<PAGE>   1
                                                                    EXHIBIT 10.8


                                                                  EXECUTION COPY





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                               CLARK/BARDES, INC.




                                   $14,500,000

                              10.50% SENIOR SECURED
                            NOTES DUE AUGUST 9, 2002



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

                                 NOTE AGREEMENT

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


                          DATED AS OF SEPTEMBER 8, 1997


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<PAGE>   2
                                TABLE OF CONTENTS

                             (Not Part of Agreement)

                                                                            Page
                                                                            ----
         1.       AUTHORIZATION OF ISSUE OF NOTES                             1

         1A.      Authorization of Issues of Notes                            1

         2.       PURCHASE AND SALE OF NOTES.                                 1

         2A.      Purchase and Sale of Notes                                  1

         3.       CONDITIONS PRECEDENT                                        2

3.       Conditions to Closing                                                2

         3A.      Certain Documents                                           2
         3B.      Representations and Warranties; No Default; No Material
                  Adverse Change                                              4
         3C.      Purchase Permitted By Applicable Laws                       5
         3D.      Completion of Due Diligence                                 5
         3E.      Information with Respect to Contemplated Sale of Common
                  Stock                                                       5
         3F.      Other Information                                           5
         3G.      Related Proceedings                                         5
         3H.      Consummation of Acquisition, Share Repurchases and
                  Settlement of Litigation; Satisfaction of Conditions 
                  Precedent to the Shareholders' Agreement                    6
         3I.      Repurchase of Common Stock                                  6
         3J.      Termination of Existing Bank Facility                       6
         3K.      Sale of Notes to Other Purchasers                           6
         3L.      Proceedings                                                 6
         3M.      Fees                                                        7

         4.       PREPAYMENTS                                                 7

         4A.      Required Prepayments                                        7
         4B.      Optional Prepayment of Notes with Yield 
                  Maintenance Amount                                          7
         4C.      Offer to Prepay Notes in the Event of a Change in 
                  Control or a Revenue Maintenance Event                      8
         4D.      Partial Payments Pro Rata                                   9
         4E.      Retirement of Notes                                         9

         5.       AFFIRMATIVE COVENANTS                                      10
<PAGE>   3
         5A.      Financial Statements                                       10
         5B.      Information Required by Rule 144A                          13
         5C.      Inspection of Property                                     13
         5D.      Covenant to Secure Notes Equally                           13
         5E.      Corporate Existence, Licenses and Permits;
                  Maintenance of Properties                                  13
         5F.      Maintenance of Material Contracts                          14
         5G.      Maintenance of Insurance                                   14
         5H.      Payment of Taxes and Other Claims                          14
         5I.      ERISA Compliance                                           15
         5J.      Compliance with Laws                                       15
         5K.      Collateral                                                 15
         5L.      Enforcement of Acquisition Documents, Share
                  Repurchase Documents, the Settlement Agreement
                  and the Shareholders' Agreement                            15
         5M.      Lockbox Account                                            16
         5N.      Performance of Obligations                                 16
         5O.      Maintenance of Key Sales Force                             16
         5P.      Pledge of Notes Payable                                    16
         5Q.      Offering of Common Stock                                   16
         5R.      Maintenance of Key Man and Shareholder Life 
                  Insurance Policies                                         16
         5S.      Creation and Maintenance of Working Capital
                  Facility                                                   16
         5T.      Reincorporation Merger                                     17
         5U.      Conversion to a C Corporation                              17
         5V.      Certain Redemptions of Common Stock                        17
         5W.      BCS Service Corporation                                    17
         5X.      Matters Related to Qualification and Licensure             17

         6.       NEGATIVE COVENANTS                                         18

         6A.      Total Debt to Annualized Cash Flow Ratio                   18
         6B.      Limitation on Restricted Payments                          18
         6C.      Maintenance of Minimum Consolidated Net Worth and
                  Consolidated Net Income                                    18
         6D.      Discounted Commission Fees to Total Debt Ratio             18
         6E.      Interest Coverage Ratio                                    19
         6F.      Fixed Charge Coverage Ratio                                19
         6G.      Liens, Indebtedness, and Other Restrictions                19
         6H.      Change of Fiscal Year                                      23
         6I.      Change of Business                                         23
         6J.      Certificates of Incorporation; Bylaws; Trade Names         23
         6K.      Other Agreements                                           24
         6L.      Limitation on Certain Restrictive Agreements               24
         6M.      ERISA Matters                                              24
         6N.      Only One Class of Capital Stock                            24
         6O.      Prohibition Against Payments and Prepayments of
                  Certain Indebtedness                                       24
         6P.      AAA Distribution                                           24
         6Q.      No Subsidiaries                                            25
<PAGE>   4
         6R.      Restrictions on Issuances of Common Stock                  25
         6S.      Restrictions Upon the Amendment of Certain Documents       25
         6T.      Limitation on Amount of S Corporation Tax Distributions    26
         6U.      Prohibition Against Phantom Stock                          26
         6V.      Reincorporation Merger                                     26

         7.       EVENTS OF DEFAULT                                          26

         7A.      Acceleration                                               26
         7B.      Rescission of Acceleration                                 30
         7C.      Notice of Acceleration or Rescission                       30
         7D.      Right of Set-off                                           30
         7E.      Notice to Holders of Subordinated Debt; Payment Block      31
         7F.      Other Remedies                                             31

         8.       REPRESENTATIONS, COVENANTS AND WARRANTIES                  31

         8A.      Organization and Qualification                             31
         8B.      Financial Statements                                       32
         8C.      Actions Pending                                            32
         8D.      Outstanding Indebtedness                                   33
         8E.      Title to Properties                                        33
         8F.      Possession of Franchises, Licenses, Patents and 
                  Trademarks                                                 33
         8G.      Taxes                                                      33
         8H.      Conflicting Agreements and Other Matters                   34
         8I.      Offering of the Notes                                      35
         8J.      Use of Proceeds                                            35
         8K.      ERISA                                                      35
         8L.      Governmental Consent                                       36
         8M.      Environmental Compliance                                   36
         8N.      Fiscal Year                                                36
         8O.      Disclosure                                                 36
         8P.      Investment Company Act                                     37
         8Q.      Other Regulation                                           37
         8R.      Acquisition, Share Repurchase, Settlement Agreement 
                  and Shareholders' Agreement Representations and
                  Warranties                                                 37
         8S.      Solvency                                                   37
         8T.      Employment Agreements, Non-Competition Agreements
                  and Principal Office Agreements                            37
         8U.      Insurance Licenses                                         37
         8V.      Undisclosed Liabilities.                                   37
         8W.      Legal Compliance                                           38
         8X.      Certain Tax Matters                                        38
         8Y.      Sales Representatives                                      38
         8Z.      Contracts                                                  38
<PAGE>   5
         8AA.     Assignment of Insurance Contracts.                         39
         8BB.     Satisfaction of Conditions  Precedent to the
                  Acquisition, the Share Repurchases, the Settlement
                  Agreement and the Shareholders' Agreement                  39
         8CC.     Compliance with Laws                                       40
         8DD.     Condition of Property                                      40
         8EE.     Books and Records.                                         40
         8FF.     Additional Disclosure                                      40
         8GG.     Reincorporation Merger                                     40
         8HH.     Satisfaction of Conditions Precedent                       40
         8II.     Certain Affiliates                                         40

         9.       REPRESENTATIONS OF EACH PURCHASER                          41

         9A.      Nature of Purchase                                         41
         9B.      Source of Funds                                            41

         10.      DEFINITIONS                                                42

         10A.     Yield Maintenance Terms                                    42
         10B.     Other Terms                                                44
         10C.     Accounting Principles, Terms and Determinations            60

         11.      MISCELLANEOUS                                              60

         11A.     Note Payments                                              60
         11B.     Expenses                                                   60
         11C.     Consent to Amendments                                      61
         11D.     Form, Registration, Transfer and Exchange of 
                  Notes; Lost Notes                                          61
         11E.     Persons Deemed Owners; Participations                      62
         11F.     Survival of Representations and Warranties;
                  Entire Agreement                                           62
         11G.     Successors and Assigns                                     62
         11H.     Disclosure to Other Persons                                63
         11I.     Notices                                                    63
         11J.     Payments Due on Non-Business Days                          63
         11K.     Satisfaction Requirement                                   63
         11L.     Governing Law                                              64
         11M.     Waiver of Jury Trial; Consent to Jurisdiction;
                  Limitation of Remedies                                     64
         11N.     Indemnification                                            65
         11O.     Release                                                    66
         11P.     Relationship of the Parties                                67
         11Q.     Final Agreement                                            67
         11R.     Construction.                                              67
         11S.     Severability                                               68
         11T.     Descriptive Headings                                       68
         11U.     Maximum Interest Payable                                   68
         11V.     Counterparts                                               68
         11W.     Severalty of Obligations                                   69
<PAGE>   6
PURCHASER SCHEDULE

                     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 8T - MATERIAL EMPLOYMENT
                                      AGREEMENTS, NON-COMPETITION AGREEMENTS 
                                      AND PRINCIPAL OFFICE AGREEMENTS
                     SCHEDULE 8U - INSURANCE LICENSES
                     SCHEDULE 8Z - CONTRACTS
                     SCHEDULE 8FF(1) - PERFORMANCE BONUSES
                     SCHEDULE 8FF(2) - PLANS AND MULTIEMPLOYER PLANS
                     SCHEDULE 8FF(3) - INTELLECTUAL PROPERTY
                     SCHEDULE A - COMPETITORS

                     EXHIBIT A - FORM OF NOTE
                     EXHIBIT B-1 - FORM OF OPINION OF COMPANY'S COUNSEL
                     EXHIBIT B-2 - FORM OF OPINION OF COMPANY'S GENERAL COUNSEL
                     EXHIBIT C - FORM OF OFFICER'S CERTIFICATE
                     EXHIBIT D - FORM OF COMPLIANCE CERTIFICATE
                     EXHIBIT E-1 - FORM OF ASSIGNMENT OF LIFE INSURANCE POLICY
                     EXHIBIT E-2 - FORM OF ASSIGNMENT OF LIFE INSURANCE POLICY
                     EXHIBIT F - FORM OF COLLATERAL AGENCY AGREEMENT
                     EXHIBIT G - FORM OF PERFECTION CERTIFICATE
                     EXHIBIT H - FORM OF SECURITY AGREEMENT
<PAGE>   7
                               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

                $14,500,000 10.50% SENIOR SECURED NOTES DUE 2002

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 NOTES.

1A.            AUTHORIZATION OF ISSUES OF NOTES. The Company will authorize the
issue of its 10.50% senior secured promissory notes in the aggregate principal
amount of $14,500,000, to be dated the date of issue thereof, to mature August
9, 2002, 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
10.50% per annum and on overdue payments at the rate specified therein; such
10.50% 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 10.50% senior secured promissory note delivered pursuant to any provision
of this Agreement and each such 10.50% 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.

<PAGE>   8

2.       PURCHASE AND SALE OF NOTES.

2A.            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").

3.       CONDITIONS PRECEDENT.

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

3A.           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)        a certified copy of the resolutions of the Board of Directors of
     the Company approving each of the Senior 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 Senior Note Documents to which it is a party;

     c)        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 Senior Note Documents to which it is a party
     and the other documents to be delivered hereunder by the Company;

     d)        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;

<PAGE>   9

     e)        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 B-1 and Exhibit B-2 attached hereto,
     respectively;

     f)        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;

     g)        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;

     h)        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;

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

     j)        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;

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

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

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

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

<PAGE>   10

     o)        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;

     p)        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;

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

     r)        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);

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

     t)        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;

     u)        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;

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

     w)        written instructions from a Responsible Officer of the Company,
     set forth on the Company's letterhead, authorizing and directing such
     Purchaser to 

<PAGE>   11

     pay the purchase price of the Notes by transfer of immediately available
     funds for credit to the bank account of the Company identified in paragraph
     2A; and

     x)        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.

3B.            REPRESENTATIONS AND WARRANTIES; NO DEFAULT; NO MATERIAL ADVERSE
CHANGE. The representations and warranties contained in this Agreement, the
other Senior 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.

3C.            PURCHASE PERMITTED BY APPLICABLE LAWS. The offer by the Company
of, and the purchase of and payment for the Notes, 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 the Notes by the Company) 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.

3D.            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.

3E.            INFORMATION WITH RESPECT TO CONTEMPLATED SALE OF COMMON STOCK.
Such Purchaser shall have received information (in reasonable detail) with
respect 

<PAGE>   12

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.

3F.            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.

3G.            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 Second Priority
Notes pursuant to the Second Priority 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.

3H.            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 Notes and the
Second Priority 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 Notes the Second
Priority Notes and the Warrants (no terms thereof having been amended,
supplemented, waived or otherwise modified without such Purchaser's prior
written consent).

3I.            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 Notes and the Second
Priority Notes pursuant to the Second Priority Note Agreement on terms and
conditions and subject to documentation (including, without limitation,
subordination of the Shareholder Notes, non-competition

<PAGE>   13

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.

3J.            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.

3K.            SALE OF NOTES TO OTHER PURCHASERS. The Company shall have sold to
the other Purchasers the Notes to be purchased by them at the closing and shall
have received payment in full therefor.

3L.            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.

3M.            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.

4A.            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
$1,450,000 on each February 9th and August 9th beginning on the February 9th
immediately following the Date of Closing, 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.

4B.            OPTIONAL PREPAYMENT OF NOTES WITH 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
<PAGE>   14
     prepayment date and, unless such prepayment is made pursuant to paragraph
     5V, the Yield Maintenance Amount, if any, with respect to the amount(s)
     prepaid; provided that the Company may not prepay the Notes pursuant to
     this paragraph 4B unless (y) the Company is not making the prepayment for
     the purpose of refunding the Notes by the application, directly or
     indirectly, of borrowed funds and (z) 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.

4C.            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 

<PAGE>   15
     each holder (in this case only, "HOLDER" in respect of any Note registered
     in the 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.

4D.      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,


<PAGE>   16
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. 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.

4E.      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 the Company covenants that:

5A.      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 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 

<PAGE>   17
     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 10K 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 the Company, all in reasonable detail
     and satisfactory in form, scope and substance to the Required Holder(s);

<PAGE>   18

     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;

     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 


<PAGE>   19

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

<PAGE>   20

5B.            INFORMATION REQUIRED BY RULE 144A. The Company will, upon the
request of the holder of any Note, 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, except at such times as
the Company is subject to the reporting requirements of section 13 or 15(d) of
the Exchange Act.

5C.            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.

5D.            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.

5E.            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 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,

<PAGE>   21

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.

5F.            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.

5G.            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
Notes 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.

5H.            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>   22

5I.            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.

5J.            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.

5K.            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 Senior 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 Senior 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.

<PAGE>   23

5L.            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 consummation of the Acquisition or the Share Repurchases, as
the case may be, including, without limitation, all indemnification obligations.

5M.            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.

5N.            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 Senior Note Documents to which it is a
party (including, without limitation, this Agreement) at the time or times and
in the manner specified.

5O.            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.

5P.            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.

5Q.            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.

5R.            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

<PAGE>   24

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.

5S.            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 Senior 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.

5T.            REINCORPORATION MERGER. The Company will consummate the
Reincorporation Merger no later than March 9, 1999.

5U.            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.

5V.            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.

5W.            BCS SERVICE CORPORATION. The Company will liquidate and dissolve
BCS Service Corporation within 180 days of the Date of Closing.

5X.            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))

<PAGE>   25

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.

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

6A.            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:

                                Period                              Ratio
                                ------                              -----
                     From the Date of Closing through and           5.0 to 1.0
            including December 31, 1998
                     From January 1, 1999 through and               4.0 to 1.0
            including December 31, 1999
            and thereafter                                          3.0 to 1.0

6B.            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.

6C.            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.

6D.            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.

<PAGE>   26

6E.            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:

                                 Period                            Ratio
                                 ------                            -----

                    From the Date of Closing through and           1.25 to 1.0
           including December 31, 1998
                    From January 1, 1999 through and including     1.60 to 1.0
           December 31, 1999
           and thereafter                                          3.0  to 1.0

6F.            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:

                                 Period                            Ratio
                                 ------                            -----

                    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

6G.            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
          Senior 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 Second Priority Notes and the payment,

<PAGE>   27

          performance and observance of the other obligations under the Second
          Priority Note Agreement and the other Second Priority Note Documents
          and addressed in the Security Documents;

          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 Second Priority Note
          Agreement, as evidenced by the Second Priority 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;

<PAGE>   28

          e)        Indebtedness evidenced by the Shareholder Notes;

          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 


<PAGE>   29

     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;

     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

<PAGE>   30

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

     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").

6H.            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).

6I.            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.

6J.            CERTIFICATES OF INCORPORATION; BYLAWS; TRADE NAMES. The Company
will not and will not permit any Subsidiary to amend, alter, modify or restate
its

<PAGE>   31

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

6K.            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 Senior Note Documents.

6L.            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
Senior 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
Senior Note Document or (iv) transfer any of its property or assets to the
Company or a Wholly Owned Subsidiary of the Company.

6M.            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.

6N.            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.

6O.            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.

6P.            AAA DISTRIBUTION. The Company will not consummate the AAA
Distribution unless (i) the aggregate amount of the AAA Distribution does not
exceed 

<PAGE>   32

$4,143,623 and (ii) all recipients of any portion of the AAA Distribution
agree to, and 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.

6Q.            NO SUBSIDIARIES. Notwithstanding anything in this Agreement or
any other Senior 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
Notes 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 Notes 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 Notes and performance and
observance of all other obligations of the Company and its Subsidiaries under
the Senior 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>   33
6R.            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.

6S.            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 Senior Note Documents.

6T.            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.

6U.            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).

6V.            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 Senior 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>   34

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.

7.             EVENTS OF DEFAULT.

7A.            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 Senior Note Documents, or by 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

<PAGE>   35

     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 Senior 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

     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

<PAGE>   36

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

<PAGE>   37

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.

7B.       RECISSION 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.

7C.            NOTICE OF ACCELERATION OR RESCISSION. Whenever any Note shall be
declared immediately due and payable pursuant to paragraph 7A or any such

<PAGE>   38

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.

7D.            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 Senior
Note Documents or the Second Priority 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.

7E.            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.

7F.            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 Senior 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 of any covenant or other agreement contained in
this Agreement or the other Senior Note Documents or in aid of the exercise of
any power granted in this Agreement or the other Senior Note Documents, and (ii)
both the Collateral Agent and the holders of the Notes 


<PAGE>   39

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 Senior 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:

8A.                 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
Senior 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.

8B.                 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 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,


<PAGE>   40

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.

8C.       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 of the other Senior Note
Documents, any of the Acquisition Documents, any of Share Repurchase Documents,
the Settlement Agreement or the Shareholders' Agreement.

8D.       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.

8E.       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 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


<PAGE>   41

for the conduct of the business of the Company are valid and subsisting and are
in full force and effect.

8F.            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.

8G.            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.

8H.            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

<PAGE>   42

or financial condition. The execution and delivery of this Agreement, the Notes,
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 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 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, (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 and (c) 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 8Z 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' 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).

<PAGE>   43

8I.            OFFERING OF THE NOTES. Neither the Company nor any agent acting
on its behalf has, directly or indirectly, offered the Notes or any similar
security of the Company for sale to, or solicited any offers to buy the Notes 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 Notes 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.

8J.            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"). Approximately $13,500,000 of the proceeds of sale of the Notes will be
used to fund the Acquisition with the remainder to be used for general corporate
purposes including, without limitation, 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 cause this Agreement or the
Notes 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.

8K.            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 Note.

<PAGE>   44

8L.           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 Notes 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 Senior 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
Notes or fulfillment of or compliance with the terms and provisions of this
Agreement or of the Notes.

8M.           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.

8N.           FISCAL YEAR. The fiscal year of the Company ends as of December 31
of each year.

8O.           DISCLOSURE. Neither this Agreement, the other Senior 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 Senior 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.

8P.           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.

<PAGE>   45

8Q.           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 Notes or (ii) the Company to perform its respective
obligations under this Agreement, the other Senior Note Documents, the Share
Repurchase Documents, the Acquisition Documents, the Settlement Agreement or the
Shareholders' Agreement.

8R.           ACQUISITION, SHARE REPURCHASE, SETTLEMENT AGREEMENT AND
SHAREHOLDERS' AGREEMENT REPRESENTATIONS AND WARRANTIES. To induce the Purchasers
to enter into this Agreement and to purchase the Notes, 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.

8S.           SOLVENCY. The Company is Solvent, both before and after giving
effect to this Agreement, the other Senior Note Documents, the Second Priority
Note Documents, the Share Repurchase Documents and the Acquisition Documents,
and to the transactions contemplated hereby and thereby.

8T.           EMPLOYMENT AGREEMENTS, NON-COMPETITION AGREEMENTS AND PRINCIPAL
OFFICE AGREEMENTS. Schedule 8T 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 8T are in full
force and effect and no default thereunder or violation of any of the provisions
thereof exists.

8U.           INSURANCE LICENSES. All Insurance Licenses of the Company are
listed on Schedule 8U 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.

8V.           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).

8W.           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

<PAGE>   46

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.

8X.            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.

8Y.            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 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.

8Z.            CONTRACTS. Except as set forth in Schedule 8Z, 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);

<PAGE>   47

          (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;

          (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 8Z 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 Senior 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.

8AA.           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.


<PAGE>   48

8BB.           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' Agreements have been
waived without the express written consent of each of the Purchasers.

8CC.           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.

8DD.           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.

8EE.           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.

8FF.           ADDITIONAL DISCLOSURE. Schedule 8FF(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 8FF(2) is a true, correct and complete schedule of all Plans and
Multiemployer Plans of the Company and any ERISA Affiliates. Schedule 8FF(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.

8GG.           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.

<PAGE>   49

8HH.           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.

8II.           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.

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

9A.            NATURE OF PURCHASE. Such Purchaser is not acquiring the Notes 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.

9B.            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 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 

<PAGE>   50

          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

               (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):

10A.           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


<PAGE>   51

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 next 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,

(i) with respect to any amount prepaid pursuant to paragraph 4B (a) 4% of the
principal amount so prepaid if such prepayment date is prior to one year after
the Date of Closing, (b) 3% of the principal amount so prepaid if such
prepayment date is one year or longer, but less than two years, after the Date
of Closing, (c) 2% of the principal amount so prepaid if such prepayment date is
two years or longer, but less than three years, after the Date of Closing, (d)
1% of the principal amount so prepaid if such prepayment date is three years or
longer, but less than four years, after the Date of Closing and (e) 0% of the
<PAGE>   52

principal amount so prepaid if such prepayment date is four years or longer
after the Date of Closing; and

(ii) with respect to any amount prepaid pursuant to any other provision of this
Agreement (including, without limitation, pursuant to paragraph 4C or upon
acceleration pursuant to paragraph 7A), 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.

10B.               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 $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



<PAGE>   53
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, 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 attached
hereto, 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.
<PAGE>   54

                   "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.

                   "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 Senior Note Documents.
<PAGE>   55

                   "COLLATERAL AGENT" shall mean Texas Commerce Bank, in its
capacity as Collateral Agent for the Acquired Company and the holders of Notes,
the Second Priority 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 Second Priority Notes and the Medium Term Notes, substantially in the
form of Exhibit F attached hereto, 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.

                   "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 of the Second Priority Note Agreement.

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

                   "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.


<PAGE>   56

                   "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,

          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 
<PAGE>   57

          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, (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.


<PAGE>   58

                   "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.

                   "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;
<PAGE>   59

                   (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);

                  (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.
<PAGE>   60

                  "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) 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 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 

<PAGE>   61


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, 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).
<PAGE>   62

                  "PARTICIPATION RIGHTS AGREEMENT" shall mean the Participation
Rights Agreement, dated September 9, 1997, substantially in the form of Exhibit
F to the Second Priority Note Agreement, 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 attached
hereto.

                  "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.

                  "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 to the Second Priority Note
Agreement, 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 to the Second Priority Note Agreement, 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 

<PAGE>   63

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>   64

                  "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 Shareholder's 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>   65

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

                  "SECOND PRIORITY NOTE DOCUMENTS" shall mean the Second
Priority Note Agreement, the Second Priority 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.

                  "SECOND PRIORITY NOTES" shall mean the Second Priority Senior
Secured Notes due 2004 of the Company, dated of even date with the Notes, issued
and sold to the Purchasers on the Date of Closing pursuant to the Second
Priority Note Agreement.

                  "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 hereto, 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 Assignment of Life Insurance Policy 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 DOCUMENTS" shall mean this Agreement, the 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 

<PAGE>   66

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.

                  "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 and among the Company and the individuals parties thereto,
as the same may be amended, supplemented and otherwise modified from time to
time.
<PAGE>   67

                  "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. 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 

<PAGE>   68

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 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 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.


<PAGE>   69

                  "WARRANTS" shall have the meaning specified in paragraph 1B of
the Second Priority Note Agreement.

                  "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.

10C.              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

11A.              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 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



<PAGE>   70

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.

11B.              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 Senior Note Documents, whether or not
such proposed modification shall be effected or proposed consent

<PAGE>   71



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
Notes or the other Senior Note Documents or in responding to any subpoena or
other legal process or informal investigative demand issued in connection with
this Agreement, the other Senior Note Documents or the transactions contemplated
hereby or thereby, or by reason of such Purchaser's or such Transferee's having
acquired any Note, 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 portion thereof or interest therein by
such Purchaser or any Transferee, the payment of any Note, the enforcement,
amendment or waiver of any provision of this Agreement or the other Senior Note
Documents, and the termination of this Agreement or any of the other Senior Note
Documents.

11C.              CONSENT TO AMENDMENTS. This Agreement and any of the other 
Senior 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 Notes at the time or
thereafter outstanding shall be bound by any consent authorized by this
paragraph 11C, whether or not such Notes shall have been marked to indicate such
consent, but any Notes issued thereafter may bear a notation referring to any
such consent. No course of dealing between the Company and the holder of any
Notes nor any delay in exercising any rights hereunder or under any Notes shall
operate as a waiver of any rights of any holder of such Notes. As used herein
and in the Notes, the term "THIS AGREEMENT" and references thereto shall mean
this Agreement as it may from time to time be amended or supplemented.

11D.              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 

<PAGE>   72

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.

11E.              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 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.

11F.              SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE AGREEMENT.
All representations and warranties contained herein or in the other Senior 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 and the other Senior Note Documents, the transfer by
any Purchaser of any Note 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 and the
other Senior 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.

11G.              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 



<PAGE>   73

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.

11H.              DISCLOSURE TO OTHER PERSONS. The Company acknowledges that the
holder of any Note 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 Senior
Note Documents to (i) such holder's directors, officers, employees, agents and
professional consultants, (ii) any other holder of any Note, (iii) any Person to
which such holder offers to sell such Note or any part thereof and to which such
holder could then transfer such Note 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 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 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.

11I.              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, 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 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 in writing; provided,
however, that any such communication to the Company may also, at the option of
the holder of any Note, be delivered by any other means either to the Company at
its address specified above or to any officer of the Company.

11J.              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 

<PAGE>   74

sentence, the period of such extension shall be included in the computation of
the interest payable on such Business Day.

11K.              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.

11L.              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.

11M.              WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION; LIMITATION OF 
REMEDIES.

         a)              THE COMPANY AND EACH HOLDER OF NOTES EACH HEREBY 
         KNOWINGLY, VOLUNTARILY, AND 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 OR THE OTHER SENIOR 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 NOTES OR THE COLLATERAL AGENT. THE COMPANY
         ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
         PURCHASERS TO ENTER INTO THIS AGREEMENT.
<PAGE>   75

         b)              ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS 
         AGREEMENT, THE NOTES, THE OTHER SENIOR 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 NOTES 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 NOTES 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>   76

11N.              INDEMNIFICATION. The Company agrees:

         (i)             TO INDEMNIFY EACH HOLDER OF NOTES 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 NOTES,
         (II) THE EXECUTION, DELIVERY AND PERFORMANCE OF THIS AGREEMENT AND THE
         OTHER SENIOR 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 SENIOR 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 SENIOR NOTE DOCUMENT, (VI) ANY ASSERTION THAT THE COMPANY
         WAS NOT ENTITLED TO RECEIVE THE PROCEEDS RECEIVED PURSUANT TO THIS
         AGREEMENT AND THE OTHER SENIOR NOTE DOCUMENTS OR (VII) ANY OTHER ASPECT
         OF THE SENIOR 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 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

<PAGE>   77
         (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 NOTES, 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 SENIOR NOTE DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED
         HEREIN OR THEREIN OR THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE
         NOTES.

         (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.

11O.              RELEASE. THE COMPANY AND ITS SUBSIDIARIES EACH HEREBY RELEASE,
DISCHARGE AND ACQUIT FOREVER THE HOLDERS OF THE NOTES AND THEIR RESPECTIVE
OFFICERS, DIRECTORS, AGENTS, EMPLOYEES AND COUNSEL FROM ANY AND ALL CLAIMS
EXISTING AS OF THE DATE HEREOF. AS USED IN THIS 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 


<PAGE>   78

CONTINGENT, AND WHETHER ARISING OUT OF WRITTEN DOCUMENTS, UNWRITTEN UNDERTAKINGS
OR COURSE OF CONDUCT.

11P.              RELATIONSHIP OF THE PARTIES. This Agreement provides for 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. The relationship between the Purchasers and the Company is
limited to that of creditors/secured parties, on the one hand, and debtor, 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 Notes to protect their
interests as lenders in assuring payments of interest and Yield Maintenance
Amount, if any, and repayment of principal and nothing contained in this
Agreement or any other Senior 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 Notes
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 Notes 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 Senior 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 Senior Note
Documents.

11Q.              FINAL AGREEMENT. THIS AGREEMENT AND THE OTHER SENIOR 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.

11R.              CONSTRUCTION. The Purchasers and the Company have participated
jointly in the negotiation and drafting of this Agreement and the other Senior
Note Documents. In the event an ambiguity or question of intent or
interpretation arises, this Agreement or other Senior 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 Senior Note Document, as the case
may be.
<PAGE>   79

11S.              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.

11T.              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.

11U.              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 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.
<PAGE>   80

11V.              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.

11W.              SEVERALTY OF OBLIGATIONS. The sales of the Notes 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.


      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGE FOLLOWS]

<PAGE>   81



         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: