Document:

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                                                                  EXHIBIT 10 (K)
                                 DEPARTMENT HEAD
                               SEVERANCE AGREEMENT

         This DEPARTMENT HEAD SEVERANCE AGREEMENT, made as of the 22nd day of
February, 2000 (the "Effective Date"), by and among CONTINENTAL CASUALTY
COMPANY, an Illinois corporation (the "Company"), CONTINENTAL ASSURANCE COMPANY
an Illinois corporation ("CAC"), and Peter E. Jokiel (the "Executive").

         WHEREAS, the Executive is presently employed as Senior Vice President
of the Company, which is a direct wholly owned subsidiary of CNA Financial
Corporation, a Delaware corporation ("CNA"); and

         WHEREAS, the Company and CAC consider it essential to their best
interests to foster the retention of key management personnel of the Company;
and

         WHEREAS, the Company recognizes that the possibility of a Change in
Control (as defined in Section 2 hereof) exists and that such possibility, and
the uncertainty and questions which it may raise among management, may result in
the departure or distraction of management personnel to the detriment of the
Company; and

         WHEREAS, this Agreement is intended to provide certain protections for
the Executive against the exigencies of a Change in Control.

         NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties hereto agree as follows:

         1. Term. This Agreement shall be effective as of the Effective Date and
shall continue to be effective with respect to a Change in Control that is
consummated during the period ending on the earlier of (i) first anniversary of
the Effective Date or (ii) the date of written notice to the Executive by the
Chief Executive Officer of CNA (the "CEO") that all potential Change in Control
transactions have been abandoned by CNA (the "Agreement Term"). Notwithstanding
the foregoing, the Agreement Term may be extended by the CEO by providing
written notice of such extension to the Executive. Any determination required to
be made by the CEO under this Agreement shall, in the event that the CEO
notifies the Board of Directors of CNA (the "Board") that he will not make such
determination, be made by the Board.

         2. Change in Control. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if, during the term of this Agreement,
at least 50% of the aggregate blocks of individual life insurance, viatical
settlements, annuities and long-term care business underwritten by the Company
and its affiliates and administered by the "Life Department" of CNA (the "Life
Department") (measured in terms of gross premiums or gross sales, as applicable,
in the determination of the CEO) is sold or otherwise transferred, in a single
or series of

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related or unrelated transactions, whether by asset purchase, stock purchase,
merger or consolidation, reinsurance, or any other form of transaction, or
combination thereof, to entities not controlled by CNA. For purposes of this
Agreement, an entity shall be deemed controlled by CNA if CNA holds, directly or
indirectly, 50% or more of the voting interest of such entity.

         If a Change in Control shall occur, any entity that acquires any block
of business administered by the Life Department shall be referred to herein,
together with its affiliates, as the "Successor Entity."

         3. Covered Termination. The termination benefits described in Section 4
hereof shall be provided to the Executive in the event that the Executive
suffers a "Covered Termination" of the Executive's employment with the Company
at any time during the "Protection Period." For purposes hereof, the "Protection
Period" means the period commencing on the Effective Date and continuing until
the date of the consummation of the transaction that results in a Change in
Control, unless a Change in Control shall not occur during the Agreement Term,
in which case the Protection Period shall expire upon the expiration of the
Agreement Term.

         For purposes hereof, "Covered Termination" shall mean (i) termination
of employment by the Company other than for "Cause", as described in paragraph
(a) below, or (ii) termination of such employment by the Executive for "Good
Reason", as described in paragraph (b) below. The Executive shall not be treated
as having suffered a Covered Termination in the event of (1) the Executive's
death or disability, (2) the Executive's involuntary termination of employment
for Cause, (3) the Executive's voluntary termination of employment other than
for Good Reason, (4) the Executive's termination of employment for any reason
following the expiration or termination of the Protection Period, (5) the
Executive accepts an offer of employment from a Successor Entity in connection
with a Change in Control or (6) the Executive accepts an offer of continued
employment in another capacity with CNA or any of its subsidiaries or affiliates
(the "CNA Group") in connection with a Change in Control.

         (a)      Termination For Cause. For purposes hereof, an involuntary
                  termination of the Executive's employment during the
                  Protection Period shall be deemed a termination for "Cause" in
                  the event of:

                  (i)  the commission by the Executive of fraudulent acts or
                       significant willful misconduct with respect to the CNA
                       Group, such as commission of an act of personal
                       dishonesty or breach of fiduciary duty in connection with
                       the Executive's employment;

                  (ii) gross negligence, consisting of wanton and reckless acts
                       or omissions in the performance of Executive's duties to
                       the CNA Group;

                  (iii)bad faith in the performance of Executive's duties to the
                       CNA Group,  consisting of willful acts or omissions;

                  (iv) a material breach by the Executive of any significant
                       written policy of the CNA Group, such as habitual
                       absenteeism;

                  (v)  a violation of the restrictive covenants set forth in
                       Section 8 hereof; or

                  (vi) the Executive's conviction for, or plea of nolo
                       contendere to, a felony or a crime involving moral
                       turpitude.

         Notwithstanding the foregoing, the Executive's employment shall be
considered to have been terminated for Cause only if, prior to such termination
for Cause, (1) CNA or the Company shall have given to the Executive written
notice, stating with specificity the reason for the Executive's termination, (2)
if such reason for termination is susceptible of cure or remedy, a period of
thirty (30) days from and after the giving of such notice shall have elapsed
without the Executive's having cured or remedied such reason for termination
during such 30-day period, unless such reason for termination cannot be cured or
remedied within thirty (30) days, in which case the period for remedy or cure
shall be extended for a reasonable time

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         (not to exceed thirty (30) days) provided the Executive has made and
         continues to make a diligent effort to effect such remedy or cure and
         (3) a final determination shall have been made by the Board that Cause
         for termination exists, following a meeting of the Board at which the
         Executive shall be entitled to appear and contest the determination.
         Notwithstanding the foregoing, the Company shall be entitled to
         terminate the employment of the Executive at any time for any reason,
         and any determination of whether such termination is for Cause may be
         made following termination of employment.

         (b)      Termination for Good Reason. For purposes of this Agreement,
                  the voluntary termination of employment by the Executive
                  during the Protection Period shall be deemed a termination for
                  "Good Reason" if:

                  (i)  there is a substantial diminution of the Executive's
                       duties or responsibilities;

                  (ii) there is a reduction in the Executive's base salary or
                       annual target bonus amount from that which was in effect
                       on the Effective Date;

                  (iii)there is a relocation, without the Executive's written
                       consent, of the Executive's principal place of business
                       by more than 35 miles;

               (iv) the Executive does not receive an offer of employment
                    from the CNA Group or a Successor Entity prior to the
                    consummation of  a Change in Control transaction;

                (v) the Executive declines, for any reason, to accept an
                    offer of employment from a Successor Entity in connection
                    with a Change in Control; or

                (vi)the Executive declines, for any reason, to accept an
                    offer of continued employment in another capacity with
                    the CNA Group in connection with a Change in Control.

         4. Consequences of Covered Termination. In the event that the
Executive's employment with the Company shall have been terminated during the
Protection Period in a manner that shall constitute a Covered Termination, the
Executive shall be provided with the following severance payments and benefits:

         (a)   Base Salary. The Executive shall receive, within 15 days
               following the Covered Termination, a lump-sum cash payment
               equal to two (2) times the Executive's annual base salary as
               in effect at the time of the Covered Termination (disregarding
               any reduction in base salary rate that constitutes Good Reason
               under Section 3(b) hereof) ("Base Salary").

         (b)   Annual Bonus. The Executive shall receive, within 15 days
               following the Covered Termination,  a lump-sum cash payment
               equal to 85.1% of two (2) times Base Salary.

         (c)   Pro-Rata Annual Bonus. The Executive shall receive, within 15
               days following the Covered Termination, in full settlement of
               his annual incentive bonus for the year of the Covered
               Termination, a lump-sum payment equal to (A) 85.1% of Base
               Salary, times (B) a fraction, the numerator of which is the
               number of days during which the Executive was employed in the
               calendar year of the Covered Termination, and the denominator
               of which is 365. If a payment is required to be made under
               this paragraph (c) with respect to the same calendar year for
               which a payment is made to the Executive under Section 5(a)
               hereof, the payment to be made hereunder shall be reduced by
               the payment made under Section 5(a).

         (d)   Welfare  Benefits. The Executive shall be entitled to coverage
               and benefits, on substantially the same terms as were in
               effect immediately prior to the Covered Termination, including
               any applicable co-payments or premiums to be paid by the
               Executive, for a period of two (2) years following the
               Executive's Covered Termination (the "Continuation Period"),
               under the medical, dental and group life insurance plans in
               which the Executive was participating at the time of the
               Covered Termination, as though the Executive's termination of
               employment had not occurred. (The benefits and coverages to be
               provided under this paragraph (d) are hereinafter referred to as

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                  "Welfare Continuation Coverages".) All Welfare Continuation
                  Coverages shall apply to the Executive and any of the
                  Executive's dependents as and to the extent they would have
                  been eligible for coverage if the Executive had continued to
                  BE employed by the Company during the Continuation Period. The
                  Company may provide the Executive with the Welfare
                  Continuation Coverages under arrangements other than the
                  generally applicable welfare benefit plans of the Company in
                  which the Executive was previously participating, provided
                  that the benefits and coverages so provided are at least as
                  favorable to the Executive as coverage under the otherwise
                  applicable Welfare Continuation Coverages, on a coverage by
                  coverage basis, and taking into account all tax consequences
                  to the Executive.

                  The Executive's entitlement to continuation "COBRA" coverages
                  for medical and dental benefits under section 4980B of the
                  Internal Revenue Code (or any successor provision thereto)
                  shall commence following the expiration of the Continuation
                  Period. Upon a Covered Termination, the Executive shall cease
                  to be eligible for any Company-provided perquisites and other
                  fringe benefits.

          Notwithstanding the foregoing, in the event that the Executive
receives any of the foregoing severance payments and benefits and, at any time
during the two-year period following the consummation of the transaction that
results in a Change in Control, he becomes employed by or otherwise renders
services to a Successor Entity, he shall be considered in breach of this
Agreement, and the Company shall be entitled to recover from the Executive all
cash amounts paid and all costs of benefits provided under this Section 4. By
accepting any of the severance payments and benefits hereunder, the Executive
represents and covenants that he has no intention to, and that he shall not, at
any time during such two-year period, become employed by or otherwise render
services to a Successor Entity. Prior to accepting any position with or
rendering any services to a Successor Entity in violation of this paragraph, the
Executive may make a written request that the Company waive its right to
recovery under this paragraph. Such waiver shall be granted in the sole and
exclusive discretion of the CEO, who may require the Executive to provide such
information, in certified form, as the CEO deems necessary to respond to such
request.

         5. Accrued Incentives. Upon the earlier of the occurrence of a Covered
Termination or the date the Executive commences employment with a Successor
Entity in connection with a Change in Control (the "Trigger Date"), the
following payments shall be made to the Executive, provided that such payments
shall not be made if the Executive continues in employment with the CNA Group
following a Change in Control.

         (a)      Annual Bonus. With respect to the annual incentive bonus
                  program in which the Executive is participating immediately
                  prior to a Trigger Date, the Executive shall receive, as full
                  settlement thereof and within 15 days following the Trigger
                  Date, a lump-sum payment equal to (A) 85.1% of the Executive's
                  annual base salary in effect on the Trigger Date, times (B) a
                  fraction, the numerator of which is the number of days in the
                  calendar year prior to the Trigger Date, and the denominator
                  of which is 365.

         (b)      Long Term Cash.  With respect to the long-term cash incentive
                  awarded to the Executive on March 1, 1998 under the 1997 CNA
                  Corporate Long-Term Incentive Plan ($100,000) and on March 1,
                  1999 under the 1998 CNA Corporate Long-Term Incentive Plan
                  ($325,000), the Executive shall receive, as full settlement
                  under each such Plan and within 15 days following the Trigger
                  Date, a lump-sum cash payment equal to the full amount thereof
                  brought forward with interest in accordance with the terms of
                  each such Plan, other than any portion of such awards that
                  have been previously paid. With respect to the Long-Term
                  Incentive Awards for the 2000-01 and the 2000-02 performance
                  periods that were granted to the Executive under the CNA
                  Financial Corporation 2000 Long-Term Incentive Plan, the
                  Executive shall receive, as full settlement thereof and within
                  15 days following the Trigger Date, a lump-sum cash payment
                  for a pro-rata portion of each such award determined based on
                  150 percent of the target payment amount for each such award,
                  other than any portion of such awards that have been
                  previously paid. Such pro-rata amounts shall be determined by
                  multiplying such 150 percent target payment amount by a
                  fraction, the numerator of which is the number of full and
                  partial calendar months from January 1, 2000 until the Trigger

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                  Date (plus, in the case of the award measuring the 2000-01
                  performance period, an additional 12 months), and the
                  denominator of which is 36.

         6. Tax Withholding. All payments required to be made to the Executive
under this Agreement shall be subject to the withholding of such amounts, if
any, relating to income tax, excise tax, employment tax and other payroll taxes
as the payor may reasonably determine it should withhold pursuant to any
applicable law or regulation.

         7. No Mitigation or Offset. The Executive shall be under no obligation
to minimize or mitigate damages by seeking other employment, and the obtaining
of any such other employment shall in no event effect any reduction of
obligations hereunder for the payments and the benefit coverages required to be
provided to the Executive. In addition, such obligations shall not be affected
by any set-off or counterclaim rights which any party may have against the
Executive.

         8. Restrictive Covenants.

         (a)      Confidentiality. The Executive agrees that, while employed by
the CNA Group, and at all times thereafter, the Executive shall continue to hold
in a fiduciary capacity for the benefit of the CNA Group all secret or
confidential information, knowledge or data relating to the CNA Group that shall
have been obtained by the Executive during and by reason of his employment by or
affiliation with the CNA Group and that shall not be public knowledge other than
by acts of the Executive or his representatives, but excluding disclosure to a
Successor Entity with which the Executive becomes employed of any such
information, knowledge or data that relates only to the Restricted Businesses
(as defined below) acquired by the Successor Entity in connection with a Change
in Control ("Confidential Material"). The Executive shall not, without the prior
written consent of the CEO, communicate or divulge any Confidential Material to
anyone other than the CNA Group and those individuals or entities designated by
the CEO.
         (b)      Non-Competition. The Executive acknowledges that (i) the Life
Department is currently engaged in the business of providing individual life
insurance, viatical settlements, annuities, long-term care and pension
administrative services and managing general agent services with respect to such
products and services (the "Restricted Businesses"), (ii) his employment by the
Company has given him access to trade secrets of and confidential information
concerning the Life Department, and (iii) the agreements and covenants contained
in this Section 8 are essential to protect the business and goodwill of the Life
Department. Accordingly, the Executive covenants and agrees that, during the
Restricted Period (as defined below), the Executive will not, directly or
indirectly, without the prior written approval of the CEO, enter into any
business relationship in which he functions in the role as the principal
executive or operating officer, chief marketing officer or chief sales officer
of any business or company that is engaged in one or more of the Restricted
Businesses (a "Competitor"); provided, however, that such prohibited activity
shall not include the ownership of fewer than 5% of the voting securities of any
publicly traded corporation (determined by vote or value) or limited partnership
interests constituting fewer than five percent (5%) of the value of any such
partnership regardless of the business of such corporation or limited
partnership.

         Upon the written request of the Executive, the CEO will determine
whether a business or other entity constitutes a "Competitor" for purposes of
this Section 8(b); provided that the CEO may require the Executive to provide
such information as the CEO reasonably determines to be necessary to make such
determination; and further provided that the current and continuing
effectiveness of such determination may be conditioned on the accuracy of such
information, and on such other factors as the CEO may reasonably determine. For
purposes hereof, the "Restricted Period" shall commence on the date of
consummation of the Change in Control transaction, provided that the Executive
has received a "Qualified Offer" (as defined below) from a Successor Entity
(whether or not the Executive accepts the Qualified Offer) and shall end on the
second anniversary of such date of consummation. For purposes hereof, a
"Qualified Offer" shall be an offer of employment from a Successor Entity that
(i) becomes effective on the date of consummation of the Change in Control, (ii)
offers a base salary and annual target bonus (expressed as a percentage of base
salary) at least equal to the base salary and annual target bonus percentage,
respectively, in effect on the date of consummation of the Change in Control and
(iii) is for a position in which the Executive will be the principal executive
or operating officer responsible for the operations of the Restricted Businesses
acquired by a Successor Entity in the Change in Control transaction, it being
understood and agreed that a Qualified Offer need not necessarily involve
responsibilities for similar lines of business of a Successor Entity. It is

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further understood and agreed that neither a requirement of relocation nor a
change in reporting status from that in effect on the Effective Date shall
prevent an offer from being treated as a Qualified Offer. Notwithstanding the
foregoing, employment or service with a Successor Entity shall not be prohibited
by this Section 8(b) as and to the extent it relates only to the Restricted
Businesses acquired by such Successor Entity in connection with a Change in
Control.

         (c)      Non-Solicitation. The Executive agrees that, during the
Restricted Period, the Executive will not employ, offer to employ, engage as a
consultant, or form an association with any person who is then, or who during
the preceding one year was, an employee of the CNA Group, nor will the Executive
assist any other person in soliciting for employment or consultation any person
who is then, or who during the preceding one year was, an employee of the CNA
Group.

         (d)      Non-Interference. The Executive agrees that, during the
Restricted Period, the Executive will not disturb or attempt to disturb any
business relationship or agreement between the CNA Group and any other person or
entity.

         (e)      Assistance with Claims. The Executive agrees that, while
employed by the CNA Group, and for a reasonable period (not fewer than 60
months) thereafter, the Executive will be available, on a reasonable basis to
assist the CNA Group in the prosecution or defense of any claims, suits,
litigation, arbitrations, investigations, or other proceedings, whether pending
or threatened ("Claims") that may be made or threatened by or against the CNA
Group. The Executive agrees, unless precluded by law, to promptly inform the CNA
Group if he is requested (i) to testify or otherwise become involved in
connection with any Claim involving the CNA Group or (ii) to assist or
participate in any investigation (whether governmental or private) of the CNA
Group or any of their actions, whether or not a lawsuit has been filed against
the CNA Group relating thereto. For periods following the 60-month anniversary
date of the Executive's termination of employment with the CNA Group, the CNA
Group agrees to provide reasonable compensation to the Executive for such
assistance. The CNA Group also shall reimburse the Executive or cause the
Executive to be reimbursed for any out-of-pocket expenses reasonably incurred by
the Executive in complying with this section. All assistance and cooperation
required of the Executive under this Section 8(e) shall be scheduled taking into
account any other employment obligations of the Executive and shall be subject,
if required in connection with such employment, to obtaining the prior consent
of the Executive's employer.

         (f)      Return of Materials. The Executive shall, at any time upon the
request of CNA, and in any event upon the termination of his employment with the
CNA Group, for whatever reason, immediately return and surrender to the CNA
Group all originals and all copies, regardless of medium, of property belonging
to the CNA Group, created or obtained by the Executive as a result of or in the
course of or in connection with his employment with the CNA Group regardless of
whether such items constitute proprietary information, provided that the
Executive shall be under no obligation to return written materials acquired from
third parties which are generally available to the public. The Executive
acknowledges that all such materials are, and will remain, the exclusive
property of the CNA Group.

         (g)      Effect of Breach. The Executive acknowledges that his
violation of the covenants set forth in this Section 8 could cause the CNA Group
irreparable harm and he agrees that the CNA Group shall be entitled to
injunctive relief restraining the Executive from actual or threatened breach of
the covenants and that if bond is required to be posted in order for the CNA
Group to secure such relief said bond need only be in a nominal amount. The
right of the CNA Group to seek injunctive relief shall be in addition to any
other remedies available to the CNA Group with respect to an alleged or
threatened breach.

         9. Release of Claims. As a condition of Executive's entitlement to the
severance payments and benefits provided by Section 4 of this Agreement, at the
time of a Covered Termination, the Executive shall execute and shall honor in
accordance with its terms a waiver and release of claims in favor of the CNA
Group in the form attached hereto as Exhibit A (as may be modified consistent
with the purposes of such waiver and release to reflect changes in law following
the date hereof).

         10. Other Compensation and Benefit Plans. Except as specifically
provided herein, the Covered Termination of the Executive's employment shall not
accelerate the time of payment or vesting under, or increase the amount of
benefits due under, any benefit or incentive compensation plans of the CNA
Group. The amount of any

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compensation deemed to be received by the Executive pursuant to this Agreement
shall not constitute compensation with respect to which any other benefit or
incentive compensation of such Executive is determined, other than as provided
for under the terms of the CNA Retirement Plan and the CNA Supplemental
Executive Retirement Plan (which currently take into account pro-rata bonus
payments upon termination of employment). Except as provided herein, the rights
and benefits of the Executive under this Agreement shall not be in lieu of the
Executive's benefits under any employee benefit plan or program of the CNA
Group, which shall be payable in accordance with the terms and conditions of
such plans or programs.

         11. Successors and Assigns. This Agreement and all rights hereunder are
personal to the Executive and shall not be assignable by the Executive;
provided, however, that any of the Executive's rights under Sections 4 and 5 of
this Agreement that shall have become payable prior to the Executive's death
shall inure to the benefit of the Executive's heirs or other legal
representatives, as the case may be. This Agreement shall be binding upon and
inure to the benefit of the successors and assigns of the Company and, subject
to Section 12 hereof, CAC.

         12. Assumption by CAC; Company Guaranty. Effective upon a Change in
Control, and without any required action of the parties hereto, (i) CAC shall
become solely responsible for satisfying any obligations to the Executive under
Sections 4 and 5 of this Agreement, (ii) CAC shall not be entitled, without the
prior written consent of the Executive, to assign its obligations under this
Agreement, and (iii), the Company shall be released from all obligations under
Sections 4 and 5 of this Agreement (but shall otherwise remain a party to this
Agreement). Notwithstanding the foregoing, in the event of a final determination
by a court of competent jurisdiction (or trustee or receiver appointed thereby)
that CAC shall be unable to satisfy its obligations under Sections 4 and 5 of
this Agreement as result of a receivership, insolvency or delinquency
proceeding, the Company shall become secondarily liable to the Executive for
satisfaction of such obligations; provided, however, that the amount payable by
the Company hereunder shall be limited to the amounts calculated under Sections
4 and 5 hereof assuming that the annual base salary of the Executive at the time
of Covered Termination is the lesser of the amount thereof or the annual base
salary at the time of Change in Control.

         13. No Right of Employment.  Nothing in this Agreement shall confer
upon the Executive any right to continue as an employee of the Company or
interfere in any way with the right of the Company to terminate the Executive's
employment at any time.

         14.  Severability.  The invalidity or unenforceability of any provision
of this Agreement shall in no way affect the validity or enforceability of any
other provision.

         15. Entire Agreement. This Agreement constitutes the entire agreement
among the parties respecting the subject matter hereof and supersedes any prior
agreements respecting the subject matter hereof. No amendment to this Agreement
shall be deemed valid unless in writing and signed by the parties, and no
discharge of the terms of this Agreement shall be deemed valid unless by full
performance by the parties or by a writing signed by the parties. No waiver by a
party of any provisions or conditions of this Agreement shall be deemed a waiver
of similar or dissimilar provisions and conditions at the same time or any prior
or subsequent time.

         16. Notices. Any notice required or permitted to be given by this
Agreement shall be effective only if in writing, delivered personally or by
courier or by facsimile transmission or sent by express, registered or certified
mail, postage prepaid, to the parties at the addresses hereinafter set forth, or
at such other places that either party may designate by notice to the other.

                     Notice to CNA or the Company shall be addressed to:

                              Jonathan D. Kantor
                              Senior Vice President and General Counsel
                              CNA Financial Corporation
                              CNA Plaza 31 South
                              Chicago, IL 60685
                              Fax:  (312) 817-0511

                    Notice to the Executive shall be addressed to the
                    Executive at the address indicated on the signature
                    page hereof.

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         17.  Governing  Law.  This Agreement shall be construed and interpreted
according to the laws of the State of Illinois and the parties submit to the
jurisdiction of the courts of the State of Illinois for the purpose of any
actions or proceedings which may be required to enforce the terms hereof.

         18. Captions and Headings. Captions and paragraph headings are for
convenience only, are not a part of this Agreement and shall not be used to
construe any provision of this Agreement.

         19. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which when
taken together shall constitute one Agreement. It shall not be necessary that
any counterpart be signed by the parties hereto so long as each such party shall
have executed a counterpart.

         IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first above written.

                       CONTINENTAL CASUALTY COMPANY

                       /s/ ROBERT V. DEUTSCH
                       ---------------------------------
                       By:  Robert V. Deutsch
                       Its: Senior Vice President & Chief Financial Officer, CNA
                       Insurance Companies
                       (Executed on June 5, 2000)

                       CONTINENTAL ASSURANCE COMPANY

                       /s/ ROBERT V. DEUTSCH
                       ----------------------------------
                       By:  Robert V. Deutsch
                       Its: Senior Vice President & Chief Financial Officer, CNA
                       Insurance Companies
                       Executed on June 5, 2000)

                       EXECUTIVE

                       /s/ PETER E. JOKIEL
                       -----------------------------------
                       Name:   Peter E. Jokiel
                       Address:
                       Fax:
                       (Executed on June 5, 2000)

                                       24<PAGE>   1
                                                                    EXHIBIT 10.1

                      FOURTH AMENDMENT TO LOAN INSTRUMENTS

         This FOURTH AMENDMENT TO LOAN INSTRUMENTS (this "FOURTH AMENDMENT"),
dated as of August __, 2000, is between SECURITY ASSOCIATES INTERNATIONAL, INC.,
a Delaware corporation ("BORROWER") and FINOVA CAPITAL CORPORATION, a Delaware
corporation ("FINOVA"), in its individual capacity and as agent for the
financial institutions from time to time parties to the Loan Agreement (this and
all other capitalized terms not otherwise defined herein shall have the meanings
ascribed thereto in Section 2 below).

                                    RECITALS

         A. Borrower, State Street Bank and Trust Company ("STATE STREET"), and
FINOVA entered into a Second Amended and Restated Loan Agreement dated as of
September 30, 1999 (the "ORIGINAL LOAN AGREEMENT"), which was amended by a First
Amendment to Loan Instruments dated as of February 11, 2000 (the "FIRST
AMENDMENT") among Borrower, Citizens Bank of Massachusetts ("CITIZENS BANK"), as
successor in interest to State Street, and FINOVA, a Second Amendment to Loan
Instruments dated as of March 10, 2000 (the "SECOND AMENDMENT") among Borrower,
Citizens Bank and FINOVA and a Third Amendment to Loan Instruments dated as of
May 16, 2000 (the "THIRD AMENDMENT") among Borrower, Citizens Bank and FINOVA.
The Original Loan Agreement, as amended by the First Amendment, the Second
Amendment and the Third Amendment is referred to herein as the "LOAN AGREEMENT."
Pursuant to the Loan Agreement, Lenders have agreed to make loans and other
financial accommodations to Borrower.

         B. Citizens Bank has assigned its interest in the Loan Agreement to
FINOVA pursuant to an Assignment and Acceptance Agreement of even date herewith
between Citizens Bank and FINOVA.

         C. Borrower has requested that the Loan Agreement be further amended in
certain respects and that certain Events of Default be waived. Subject to the
terms and conditions of this Fourth Amendment, Lenders are willing to agree to
the requests of Borrower.

         NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and subject to the terms and conditions hereof, Borrower and Lenders
agree as follows:

         1. INCORPORATION OF RECITALS. The Recitals set forth above are
incorporated herein, are acknowledged by Borrower to be true and correct and are
made a part hereof.

         2. DEFINITIONS. All capitalized terms used but not elsewhere defined
herein shall have the respective meanings ascribed to such terms in the Loan
Agreement, as amended by this Fourth Amendment.

         3. AMENDMENTS TO THE LOAN AGREEMENT. The Loan Agreement is amended as
set forth below:

               3.1 SUBSECTION 1.1 - DELETED DEFINITIONS. Section 1.1 is amended
            by deleting the definitions "Acquisition Portion" and "Advance."

               3.2 SUBSECTION 1.1 - ADDITIONAL DEFINITIONS. Section 1.1 is
            amended by adding the following definitions in the appropriate
            alphabetical order:

<PAGE>   2
                  "Fourth Amendment: the Fourth Amendment to Loan Instruments
               dated as of August __, 2000 among Borrower and Lenders.

                  "King/Monital Proposed Acquisition: a series of acquisitions
               pursuant to which KC Acquisition Corp. proposes to acquire
               substantially all of the assets of Monital Signal Corporation,
               and subsequent to such acquisition, Borrower proposes to cause a
               wholly-owned subsidiary of Borrower to merge with KC Acquisition
               Corp., with such subsidiary as the surviving entity."

               3.3 SECTION 2.1. Section 2.1 is deleted in its entirety and the
            following is substituted therefor:

                   "2.1.1 AGGREGATE LOAN AMOUNT. The Loan shall consist of a
               term credit facility made available by Lenders to Borrower in the
               maximum aggregate amount of $17,500,000. As of the date of the
               Fourth Amendment, (i) $300,000 of the Capital Expenditure
               Portion, (ii) $1,800,000 of the SAFE Attrition Guaranty Portion
               and (iii) $2,000,000 of the SAFE Debt Portion remain available to
               be disbursed on or before December 31, 2000 pursuant to the terms
               hereof.

                   "2.1.2 INTENTIONALLY OMITTED.

                   "2.1.3 INTENTIONALLY OMITTED.

                   "2.1.4 USE OF PROCEEDS. The proceeds of the Initial Portion
               were used (i) to pay transaction costs, (ii) to reimburse
               Borrower for certain Capital Expenditures permitted hereunder and
               (iii) for working capital. The proceeds of the Capital
               Expenditure Portion have been and shall continue to be used to
               reimburse Borrower for certain Capital Expenditures permitted
               hereunder. The proceeds of the SAFE Attrition Guaranty Portion
               have been and shall continue to be used to repay certain
               obligations to SAFE (i) in connection with the reprogramming of
               account telephone lines (the "Telephone Reprogramming
               Obligations") and (ii) arising under the SAFE Attrition Guaranty.
               If SAFE has delivered a certificate to Borrower stating that all
               amounts owing from Borrower to SAFE pursuant to the Telephone
               Reprogramming Obligations and the SAFE Attrition Guaranty have
               been satisfied, any amounts remaining under the SAFE Attrition
               Guaranty Portion may be used for Capital Expenditures permitted
               hereunder. The proceeds of the SAFE Debt Portion shall be used to
               repay the SAFE Debt or, in the event that Borrower is not
               obligated to repay the SAFE Debt pursuant to the terms of the
               SAFE Debt Instruments, for Capital Expenditures permitted
               hereunder.

                   "2.1.5 NOTES. The Loan shall be evidenced by the Notes.

                   "2.1.6 REBORROWING. Borrower shall not be entitled to
               reborrow any portion of the Loan which is repaid or prepaid.

                   "2.1.7 FUNDING PROCEDURES. Agent shall give each Lender
               prompt notice by telephone or facsimile transmission of a Notice
               of Borrowing that is received by it. Each applicable Lender shall
               make available to Agent, no later than 1:00 p.m. Eastern Time on
               the applicable Funding Date set forth in the Notice of Borrowing,
               for deposit into such account

                                       2
<PAGE>   3

               as Borrower may direct, its Pro Rata Share of such Additional
               Portion Advance in immediately available funds in Dollars,
               provided that all of the conditions set forth in Sections 4.1 and
               4.4 have been satisfied with respect to a Additional Portion
               Advance requested in such Notice of Borrowing.

                   "Unless Agent receives contrary written notice prior to any
               such Additional Portion Advance, it is entitled to assume that
               each applicable Lender will make available its Pro Rata Share of
               the Additional Portion Advance and in reliance upon that
               assumption, but without any obligation to do so, may advance such
               Pro Rata Share on behalf of the applicable Lender, without the
               necessity of giving daily notice to such Lender of the receipt of
               a Notice of Borrowing. If the applicable amount is not in fact
               made available to Agent by such Lender, Agent shall be entitled
               to recover such amount on demand from such Lender together with
               interest thereon, for each day from such Funding Date until the
               date such amount is paid to Agent, at the Base Rate. If such
               Lender pays such amount to Agent, then such amount shall
               constitute such Lender's Pro Rata Share of the applicable
               Additional Portion Advance. If such Lender does not pay such
               corresponding amount forthwith upon Agent's demand therefor,
               Agent shall promptly notify the Borrower and the Borrower shall
               immediately pay such corresponding amount to Agent together with
               interest thereon, for each day from such Funding Date until the
               date such amount is paid to Agent, at the rate payable under this
               Loan Agreement for the Base Rate Portion.

                   "Nothing in this subsection 2.1.7 shall be deemed to relieve
               any Lender from its obligation to fulfill its Commitments
               hereunder or to prejudice any rights that Borrower may have
               against any Lender as a result of any default by such Lender
               hereunder. It is understood and agreed that no Lender shall be
               responsible for any default by any other Lender in that other
               Lender's obligation to make an Additional Portion Advance
               requested hereunder nor shall the Commitment of any Lender to
               make the particular type of Additional Portion Advance requested
               be increased or decreased as a result of a default by any other
               Lender in that other Lender's obligation to make an Additional
               Portion Advance requested hereunder."

               3.4 SUBSECTION 2.6.2. Subsection 2.6.2 is deleted in its entirety
            and the following is substituted therefor:

                   "2.6.2 NON-UTILIZATION FEE. Borrower shall pay to Agent, for
               the benefit of Lenders, for each month through December 31, 2000,
               a fee in the amount of one-half of one percent (.50%) per annum
               (the "NON-UTILIZATION FEE") on the remainder of (i) $17,500,000
               minus (ii) the Principal Balance as of the last day of such
               month. The Non-Utilization Fee shall be payable monthly in
               arrears on the first Business Day of each month."

               3.5 SECTION 2.7.1 (a). Subsection 2.7.1(a) is deleted in its
            entirety and the following is substituted therefor:

                   "2.7.1(a) PREPAYMENT PREMIUM. Except as provided in
               subsection 2.7.3, concurrently with any voluntary prepayment of
               all or any part of the Principal Balance, Borrower shall pay to
               Lenders a prepayment premium (the "PREPAYMENT PREMIUM") equal to
               a percentage of the amount of the Principal Balance prepaid,
               determined in accordance with the following schedule:

                                       3
<PAGE>   4

<TABLE>
<CAPTION>
                                                                             Percentage of Principal
                           Period of Prepayment                              Balance Prepaid
                           --------------------                              ---------------
<S>                                                                          <C>
                           First Loan Year                                   2.0%
                           October 1, 2000 through December 31, 2000         1.0%
                           Thereafter                                        0.0%"
</TABLE>

               3.6 SECTION 4.3. Section 4.3 is deleted in its entirety and the
            following is substituted therefor:

                   "4.3 INTENTIONALLY OMITTED."

               3.7 SECTION 7.3. Section 7.3 is deleted in its entirety and the
            following is substituted therefor:

                  "7.3 MERGER AND ACQUISITION. Consolidate with or merge with or
               into any Person, or acquire directly or indirectly all or
               substantially all of the capital stock, equity interests,
               membership interests or Property of any Person, or otherwise
               enter into any agreement for, or consummate or cause to be
               consummated any Acquisition, including without limitation the
               King/Monital Proposed Acquisition, except that any Subsidiary of
               Borrower may merge with and into Borrower."

               3.8 SCHEDULE I. Schedule I is deleted in its entirety and
            replacement Schedule I, attached hereto, is substituted therefor.

         4. CONDITIONS TO EFFECTIVENESS. The effectiveness of this Fourth
Amendment shall be subject to the satisfaction of all of the following
conditions in a manner, form and substance satisfactory to Lenders:

               4.1 DELIVERY OF DOCUMENTS. The following shall have been
            delivered to Agent, each duly authorized and executed and each in
            form and substance satisfactory to Lenders:

                   (a) this Fourth Amendment;

                   (b) an Assignment and Acceptance Agreement dated on or before
                       the date of this Fourth Amendment executed by Citizens
                       Bank and FINOVA;

                   (c) a copy, certified by the corporate secretary of Borrower,
                       of resolutions adopted by the Board of Directors of
                       Borrower authorizing the execution of this Fourth
                       Amendment;

                   (d) such other instruments, documents, certificates,
                       consents, waivers and opinions as Lenders reasonably may
                       request.

               4.2 PERFORMANCE; NO DEFAULT. Each Obligor shall have performed
            and complied with all agreements and conditions contained in the
            Loan Instruments to be performed by or complied with by it, and no
            Event of Default or Incipient Default shall exist, other than as
            waived in Paragraph 6 hereof.

                                       4
<PAGE>   5

               4.3 MATERIAL ADVERSE CHANGE. No event shall have occurred since
            December 31, 1999 which has had or could have a Material Adverse
            Effect.

The date on which all of the conditions set forth in this Paragraph 4 have been
satisfied is referred to herein as the "Effective Date."

         5. REFERENCES. From and after the Effective Date, all terms used in the
Loan Instruments which are defined in the Loan Agreement shall be deemed to
refer to such terms as amended by this Fourth Amendment.

         6. WAIVER OF EVENTS OF DEFAULT UNDER SECTIONS 7.21 AND 7.22. From and
after the Effective Date, Lenders shall be deemed to have waived their rights to
pursue their remedies as a result of Borrower's failure to comply with Sections
7.21 and 7.22 of the Loan Agreement for the quarter ending June 30, 2000. The
foregoing waiver shall not be deemed a waiver of any other Event of Default
which may have occurred under the Loan Agreement, and except as specifically set
forth above, Lenders reserve and preserve all of their rights and remedies under
the Loan Agreement and the other Loan Instruments.

         7. AMENDMENT FEE. In consideration of Lenders' entry into this Fourth
Amendment, Borrower agrees to pay to Lenders a non-refundable amendment fee of
$112,500, which shall be deemed to be fully earned and payable upon the date
hereof and which shall be charged against the Principal Balance of Borrower as
of the date of the Fourth Amendment.

         8. KING/MONITAL PROPOSED ACQUISITION. Borrower acknowledges and agrees
that (i) neither Agent nor any Lender has consented to, nor shall the execution
and delivery of this Fourth Amendment be deemed to be a consent by Agent or any
Lender to the entry into any agreement for, or the consummation of, the
King/Monital Proposed Acquisition, (ii) neither Agent nor any Lender has agreed
or committed to provide, nor shall the execution and delivery of this Fourth
Amendment be deemed to be an agreement or commitment by Agent or any Lender to
provide, financing in connection with the King/Monital Proposed Acquisition and
(iii) neither Agent nor any Lender has received the necessary due diligence
information with respect to the King/Monital Proposed Acquisition to enable such
Person to decide whether or not to consent to the entry into any agreement for,
or the consummation of, the King/Monital Proposed Acquisition.

         9. REPRESENTATIONS AND WARRANTIES. Borrower hereby confirms to Agent
and Lenders that the representations and warranties set forth in the Loan
Instruments, as amended by this Fourth Amendment, are true and correct in all
material respects as of the date hereof, and shall be deemed to be remade as of
the date hereof. Borrower represents and warrants to Agent and Lenders that (i)
Borrower has full power and authority to execute and deliver this Fourth
Amendment and to perform its obligations hereunder, (ii) upon the execution and
delivery hereof, this Fourth Amendment will be valid, binding and enforceable
upon Borrower in accordance with its terms, (iii) the execution and delivery of
this Fourth Amendment does not and will not contravene, conflict with, violate
or constitute a default under (A) its articles of incorporation or by-laws or
(B) any applicable law, rule, regulation, judgment, decree or order or any
agreement, indenture or instrument to which Borrower is a party or is bound or
which is binding upon or applicable to all or any portion of Borrower's Property
and (iv) as of the date hereof no Incipient Default or Event of Default exists,
other than as waived in Paragraph 6 hereof.

        10. COSTS AND EXPENSES. Borrower agrees to reimburse Agent for all fees
and expenses incurred in the preparation, negotiation and execution of this
Fourth Amendment and the consummation of the transactions contemplated hereby,
including, without limitation, the fees and expenses of counsel for Agent.

                                       5
<PAGE>   6

         11. NO FURTHER AMENDMENTS; RATIFICATION OF LIABILITY. Except as amended
hereby, the Loan Agreement and each of the other Loan Instruments shall remain
in full force and effect in accordance with its respective terms. Borrower
hereby ratifies and confirms its liabilities, obligations and agreements under
the Loan Agreement and the other Loan Instruments, all as amended by this Fourth
Amendment, and the Liens created thereby, and acknowledges that (i) it has no
defenses, claims or set-offs to the enforcement by Agent and Lenders of such
liabilities, obligations and agreements, (ii) Agent and Lenders have fully
performed all obligations to Borrower which any such Person may have had or has
on and as of the date hereof and (iii) other than as specifically set forth
herein, neither Agent nor any Lender waives, diminishes or limits any term or
condition contained in the Loan Agreement or the other Loan Instruments. Agent
and Lenders' agreement to the terms of this Fourth Amendment or any other
amendment of the Loan Agreement shall not be deemed to establish or create a
custom or course of dealing among Agent, Lenders and Borrower. The Loan
Instruments, as amended by this Fourth Amendment, contain the entire agreement
among Agent, Lenders and Borrower with respect to the transactions contemplated
hereby.

         12. COUNTERPARTS. This Fourth Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, and all of which, when
taken together, shall constitute one and the same instrument.

         13. FURTHER ASSURANCES. Borrower covenants and agrees that it will at
any time and from time to time do, execute, acknowledge and deliver, or will
cause to be done, executed, acknowledged and delivered, all such further acts,
documents and instruments as reasonably may be required by Agent and Lenders in
order to effectuate fully the intent of this Fourth Amendment.

         14. SEVERABILITY. If any term or provision of this Fourth Amendment or
the application thereof to any party or circumstance shall be held to be
invalid, illegal or unenforceable in any respect by a court of competent
jurisdiction, the validity, legality and enforceability of the remaining terms
and provisions of this Fourth Amendment shall not in any way be affected or
impaired thereby, and the affected term or provision shall be modified to the
minimum extent permitted by law so as most fully to achieve the intention of
this Fourth Amendment.

         15. CAPTIONS. The captions in this Fourth Amendment are inserted for
convenience of reference only and in no way define, describe or limit the scope
or intent of this Fourth Amendment or any of the provisions hereof.

                [remainder of this page intentionally left blank]

                                       6
<PAGE>   7

         IN WITNESS WHEREOF, this Fourth Amendment has been executed and
delivered by each of the parties hereto by a duly authorized officer of each
such party on the date first set forth above.

                                         SECURITY ASSOCIATES INTERNATIONAL, INC.

                                         By:
                                            ------------------------------------
                                            James S. Brannen
                                            President

                                         FINOVA CAPITAL CORPORATION, in its
                                         individual capacity as a Lender and as
                                         Agent for all Lenders

                                         By:
                                            ------------------------------------
                                            Andrew J. Pluta
                                            Vice President

<PAGE>   8

                             REPLACEMENT SCHEDULE I
                TO THE SECOND AMENDED AND RESTATED LOAN AGREEMENT

                                   COMMITMENTS

            LENDER                                   COMMITMENT
            ------                                   ----------

            FINOVA Capital Corporation               $17,500,000

                                       8

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