<PAGE>                                       

[LOGO] BANCBOSTON LEASING
         a BANK OF BOSTON company

                       MASTER LEASE FINANCE AGREEMENT

     This MASTER LEASE FINANCE AGREEMENT, dated as of the 1st day of 
December, 1998, ("Lease Agreement") is made at Boston, Massachusetts by and 
between BancBoston Leasing Inc. ("Lessor"), a Massachusetts corporation with 
its principal place of business at 100 Federal Street, Boston, Massachusetts 
02110 and Business Insurance Group, Inc. and Subsidiaries ("Lessee"), a 
Delaware corporation with its principal place of business at 11171 Sun Center 
Drive, Rancho Cordova, California 95670.

     IN CONSIDERATION OF the mutual promises and covenants contained herein, 
Lessor and Lessee hereby agree as follows:

     1.  PROPERTY LEASED.  At the request of Lessee and subject to the terms 
and conditions of this Lease Agreement, Lessor shall lease to Lessee and 
Lessee shall lease from Lessor such personal property ("Equipment") as may be 
mutually agreed upon by Lessor and Lessee.  The Equipment shall be selected 
by or ordered at the request of Lessee, identified in one or more equipment 
schedules substantially in the form of Exhibit A attached hereto ("Equipment 
Schedule") and accepted by Lessee in one or more certificates of acceptance 
("Certificate of Acceptance") in the form of Exhibit B attached hereto.  Each 
Equipment Schedule executed by Lessor and Lessee and each Certificate of 
Acceptance executed by Lessee shall constitute a part of this Lease Agreement.

     2.  CERTAIN DEFINITIONS.

     2.1  The "Commencement Date" shall mean the date on which the Equipment 
identified in the applicable Equipment Schedule is accepted by Lessee under 
this Lease Agreement.  Each Commencement Date shall be evidenced by the 
Certificate of Acceptance applicable to such Equipment Schedule.

     2.2  The "Rent Start Date" shall mean either (i) the first day of the 
month following the month in which the Commencement Date occurs or (ii) the 
Commencement Date, if the Commencement Date occurs on the first day of the 
month.

     2.3  The "Monthly Rent" shall mean the amount set forth in the 
applicable Equipment Schedule as Monthly Rent for the Equipment identified on 
such Equipment Schedule.

     2.4  The "Daily Rent" shall mean one-thirtieth (1/30) of the Monthly 
Rent.

     2.5  The words "herein", "hereof", and "hereunder" shall refer to this 
Lease Agreement as a whole and not to any particular section.  All other 
capitalized terms defined in this Lease Agreement shall have the meanings 
assigned thereto.

     3.  TERM OF LEASE; PAYMENT OF RENT.

     3.1  The term of lease for the Equipment ("Lease Term") shall begin on 
the Commencement Date set forth in the applicable Certificate of Acceptance 
and shall continue during and until the expiration of the number of full 
calendar months set forth in the applicable Equipment Schedule, measured from 
the Rent Start Date.  The Lease Term may not be cancelled or terminated 
except as set forth in Section 10.2 below.

     3.2  Aggregate Daily Rent shall be due and payable by Lessee on the Rent 
Start Date in an amount equal to the Daily Rent multiplied by the actual 
number of days elapsed from, and including, the Commencement Date to, but 
excluding, the Rent State Date.  The Monthly Rent shall be due and payable on 
the Rent State Date and, thereafter on the first day of each month of the 
Lease Term.  All Daily Rents and Monthly Rents shall be paid to Lessor at its 
office in Boston, Massachusetts.

     4.  ACCEPTANCE OF EQUIPMENT; EXCLUSION OF WARRANTIES.

     4.1  Lessee shall signify its acceptance of the Equipment identified in 
the applicable Equipment Schedule by promptly executing and delivering to 
Lessor a Certificate of Acceptance.  Lessee acknowledges that its execution 
and delivery of the Certificate of Acceptance shall conclusively establish, 
as between Lessor and Lessee, that the Equipment has been inspected by 
Lessee, is in good repair and working order, is of the design, manufacture 
and capacity selected by Lessee, and is accepted by Lessee under this Lease 
Agreement.

     4.2  In the event the Equipment is ordered by Lessor from a manufacturer 
or supplier at the request of Lessee, Lessor shall not be required to pay the 
purchase price for such Equipment unless and until the applicable Certificate 
of Acceptance has been received by Lessor.  Lessee hereby agrees to 
indemnify, defend and hold harmless from any liability to any manufacturer or 
supplier arising from the failure of Lessee to lease any Equipment which is 
ordered by Lessor at the request of Lessee or for which Lessor has assumed an 
obligation to purchase.

     4.3  Lessor leases the Equipment to Lessee and Lessee leases the 
equipment from Lessor "AS IS" and "WITH ALL FAULTS".  Lessee hereby 
acknowledges that (i) Lessor is not a manufacturer, supplier or dealer of 
such Equipment nor an agent thereof; and (ii) LESSOR HAS NOT MADE, DOES NOT 
MAKE, AND HEREBY DISCLAIMS ANY REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS 
OR IMPLIED, WITH RESPECT TO THE EQUIPMENT INCLUDING, BUT NOT LIMITED TO, ITS 
DESIGN, CAPACITY, CONDITION, MERCHANTABILITY, OR FITNESS FOR USE OR FOR ANY 
PARTICULAR PURPOSE. Lessee further acknowledges that Lessor is not 
responsible for any repairs, maintenance, service, latent or other defects in 
the Equipment or in the operation thereof, or for compliance of any Equipment 
with requirements of any laws, ordinances, governmental rules or regulations 
including, but not limited to, laws with respect to environmental matters, 
patent, trademark, copyright or trade secret infringement, or for any direct 
or consequential damages arising out of the use of or inability to use the 
Equipment.

     4.4  Provided no Event of Default, as defined in Section 15 below, has 
occurred and is continuing, Lessor agrees to cooperate with Lessee, at 

<PAGE>

the sole cost and expense of Lessee, in making any claim against a 
manufacturer or supplier of the Equipment arising from a defect in such 
Equipment.  At the request of Lessee, Lessor shall assign to Lessee all 
warranties on the Equipment available from any manufacturer or supplier to 
the full extent permitted by the terms of such warranties and by applicable 
law.

     5.  OWNERSHIP; INSPECTION; MAINTENANCE AND USE.

     5.1  Title to the equipment shall at all times be in the name of Lessor. 
Any Equipment subject to titling and registration laws shall be titled and 
registered by Lessee on behalf of and in the name of Lessor at the sole cost 
and expense of Lessee.  Lessee shall cooperate with and provide Lessor with 
any information or documents necessary for titling and registration of the 
Equipment.  Upon the request of Lessor, Lessee shall execute and documents or 
instruments which may be necessary or appropriate to confirm, to record or to 
give notice of the interest of Lessor in the Equipment, including, but not 
limited to, financing statements under the Uniform Commercial Code. Lessee, 
at the request of Lessor, shall affix to the Equipment, in a conspicuous 
place, any label, plaque or other insignia supplied by Lessor designating the 
interest of Lessor in the Equipment.

     5.2  The Equipment shall be located at the address specified in the 
applicable Equipment Schedule and shall not be removed therefrom without the 
prior written consent of Lessor.  Lessor, its agents or employes shall have 
the right to enter the premises of Lessee, upon reasonable notice and during 
normal business hours, for the purpose of inspecting the Equipment.

     5.3  Lessee shall pay all costs, expenses, fees and charges whatsoever 
incurred in connection with the use and operation of the Equipment.  Lessee 
shall, at all times and at its own expense, keep the Equipment in good repair 
and working order, reasonable wear and tear excepted.  Any maintenance 
contract required by a manufacturer or supplier for the care and upkeep of 
the Equipment shall be entered into by Lessee at its sole cost and expense.  
Lessee shall permit the use and operation of the Equipment only by personnel 
authorized by Lessee and shall comply with all laws, ordinances or 
governmental rules and regulations relating to the use and operation of the 
Equipment.

     6.  ALTERATIONS AND MODIFICATIONS.  Lessee may make, or cause to be made 
on its behalf, any improvement, modification or addition to the Equipment 
with the prior written consent of Lessor, provided, however, that such 
improvement, modification or addition is readily removable without causing 
damage to the impairment of the functional effectiveness of the Equipment.  
To the extent that such improvement, modification or addition is not so 
removable, it shall immediately become the property of Lessor and thereupon 
shall be considered Equipment for all purposes of this Lease Agreement.

     7.  EQUIPMENT USE; NO DEFENSE, SET-OFFS OR COUNTERCLAIMS.

     7.1  Provided no Event of Default, as defined in Section 15 below, has 
occurred and is continuing, Lessee shall have the use of the Equipment in the 
ordinary course of its business during the Lease Term without interruption by 
Lessor or any person or entity claiming through or under Lessor.

     7.2  Lessee acknowledges and agrees that ANY DAMAGE TO OR LOSS, 
DESTRUCTION, OR UNFITNESS OF, OR DEFECT IN THE EQUIPMENT, OR THE INABILITY OF 
LESSEE TO USE THE EQUIPMENT FOR ANY REASON WHATSOEVER, SHALL NOT (i) GIVE 
RISE TO ANY DEFENSE, COUNTERCLAIM, OR RIGHT OF SET-OFF AGAINST LESSOR, OR 
(ii) PERMIT ANY ABATEMENT OR RECOUPMENT OF, OR REDUCTION IN DAILY OR MONTHLY 
RENT, OR (iii) RELIEVE LESSEE OF THE PERFORMANCE OF ITS OBLIGATIONS UNDER 
THIS LEASE AGREEMENT INCLUDING, BUT NOT LIMITED TO, ITS OBLIGATION TO PAY THE 
FULL AMOUNT OF DAILY RENT AND MONTHLY RENT, WHICH OBLIGATIONS ARE ABSOLUTE 
AND UNCONDITIONAL, unless and until this Lease Agreement is terminated with 
respect to such Equipment in accordance with the provisions of Section 10.2 
below.  Any claim that Lessee may have which arises from a defect in or 
deficiency of the Equipment shall be brought solely against the manufacturer 
or supplier of the Equipment and Lessee shall, notwithstanding any such 
claim, continue to pay Lessor all amounts due and to become due under this 
Lease Agreement.

     8.  ADVERSE CLAIMS AND INTERESTS.

     8.1  Except for any liens, claims, mortgages, pledges, encumbrances or 
security interests created by Lessor, Lessee shall keep the Equipment, at all 
times, free and clear from all liens, claims, mortgages, pledges, 
encumbrances and security interests and from all levies, seizures and 
attachments.  Without limitation of the covenants and obligations of Lessee 
set forth in the preceding sentence, Lessee shall immediately notify Lessor 
in writing of the imposition of any prohibited lien, claim, levy or 
attachment on or seizure of the Equipment at which time Lessee shall provide 
Lessor with all relevant information in connection therewith.

     8.2  Lessee agrees that the Equipment shall be and at all times shall 
remain personal property.  Accordingly, Lessee shall take such steps as may 
be necessary to prevent any person from acquiring, having or retaining any 
rights in or to the Equipment by reason of its being affixed or attached to 
real property.

     9.  INDEMNITIES; PAYMENT OF TAXES.

     9.1  Lessee hereby agrees to indemnify, defend and hold harmless Lessor, 
its agents, employees, successors and assigns from and against any and all 
claims, actions, suits, proceedings, costs, expenses, damages and liabilities 
whatsoever arising out of or in connection with the manufacture, ordering, 
selection, specifications, availability, delivery, titling, registration, 
rejection, installation, possession, maintenance, ownership, use, leasing, 
operation or return of the Equipment including, but not limited to, any claim 
or demand based upon any STRICT OR ABSOLUTE LIABILITY IN TORT and upon any 
infringement or alleged infringement of any patent, trademark, trade secret, 
license, copyright or otherwise.  All costs and expenses incurred by Lessor 
in connection with any of the foregoing including, but not limited to, 
reasonable legal fees, shall be paid by Lessee on demand.

     9.2  Lessee hereby agrees to indemnify, defend and hold Lessor harmless 
against all Federal, state and local taxes, assessments, licenses, 
withholdings, levies, imposts, duties, assessments, excise taxes, 
registration fees and other governmental fees and charges whatsoever, which 
are imposed, assessed or levied on or with respect to the Equipment or its 
use or related in any way to this Lease Agreement ("Tax Assessments"), except 
for taxes on or measured by the net income of Lessor determined substantially 
in the same manner as under the Internal Revenue Code of 1986, as amended.  
Lessee shall file all returns, reports or other such documents required in 
connection with the Tax Assessments and shall provide Lessor with copies 
thereof. If, under local law or custom, Lessee is not authorized to make the 
filings required by a taxing authority, Lessee shall notify Lessor in writing 
and Lessor shall thereupon undertake to file such returns, reports or 
documents.  Without limiting any of the foregoing, Lessee shall indemnify, 
defend and hold Lessor harmless from all penalties, fines, interest payments, 
claims and expenses including, but not limited to, reasonable legal fees, 
arising from any failure of Lessee to comply with the requirements of this 
Section 9.2.

     9.3  The obligations and indemnities of Lessee under this Section 9 for 
events occurring or arising during the Lease Term shall continue in full 
force and effect, notwithstanding the expiration or other termination of this 
Lease Agreement.

<PAGE>

     10.  RISK OF LOSS; LOSS OF EQUIPMENT.

     10.1  Lessee hereby assumes and shall bear the entire risk of loss for 
theft, damage, seizure, condemnation, destruction or other injury whatsoever 
to the Equipment from any and every cause whatsoever.  Such risk of loss 
shall be deemed to have been assumed by Lessee from and after such risk 
passes from the manufacturer or supplier by agreement or pursuant to 
applicable law.

     10.2  In the event of any loss, seizure, condemnation or destruction of 
the Equipment or damage to the Equipment which cannot be repaired by Lessee, 
Lessee shall immediately notify Lessor in writing.  Within thirty (30) days 
of such notice, during which time Lessee shall continue to pay Monthly Rent, 
Lessee shall, at the option of Lessor, either (i) replace the Equipment with 
equipment of the same type and manufacture and in good repair, condition and 
working order, transfer title to such equipment to Lessor free and clear of 
all liens, claims and encumbrances, whereupon such equipment shall be deemed 
Equipment for all purposes of this Lease Agreement, or (ii) pay to Lessor an 
amount equal to the present value of the aggregate of the remaining unpaid 
Monthly Rents plus any other costs actually incurred by Lessor.  The present 
value shall be determined by discounting the aggregate of the remaining 
unpaid Monthly Rents to the date of payment by Lessee at the rate of five (5) 
percent per annum.  Any insurance or condemnation proceeds received by Lessor 
shall be credited to the obligation of Lessee under this Section 10.2 and the 
remainder of such proceeds, if any, shall be paid to Lessee by Lessor in full 
compensation for the loss of the leasehold interest in the Equipment by 
Lessee.

     10.3  Upon any replacement of or payment for the Equipment as provided 
in Section 10.2 above, this Lease Agreement shall terminate only with respect 
to the Equipment so replaced or paid for, and Lessor shall transfer to Lessee 
title only to such Equipment "AS IS", "WITH ALL FAULTS", and WITH NO 
WARRANTIES WHATSOEVER, EITHER EXPRESS OR IMPLIED, INCLUDING, WITHOUT 
LIMITATION, ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR USE OR FOR ANY 
PARTICULAR PURPOSE.  Lessee shall pay any sales or use taxes due on such 
transfer.

     11.  INSURANCE.

     11.1  Lessee shall keep the Equipment insured against all risks of loss 
or damage from every cause whatsoever occurring during the Lease Term, for an 
amount not less than the higher of the full replacement value of the 
Equipment or the aggregate of unpaid Daily Rent and Monthly Rent for the 
balance of the Lease Term.  Lessee shall also carry public liability 
insurance, both personal injury and property damage, covering the Equipment, 
and Lessee shall be liable for any deductable portions of all required 
insurance.

     11.2  All insurance required under this Section 11 shall name Lessor as 
additional insured and loss payee.  Such insurance shall also be with such 
insurers and shall be in such forms and amounts as are satisfactory to 
Lessor.  All applicable policies shall provide that no act, omission or 
breach of warranty by Lessee shall give rise to any defense against payment 
of the insurance proceeds to Lessor.  Lessee shall pay the premiums for such 
insurance and, at the request of Lessor, deliver to Lessor duplicates of such 
policies or other evidence satisfactory to Lessor of such insurance coverage. 
In any event, Lessee shall provide Lessor with endorsements upon the policies 
issued by the insurers which evidence the existence of insurance coverage 
required by this Section 11 and by which the insurers agree to give Lessor 
written notice at least twenty (20) days prior to the effective date of any 
expiration, modification, reduction, termination or cancellation of any such 
policies.

     11.3  The proceeds of insurance required under this Section 11 and 
payable as a result of loss or damage to the Equipment shall be applied as 
set forth in Section 10.2 above.  Upon the occurrence of an Event of Default 
as defined in Section 15 below, Lessee hereby irrevocably appoints Lessor as 
its attorney-in-fact, which power shall be deemed coupled with an interest, 
to make claim for, receive payment of, execute and endorse all documents, 
checks or drafts received in payment for loss or damage under any insurance 
policies required by this Section 11.

     11.4  Notwithstanding anything herein, Lessor shall not be under any 
duty to examine any evidence of insurance furnished hereunder, or to 
ascertain the existence of any policy or coverage, or to advise Lessee of any 
failure to comply with the provisions of this Section 11.

     12.  SURRENDER TO LESSEE.  Upon the expiration of the Lease Term and 
provided that no Event of Default, as defined in Section 15 below, has 
occurred and is continuing, Lessor shall transfer title to the Equipment to 
Lessee "AS IS", "WITH ALL FAULTS", and WITH NO WARRANTIES WHATSOEVER, EITHER 
EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, ANY WARRANTIES OF 
MERCHANTABILITY OR FITNESS FOR USE OR FOR PARTICULAR PURPOSE.

     13.  FINANCIAL STATEMENTS.  Lessee shall annually, within ninety (90) 
days after the close of the fiscal year for Lessee, furnish to Lessor 
financial statements of Lessee, including a balance sheet as of the close of 
such year and statements of income and retained earnings for such year, 
prepared in accordance with generally accepted accounting principles, 
consistently applied from year to year, and certified by independent public 
accountants for Lessee, if requested by Lessor, Lessee shall also provide 
quarterly financial statements of Lessee, similarly for each of the first 
three quarters of each fiscal year, certified (subject to normal year-end 
audit adjustments) by the chief financial officer of Lessee and furnished to 
Lessor within sixty (60) days following the end of the quarter, and such 
other financial information as may be reasonably requested by Lessor.

     14.  DELAYED PAYMENT CHANGE.  Lessee shall pay to Lessor interest upon 
the amount of any Daily Rent, Monthly Rent or other sums not paid by Lessee 
when due and owing under this Lease Agreement, from the due date thereof 
until paid, at the rate of one and one half (1 1/2) percent per month, but if 
such rate violates applicable law, then the maximum rate of interest allowed 
by such law.

     15.  DEFAULT.

     15.1  The occurrence of any of the following events shall constitute an 
event of default ("Event of Default") under this Lease Agreement.
      (a)  Lessee fails to pay any Daily Rent or any Monthly Rent when due 
and such failure to pay continues for ten (10) consecutive days; or 
      (b)  Lessee fails to pay any other sum required hereunder, and such
failure continues for a period of ten (10) days following written notice from
Lessor; or
      (c)  Lessee fails to maintain the insurance as required by Section 11 
above and such failure continues for ten (10) days after written notice from 
Lessor; or
      (d)  Lessee violates or fails to perform any other term, covenant or 
condition of this Lease Agreement or any other document, agreement to 
instrument executed pursuant hereto or in connection herewith, which failure 
is not cured within (30) days after notice from Lessor; or
      (e)  Lessee ceases to exist or terminates its independent operations by 
reason of any discontinuance, dissolution, liquidation, merger, sale of 
substantially all of its assets, or otherwise ceases doing business as a 
going concern; or

<PAGE>

      (f)  Lessee (i) applies for or consents to the appointment of, or the 
taking of possession by, a receiver, custodian, trustee, liquidator or similar 
official for itself or for all or a substantial part of its property, (ii) is 
generally not paying its debts as such debts become due, (iii) makes a 
general assignment for the benefit of its creditors, (iv) commences a 
voluntary case under the United States Bankruptcy Code, as now or hereafter 
in effect, seeking liquidation, reorganization or other relief with respect 
to itself or its debts, (v) files a petition seeking to take advantage of any 
other law providing for the relief of debtors, (vi) takes any action under 
the laws of its jurisdiction of incorporation or organization similar to any 
of the foregoing, or (vii) takes any corporate action for the purpose of 
effecting any of the foregoing; or
      (g)  A proceeding or case is commenced, without the application or 
consent of Lessee, in any court of competent jurisdiction, seeking (i) the 
liquidation, reorganization, dissolution, winding up of Lessee or composition 
or readjustment of the debts of Lessee, (ii) the appointment of a trustee, 
receiver, custodian, liquidator or similar official for Lessee or for all or 
any substantial part of its assets, or (iii) similar relief with respect to 
Lessee, under any law providing for the relief of debtors; or an order for 
relief is entered with respect to Lessee in an involuntary case under the 
United States Bankruptcy Code, as now or hereafter in effect; or an action 
under the laws of the jurisdiction of incorporation or organization of 
Lessee, similar to any of the foregoing, is taken with respect to Lessee 
without its application or consent; or
      (h)  Lessee makes any representation or warranty herein or in any 
statement or certificate at any time given in writing pursuant to or in 
connection with this Lease Agreement, which is false or misleading in any 
material respect; or
      (i)  Lessee* defaults under any promissory note, credit agreement, loan 
agreement, conditional sales contract, guaranty, lease, indenture, bond, 
debenture or other material obligation whatsoever, and a party thereto or a 
holder thereof is entitled to accelerate the obligations of Lessee*
thereunder; or Lessee* defaults in meeting any of its trade, tax or other 
current obligations as they mature, unless such obligations are being 
contested diligently and in good faith; or
      (j)  Any party to any guaranty, letter of credit, subordination or 
credit agreement or other undertaking, given for the benefit of Lessor and 
obtained in connection with this Lease Agreement, breaches, fails to 
continue, contests, or purports to terminate or to disclaim such guaranty, 
letter of credit, subordination or credit agreement or other undertaking; or 
such guaranty, letter of credit, subordination agreement or other undertaking 
becomes unenforceable; or a guarantor of this Lease Agreement shall die, cease 
to exist or terminate its independent operations.

     15.2  No waiver by Lessor of any Event of Default shall constitute a 
waiver of any other Event of Default or of the same Event of Default at any 
other time.

     16.  REMEDIES.

     16.1  Upon the occurrence of an Event of Default and while such Event of 
Default is continuing, Lessor, at its sole option, upon its declaration, and 
to the extent not inconsistent with applicable law, may exercise any one or 
more of the following remedies:

      (a)  Lessor may terminate this Lease Agreement whereupon all rights of 
Lessee to the use of the Equipment shall cease;

      (b)  Whether or not this Lease Agreement is terminated, Lessor may 
cause Lessee, at the sole cost and expense of Lessee, to return any or all of 
the Equipment promptly to the possession of Lessor in good repair and working 
order, reasonable wear and tear excepted.  Lessor, at its sole option and 
through its employees, agents or contractors, may peaceably enter upon the 
premises where the Equipment is located and take immediate possession of and 
remove the Equipment, all without liability to Lessor, its employees, agents 
or contractors for such entry. LESSEE HEREBY WAIVES, TO THE EXTENT PERMITTED 
BY APPLICABLE LAW, ANY AND ALL RIGHTS TO NOTICE AND/OR HEARING PRIOR TO THE 
REPOSSESSION OR REPLEVIN OF THE EQUIPMENT BY LESSOR, ITS EMPLOYEES, AGENTS OR 
CONTRACTORS;

      (c)  Lessor may proceed by court action to enforce performance by 
Lessee of this Lease Agreement or pursue any other remedy Lessor may have 
hereunder, at law, in equity or under any applicable statute including, 
without limitation, the rights and remedies of a secured party under the 
Uniform Commercial Code of The Commonwealth of Massachusetts or of any other 
jurisdiction, and recover such other actual damages as may be incurred by 
Lessor;

      (d)  Lessor may recover from Lessee damages, not as a penalty but as 
liquidation for all purposes and without limitation of any other amounts due 
from Lessee under this Lease Agreement, in an amount equal to the sum of (i) 
any unpaid Daily Rents and/or Monthly Rents due and payable for periods prior 
to the repossession of the Equipment by Lessor plus any interest due thereon 
pursuant to Section 14 above, (ii) the present value of all future Monthly 
Rents required to be paid over the remaining Lease Term after repossession of 
the Equipment by Lessor, determined by discounting such future Monthly Rents 
to the date of payment by Lessee at a rate of five (5) percent per annum, and 
(iii) all costs and expenses incurred in searching for, taking, removing, 
storing, repairing, refurbishing and leasing or selling such Equipment; or

      (e)  Lessor may sell, lease or otherwise dispose of any or all of the 
Equipment, whether or not in the possession of Lessor, at public or private 
sale and with or without notice Lessee, which notice is hereby expressly 
waived by Lessee, to the extent permitted by and not inconsistent with 
applicable law.  Lessor may sell, lease or dispose of the Equipment in such 
order and manner as Lessor may determine.  Lessor shall then apply against 
the obligations of Lessee hereunder the net proceeds of such sale, lease or 
other disposition, after deducting all costs incurred by Lessor in connection 
with such sale, lease or other disposition including, but not limited to, 
costs of transportation, repossession, storage, refurbishing, advertising or 
other fees and Lessee shall remain liable for any deficiency.  Lessor shall 
account for any excess of such proceeds over the total obligations owed by 
Lessee, which excess shall be immediately paid over to Lessee.  Unless the 
Equipment threatens to decline speedily in value or is of the type 
customarily sold on a recognized market, Lessor shall give to Lessee at least 
(5) days prior written notice of the time and place of any public sale of the 
Equipment or of the time after which any private sale or other disposition of 
the Equipment is to be made.

     16.2  No failure on the part of Lessor to exercise, and no delay in 
exercising, any right or remedy hereunder shall operate as a waiver thereof.  
No single or partial exercise of any right or remedy hereunder shall preclude 
any other or further exercise thereof of the exercise of any other right or 
remedy.  Each right and remedy hereunder is cumulative and not exclusive of 
any other right or remedy including, without limitation, any right or remedy 
available to Lessor at law, by statute or in equity.

     16.3  Lessee shall pay all costs and expenses including, but not limited 
to, reasonable legal fees incurred by Lessor arising out of or in connection 
with any Event of Default or this Lease Agreement.  Lessee shall also be 
liable for any amounts due and payable to Lessor under any other provision of 
this Lease Agreement.

<PAGE>

     17.  ASSIGNMENT; SUBLEASE.

     17.1  Lessor may sell, assign or otherwise transfer all or any part of 
its right, title and interest in and to the Equipment and/or this Lease 
Agreement to a third-party assignee, subject to the terms and conditions of 
this Lease Agreement including, but not limited to, the right to the use of 
the Equipment by Lessee as set forth in Section 7.1 above.  Such assignee 
shall assume all of the rights and obligations of Lessor under this Lease 
Agreement and shall relieve Lessor therefrom.  Thereafter, all references to 
Lessor herein shall mean such assignee.  Notwithstanding any such sale, 
assignment or transfer, the obligations of Lessee hereunder shall remain 
absolute and unconditional as set forth in Section 7.2 above.

     17.2  Lessor may also, to the extent if its interest therein, pledge, 
mortgage or grant a security interest in the Equipment and assign this Lease 
Agreement as collateral.  Each such pledgee, mortgagee, lienholder or 
assignee shall have any and all rights as may be assigned by Lessor but none 
of the obligations of Lessor hereunder.  Any pledge, mortgage or grant of 
security interest in the Equipment or assignment of this Lease Agreement 
shall be subject to the terms and conditions hereof including, but not 
limited to, the right to the use of the Equipment by Lessee as set forth in 
Section 7.1 above.  Lessor, by reason of such pledge, mortgage, grant of 
security interest or collateral assignment, shall not be relieved of any of 
its obligations hereunder which shall remain absolute and unconditional as 
set forth in Section 7.2 above.  Upon the written request of Lessor, Lessee 
shall acknowledge such obligations to the pledgee, mortgagee, lienholder or 
assignee.

     17.3  LESSEE SHALL NOT SELL, TRANSFER, SUBLEASE, CONVEY OR PLEDGE ANY OF 
ITS INTEREST IN THIS LEASE AGREEMENT OR ANY OF THE EQUIPMENT WITHOUT THE 
PRIOR WRITTEN CONSENT OF LESSOR.  Any such sale, transfer, assignment, 
sublease, conveyance or pledge, whether by operation of law or otherwise, 
without the prior written consent of Lessor, shall be void.

     18.  COMPLIANCE AND APPROVALS.  Lessee warrants and agrees that this 
Lease Agreement and the performance by Lessee of all of its obligations 
hereunder have been duly authorized, do not and will not conflict with any 
provision of the charter or bylaws of Lessee or of any agreement, indenture, 
lease or other instrument to which Lessee is a party of by which Lessee or 
any of its property is or may be bound.  Lessee warrants and agrees that this 
Lease Agreement does not and will not require any governmental authorization, 
approvals, license or consent except those which have been duly obtained and 
will remain in effect during the entire Lease Term.

     19.  MISCELLANEOUS.

     19.1  The section headings are inserted herein for convenience of 
reference and are not a part of and shall not affect the meaning or 
interpretation of this Lease Agreement.

     19.2  Any provision of this Lease Agreement which is unenforceable in 
whole or in part in any jurisdiction shall, as to such jurisdiction, be 
ineffective only to the extent of such unenforceability without invalidating 
any remaining part or other provision hereof and shall not be affected in any 
manner by reason of such enforceability in any other jurisdiction. The 
validity and interpretation of this Lease Agreement and the rights and 
obligations of the parties hereto shall be governed in all respects by the 
laws of The Commonwealth of Massachusetts without giving effect to the 
conflicts of laws provisions thereof.

     19.3  This Lease Agreement, including all Equipment Schedules and 
Certificates of Acceptance, constitutes the entire agreement between Lessor 
and Lessee.  Lessor and Lessee agree that this Lease Agreement shall not be 
amended, altered or changed except by a written agreement signed by the 
parties hereto.  LESSEE ACKNOWLEDGES THAT THERE HAVE BEEN NO REPRESENTATIONS, 
EXPRESS OR IMPLIED, BY LESSOR OTHER THAN AS SET FORTH AND LESSEE EXPRESSLY 
CONFIRMS THAT IT HAS NOT RELIED UPON ANY REPRESENTATIONS BY LESSOR, EXCEPT 
THOSE SET FORTH HEREIN, AS A BASIS FOR ENTERING INTO THIS LEASE AGREEMENT.

     19.4  Any notice required to be given by Lessee or Lessor hereunder 
shall be deemed adequately given if sent by registered or certified mail, 
return receipt requested, to the other party at their respective addresses 
stated herein or at such other place as either party may designate in writing 
to the other.

     19.5  Lessee agrees to execute and deliver such additional documents and 
to perform such further acts as may be reasonably requested by Lessor in 
order to carry out and effectuate the purposes of this Lease Agreement. Upon 
the written request of Lessor, Lessee further agrees to execute any 
instrument necessary for filing or recording this Lease Agreement or to 
confirm the interest of Lessor in the Equipment.  Lessor is hereby authorized 
to insert in any Equipment Schedule the serial numbers of the Equipment and 
other identifying marks or similar information and to sign, on behalf of 
Lessee, any Uniform Commercial Code financing statements.

     19.6  This Lease Agreement cannot be cancelled or terminated except as 
expressly provided herein.

     19.7  Whenever the context of this Lease Agreement requires, the 
singular includes the plural and the plural includes the singular.  Whenever 
the word Lessor is used herein, it includes all assignees and successors in 
interest of Lessor.  If more that one Lessee are named in this Lease 
Agreement, the liability of each shall be joint and several.

     19.8  All agreements, indemnities, representations and warranties of 
Lessee made herein and all rights and remedies of Lessor shall survive the 
expiration or other termination of this Lease Agreement, whether or not 
expressly provided herein.

     19.9  Any waiver of any power, right, remedy or privilege of Lessor 
hereunder shall not be effective unless in writing signed by Lessor.

     19.10  This Lease Agreement may be executed in one or more counterparts, 
each of which shall be deemed an original, but all of which together shall 
constitute one and the same instrument.

     IN WITNESS WHEREOF, Lessor and Lessee, each by its duly authorized 
officer or agent, have duly executed and delivered this Lease Agreement, 
which is intended to take effect as sealed instrument, as of the day and year 
first written above.

                             Business Insurance Group, Inc. and Subsidiaries

                             By:  J. Chris Seamon
                                ---------------------------------------------
                             Title:  V.P
                                ---------------------------------------------

Accepted at Boston, Massachusetts

BANCBOSTON LEASING INC.

By: [Illegible]
  -------------------------------
Title: Assistant Vice President
  -------------------------------



<PAGE>
                                       
                                  RIDER NO. 1
                                       TO
                         MASTER LEASE FINANCE AGREEMENT

     This Rider No. 1 (the "Rider") is entered into between BancBoston 
Leasing Inc. ("Lessor") and the undersigned signatories (collectively, the 
"Lessee"), and is contemporaneous with and amends the Master Lease Finance 
Agreement dated as of December 1, 1998 (the "Lease Agreement"), between 
Lessor and Lessee.  It is the intention of Lessor and Lessee that, upon 
execution, this Rider shall constitute a part of the Lease Agreement.

     IN CONSIDERATION OF the mutual covenants and promises as hereinafter set 
forth, Lessor and Lessee hereby agree as follows:

     1.     All capitalized terms used in this Rider shall, unless otherwise 
defined, have the meanings set forth in the Lease Agreement.

     2.     Add the following to the end of Section 15.1(g) after the words 
"application of consent;": "and the same is not dismissed within (60) days."

     3.     Add the following as Sections 20 and 21 of the Lease Agreement:

            "20.  Relationship of Co-Lessees.  Joint and Several Obligations;
Defaults of Co-Lessees.  The undersigned Co-Lessees are all engaged in
interrelated businesses and increasing the availability of capital equipment
to Superior National Insurance Group, Inc. and other Co-Lessees will benefit,
directly and indirectly, the business of all Co-Lessees in furtherance of
their respective corporate purposes.  In light of the foregoing, the Co-Lessees
covenant and agree the the obligations, representations and warranties
hereunder of the Lessee are the joint and several obligations of the
Co-Lessees and that any reference to an Event of Default involving the Lessee
shall mean an Event of Default involving any Co-Lessee."

            "21.  Appointment of Agent.  For convenience of the Co-Lessees 
and in order to facilitate the administration of various actions required 
under this Lease Agreement, each of the Co-Lessees hereby designates Superior 
National Insurance Group, Inc. (the "Agent") as its agent in connection with 
the Lease Agreement, and grants the Agent an irrevocable power of attorney to 
take all actions and execute all such documents in the place and stead of 
each Co-Lessee as may now or hereinafter be necessary to carry out the duties 
of the Lessee hereunder; including (a) the execution and delivery on behalf 
of the Co-Lessees of any and all Equipment Schedules, Riders, notices, 
consents and requests required or permitted to be given under this Lease 
Agreement (b) the receipt on behalf of Co-Lessees of all notices required or 
permitted to be given to Lessee under this Lease Agreement, (c) the 
selection, inspection, and acceptance of any item of Equipment, (d) the 
negotiation, resolution and settlement of any disputes arising under this 
Lease Agreement and (e) the taking of all such actions and execution of all 
such documents as may be necessary or appropriate in connection with the 
exercise of any purchase or renewal option.  Notwithstanding the foregoing, 
each Co-Lessee may act on its own behalf hereunder.  Lessor shall 
nevertheless be entitled to rely on all acts taken by Agent with respect to 
any Co-Lessee hereunder, and each Co-Lessee (i) agrees that Lessor or any 
assignee, lender or secured party shall be entitled to rely on such acts to 
the same extent if they were performed by such Co-Lessee, (ii) waives the 
right to require Lessor to (a) proceed against any other party, (b) proceed 
against or exhaust any security held from any other party, and (c) pursue any 
other remedy in Lessor's power whatsoever; (iii) waives diligence, demand, 
presentment, protest and notice; (iv) consents to the alteration or release 
in any manner of any other obligor, including without limitation the renewal, 
extension, acceleration, changes in time for payment, and increases or 
decreases in any Monthly Rent, rate of interest or other amounts owing, all 
without in any way altering the liability of such Co-Lessee, and (v) waives 
any circumstances which might otherwise constitute a legal or equitable 
discharge of a surety or guarantor and, without limitation, any right of 
subrogation, contribution, indemnification, setoff or other recourse in 
respect of sums paid to Lessor by any other Co-Lessee."

<PAGE>

     The terms and conditions of this Rider shall prevail where there may be 
conflicts or inconsistencies with the terms and conditions of the Lease 
Agreement.

     IN WITNESS WHEREOF, Lessor and Lessee, each by its duly authorized 
officer or agent, have duly executed and delivered this Rider which is 
intended to take effect as a sealed instrument as of the date of the Lease 
Agreement.

                              BUSINESS INSURANCE GROUP, INC.,
                              A DELAWARE CORPORATION,
                              in its individual capacity as a Co-Lessee, and
                              as Agent for the Co-Lessees under this Lease
                              Agreement

                              By: /s/ J. Chris Seaman
                                 ------------------------------------------
                              Title:          V.P.
                                 ------------------------------------------

                              BUSINESS INSURANCE COMPANY
                              A DELAWARE CORPORATION, Co-Lessee

                              By: /s/ J. Chris Seaman
                                 ------------------------------------------
                              Title:          V.P.
                                 ------------------------------------------

                              CALIFORNIA COMPENSATION 
                                INSURANCE COMPANY,
                              A CALIFORNIA CORPORATION, Co-Lessee

                              By: /s/ J. Chris Seaman
                                 ------------------------------------------
                              Title:          V.P.
                                 ------------------------------------------

                              COMMERCIAL COMPENSATION 
                                INSURANCE COMPANY
                              A NEW YORK CORPORATION, Co-Lessee

                              By: /s/ J. Chris Seaman
                                 ------------------------------------------
                              Title:          V.P.
                                 ------------------------------------------

                              COMBINED BENEFITS INSURANCE COMPANY
                              A CALIFORNIA CORPORATION, Co-Lessee

                              By: /s/ J. Chris Seaman
                                 ------------------------------------------
                              Title:          V.P.
                                 ------------------------------------------

Accepted at Boston, Massachusetts

BANCBOSTON LEASING INC.

By:  [Illegible]
   ------------------------------
Title:  [Illegible]
   ------------------------------


<PAGE>

                                       

                AMENDMENT NO. 1 TO MASTER LEASE FINANCE AGREEMENT

     THIS AMENDMENT NO. 1 TO MASTER LEASE FINANCE AGREEMENT (the "Amendment") 
is made as of the 10th day of December, 1998, among BANCBOSTON LEASING INC. 
("Lessor"), BUSINESS INSURANCE GROUP INC., individually and as agent for its 
subsidiaries ("BIG"), and SUPERIOR NATIONAL INSURANCE GROUP, INC., 
individually and as agent for its subsidiaries ("Superior National").  BIG 
and its subsidiaries (collectively, the "Original Lessees") and Lessor have 
heretofore entered into that certain Master Lease Finance Agreement, together 
with Rider No. 1 to Master Lease Finance Agreement, each dated as of December 
1, 1998 (collectively, the "Lease Agreement").  Capitalized terms used herein 
without definition shall have the meaning given them in the Lease Agreement.  
In connection therewith, Superior National executed and delivered to Lessor 
that Certain Unlimited Guaranty dated as of December 1, 1998 (the "Guaranty").

     The Original Lessees have been acquired by Superior National and the 
parties desire to add Superior National as an additional co-lessee, jointly 
and severally liable under the Lease Agreement; and further desire to 
terminate the Guaranty.

     NOW, THEREFORE, in consideration of the mutual covenants and promises as 
hereinafter set forth, the parties agree as follows:

     1.  From and after the date hereof, the Lease Agreement is amended to 
include Superior National as a co-lessee thereunder; to change the Agent from 
BIG to Superior National; and BIG grants to Superior National an irrevocable 
power of attorney to take all actions and execute all documents in the place 
and stead of BIG, as agent, as may now or hereafter be necessary to carry out 
the duties of the "Lessee" thereunder, all in accordance with the provisions 
of Section 21 of the Lease Agreement.

     2.  Superior National acknowledges and agrees that, from and after the 
date hereof, Superior National shall be a co-lessee, jointly and severally 
liable for the obligations of the Lessee pursuant to the Lease Agreement; and 
Superior National acknowledges that increasing the availability of equipment 
to the co-lessees will benefit, directly and indirectly, the business of 
Superior National in furtherance of its corporate purposes; all pursuant to 
Section 20 of the Lease Agreement.

     3.  Except as expressly set forth herein, the terms and conditions of 
the Lease Agreement remain unmodified and in full force and effect.

     4.  Subject to the effectiveness of this Agreement, the Guaranty is 
terminated and all obligations of Superior National pursuant to the Guaranty 
are released.

     5.  This Amendment, together with the Lease Agreement, constitutes the 
entire agreement among the parties with respect to the subject matter hereof.

     6.  THE VALIDITY AND INTERPRETATION OF THIS AMENDMENT AND THE RIGHTS AND 
OBLIGATIONS OF THE PARTIES HERETO SHALL BE GOVERNED IN ALL RESPECTS BY THE 
LAWS OF THE COMMONWEALTH OF MASSACHUSETTS, WITHOUT 

<PAGE>

GIVING EFFECT TO THE CONFLICT OF LAWS PROVISIONS THEREOF.

     7.  This Amendment may be executed in one or more counterparts, each of 
which shall be deemed an original, but all of which together shall constitute 
one and the same instrument.

     IN WITNESS WHEREOF, the parties, each by its duly authorized officer or 
agent, have duly executed and delivered this Amendment No. 1 to Master Lease 
Finance Agreement, which is intended to take effect as a sealed instrument, 
as of the day and year first above written.

                                    BUSINESS INSURANCE GROUP INC.,
                                    individually and as Agent

                                    By: /s/ J. Chris Seaman
                                       ----------------------------
                                    Name: J. Chris Seaman
                                       ----------------------------
                                    Title:      VP
                                       ----------------------------

                                    SUPERIOR NATIONAL INSURANCE GROUP,
                                    INC., INDIVIDUALLY AND AS AGENT FOR ITS
                                    SUBSIDIARIES

                                    By: /s/ J. Chris Seaman
                                       ----------------------------
                                    Name: J. Chris Seaman
                                       ----------------------------
                                    Title:      VP
                                       ----------------------------

                                    BANCBOSTON LEASING INC.

                                    By: [Illegible]
                                       -----------------------------
                                    Name:
                                       -----------------------------
                                    Title:
                                       -----------------------------


                                       2

<PAGE>

                                       
               AMENDMENT NO. 2 TO MASTER LEASE FINANCE AGREEMENT

     THIS AMENDMENT NO. 2 TO MASTER LEASE FINANCE AGREEMENT (this "Amendment")
is made as of this 18th day of December, 1998, by and among BANCBOSTON 
LEASING INC. ("Lessor") and SUPERIOR NATIONAL INSURANCE GROUP, INC., 
individually and as agent ("Lessee") for its subsidiaries (collectively, 
together with Lessee, the "Co-Lessees" and sometimes hereinafter individually 
referred to as a "Co-Lessee").  Lessee and Lessor have heretofore entered into 
that certain Master Lease Finance Agreement, dated as of December 1, 1998 
(collectively with Rider No. 1 dated December 1, 1998, to Master Lease 
Finance Agreement, Amendment No. 1 dated as of December 10, 1998, to Master 
Lease Finance Agreement, and any and all Equipment Schedules thereunder, the 
"Lease Agreement").  Capitalized terms used herein without definition shall 
have the meaning given them in the Lease Agreement.

     WHEREAS, in connection with the sale by Lessee of its indirect 100% 
stock ownership of Business Insurance Company ("BICO"), Lessee has requested 
that Lessor agree to remove BICO as a Co-Lessee, and Lessor shall agree so to 
remove BICO and to amend the Lease Agreement accordingly, all upon the terms 
and conditions hereof.

     NOW, THEREFORE, in consideration of the mutual covenants and promises as 
hereinafter set forth, the parties agree as follows:

     1.   The Lease Agreement is hereby amended by the deletion of Business 
Insurance Company as a Co-Lessee, wherever its name appears therein, 
effective as of the date hereof.

     2.   Except as expressly set forth herein, the terms and conditions of 
the Lease Agreement remain unmodified and in full force and effect.

     3.   This Amendment, together with the Lease Agreement, constitutes the 
entire agreement among the parties with respect to the subject matter hereof.

     4.   The validity and interpretation of this Amendment and the rights 
and obligations of the parties hereto shall be governed in all respects by 
the laws of The Commonwealth of Massachusetts, without giving effect to the 
conflict of laws provisions thereof.

     5.   This Amendment may be executed in one or more counterparts, each 
of which shall be deemed an original, but all of which together shall 
constitute one and the same instrument.

     IN WITNESS WHEREOF, the parties, each by its duly authorized officer or 
agent, have duly executed and delivered this Amendment No. 2 to Master Lease 
Finance Agreement, which is intended to take effect as a sealed instrument, 
as of the day and year first above written.

SUPERIOR NATIONAL INSURANCE                 BANCBOSTON LEASING INC.
GROUP,INC., individually and as agent    

By:/s/ J. Chris Seaman                      By: [Illegible]
  ----------------------------------          ------------------------------
Name:  J. Chris Seaman                      Name:
  ----------------------------------          ------------------------------
Title:       CFO                            Title
  ----------------------------------          ------------------------------