

                  q) the Letters of Intent, duly executed and delivered by each
         of Richard C. Chapman and Larry Hendricksen;

                  r) an Officer's Certificate substantially in the form of
         Exhibit D attached hereto, duly executed and delivered by the Company;



<PAGE>   12


                  s) certified copies of each of the Acquisition Documents and
         the Share Repurchase Documents, the terms and conditions of which shall
         be in full force and effect and shall not have been amended, modified
         or waived except with such Purchaser's prior written consent;

                  t) certified copies of the Shareholders' Agreement and the
         Settlement Agreement, the terms and conditions of which shall be in
         full force and effect and shall not have been amended, modified or
         waived except with such Purchaser's prior written consent; 

                  u) a certified schedule of the stockholders of the Company
         both prior to and after giving effect to the Share Repurchases;

                  v) copies of (a) (i) a pro forma balance sheet and pro forma
         statements of income, changes in shareholders' equity and cash flow for
         each of the Company and each division thereof for the fiscal year ended
         December 31, 1996 (giving effect to the Acquisition and the Share
         Repurchases) and (ii) a pro forma balance sheet as at June 30, 1997 and
         pro forma statements of income, changes in shareholders' equity and
         cash flow for the three month period ended on such date for each of the
         Company and each division thereof (giving effect to the Acquisition and
         the Share Repurchases), certified by an authorized financial officer of
         the Company and (b) good-faith, projected, pro forma financial
         statements (including, without limitation, balance sheets and
         statements of income, changes in shareholders' equity and cash flow)
         for each of the Company and each division thereof for fiscal years 1997
         through 2001 (giving effect to the Acquisition and the Share
         Repurchases);

                  w) the Security Documents, duly executed and delivered by the
         Company;

                  x) all Uniform Commercial Code financing statements deemed
         necessary or appropriate by such Purchaser to perfect the Liens in
         favor of the Collateral Agent arising under the Security Documents,
         duly executed and delivered by the Company, to be recorded with the
         appropriate filing offices;

                  y) certificates of insurance naming the Collateral Agent as
         loss payee and the Collateral Agent and all holders of Notes as
         additional insureds, as required by paragraph 5G;

                  z) certified copies of the Tax Advisory Memorandum and the
         Special Audit prepared by Ernst & Young LLP;

                  aa) written instructions from a Responsible Officer of the
         Company, set forth on the Company's letterhead, authorizing and
         directing such Purchaser to pay the purchase price of the Securities by
         transfer of immediately available funds 



<PAGE>   13


         for credit to the bank account of the Company identified in paragraphs 
         2A and 2B; and

                  bb) additional documents, lien and judgment searches,
         certificates of officers of the Company and the Acquired Company,
         certificates of public officials and opinions of counsel to the Company
         and the Acquired Company with respect to legal matters or corporate or
         other proceedings related to the transactions contemplated hereby or by
         the Acquisition, the Share Repurchases, the settlement of the
         Litigation or the Shareholders' Agreement as may be requested by such
         Purchaser.

C.                REPRESENTATIONS AND WARRANTIES; NO DEFAULT; NO MATERIAL
ADVERSE CHANGE. The representations and warranties contained in this Agreement,
the other Second Priority Note Documents, the Acquisition Documents, the Share
Repurchase Documents, the Shareholders' Agreement and the Settlement Agreement
shall be true on and as of the Date of Closing, except to the extent of changes
caused by the transactions herein contemplated; there shall exist on the Date of
Closing no Event of Default or Default; there shall exist or have occurred no
condition, event or act which could have a material adverse effect on the
business, condition (financial or other), assets, properties, operations or
prospects of the Company and the Company shall have delivered to such Purchaser
an Officer's Certificate, dated the Date of Closing, to such effects.

D.                PURCHASE PERMITTED BY APPLICABLE LAWS. The offer by the
Company of, and the purchase of and payment for the Securities, to be purchased
by such Purchaser on the Date of Closing on the terms and conditions herein
provided (including the use of the proceeds of such Securities by the Company),
and any subsequent exercise of the Warrants shall not violate any applicable law
or governmental regulation (including, without limitation, section 5 of the
Securities Act or Regulation G or X of the Board of Governors of the Federal
Reserve System) (other than Art. 21.07-1 of the Texas Insurance Code (but only
with respect to the issuance of shares of Common Stock upon the exercise of the
Warrants) the violation of which the Company represents and warrants will be
cured by the satisfaction of the covenant contained in paragraph 5T) and shall
not subject such Purchaser to any tax, penalty, liability or other onerous
condition under or pursuant to any applicable law or governmental regulation,
and such Purchaser shall have received such certificates or other evidence as it
may request to establish compliance with this condition.

E.                COMPLETION OF DUE DILIGENCE.  The Company shall have completed
its due diligence investigation with respect to the business and assets of the
Acquired Company, and such Purchaser shall have received such information,
analyses and documentation with respect thereto (including, without limitation,
the projected revenues of the Acquired Company and analyses thereof (both
historical and prospective) by geographical area, agent and office and client or
prospective client) as it may request.



<PAGE>   14


F.                INFORMATION WITH RESPECT TO CONTEMPLATED SALE OF COMMON STOCK.
Such Purchaser shall have received information (in reasonable detail) with
respect to the Company's contemplated sale during September 1997 of
approximately 1,400,000 shares of Common Stock, at a price of not less than
$2.40 per share, to Richard Chapman, Larry Hendrickson and certain other
individuals.

G.                OTHER INFORMATION.  Such Purchaser shall have received all 
documentation and information relating to the business, assets and capital
structure of the Company and the Acquired Company as it may reasonably request,
and such Purchaser shall have had an opportunity to review such documentation
and information and discuss the same with the management of the Company and the
Acquired Company.

H.                RELATED PROCEEDINGS. All corporate and other proceedings taken
or to be taken in connection with (i) the Acquisition, (ii) the Share
Repurchases, (iii) the settlement of the Litigation, (iv) the Company's
execution, delivery, issuance and sale to such Purchaser of the Senior Notes
pursuant to the Senior Note Agreement, (v) the Shareholders' Agreement and (vi)
the other transactions contemplated thereby, and all documents incident thereto,
shall be satisfactory in form, scope and substance to such Purchaser (including,
without limitation, the terms and conditions of the conversion of the
Convertible Subordinated Notes and the subordination of (a) the Convertible
Subordinated Notes and (b) any promissory note payable by the Acquired Company
or the Company to any stockholder of the Acquired Company), and such Purchaser
shall have received all such counterpart originals or certified or other copies
of such documents as it may reasonably request.

I.                CONSUMMATION OF ACQUISITION, SHARE REPURCHASES AND SETTLEMENT
OF LITIGATION; SATISFACTION OF CONDITIONS PRECEDENT TO THE SHAREHOLDERS'
AGREEMENT. Such Purchaser shall have received satisfactory evidence that the
Acquisition, the Share Repurchases and the settlement of the Litigation have
been consummated prior to or concurrently with the issuance of the Securities
and the Senior Notes, pursuant to and in accordance with the terms and
conditions of the Acquisition Documents, the Share Repurchase Documents and the
Settlement Agreement (no terms thereof having been amended, supplemented, waived
or otherwise modified without such Purchaser's prior written consent). Such
Purchaser shall have received satisfactory evidence that the conditions
precedent to the effectiveness of the Shareholders' Agreement have been
satisfied prior to or concurrently with the issuance of the Securities and the
Senior Notes (no terms thereof having been amended, supplemented, waived or
otherwise modified without such Purchaser's prior written consent).

J.                REPURCHASE OF COMMON STOCK. Such Purchaser shall have received
evidence that the Company has repurchased in the Share Repurchases from the
stockholders listed on Schedule 3I at least 4,197,483 shares of Common Stock and
has retired, or is holding in treasury, at least 2,793,143 shares of Common
Stock prior to or concurrently with the issuance of the Securities and the
Senior Notes pursuant to the Senior Note Agreement on terms and conditions and
subject to documentation (including, 



<PAGE>   15


without limitation, subordination of the Shareholder Notes, non-competition
agreements and settlements and releases of all claims related to the
Litigation), satisfactory in all respects to such Purchaser. Such Purchaser
shall have received evidence that W.T. Wamberg has purchased 450,000 shares of
Common Stock from certain stockholders of the Company prior to or concurrently
with the Share Repurchases.

K.                TERMINATION OF EXISTING BANK FACILITY.  Such Purchaser shall 
have received evidence that the Existing Bank Facility has been terminated, all
amounts outstanding thereunder have been satisfied in full and all liens related
thereto have been released.

L.                SALE OF SECURITIES TO OTHER PURCHASERS.  The Company shall 
have sold to the other Purchasers the Securities to be purchased by them at the
closing and shall have received payment in full therefor.

M.                PROCEEDINGS.  All corporate and other proceedings taken or to
be taken in connection with the transactions contemplated hereby and all
documents incident thereto shall be satisfactory in substance and form to such
Purchaser, and such Purchaser shall have received all such counterpart originals
or certified or other copies of such documents as it may reasonably request.

N.                FEES.  Without limiting the provisions of paragraph 11B, such
Purchaser's special counsel shall have received its fees, charges and
disbursements to the extent reflected in a statement of such special counsel
rendered to the Company at least one Business Day prior to the Closing.

4.                PREPAYMENTS.  The Notes shall be subject to prepayment only 
with respect to the prepayments specified in paragraphs 4A, 4B and 4C.

A.                REQUIRED PREPAYMENTS.  Until the Notes shall be paid in full,
the Company shall apply to the prepayment of the Notes, without premium, the sum
of $2,967,000 on August 9th in each of the years 2002 and 2003, and such
principal amounts of the Notes, together with interest thereon to the prepayment
dates, shall become due on such prepayment dates. The remaining outstanding
principal amount of the Notes, together with interest accrued thereon, shall
become due on the maturity date of the Notes.




<PAGE>   16
B.                OPTIONAL PREPAYMENT OF NOTES WITHOUT YIELD MAINTENANCE AMOUNT.

                  a) The Notes shall be subject to prepayment in whole at any
         time or from time to time in part (in integral multiples of $600,000 or
         such lesser amount necessary to permit compliance with paragraph 5V),
         at the option of the Company, at 100% of the principal amount so
         prepaid plus interest thereon to the prepayment date, provided that the
         Company may not prepay the Notes pursuant to this paragraph 4B unless
         (i) the Company is not making the prepayment for the purpose of
         refunding the Notes by the application, directly or indirectly, of
         borrowed funds and (ii) the Company does not contemplate replacing the
         funds applied to such prepayments by other borrowed funds. Any partial
         prepayment of the Notes pursuant to this paragraph 4B shall be applied
         in satisfaction of required payments of principal in inverse order of
         their scheduled due dates.

                  b) The Company shall give the holder of each Note irrevocable
         written notice of any prepayment pursuant to this paragraph 4B not less
         than ten Business Days prior to the prepayment date, specifying such
         prepayment date and the principal amount of the Notes, and of the Notes
         held by such holder, to be prepaid on such date and stating that such
         prepayment is to be made pursuant to this paragraph 4B and complies
         with the proviso of paragraph 4B(i). Notice of prepayment having been
         given as aforesaid, the principal amount of the Notes specified in such
         notice, together with interest thereon to the prepayment date, shall
         become due and payable on such prepayment date. The Company shall, on
         or before the day on which it gives written notice of any prepayment
         pursuant to this paragraph 4B, give telephonic notice of the principal
         amount of the Notes to be prepaid and the prepayment date to each
         holder which shall have designated a recipient of such notices in the
         Purchaser Schedule attached hereto or by notice in writing to the
         Company.

C.                OFFER TO PREPAY NOTES IN THE EVENT OF A CHANGE IN CONTROL OR 
A REVENUE MAINTENANCE EVENT.

                  a) Notice of Impending Change in Control. The Company will not
         take any action that consummates or finalizes a Change in Control
         unless at least 30 days prior to such action it shall have given to
         each holder of Notes written notice of such impending Change in
         Control.

                  b) Notice of Occurrence of Change in Control or Revenue
         Maintenance Event. The Company will, within five Business Days after
         any Responsible Officer has knowledge of the occurrence of any Change
         in Control or Revenue Maintenance Event, give written notice of such
         Change in Control or such Revenue Maintenance Event to each holder of
         Notes. If a Change in Control or Revenue Maintenance Event has
         occurred, such notice shall contain and constitute an offer to prepay
         the Notes as described in clause (iii) of this paragraph 4C and shall
         be accompanied by the certificate described in clause (vi) hereof.

                  c) Offer to Prepay Notes. The offer to prepay Notes
         contemplated by the foregoing clause (ii) shall be an offer to prepay,
         in accordance with and subject to this paragraph 4C, all, but not less
         than all, the Notes held by each holder (in this case only, "HOLDER" in
         respect of any Note registered in the 



<PAGE>   17


         name of a nominee for a disclosed beneficial owner shall mean such
         beneficial owner) on a date specified in such offer (the "PROPOSED
         PREPAYMENT DATE"). Such Proposed Prepayment Date shall be not less
         than 30 days and not more than 60 days after the date of such offer
         (if the Proposed Prepayment Date shall not be specified in such offer,
         the Proposed Prepayment Date shall be the 30th day after the date of
         such offer).

                  d) Rejection; Acceptance. A holder of Notes may accept the
         offer to prepay made pursuant to this paragraph 4C by causing a notice
         of such acceptance to be delivered to the Company at least five days
         prior to the Proposed Prepayment Date. A failure by a holder of Notes
         to respond to an offer to prepay made pursuant to this paragraph 4C
         shall be deemed to constitute an acceptance of such offer by such
         holder.


                  e) Prepayment; Reduction of Required Prepayments. Prepayment
         of the Notes to be prepaid pursuant to this paragraph 4C shall be at
         100% of the principal amount of such Notes, plus the Yield Maintenance
         Amount determined for the date of prepayment with respect to such
         principal amount, together with interest on such Notes accrued to the
         date of prepayment. On the Business Day preceding the date of
         prepayment, the Company shall deliver to each holder of Notes being
         prepaid a statement showing the Yield Maintenance Amount due in
         connection with such prepayment and setting forth the details of the
         computation of such amount. The prepayment shall be made on the
         Proposed Prepayment Date. Upon any partial prepayment of Notes pursuant
         to this paragraph 4C, the principal amount of the required prepayment
         of the Notes becoming due under paragraph 4A on or after the date of
         such prepayment shall be reduced in the same proportion as the
         aggregate unpaid principal amount of Notes is reduced as a result of
         such prepayment.

                  f) Officer's Certificate. Each offer to prepay the Notes
         pursuant to this paragraph 4C shall be accompanied by a certificate,
         executed by a Responsible Officer of the Company and dated the date of
         such offer, specifying: (a) the Proposed Prepayment Date; (b) that such
         offer is made pursuant to this paragraph 4C; (c) the principal amount
         of each Note offered to be prepaid; (d) the estimated Yield Maintenance
         Amount due in connection with such prepayment (calculated as if the
         date of such notice were the date of the prepayment) and the details of
         such calculation; (e) the interest that would be due on each Note
         offered to be prepaid, accrued to the Proposed Prepayment Date; (f)
         that the conditions of this paragraph 4C have been fulfilled; and (g)
         in reasonable detail, the nature and date of the Change in Control or
         Revenue Maintenance Event, as the case may be.

D.                PARTIAL PAYMENTS PRO RATA. Upon any partial prepayment of
Notes pursuant to paragraph 4A or 4B, the principal amount so prepaid shall be
allocated to all Notes at the time outstanding (including, for the purpose of
this paragraph 4D only, all such Notes prepaid or otherwise retired or purchased
or otherwise acquired by the 



<PAGE>   18


Company or any of its Subsidiaries or Affiliates other than by prepayment
pursuant to paragraph 4A, 4B or 4C) in proportion to the respective outstanding
principal amounts thereof. Upon any partial prepayment of Notes pursuant to
paragraph 4C, the principal amount so prepaid shall be allocated to all Notes at
the time outstanding and held by holders who have accepted the Company's offer
of prepayment made pursuant to paragraph 4C (including, for the purpose of this
paragraph 4D only, all such Notes prepaid or otherwise retired or purchased or
otherwise acquired by the Company or any of its Subsidiaries or Affiliates other
than by prepayment pursuant to paragraph 4A 4B or 4C) in proportion to the
respective outstanding principal amounts thereof.

E.                RETIREMENT OF NOTES. The Company shall not, and shall not
permit any of its Subsidiaries or Affiliates to, prepay or otherwise retire in
whole or in part prior to their stated final maturity (other than by prepayment
pursuant to paragraph 4A, 4B or 4C or upon acceleration of such final maturity
pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder unless the Company or such Subsidiary or
Affiliate shall have offered to prepay or otherwise retire or purchase or
otherwise acquire, as the case may be, the same proportion of the aggregate
principal amount of Notes held by each other holder of Notes at the time
outstanding upon the same terms and conditions. Any Notes so prepaid or
otherwise retired or purchased or otherwise acquired by the Company or any of
its Subsidiaries or Affiliates shall not be deemed to be outstanding for any
purpose under this Agreement, except as provided in paragraph 4D.

5.                AFFIRMATIVE COVENANTS.

         So long as any Note shall remain unpaid (or, with respect to the
covenants of the Company set forth in paragraphs 5A, 5B, 5C, 5T, 5U and 5X, so
long as any Note shall remain unpaid, any Warrant shall remain outstanding or
any Purchaser shall hold, directly or indirectly, any Common Stock) the Company
covenants that:

A.                FINANCIAL STATEMENTS.  The Company will deliver to each holder
in duplicate:

                  a) as soon as practicable and in any event within 45 days
         after the end of each quarterly period (other than the last quarterly
         period) in each fiscal year, consolidating and consolidated statements
         of income, shareholders' equity and cash flows of the Company and its
         Subsidiaries for the period from the beginning of the current fiscal
         year to the end of such quarterly period, and a consolidating and
         consolidated balance sheet of the Company and its Subsidiaries as at
         the end of such quarterly period, setting forth in each case in
         comparative form figures for the corresponding period in the preceding
         fiscal year, all in reasonable detail (including, without limitation, a
         breakdown by each division of the Company and its Subsidiaries) and
         satisfactory in form to the Required 



<PAGE>   19

         Holder(s) and certified by an authorized financial officer of the
         Company, subject to changes resulting from year-end adjustment;
         provided, that delivery pursuant to clause (vi) below of copies of the
         Quarterly Report on Form 10Q of the Company for such quarterly period
         filed with the Securities and Exchange Commission shall be deemed to
         satisfy the requirements of this clause (i) with respect to
         consolidated financial statements if such financial statements are
         included in such report;

                  b) as soon as practicable and in any event within 90 days
         after the end of each fiscal year, consolidating and consolidated
         statements of income and cash flows and a consolidated statement of
         stockholders' equity of the Company and its Subsidiaries for such year,
         and a consolidating and consolidated balance sheet of the Company and
         its Subsidiaries as at the end of such year, setting forth in each case
         in comparative form corresponding consolidated figures from the
         preceding annual audit, all in reasonable detail and satisfactory in
         form to the Required Holder(s) and, as to the consolidated statements,
         reported on by the Independent Accountant whose report shall be without
         limitation as to the scope of the audit and satisfactory in substance
         to the Required Holder(s) and, as to the consolidating statements,
         certified by an authorized financial officer of the Company; provided,
         that delivery pursuant to clause (vi) below of copies of the Annual
         Report on Form 10-K of the Company for such fiscal year filed with the
         Securities and Exchange Commission shall be deemed to satisfy the
         requirements of this clause (ii) with respect to consolidated financial
         statements if such financial statements are included in such report;

                  c) as soon as practicable and in any event within 90 days
         after the end of each fiscal year, good faith, projected consolidating
         and consolidated balance sheets and good faith, projected consolidating
         and consolidated statements of income, cash flows and stockholders'
         equity of the Company and its Subsidiaries as at the end of each of the
         next five fiscal years, all in reasonable detail (including, without
         limitation, a breakdown by each division of the Company and its
         Subsidiaries and an enumeration of the assumptions underlying such
         balance sheets and financial statements) and substantially in the form
         of the projections delivered pursuant to paragraph 3A(xviii), certified
         by an authorized financial officer of the Company (such certification
         to contain, among other things, a representation and warranty that such
         projected financial statements are reasonable based on the assumptions
         stated therein and the best information available to the officers of
         the Company);

                  d) as soon as practicable and in any event within 30 days
         after the end of each fiscal quarter, accounts receivable reports,
         commission renewal reports, business reports, policy cancellation
         reports and reports detailing the composition of the Commission Fees of
         the Company and its Subsidiaries for or as of, as the case may be, such
         quarter, certified by an authorized financial officer of 



<PAGE>   20

         the Company, all in reasonable detail and satisfactory in form, scope 
         and substance to the Required Holder(s);

                  e) as soon as practicable and in any event within 30 days
         after the end of each calendar month, a list of the shareholders and
         principals of each of the Company and its Subsidiaries, certified by a
         Responsible Officer, all in reasonable detail and satisfactory in form,
         scope and substance to the Required Holder(s);

                  f) promptly upon transmission thereof, copies of all such
         financial statements, proxy statements, notices and reports as it shall
         send to its stockholders and copies of all registration statements
         (without exhibits) and all reports which it files with the Securities
         and Exchange Commission (or any governmental body or agency succeeding
         to the functions of the Securities and Exchange Commission);

                  g) promptly upon receipt thereof, a copy of each other report
         submitted to the Company or any Subsidiary by independent accountants
         in connection with any annual, interim or special audit made by them of
         the books of the Company or any Subsidiary;

                  h) as soon as practicable and in any event within five days
         after any officer of the Company obtaining knowledge (a) of any
         condition or event which, in the opinion of management of the Company,
         could reasonably be expected to have a material adverse effect on the
         business, condition (financial or other), assets, properties,
         operations or prospects of the Company and its Subsidiaries, (b) that
         any Person has given any notice from any Person to the Company or any
         of its Subsidiaries or taken any other action with respect to a claimed
         default or event or condition of the type referred to in clause (iii)
         of paragraph 7A, (c) of the institution of any litigation involving
         claims against the Company or any of its Subsidiaries equal to or
         greater than $100,000 with respect to any single cause of action or of
         any adverse determination in any court proceeding in any litigation
         involving a potential liability to the Company or any of its
         Subsidiaries equal to or greater than $100,000 with respect to any
         single cause of action which makes the likelihood of an adverse
         determination in such litigation against the Company or such Subsidiary
         substantially more probable, (d) of any regulatory proceeding which
         could reasonably be expected to have a material adverse effect on the
         Company or any of its Subsidiaries, an Officer's Certificate specifying
         the nature and period of existence of any such condition or event, or
         specifying the notice given or action taken by such Person and the
         nature of any such claimed default, event or condition, or specifying
         the details of such proceeding, litigation or dispute and what action
         the Company or any of its Subsidiaries has taken, is taking or proposes
         to take with respect thereto;



<PAGE>   21

                  i) promptly after the filing or receiving thereof, copies of
         all reports and notices which the Company or any of its Subsidiaries
         files under ERISA with the Internal Revenue Service or the PBGC or the
         U.S. Department of Labor or which the Company or any of its
         Subsidiaries receives from such corporation;

                  j) promptly upon receipt or distribution thereof, as the case
         may be, a copy of each notice received or delivered, as the case may
         be, pursuant to Section 6(f) of the Acquisition Agreement and each
         claim received or delivered, as the case may be, with respect to a
         breach of the representations and warranties of any party to the
         Acquisition Agreement;

                  k) with reasonable promptness, budgets and financial plans of
         the Company and any of its Subsidiaries (including, without limitation,
         balance sheets and statements of income, shareholders' equity and cash
         flows) as such holder may request;

                  l) with reasonable promptness, such other information
         respecting the condition or operations, financial or otherwise, of the
         Company or any of its Subsidiaries as such holder may reasonably
         request; and

                  m) promptly upon transmission thereof, copies of all
         appraisals and valuations of the Company and its Subsidiaries or the
         Common Stock as it shall send to any Person in connection with any
         Share Repurchase Document or the Shareholders' Agreement;

Together with each delivery of financial statements required by clauses (i) and
(ii) above, the Company will deliver to each holder a Compliance Certificate
substantially in the form of Exhibit E attached hereto. Together with each
delivery of financial statements required by clause (ii) above, the Company will
deliver to the holder of each Note (i) a certificate of such accountants stating
that, in making the audit necessary for their report on such financial
statements, they have obtained no knowledge of any Event of Default or Default,
or, if they have obtained knowledge of any Event of Default or Default,
specifying the nature and period of existence thereof, provided, however, such
accountants shall not be liable to anyone by reason of their failure to obtain
knowledge of any Event of Default or Default which would not be disclosed in the
course of an audit conducted in accordance with generally accepted auditing
standards and (ii) a report, in reasonable detail and in form satisfactory to
the Required Holder(s), containing a breakdown by each division of the Company
and its Subsidiaries of the financial information contained in the financial
statements described in clause (ii) above, certified by an authorized financial
officer of the Company.

         The Company also covenants that immediately after any Responsible
Officer obtains knowledge of an Event of Default or Default, it will deliver to
each holder an 



<PAGE>   22


Officer's Certificate specifying the nature and period of existence thereof and
what action the Company proposes to take with respect thereto.

B.                INFORMATION REQUIRED BY RULE 144A. The Company will, upon the
request of the holder of any Note or Warrant, provide such holder, and any
Qualified Institutional Buyer designated by such holder, such financial and
other information as such holder may reasonably determine to be necessary in
order to permit compliance with the information requirements of Rule 144A under
the Securities Act in connection with the resale of Notes or Warrants, except at
such times as the Company is subject to the reporting requirements of section 13
or 15(d) of the Exchange Act.

C.                INSPECTION OF PROPERTY. The Company will permit any Person
designated by any holder in writing, at the Company's expense during the
continuance of a Default or Event of Default and otherwise at such holder's
expense, to visit and inspect any of the properties of the Company and its
Subsidiaries, to examine the corporate books and financial records of the
Company and its Subsidiaries and make copies thereof or extracts therefrom and
to discuss the affairs, finances and accounts of any of such corporations with
the principal officers of the Company and its independent public accountants
(and by this provision the Company authorizes such accountants to discuss the
affairs, finances and accounts of such corporations), all at such reasonable
times and as often as such holder may reasonably request, provided that, in the
absence of a Default or an Event of Default, such holder shall provide the
Company at least five days' advance notice of its intent to exercise its rights
pursuant to this paragraph 5C.

D.                COVENANT TO SECURE NOTES EQUALLY. The Company will, if it or
any Subsidiary shall create or assume any Lien upon any of its property or
assets, whether now owned or hereafter acquired, other than Liens permitted by
the provisions of paragraph 6G(1) (unless prior written consent to the creation
or assumption thereof shall have been obtained pursuant to paragraph 11C), make
or cause to be made effective provision whereby the Notes will be secured by
such Lien equally and ratably with any and all other Indebtedness thereby
secured so long as any such other Indebtedness shall be so secured pursuant to
such agreements and instruments as shall be approved by the Required Holder(s),
and the Company will cause to be delivered to the holder of each Note an opinion
of independent counsel to the effect that such agreements and instruments are
enforceable in accordance with their terms and that the Notes are equally and
ratably secured with such other Indebtedness.

E.                CORPORATE EXISTENCE, LICENSES AND PERMITS; MAINTENANCE OF
PROPERTIES. The Company will at all times do or cause to be done all things
necessary to maintain, preserve and renew its existence as a corporation
organized under the laws of a state of the United States of America, will
preserve and keep in force and effect, and cause each of its Subsidiaries to
preserve and keep in force and effect, all licenses and permits necessary to the
conduct of its and their respective businesses and will maintain and keep, and
will cause each of its Subsidiaries to maintain and keep, its and their
respective properties in good repair, working order and condition, and from time
to time make all 



<PAGE>   23


necessary and proper repairs, renewals and replacements, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times in the normal course of business as conducted prior to the date of
repair; provided, however, that nothing contained in this paragraph 5E shall
prevent the Company or any Subsidiary from ceasing or omitting to exercise any
right, license or permit or to make any repair, renewal or replacement that (i)
in the reasonable judgment of the Company or such Subsidiary is no longer in the
best interests of the Company or such Subsidiary and (ii) such cessation or
omission could not reasonably be expected to result in a material adverse effect
on the business, condition (financial or other), assets, properties, operations
or prospects of the Company and its Subsidiaries taken as a whole.

F.                MAINTENANCE OF MATERIAL CONTRACTS. The Company will, and will
causes its Subsidiaries to, maintain all contracts necessary to the conduct of
its and their respective businesses (including, without limitation, employment
contracts, non-competition agreements and principal office agreements);
provided, however, that nothing contained in this paragraph 5F shall prevent the
Company or any Subsidiary from terminating any contract that (i) in the
reasonable judgment of the Company or such Subsidiary is no longer in the best
interests of the Company or such Subsidiary and (ii) such termination could not
reasonably be expected to result in a material adverse effect on the business,
condition (financial or other), assets, properties, operations or prospects of
the Company and its Subsidiaries taken as a whole.

G.                MAINTENANCE OF INSURANCE.  The Company will carry and 
maintain, and cause each Subsidiary to carry and maintain, insurance (subject to
customary deductibles and retentions) in at least such amounts and against such
liabilities and hazards and by such methods as customarily maintained by other
companies operating similar businesses. The Collateral Agent and all holders of
Securities shall be named as additional insureds, and the Collateral Agent shall
be named as loss payee, on each insurance policy obtained or maintained by the
Company and its Subsidiaries with respect to their properties and businesses.

H.                PAYMENT OF TAXES AND OTHER CLAIMS. The Company will and will
cause each of its Subsidiaries to file all income tax or similar tax returns
required to be filed in any jurisdiction and to pay and discharge all taxes
shown to be due and payable on such returns and all other taxes, assessments,
governmental charges, levies, trade accounts payable and claims for work, labor
or materials (all the foregoing being referred to collectively as "CLAIMS")
payable by any of them, to the extent such Claims have become due and payable
and before they have become delinquent; provided that neither the Company nor
any Subsidiary need pay any Claim if (i) the amount, applicability or validity
thereof is contested by the Company or such Subsidiary on a timely basis in good
faith and in appropriate proceedings, and the Company or a Subsidiary has
established adequate reserves therefor to the extent required by GAAP on the
books of the Company or such Subsidiary or (ii) the nonpayment of all such
Claims in the aggregate could not result in a material adverse change in the
business, condition (financial or other), assets, properties, operations or
prospects of the Company and its Subsidiaries taken as a whole.



<PAGE>   24


I.                ERISA COMPLIANCE. The Company will, and will cause each ERISA
Affiliate to, at all times:

                  a) with respect to each Plan, make timely payments of
         contributions required to meet the minimum funding standard set forth
         in ERISA or the Code with respect thereto and, with respect to any
         Multiemployer Plan, make timely payment of contributions required to be
         paid thereto as provided by Section 515 of ERISA, and

                  b) comply with all other provisions of ERISA,

except for such failures to make contributions and failures to comply as could
not have a material adverse effect on the business, condition (financial or
other), assets, properties, operations or prospects of the Company and its
Subsidiaries taken as a whole.

J.                COMPLIANCE WITH LAWS.  The Company will comply, and will cause
each of its Subsidiaries to comply, with all applicable laws, rules, regulations
and orders (including those relating to protection of the environment) except,
in any such case, where failure to comply could not have a material adverse
effect on the business, condition (financial or otherwise), operations or
prospects of the Company and its Subsidiaries taken as a whole.

K.                COLLATERAL. The Company shall execute, and shall cause its
Subsidiaries to execute, any and all documents, financing statements, agreements
and instruments, and take all action (including filing Uniform Commercial Code
and other financing statements, mortgages and deeds of trust), that may be
required under applicable law, or which the Required Holder(s) or the Collateral
Agent may reasonably request in order to effectuate the transactions
contemplated by the Second Priority Note Documents and in order to grant,
preserve, protect and perfect the validity and priority of the security
interests and Liens created or purported to be created by the Security Documents
(it being understood that it is the intent of the parties that the obligations
of the Company and its Subsidiaries under the Second Priority Note Documents
shall be secured by, among other things, substantially all the property and
assets of the Company and its Subsidiaries (now or hereafter acquired or
created), including, without limitation, real and other properties acquired
subsequent to the Date of Closing). The Company agrees to provide from time to
time such evidence as the Required Holder(s) or the Collateral Agent shall
request as to the perfection and priority status of each such security interest
and Lien.

L.                ENFORCEMENT OF ACQUISITION DOCUMENTS, SHARE REPURCHASE 
DOCUMENTS, THE SETTLEMENT AGREEMENT AND THE SHAREHOLDERS' AGREEMENT. The Company
will enforce, and will cause each of its Subsidiaries parties thereto to
enforce, all covenants, agreements and other obligations contained in the
Acquisition Documents, the Share Repurchase Documents, the Settlement Agreement
and the Shareholders' Agreement which are binding upon the other parties thereto
and which survive the 



<PAGE>   25


consummation of the Acquisition or the Share Repurchases, as the case may be,
including, without limitation, all indemnification obligations.

M.                LOCKBOX ACCOUNT.  No later than the earlier of (a) 90 days 
after the Date of Closing and (b) the occurrence of a Default or an Event of
Default, the Company and each of its Subsidiaries shall have executed and
delivered the Lockbox Agreements and the Collateral Assignment of Deposit
Accounts. Upon the creation of the Lockbox Accounts, the Company and each of its
Subsidiaries shall maintain such Lockbox Accounts pursuant to the Lockbox
Agreements.

N.                PERFORMANCE OF OBLIGATIONS.  The Company will pay the Notes 
according to the reading, tenor and effect thereof. The Company will, and will
cause its Subsidiaries to, do and perform every act and discharge all of the
obligations provided to be performed and discharged by the Company or such
Subsidiary, as the case may be, under the Second Priority Note Documents to
which it is a party (including, without limitation, this Agreement) at the time
or times and in the manner specified.

O.                MAINTENANCE OF KEY SALES FORCE.  The Company will maintain, at
all times, a full time sales force equal to the greater of twenty individuals
and 80% of the number of sales representatives and agents as of the end of the
immediately preceding fiscal year.

P.                PLEDGE OF NOTES PAYABLE.  The Company will, and will cause its
Subsidiaries to, promptly deliver to the Collateral Agent pursuant to the
Security Documents all promissory notes payable to the Company or any of its
Subsidiaries, together with any necessary endorsements or instruments of
transfer, other than promissory notes in an aggregate principal amount, at any
time, not to exceed $2,000,000.

Q.                OFFERING OF COMMON STOCK.  On or prior to September 30, 1997,
the Company shall offer to sell approximately 1,400,000 shares of Common Stock,
at a price of not less than $2.40 per share, to Richard Chapman, Larry
Hendrickson and certain other individuals.

R.                MAINTENANCE OF KEY MAN AND SHAREHOLDER LIFE INSURANCE
POLICIES. The Company shall maintain in full force and effect at all times
policies of insurance in such form and issued by such financially sound and
reputable insurers rated at least A by A.M. Best as shall be acceptable to the
Required Holder(s) insuring the life of W.T. Wamberg in an aggregate amount
equal to $15,000,000. Such policies of insurance shall name the Company as
beneficiary and shall be collaterally assigned to the Collateral Agent. The
Company shall use its best efforts to maintain in full force and effect at all
times policies of insurance in such form and issued by such financially sound
and reputable insurers rated at least A by A.M. Best as shall be acceptable to
the Required Holder(s) insuring the lives of certain shareholders of the Company
to fund certain redemption obligations of the Company pursuant to the
Shareholders' Agreement.



<PAGE>   26


S.                CREATION AND MAINTENANCE OF WORKING CAPITAL FACILITY. Within
180 days after the Date of Closing, the Company will enter into a revolving
working capital facility upon terms and conditions and pursuant to documentation
in all respects satisfactory to the holders of the Notes, provided that the
aggregate principal amount of the Indebtedness outstanding under such facility
may not at any time exceed $3,000,000, such Indebtedness may not mature later
than three years after the creation of such facility and such Indebtedness may
be secured as provided in the Security Documents. Subject to the restrictions
contained in this Agreement and the other Second Priority Note Documents, the
Company will at all times maintain such revolving working credit facility and
will maintain its ability to satisfy all conditions precedent to its ability to
obtain advances thereunder.

T.                REINCORPORATION MERGER.  The Company will consummate the 
Reincorporation Merger no later than March 9, 1999.

U.                CONVERSION TO A C CORPORATION.  After the earlier of March 9,
1999 and the date upon which the Reincorporation Merger is consummated, the
Company will, upon 30 days written notice from the holder of any Warrant,
convert from an S Corporation to a C Corporation.

V.                CERTAIN REDEMPTIONS OF COMMON STOCK. With respect to the
redemptions of Common Stock described in clause (d) of the second sentence of
the definition of "Restricted Payments," the Company shall promptly furnish the
holders of the Notes a valuation (in reasonable detail and based upon the most
recent valuation prepared for the Company) of the shares of Common Stock being
redeemed and, to the extent that the life insurance proceeds attributable to the
deceased shareholder exceed the amount needed to redeem such deceased
shareholder's shares, the Company shall promptly prepay the Notes by the amount
of such excess pursuant to paragraph 4B.

W.                BCS SERVICE CORPORATION.  The Company will liquidate and 
dissolve BCS Service Corporation within 180 days of the Date of Closing.

X.                MATTERS RELATED TO QUALIFICATION AND LICENSURE. If the Company
is in any way unable to qualify to do business and be licensed as a "life
insurance agent" or similar entity under the laws of any state in which it
desires to conduct business (whether because of restrictions upon having
corporate shareholders or otherwise), it will take all necessary steps to
create, or cause the creation of, an Affiliate that is qualified and licensed
under the laws (including the insurance code or other similar statute) of such
state and will enter into and maintain in effect a management and service
agreement or similar arrangement between itself and the Affiliate (which shall
comply with paragraph 6G(8)) under which the net revenues of the Affiliate are
paid to the Company in consideration for services, administration and other
maintenance activities related to the business of the Affiliate.



<PAGE>   27
6.                NEGATIVE COVENANTS.     So long as any Note shall remain
unpaid the Company covenants that:

A.                TOTAL DEBT TO ANNUALIZED CASH FLOW RATIO.  The Company will 
not permit the ratio of Total Debt to Annualized Cash Flow at any time during
any period specified below to exceed the ratio set forth opposite such period:


<TABLE>
<CAPTION>
                      Period                             Ratio
                      ------                             -----
<S>                                                   <C>
         From the Date of Closing
         through and including December 31, 
         1998                                         5.0 to 1.0 

         From January 1, 1999 through and 
         including December 31, 1999                  4.0 to 1.0
         and thereafter                               3.0 to 1.0
</TABLE>


B.                LIMITATION ON RESTRICTED PAYMENTS.  The Company will not and 
will not permit any Subsidiary to directly or indirectly declare, order, pay,
make or set apart any sum for any Restricted Payment.

C.                MAINTENANCE OF MINIMUM CONSOLIDATED NET WORTH AND CONSOLIDATED
NET INCOME.

                  a) The Company will not permit, at any time, Consolidated Net
         Worth to be less than the sum of (a) $1,500,000 and (b) an aggregate
         amount equal to 100% of its Consolidated Net Income (on an after-tax
         basis or, as long as the Company is an S Corporation, after giving
         effect to any S Corporation Tax Distributions, but, in each case, only
         if a positive number) for each completed fiscal year beginning with the
         fiscal year ending December 31, 1997, minus (A) amounts expended for
         Share Repurchases and (B) the aggregate principal amount of the AAA
         Distribution Notes; and

                  b) The Company will not, for any fiscal quarter, permit
         Consolidated Net Income to be a negative number the absolute value of
         which exceeds $1,200,000 and will not, for the four most recently ended
         fiscal quarters, permit Consolidated Net Income to be a negative
         number.

D.                DISCOUNTED COMMISSION FEES TO TOTAL DEBT RATIO.  The Company 
will not permit, at any time, the ratio of Discounted Commission Fees to Total
Debt to be less than 1.0 to 1.0.

E.                INTEREST COVERAGE RATIO.  The Company will not permit the 
Interest Coverage Ratio at any time during any period specified below to be less
than the ratio set forth opposite such period:

<PAGE>   28
<TABLE>
<CAPTION>
                       Period                                        Ratio
                       ------                                        -----
<S>                                                              <C>
         From the Date of Closing through and                    1.25 to 1.0
         including December 31, 1998
         From January 1, 1999 through and                        1.60 to 1.0
         including December 31, 1999
         and thereafter                                           3.0 to 1.0
</TABLE>

F.       FIXED CHARGE COVERAGE RATIO. The Company will not permit the Fixed
Charge Coverage Ratio at any time during any period specified below to be less
than the ratio set forth opposite such period:

<TABLE>
<CAPTION>
                       Period                                        Ratio
                       ------                                        -----
<S>                                                              <C>
         From the Date of Closing through and                     .90 to 1.0
         including December 31, 1999
         From January 1, 2000 through and                        1.10 to 1.0
         including December 31, 2000
         and thereafter                                          1.25 to 1.0
</TABLE>

G.                 LIENS, INDEBTEDNESS, AND OTHER RESTRICTIONS. The Company will
not and will not permit any Subsidiary to:

         1.        LIENS. Create, assume or suffer to exist (upon the happening
         of a contingency or otherwise) any Lien upon any of its properties or
         assets (including, without limitation, any documents or instruments in
         respect of goods or accounts receivable), whether now owned or
         hereafter acquired, or any income or profits therefrom (whether or not
         provision is made for the equal and ratable securing of the Notes in
         accordance with the provisions of paragraph 5D) or assign or otherwise
         convey any right to receive income or profits therefrom, except:

               a)        Liens in favor of the Collateral Agent securing the
               Indebtedness evidenced by the Notes and the payment, performance
               and observance of the other obligations under this Agreement and
               the other Second Priority Note Documents;

               b)        Liens in favor of the Collateral Agent securing the
               Indebtedness evidenced by the Medium Term Notes and addressed in
               the Security Documents;

               c)        Liens in favor of the Collateral Agent securing the
               Indebtedness evidenced by the Senior Notes and the payment,
               performance and observance of the other obligations under the
               Senior Note Agreement and the other Senior Note Documents and
               addressed in the Security Documents;



<PAGE>   29

               d)        Liens in favor of the Collateral Agent securing the
               Indebtedness evidenced by the Working Capital Notes and addressed
               in the Security Documents; and

               e)        Liens incidental to the conduct of business or the
               ownership of properties of the Company and its Subsidiaries
               (including Liens in connection with worker's compensation,
               unemployment insurance and other like laws (other than ERISA
               Liens), warehousemen's and mechanic's liens and statutory
               landlord's liens) and Liens to secure the performance of bids,
               tenders or purchase, construction or sales contracts, or to
               secure statutory obligations, property taxes and assessments or
               governmental charges, surety or appeal bonds or other Liens of
               like general nature which in each case are incurred in the
               ordinary course of business and not in connection with the
               borrowing of money, the obtaining of advances or credit or the
               payment of the deferred purchase price of property and which do
               not in any event materially impair the value or use of the
               property encumbered thereby in the operation of the business of
               the Company and its Subsidiaries; provided in each case, that the
               obligation secured is not overdue, or, if overdue, the amount or
               validity thereof is being contested by the Company or such
               Subsidiary on a timely basis in good faith and in appropriate
               proceedings, and the Company or a Subsidiary has established
               adequate reserves therefor to the extent required by GAAP on the
               books of the Company or such Subsidiary;

         2.        LIMITATION ON INDEBTEDNESS. Create, incur, assume or permit
         to exist any Indebtedness other than, without duplication:

               a)        Indebtedness incurred pursuant to this Agreement, as
               evidenced by the Notes, and the guaranty obligations of the
               Company's Subsidiaries with respect thereto;

               b)        Indebtedness incurred pursuant to the Senior Note
               Agreement, as evidenced by the Senior Notes, and the guaranty
               obligations of the Company's Subsidiaries with respect thereto;

               c)        Indebtedness incurred pursuant to the Working Capital
               Note Documents, as evidenced by the Working Capital Notes,
               provided that the aggregate principal amount of the Working
               Capital Notes shall not, at any time, exceed $3,000,000;

               d)        Indebtedness incurred pursuant to the Acquisition
               Agreement, as evidenced by the Seller Notes; 

               e)        Indebtedness evidenced by the Shareholder Notes;



<PAGE>   30

               f)        Indebtedness consisting of unsecured trade payables
               incurred in the ordinary course or business and maturing not more
               than 90 days from the date of creation thereof; and

               g)        Indebtedness of the type described in clause (iii) of
               the definition of "Indebtedness," provided that such Indebtedness
               is incurred in connection with the leasing of office equipment
               and the aggregate amount of such Indebtedness shall not, at any
               time, exceed $500,000.

         3.        CLEAN-UP OF INDEBTEDNESS REPRESENTED BY WORKING CAPITAL
         NOTES. Have, at any time, any Indebtedness outstanding under the
         Working Capital Notes unless there shall have been during the
         immediately preceding twelve months a period of at least 45 consecutive
         days during which there shall have been no Indebtedness outstanding
         under the Working Capital Notes.

         4.        LOANS, ADVANCES, INVESTMENTS AND CONTINGENT LIABILITIES.
         Except as set forth on Schedule 6G(4), make or permit to remain
         outstanding any loan or advance (including, without limitation,
         advances of commission fees) to, or extend credit (other than trade
         credit extended in the normal course of business to any Person that is
         not a Subsidiary of the Company) to, or make or permit to remain
         outstanding any Guarantee in connection with the obligations, stock or
         dividends of, or own, purchase or acquire any stock, obligations or
         securities of, or any other interest in, or make any capital
         contribution to, any Person (any of the foregoing, an "INVESTMENT"),
         except that the Company or any Subsidiary may:

               a)        endorse negotiable instruments for collection in the
               ordinary course of business;

               b)        provide Guarantees with respect to the Indebtedness and
               other obligations of the Company and its Subsidiaries under the
               Senior Note Documents and the Second Priority Note Documents;

               c)        own, purchase or acquire (a) certificates of deposit of
               commercial banks organized under the laws of the United States or
               any state thereof (having capital resources in excess of
               $100,000,000) (provided that neither the Company nor any
               Subsidiary may own, purchase, or acquire more than $1,000,000 (in
               face amount) of such certificates of deposit from any such
               commercial bank) due within one year from the date of purchase
               and payable in the United States in United States dollars which
               are rated "A" or better by at least two nationally recognized
               rating agencies and (b) obligations of the United States
               Government, of any state, territory or possession of the United
               States of America or any agency thereof maturing within three
               years after the acquisition thereof which are rated in one of the
               two highest rating classifications by at least one nationally
               recognized rating agency;



<PAGE>   31

               d)        make loans and advances to employees and salespersons
               of the Company (who are not shareholders of the Company or any
               Subsidiary) granted in the normal and customary course of the
               Company's business and not to finance the acquisition of shares
               of Common Stock of the Company, provided that loans and advances
               in the normal and customary course of the Company's business
               shall not at any time exceed $400,000;

               e)        acquire promissory notes of shareholders of the Company
               in an aggregate principal amount not to exceed $1,320,000
               executed in connection with such shareholders' purchase of up to
               approximately 1,400,000 shares of Common Stock repurchased by the
               Company from H.G. Smith, provided that such promissory notes are
               pledged to the Collateral Agent to the extent required by
               paragraph 5P; and

               f)        make non-cash recourse loans to shareholders of the
               Company in an aggregate principal amount not to exceed, at any
               time, $300,000, provided that such loans may not mature more than
               three years after the making thereof and the promissory note(s)
               representing such loans are pledged to the Collateral Agent to
               the extent required by paragraph 5P.

         5.        CONSOLIDATION, MERGER, TRANSFER OF ASSETS, ACQUISITION, ETC.
         Except in connection with the Acquisition and the Reincorporation
         Merger, (i) merge or consolidate with or into any Person, (ii) convey,
         transfer, lease or otherwise dispose of all or substantially all of its
         assets to any Person, (iii) acquire all or substantially all of the
         assets or capital stock of any other Person or division thereof, (iv)
         adopt or effect any plan of reorganization, recapitalization,
         liquidation or dissolution except as contemplated by paragraph 5W in
         the case of BCS Service Corporation or (v) acquire any properties or
         assets other than in the ordinary course of business.

         6.        LIMITATION ON ASSET DISPOSITIONS. Except as permitted under
         paragraph 6G(5), make or permit to be made any Asset Disposition, other
         than the following:

               a)        any Asset Disposition involving worthless or obsolete
               equipment which is promptly replaced with equipment of comparable
               suitability; and

               b)        any Asset Disposition involving inventory sold in the
               ordinary course of business pursuant to customary trade terms.



<PAGE>   32

         7.        SALE OR DISCOUNT OF RECEIVABLES. Sell with recourse, discount
         (other than to the extent of finance and interest charges included
         therein) or otherwise sell for less than face value thereof, any of its
         notes or accounts receivable, except notes or accounts receivable the
         collection of which is doubtful in accordance with general accepted
         accounting principles.

         8.        TRANSACTIONS WITH AFFILIATES. Directly or indirectly,
         purchase, acquire or lease any property from, or sell, transfer or
         lease any property to, or otherwise deal with, in the ordinary course
         of business or otherwise (i) any Affiliate, (ii) any Person owning,
         beneficially or of record, directly or indirectly, either individually
         or together with all other Persons to whom such Person is related by
         blood, adoption or marriage, stock of the Company (of any class having
         ordinary voting power for the election of directors) aggregating 5% or
         more of such voting power or (iii) any Person related by blood,
         adoption or marriage to any Person described or coming within the
         provisions of clause (i) or (ii) of this paragraph 6G(8), except in the
         ordinary course and pursuant to the reasonable requirements of the
         Company's or such Subsidiary's business and upon fair and reasonable
         terms no less favorable to the Company or such Subsidiary than would be
         obtainable in a comparable arm's-length transaction with a Person not
         an Affiliate.

         9.        LIMITATION ON SALE-LEASEBACK TRANSACTIONS. Enter into any
         arrangement with any lender or investor or to which such lender or
         investor is a party providing for the leasing by the Company or any
         Subsidiary of real or personal property which has been or is to be sold
         or transferred by the Company or any Subsidiary to such lender or
         investor or to any Person to whom funds have been or are to be advanced
         by such lender or investor on the security of such property or rental
         obligations of the Company or any Subsidiary (each such arrangement, a
         "SALE-LEASEBACK TRANSACTION").

H.                 CHANGE OF FISCAL YEAR. The Company will not and will not
permit any Subsidiary to change its fiscal year from its present fiscal year
(fiscal year end of December 31).

I.                 CHANGE OF BUSINESS. The Company will not and will not permit
any Subsidiary to change the general character of its business activities or
operations from its current business activities or operations or to engage in
any business activity or operation not reasonably related to its current
business activities or operations as normally conducted as of the Date of
Closing.

J.                 CERTIFICATES OF INCORPORATION; BYLAWS; TRADE NAMES. The
Company will not and will not permit any Subsidiary to amend, alter, modify or
restate its articles or certificate of incorporation or bylaws in any way which
would (i) change its corporate name or adopt a trade name, or (ii) in any manner
adversely affect the 


<PAGE>   33

obligations or covenants of the Company and its Subsidiaries hereunder or under
any of the other Second Priority Note Documents.

K.                 OTHER AGREEMENTS. The Company will not and will not permit
any of its Subsidiaries to enter into or permit to exist any agreement (i) which
would cause a Default or Event of Default hereunder or (ii) which contains any
provision which would be violated or breached by the performance of the
obligations of the Company and its Subsidiaries hereunder or under any of the
other Second Priority Note Documents.

L.                 LIMITATION ON CERTAIN RESTRICTIVE AGREEMENTS. The Company
will not, and will not permit any of its Subsidiaries to, enter into or suffer
to exist any contractual obligation, other than the Senior Note Documents and
the Second Priority Note Documents, which in any way restricts the ability of
the Company or any of its Subsidiaries to (i) create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, (ii) make any
prepayments or purchases of the Notes required under this Agreement, (iii) make
any dividends or distributions, or any payments required under this Agreement or
any other Second Priority Note Document or (iv) transfer any of its property or
assets to the Company or a Wholly Owned Subsidiary of the Company.

M.                 ERISA MATTERS. The Company will not, and will not permit any
Subsidiary or ERISA Affiliate to, adopt a Plan or amend an existing Plan in a
manner that materially increases the total dollar amount of the benefits
provided by the Plans described in Schedule 6M. The Company will not, and will
not permit any Subsidiary or ERISA Affiliate to, permit any Plan maintained by
the Company, any Subsidiary or any ERISA Affiliate (a) to engage in any
"PROHIBITED TRANSACTION" (as defined in ERISA), (b) to incur an "ACCUMULATED
FUNDING DEFICIENCY" (as defined in section 302 of ERISA and section 412 of the
Code), or (c) to terminate such Plan in a manner which could result in the
imposition of a Lien on the property or assets of the Company or any of its
Subsidiaries.

N.                 ONLY ONE CLASS OF CAPITAL STOCK. The Company will not, and
will not permit any Subsidiary to, have any class of capital stock other than
its Common Stock or common stock, as the case may be.

O.                 PROHIBITION AGAINST PAYMENTS AND PREPAYMENTS OF CERTAIN
INDEBTEDNESS. The Company will not, and will not permit any of its Subsidiaries
to, prepay any Subordinated Debt or any Indebtedness evidenced by the Medium
Term Notes. Upon the occurrence and during the continuance of any Default or
Event of Default, the Company will not, and will not permit any Subsidiary to,
pay any principal of or interest or premium on any Subordinated Debt.

P.                 AAA DISTRIBUTION. The Company will not consummate the AAA
Distribution unless (i) the aggregate amount of the AAA Distribution does not
exceed $4,143,623 and (ii) all recipients of any portion of the AAA Distribution
agree to, and 



<PAGE>   34

concurrently with the AAA Distribution do, lend their respective portions of the
AAA Distribution to the Company, provided that such loans mature no earlier than
October 31, 2007, are not subject to prepayment other than at maturity, bear
interest at a rate not to exceed 8.50% per annum, are subject to subordination
provisions acceptable in form, scope and substance, to the holders of the Notes
and are not offset (other than on a non-cash basis) by any obligation of any
recipient of any portion of the AAA Distribution to the Company or any of its
Subsidiaries.

Q.                 NO SUBSIDIARIES. Notwithstanding anything in this Agreement
or any other Second Priority Note Document to the contrary, the Company will not
create any Subsidiaries (other than the Wholly Owned Subsidiary described in the
definition of "Reincorporation Merger"); provided, however, that, if the holders
of the Notes consent to the creation of a Subsidiary pursuant to paragraph 11C
or the Company creates the Wholly Owned Subsidiary described in the definition
of "Reincorporation Merger," at the cost and expense of the Company, the Company
will (i) execute and deliver a pledge agreement in favor of the holders of the
Securities and in form, scope and substance satisfactory to the Required
Holder(s), (ii) cause each subsequently acquired or organized Subsidiary
(contemporaneously with such acquisition or organization) to execute and deliver
a guaranty agreement in favor of the holders of Securities and in form, scope
and substance satisfactory to the Required Holder(s), (iii) deliver or cause
such Subsidiary to deliver to the Collateral Agent a certificate representing
all capital stock of, or other equity interests in, such subsequently acquired
or organized Subsidiary, together with an undated stock power or assignment,
executed in blank by a Responsible Officer (or take or cause a Subsidiary to
take such other actions as are necessary to provide the Collateral Agent with a
perfected pledge of or security interest in such capital stock or other equity
interests), and (iv) cause such Subsidiary to secure payment of the Securities
and performance and observance of all other obligations of the Company and its
Subsidiaries under the Second Priority Note Documents by pledging or creating,
or causing to be pledged or created, perfected security interests and Liens with
respect to such of its assets and properties as the Required Holder(s) shall
designate (it being understood that it is the intent of the parties that such
obligations shall be secured by, among other things, substantially all the
property and assets of the Company and its Subsidiaries (now or hereafter
acquired or created), including, without limitation, real and other properties
acquired subsequent to the Date of Closing). The aforementioned security
interests and Liens will be created under the Security Documents and other
security agreements, mortgages, deeds of trust and other instruments and
documents in form, scope and substance satisfactory to the Required Holder(s)
and the Collateral Agent, and the Company will deliver or cause to be delivered
to the Collateral Agent, all such instruments and documents (including, without
limitation, legal opinions, title insurance policies, surveys and lien searches)
as the Required Holder(s) or the Collateral Agent shall request to evidence
compliance with this paragraph 6Q.



<PAGE>   35

R.                 RESTRICTIONS ON ISSUANCES OF COMMON STOCK. Except for the
transactions contemplated by paragraph 5Q, the Company will not issue more than
1,300,000 shares (including the 786,659 shares issuable pursuant to options
outstanding prior to January 1, 1997), on a fully diluted basis, of Common Stock
pursuant to current or future profit sharing, stock option, stock purchase,
stock appreciation or deferred compensation plans of the Company.

S.                 RESTRICTIONS UPON THE AMENDMENT OF CERTAIN DOCUMENTS. The
Company will not, and will not permit any Subsidiary to, amend any principal
office agreement (including, without, limitation, the provisions related to the
sharing of commissions), any employment agreement, any Acquisition Document, any
Share Repurchase Document, the Shareholders' Agreement, the Settlement
Agreement, the Non-Compete Agreement or any Working Capital Note Document in any
manner that (i) could result in a material adverse change in the business,
condition (financial or otherwise), prospects or operations of the Company and
its Subsidiaries taken as a whole, (ii) could result in a material adverse
effect on the Company and its Subsidiaries as a going concern or (iii) could in
any manner materially adversely affect the obligations or covenants of the
Company and its Subsidiaries hereunder or under any of the other Second Priority
Note Documents.

T.                 LIMITATION ON AMOUNT OF S CORPORATION TAX DISTRIBUTIONS.
Notwithstanding any provision in this Agreement to the contrary, (i) no S
Corporation Tax Distributions may be made for any tax period during which the
Company is not an S Corporation and (ii) the aggregate amount of S Corporation
Tax Distributions that may be made by the Company for any period during which
the Company is an S Corporation shall not exceed the product of (A) the maximum
marginal federal income tax rate applicable to individuals under Section 1 of
the Code, plus 3% and (B) the net taxable income and gain of the Company for
such period, less the aggregate amount of unrecovered net taxable losses of the
Company for all prior periods.

U.                 PROHIBITION AGAINST PHANTOM STOCK. The Company will not, and
will not permit any Subsidiary to, create any "phantom stock" or any equivalent
thereto (other than pursuant to the Cochlan Phantom Stock Agreement).

V.                 REINCORPORATION MERGER. The Company will not amend, and will
not permit its board of directors to consent to the amendment of, its Articles
of Incorporation or its bylaws or any agreement or document to which the Company
is a party in any manner which could require the affirmative vote of the holders
of more than two-thirds of the issued and outstanding shares of Common Stock to
approve the Reincorporation Merger. The Company will not permit its board of
directors to require the affirmative vote of the holders of more than two-thirds
of the issued and outstanding shares of Common Stock to approve the
Reincorporation Merger. Notwithstanding any provision of this Agreement or any
other Second Priority Note Document to the contrary, prior to or
contemporaneously with the consummation of the Reincorporation Merger, the
Company will not issue shares of Common Stock if the result of such issuance
would be 



<PAGE>   36

that the holders of at least two-thirds of the issued and outstanding shares of
Common Stock, after giving effect to such issuance, were not parties to the
Shareholders' Agreement as of its effective date.

W.                RESTRICTIONS UPON STOCK OPTIONS. The Company will not issue
any stock option with respect to Common Stock with an exercise price (on a per
share basis) less than the greater of $2.95 and the Market Price (as defined in
the Warrants).

7.                EVENTS OF DEFAULT.

A.                ACCELERATION. If any of the following events shall occur and
be continuing for any reason whatsoever (and whether such occurrence shall be
voluntary or involuntary or come about or be effected by operation of law or
otherwise):

               a)        the Company defaults in the payment of any principal of
               or Yield Maintenance Amounts payable with respect to any Note
               when the same shall become due, either by the terms thereof or
               otherwise as herein provided; or

               b)        the Company defaults in the payment of any interest on
               any Note for more than five days after the date due; or

               c)        the Company or any Subsidiary (a) defaults (whether as
               primary obligor or as guarantor or other surety) in any payment
               of principal of or interest on any other Indebtedness (or any
               obligation under notes payable or drafts accepted representing
               extensions of credit) beyond any period of grace provided with
               respect thereto, (b) fails to perform or observe any other
               agreement, term or condition contained in any agreement under
               which any such obligation is created (or if any other event
               thereunder or under any such agreement shall occur and be
               continuing) and the effect of such failure or other event is to
               cause such obligation to become due (or to be repurchased by the
               Company or any Subsidiary) prior to any stated maturity;
               provided, that the aggregate amount of all obligations as to
               which such a payment default shall occur and be continuing or
               such a failure or other event causing acceleration (or sale to
               the Company or any Subsidiary) shall occur and be continuing
               exceeds $100,000; or

               d)        the Company defaults in the payment of any principal
               of, premium payable with respect to or interest on any Seller
               Note, any Working Capital Note or any Shareholder Note when the
               same shall become due, either by the terms thereof or otherwise
               as provided in the Acquisition Agreement, the Working Capital
               Documents or the Share Repurchase Agreements;

               e)        any representation or warranty made by the Company or
               any of its Subsidiaries herein or in any of the other Second
               Priority Note Documents, or by 


<PAGE>   37

               the Company or any of its officers in any writing furnished in
               connection with or pursuant to this Agreement shall be false in
               any material respect on the date as of which made; or

               f)        the Company fails to perform or observe any term,
               covenant or agreement contained in paragraph 5M, 5P, 5R, 5S, 5T,
               5U or 6 or Section 7 or 8 of the Security Agreement or Section 5
               of the Collateral Assignment of Deposit Accounts; or

               g)        the Company or any Subsidiary fails to perform or
               observe any other agreement, covenant, term or condition
               contained herein or in any of the other Second Priority Note
               Documents and such failure shall not be remedied (a) within 30
               days after any Responsible Officer obtains (or should have
               obtained) knowledge thereof or (b) within 15 days after the
               Company receives written notice of such failure from any holder;
               or

               h)        the Company or any Subsidiary makes an assignment for
               the benefit of creditors or is generally not paying its debts as
               such debts become due; or

               i)        any decree or order for relief in respect of the
               Company or any Subsidiary is entered under any bankruptcy,
               reorganization, compromise, arrangement, insolvency, readjustment
               of debt, dissolution or liquidation or similar law, whether now
               or hereafter in effect (the "BANKRUPTCY LAW"), of any
               jurisdiction; or

               j)        the Company or any Subsidiary petitions or applies to
               any Tribunal for, or consents to, the appointment of, or taking
               possession by, a trustee, receiver, custodian, liquidator or
               similar official of the Company or any Subsidiary, or of any
               substantial part of the assets of the Company or any Subsidiary,
               or commences a voluntary case under the Bankruptcy Law of the
               United States or any proceedings (other than proceedings for the
               voluntary liquidation and dissolution of a Subsidiary) relating
               to the Company or any Subsidiary under the Bankruptcy Law of any
               other jurisdiction; or

               k)        any such petition or application is filed, or any such
               proceedings are commenced, against the Company or any Subsidiary
               and the Company or such Subsidiary by any act indicates its
               approval thereof, consent thereto or acquiescence therein, or an
               order, judgment or decree is entered appointing any such trustee,
               receiver, custodian, liquidator or similar official, or approving
               the petition in any such proceedings, and such order, judgment or
               decree remains unstayed and in effect for more than 60 days; or

               l)        any order, judgment or decree is entered in any
               proceedings against the Company decreeing the dissolution of the
               Company and such order, judgment or decree remains unstayed and
               in effect for more than 30 days; or



<PAGE>   38

               m)        any order, judgment or decree is entered in any
               proceedings against the Company or any Subsidiary decreeing a
               split-up of the Company or such Subsidiary which requires the
               divestiture of assets representing a substantial part, or the
               divestiture of the stock of a Subsidiary whose assets represent a
               substantial part, of the consolidated assets of the Company and
               its Subsidiaries (determined in accordance with generally
               accepted accounting principles) or which requires the divestiture
               of assets, or stock of a Subsidiary, which shall have contributed
               a substantial part of the Consolidated Net Income for any of the
               three fiscal years then most recently ended, and such order,
               judgment or decree remains unstayed and in effect for more than
               30 days; or

               n)        any final judgment or order, or series of final
               judgments or orders, in an amount in excess of $100,000, is
               rendered against the Company or any Subsidiary and either (i)
               enforcement proceedings have been commenced by any creditor upon
               such judgment or order or (ii) within 30 days after entry
               thereof, such judgment is not discharged or execution thereof
               stayed pending appeal, or within 30 days after the expiration of
               any such stay, such judgment is not discharged; or

               o)        any Termination Event with respect to a Plan shall have
               occurred and, within 30 days after the occurrence thereof, (a)
               such Termination Event (if correctable) shall not have been
               corrected and (b) the then present value of such Plan's vested
               benefits exceeds the then current value of assets accumulated in
               such Plan by more than the amount of $100,000 (or in the case of
               a Termination Event involving the withdrawal of a "substantial
               employer" (as defined in Section 4001(a) (2) of ERISA), the
               withdrawing employer's proportionate share of such excess shall
               exceed such amount); or

               p)        the Company or any of its ERISA Affiliates as employer
               under a Multiemployer Plan shall have made a complete or partial
               withdrawal from such Multiemployer Plan and the plan sponsor of
               such Multiemployer Plan shall have notified such withdrawing
               employer that such employer has incurred a withdrawal liability
               in an aggregate amount exceeding $100,000; or

               q)        any two of W.T. Wamberg, Mel Todd and Richard Chapman
               shall no longer continue to be executive officers of the Company
               or engaged in the day-to-day management of the affairs of the
               Company and its Subsidiaries; or

               r)        after July 31, 1998, any two of W.T. Wamberg, Mel Todd,
               Richard Chapman and the chief financial officer or chief
               operating officer of the Company, as the case may be, shall no
               longer continue to be executive officers of the Company or
               engaged in the day-to-day management of the affairs of the
               Company and its Subsidiaries, provided that the absence of the
               chief financial officer or the chief operating officer shall not
               result in a Default or an Event of 


<PAGE>   39

               Default pursuant to this clause (xviii) unless the chief
               financial officer or the chief operating officer is not replaced
               within 180 days;

then (a) if such event is an Event of Default specified in clause (i) or (ii) of
this paragraph 7A, the holder of any Note (other than the Company or any of its
Subsidiaries or Affiliates) may at its option, by notice in writing to the
Company, declare such Note to be, and such Note shall thereupon be and become,
immediately due and payable at par together with interest accrued thereon,
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by the Company, (b) if such event is an Event of Default
specified in clause (ix), (x) or (xi) of this paragraph 7A, all of the Notes at
the time outstanding shall automatically become immediately due and payable
together with interest accrued thereon and together with the Yield Maintenance
Amount, if any, with respect to each Note, without presentment, demand, protest
or notice of any kind, all of which are hereby waived by the Company, and (c) if
such event is not an Event of Default specified in clause (ix), (x) or (xi) of
this paragraph 7A, the holder(s) of 100% of the aggregate principal amount of
the Notes at the time outstanding may at its or their option, by notice in
writing to the Company, declare all of the Notes to be, and all of the Notes
shall thereupon be and become, immediately due and payable together with
interest accrued thereon and together with the Yield Maintenance Amount, if any,
with respect to each Note, without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Company.

               The Company acknowledges, and the parties hereto agree, that each
holder of a Note has the right to maintain its investment in the Notes free from
repayment by the Company (except as herein specifically provided for) and that
the provisions for payment of the Yield Maintenance Amount by the Company in the
event that the Notes are prepaid or accelerated as a result of an Event of
Default are intended to provide compensation for the deprivation of such right
under such circumstances.

B.                 RESCISSION OF ACCELERATION. At any time after any or all of
the Notes shall have been declared immediately due and payable pursuant to
paragraph 7A, the holder(s) of 100% of the aggregate principal amount of the
Notes at the time outstanding may, by notice in writing to the Company, rescind
and annul such declaration and its consequences if (i) the Company shall have
paid all overdue interest on the Notes, the principal of the Notes which has
become due otherwise than by reason of such declaration, and the Yield
Maintenance Amount, if any, with respect to any Notes which has become due
otherwise than by reason of such declaration, and interest on such overdue
interest, overdue principal and Yield Maintenance Amount at the rate specified
in the Notes, (ii) the Company shall not have paid any amounts which have become
due solely by reason of such declaration, (iii) all Events of Default and
Defaults, other than non-payment of amounts which have become due solely by
reason of such declaration, shall have been cured or waived pursuant to
paragraph 11C, and (iv) no judgment or decree shall have been entered for the
payment of any amounts due pursuant to the Notes or this Agreement. No such
rescission or annulment shall extend to or affect any subsequent Event of
Default or Default or impair any right arising therefrom.



<PAGE>   40

C.                 NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall
be declared immediately due and payable pursuant to paragraph 7A or any such
declaration shall be rescinded and annulled pursuant to paragraph 7B, the
Company shall forthwith give written notice thereof to the holder of each Note
at the time outstanding.

D.                 RIGHT OF SET-OFF. In addition to any rights and remedies of
the holders of the Notes provided by law (including, without limitation, other
rights of set-off, recoupment or appropriation and application) and upon the
occurrence and continuance of an Event of Default, each holder of a Note shall
have the right, without prior notice to the Company or any of its Subsidiaries,
any such notice being expressly waived by the Company and its Subsidiaries to
the extent permitted by applicable law, upon any amount becoming due and payable
by the Company or any of its Subsidiaries hereunder or under the other Second
Priority Note Documents or the Senior Note Documents (whether at the stated
maturity, by acceleration or otherwise) to set-off, recoup or appropriate and
apply, at any time and from time to time, against such amount, to the extent
permitted by applicable law, any and all commission fees and revenues and any
other credits, indebtedness or claims, in each case whether direct or indirect,
absolute or contingent, matured or unmatured, at any time held or owing or to
become owing by such holder or any affiliate thereof to or for the credit or the
account of the Company or any of its Subsidiaries, whether or not the Collateral
Agent or any holder of a Note has made any demand for payment. Any Person to
whom the holder of any Note has granted a participation pursuant to paragraph
11E of this Agreement shall, to the maximum extent permitted by applicable law,
also have the rights of set-off, recoupment or appropriation and application
provided for in this paragraph 7D in respect of its participating interest, to
the same extent as if the amount of its participating interest were owing
directly to it as a holder of a Note. Each holder of a Note agrees promptly to
notify the Company or any Subsidiary, as applicable, and the Collateral Agent
after any such set-off, recoupment or appropriation and application made by such
holder, or, to its knowledge, by a Person to whom such holder has granted such a
participation, provided that, to the extent permitted by applicable law, the
failure to give such notice shall not affect the validity of such set-off,
recoupment or appropriation and application.

E.                 NOTICE TO HOLDERS OF SUBORDINATED DEBT; PAYMENT BLOCK. Upon
the occurrence and continuance of any Default or any Event of Default, the
Company shall promptly notify each holder of any Subordinated Debt of such
Default and Event of Default. The Company will not, and will not permit any
Subsidiary to, pay any principal of or interest or premium on any Subordinated
Debt during the continuance of any Default or any Event of Default.

F.                 OTHER REMEDIES. If any Event of Default or Default shall
occur and be continuing, (i) the holder of any Note may proceed to protect and
enforce its rights under this Agreement, such Note and the other Second Priority
Note Documents by exercising such remedies as are available to such holder in
respect thereof under applicable law, either by suit in equity or by action at
law, or both, whether for specific performance 


<PAGE>   41

of any covenant or other agreement contained in this Agreement or the other
Second Priority Note Documents or in aid of the exercise of any power granted in
this Agreement or the other Second Priority Note Documents, and (ii) both the
Collateral Agent and the holders of the Notes may exercise any rights or
remedies in their respective capacities under the Security Documents in
accordance with the provisions thereof. No remedy conferred in this Agreement or
the other Second Priority Note Documents upon the holder of any Note or the
Collateral Agent is intended to be exclusive of any other remedy, and each and
every such remedy shall be cumulative and shall be in addition to every other
remedy conferred herein or now or hereafter existing at law or in equity or by
statute or otherwise.

8.                 REPRESENTATIONS, COVENANTS AND WARRANTIES. The Company
represents, covenants and warrants (giving effect to the Acquisition and the
Share Repurchases) as follows:

A.                 ORGANIZATION AND QUALIFICATION. The Company is a corporation
duly organized and validly existing in good standing under the laws of the State
of Texas, and is duly licensed and in good standing as a foreign corporation in
each jurisdiction in which the nature of the business transacted or the property
owned is such as to require licensing or qualification as a foreign corporation.
The Company has no Subsidiaries (other than BCS Service Corporation). BCS
Service Corporation is engaged in the collection of consulting and
administrative service fees relating to nonqualified benefit plans and has total
liabilities (absolute and contingent) of less than $30,000. The execution,
delivery and performance by the Company of the Notes, this Agreement, the other
Second Priority Note Documents, the Share Repurchase Documents, the Acquisition
Documents, the Settlement Agreement and the Shareholders' Agreement to which it
is a party are within the Company's corporate powers and have been duly
authorized by all necessary corporate action.

B.                 FINANCIAL STATEMENTS. The Company has furnished each
Purchaser with the following financial statements, identified by a principal
financial officer of the Company: (a) (i) a balance sheet of the Company as at
December 31 in each of the years 1992 to 1996, inclusive, and statements of
income, stockholders' equity and cash flows of the Company for each such year,
all reported on by Lane, Gorman and Trubitt, (ii) a balance sheet of the Company
as at June 30 in each of the years 1996 and 1997 and statements of income,
stockholders' equity and cash flows for the three-month period ended on each
such date, prepared by the Company and (iii) a balance sheet of the Acquired
Company as at June 30, 1997 and statements of income, stockholders' equity and
cash flows for the three-month period ended on such date, prepared by the
Acquired Company and (b) (i) a pro forma balance sheet of the Company (after
giving effect to the Acquisition and the Share Repurchases and including a
breakdown by each division of the Company) as at December 31, 1996 and pro forma
statements of income, stockholder's 


<PAGE>   42

equity and cash flows of the Company (after giving effect to the Acquisition and
the Share Repurchases and including a breakdown by each division of the Company)
for such year, prepared by the Company, and (ii) a pro forma balance sheet of
the Company (after giving effect to the Acquisition and the Share Repurchases
and including a breakdown by each division of the Company) as at June 30, 1997
and pro forma statements of income, stockholders' equity and cash flow of the
Company (after giving effect to the Acquisition and the Share Repurchases and
including a breakdown by each division of the Company) for the three-month
period ended on such date, prepared by the Company. Such financial statements
(including any related schedules and/or notes) are true and correct in all
material respects (subject, as to interim statements, to changes resulting from
audits and year-end adjustments), have been prepared in accordance with
generally accepted accounting principles consistently followed throughout the
periods involved and show all liabilities, direct and contingent, of the Company
required to be shown in accordance with such principles. The balance sheets
fairly present the historical or pro forma, as the case may be, condition of the
Company or the Acquired Company, as the case may be, as at the dates thereof,
and the statements of income, stockholders' equity and cash flows fairly present
the, historical or pro forma, as the case may be, results of the operations of
the Company or the Acquired Company, as the case may be, and its cash flows for
the periods indicated. There has been no material adverse change in the
business, condition (financial or otherwise), prospects or operations of the
Company since December 31, 1996.

C.                 ACTIONS PENDING. Other than as described on Schedule 8C,
there is no action, suit, investigation or proceeding pending or, to the
knowledge of the Company, threatened against the Company, or any properties or
rights of the Company, by or before any court, arbitrator or administrative or
governmental body which, if adversely determined, might result in a liability of
greater than $100,000 or might otherwise result in any material adverse change
in the business, condition (financial or otherwise), prospects or operations of
the Company. There is no action, suit, investigation or proceeding pending or
threatened against the Company which purports to affect the validity or
enforceability of this Agreement, any Note, any Warrant, any of the other Second
Priority Note Documents, any of the Acquisition Documents, any of Share
Repurchase Documents, the Settlement Agreement or the Shareholders' Agreement.

D.                 OUTSTANDING INDEBTEDNESS. The Company does not have
outstanding any Indebtedness except as permitted by paragraphs 6A, 6D and 6G(2)
and all of which is described in Schedule 8D attached hereto. There exists no
default under (and no waiver of default is currently in effect with respect to)
the provisions of any instrument evidencing such Indebtedness or of any
agreement relating thereto, and no event or condition exists with respect to any
Indebtedness of the Company that would permit (or that with notice or the lapse
of time, or both, would permit) one or more Persons to cause such Indebtedness
to become due and payable before its stated maturity or before its regularly
scheduled dates of payment.

E.                 TITLE TO PROPERTIES. The Company has good and marketable
title to its real property (other than property which it leases) and good title
to all of its other 


<PAGE>   43

properties and assets, including the properties and assets reflected in the pro
forma balance sheet as at June 30, 1997 referred to in paragraph 8B(b)(ii)
(other than properties and assets disposed of in the ordinary course of
business), subject to no Lien of any kind except Liens permitted by paragraph
6G(1). All leases necessary in any material respect for the conduct of the
business of the Company are valid and subsisting and are in full force and
effect.

F.                 POSSESSION OF FRANCHISES, LICENSES, PATENTS AND TRADEMARKS.
The Company possesses all franchises, certificates, licenses, permits and other
authorizations from governmental political subdivisions or regulatory
authorities, free from burdensome restrictions, that are necessary in any
material respect for the ownership, maintenance and operation of its properties
and assets, and the Company is not in violation of any thereof in any material
respect. The Company owns or possesses all licenses, permits, franchises,
authorizations, patents, copyrights, service marks, trademarks, trade dress,
logos, corporate names and trade names and rights thereto, that individually or
in the aggregate are material, without known conflict with the rights of others.
To the best knowledge of the Company, no product of the Company infringes in any
material respect any license, permit, franchise, authorization, patent,
copyright, service mark, trademark, trade name, trade dress, logo, corporate
name or other right owned by any other Person. To the best knowledge of the
Company, there is no material violation by any Person of any right of the
Company with respect to any patent, copyright, service mark, trademark, trade
name, trade dress, logo, corporate name or other right owned or used by the
Company.

G.                 TAXES. The Company has filed all federal, state and other
income tax returns which, to the knowledge of the officers of the Company, are
required to be filed, and has paid all taxes as shown on such returns and on all
assessments received by it, and has paid, collected and withheld all other taxes
which are otherwise required to be paid, collected or withheld on or prior to
the date hereof, except such taxes as are being contested in good faith by
appropriate proceedings and for which adequate reserves have been established in
accordance with generally accepted accounting principles. There are no
unsatisfied actual or proposed adjustments or assessments for taxes against the
Company or, to the knowledge of the Company, any basis for any such assessment
or adjustment. There are no pending audits, actions, proceedings, disputes,
claims or, to the Company's knowledge, investigations with respect to any taxes
payable by or asserted against the Company. The Company has not received notice
from any governmental authority of its intent to examine or audit any tax
returns of the Company. The Company has been subject to a valid and effective
election to be an S corporation, within the meaning of section 1361(a)(1) of the
Code from the date of its organization to the date hereof, and such S
corporation election has not been terminated (within the meaning of section
1362(d) of the Code) at any time on or prior to the date hereof. As of the date
hereof, the Company does not have any amounts of "net unrealized built-in gain"
(within the meaning of section 1374(d) of the Code) on which the Company would
be required to pay taxes under Section 1374(a) of the Code if the Company were
to sell any of its assets at any time on or after the date hereof.



<PAGE>   44

H.                 CONFLICTING AGREEMENTS AND OTHER MATTERS. The Company is not
a party to any contract or agreement or subject to any charter or other
corporate restriction which materially and adversely affects its business,
property or assets, prospects or financial condition. The execution and delivery
of this Agreement, the Notes, the Warrants, the Registration Rights Agreement,
the Participation Rights Agreement, the Put Rights Agreement, the Security
Documents (collectively, the "NOTE DOCUMENTS"), the Acquisition Documents, the
Share Repurchase Documents, the Settlement Agreement and the Shareholders'
Agreement (the Note Documents, the Acquisition Documents, the Share Repurchase
Documents, the Settlement Agreement and the Shareholders' Agreement are
collectively, the "TRANSACTION DOCUMENTS") by the Company, the offering,
issuance and sale of the Notes, the Warrants, the Seller Notes, the Working
Capital Notes and the Shareholder Notes (as defined in clauses (a) and (c) of
the definition of Shareholder Notes) by the Company and the issuance of the
shares of Common Stock upon the exercise of the Warrants and the conversion of
the Convertible Subordinated Notes and the fulfillment of and compliance with
the respective provisions of the Transaction Documents by the Company do not and
will not conflict with, or result in a breach of the terms, conditions or
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien (except Liens created under the Security
Documents and any Liens created pursuant to Section 3 of the Medium Term Notes)
upon any of the properties or assets of the Company (including Purchased Assets,
as such term is defined in the Acquisition Agreement) pursuant to, or require
any authorization, consent, approval, exemption or other action by or notice to
or filing with any court, administrative or governmental body or other Person
(other than (a) routine filings after the date hereof with the Securities and
Exchange Commission and/or state Blue Sky authorities in connection with the
Registration Rights Agreement, (b) those recordations and filings with respect
to the Security Documents as are set forth in the opinion of Keith Staudt,
General Counsel of the Company, delivered pursuant to paragraph 3A(vi)hereof,
(c) the registration of Common Stock under the circumstances contemplated by the
Registration Rights Agreement and (d) other consents and approvals required by
the assignment of various licenses and contracts pursuant to the Acquisition
Agreement) or result in the revocation, suspension, limitation or imposition of
any material condition upon the license of the Company to act as a life
insurance agent in the State of Texas pursuant to the Texas Insurance Code
(other than pursuant to Art. 21.07-1 of the Texas Insurance Code (but only with
respect to the issuance of the shares of Common Stock upon the exercise of the
Warrants) or any similar license required or granted by any administrative or
governmental body or other Person pursuant to, the Articles of Incorporation or
bylaws of the Company, any applicable law (including, without limitation, any
insurance, securities or Blue Sky law), statute, rule or regulation or any
agreement (including, without limitation, (i) any Acquisition Document, any
Share Repurchase Document, the Shareholders' Agreement or the Settlement
Agreement, (ii) any agreement referred to in Schedule 8AA or any other material
agreement of the Company or the Acquired Company, if any, and (iii) any
agreement (other than the Note Documents) set forth or listed in any schedule or
exhibit to, or specifically referred to in, any Acquisition Document, any Share
Repurchase Document, the Shareholders' 


<PAGE>   45

Agreement or the Settlement Agreement) or any instrument, order, judgment or
decree to which the Company is a party or otherwise subject (including, without
limitation, by virtue of its assumption of liabilities under the Acquisition
Agreement). The Company is not a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness of the Company, any
agreement relating thereto or any other contract or agreement (including its
charter) which limits the amount of, or otherwise imposes restrictions on the
incurring of, Indebtedness of the Company of the type to be evidenced by the
Notes except as set forth in the agreements listed in Schedule 8H(1).

I.                 AUTHORIZED CAPITAL STOCK. The authorized capital stock of the
Company consists of 20,000,000 shares of Common Stock, no par value per share.
The outstanding capital stock of the Company consists of 5,501,698 shares of
Common Stock. 1,404,340 shares of Common Stock are held in treasury. All of the
outstanding shares of Common Stock are duly authorized, validly issued, fully
paid and nonassessable. Except as set forth on Schedule 8I and in the Cochlan
Phantom Stock Agreement, the Company does not have outstanding any warrants,
options, convertible securities or other rights for the purchase or acquisition
of shares of its capital stock other than the Warrants. The Warrants and the
shares of Common Stock issuable upon the exercise of the Warrants have been duly
and validly authorized, and such shares of Common Stock have been duly reserved
for issuance upon exercise of the Warrants. No shareholder of the Company or any
other Person is entitled to preemptive or similar rights with respect to the
shares of Common Stock which are issuable upon exercise of the Warrants and, if
and when issued upon exercise of the Warrants in accordance with the provisions
thereof, such shares will be validly issued, fully paid and nonassessable
shares.

J.                 OFFERING OF THE SECURITIES. Neither the Company nor any agent
acting on its behalf has, directly or indirectly, offered the Securities or any
similar security of the Company for sale to, or solicited any offers to buy the
Securities or any similar security of the Company from, or otherwise approached
or negotiated with respect thereto with, any Person other than institutional
investors, and neither the Company nor any agent acting on its behalf has taken
or will take any action which would subject the issuance or sale of the
Securities to the provisions of section 5 of the Securities Act or to the
provisions of any securities or Blue Sky law of any applicable jurisdiction.

K.                 USE OF PROCEEDS. The Company does not own or have any present
intention of acquiring any "MARGIN STOCK" as defined in Regulation G (12 CFR
Part 207) of the Board of Governors of the Federal Reserve System ("MARGIN
STOCK"). The proceeds of sale of the Securities will be used to repurchase and
retire Common Stock of the Company pursuant to the Share Repurchases. None of
such proceeds will be used, directly or indirectly, for the purpose, whether
immediate, incidental or ultimate, of purchasing or carrying any margin stock or
for the purpose of maintaining, reducing or retiring any Indebtedness which was
originally incurred to purchase or carry any stock that is currently a margin
stock or for any other purpose which might constitute this transaction a
"PURPOSE CREDIT" within the meaning of such Regulation G. Neither the Company
nor any agent acting on its behalf has taken or will take any action which might



<PAGE>   46

cause this Agreement or the Securities to violate Regulation G or any other
regulation of the Board of Governors of the Federal Reserve System or to violate
the Exchange Act, in each case as in effect now or as the same may hereafter be
in effect.

L.                 ERISA. No accumulated funding deficiency (as defined in
section 302 of ERISA and section 412 of the Code), whether or not waived, exists
with respect to any Plan (other than a Multiemployer Plan). No liability to the
PBGC has been or is expected by the Company or any ERISA Affiliate to be
incurred with respect to any Plan (other than a Multiemployer Plan) by the
Company or any ERISA Affiliate which is or would be materially adverse to the
business, condition (financial or otherwise), prospects or operations of the
Company. Neither the Company nor any ERISA Affiliate has incurred or presently
expects to incur any withdrawal liability under Title IV of ERISA with respect
to any Multiemployer Plan which is or would be materially adverse to the
business, condition (financial or otherwise), prospects or operations of the
Company. The execution and delivery of this Agreement and the issuance and sale
of the Securities will be exempt from, or will not involve any transaction which
is subject to, the prohibitions of section 406 of ERISA and will not involve any
transaction in connection with which a penalty could be imposed under section
502(i) of ERISA or a tax could be imposed pursuant to section 4975 of the Code.
The representation by the Company in the next preceding sentence is made in
reliance upon and subject to the accuracy of the representation of each
Purchaser in paragraph 9B as to the source of funds to be used by it to purchase
any Security.

M.                 GOVERNMENTAL CONSENT. Neither the nature of the Company, nor
any of its businesses or properties, nor any relationship between the Company
and any other Person, nor any circumstance in connection with the offering,
issuance, sale or delivery of the Securities is such as to require any
authorization, consent, approval, exemption or other action by or notice to or
filing with any court or administrative or governmental or regulatory body
(other than routine filings after the Date of Closing with the Securities and
Exchange Commission and/or state Blue Sky authorities) in connection with the
execution and delivery of this Agreement, the other Second Priority Note
Documents, the Share Repurchase Documents, the Acquisition Documents, the
Settlement Agreement or the Shareholders' Agreement and the offering, issuance,
sale or delivery of the Securities or fulfillment of or compliance with the
terms and provisions of this Agreement, the Registration Rights Agreement, the
Put Rights Agreement or the Participation Rights Agreement or of the Securities.

N.                 ENVIRONMENTAL COMPLIANCE. The Company and all of its
properties and facilities have complied at all times and in all respects with
all federal, state, local and regional statutes, laws, ordinances and judicial
or administrative orders, judgments, rulings and regulations relating to
protection of the environment except, in any such case, where failure to comply
could not result in a material adverse effect on the business, condition
(financial or otherwise) or operations of the Company.



<PAGE>   47

O.                 FISCAL YEAR. The fiscal year of the Company ends as of
December 31 of each year.

P.                 DISCLOSURE. Neither this Agreement, the other Second Priority
Note Documents nor any other document, certificate or statement furnished to any
Purchaser by or on behalf of the Company in connection herewith contains any
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements contained herein and therein not misleading.
There is no fact peculiar to the Company which materially adversely affects or
in the future may (so far as the Company can now foresee) materially adversely
affect the business, property or assets, or financial condition of the Company
and which has not been set forth in this Agreement, the other Second Priority
Note Documents or in the other documents, certificates and statements furnished
to any Purchaser by or on behalf of the Company prior to the date hereof in
connection with the transactions contemplated hereby. The pro forma financial
projections dated as of September 3, 1997 and previously delivered to the
Purchasers by the Company are reasonable based on the assumptions stated therein
and the best information available to the officers of the Company. The Company
and the Acquired Company have disclosed the material terms of all existing
transactions with Affiliates to the Purchasers.

Q.                 INVESTMENT COMPANY ACT. Neither the Company nor any Person
controlling the Company is an "INVESTMENT COMPANY," or a company "CONTROLLED" by
an "INVESTMENT COMPANY," within the meaning of the Investment Company Act of
1940, as amended.

R.                 OTHER REGULATION. Neither the Company nor any Person
controlling the Company is subject to regulation under any federal or state
statute or regulation, as amended from time to time, which limits the ability of
(i) the Company to issue the Securities or (ii) the Company to perform its
respective obligations under this Agreement, the other Second Priority Note
Documents, the Share Repurchase Documents, the Acquisition Documents, the
Settlement Agreement or the Shareholders' Agreement.

S.                 ACQUISITION, SHARE REPURCHASE, SETTLEMENT AGREEMENT AND
SHAREHOLDERS' AGREEMENT REPRESENTATIONS AND WARRANTIES. To induce the Purchasers
to enter into this Agreement and to purchase the Securities, the Company agrees
that the Purchasers shall be entitled to rely upon each of the representations
and warranties set forth in any of the Acquisition Documents, any of the Share
Repurchase Documents, the Settlement Agreement and the Shareholders' Agreement,
as fully as if set forth in this Agreement.

T.                 SOLVENCY. The Company is Solvent, both before and after
giving effect to this Agreement, the other Second Priority Note Documents, the
Senior Note Documents, the Share Repurchase Documents and the Acquisition
Documents, and to the transactions contemplated hereby and thereby.



<PAGE>   48

U.                 EMPLOYMENT AGREEMENTS, NON-COMPETITION AGREEMENTS AND
PRINCIPAL OFFICE AGREEMENTS. Schedule 8U describes all material employment
agreements, non-competition agreements and principal office agreements to which
the Company is a party. All of the material employment agreements,
non-competition agreements and principal office agreements described on Schedule
8U are in full force and effect and no default thereunder or violation of any of
the provisions thereof exists.

V.                 INSURANCE LICENSES. All Insurance Licenses of the Company are
listed on Schedule 8V and are in full force and effect. No proceeding or
customer complaint has been filed with insurance regulatory authorities which
could reasonably be expected to lead to revocation, failure to renew,
limitation, suspense or restriction of any such Insurance License.

W.                 UNDISCLOSED LIABILITIES. The Company does not have any
Liability (and there is no Basis for any present or future action, suit,
proceeding, hearing, investigation, charge, complaint, claim, or demand against
it giving rise to any Liability), except for (i) Liabilities set forth on the
face of the pro forma balance sheet of the Company dated as of June 30, 1997
described in paragraph 3A(xxii)(a)(ii) and disclosed in any notes thereto and
(ii) Liabilities which have arisen after June 30, 1997 in the Ordinary Course of
Business (none of which results from, arises out of, relates to, is in the
nature of, or was caused by any breach of a contract, breach of warranty, tort,
infringement, or violation of law).

X.                 LEGAL COMPLIANCE. The Company and each of its shareholders,
officers, independent contractors, subagents, consultants and employees who are
required by reason of the nature of their employment by the Company to be
registered or appointed as an insurance agent, insurance broker or insurance
producer with the insurance department of any state or any self-regulatory body
or other governmental entity, is duly registered or appointed as such and such
registration or appointment is in full force and effect, and neither the Company
nor any such other Persons has been enjoined, indicted, convicted or made the
subject of any consent decree or administrative order on account of any material
violation of applicable law in connection with such Person's actions in any of
the foregoing capacities or, any enforcement or disciplinary proceeding alleging
any such violation.

Y.                 CERTAIN TAX MATTERS. The Company is not now and has never
been (i) a member of an Affiliated Group filing a consolidated federal income
Tax Return or (ii) responsible for any Liability for the taxes of any Person
(other than the Company) as a transferee or successor, by contract, by operation
of law, or otherwise.

Z.                 SALES REPRESENTATIVES. To the Company's knowledge, the
shareholders, directors and officers (and employees with responsibility for
sales matters) of the Company and the Acquired Company, and all sales
representatives currently marketing the Company's and the Acquired Company's
insurance policies under 




<PAGE>   49

Representative Agreements (other than William Chatfield and Bennett Meyer) are
expected to continue to perform such services after the Date of Closing, and
none has expressed an intention or desire to cease such sales activities.

AA.                 CONTRACTS. Except as set forth in Schedule 8AA, the Company
is not a party to, or bound by:

                   (i) any agreement (or group of related agreements) for the
          lease of personal property to or from any Person providing for lease
          payments in excess of $20,000 per annum;

                   (ii) any agreement (or group of related agreements) for the
          purchase or sale of supplies, products, or other personal property, or
          for the furnishing or receipt of services, the performance of which
          will extend over a period of more than one year, result in a material
          loss to the Company, or involve consideration in excess of $25,000;

                   (iii) any agreement concerning a partnership or joint
          venture;

                   (iv) any agreement (or group of related agreements) under
          which it has created, incurred, assumed, or guaranteed any
          indebtedness for borrowed money, or any Capitalized Lease Obligation,
          or under which it has imposed a Lien on any of its assets, tangible or
          intangible, except for the Liens permitted by paragraph 6G(1);

                   (v) any agreement concerning confidentiality or
          noncompetition other than with the Acquired Company or insurance
          carriers and others regarding product development;

                   (vi) any agreement or arrangement with any of the
          shareholders of the Acquired Company;

                   (vii) any profit sharing, stock option, stock purchase, stock
          appreciation, deferred compensation, severance, or other material plan
          or arrangement (including, without limitation, any plan or arrangement
          with respect to phantom stock or any equivalent thereto) for the
          benefit of its current or former directors, officers, and employees;

                   (viii) any collective bargaining agreement;

                   (ix) any agreement for the employment of any individual on a
          full-time, part-time, consulting, or other basis providing annual
          compensation in excess of $50,000 or providing severance benefits or
          which is not terminable at the will of the Company;



<PAGE>   50

                   (x) any agreement or arrangement under which it has advanced
          or loaned any amount to any of its directors, officers, and employees;

                   (xi) any agreement under which the consequences of a default
          or termination could have a material adverse effect on the business,
          condition (financial or other), prospects or operations of the
          Company; or

                   (xii) any other agreement (or group of related agreements),
          including Vendors' Contracts, the performance of which involves
          consideration in excess of $10,000.

With respect to each agreement described in Schedule 8AA attached hereto: (A)
such agreement is legal, valid, binding, enforceable, and in full force and
effect; (B) such agreement will continue to be legal, valid, binding,
enforceable, and in full force and effect on identical terms following the
consummation of the Acquisition, the Share Repurchases and the transactions
contemplated by this Agreement and the other Second Priority Note Documents; (C)
no party is in breach or default, and no event has occurred which with notice or
lapse of time would constitute a breach or default, or permit termination,
modification, or acceleration, under such agreement; and (D) no party has
repudiated any provision of such agreement. The Company is not a party to any
oral agreement.

BB.                ASSIGNMENT OF INSURANCE CONTRACTS. The Company has no reason
to believe that the notices and consents required to assign the Insurance
Contracts to the Company as provided in Section 7(b) of the Acquisition
Agreement will not be obtained.

CC.                SATISFACTION OF CONDITIONS PRECEDENT TO THE ACQUISITION, THE
SHARE REPURCHASES, THE SETTLEMENT AGREEMENT AND THE SHAREHOLDERS' AGREEMENT. All
of the conditions precedent to the effectiveness of the Acquisition Documents,
the Share Repurchase Documents, the Settlement Agreement and the Shareholders'
Agreements have been satisfied. None of the conditions precedent to the
effectiveness of the Acquisition Documents, the Share Repurchase Documents, the
Settlement Agreement and the Shareholders' Agreement have been waived without
the express written consent of each of the Purchasers.

DD.                COMPLIANCE WITH LAWS. The Company has complied with all
applicable laws, rules, regulations and orders (including those relating to
protection of the environment) except, in any such case, where failure to comply
could not have a material adverse effect on the business, condition (financial
or otherwise), operations or prospects of the Company.

EE.                CONDITION OF PROPERTY. All of the property of the Company is
in good repair, working order and condition so that the business carried on in
connection therewith may be properly and advantageously conducted at all times
in the normal course of business.



<PAGE>   51

FF.                BOOKS AND RECORDS. The Company has at all times maintained
proper books of record and account in which full, true and correct entries have
been made in accordance with GAAP.

GG.                ISSUANCE AND EXERCISE OF THE WARRANTS. The issuance of the
Warrants hereunder and any subsequent exercise of the Warrants (i) does not
violate any applicable law or governmental regulation (including, without
limitation, any laws or regulations applicable to Persons acting as insurance
agents, insurance brokers or insurance producers) (other than Art. 21.07-1 of
the Texas Insurance Code (but only with respect to the issuance of shares of
Common Stock upon the exercise of the Warrants) the violation of which the
Company represents and warrants will be cured by the satisfaction of the
covenant contained in paragraph 5T) or any contract, agreement or other document
to which the Company is party and (ii) could not result in a material adverse
change in the business, condition (financial or otherwise), prospects or
operations of the Company.

HH.                ADDITIONAL DISCLOSURE. Schedule 8HH(1) is a true, correct and
complete schedule of all properly accrued performance bonuses payable to
employees and independent sales representatives and agents of the Company.
Schedule 8HH(2) is a true, correct and complete schedule of all Plans and
Multiemployer Plans of the Company and any ERISA Affiliates. Schedule 8HH(3) is
a true, correct and complete schedule of all trademarks, service marks, trade
dress, logos, trade names and corporate names of the Company, together with all
translations, adaptations, derivations and combinations thereof, and all
applications, registrations and renewals in connection therewith.

II.                REINCORPORATION MERGER. The Company intends to consummate the
Reincorporation Merger no later than March 9, 1999. Neither the Articles of
Incorporation or the bylaws of the Company nor any agreement or document to
which the Company is a party nor any applicable law (including, without
limitation, the Texas Business Corporation Act), statute, rule or regulation
requires the affirmative vote of the holders of more than two-thirds of the
issued and outstanding shares of Common Stock to approve the Reincorporation
Merger. The consummation of the Reincorporation Merger could not have a material
adverse effect on the business, condition (financial or other), assets,
properties, operations or prospects of the Company.

JJ.                SATISFACTION OF CONDITIONS PRECEDENT. All of the conditions
precedent to the effectiveness of this Agreement have been satisfied or waived
in writing by each of the Purchasers.

KK.                CERTAIN AFFILIATES. The arrangements contemplated by
paragraph 5X are lawful and are customary and are recognized in the industry and
jurisdictions in which the Company operates or proposes to operate, directly or
in conjunction with Affiliates.



<PAGE>   52

9.                 REPRESENTATIONS OF EACH PURCHASER. Each Purchaser represents
as follows:

A.                 NATURE OF PURCHASE. Such Purchaser is not acquiring the
Securities to be purchased by it hereunder with a view to or for sale in
connection with any distribution thereof within the meaning of the Securities
Act, provided that the disposition of such Purchaser's property shall at all
times be and remain within its control.

B.                 SOURCE OF FUNDS. Such Purchaser represents that at least one
of the following statements is an accurate representation as to each source of
funds (a "Source") to be used by such Purchaser to pay the purchase price of the
Securities to be purchased by such Purchaser hereunder:

                   (i) the Source constitutes assets of a general account
          maintained by an insurance company, and the use of such Source for the
          purchase of the Notes is permitted by the terms of Prohibited
          Transaction Class Exemption 95-60; or

                   (ii) the Source is either (a) an insurance company pooled
          separate account, within the meaning of Prohibited Transaction
          Exemption ("PTE") 90-1 (issued January 29, 1990), or (b) a bank
          collective investment fund, within the meaning of the PTE 91-38
          (issued July 12, 1991) and, except as such Purchaser has disclosed to
          the Company in writing pursuant to this clause (ii), no employee
          benefit plan or group of plans maintained by the same employer or
          employee organization beneficially owns more than 10% of all assets
          allocated to such pooled separate account or collective investment
          fund; or

                   (iii) the Source constitutes assets of an "investment fund"
          (within the meaning of Part V of the QPAM Exemption) managed by a
          "qualified professional asset manager" or "QPAM" (within the meaning
          of Part V of the QPAM Exemption), no employee benefit plan's assets
          that are included in such investment fund, when combined with the
          assets of all other employee benefit plans established or maintained
          by the same employer or by an affiliate (within the meaning of Section
          V(c)(1) of the QPAM Exemption) of such employer or by the same
          employee organization and managed by such QPAM, exceed 20% of the
          total client assets managed by such QPAM, the conditions of Part I(c)
          and (g) of the QPAM Exemption are satisfied, neither the QPAM nor a
          person controlling or controlled by the QPAM (applying the definition
          of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
          interest in the Company and (a) the identity of such QPAM and (b) the
          names of all employee benefit plans whose assets are included in such
          investment fund have been disclosed to the Company in writing pursuant
          to this clause (iii); or



<PAGE>   53

                   (iv) the Source is a governmental plan; or

                   (v) the Source is one or more employee benefit plans, or a
          separate account or trust fund comprised of one or more employee
          benefit plans, each of which has been identified to the Company in
          writing pursuant to this clause (v); or

                   (vi) the Source does not include assets of any employee
          benefit plan, other than a plan exempt from the coverage of ERISA.

As used in this paragraph 9B, the terms "EMPLOYEE BENEFIT PLAN", "GOVERNMENTAL
PLAN", "PARTY IN INTEREST" and "SEPARATE ACCOUNT" shall have the respective
meanings assigned to such terms in Section 3 of ERISA.

10.                DEFINITIONS. For the purpose of this Agreement, the terms
defined in the introductory sentence and in paragraphs 1 and 2 shall have the
respective meanings specified therein, and the following terms shall have the
meanings specified with respect thereto below (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

A.                 YIELD MAINTENANCE TERMS.

               "CALLED PRINCIPAL" shall mean, with respect to any Note, the
principal of such Note that is to be prepaid pursuant to paragraph 4C or is
declared to be immediately due and payable pursuant to paragraph 7A, as the
context requires.

               "DISCOUNTED VALUE" shall mean, with respect to the Called
Principal of any Note, the amount obtained by discounting all Remaining
Scheduled Payments with respect to such Called Principal from their respective
scheduled due dates to the Settlement Date with respect to such Called
Principal, in accordance with accepted financial practice and at a discount
factor (applied on the same periodic basis as that on which interest on the
Notes is payable) equal to the Reinvestment Yield with respect to such Called
Principal.

               "REINVESTMENT YIELD" shall mean, with respect to the Called
Principal of any Note, 0.50% over the yield to maturity implied by (a) the
yields reported, as of 10:00 a.m. (New York City time) on the second Business
Day next preceding the Settlement Date with respect to such Called Principal, on
the display designated as "PAGE 678" on the Telerate Service (or such other
display as may replace Page 678 on the Telerate Service) for actively traded
U.S. Treasury securities having a maturity equal to the Remaining Average Life
of such Called Principal as of such Settlement Date, or if such yields shall not
be reported as of such time or the yields reported as of such time shall not be
ascertainable, (b) the Treasury Constant Maturity Series yields reported, for
the latest day for which such yields shall have been so reported as of the
second Business Day 
<PAGE>   54
preceding the Settlement Date with respect to such Called Principal, in Federal
Reserve Statistical Release H.15 (519) (or any comparable successor publication)
for actively traded U.S. Treasury securities having a constant maturity equal to
the Remaining Average Life of such Called Principal as of such Settlement Date.
Such implied yield shall be determined, (x) if necessary, by (1) converting U.S.
Treasury bill quotations to bond-equivalent yields in accordance with accepted
financial practice and (2) interpolating linearly between (I) the actively
traded U.S. Treasury security with the maturity closest to and greater than the
Remaining Average Life and (II) the actively traded U.S. Treasury security with
the maturity closest to and less than the Remaining Average Life and (y) by
converting all such implied yields to a payment basis in accordance with
accepted financial practice.

         "REMAINING AVERAGE LIFE" shall mean, with respect to the Called
Principal of any Note, the number of years (calculated to the nearest
one-twelfth year) obtained by dividing (i) such Called Principal into (ii) the
sum of the products obtained by multiplying (a) each Remaining Scheduled Payment
of such Called Principal (but not of interest thereon) by (b) the number of
years (calculated to the nearest one-twelfth year) which will elapse between the
Settlement Date with respect to such Called Principal and the scheduled due date
of such Remaining Scheduled Payment.

         "REMAINING SCHEDULED PAYMENTS" shall mean, with respect to the Called
Principal of any Note, all payments of such Called Principal and interest
thereon that would be due on or after the Settlement Date with respect to such
Called Principal if no payment of such Called Principal were made prior to its
scheduled due date.

         "SETTLEMENT DATE" shall mean, with respect to the Called Principal of
any Note, the date on which such Called Principal is to be prepaid pursuant to
paragraph 4C or is declared to be immediately due and payable pursuant to
paragraph 7A, as the context requires.

         "YIELD MAINTENANCE AMOUNT" shall mean, with respect to any Note, an
amount equal to the excess, if any, of the Discounted Value of the Called
Principal of such Note over the sum of (i) such Called Principal plus (ii)
interest accrued thereon as of (including interest due on) the Settlement Date
with respect to such Called Principal. The Yield Maintenance Amount shall in no
event be less than zero.

B.       OTHER TERMS.

         "AAA DISTRIBUTION" shall mean the proposed $0.60 per share distribution
to the shareholders of record of Common Stock on October 31, 1997.

         "AAA DISTRIBUTION NOTES" shall mean the subordinated promissory notes
of the Company to evidence the Company's borrowing from its shareholders of the
proceeds of the AAA Distribution in an aggregate principal amount not to exceed


<PAGE>   55

$4,143,623 upon terms and conditions and subject to documentation satisfactory
in all respects to the holders of the Notes.

         "ACQUIRED COMPANY" shall mean Bank Compensation Strategies, Inc., a
Minnesota corporation.

         "ACQUISITION" shall mean the acquisition by the Company of all or
substantially all of the assets of the Acquired Company and the assumption by
the Company of certain liabilities of the Acquired Company pursuant to the
Acquisition Documents.

         "ACQUISITION AGREEMENT" shall mean that certain Asset Purchase
Agreement among the Company, the Acquired Company and certain individuals dated
as of September 5, 1997.

         "ACQUISITION DOCUMENTS" shall mean the Acquisition Agreement and all
other written agreements, documents, instruments and certificates now or
hereafter executed and delivered by any Person which are required by the terms
of the Acquisition Agreement to be delivered to consummate the Acquisition, and
any and all amendments, supplements and other modifications thereof and all
renewals, extensions, restatements or substitutions from time to time of all or
any of the foregoing.

         "AFFILIATE" shall mean at any time, and with respect to any Person, (i)
any other Person that at such time directly or indirectly through one or more
intermediaries Controls, or is Controlled by, or is under common Control with,
such first Person, and (ii) any Person beneficially owning or holding, directly
or indirectly, 10% or more of any class of voting or equity interests of the
Company or any Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or indirectly,
10% or more of any class of voting or equity interests. As used in this
definition, "CONTROL" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management and policies of a Person,
whether through the ownership of voting securities, by contract or otherwise.
Unless the context otherwise clearly requires, any reference to an "AFFILIATE"
is a reference to an Affiliate of the Company.

         "AFFILIATED GROUP" shall mean an affiliated group within the meaning of
Section 1504(a) of the Code.

         "ANNUALIZED CASH FLOW" shall mean, at any time, (i) prior to September
30, 1998, Cash Flow for the period commencing September 1, 1997 through to such
date, annualized in accordance with accepted financial practice; and (ii) on or
after September 30, 1998, Cash Flow for the most recently ended four fiscal
quarters.

         "ASSET DISPOSITION" shall mean, with respect to the Company or any
Subsidiary, any transaction or series of related transactions in which such
Person sells, 



<PAGE>   56

conveys, transfers or leases (as lessor) or parts with control of (collectively,
for purposes of this definition, a "TRANSFER"), directly or indirectly, any of
its property or assets, including, without limitation, any Indebtedness of any
Subsidiary or capital stock of or other equity interests in any Subsidiary
(including the issuance of such stock or other equity interests by such
Subsidiary), other than transfers of cash or cash equivalents.

         "ASSIGNMENT OF LIFE INSURANCE POLICY" shall mean, collectively, those
certain Assignment of Life Insurance Policy, dated September 9, 1997, executed
and delivered by the Company and W. T. Wamberg to the Collateral Agent,
substantially in the form of Exhibit E-1 and E-2 to the Senior Note Agreement,
respectively, as the same may be amended, supplemented and otherwise modified
from time to time.

         "BANKRUPTCY LAW" shall have the meaning specified in clause (ix) of
paragraph 7A.

         "BASIS" shall mean any past or present fact, situation, circumstance,
status, condition, activity, practice, plan, occurrence, event, incident,
action, failure to act, or transaction that forms or could form the basis for
any specified consequence.

         "BUSINESS DAY" shall mean any day on which banks are open for business
in New York City (other than a Saturday, a Sunday or a legal holiday) in the
State of New York.

         "C CORPORATION" shall mean a corporation, or an association taxable as
a corporation under the Code, other than an S Corporation.

         "CAPITAL LEASE" shall mean a lease with respect to which the lessee is
required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.

         "CAPITAL LEASE OBLIGATION" shall mean, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.

         "CASH FLOW" shall mean, for any period, (a) the sum of (i) Consolidated
Net Income, plus Interest Charges and consolidated taxes, depreciation,
amortization and other non-cash charges to income of the Company and its
Subsidiaries for such period, but only to the extent deducted in the
determination of Consolidated Net Income, less (b) consolidated deferred taxes
or other non-cash items which constitute non-cash contributions to Consolidated
Net Income, excluding in each case all extraordinary and non-recurring items.
"CASH FLOW" for any period shall be determined after giving effect to
acquisitions and dispositions of assets by the Company or any of its
Subsidiaries during such period as if such acquisitions and dispositions had
occurred on the first day of such period.


<PAGE>   57

         "CHANGE IN CONTROL" shall mean (i) (a) the failure of the members of
the Control Group to own, on a fully diluted basis, at least 23% of the then
issued and outstanding Common Stock, or (b) the sale (in a single sale or a
series of sales) by the members of the Control Group of any shares of Common
Stock held as of the Date of Closing or thereafter in excess of 500,000 shares
or (ii) any person (as such term is defined in Section 13(d) and Section
14(d)(2) of the Exchange Act as in effect on the Date of Closing) or related
persons constituting a group (as such term is used in Rule 13d-5 under the
Exchange Act as in effect on the Date of Closing) own, at any time, on a fully
diluted basis, as the result of a single transaction or a series of
transactions, at least 30% of the then issued and outstanding shares of Common
Stock.

         "CLOSING" or "DATE OF CLOSING" shall have the meaning specified in
paragraph 2A.

         "COCHLAN PHANTOM STOCK AGREEMENT" shall mean that certain Phantom Stock
Agreement dated as of September 5, 1997, between Steven J. Cochlan and the
Company.

         "CODE" shall mean the Internal Revenue Code of 1986, as amended.

         "COLLATERAL" shall mean the collateral described in the Security
Documents which secures payment of the Notes and payment, performance and
observance of the obligations of the Company and its Subsidiaries under this
Agreement and the other Second Priority Note Documents.

         "COLLATERAL AGENT" shall mean Texas Commerce Bank, in its capacity as
Collateral Agent for the Acquired Company and the holders of Notes, the Senior
Notes and the Medium Term Notes, as provided under the Collateral Agency
Agreement, and its successors and assigns as such Collateral Agent.

         "COLLATERAL AGENCY AGREEMENT" shall mean that certain Collateral Agency
Agreement, dated as of September 9, 1997 by and among the Company, the Acquired
Company, the Collateral Agent and the holders of the Notes, the Senior Notes and
the Medium Term Notes, substantially in the form of Exhibit F to the Senior Note
Agreement, as the same may be amended, supplemented and otherwise modified from
time to time.

         "COLLATERAL ASSIGNMENT OF DEPOSIT ACCOUNTS" shall mean that certain
collateral assignment of deposit accounts between the Collateral Agent and the
Company and each of its Subsidiaries to be entered into after the Date of
Closing in conjunction with the execution and delivery of the Lockbox Agreements
collaterally assigning the Lockbox Accounts to the Collateral Agent, in form,
scope and substance satisfactory to the holders of the Notes, as the same may be
amended, supplemented and otherwise modified from time to time.
<PAGE>   58

         "COMMISSION FEES" shall mean, at any time, 60% of the future commission
fees of the Company and its Subsidiaries payable under products whose
persistency rate is greater than 90% over the last five calendar years exclusive
of products (such as leveraged COLI) whose federal, state or local tax
advantages have been materially decreased pursuant to federal, state or local
legislation or regulations promulgated thereunder; provided, however, that at
any time 180 days after the Date of Closing, such future commission fees shall
not include any such fees which are payable pursuant to contracts or agreements
for which the Company or any of its Subsidiaries have not obtained consents to
the assignment or transfer thereof (unless such consents are not required by
applicable law (such as New York Uniform Commercial Code Section 9-318(4)).

         "COMMON STOCK" shall have the meaning specified in paragraph 1B.

         "COMPETITOR" shall mean any Person specified in Schedule A.

         "CONFIDENTIAL INFORMATION" shall mean any material non-public
information regarding the Company that is provided to any holder of any Note,
any Person that purchases a participation in a Note and any offeree of a Note or
a participation therein pursuant to this Agreement other than information (i)
which was publicly known or otherwise known to such holder, such Person or such
offeree at the time of disclosure, (ii) which subsequently becomes publicly
known through no act or omission of such holder, such Person or such offeree or
(iii) which otherwise becomes known to such holder, such Person or such offeree
other than through disclosure by the Company or any Subsidiary.

         "CONTROL GROUP" shall mean W.T. Wamberg and The Wamberg Organization,
Inc., an Illinois corporation.

         "CONSOLIDATED NET INCOME" shall mean, with reference to any period, the
net income (or loss) of the Company and its Subsidiaries for such period (taken
as a cumulative whole), as determined in accordance with GAAP, after deducting,
among other items, commission expenses of the Company and its Subsidiaries and
after eliminating all offsetting debits and credits between the Company and its
Subsidiaries and all other items required to be eliminated in the course of
preparation of consolidated financial statements of the Company and its
Subsidiaries in accordance with GAAP, provided that there shall be excluded:

     a) any net income or gain (but not any net loss) during such period from
     any extraordinary items (including, without limitation, proceeds of life
     insurance policies),

     b) the net loss or any undistributed earnings of any Subsidiary that is not
     consolidated with the Company in accordance with GAAP for financial
     accounting purposes,
<PAGE>   59

     c) the net income (or loss) of any Person accrued prior to the date it
     becomes a Subsidiary or is merged into or consolidated with the Company or
     a Subsidiary, and the net income (or loss) of any Person, substantially all
     of the assets of which have been acquired in any manner, realized by such
     other Person prior to the date of acquisition,

     d) any aggregate net gain (but not any aggregate net loss) during such
     period arising from the sale, conversion, exchange or other disposition of
     capital assets (such term to include, without limitation, (a) all
     non-current assets and, without duplication, (b) the following, whether or
     not current: all fixed assets, whether tangible or intangible, all
     inventory sold in conjunction with the disposition of fixed assets, and all
     securities), and

     e) any non-cash net income or gain (but not any net loss) during such
     period from (a) any one-time change in accounting principles in accordance
     with GAAP or (b) any prior period adjustments resulting from any one-time
     change in accounting principles in accordance with GAAP.

         "CONSOLIDATED NET WORTH" shall mean, at any time,

     a) the sum of (a) the par value (or value stated on the books of the
     corporation) of the capital stock (but excluding treasury stock and capital
     stock subscribed and unissued) of the Company and its Subsidiaries plus (b)
     the amount of paid-in capital and retained earnings of the Company and its
     Subsidiaries, in each case as such amounts would be shown on a consolidated
     balance sheet of the Company and its Subsidiaries as of such time prepared
     in accordance with GAAP, minus

     b) to the extent included in clause (i), all amounts properly attributable
     to minority interests, if any, in the stock and surplus of Subsidiaries.

         "CONVERTIBLE SUBORDINATED NOTES" shall mean the unsecured convertible
subordinated promissory notes of the Company in the aggregate principal amount
of $4,800,000, issued to the Acquired Company in connection with the
Acquisition, upon terms and conditions satisfactory in all respects to the
holders of the Notes.

         "DISCOUNTED COMMISSION FEES" shall mean, at any time, the amount
obtained by discounting all Commission Fees payable to the Company and its
Subsidiaries for a five year period from their respective scheduled payment
dates to the date of determination, in accordance with accepted financial
practice and at a discount factor (applied on an annual basis) equal to 10% per
annum.

         "EBIT" shall mean, for any period, the sum of (i) Consolidated Net
Income plus (ii) to the extent deducted in the determination of Consolidated Net
Income, 

<PAGE>   60

(a) all provisions for federal, state and other income tax for such
period, and (b) Interest Charges.

         "ENDORSEMENT CONTRACTS" shall mean the Agreement dated March 1, 1993,
between the Acquired Company, and the Corporation for American Banking, a
subsidiary of the American Bankers Association, as amended, and similar
endorsement contracts between the Acquired Company or the Company, as the case
may be, and any state banking association pursuant to which the Acquired Company
or the Company, as the case may be, is appointed the exclusive supplier and
marketer of benefit and salary plans for financial institutions.

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended.

         "ERISA AFFILIATE" shall mean any corporation which is a member of the
same controlled group of corporations as the Company within the meaning of
section 414(b) of the Code, or any trade or business which is under common
control with the Company within the meaning of section 414(c) of the Code.

         "EVENT OF DEFAULT" shall mean any of the events specified in paragraph
7A, provided that there has been satisfied any requirement in connection with
such event for the giving of notice, or the lapse of time, or the happening of
any further condition, event or act, and "DEFAULT" shall mean any of such
events, whether or not any such requirement has been satisfied.

         "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.

         "EXISTING BANK FACILITY" shall mean the $2,000,000 line of credit made
available to the Company pursuant to that certain Line of Credit Agreement dated
as of March 28, 1996 between Comerica Bank-Texas and the Company.

         "FIXED CHARGES" shall mean, with respect to any period, the sum of (i)
Interest Charges, (ii) Lease Rentals, and (iii) the aggregate amount of
principal payments on Indebtedness of the Company and its Subsidiaries made or
to be made during such period.

         "FIXED CHARGES COVERAGE RATIO" shall mean, at any time, (i) prior to
September 30, 1998, the ratio of (a) the sum of Cash Flow and Lease Rentals for
the period commencing September 1, 1997 through such date, annualized in
accordance with accepted financial practice, to (b) Fixed Charges for such
period, annualized in accordance with accepted financial practice, and (ii) on
or after September 30, 1998, the ratio of (a) the sum of Cash Flow and Lease
Rentals for the four most recently ended fiscal quarters to (b) Fixed Charges
for the four most recently ended fiscal quarters.


<PAGE>   61

         "GAAP" shall have the meaning specified in paragraph 10C.

         "GENERAL AGENT'S CONTRACTS" shall mean the agreements between the
Company or the Acquired Company, as the case may be, and insurance companies for
the purpose of soliciting applications for insurance and recruiting producers to
solicit applications for insurance.

         "GUARANTEE" shall mean, with respect to any Person, any obligation
(except the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or in effect
guaranteeing (whether by reason of being a general partner of a partnership or
otherwise) any indebtedness, dividend or other obligation of any other Person in
any manner, whether directly or indirectly, including (without limitation)
obligations incurred through an agreement, contingent or otherwise, by such
Person:

          (i) to purchase such indebtedness or obligation or any property
     constituting security therefor;

          (ii) to advance or supply funds (a) for the purchase or payment of
     such indebtedness or obligation, or (b) to maintain any working capital or
     other balance sheet condition or any income statement condition of any
     other Person or otherwise to advance or make available funds for the
     purchase or payment of such indebtedness or obligation;

          (iii) to lease properties or to purchase properties or services
     primarily for the purpose of assuring the owner of such indebtedness or
     obligation of the ability of any other Person to make payment of the
     indebtedness or obligation; or

          (iv) otherwise to assure the owner of such indebtedness or obligation
     against loss in respect thereof.

     In any computation of the indebtedness or other liabilities of the obligor
under any Guarantee, the indebtedness or other obligations that are the subject
of such Guarantee shall be assumed to be direct obligations of such obligor.

         "INDEBTEDNESS" shall mean, with respect to any Person, at any time,
without duplication,

          (i) its liabilities for borrowed money;

          (ii) its liabilities for the deferred purchase price of property
     acquired by such Person (excluding accounts payable arising in the ordinary
     course of business but including all liabilities created or arising under
     any conditional sale or other title retention agreement with respect to any
     such property);


<PAGE>   62

          (iii) all liabilities appearing on its balance sheet in accordance
     with GAAP in respect of Capital Leases;

          (iv) all liabilities for borrowed money secured by any Lien with
     respect to any property owned by such Person (whether or not it has assumed
     or otherwise become liable for such liabilities);

          (v) all its liabilities in respect of letters of credit or instruments
     serving a similar function issued or accepted for its account by banks and
     other financial institutions (whether or not representing obligations for
     borrowed money);

          (vi) Swaps of such Person; and

          (vii) any Guarantee of such Person with respect to liabilities of a
     type described in any of clauses (i) through (vi) hereof.

     Indebtedness of any Person shall include all obligations of such Person
of the character described in clauses (i) through (vii) to the extent such
Person remains legally liable in respect thereof notwithstanding that any such
obligation is deemed to be extinguished under GAAP.

         "INDEPENDENT ACCOUNTANT" shall mean Ernst & Young LLP or another "Big
Six" independent accounting firm selected by the Company.

         "INSURANCE CONTRACTS" shall mean the Endorsement Contracts, the General
Agent's Contracts, the Producer's Contracts, the Representative Agreements and
the Servicing Agreements.

         "INSURANCE LICENSES" shall mean any license, certificate of authority,
permit or other authorization granted to the Company by any governmental
authority to engage in any life insurance brokerage or agency business.

         "INTEREST CHARGES" shall mean, with respect to any period, the sum
(without duplication) of the following (in each case, eliminating all offsetting
debits and credits between the Company and its Subsidiaries and all other items
required to be eliminated in the course of the preparation of consolidated
financial statements of the Company and its Subsidiaries in accordance with
GAAP): (i) all interest in respect of Indebtedness of the Company and its
Subsidiaries (including imputed interest on Capital Lease Obligations) deducted
in determining Consolidated Net Income for such period, and (ii) all debt
discount and expense amortized or required to be amortized in the determination
of Consolidated Net Income for such period.

         "INTEREST COVERAGE RATIO" shall mean, at any time, (i) prior to
September 30, 1998, the ratio of (a) EBIT for the period commencing September 1,
1997 through such date, annualized in accordance with accepted financial
practice to (b) Interest Charges for such period, annualized in accordance with
accepted financial practice and (ii) 




<PAGE>   63

on or after September 30, 1998, the ratio of (a) EBIT for the four immediately
preceding fiscal quarters to (b) Interest Charges for the four immediately
preceding fiscal quarters.

         "INVESTMENT" shall have the meaning specified in paragraph 6G(4).

         "LEASE RENTALS" shall mean, with respect to any period, the sum of the
minimum amount of rental and other obligations required to be paid during such
period by the Company or any Subsidiary as lessee under all leases of real or
personal property (other than Capital Leases), excluding any amounts required to
be paid by the lessee (whether or not therein designated as rental or additional
rental) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, but including any amounts required
to be paid by the lessee (whether or not therein designated as rental or
additional rental) which are based on profits, revenues or sales realized by the
lessee from the leased property or otherwise based on the performance of the
lessee.

         "LETTERS OF INTENT" shall mean that certain memorandum dated August 29,
1997 from Richard Chapman to Jim Radosavich regarding "Continued Efforts and
Production of BCS Sale Representatives After the Merger" and that certain letter
dated September 4, 1996, from and Larry Hendrickson to Mel Todd regarding the
same.

         "LIABILITIES" shall mean any liability (whether known or unknown,
whether asserted or unasserted, whether absolute or contingent, whether accrued
or unaccrued, whether liquidated or unliquidated, and whether due or to become
due), including any liability for taxes.

         "LIEN" shall mean any mortgage, pledge, priority, security interest,
encumbrance, contractual deposit arrangement, lien (statutory or otherwise) or
charge of any kind (including any agreement to give any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, and the filing of or agreement to give any financing statement under
the Uniform Commercial Code of any jurisdiction) or any other type of
preferential arrangement for the purpose, or having the effect, of protecting a
creditor against loss or securing the payment or performance of an obligation.
"LITIGATION" shall mean the shareholder derivative action described in the
Settlement Agreement.

         "LOCKBOX ACCOUNTS" shall mean the joint lockbox accounts of the Company
and each of its Subsidiaries created pursuant to the Lockbox Agreements.

         "LOCKBOX AGREEMENTS" shall mean those certain lockbox agreements
between the Collateral Agent and the Company and each of its Subsidiaries
creating a joint lockbox account with respect to commission fees and revenues
payable to the Acquired Company and a joint lockbox account with respect to
commission fees and revenues payable to the Company to be executed and delivered
pursuant to paragraph 5M, in form, 




<PAGE>   64

scope and substance satisfactory to the holders of the Notes, as the same may be
amended, supplemented and otherwise modified from time to time.

         "MEDIUM TERM NOTE" shall mean the secured promissory notes of the
Company in the aggregate principal amount of $5,700,000, upon terms and
conditions satisfactory in all respects to the holders of the Notes.

         "MULTIEMPLOYER PLAN" shall mean any Plan which is a "MULTIEMPLOYER
PLAN" (as such term is defined in section 4001(a)(3) of ERISA).

         "NON-COMPETE AGREEMENT" shall mean that certain Non-Compete and
Confidentiality Agreement, dated as of September 4, 1997, between the Company
and W.T. Wamberg.

         "NOTES" shall have the meaning specified in paragraph 1A.

         "OFFICER'S CERTIFICATE" shall mean a certificate signed in the name of
the Company by its President, one of its Vice Presidents or its Treasurer.

         "ORDINARY COURSE OF BUSINESS" shall mean the ordinary course of
business consistent with past custom and practice (including with respect to
quantity and frequency).

         "PARTICIPATION RIGHTS AGREEMENT" shall mean the Participation Rights
Agreement, dated September 9, 1997, substantially in the form of Exhibit F
attached hereto, by and among the Purchasers, the Company and the holders of
Common Stock listed on Schedule I thereto, as the same may be amended,
supplemented or otherwise modified from time to time.

         "PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor entity.

         "PERFECTION CERTIFICATE" shall mean the Perfection Certificate, dated
September 9, 1997 and executed and delivered by the Company to the holders of
the Notes, substantially in the form of Exhibit G to the Senior Note Agreement.
"PERSON" shall mean and include an individual, a partnership, a joint venture, a
corporation, a trust, a limited liability company, an unincorporated
organization and a government or any department or agency thereof.

         "PLAN" shall mean any "EMPLOYEE PENSION BENEFIT PLAN" (as such term is
defined in section 3 of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by the Company or any ERISA
Affiliate.


<PAGE>   65

         "PRODUCER'S CONTRACTS" shall mean the agreements entered into between
the Acquired Company or the Company, as the case may be, and insurance companies
for the procurement or submission of insurance policies and variable annuity
contracts.

         "PROPOSED PREPAYMENT DATE" shall have the meaning specified in clause
(iii) of paragraph 4C.

         "PUT RIGHTS AGREEMENT" shall mean that certain Put Rights Agreement,
dated as of September 9, 1997, by and among the Company and the Purchasers,
substantially in the form of Exhibit G attached hereto, as the same may be
amended, supplemented and otherwise modified from time to time.

         "QPAM EXEMPTION" shall mean Prohibited Transaction Class Exemption
84-14 issued by the United States Department of Labor.

         "QUALIFIED INSTITUTIONAL BUYER" shall mean a "QUALIFIED INSTITUTIONAL
BUYER" as such term is defined in Rule 144A under the Securities Act.

         "REGISTRATION RIGHTS AGREEMENT" shall mean the Registration Rights
Agreement, dated September 9, 1997, substantially in the form of Exhibit H
attached hereto, by and between the Purchasers and the Company.

         "REINCORPORATION MERGER" shall mean the merger of the Company with and
into a Wholly Owned Subsidiary which is a corporation incorporated in the State
of Delaware or such other state of the United States of America as may be
selected in good faith by the board of directors of the Company (provided that
such state of incorporation is one in which the presence of the holders of the
Notes as shareholders of the Company does not result in adverse legal
consequences under the laws of such state or any other jurisdiction in which the
survivor of such merger will conduct or proposes to conduct its business), is
the survivor of such merger and, prior to the consummation of the
Reincorporation Merger, possesses a nominal capitalization.

         "REPRESENTATIVE AGREEMENTS" shall mean the agreements entered into
between the Acquired Company or the Company, as the case may be, and independent
representatives for the marketing of compensation and benefit plans to financial
institutions.

         "REQUIRED HOLDER(S)" shall mean the holder or holders of at least 
66-2/3% of the aggregate principal amount of the Notes from time to time
outstanding.

         "RESPONSIBLE OFFICER" shall mean the chief executive officer, chief
operating officer, chief financial officer or chief accounting officer of the
Company or any other officer of the Company involved principally in its
financial administration or its controllership function.
<PAGE>   66

         "RESTRICTED PAYMENT" shall mean (i) the declaration of any dividend on,
or the incurrence of any liability to make any other payment or distribution in
respect of any capital stock or equity equivalent (except, in the case of a
Subsidiary, dividends or other payments or distributions in respect of its
capital stock or equity to the Company or a Wholly Owned Subsidiary) or (ii) the
distribution on account of the purchase, redemption or other retirement of any
such capital stock or equity equivalent (except, in the case of a Subsidiary,
purchases, redemptions or other retirements of its capital stock from the
Company or a Wholly Owned Subsidiary). "RESTRICTED PAYMENT" shall not include
(a) any of the Share Repurchases, (b) so long as no Default or Event of Default
exists prior thereto or would exist immediately after giving effect thereto, the
AAA Distribution and, for any tax period during which the Company is an S
corporation, quarterly S Corporation Tax Distributions to shareholders of the
Company solely to satisfy the income tax liability of such shareholders with
respect to taxable income of the Company for such period, (c) so long as no
Default or Event of Default exists prior thereto or would exist immediately
after giving effect thereto, redemptions of Common Stock pursuant to the
Shareholders' Agreement which are not payable with life insurance proceeds as
provided in Section 6 of the Shareholders' Agreement, provided that the
aggregate, cumulative amount of such redemptions may not exceed $1,000,000, (d)
after receipt of the life insurance proceeds with respect thereto, redemptions
of Common Stock pursuant to the Shareholders' Agreement which are payable with
life insurance proceeds as provided in Section 6 of the Shareholders' Agreement,
(e) the incurrence of any liability to make any payment or distribution in
respect of the phantom stock issued pursuant to the Cochlan Phantom Stock
Agreement as in effect on the Date of Closing and (f) the distribution on
account of the purchase, redemption or other retirement of the phantom stock
issued pursuant to the Cochlan Phantom Stock Agreement as in effect on the Date
of Closing.

         "REVENUE MAINTENANCE EVENT" shall mean the occurrence of either (i) an
event in which W.T. Wamberg is no longer a principal of the Company, (ii) prior
to September 30, 1998, an event in which gross revenues (net of commission
expenses) of the Company and its Subsidiaries for the four immediately preceding
fiscal quarters (consisting of actual gross revenues (net of commission
expenses) for fiscal quarters ending after September 30, 1997 and pro forma
gross revenues (net of commission expenses) (giving effect to the Acquisition
and the Share Repurchases) for fiscal quarters ending prior to or on September
30, 1997) do not exceed $16,000,000, or (iii) on or after September 30, 1998, an
event in which gross revenues (net of commission expenses) of the Company and
its Subsidiaries for the four immediately preceding fiscal quarters do not
exceed $16,000,000.

         "S CORPORATION" shall mean an S corporation described Section
1361(a)(1) of the Code.

         "S CORPORATION TAX DISTRIBUTIONS" shall mean distributions by the
Company to its shareholders solely to satisfy the income tax liability of such
shareholders 



<PAGE>   67

with respect to the taxable income of the Company for tax periods in which the
Company is an S Corporation.

         "SALE-LEASEBACK TRANSACTION" shall have the meaning specified in
paragraph 6G(9).

         "SECOND PRIORITY NOTE DOCUMENTS" shall mean this Agreement, the Notes,
the Warrants, the Participation Rights Agreement, the Registration Rights
Agreement, the Put Rights Agreement, the Security Documents and all other
instruments, certificates, documents and other writings now or hereafter
executed and delivered by the Company or any other Person pursuant to or in
connection with any of the foregoing or any of the transactions contemplated
thereby, and any and all amendments, supplements and other modifications to any
of the foregoing.

         "SECURITIES" shall mean the Notes and the Warrants.

         "SECURITIES ACT" shall mean the Securities Act of 1933, as amended.

         "SECURITY AGREEMENTS" shall mean the Security Agreement, dated as of
the Date of Closing and executed and delivered by the Company to the Collateral
Agent, substantially in the form of Exhibit H attached to the Senior Note
Agreement, and all security agreements hereafter executed by any Subsidiary as
contemplated under paragraph 6Q, as each may be amended, supplemented and
otherwise modified from time to time.

         "SECURITY DOCUMENTS" shall mean the Security Agreements, the Collateral
Agency Agreement, the Lockbox Agreements and the Collateral Assignment of
Deposit Accounts and all financing statements, assignments, pledges, lien entry
forms, documents and other writings executed and delivered from time to time to
secure the Notes and the obligations owed to the holders of Notes in connection
therewith (including, without limitation those executed and delivered pursuant
to paragraph 6Q) , and any and all amendments, supplements and other
modifications thereto.

         "SELLER NOTES" shall mean the Medium Term Notes and the Convertible
Subordinated Notes.

         "SENIOR NOTE AGREEMENT" shall mean the Note Agreement, dated of even
date herewith, by and between the Purchasers and the Company, providing for the
issuance, sale and purchase of the Senior Notes, as the same may be amended,
supplemented and otherwise modified from time to time.

         "SENIOR NOTE DOCUMENTS" shall mean the Senior Note Agreement, the
Senior Notes, the Security Documents and all other instruments, certificates,
documents and other writings now or hereafter executed and delivered by the
Company, any Subsidiary or any other Person pursuant to or in connection with
any of the foregoing or 



<PAGE>   68

any of the transactions contemplated thereby, and any and all amendments,
supplements and other modifications to any of the foregoing.

         "SENIOR NOTES" shall mean the Senior Secured Notes due 2002 of the
Company, dated of even date with the Notes, issued and sold to the Purchasers on
the Date of Closing pursuant to the Senior Note Agreement.

         "SERVICING AGREEMENTS" shall mean the servicing agreements between the
Acquired Company or the Company, as the case may be, and insureds with respect
to the servicing of insurance contracts.

         "SETTLEMENT AGREEMENT" shall mean that certain Clark/Bardes,
Inc./Cochlan Group Settlement Agreement, dated as of August 22, 1997, by and
among the Company, the Wamberg Group and the Cochlan Group (each as defined
therein), as the same may be amended, supplemented and otherwise modified from
time to time.

         "SHARE REPURCHASES" shall mean the share repurchases contemplated under
the Share Repurchase Agreements.

         "SHARE REPURCHASE AGREEMENTS" shall mean that certain Stock Purchase
Agreement dated as of August 22, 1997 entered into between the Company and
Malcolm N. Briggs, Steven J. Cochlan, G.F. Pendleton, III and Donald R. Teasley
and the certain Stock Purchase Agreement dated as of August 22, 1997 between the
Company and Henry J. Smith, as the same may be amended, supplemented and
otherwise modified from time to time.

         "SHARE REPURCHASE DOCUMENTS" shall mean the Share Repurchase Agreements
and all other written agreements, documents, instruments and certificates now or
hereafter executed and delivered by any Person which are required by the terms
of either of the Share Repurchase Agreements to be delivered to consummate the
Share Repurchases, and any and all amendments, supplements and other
modifications thereof and all renewals, extensions, restatements or
substitutions from time to time of all or any of the foregoing.

         "SHAREHOLDER NOTES" shall mean (a) the unsecured, subordinated
promissory notes of the Company in an aggregate principal amount of $837,943
issued as partial consideration for the Share Repurchases, upon terms and
conditions and subject to documentation satisfactory in all respects to the
holders of the Notes, (b) the AAA Distribution Notes and (c) the unsecured,
subordinated promissory notes of the Company in an aggregate principal amount of
$337,042 issued to H.J. Smith as partial consideration for the Share Repurchase
effected pursuant to the Share Repurchase Agreement to which H.J. Smith is a
party.

         "SHAREHOLDERS' AGREEMENT" shall mean that certain Second Amended and
Restated Shareholders' Agreement and Voting Agreement dated as of August 22,
1997, by 

<PAGE>   69


and among the Company and the individuals parties thereto, as the same
may be amended, supplemented and otherwise modified from time to time.

         "SOLVENT" shall mean, with respect to any Person as of the date of any
determination, that on such date (a) the fair value of the property of such
Person (both at fair valuation and at present fair saleable value) is greater
than the total amount of liabilities, including, without limitation, contingent
liabilities, of such Person, (b) the present fair saleable value of the assets
of such Person is not less than the amount that will be required to pay the
probable liability of such Person on its debts as they become absolute and
matured, (c) such Person is able to realize upon its assets and pay its debts
and other liabilities, contingent obligations and other commitments as they
mature in the normal course of business, (d) such Person does not intend to, and
does not believe that it will, incur debts or liabilities beyond such Person's
ability to pay as such debts and liabilities mature and (e) such Person is not
engaged in business or a transaction, and is not about to engage in business or
a transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to current and anticipated future
capital requirements and current and anticipated future business conduct and the
prevailing practice in the industry in which such Person is engaged. In
computing the amount of contingent liabilities at any time, such liabilities
shall be computed at the amount which, in light of the facts and circumstances
existing at such time, represents the amount that can reasonably be expected to
become an actual or matured liability.

         "SPECIAL AUDIT" shall mean those certain agreed procedure letters
prepared by Ernst & Young LLP each dated August 27, 1997 with respect to Renewal
Commission and Renewal Fee Schedules of the Company and Renewal and Service Fee
Income Schedules of the Acquired Company as described therein.

         "SUBORDINATED DEBT" shall mean the Convertible Subordinated Notes and
the Shareholder Notes.

         "SUBSIDIARY" shall mean, as to any Person, any corporation, association
or other business entity in which such Person or one or more of its Subsidiaries
or such Person and one or more of its Subsidiaries owns sufficient equity or
voting interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take major
business actions without the prior approval of such Person or one or more of its
Subsidiaries). Unless the context otherwise clearly requires, any reference to a
"SUBSIDIARY" is a reference to a Subsidiary of the Company.

         "SWAPS" shall mean with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. 


<PAGE>   70

For the purposes of this Agreement, the amount of the obligation under any Swap
shall be the amount determined in respect thereof as of the end of the then most
recently ended fiscal quarter of such Person, based on the assumption that such
Swap had terminated at the end of such fiscal quarter, and in making such
determination, if any agreement relating to such Swap provides for the netting
of amounts payable by and to such Person thereunder or if any such agreement
provides for the simultaneous payment of amounts by and to such Person, then in
each such case, the amount of such obligation shall be the net amount so
determined.

         "TAX ADVISORY MEMORANDUM" shall mean the memorandum of Ernst & Young
LLP received prior to the Date of Closing by the Company relating to (i) the
ability of the Company to obtain a "stepped up" basis in the intangible assets
of the Acquired Company equal to the amount the Company pays for such assets,
and (ii) the ability of the Company to amortize, for federal income tax
purposes, the cost basis of such intangible assets.

         "TAX RETURN" shall mean any return, declaration, report, claim for
refund, or information return or statement relating to taxes, including any
schedule or attachment thereto, and including any amendment thereof.

         "TERMINATION EVENT" shall mean (i) a Reportable Event described in
Section 4043 of ERISA and the regulations issued thereunder (other than a
Reportable Event not subject to the provision for 30-day notice to the PBGC
under such regulations), or (ii) the withdrawal of the Company or any of its
ERISA Affiliates from a Plan during a plan year in which it was a "SUBSTANTIAL
EMPLOYER" as defined in Section 4001(a)(2) of ERISA, or (iii) the filing of a
notice of intent to terminate a Plan or the treatment of a Plan amendment as a
termination under Section 4041 of ERISA, or (iv) the institution of proceedings
to terminate a Plan by the PBGC, or (v) any other event or condition that might
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Plan.

         "TOTAL DEBT" shall mean, at any time, the Indebtedness represented by
the Notes and the Senior Notes.

         "TRANSFEREE" shall mean any direct or indirect transferee of all or any
part of any Note or Warrant purchased by any Purchaser under this Agreement.

         "TRIBUNAL" shall mean any municipal, state, commonwealth, federal,
foreign, territorial or other sovereign, governmental entity, governmental
department, court, commission, board, bureau, agency or instrumentality.

         "VENDORS' CONTRACTS" shall mean obligations of continued performance
under executory vendor purchase orders for the purchase of supplies, equipment
or services entered into



<PAGE>   71



in the Ordinary Course of Business and under which the supplies, equipment or
services subject thereto have not been received by the Acquired Company prior to
the closing of the Acquisition.

         "WARRANTS" shall have the meaning specified in paragraph 1B.

         "WHOLLY OWNED SUBSIDIARY" shall mean any Subsidiary all of the equity
interests (except directors' qualifying shares) of which are owned, directly or
indirectly, by the Company or other Wholly Owned Subsidiaries.

         "WORKING CAPITAL NOTE DOCUMENTS" shall mean the Working Capital Notes
and all other written agreements, documents, instruments and certificates now or
hereafter executed and delivered by any Person in connection with the revolving
working capital facility described in paragraph 5S, and any and all amendments,
supplements and other modifications thereof and all renewals, extensions,
restatements or substitutions from time to time of all or any of the foregoing.

         "WORKING CAPITAL NOTES" shall mean the promissory notes evidencing the
Indebtedness incurred pursuant to the revolving working capital facility
described in paragraph 5S.

C.       ACCOUNTING PRINCIPLES, TERMS AND DETERMINATIONS. All references in this
Agreement to "GAAP" shall be deemed to refer to generally accepted accounting
principles in effect in the United States at the time of application thereof.
Unless otherwise specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting matters hereunder
shall be made, and all unaudited financial statements and certificates and
reports as to financial matters required to be furnished hereunder shall be
prepared, in accordance with generally accepted accounting principles, applied
on a basis consistent with the most recent audited consolidated financial
statements of the Company and its Subsidiaries delivered pursuant to clause (ii)
of paragraph 5A or, if no such statements have been so delivered, the most
recent audited financial statements referred to in clause (a) of paragraph 8B.
Wherever reference is made in any provision of this Agreement to a consolidated
balance sheet or other consolidated financial statement or financial computation
with respect to the Company and its Subsidiaries, if at the time that any such
provision is applicable the Company shall not have any Subsidiary, such terms
shall mean a balance sheet or other financial statement or financial
computation, as the case may be, with respect to the Company only.

11.      MISCELLANEOUS.

A.       NOTE PAYMENTS. So long as any Purchaser shall hold any Note, the 
Company will make payments of principal of and interest on such Note, which
comply 

<PAGE>   72


with the terms of this Agreement, by wire transfer of immediately available
funds for credit (not later than 12:00 noon, New York City time, on the date
due) to such Purchaser's account or accounts as specified in the Purchaser
Schedule attached hereto, or such other account or accounts in the United States
as such Purchaser may designate in writing, notwithstanding any contrary
provision herein or in any Note with respect to the place of payment. Each
Purchaser agrees that, before disposing of any Note, such Purchaser will make a
notation thereon (or on a schedule attached thereto) of all principal payments
previously made thereon and of the date to which interest thereon has been paid.
The Company agrees to afford the benefits of this paragraph 11A to any
Transferee which shall have made the same agreement as each Purchaser has made
in this paragraph 11A.

B.       EXPENSES. The Company agrees, whether or not the transactions
contemplated hereby shall be consummated, to pay, and save each Purchaser, any
Transferee and the Collateral Agent harmless against liability for the payment
of, all out-of-pocket expenses arising in connection with such transactions,
including (i) all document production and duplication charges and the fees and
expenses of any special counsel engaged by such Purchaser, such Transferee or
the Collateral Agent in connection with this Agreement, the transactions
contemplated hereby and any subsequent proposed modification of, or proposed
consent under, this Agreement or the other Second Priority Note Documents,
whether or not such proposed modification shall be effected or proposed consent
granted, and (ii) the costs and expenses, including attorneys' fees, incurred by
such Purchaser, such Transferee or the Collateral Agent in enforcing (or
determining whether or how to enforce) any rights under this Agreement, the
Securities or the other Second Priority Note Documents or in responding to any
subpoena or other legal process or informal investigative demand issued in
connection with this Agreement, the other Second Priority Note Documents or the
transactions contemplated hereby or thereby, or by reason of such Purchaser's or
such Transferee's having acquired any Note or Warrant, including without
limitation costs and expenses incurred in any bankruptcy case. The obligations
of the Company under this paragraph 11B shall survive the transfer of any Note
or Warrant or portion thereof or interest therein by such Purchaser or any
Transferee, the payment of any Note or Warrant, the enforcement, amendment or
waiver of any provision of this Agreement or the other Second Priority Note
Documents, and the termination of this Agreement or any of the other Second
Priority Note Documents.

C.       CONSENT TO AMENDMENTS. This Agreement and any of the other Second 
Priority Note Documents may be amended, and the Company may take any action
herein prohibited, or omit to perform any act herein required to be performed by
it, if the Company shall obtain the written consent to such amendment, action or
omission to act, of the Required Holder(s) except that, without the written
consent of the holder or holders of all Notes at the time outstanding, no
amendment to this Agreement shall change the maturity of any Note, or change the
principal of, or the rate or time of payment of interest on any Note, or affect
the time, amount or allocation of any prepayments, or change the proportion of
the principal amount of the Notes required with respect to any consent,
amendment, waiver or declaration. Each holder of any Securities at the time or
thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or 

<PAGE>   73

not such Securities shall have been marked to indicate such consent, but any
Securities issued thereafter may bear a notation referring to any such consent.
No course of dealing between the Company and the holder of any Securities nor
any delay in exercising any rights hereunder or under any Securities shall
operate as a waiver of any rights of any holder of such Securities. As used
herein and in the Securities, the term "THIS AGREEMENT" and references thereto
shall mean this Agreement as it may from time to time be amended or
supplemented.

D.       FORM, REGISTRATION, TRANSFER AND EXCHANGE OF NOTES; LOST NOTES. The
Notes are issuable as registered notes without coupons in denominations of at
least $100,000, except as may be necessary to reflect any principal amount not
evenly divisible by $100,000. The Company shall keep at its principal office a
register in which the Company shall provide for the registration of Notes and of
transfers of Notes. Upon surrender for registration of transfer of any Note at
the principal office of the Company, the Company shall, at its expense, execute
and deliver one or more new Notes of like tenor and of a like aggregate
principal amount, registered in the name of such transferee or transferees. At
the option of the holder of any Note, such Note may be exchanged for other Notes
of like tenor and of any authorized denominations, of a like aggregate principal
amount, upon surrender of the Note to be exchanged at the principal office of
the Company. Whenever any Notes are so surrendered for exchange, the Company
shall, at its expense, execute and deliver the Notes which the holder making the
exchange is entitled to receive. Every Note surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer duly executed, by the holder of such Note or such
holder's attorney duly authorized in writing. Any Note or Notes issued in
exchange for any Note or upon transfer thereof shall carry the rights to unpaid
interest and interest to accrue which were carried by the Note so exchanged or
transferred, so that neither gain nor loss of interest shall result from any
such transfer or exchange. Upon receipt of written notice from the holder of any
Note of the loss, theft, destruction or mutilation of such Note and, in the case
of any such loss, theft or destruction, upon receipt of such holder's unsecured
indemnity agreement, or in the case of any such mutilation upon surrender and
cancellation of such Note, the Company will make and deliver a new Note, of like
tenor, in lieu of the lost, stolen, destroyed or mutilated Note. Any Transferee,
by its acceptance of a Note registered in its name (or the name of its nominee),
shall be deemed to have made the representations set forth in paragraphs 9A and
9B.

E.       PERSONS DEEMED OWNERS; PARTICIPATIONS. Prior to due presentment for
registration of transfer, the Company may treat the Person in whose name any
Note is registered as the owner and holder of such Note for the purpose of
receiving payment of principal of and interest on such Note and for all other
purposes whatsoever, whether or not such Note shall be overdue, and the Company
shall not be affected by notice to the contrary. Subject to the preceding
sentence, the holder of any Note may from time to time grant participations in
such Note to any Person on such terms and conditions as may be determined by
such holder in its sole and absolute discretion, provided that any such
participation shall be in a principal amount of at least $100,000 and


<PAGE>   74

each holder of a Note hereby agrees that, so long as no Event of Default shall
have occurred and be continuing, it will grant participations only to Qualified
Institutional Buyers which are believed by such holder, after reasonable
inquiry, not to be Competitors.

F.       SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT. All
representations and warranties contained herein or in the other Second Priority
Note Documents or otherwise made in writing by or on behalf of the Company in
connection herewith and therewith shall survive the execution and delivery of
this Agreement, the Notes, the Warrants and the other Second Priority Note
Documents, the transfer by any Purchaser of any Note or Warrant or portion
thereof or interest therein and the payment of any Note, and may be relied upon
by any Transferee, regardless of any investigation made at any time by or on
behalf of any Purchaser or any Transferee. Subject to the preceding sentence,
this Agreement, the Notes, the Warrants and the other Second Priority Note
Documents embody the entire agreement and understanding between the Purchasers
and the Company and supersede all prior agreements and understandings relating
to the subject matter hereof.

G.       SUCCESSORS AND ASSIGNS. All covenants and other agreements in this
Agreement contained by or on behalf of any of the parties hereto shall bind and
inure to the benefit of the respective successors and assigns of the parties
hereto (including, without limitation, any Transferee) whether so expressed or
not; provided, however, that each holder of a Note hereby agrees that, so long
as no Event of Default shall have occurred and be continuing, it will transfer
its Notes only to Qualified Institutional Buyers which are believed by such
holder, after reasonable inquiry, not to be Competitors.

H.       DISCLOSURE TO OTHER PERSONS. The Company acknowledges that the holder
of any Note or Warrant may deliver copies of any financial statements and other
documents or materials delivered to such holder, and disclose any other
information disclosed to such holder, by or on behalf of the Company or any
Subsidiary in connection with or pursuant to this Agreement and the other Second
Priority Note Documents to (i) such holder's directors, officers, employees,
agents and professional consultants, (ii) any other holder of any Note or
Warrant, (iii) any Person to which such holder offers to sell such Note or
Warrant or any part thereof and to which such holder could then transfer such
Note or Warrant pursuant to paragraph 11G, (iv) any Person to which such holder
sells or offers to sell a participation in all or any part of such Note or
Warrant and to which such holder could then sell such participation pursuant to
paragraph 11F, (v) any Person from which such holder offers to purchase any
security of the Company and to which such holder could then transfer such Note
or Warrant pursuant to paragraph 11G, (vi) any federal or state regulatory
authority having jurisdiction over such holder, (vii) the National Association
of Insurance Commissioners or any similar organization or (viii) any other
Person to which such delivery or disclosure may be necessary or appropriate (a)
in compliance with any law, rule, regulation or order applicable to such holder,
(b) in response to any subpoena or other legal process or informal investigative
demand or (c) in connection with any litigation to which such holder is a party.
<PAGE>   75

I.       NOTICES. All notices or other communications provided for hereunder
(except for the telephonic notice required by paragraph 4B) shall be in writing
and sent by first class mail or nationwide overnight delivery service (with
charges prepaid) and (i) if to any Purchaser, addressed to such Purchaser at the
address specified for such communications in the Purchaser Schedule attached
hereto, or at such other address as such Purchaser shall have specified to the
Company in writing, (ii) if to any other holder of any Note or Warrant,
addressed to such other holder at such address as such other holder shall have
specified to the Company in writing or, if any such other holder shall not have
so specified an address to the Company, then addressed to such other holder in
care of the last holder of such Note or Warrant which shall have so specified an
address to the Company, and (iii) if to the Company, addressed to it at 2121 San
Jacinto, Suite 2200, Dallas, Texas 75201, Attention: Mel Todd or at such other
address as the Company shall have specified to the holder of each Note or
Warrant in writing; provided, however, that any such communication to the
Company may also, at the option of the holder of any Note or Warrant, be
delivered by any other means either to the Company at its address specified
above or to any officer of the Company.

J.       PAYMENTS DUE ON NON-BUSINESS DAYS. Anything in this Agreement or the
Notes to the contrary notwithstanding, any payment of principal of or interest
or Yield Maintenance Amount, if any, on any Note that is due on a date other
than a Business Day shall be made on the next succeeding Business Day. If the
date for any payment is extended to the next succeeding Business Day by reason
of the preceding sentence, the period of such extension shall be included in the
computation of the interest payable on such Business Day.

K.       SATISFACTION REQUIREMENT. If any agreement, certificate or other
writing, or any action taken or to be taken, is by the terms of this Agreement
required to be satisfactory to any Purchaser, the holders of the Notes or to the
Required Holder(s), the determination of such satisfaction shall be made by such
Purchaser, the holders of the Notes or the Required Holder(s), as the case may
be, in the sole and exclusive judgment (exercised in good faith) of the Person
or Persons making such determination.

L.       GOVERNING LAW. THIS AGREEMENT AND ALL MATTERS RELATING HERETO SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, AND THE RIGHTS OF THE PARTIES SHALL
BE GOVERNED BY, THE LAW OF THE STATE OF NEW YORK. This Agreement may not be
changed orally, but (subject to the provisions of paragraph 11C) only by an
agreement in writing signed by the party against whom enforcement of any waiver,
change, modification or discharge is sought.

M.       WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; LIMITATION OF REMEDIES.

     a) THE COMPANY AND EACH HOLDER OF SECURITIES EACH HEREBY KNOWINGLY,
     VOLUNTARILY, AND 

<PAGE>   76

     INTENTIONALLY WAIVES ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN ANY
     LITIGATION OF ANY CLAIM WHICH IS BASED HEREON, OR ARISES OUT OF, UNDER, OR
     IN CONNECTION WITH THIS AGREEMENT, THE NOTES, THE WARRANTS OR THE OTHER
     SECOND PRIORITY NOTE DOCUMENTS, OR ANY TRANSACTIONS RELATING HERETO OR
     THERETO, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
     ORAL OR WRITTEN), OR ACTIONS OF THE COMPANY, THE HOLDERS OF THE SECURITIES
     OR THE COLLATERAL AGENT. THE COMPANY ACKNOWLEDGES THAT THIS PROVISION IS A
     MATERIAL INDUCEMENT FOR THE PURCHASERS TO ENTER INTO THIS AGREEMENT.

     b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT, THE
     NOTES, THE WARRANTS, THE OTHER SECOND PRIORITY NOTE DOCUMENTS OR ANY
     TRANSACTIONS RELATING HERETO OR THERETO, OR ANY COURSE OF CONDUCT, COURSE
     OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN), OR ACTIONS OF THE
     COMPANY, THE HOLDERS OF SECURITIES OR THE COLLATERAL AGENT MAY BE BROUGHT
     IN THE COURTS OF THE STATE OF NEW YORK, OR THE UNITED STATES OF AMERICA FOR
     THE SOUTHERN DISTRICT OF NEW YORK AND THE COMPANY HEREBY ACCEPTS FOR ITSELF
     AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
     NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE COMPANY AND EACH
     HOLDER OF SECURITIES EACH HEREBY IRREVOCABLY WAIVES ANY OBJECTIONS,
     INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR
     BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER
     HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH RESPECTIVE
     JURISDICTIONS.

     c) The Company hereby agrees that process may be served on CT Corporation
     System, Inc., located at 1633 Broadway, New York, New York 10019. Any and
     all service of process and any other notice in any such action, suit or
     proceeding shall be effective against such parties if given by registered
     or certified mail, return receipt requested, or by any other means or mail
     which requires a signed receipt, postage prepaid, mailed to such parties as
     herein provided in paragraph 11I. In the event CT Corporation System, Inc.
     shall not be able to accept service of process as aforesaid and if the
     Company shall not maintain an office in New York City, the Company shall
     promptly appoint and maintain an agent qualified to act as an agent for
     service of process with respect to all courts in and of the New York City,
     and acceptable to the Required Holder(s), as the Company's authorized agent
     to accept and acknowledge on the Company's behalf service of any and all
     process which may be served in any such action, suit or proceeding.
<PAGE>   77

N.       INDEMNIFICATION. The Company agrees:

          (i) TO INDEMNIFY EACH HOLDER OF SECURITIES AND EACH OF THEIR
     AFFILIATES AND EACH OF THEIR OFFICERS, DIRECTORS, EMPLOYEES, SHAREHOLDERS,
     REPRESENTATIVES, AGENTS, ATTORNEYS, ACCOUNTANTS AND EXPERTS ("INDEMNIFIED
     PARTIES") FROM, HOLD EACH OF THEM HARMLESS AGAINST AND PROMPTLY UPON DEMAND
     PAY OR REIMBURSE EACH OF THEM FOR, THE INDEMNITY MATTERS WHICH MAY BE
     INCURRED BY OR ASSERTED AGAINST OR INVOLVE ANY OF THEM (WHETHER OR NOT ANY
     OF THEM IS DESIGNATED A PARTY THERETO) AS A RESULT OF, ARISING OUT OF OR IN
     ANY WAY RELATED TO (I) ANY ACTUAL OR PROPOSED USE BY THE COMPANY OF THE
     PROCEEDS OF THE SECURITIES, (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF
     THIS AGREEMENT AND THE OTHER SECOND PRIORITY NOTE DOCUMENTS, (III) THE
     OPERATIONS OF THE BUSINESS OF THE COMPANY AND ITS SUBSIDIARIES, (IV) THE
     FAILURE OF COMPANY OR ANY OF ITS SUBSIDIARIES TO COMPLY WITH THE TERMS OF
     THIS AGREEMENT OR ANY OF THE OTHER SECOND PRIORITY NOTE DOCUMENTS OR WITH
     ANY GOVERNMENTAL REQUIREMENT, (V) ANY INACCURACY OF ANY REPRESENTATION OR
     ANY BREACH OF ANY WARRANTY OF THE COMPANY OR ANY OF ITS SUBSIDIARIES SET
     FORTH IN THIS AGREEMENT OR ANY OTHER SECOND PRIORITY NOTE DOCUMENT, (VI)
     ANY ASSERTION THAT THE COMPANY WAS NOT ENTITLED TO RECEIVE THE PROCEEDS
     RECEIVED PURSUANT TO THIS AGREEMENT AND THE OTHER SECOND PRIORITY NOTE
     DOCUMENTS, (VII) THE ISSUE OR EXERCISE OF THE WARRANTS (INCLUDING, WITHOUT
     LIMITATION, ANY EFFECT OF SUCH EXERCISE UPON THE COMPANY'S STATUS AS AN S
     CORPORATION AND ANY EFFECT OF SUCH EXERCISE UPON ANY INSURANCE LICENSE OF
     THE COMPANY OR ANY SHAREHOLDER, DIRECTOR, OFFICER OR EMPLOYEE THEREOF) OR
     (VIII) ANY OTHER ASPECT OF THE SECOND PRIORITY NOTE DOCUMENTS, INCLUDING,
     WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL AND
     ALL OTHER EXPENSES INCURRED IN CONNECTION WITH INVESTIGATING, DEFENDING OR
     PREPARING TO DEFEND ANY SUCH ACTION, SUIT, PROCEEDING (INCLUDING ANY
     INVESTIGATIONS, LITIGATIONS OR INQUIRIES) OR CLAIM AND INCLUDING ALL
     INDEMNITY MATTERS ARISING BY REASON OF THE ORDINARY NEGLIGENCE OF ANY
     INDEMNIFIED PARTY (EXCEPT AS TO THE EXTENT ANY SUCH INDEMNITY MATTERS HAVE
     BEEN CAUSED BY THE GROSS 


<PAGE>   78

     NEGLIGENCE OR WILLFUL MISCONDUCT OF SUCH INDEMNIFIED PARTY, IT BEING THE
     INTENT OF THE PARTIES THAT EACH INDEMNIFIED PARTY SHALL BE INDEMNIFIED FROM
     INDEMNITY MATTERS CAUSED BY THE NEGLIGENCE, WHETHER SOLE, JOINT,
     CONCURRENT, CONTRIBUTORY, ACTIVE OR PASSIVE, OF SUCH INDEMNIFIED PARTY);
     AND

          (ii) THE FOREGOING INDEMNITIES SHALL EXTEND TO THE INDEMNIFIED PARTIES
     NOTWITHSTANDING THE NEGLIGENCE OF EVERY KIND OR CHARACTER WHATSOEVER,
     WHETHER ACTIVE OR PASSIVE, WHETHER AN AFFIRMATIVE ACT OR AN OMISSION,
     INCLUDING, WITHOUT LIMITATION, ALL TYPES OF NEGLIGENT CONDUCT IDENTIFIED IN
     THE RESTATEMENT (SECOND) OF TORTS OF ONE OR MORE OF THE INDEMNIFIED PARTIES
     OR BY REASON OF STRICT LIABILITY IMPOSED WITHOUT FAULT ON ANY ONE OR MORE
     OF THE INDEMNIFIED PARTIES. TO THE EXTENT THAT AN INDEMNIFIED PARTY
     COMMITTED AN ACT OF GROSS NEGLIGENCE OR WILLFUL MISCONDUCT, THIS
     CONTRACTUAL OBLIGATION OF INDEMNIFICATION SHALL CONTINUE BUT SHALL ONLY
     EXTEND TO THE PORTION OF THE CLAIM THAT IS DEEMED TO HAVE OCCURRED BY
     REASON OF EVENTS OTHER THAN THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF
     THE INDEMNIFIED PARTY.

          (iii) THE COMPANY AND ITS SUBSIDIARIES AGREE NOT TO ASSERT ANY CLAIM
     AGAINST THE HOLDER OF ANY SECURITIES, ANY OF THEIR AFFILIATES, OR ANY OF
     THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, ATTORNEYS, AGENTS AND
     ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL, INDIRECT, CONSEQUENTIAL
     OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE RELATING TO THE SECOND
     PRIORITY NOTE DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
     THEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE SECURITIES.

          (iv) The obligations of the Company and its Subsidiaries under this
     paragraph 11N shall survive the termination of this Agreement and the
     payment in full of the Notes and all other amounts payable hereunder.

O.       RELEASE. THE COMPANY AND ITS SUBSIDIARIES EACH HEREBY RELEASE,
DISCHARGE AND ACQUIT FOREVER THE HOLDERS OF THE SECURITIES AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND COUNSEL FROM ANY AND ALL CLAIMS
EXISTING AS OF THE DATE HEREOF. AS USED IN THIS 

<PAGE>   79

PARAGRAPH 11O, THE TERM "CLAIM" SHALL MEAN ANY AND ALL LIABILITIES, CLAIMS,
JUDGMENTS, DEFICIENCIES, INTEREST, LIENS, COSTS OR EXPENSES (INCLUDING COURT
COSTS, PENALTIES, ATTORNEYS' FEES AND DISBURSEMENTS, AND AMOUNTS PAID IN
SETTLEMENT) OF ANY KIND AND CHARACTER WHATSOEVER, IN EACH CASE WHETHER NOW KNOWN
OR UNKNOWN, SUSPECTED OR UNSUSPECTED, ASSERTED OR UNASSERTED OR PRIMARY OR
CONTINGENT, AND WHETHER ARISING OUT OF WRITTEN DOCUMENTS, UNWRITTEN UNDERTAKINGS
OR COURSE OF CONDUCT.

P.       RELATIONSHIP OF THE PARTIES. This Agreement provides for (a) the making
of loans by the Purchasers, in their capacity as lenders, to the Company, in its
capacity as a borrower, and for the payment of interest and Yield Maintenance
Amount, if any, and repayment of principal by the Company to the holders of the
Notes and (b) the sale of Warrants by the Company to the Purchasers. The
relationship between the Purchasers and the Company is limited to that of
creditors/secured parties/warrant holders, on the one hand, and debtor/issuer of
warrants, on the other hand. The provisions herein for compliance with
financial, environmental, and other covenants, delivery of financial and other
reports, and financial and other inspections, investigations, audits,
examinations or tests are intended solely for the benefit of the holders of the
Securities to protect their interests as lenders and warrant holders in assuring
payments of interest and Yield Maintenance Amount, if any, and repayment of
principal and the maintenance of the underlying value of the Warrants and
nothing contained in this Agreement or any other Second Priority Note Document
shall be construed as permitting or obligating the holders of the Notes to act
as financial or business advisors or consultants to the Company, as permitting
or obligating the holders of the Securities to control the Company or to conduct
or operate the Company's operations, as creating any fiduciary obligation on the
part of the holders of the Securities to the Company, or as creating any joint
venture, agency, or other relationship between the parties other than as
explicitly and specifically stated in this Agreement. The Company acknowledges
that it has had the opportunity to obtain the advice of experienced counsel of
its own choosing in connection with the negotiation and execution of this
Agreement and the other Second Priority Note Documents and to obtain the advice
of such counsel with respect to all matters contained herein, including, without
limitation, the provision in paragraph 11M for waiver of trial by jury. The
Company further acknowledges that it is experienced with respect to financial
and credit matters and has made its own independent decision to apply to the
Purchasers for the financial accommodations provided hereby and to execute and
deliver this Agreement and the other Second Priority Note Documents.

Q.       FINAL AGREEMENT. THIS AGREEMENT AND THE OTHER SECOND PRIORITY NOTE
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENT
OF THE PARTIES. THERE ARE NO ORAL AGREEMENTS BETWEEN THE PARTIES.
<PAGE>   80

R.       CONSTRUCTION. The Purchasers and the Company have participated jointly
in the negotiation and drafting of this Agreement and the other Second Priority
Note Documents. In the event an ambiguity or question of intent or
interpretation arises, this Agreement or other Second Priority Note Document, as
the case may be, shall be construed as if drafted jointly by the Purchasers and
the Company and no presumption or burden of proof shall arise favoring or
disfavoring any Purchaser or the Company by virtue of the authorship of any of
the provisions of this Agreement or such other Second Priority Note Document, as
the case may be.

S.       SEVERABILITY. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.

T.       DESCRIPTIVE HEADINGS. The descriptive headings of the several
paragraphs of this Agreement are inserted for convenience only and do not
constitute a part of this Agreement.

U.       MAXIMUM INTEREST PAYABLE. The Company, each Purchaser and any other
holders of the Notes specifically intend and agree to limit contractually the
amount of interest payable under this Agreement, the Notes and all other
instruments and agreements related hereto and thereto to the maximum amount of
interest lawfully permitted to be charged under applicable law. Therefore, none
of the terms of this Agreement, the Notes or any instrument pertaining to or
relating to this Agreement or the Notes shall ever be construed to create a
contract to pay interest at a rate in excess of the maximum rate permitted to be
charged under applicable law, and neither the Company, any guarantor nor any
other party liable or to become liable hereunder, under the Notes, any guaranty
or under any other instruments and agreements related hereto and thereto shall
ever be liable for interest in excess of the amount determined at such maximum
rate, and the provisions of this paragraph 11U shall control over all other
provisions of this Agreement, any Notes, any guaranty or any other instrument
pertaining to or relating to the transactions herein contemplated. If any amount
of interest taken or received by any Purchaser or any holder of a Note shall be
in excess of said maximum amount of interest which, under applicable law, could
lawfully have been collected by such Purchaser or such holder incident to such
transactions, then such excess shall be deemed to have been the result of a
mathematical error by all parties hereto and shall be refunded promptly by the
Person receiving such amount to the party paying such amount, or, at the option
of the recipient, credited ratably against the unpaid principal amount of the
Note or Notes held by such Purchaser or such holder, respectively. All amounts
paid or agreed to be paid in connection with such transactions which would under
applicable law be deemed "INTEREST" shall, to the extent permitted by such
applicable law, be amortized, prorated, allocated and spread throughout the
stated term of this Agreement and the Notes. "APPLICABLE LAW" as used in this
paragraph means that law in effect from time to time which permits the 



<PAGE>   81

charging and collection of the highest permissible lawful, nonusurious rate of
interest on the transactions herein contemplated including laws of the State of
New York and of the United States of America, and "MAXIMUM RATE" as used in this
paragraph means, with respect to each of the Notes, the maximum lawful,
nonusurious rates of interest (if any) which under applicable law may be charged
to the Company from time to time with respect to such Notes.

V.       COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original but all of which together shall
constitute one instrument.

W.       SEVERALTY OF OBLIGATIONS. The sales of the Securities to the Purchasers
are to be several sales, and the obligations of the Purchasers under this
Agreement are several obligations. Except as provided in paragraph 3K, no
failure by any Purchaser to perform its obligations under this Agreement shall
relieve any other Purchaser or the Company of any of its obligations hereunder,
and no Purchaser shall be responsible for the obligations of, or any action
taken or omitted by, any other Purchaser hereunder.

X.       ADJUSTMENTS RELATED TO NUMBER OF SHARES OF COMMON STOCK. Without in any
manner affecting the adjustment of the exercise price of the Warrants as
provided therein, in the event of any change in the number of outstanding shares
of Common Stock subsequent to the Date of Closing whether by combination,
consolidation, reclassification, stock split or otherwise, the parties hereto
agree to make appropriate adjustments, to references to numbers of shares of
Common Stock contained herein and execute amendments to this Agreement (in form,
scope and substance satisfactory to the holders of the Notes) to reflect the
same.


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<PAGE>   82


         If you are in agreement with the foregoing, please sign the form of
acceptance on the enclosed counterparts of this letter and return the same to
the Company, whereupon this letter shall become a binding agreement among the
Company and the Purchasers.

                                          Very truly yours,

                                          CLARK/BARDES, INC.



                                          By:
                                               Title:


The foregoing Agreement is 
hereby accepted as of the 
date first above written.


GREAT-WEST LIFE & ANNUITY
INSURANCE COMPANY


By:
      Title:

By:
      Title:


LIFE INVESTORS INSURANCE
COMPANY OF AMERICA


By:
      Title:


NATIONWIDE LIFE INSURANCE COMPANY


By:
      Title: