Document:

Prepared and filed by St Ives Burrups

 

Exhibit 10.1

CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation
    by reference in the Registration Statements on Form F-3 (No. 333-12592) and
    Form S-8 (No. 333-103491) of Unilever N.V. and Unilever PLC, of our report
    dated 2 March 2004 relating to the 2003 financial statements, which appears
    in this Form 20-F.

/s/ PricewaterhouseCoopers
      Accountants N.V.

Rotterdam, The Netherlands

As auditors of Unilever
    N.V.

/s/ PricewaterhouseCoopers LLP

Chartered Accountants and Registered
Auditors

London, England

As auditors of Unilever PLC

25 March 2004<PAGE>

                                                                   EXHIBIT 10.10

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

                                 LOAN AGREEMENT

                           DATED AS OF MARCH 22, 2004

                                     BETWEEN

                                 CITIZENS, INC.

                                       AND

                                  REGIONS BANK

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

<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                              <C>
ARTICLE I            DEFINITIONS AND USE OF TERMS..............................................................    1

   Section 1.1       Defined Terms.............................................................................    1
   Section 1.2       Heading...................................................................................   14
   Section 1.3       Number and Gender of Words................................................................   14
   Section 1.4       Money.....................................................................................   14
   Section 1.5       Accounting Terms..........................................................................   14
   Section 1.6       Articles, Sections, and Exhibits..........................................................   14
   Section 1.7       Construction..............................................................................   14

ARTICLE II           REVOLVING LOAN............................................................................   15

   Section 2.1       Revolving Advances........................................................................   15
   Section 2.2       Procedures for Requesting Revolving Advances..............................................   15
   Section 2.3       Voluntary Prepayments.....................................................................   15
   Section 2.4       Mandatory Prepayments.....................................................................   16
   Section 2.5       Repayment of the Revolving Loan...........................................................   16
   Section 2.6       Interest..................................................................................   16
   Section 2.7       Computation of Interest...................................................................   16
   Section 2.8       Payments Generally........................................................................   16
   Section 2.9       Termination of Revolving Commitment.......................................................   17

ARTICLE III          COLLATERAL................................................................................   17

   Section 3.1       Collateral................................................................................   17

ARTICLE IV           REPRESENTATIONS AND WARRANTIES............................................................   18

   Section 4.1       Existence and Authority...................................................................   18
   Section 4.2       Corporate Authorization...................................................................   18
   Section 4.3       Compliance with Laws and Documents........................................................   18
   Section 4.4       Litigation................................................................................   19
   Section 4.5       Taxes.....................................................................................   19
   Section 4.6       Financial Statements......................................................................   19
   Section 4.7       Purpose of Loan...........................................................................   19
   Section 4.8       Investment Company Act....................................................................   19
   Section 4.9       Properties................................................................................   19
   Section 4.10      Subsidiaries..............................................................................   20
   Section 4.11      Compliance with Law.......................................................................   20
   Section 4.12      Capital Stock.............................................................................   20
   Section 4.13      Existing Indebtedness.....................................................................   20
   Section 4.14      Material Agreements.......................................................................   20
   Section 4.15      Insiders..................................................................................   20
</TABLE>

                                       i
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 Page
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<S>                                                                                                              <C>
   Section 4.16      ERISA.....................................................................................   20
   Section 4.17      Full Disclosure...........................................................................   21
   Section 4.18      No Default................................................................................   21
   Section 4.19      Principal Office..........................................................................   21
   Section 4.20      Licenses, Patents and Trademarks..........................................................   21
   Section 4.21      Insurance Licenses........................................................................   21
   Section 4.22      No Assumed Names..........................................................................   22
   Section 4.23      Sufficiency of Capital....................................................................   22

ARTICLE V            CONDITIONS PRECEDENT......................................................................   22

   Section 5.1       Conditions Precedent to Revolving Advances on the Closing Date............................   22
   Section 5.2       Conditions Precedent to All Revolving Advances............................................   24
   Section 5.3       Conditions Precedent to All Acquisition Advances..........................................   24
   Section 5.4       Conditions Precedent to All Acquisition Advances in Excess of $12,000,000.................   24

ARTICLE VI           AFFIRMATIVE COVENANTS.....................................................................   25

   Section 6.1       Proceeds..................................................................................   25
   Section 6.2       Reporting Requirements....................................................................   25
   Section 6.3       Insurance Matters.........................................................................   26
   Section 6.4       Notice of Litigation or Changes in Fact...................................................   27
   Section 6.5       Taxes.....................................................................................   27
   Section 6.6       Payment of Debts..........................................................................   27
   Section 6.7       Insurance.................................................................................   27
   Section 6.8       Maintenance of Existence..................................................................   27
   Section 6.9       Maintenance of Assets.....................................................................   27
   Section 6.10      Expenses of Bank..........................................................................   27
   Section 6.11      Compliance with Material Agreements.......................................................   27
   Section 6.12      Books and Records: Access.................................................................   28
   Section 6.13      Compliance with Law.......................................................................   28
   Section 6.14      Authorization and Approvals...............................................................   28
   Section 6.15      Information and Other Documents...........................................................   28
   Section 6.16      Environmental Law Compliance..............................................................   28
   Section 6.17      Acquisitions and Subsidiaries.............................................................   28
   Section 6.18      Preferred Stock...........................................................................   28

ARTICLE VII          NEGATIVE COVENANTS........................................................................   29

   Section 7.1       Indebtedness..............................................................................   29
   Section 7.2       Negative Pledge...........................................................................   29
   Section 7.3       Restrictions on Dividends.................................................................   29
   Section 7.4       Limitation on Liquidation, Merger, Consolidation, and Disposition of Assets...............   29
</TABLE>

                                       ii
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                              <C>
   Section 7.5       No Assignment.............................................................................   30
   Section 7.6       Prepayments...............................................................................   30
   Section 7.7       Loans, Advances and Investments...........................................................   30
   Section 7.8       Surplus Debenture.........................................................................   30
   Section 7.9       Leverage Ratio............................................................................   30
   Section 7.10      Fixed Charge Coverage Ratio...............................................................   30
   Section 7.11      Funded Debt to Equity Ratio...............................................................   30
   Section 7.12      Reinsurance...............................................................................   30
   Section 7.13      Transactions With Affiliates..............................................................   30
   Section 7.14      Business..................................................................................   30
   Section 7.15      Limitation on Issuance of Capital Stock...................................................   31
   Section 7.16      Limitation on Leases......................................................................   31
   Section 7.17      Capital Expenditures......................................................................   31
   Section 7.18      Employee Plans............................................................................   31
   Section 7.19      Subsidiaries..............................................................................   32
   Section 7.20      Use of Proceeds...........................................................................   32
   Section 7.21      Composition of Corporate Group............................................................   32
   Section 7.22      Preferred Stock...........................................................................   32

ARTICLE VIII         DEFAULT...................................................................................   32

   Section 8.1       Payment of Obligations....................................................................   32
   Section 8.2       Certain Covenants.........................................................................   32
   Section 8.3       Default under Loan Documents..............................................................   32
   Section 8.4       Other Covenants...........................................................................   33
   Section 8.5       Voluntary Debtor Relief...................................................................   33
   Section 8.6       Involuntary Proceedings...................................................................   33
   Section 8.7       Judgments.................................................................................   33
   Section 8.8       Attachment................................................................................   33
   Section 8.9       Material Agreements.......................................................................   33
   Section 8.10      Other Indebtedness........................................................................   33
   Section 8.11      Misrepresentation.........................................................................   34
   Section 8.12      Surplus Debenture Payments................................................................   34
   Section 8.13      Action by Governmental Authority..........................................................   34
   Section 8.14      Full Force and Effect.....................................................................   34
   Section 8.15      Stock Ownership...........................................................................   34
   Section 8.16      Change of Control.........................................................................   34
   Section 8.17      Liquidation or Dissolution................................................................   34
   Section 8.18      Preferred Stock...........................................................................   34

ARTICLE IX           RIGHTS OF BANK............................................................................   35

   Section 9.1       Remedies Upon Default.....................................................................   35
</TABLE>

                                      iii
<PAGE>

                                TABLE OF CONTENTS

<TABLE>
<CAPTION>
                                                                                                                 Page
                                                                                                                 ----
<S>                                                                                                              <C>
   Section 9.2       Cumulative Rights.........................................................................   35
   Section 9.3       Reimbursement of Expenses.................................................................   35
   Section 9.4       Performance by Bank.......................................................................   35
   Section 9.5       Bank Not in Control.......................................................................   36
   Section 9.6       Waivers...................................................................................   36
   Section 9.7       Application of Proceeds...................................................................   36

ARTICLE X            MISCELLANEOUS.............................................................................   36

   Section 10.1      Notices...................................................................................   36
   Section 10.2      GOVERNING LAW.............................................................................   37
   Section 10.3      Choice of Forum: Service of Process and Jurisdiction......................................   37
   Section 10.4      Expenses; Indemnification.................................................................   38
   Section 10.5      Right of Set-off..........................................................................   39
   Section 10.6      Severability..............................................................................   39
   Section 10.7      Survival..................................................................................   39
   Section 10.8      Further Assurances........................................................................   39
   Section 10.9      Counterparts..............................................................................   39
   Section 10.10     Parties Bound.............................................................................   39
   Section 10.11     Amendments and Waivers....................................................................   40
   Section 10.12     Form of Documents.........................................................................   40
   Section 10.13     Confidentiality...........................................................................   40
   Section 10.14     Exception to Covenants....................................................................   40
   Section 10.15     No Usury Intended; Usury Savings Clause...................................................   40
   Section 10.16     WAIVER OF JURY TRIAL......................................................................   40
   Section 10.17     ENTIRE AGREEMENT..........................................................................   41
</TABLE>

                                       iv
<PAGE>

                                 LOAN AGREEMENT

         LOAN AGREEMENT (the "Agreement") dated as of March 22, 2004 between
CITIZENS, INC., a Colorado corporation ("Borrower"), and REGIONS BANK, an
Alabama banking association ("Bank"), recites and provides as follows:

                                R E C I T A L S:

         A.       Borrower has applied to Bank for a revolving line of credit.

         B.       The proceeds of the Revolving Loan shall be used by Borrower
for the acquisition of insurance companies or holding companies engaged solely
in the business of insurance through one or more subsidiaries and for general
corporate purposes.

         C.       Bank is willing to make the Revolving Loan to Borrower upon
the terms and conditions herein and subject to the covenants and agreements
herein set forth.

         NOW, THEREFORE, in consideration of the premises and the mutual
covenants, representations, warranties and agreements herein set forth and for
other valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Bank and Borrower covenant and agree as follows:

                                   ARTICLE I

                          DEFINITIONS AND USE OF TERMS

         Section 1.1 Defined Terms. As used herein, the following terms shall
have the meanings indicated, unless the context otherwise requires:

         "Acquisition" means the acquisition by any Person of (a) a majority of
         the capital stock or other equity interests of another Person, (b) all
         or substantially all of the assets of another Person or (c) all or
         substantially all of a line of business of another Person, in each case
         (i) whether or not involving a merger or consolidation with such other
         Person and (ii) whether in one transaction or a series of related
         transactions.

         "Acquisition Advance" means a Revolving Advance to be used for an
         Acquisition by Borrower of an operating insurance company or a holding
         company engaged solely in the business of insurance through one or more
         subsidiaries.

         "Acquisition Consideration" means the consideration given by Borrower
         for an Acquisition, including but not limited to the sum of (without
         duplication) (a) the fair market value of any cash, property (including
         capital stock) or services given, plus (b) consideration paid with
         proceeds of Indebtedness permitted pursuant to this Agreement, plus (c)
         the amount of any Indebtedness assumed, incurred or guaranteed (to the
         extent not otherwise included) in connection with such Acquisition by
         Borrower.

Loan Agreement - Page 1

<PAGE>

         "Affiliate" means with respect to any Person (a) each Person that,
         directly or indirectly, owns or controls, whether beneficially, or as a
         trustee, guardian or other fiduciary, 10% or more of the securities
         having ordinary voting power in the election of directors of such
         Person, (b) each Person that controls, is controlled by or is under
         common control with such Person or any Affiliate of such Person, or (c)
         each of such Person's officers, directors, joint venturers and
         partners. For the purpose of this definition, "control" of a Person
         shall mean the possession, directly or indirectly, of the power to
         direct or cause the direction of its management or policies, whether
         through the ownership of voting securities, by contract or otherwise.

         "Aggregate Permitted Exceptions" means the aggregate amount of the
         baskets utilized by Borrower and its Subsidiaries with respect to the
         exceptions to those certain covenants set forth in Sections 7.1(g),
         7.1(h), 7.16, 7.17 and clause (k) of the definition of Permitted
         Investments.

         "Aggregate Permitted Exceptions Amount" means, during any fiscal year
         of Borrower, $5,000,000.

         "Annual Statement" means the annual financial statement of any
         Subsidiary of Borrower as required to be filed with the insurance
         commissioner (or similar authority) of respective state of domicile,
         together with all exhibits or schedules filed therewith, prepared in
         accordance with SAP.

         "Applicable Environmental Laws" means and includes the collective
         aggregate of the following: any law, statute, ordinance, rule,
         regulation, order or determination of any governmental authority or any
         board of fire underwriters (or other body exercising similar
         functions), or any restrictive covenants or deed restrictions (recorded
         or otherwise) affecting Borrower pertaining to health, safety or the
         environment, including, without limitation, all applicable flood
         disaster laws and health, safety and environmental laws and regulations
         pertaining to health, safety or the environment, including without
         limitation, the Comprehensive Environmental Response, Compensation, and
         Liability Act of 1980, the Resource Conservation and Recovery Act of
         1976, the Superfund Amendments and Reauthorization Act of 1986, the
         Occupational Safety and Health Act, the Texas Water Code, the Texas
         Solid Waste Disposal Act, the Texas Workers' Compensation Laws, and any
         federal, state or municipal laws, ordinances, regulations or law which
         may now or hereafter require removal of asbestos or other hazardous
         wastes from any property of Borrower or impose any liability on Bank
         related to asbestos or other hazardous wastes in any property of
         Borrower.

         "Audited Financial Statements" means the audited consolidated balance
         sheet of Borrower and its Subsidiaries for the fiscal year ended
         December 31, 2002 and the related consolidated statements of income or
         operations, shareholders' equity and cash flows for such fiscal year of
         Borrower and its Subsidiaries, including the notes thereto, prepared in
         accordance with GAAP.

Loan Agreement - Page 2

<PAGE>

         "Authorized Representative" means any of Mark Oliver, Harold Riley,
         Rick Riley or any other person designated in a writing sent to Bank by
         Borrower notifying Bank that such person is authorized and empowered to
         act on behalf of Borrower.

         "Business Day" means every day on which banks in Texas are required by
         Law to be open for banking business.

         "Capital Leases" means capital leases and subleases, properly
         classifiable in relevant financial statements as a capitalized cost.

         "Change of Control" means, with respect to Borrower, an event or series
of events by which:

                  (a)      any "person" or "group" (as such terms are used in
         Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but
         excluding any employee benefit plan of such person or its subsidiaries,
         and any person or entity acting in its capacity as trustee, agent or
         other fiduciary or administrator of any such plan) becomes the
         "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
         Securities Exchange Act of 1934, except that a person or group shall be
         deemed to have "beneficial ownership" of all securities that such
         person or group has the right to acquire (such right, an "option
         right"), whether such right is exercisable immediately or only after
         the passage of time), directly or indirectly, of 25% or more of the
         equity securities of Borrower entitled to vote for members of the board
         of directors of Borrower on a fully-diluted basis (and taking into
         account all such securities that such person or group has the right to
         acquire pursuant to any option right); or

                  (b)      during any period of 12 consecutive months, a
         majority of the members of the board of directors of Borrower cease to
         be composed of individuals (i) who were members of that board on the
         first day of such period, (ii) whose election or nomination to that
         board was approved by individuals referred to in clause (i) above
         constituting at the time of such election or nomination at least a
         majority of that board or (iii) whose election or nomination to that
         board was approved by individuals referred to in clauses (i) and (ii)
         above constituting at the time of such election or nomination at least
         a majority of that board (excluding, in the case of both clause (ii)
         and clause (iii), any individual whose initial nomination for, or
         assumption of office as, a member of that board occurs as a result of
         an actual or threatened solicitation of proxies or consents for the
         election or removal of one or more directors by any person or group
         other than a solicitation for the election of one or more directors by
         or on behalf of the board of directors); or

                  (c)      any of Rick Riley, Harold Riley, or Mark Oliver shall
         cease to actively manage Borrower's day-to-day business activities.

         "CICA" means Citizens Insurance Company of America, a Colorado
         insurance company.

         "Closing Date" means the first date all the conditions set forth in
         Section 5.1 are satisfied

Loan Agreement - Page 3

<PAGE>

         "Code" means the United States Internal Revenue Code of 1986, as
         amended, and regulations promulgated thereunder.

         "Collateral" has the meaning set forth in Section 3.1.

         "Controlled Group" has the meaning set forth in Section 7.18(a).

         "Corporate Advances" means Revolving Advances to be used for general
         corporate purposes not related to the Acquisition of operating
         insurance companies by Borrower.

         "Current Financials" means the Financial Statements of each of Borrower
         and its Subsidiaries as of December 31, 2003.

         "Current Date" means a date within 15 days of the Closing Date.

         "Debtor Relief Laws" means any applicable liquidation, conservatorship,
         bankruptcy, moratorium, rearrangement, insolvency, reorganization, or
         similar Laws affecting the rights of creditors generally from time to
         time in effect.

         "Default" has the meaning set forth in Article VIII.

         "Default Rate" means an interest rate per annum equal to the lesser of
         (a) the Highest Lawful Rate and (b) the Rate plus 2% per annum.

         "Dividends," in respect of any corporation, means:

         (a)      cash distributions or any other distributions on, or in
                  respect of, any class of capital stock of such corporation,
                  except for distributions made solely in shares of stock of the
                  same class or for the Preferred Stock, distributions made
                  solely in shares of stock of the same class or common stock;
                  and

         (b)      any and all funds, cash or other payments made in respect of
                  the redemption, repurchase or acquisition of such stock by the
                  issuer thereof, unless such stock is redeemed or acquired
                  through the exchange of such stock with stock of the same
                  class.

         "Dollar" and "$" each mean lawful money of the United States.

         "EBITDA" means, with respect to any period, (a) Net Income for such
         period, plus (b) without duplication and to the extent deducted in
         determining Net Income for such period, (i) Interest Expense for such
         period, (ii) federal, state, local and foreign income and franchise
         taxes of Borrower and its Subsidiaries for such period, (iii)
         depreciation and amortization expenses of Borrower and its Subsidiaries
         for such period and (iv) any extraordinary losses of Borrower and its
         Subsidiaries for such period, minus (c) without duplication and to the
         extent included in determining Net Income for such period, any
         extraordinary gains of Borrower and its Subsidiaries for such period.

Loan Agreement - Page 4

<PAGE>

         "Employee Plan" means at any time an employee benefit plan as defined
         in Section 3(3) of ERISA that is now or was previously maintained,
         sponsored or contributed to by Borrower or any of its Subsidiaries or
         by any Person that at such time is or was an ERISA Affiliate of
         Borrower or any Subsidiary.

         "Equity" means, as of any date of determination, shareholders' equity
         of Borrower and its Subsidiaries as of such date determined in
         accordance with GAAP.

         "ERISA" means the Employee Retirement Income Security Act of 1974, as
         amended from time to time, together with all regulations issued
         pursuant thereto.

         "ERISA Affiliate" means any Person that is treated as a single employer
         with Borrower or any Subsidiary under Section 414 of the Code.

         "ERISA Event" means, with respect to Borrower and its Subsidiaries, (a)
         a Reportable Event (other than a Reportable Event not subject to the
         provision for 30-day notice to the PBGC under regulations issued under
         Section 4043 of ERISA), (b) the withdrawal of any such Person or any
         member of its Controlled Group from an Employee Plan subject to Title
         IV of ERISA during a plan year in which it was a "substantial employer"
         as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice
         of intent to terminate under Section 4041(c) of ERISA, (d) the
         institution of proceedings to terminate an Employee Plan by the PBGC,
         (e) the failure to make required contributions which could result in
         the imposition of a lien under Section 412 of the Code or Section 302
         of ERISA, or (f) any other event or condition which might reasonably be
         expected to constitute grounds under Section 4042 of ERISA for the
         termination of, or the appointment of a trustee to administer, any
         Employee Plan or the imposition of any liability under Title IV of
         ERISA other than PBGC premiums due but not delinquent under Section
         4007 of ERISA.

         "Financial Statements" includes (where applicable), but is not
         necessarily limited to, balance sheets, statements of operations,
         reconciliations of capital and surplus, and schedules of sources and
         applications of funds.

         "Fixed Charge Coverage Ratio" means, for any fiscal period, the ratio
         of (a) EBITDA to (b) the sum of (i) Interest Expense, plus (ii) all
         scheduled payments on obligations in respect of any Capital Leases of
         Borrower and its Subsidiaries, in each case for the period of four
         consecutive fiscal quarters ending on such date.

         "Funded Debt" means, as to Borrower and its Subsidiaries at a
         particular time, all of the following (without duplication):

         (a) all obligations for borrowed money and all obligations evidenced by
         bonds, debentures, notes, loan agreements or other similar instruments;

         (b) any direct or contingent obligations arising under letters of
         credit, bankers' acceptances, bank guaranties, surety bonds and similar
         instruments;

Loan Agreement - Page 5

<PAGE>

         (c) accrued obligations in respect of earnout or similar payments
         payable in cash or which may be payable in cash at the seller's or
         obligee's option;

         (d) obligations in respect of Capital Leases;

         (e) obligations to pay the deferred purchase price of property or
         services (excluding trade accounts payable that are not more than 30
         days past due); and

         (f) all Guaranty Obligations with respect to obligations of any other
         Person of the type described in clauses (a) through (e) above.

         Provided however, there shall be excluded for purposes of calculating
         Funded Debt obligations of Borrower or its Subsidiaries with respect to
         (a) claims liabilities under insurance policies in the ordinary course
         of business of Borrower or such Subsidiary and (b) the Preferred Stock.

         "Funded Debt to Equity Ratio" means, as of any date of determination,
         the ratio of (a) Funded Debt as of such date to (b) Equity as of such
         date.

         "GAAP" means generally accepted accounting principles applied on a
         consistent basis, set forth in the Opinions of the Accounting
         Principles Board of the American Institute of Certified Public
         Accountants and/or in statements of the Financial Accounting Standards
         Board, which are applicable in the circumstances as of the date in
         question, and the requisite that such principles be applied on a
         consistent basis shall mean that the accounting principles observed in
         a current period are comparable in all material respects to those
         applied in a preceding period.

         "Governmental Authority" means any government, any state or other
         political subdivision thereof, or any Person exercising executive,
         legislative, judicial, regulatory or administrative functions of or
         pertaining to government, including but not limited to any
         commonwealth, federal, foreign, territorial, or other court or
         governmental department, commission, board, bureau, agency, central
         bank, or instrumentality, including, without limitation, any board of
         insurance, insurance department or insurance commissioner.

         "Guaranty Obligations" means, as to any Person, (a) any obligation,
         contingent or otherwise, of such Person guarantying or having the
         economic effect of guarantying any Indebtedness or other obligation
         payable or performable by another Person (the "primary obligor") in any
         manner, whether directly or indirectly, and including any obligation of
         such Person, direct or indirect, (i) to purchase or pay (or loan or
         supply funds for the purchase or payment of) such Indebtedness or other
         obligation, (ii) to purchase or lease property, securities or services
         for the purpose of assuring the obligee in respect of such Indebtedness
         or other obligation of the payment or performance of such Indebtedness
         or other obligation, (iii) to maintain working capital, equity capital
         or any other financial statement condition or liquidity of the primary
         obligor so as to enable the primary obligor to pay such Indebtedness or
         other obligation, or (iv) entered into for the purpose of assuring in
         any other manner the obligees in respect of such Indebtedness or other
         obligation of the payment or performance thereof or to protect such
         obligees against loss

Loan Agreement - Page 6

<PAGE>

         in respect thereof (in whole or in part), or (b) any Lien on any assets
         of such Person securing any Indebtedness or other obligation of any
         other Person, whether or not such Indebtedness or other obligation is
         assumed by such Person; provided, however, that the term "Guaranty
         Obligation" shall not include endorsements of instruments for deposit
         or collection in the ordinary course of business. The amount of any
         Guaranty Obligation shall be deemed to be an amount equal to the stated
         or determinable amount of the related primary obligation, or portion
         thereof, in respect of which such Guaranty Obligation is made or, if
         not stated or determinable, the maximum reasonably anticipated
         liability in respect thereof as determined by the guarantying Person in
         good faith.

         "Highest Lawful Rate" means at the particular time in question the
         maximum rate of interest which, under applicable Law, Bank is then
         permitted to charge on the Obligations. If the maximum rate of interest
         which, under applicable Law, Bank is permitted to charge on the
         Obligations shall change after the date hereof, the Highest Lawful Rate
         shall be automatically increased or decreased, as the case may be, from
         time to time as of the effective time of each change in the Highest
         Lawful Rate without notice to Borrower. For purposes of determining the
         Highest Lawful Rate under applicable Law, the indicated rate ceiling
         shall be the lesser of (a)(i) the "weekly ceiling", as that expression
         is defined in Section 303.003 of the Texas Finance Code, as amended, or
         (ii) if available in accordance with the terms thereof and at Bank's
         option after notice to Borrower and otherwise in accordance with the
         terms of Section 303.103 of the Texas Finance Code, as amended, the
         "annualized ceiling" and (b)(i) if the amount outstanding under this
         Agreement is less than $250,000, twenty-four percent (24%), or (ii) if
         the amount under this Agreement is equal to or greater than $250,000,
         twenty-eight percent (28%) per annum.

         "Indebtedness" means and includes for any Person, as of any date as of
         which the amount thereof is to be determined (a) all indebtedness for
         borrowed money, and all obligations evidenced by bonds, notes,
         debentures, loan agreements or similar instruments, (b) all obligations
         which are secured by any Lien existing on property owned by such Person
         whether or not the obligations secured thereby shall have been assumed
         by such Person, (c) all obligations of such Person to purchase any
         materials, supplies or other property, or to obtain the services of any
         other Person, if the relevant contract or other related document
         requires that payment for such materials, supplies, or other property,
         or for such services, shall be made regardless of whether delivery of
         such materials, supplies, or other property is ever made or tendered or
         such services are ever performed or tendered, (d) all obligations in
         respect of Capital Leases, (e) Synthetic Lease Obligations; (f)
         obligations under any Swap Contracts; (g) obligations in respect of
         capital stock which prior to April 22, 2005 is (i) mandatory redeemable
         (by sinking fund or similar payment or otherwise), (ii) redeemable at
         the option of the holder or (iii) convertible into Indebtedness; (h)
         any direct or contingent obligations arising under letters of credit,
         bankers' acceptances, bank guaranties, surety bonds, and similar
         instruments; (i) "withdrawal liability" of such Person as defined under
         Part 1 of Subtitle E of Title IV of ERISA; (j) any direct or contingent
         obligations under insurance policies and reinsurance agreements, and
         (k) Guaranty Obligations for the payment, discharge, or

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<PAGE>

         satisfaction of Indebtedness of others of the character described in
         clauses (a) through (j) above.

         "Insurance Regulatory Authority" means each Governmental Authority
         which regulates CICA or any other Material Subsidiary which is an
         Insurance Subsidiary.

         "Insurance Subsidiary" means any direct or indirect Material Subsidiary
         of Borrower or any of its Material Subsidiaries that is an operating
         insurance company.

         "Interest Expense" means, with respect to any period, total interest
         expense, whether paid or accrued (including the interest component of
         Capital Leases), of Borrower and its Subsidiaries, including, without
         limitation, all commissions, discounts and other fees and charges owed
         with respect to letters of credit and net costs under interest rate
         contracts and foreign exchange contracts, but excluding, however,
         interest expense not payable in cash (including amortization of
         discount), all as determined in conformity with GAAP.

         "Interest Payment Date" means (a) the fifth day of each month following
         the end of each fiscal quarter of Borrower and (b) the Maturity Date.

         "Investment" in any Person means any investment, whether by means of
         share purchase, loan, advance, extension of credit, capital
         contribution or otherwise, in or to such Person, the guaranty of any
         Indebtedness of such Person, or the subordination of any claim against
         such Person to other Indebtedness of such Person.

         "Law" or "Laws" means all statutes, laws, ordinances, regulations,
         orders, writs, injunctions; or decrees of the United States, any state
         or commonwealth, any county, any municipality, any foreign country, any
         territory or possession, or any Governmental Authority.

         "Leverage Ratio" means, as of any date of determination, the ratio of
         (a) Funded Debt as of such date to (b) EBITDA for the period of the
         four consecutive fiscal quarters ending on such date.

         "LIBOR Rate" means: (a) the rate per annum equal to the rate determined
         by Bank to be the offered rate that appears on Page 3750 of the
         Telerate screen (or any successor thereto) that displays an average
         British Bankers Association Interest Settlement Rate for deposits in
         Dollars with a term equivalent to an interest period of 30 days,
         determined as of approximately 11:00 a.m. (London time) on the first
         day of such 30-day period, or

                  (b)      if the rate referenced in the preceding subsection
         (a) does not appear on such page or service or such page or service
         shall cease to be available, the rate per annum equal to the rate
         determined by Bank to be the offered rate on such other page or such
         other service that displays an average British Bankers Association
         Interest Settlement Rate for deposits in Dollars with a term equivalent
         of 30 days, determined as of approximately 11:00 a.m. (London time) on
         the first day of such 30-day period, provided such offered rate on such
         other page or such other service is substantially comparable to the
         rate if determined by subsection (a) above.

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<PAGE>

         "License" has the meaning set forth in Section 4.21.

         "Lien" means any lien, security interest, Tax lien, mechanic's lien,
         materialmen's lien, or similar encumbrance, whether arising by contract
         or under Law.

         "Litigation" means any proceeding, claim, lawsuit, investigation and/or
         arbitration by or before any Governmental Authority, including, but not
         limited to, proceedings, claims, and/or lawsuits under or pursuant to
         any environmental, occupational safety and health, antitrust, unfair
         competition, securities, Tax or other Law, or under or pursuant to any
         contract, agreement or other instrument.

         "Loan Documents" means this Agreement, the Note, the Security
         Agreement, and any other instruments, documents, and agreements
         executed and/or delivered pursuant to the terms of this Agreement, and
         any future amendments, modifications, restatements, renewals, or
         extensions hereof or thereof.

         "Margin Stock" has the meaning given thereto in Regulation U,
         promulgated by the Board of Governors of the Federal Reserve System, as
         amended from time to time.

         "Material Adverse Effect" means any act or circumstance that (a) causes
         a Default, (b) otherwise could reasonably be expected to be material
         and adverse to the business, assets, liabilities (actual or
         contingent), condition (financial or otherwise), results of operations,
         or business prospects of Borrower or any of its Subsidiaries) or (c) in
         any manner whatsoever does or would reasonably be expected to
         materially and adversely affect the validity or enforceability of any
         Loan Document.

         "Material Agreements" has the meaning set forth in Section 4.14.

         "Material Subsidiary" means (a) CICA, and (b) at any time, any
         Subsidiary having at such time either (i) total (gross) revenues for
         the preceding four fiscal quarter periods in excess of 20% of the total
         (gross) revenues of the Borrower and its Subsidiaries on a consolidated
         basis determined in accordance with GAAP for such period or (ii) a
         shareholder's equity, as of the last day of the preceding fiscal
         quarter, having a book value in excess of 20% of Equity, based upon
         Borrower's most recent annual or quarterly financial statements
         delivered to Bank in accordance with Section 6.2.

         "Maturity Date" means the first to occur of (a) March 22, 2005, (b) the
         date the Revolving Commitment is terminated pursuant to Section 2.9 or
         9.1, or (c) the date the Obligations are accelerated.

         "NAIC" means the National Association of Insurance Commissioners.

         "Net Income" means, with respect to any period for Borrower and its
         Subsidiaries, the net income or loss determined in accordance with
         GAAP.

         "Note" means the promissory note issued by Borrower pursuant to this
         Agreement to evidence the Revolving Loan in substantially the same form
         as Exhibit A attached hereto.

Loan Agreement - Page 9

<PAGE>

         "Obligations" means all present and future indebtedness, obligations,
         and liabilities, and all renewals and extensions thereof, or any part
         thereof, of Borrower to Bank arising pursuant to this Agreement, the
         Note or any of the other Loan Documents, and all interest accruing
         thereon and costs, expenses, and reasonable attorney's fees incurred in
         the enforcement or collection thereof, regardless of whether such
         indebtedness, obligations, and liabilities are direct, indirect, fixed,
         contingent, liquidated, unliquidated, joint, several, or joint and
         several, including, but not limited to, the indebtedness, obligations,
         and liabilities evidenced, secured, or arising pursuant to any of the
         Loan Documents, and all renewals and extensions thereof, or any part
         thereof, and all present and future amendments thereto, and including
         all amounts that would be owed by Borrower or any other Person under
         any Loan Document but for the fact that they are unenforceable or not
         allowable due to the existence of a proceeding pursuant to Debtor
         Relief Laws involving Borrower or any other Person (including all such
         amounts that would become due or would be secured but for the filing of
         any petition, or the commencement of any proceeding, under any Debtor
         Relief Laws).

         "PBGC" means the Pension Benefit Guaranty Corporation, and any
         successor to all or any of the Pension Benefit Guaranty Corporation's
         functions under ERISA.

         "Pension Plan" means any Employee Plan that is now or was previously
         covered by Title IV of ERISA or subject to the minimum funding
         standards under Section 412 of the Code.

         "Permitted Investments" means (a) marketable direct obligations of the
         United States of America or any agency controlled or supervised by or
         acting as an instrumentality thereof, and in any event shall also
         include marketable direct obligations of the Federal Home Loan Mortgage
         Corporation, the Federal National Mortgage Association and the
         Government National Mortgage Corporation, and obligations fully
         guaranteed as to principal and interest by the United States of
         America, (b) bank repurchase agreements and certificates of deposit
         issued by, and money market fund or other accounts placed with,
         commercial banks organized under the Laws of the United States of
         America or any state thereof, and having combined capital, surplus and
         undivided profits of not less than $500,000,000.00, (c) certificates of
         deposit issued by, and accounts placed with, financial institutions
         insured by the Federal Deposit Insurance Corporation, the amount of
         which are fully insured by the Federal Deposit Insurance Corporation,
         (d) investments by Borrower in the capital stock of its Subsidiaries
         provided Bank has a perfected first priority Lien in such capital stock
         and the proceeds of the Surplus Debenture related thereto, (e) accounts
         receivable, chattel paper, instruments, and contract rights arising in
         the ordinary course of business, (f) investments in corporate
         commercial paper maturing no more than one year from the date of
         creation thereof and at the time of acquisition having the highest
         rating obtainable from either Moody's Investors Service, Inc.
         ("Moody's") or Standard and Poor's Corporation ("S&P"), (g) Investments
         in corporate or municipal debt instruments rated investment grade or
         better by either Moody's or S&P, (h) Investments in preferred stock by
         issuers whose debt instruments have one of the three highest ratings
         obtainable by Moody's or S&P, (i) investments by Subsidiaries in loans
         made to insureds pursuant to insurance policies issued by such
         Subsidiaries,

Loan Agreement - Page 10

<PAGE>

         (j) investments existing on the Closing Date that are set forth in
         Schedule 7.7, (k) mortgage loans to the extent not prohibited by any
         Insurance Regulatory Authority or applicable Law, and (l) other
         investments as authorized by the applicable insurance codes in the
         State of Colorado and any other state in which a Subsidiary of Borrower
         may be organized, not otherwise provided for herewith in clauses (a)
         through (k) in an amount not to exceed the lesser of (i) $3,000,000 in
         the aggregate during any fiscal year of Borrower or (ii) an amount that
         would cause the Aggregate Permitted Exceptions during any fiscal year
         to be equal to the Aggregate Permitted Exceptions Amount.

         "Permitted Liens" means:

         (a)      Liens in existence as of the date hereof as set forth on
                  Schedule 4.9;

         (b)      Liens created in the ordinary course of business resulting
                  from (i) pledges or deposits under workmen's compensation
                  laws, unemployment insurance laws or similar legislation, (ii)
                  good faith deposits in connection with bids, tenders,
                  contracts (other than for the purpose of borrowing money or
                  obtaining credit) or leases to which Borrower or any
                  Subsidiary is a party, including security deposits, (iii)
                  deposits of any Subsidiary required to be maintained with
                  Insurance Regulatory Authorities in the ordinary course of
                  business, (iv) deposits of any Subsidiary required by
                  reinsurance agreements permitted by the terms hereof entered
                  into in the ordinary course of business, and (v) deposits to
                  secure public or statutory obligations of Borrower or any
                  Subsidiary, or surety, custom or appeal bonds to which
                  Borrower or any Subsidiary is a party, or the payment of
                  contested Taxes or import duties of Borrower or any
                  Subsidiary;

         (c)      any Lien (i) which is imposed by law, such as those of
                  carriers, warehousemen and mechanics, if payment of the
                  obligation secured thereby is not yet due, or the validity or
                  amount of which is being contested by appropriate legal
                  proceedings and with respect to which adequate reserves have
                  been set up, (ii) which arises out of a judgment or award
                  against Borrower or any Subsidiary with respect to which
                  Borrower or such Subsidiary at the time shall currently be
                  prosecuting an appeal or proceedings for review and with
                  respect to which it shall have secured a stay of execution
                  pending such appeal or proceedings for review, and with
                  respect to which adequate reserves have been set up, and (iii)
                  for taxes, assessments or other governmental charges or levies
                  not yet subject to penalties for nonpayment or the validity or
                  amount of which is being contested by appropriate legal
                  proceedings and with respect to which adequate reserves have
                  been established;

         (d)      minor survey exceptions, minor encumbrances, easements or
                  reservations of, or rights of others for, rights of way,
                  sewers, electric lines, telegraph lines and other similar
                  purposes, or zoning or other restrictions as to the use of
                  real property, provided, that all of the foregoing, in the
                  aggregate, do not at any time materially detract from the
                  value of said properties or materially impair their use in the
                  operation of the businesses of Borrower or any Subsidiary;

Loan Agreement - Page 11

<PAGE>

         (e)      the Security Interests; and

         (f)      Liens related to Indebtedness permitted pursuant to Section
                  7.1(g) and (h).

         "Person" means any individual, firm, corporation, association,
         partnership, joint venture, trust, other entity, or a Governmental
         Authority.

         "Plan Asset Regulation" means a regulation promulgated by the
         Department of Labor at 29 C.F.R. Section 25110.3-101, as amended from
         time to time.

         "Preferred Stock" means any preferred securities which may be issued in
         series under the Borrower's Restated and Amended Articles of
         Incorporation, received by the Colorado Secretary of State on March 8,
         2004 which contain terms providing for the conversion of the preferred
         securities into common stock of Borrower and warrants and common stock
         related thereto.

         "Principal Office" means the principal office of Bank, located at 4314
         West Braker Lane, Suite 100, Austin, Texas 78759.

         "Rate" shall mean a rate of interest per annum equal to the 30-day
         LIBOR Rate plus 1.80%.

         "Reportable Event" has the meaning assigned to such term in Title IV of
         ERISA.

         "Request" means a written Request and Receipt form supplied by Bank and
         signed by any two of Borrower's Authorized Representatives requesting a
         Revolving Advance under this Agreement.

         "Revolving Advances" has the meaning given in Section 2.1 and which may
         refer to either an Acquisition Advance or a Corporate Advance, as the
         case may be.

         "Revolving Loan" has the meaning given in Section 2.1.

         "Revolving Commitment" means the obligation of Bank to make the
         Revolving Advances, pursuant to Section 2.1, in the aggregate principal
         amount of $30,000,000.

         "Rights" means any remedies, powers, and privileges exercisable under
         the Loan Documents, at Law, equity, or otherwise.

         "SAP" means, when used with respect to an insurance company, statutory
         accounting practices prescribed or permitted by the insurance laws or
         regulations or insurance commissioner (or other similar authority) in
         the jurisdiction of the incorporation of such insurance company for the
         preparation of financial statements and other financial reports by
         insurance corporations of the type of such insurance company applied on
         a basis consistent with those reflected in the Current Financials. If
         SAP is changed in any jurisdiction, the appropriate company affected
         thereby may change its practices in accordance with such change.

Loan Agreement - Page 12

<PAGE>

         "Shemano/Stonegate Warrants" means those certain warrants that may be
         issued pursuant to (a) the Non-Exclusive Finder's Agreement, dated as
         of September 29, 2003, between the Borrower and The Shemano Group, Inc.
         and (b) the Placement Agency Agreement, dated as of March 7, 2003,
         between the Borrower and Stonegate Securities, Inc.

         "Security Agreement" means the Security Agreement dated the Closing
         Date whereby Borrower grants to Bank a security interest in the
         proceeds of the Surplus Debentures and the equity interests in any
         Subsidiary acquired as part of an Acquisition or formed by Borrower
         after the date of this Agreement as collateral security for the payment
         of the Obligations, as the same may be amended, modified, supplemented
         or restated from time to time.

         "Security Interests" has the meaning set forth in Section 4.1.

         "Subsidiary" means every firm, corporation, association, partnership,
         joint venture, trust, or other entity of which an aggregate of 50% or
         more of the equity interests or the issued and outstanding stock having
         ordinary voting power (except directors' qualifying shares) is, at the
         time the determination is being made, owned, either directly or
         indirectly, or controlled by Borrower or one or more Subsidiaries of
         Borrower.

         "Surplus Debentures" means any subordinated surplus debentures payable
         by CICA to Borrower issued after the date of this Agreement in
         connection with an Acquisition Advance in the original principal amount
         of such Acquisition Advance.

         "Swap Contract" means (a) any and all rate swap transactions, basis
         swaps, credit derivative transactions, forward rate transactions,
         commodity swaps, commodity options, forward commodity contracts, equity
         or equity index swaps or options, bond or bond price or bond index
         swaps or options or forward bond or forward bond price or forward bond
         index transactions, interest rate options, forward foreign exchange
         transactions, cap transactions, floor transactions, collar
         transactions, currency swap transactions, cross-currency rate swap
         transactions, currency options, spot contracts, any cancellations, buy
         backs or reversals, of any of the foregoing, or any other similar
         transactions or any combination of any of the foregoing (including any
         options to enter into any of the foregoing), whether or not any such
         transaction is governed by or subject to any master agreement, and (b)
         any and all transactions of any kind, and the related confirmations,
         which are subject to the terms and conditions of, or governed by, any
         form of master agreement published by the International Swaps and
         Derivatives Association, Inc., any International Foreign Exchange
         Master Agreement, or any other master agreement, together with any
         related schedules, including any such obligations or liabilities under
         any master agreement.

         "Synthetic Lease Obligation" means the monetary obligation of a Person
         under (a) a so-called synthetic, off-balance sheet or tax retention
         lease, or (b) an agreement for the use or possession of property
         creating obligations that do not appear on the balance sheet of such
         Person but which, upon the insolvency or bankruptcy of such Person,
         would be

Loan Agreement - Page 13

<PAGE>

         characterized as the indebtedness of such Person (without regard to
         accounting treatment).

         "Taxes" means all taxes, assessments, fees, or other charges from time
         to time or at any time imposed by any Laws or by any Governmental
         Authority.

         Section 1.2 Heading. The headings, captions, and arrangements used in
any of the Loan Documents are, unless specified otherwise, for convenience only
and shall not be deemed to limit, amplify, or modify the terms of the Loan
Documents, nor affect the meaning thereof.

         Section 1.3 Number and Gender of Words. Whenever herein the singular
number is used, the same shall include the plural, and the plural shall include
the singular, where appropriate; and words of any gender shall include each
other gender where appropriate.

         Section 1.4 Money. Unless stipulated otherwise, all references herein
to "dollars," "money," "payments," or other similar financial or monetary terms,
are references to currency of the United States of America.

         Section 1.5 Accounting Terms. All accounting and financial terms used
herein, and the compliance with each covenant contained herein which relates to
financial matters, shall be determined in accordance with GAAP in the case of
Borrower or, in the case of an Insurance Subsidiary, with SAP.

         Section 1.6 Articles, Sections, and Exhibits. All references to
Articles and Sections contained herein are, unless specifically indicated
otherwise, references to articles and sections of this Agreement. All references
to "Exhibits" contained herein are references to exhibits attached hereto, all
of which are made a part hereof for all purposes, the same as if set forth
herein verbatim, it being understood that if any exhibit attached hereto, which
is to be executed and delivered, contains blanks, the same shall be completed
correctly and in accordance with the terms and provisions contained and as
contemplated herein prior to or at the time of the execution and delivery
thereof.

         Section 1.7 Construction. Unless otherwise expressly provided in this
Agreement or the context requires otherwise, (a) all references to time are
Austin, Texas time, (b) all references to "Articles", "Sections", "Exhibits",
and "Schedules" are to the Articles, Sections, Exhibits, and Schedules of and to
this Agreement, (c) headings used in this Agreement and each other Loan Document
are for convenience only and shall not be used in connection with the
interpretation of any provision hereof or thereof, (d) references to any Person
include that Person's heirs, personal representatives, successors, and permitted
assigns, that Person as a debtor-in-possession, and any receiver, trustee,
liquidator, conservator, custodian, or similar party appointed for such Person
or all or substantially all of its assets, (e) references to any Law include
every amendment or restatement to it, rule and regulation adopted under it, and
successor or replacement for it, and (f) references to a particular Loan
Document include each amendment, modification, extension, or supplement to or
restatement of it made in accordance with this Agreement and such other Loan
Document.

Loan Agreement - Page 14

<PAGE>

                                   ARTICLE II

                                 REVOLVING LOAN

         Section 2.1 Revolving Advances. Subject to the terms and conditions
herein set forth, Bank agrees to make advances to Borrower from time to time on
any Business Day during the period from the Closing Date to the Maturity Date
(the "Revolving Advances"), in an aggregate amount not to exceed at any time
outstanding the Revolving Commitment (such outstanding Revolving Advances
collectively referred to herein as the "Revolving Loan"). Bank shall have no
obligation to make a Revolving Advance (a) to the extent the amount of the
requested Revolving Advance plus all outstanding Revolving Advances exceeds the
Revolving Commitment, (b) to the extent the amount of a requested Acquisition
Advance exceeds 90% of the Acquisition Consideration for such Acquisition, and
(c) to the extent the amount of a requested Corporate Advance plus all
outstanding Corporate Advances exceeds $5,000,000 in the aggregate. Borrower's
obligation to pay the Revolving Advances shall be evidenced by the Note and,
except for the Corporate Advances, shall be secured by the Collateral. Within
the limits set forth in this Section 2.1, Borrower may borrow, prepay pursuant
to Section 2.3 and reborrow.

         Section 2.2 Procedures for Requesting Revolving Advances. Borrower
shall comply with the following procedures in requesting Revolving Advances:

         (a)      Time for Requests. Borrower shall submit a Request for each
(i) Acquisition Advance of less than $12,000,000 and Corporate Advance not later
than 11:00 a.m. on the Business Day which is the date such Revolving Advance is
to be made, and (ii) Acquisition Advance equal to or in excess of $12,000,000,
not later than at least twenty (20) days before the date such requested
Revolving Advance is to be made. Each such Request shall be effective upon
receipt by Bank, shall be in writing signed by two (2) Authorized
Representatives of Borrower or persons whom Bank reasonably believes to be an
Authorized Representative of Borrower, and shall specify whether the requested
Revolving Advance shall be an Acquisition Advance or a Corporate Advance. Bank
may, in its sole discretion, accept and honor telephonic or electronic
(including facsimile) requests for Revolving Advances, and if Bank does accept
and honor any telephonic or electronic request, it may require written
confirmation thereof from Borrower. Borrower shall repay all Revolving Advances
even if Bank does not receive such confirmation and even if the person
requesting a Revolving Advance was not in fact authorized to do so. Any request
for a Revolving Advance, whether written or telephonic, shall be deemed to be a
representation by Borrower that the applicable conditions set forth in Article V
have been satisfied as of the time of the request.

         (b)      Disbursement. Upon fulfillment of the applicable conditions
set forth in Article V, Bank shall disburse the proceeds of the requested
Revolving Advance by crediting the same to Borrower's demand deposit account
maintained with Bank unless Bank and Borrower shall agree in writing to another
manner of disbursement.

         Section 2.3 Voluntary Prepayments. Borrower may, upon notice to Bank,
at any time or from time to time voluntarily prepay the Revolving Loan in whole
or in part without premium

Loan Agreement - Page 15

<PAGE>

or penalty; provided that (i) such notice must be received by Bank not later
than 11:00 a.m. of the date of prepayment; (ii) any prepayment of the Revolving
Loan shall be in a principal amount of $100,000 or a whole multiple thereof (or,
in each case if less, the entire principal amount thereof then outstanding).
Each such notice shall specify the date and amount of such prepayment. If such
notice is given by Borrower, Borrower shall make such prepayment and the payment
amount specified in such notice shall be due and payable on the date specified
therein.

         Section 2.4 Mandatory Prepayments. On or before any date of any
reduction of the Revolving Commitment, Borrower shall prepay Revolving Loans in
an amount necessary to reduce the sum of Revolving Loans to an amount less than
or equal to the Revolving Commitment as so reduced.

         Section 2.5 Repayment of the Revolving Loan. To the extent not
otherwise required to be paid earlier as provided herein, Borrower shall repay
the Revolving Loan on the Maturity Date.

         Section 2.6 Interest.

         (a)      Subject to the provisions of subsection (b) below, each
Revolving Advance shall bear interest on the outstanding principal amount
thereof at a rate per annum equal to the lesser of (x) the Highest Lawful Rate
or (y) the Rate.

         (b)      If any amount payable by Borrower under any Loan Document is
not paid when due (giving effect, however, to any applicable grace periods),
whether at stated maturity, by acceleration or otherwise, such amount shall
thereafter bear interest at a fluctuating interest rate per annum at all times,
to the fullest extent permitted by applicable Laws, equal to the lesser of (x)
the Default Rate or (y) the Highest Lawful Rate. Furthermore, upon the request
of Bank, while any Default exists, Borrower shall pay interest on the principal
amount of all outstanding Obligations hereunder at a fluctuating interest rate
per annum at all times, to the fullest extent permitted by applicable Laws,
equal to lesser of (x) the Default Rate or (y) the Highest Lawful Rate. Accrued
and unpaid interest on past due amounts (including interest on past due
interest) shall be due and payable upon demand.

         (c)      Interest on each Revolving Advance shall be due and payable in
arrears on each Interest Payment Date applicable thereto and at such other times
as may be specified herein. Interest hereunder shall be due and payable in
accordance with the terms hereof before and after judgment, and before and after
the commencement of any proceeding under any Debtor Relief Law.

         Section 2.7 Computation of Interest. Subject to Section 10.15, all
computations of interest for Revolving Advances shall be made on the basis of a
year of 360 days and the actual number of days elapsed.

         Section 2.8 Payments Generally.

         (a)      All payments to be made by Borrower shall be made without
condition or deduction for any counterclaim, defense, recoupment, setoff or
Taxes. Except as otherwise

Loan Agreement - Page 16

<PAGE>

expressly provided herein, all payments by Borrower hereunder shall be made to
Bank, at the Principal Office of Bank in Dollars and in immediately available
funds not later than 11:00 a.m. on the date specified herein. All payments
received by Bank after 2:00 p.m. shall be deemed received on the next succeeding
Business Day and any applicable interest or fee shall continue to accrue.

         (b)      If any payment to be made by Borrower shall come due on a day
other than a Business Day, payment shall be made on the next following Business
Day, and such extension of time shall be reflected in computing interest or
fees, as the case may be.

         (c)      Nothing herein shall be deemed to obligate Bank to obtain the
funds for any Revolving Advance in any particular place or manner or to
constitute a representation by Bank that it has obtained or will obtain the
funds for any Revolving Advance in any particular place or manner.

         (d)      Borrower agrees to pay any and all present or future stamp,
court or documentary taxes and any other excise or property taxes or charges or
similar levies which arise from any payment made under any Loan Document or from
the execution, delivery, performance, enforcement or registration of, or
otherwise with respect to, any Loan Document.

         Section 2.9 Termination of Revolving Commitment. (a) Borrower shall
have the right to terminate the Revolving Commitment at any time.

         (b)      On the Maturity Date, the Revolving Commitment shall
automatically reduce to zero.

         (c)      Upon any termination of the Revolving Commitment pursuant to
this Section 2.9, Borrower shall immediately make a prepayment of Revolving
Loans in accordance with Section 2.4 unless otherwise mutually agreed upon by
Borrower and Bank. Borrower shall not have any right to rescind any termination.
Once terminated, the Revolving Commitment may not be reinstated.

                                  ARTICLE III

                                   COLLATERAL

         Section 3.1 Collateral. As collateral security for the prompt payment
and performance of the Obligations, Bank shall be granted Liens and security
interests (collectively, the "Security Interests") on, in, and to the following
described Collateral (herein so called):

         (a)      any and all shares of capital stock of any Subsidiary
                  hereafter acquired or formed by Borrower using all or a
                  portion of proceeds from any Revolving Advance, which shall be
                  not less than 100% of issued and outstanding capital stock or
                  other equity interests of such entity;

         (b)      proceeds of assignment of proceeds of the Surplus Debentures;
                  and

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         (c)      any and all interest, dividends and distributions with respect
                  to, and any and all proceeds arising from or by virtue of the
                  sale or other disposition of, or from the collection of, the
                  Collateral described in paragraphs (a) through (b) above.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

         Borrower hereby represents and warrants to Bank as follows:

         Section 4.1 Existence and Authority. Each of Borrower and its
Subsidiaries (a) is duly organized, validly existing, and in good standing under
the Laws of its state of organization recited herein, (b) is duly qualified to
transact business and is in good standing in each jurisdiction where the nature
and extent of its assets, properties, business, and operations require the same
and where the failure to so qualify and/or be in good standing could have a
Material Adverse Effect, and (c) possesses all requisite authority and power,
and all licenses, permits, and franchises, to conduct its business as presently
conducted and to own its properties and assets. Each of Borrower and its
Subsidiaries possesses all requisite corporate authority and power to execute,
deliver, and comply with the terms of this Agreement and the other Loan
Documents to which it is a party.

         Section 4.2 Corporate Authorization. All requisite corporate action to
authorize the execution and delivery of the Loan Documents to be executed by
Borrower and its Subsidiaries, the consummation of all transactions contemplated
thereby, and the performance and discharge by Borrower and its Subsidiaries of
their respective obligations thereunder has been duly taken by Borrower and its
Subsidiaries; no authorization, approval, consent, or notice under the
provisions of the articles of incorporation or bylaws, or any amendments
thereof, of Borrower or its Subsidiaries, or under any other relevant
agreements, documents, instruments or applicable Law or by any additional party
or Governmental Authority is required with respect to the execution and delivery
of such Loan Documents, the consummation of all transactions contemplated
thereby or the performance and discharge by Borrower and its Subsidiaries of
their respective obligations thereunder, except such consents as have been
obtained; and all of such Loan Documents will, upon execution and delivery,
constitute, legal, valid and binding obligations of Borrower and its
Subsidiaries, as the case may be, enforceable against each of them in accordance
with their respective terms. The Surplus Debenture constitutes the legal, valid
and binding obligation of CICA, enforceable against CICA in accordance with its
terms and each other Surplus Debenture hereafter executed and delivered in
connection with an Acquisition Advance, will, when so executed, constitute the
legal, valid and binding of obligation of CICA under such Surplus Debenture.

         Section 4.3 Compliance with Laws and Documents. Neither Borrower nor
any Subsidiary is, nor will the execution, delivery, or performance of or
compliance with the terms of, the Loan Documents cause Borrower or any
Subsidiary to be, in violation of any Laws or provisions of their respective
articles of incorporation or bylaws, as amended, in any respect which could have
any effect whatsoever upon the validity, performance, or enforceability of any
of the terms of the Loan Documents or which could have a Material Adverse
Effect. The

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<PAGE>

performance by Borrower or any Subsidiary of any or all of the terms and
provisions contained herein or in any of the other Loan Documents will not
violate the provisions of any agreement to which Borrower or any Subsidiary is a
party the effect of which could have a Material Adverse Effect.

         Section 4.4 Litigation. Except as set forth on Schedule 4.4, there is
no Litigation pending or, to the knowledge of Borrower, threatened against
Borrower or any Subsidiary, and there are no outstanding or unpaid judgments,
penalties or assessments against Borrower or any Subsidiary, which in either
event could have a Material Adverse Effect.

         Section 4.5 Taxes. Each of Borrower and the Subsidiaries has filed all
required Tax returns and reports and has paid, or adequately provided for the
payment of, all material Taxes imposed on any of them or upon any of their
respective assets, income, or franchises, other than (a) any such charges which
are currently payable without penalty or interest, and (b) Taxes being contested
in good faith and by appropriate proceedings diligently conducted.

         Section 4.6 Financial Statements. The Current Financials, heretofore
furnished to Bank, were prepared on a basis consistent with preceding periods
and fairly present the financial condition and results of operations of each of
Borrower and its Subsidiaries as of, and for the portion of the fiscal year
ending on, the date thereof. There were no material liabilities, direct or
indirect, fixed or contingent, of Borrower and its Subsidiaries as of the date
of the Current Financials which are not reflected therein or in the notes
thereto. Except for transactions directly related to, or specifically
contemplated by, this Agreement and transactions heretofore disclosed in writing
to Bank, there have been no material adverse changes in the financial condition
or operation of Borrower and its Subsidiaries from those shown in the Current
Financials since the date thereof, nor has Borrower and its Subsidiaries
incurred any material liability, direct or indirect, fixed, or contingent
(except contingent liabilities with respect to insurance policies issued in the
ordinary course of business).

         Section 4.7 Purpose of Loan. The proceeds of the Revolving Loan will be
used by Borrower only for the purposes described in the Recitals hereto.

         Section 4.8 Investment Company Act. Neither Borrower nor any Material
Subsidiary is an "investment company" or "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.

         Section 4.9 Properties. Borrower and the Material Subsidiaries have
good and marketable title to all their respective properties reflected on the
Current Financials, and except for the Permitted Liens, there is no Lien on any
asset of Borrower or any Material Subsidiary. There are no presently effective
financing statements of record in any jurisdiction covering any tangible or
intangible assets of Borrower or any Material Subsidiary. Borrower and the
Material Subsidiaries have in effect with respect to their properties and assets
insurance in such amounts and against such casualties and contingencies as is
customary in the case of businesses engaged in the same or a similar business or
having similar properties similarly situated.

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         Section 4.10 Subsidiaries. As of the Closing Date, Borrower has no
Subsidiaries other than as set forth on Schedule 4.10 and the corporate
structure and stock ownership of Borrower and its Subsidiaries is as set forth
on Schedule 4.12.

         Section 4.11 Compliance with Law. The business and operations of each
of Borrower and its Subsidiaries have been and are being conducted in accordance
with all applicable laws, rules and regulations of all Governmental Authorities
and Insurance Regulatory Authorities.

         Section 4.12 Capital Stock. As of the Closing Date, the authorized
capital stock and the issued and outstanding capital stock of Borrower and each
of its Material Subsidiaries is as designated on Schedule 4.12. All of the
issued and outstanding shares of capital stock of each such corporation are duly
authorized, validly issued, fully paid and nonassessable. Neither Borrower nor
any Subsidiary has granted or issued, or agreed to grant or issue, or reserved
for issuance, any options, warrants or similar rights to any Person to acquire
any shares or other securities convertible into capital stock other than (a) the
Shemano/Stonegate Warrants and (b) the Preferred Stock.

         Section 4.13 Existing Indebtedness. Except as disclosed in the Current
Financials or the notes thereto or on Schedule 4.13, neither Borrower nor any
Material Subsidiary is directly, indirectly, or contingently obligated with
respect to any Indebtedness.

         Section 4.14 Material Agreements. As of the Closing Date, Schedule 4.14
contains a true and complete description of all material written contracts,
agreements, commitments, and understandings to which Borrower or any Material
Subsidiary is a party, by which Borrower or any Material Subsidiary is directly
or indirectly bound, or to which any of the assets of Borrower or any Material
Subsidiary may be subject, except insurance policies or contracts issued, or
reinsurance contracts entered into, by any Material Subsidiary in the ordinary
course of business ("Material Agreements").

         Section 4.15 Insiders. Neither Borrower nor any Subsidiary nor any
Person having "control" (as that term is defined in 12 U.S.C. Section 375(b)(5)
or in regulations promulgated pursuant thereto) of Borrower or any Subsidiary
is, an "executive officer", "director" or "principal shareholder" (as those
terms are defined in 12 U.S.C. Section 375(b) or in regulations promulgated
pursuant thereto) of Bank, of a bank holding company of which Bank is a
subsidiary, or of any subsidiary of a bank holding company of which Bank is a
subsidiary.

         Section 4.16 ERISA.

         (a)      Each Employee Plan has been maintained and administered in
substantial compliance with the applicable requirements of the Code and ERISA.
No circumstances exists with respect to any Employee Plan that could have a
Material Adverse Effect.

         (b)      With respect to each Pension Plan, (i) no accumulated funding
deficiency (within the meaning of Section 412(a) of the Code), whether waived or
unwaived, exists; (ii) the present value of accrued benefits (based on the most
recent actuarial valuation prepared for each such plan, if any, in accordance
with ongoing assumptions) does not exceed the current value of plan assets
allocable to such benefits by a material amount; (iii) no reportable event
(within the

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<PAGE>

meaning of Section 4043 of ERISA) has occurred other than a reportable event
with respect to which the 30-day notice requirement has been waived by
regulation; (iv) no uncorrected prohibited transactions (within the meaning of
Section 4975 of the Code) exist which could have a Material Adverse Effect and
for which there exists no statutory or regulatory exception; (v) to the extent
such plan is covered by PBGC, no material liability to the PBGC exists and no
circumstances exist that could reasonably be expected to result in any such
liability; and (vi) no material withdrawal liability (within the meaning of
Section 4201(a) of ERISA) exists and no circumstances exist that could
reasonably be expected to result in any such liability.

         (c)      As of the Closing Date, neither Borrower nor any Subsidiary
has any obligation under any Employee Plan to provide post-employment health
care benefits to any of its current or former employees, except as may be
required by Section 4980B of the Code or otherwise required by law.

         Section 4.17 Full Disclosure. There is no material fact that Borrower
has not disclosed to Bank which could have a Material Adverse Effect. Neither
the Financial Statements referenced in Section 4.6 hereof, nor any certificate
or statement delivered herewith or heretofore by Borrower or any Subsidiary to
Bank in connection with negotiation of this Agreement, contains any untrue
statement of a material fact or omits to state any material fact necessary to
keep the statements contained herein or therein from being misleading.

         Section 4.18 No Default. No Default and no event which, with the lapse
of time or notice or both could become a Default, has occurred and is
continuing, and neither Borrower nor any Subsidiary is in default under any
partnership agreement, indenture, indebtedness, promissory note, mortgage, deed
of trust, security agreement, lease, license, permit, franchise or other
obligation to which it is a party or by which it or its property is bound, which
default could have a Material Adverse Effect or result in any cancellation, loss
or forfeiture of any material right granted thereby or result in any material
penalty to Borrower or any Subsidiary.

         Section 4.19 Principal Office. The addresses of the principal office,
chief executive office, and principal place of business of Borrower and each
Material Subsidiary is as set forth on Schedule 4.19.

         Section 4.20 Licenses, Patents and Trademarks. Borrower and its
Material Subsidiaries own or possess all patents, trademarks, copyrights and
other industrial or intellectual property rights (whether granted by Law or
contract) and all Licenses and franchises which are necessary for the present
and planned future conduct of their respective businesses, without any known
conflict with, or violation of, the rights of others.

         Section 4.21 Insurance Licenses. Schedule 4.21 attached hereto lists,
as of the Closing Date, all of the jurisdictions in which any Material
Subsidiary holds active licenses (including, without limitation, licenses or
certificates of authority from applicable insurance departments), permits or
authorizations to transact insurance business (collectively, the "Licenses"). No
such License is the subject of a proceeding for suspension or revocation or any
similar proceedings, there is no sustainable basis known to Borrower or its
Material Subsidiaries for such a suspension or revocation, and to Borrower's or
such Material Subsidiary's knowledge no such

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<PAGE>

suspension or revocation has been threatened by any licensing authority.
Schedule 4.21 indicates the line or lines of insurance which each Material
Subsidiary is permitted to engage in with respect to each License therein
listed. No Material Subsidiary transacts any insurance business, directly or
indirectly, in any state in a manner or to an extent which would require it to
be licensed in such state under the Laws of such state, other than as specified
on Schedule 4.21 hereto.

         Section 4.22 No Assumed Names. Except as set forth on Schedule 4.22,
neither Borrower nor any Material Subsidiary does business under any name other
than its corporate name shown herein.

         Section 4.23 Sufficiency of Capital. Borrower and its Subsidiaries on a
consolidated basis are, and Borrower and each Material Subsidiary on an
individual basis is, and after consummation of the transactions contemplated by
this Agreement and after giving effect to the Obligations incurred and Security
Interests created by such companies in connection herewith will be, Solvent. As
used in this Section 4.23, "Solvent" means, with respect to a particular date,
that on such date (i) the fair value of the property of such company is greater
than the total amount of the fair value of liabilities, including, without
limitation, contingent liabilities, of such company, (ii) the present fair
salable value of the assets of such company is not less than the amount that
will be required to pay the probable liability of such company on its debts as
they become absolute and matured, (iii) such company is able to realize upon its
assets and pay its debts and other liabilities, contingent obligations and other
commitments as they mature in the normal course of business, (iv) such company
does not intend to, nor believes that it will, incur debts or liabilities beyond
such company's ability to pay as such debts and liabilities mature, and (v) such
company is not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such company's property would constitute
unreasonably small capital after giving due consideration to the prevailing
practice in the industry in which such company is engaged. In computing the
amount of contingent liabilities at any time, it is intended that such
liabilities will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or material liability.

                                    ARTICLE V

                              CONDITIONS PRECEDENT

         Section 5.1 Conditions Precedent to Revolving Advances on the Closing
Date. Bank will not be obligated to make the initial Revolving Advance until
Borrower has delivered, or has caused to be delivered, to Bank, or Bank
otherwise receives, on or prior to the Closing Date, the following described
documents, certificates, evidences, opinions, and other instruments in form and
substance satisfactory to Bank:

         (a)      Articles of Incorporation. A copy of the articles of
                  incorporation or organization, and all amendments thereto, of
                  each of Borrower and its Material Subsidiaries, accompanied by
                  certificates that such copy is correct and complete issued by
                  (i) the appropriate governmental official of the state of its
                  organization bearing a

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<PAGE>

                  Current Date and (ii) the secretary of each such corporation
                  or organization dated as of the Closing Date.

         (b)      Bylaws. A copy of the bylaws, and all amendments thereto, of
                  each of Borrower and its Material Subsidiaries, accompanied by
                  a certificate that each such copy is correct and complete,
                  dated the Closing Date, executed by the secretary of such
                  corporation.

         (c)      Good Standing and Authority. Certificates of the appropriate
                  governmental officials of such jurisdictions as Bank may
                  request, each bearing a Current Date, to the effect that
                  Borrower and its Material Subsidiaries are in good standing
                  with respect to payment of franchise and similar Taxes and are
                  duly qualified to transact business therein, accompanied by
                  the certificate of the secretary of each such corporation,
                  dated the Closing Date, that such certificates are true and
                  correct.

         (d)      Incumbency. A certificate of incumbency of all officers of
                  Borrower and its Material Subsidiaries who will be authorized
                  to execute or attest any of the Loan Documents to which
                  Borrower or such Subsidiary is a party on behalf of such
                  companies, dated the Closing Date, executed by their
                  respective presidents and secretaries.

         (e)      Resolutions. A copy of resolutions approving the Loan
                  Documents and authorizing the transactions contemplated in
                  this Agreement, duly adopted by the boards of directors of
                  Borrower, accompanied by a certificate of the secretary of
                  each such company dated the Closing Date, that such copy is a
                  true and correct copy of resolutions duly adopted at a meeting
                  of, or by unanimous written consent of, the board of directors
                  of such company and that such resolutions have not been
                  amended, modified, or revoked in any respect, and are in full
                  force and effect as of the Closing Date.

         (f)      Assumed Name Certificate. If Borrower or any Material
                  Subsidiary is engaged in business using an assumed name, a
                  certified copy of the certificate of assumed name, with
                  evidence that such certificate was properly filed in the
                  appropriate public office of the applicable jurisdiction in
                  which Borrower or such Material Subsidiary is engaged in
                  business using the assumed name.

         (g)      Opinion of Counsel. The opinion of counsel to Borrower and its
                  Material Subsidiaries satisfactory in form and substance to
                  Bank.

         (h)      Note. The Note, duly executed by Borrower, properly completed,
                  dated the Closing Date.

         (i)      Security Agreement. The Security Agreement, properly executed
                  by Borrower, and related UCC financing statements.

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<PAGE>

         (j)      UCC Searches. Searches of the Uniform Commercial Code, tax
                  lien and other records as Bank may require.

         (k)      Financing Statements. Evidence that Uniform Commercial Code
                  financing statements in proper form executed by all proper
                  parties have been filed in all necessary filing offices.

         (l)      Priority. Evidence that the Security Interests are of first
                  priority.

         (m)      Regulatory Approvals. Evidence that all consents, licenses and
                  approvals of Governmental Authorities required in connection
                  with the execution, delivery, performance, validity and
                  enforceability of this Agreement and, each of the other Loan
                  Documents have been obtained, including, without limitation,
                  any necessary approvals for the issuance of the Surplus
                  Debenture.

         (n)      Other Documents. Such other documents, opinions, certificates,
                  agreements, instruments, and evidences as Bank may reasonably
                  request.

         Section 5.2 Conditions Precedent to All Revolving Advances. In addition
to the conditions precedent in Section 5.1, the obligation of Bank to make each
Revolving Advance shall be subject to the conditions precedent that:

         (a)      the representations and warranties contained in Article IV are
                  correct on and as of the date of such Revolving Advance as
                  though made on and as of such date, except to the extent that
                  such representations and warranties relate solely to an
                  earlier date; and

         (b)      no event has occurred and is continuing, or would result from
                  such Revolving Advance which constitutes a Default or which,
                  with the lapse of time or notice or both, could become a
                  Default.

         Section 5.3 Conditions Precedent to All Acquisition Advances. In
addition to the conditions precedent in Sections 5.1 and 5.2, the obligations of
Bank to make each Acquisition Advance shall be subject to the conditions
precedent that Bank shall receive prior to or on the date of such Acquisition
Advance, an assignment of proceeds of a Surplus Debenture in at least the amount
of such Acquisition Advance, any amendments or supplements to the Security
Agreement required by Bank, and evidence that the Acquisition to which such
requested Acquisition Advance relates has been approved by the board of
directors or other governing body of the Person being acquired.

         Section 5.4 Conditions Precedent to All Acquisition Advances in Excess
of $12,000,000. In addition to the conditions precedent in Sections 5.1, 5.2 and
5.3, the obligation of Bank to make each Acquisition Advance equal to or in
excess of $12,000,000 shall be subject to the conditions precedent that (a) Bank
shall have given its prior written consent to such Acquisition;

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<PAGE>

         (a)      at least twenty (20) days prior to the requested Acquisition
Advance, Bank shall have received copies of the acquisition documents; and

         (b)      Bank shall have received pro forma Financial Statements of
Borrower (prepared in accordance with GAAP) which take into account the effects
of the applicable Acquisition, and which demonstrate to the satisfaction of Bank
that no Default shall exist after giving effect thereto.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

         Unless Bank shall otherwise consent in writing, until payment and
performance in full of the Obligations and termination of the Revolving
Commitment, Borrower covenants and agrees with Bank that it will and will cause
each Subsidiary to, directly or indirectly:

         Section 6.1 Proceeds. Use the proceeds of the Revolving Loan for proper
corporate purposes and as represented and warranted herein.

         Section 6.2 Reporting Requirements. Deliver or cause to be delivered to
Bank:

         (a)      as soon as available, but in any event within 120 days after
                  the end of each fiscal year of Borrower, a consolidated and
                  consolidating balance sheet of Borrower and its Subsidiaries
                  as at the end of such fiscal year, and the related
                  consolidated and consolidating statements of profit and loss,
                  and reconciliation of surplus, and cash flows for such fiscal
                  year, audited and accompanied by a report and opinion of an
                  independent certified public accountant of nationally
                  recognized standing reasonably acceptable to Bank, which
                  report and opinion shall be prepared in accordance with GAAP
                  and shall not be subject to any qualifications or exceptions,
                  and accompanied by a certificate of such accountants that, in
                  the course of their examination necessary for their
                  certification of the foregoing (other than with respect to
                  consolidating statements), they have not obtained knowledge of
                  any Default or unmatured Default, or, if in the opinion of
                  such accountants any Default or unmatured Default shall exist,
                  stating the nature and status thereof; and

         (b)      as soon as available, but in any event within 60 days after
                  the end of the first three (3) fiscal quarters of each fiscal
                  year of Borrower, a consolidated and consolidating balance
                  sheet of Borrower and its Subsidiaries as at the end of each
                  such fiscal quarter, and the related consolidated and
                  consolidating statements of profit and loss, and
                  reconciliation of surplus, and cash flows for each such fiscal
                  quarter and for the portion of Borrower's fiscal year then
                  ended, all in reasonable detail and certified by the chief
                  financial officer or chief accounting officer of Borrower as
                  fairly presenting the financial condition, results of
                  operations and cash flows of Borrower and its Subsidiaries in
                  accordance with GAAP, subject only to normal year-end audit
                  adjustments and the absence of footnotes;

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<PAGE>

         (c)      as soon as available, but in any event on or before April 1
                  following the end of each fiscal year of each Material
                  Subsidiary that is an Insurance Subsidiary, copies of each
                  Annual Statement that such companies have filed with or
                  submitted to their respective domiciliary Insurance Regulatory
                  Authorities, all such statements to be prepared in accordance
                  with SAP consistently applied throughout the periods reflected
                  therein, and accompanied by a certificate of a responsible
                  financial official of the appropriate company to the effect
                  that such Annual Statements present fairly the financial
                  condition and results of operations of each such company;

         (d)      as soon as available, but in any event on or before June 1
                  following the end of each fiscal year of each of Borrower and
                  its Material Subsidiaries that are Insurance Subsidiaries,
                  copies of reports certified by an independent certified public
                  accountant reasonably acceptable to Bank on a SAP basis of any
                  certifications required by any Governmental Authority;

         (e)      promptly after the same are available, copies of each annual
                  report, proxy or financial statement or other report or
                  communication sent to the stockholders of Borrower or any of
                  its Material Subsidiaries, and copies of all annual, regular,
                  periodic and special reports and registration statements which
                  Borrower or any of its Material Subsidiaries may file or be
                  required to file with the Securities and Exchange Commission
                  under Section 13 or 15(d) of the Securities Exchange Act of
                  1934, and not otherwise required to be delivered to Bank
                  pursuant hereto;

         (f)      promptly, notice of any material change in accounting policies
                  or financial reporting practices by Borrower or any Material
                  Subsidiary;

         (g)      promptly, notice of the occurrence of any ERISA Event;

         (h)      as soon as available, and in any event within 60 days after
                  the end of each fiscal year of Borrower, updated Schedule 4.14
                  and 4.21;

         (i)      promptly upon any Acquisition or formation of a new Subsidiary
                  of Borrower, updated Schedules 4.10, 4.12, 4.14 and 4.21; and

         (j)      promptly, such additional information regarding the business,
                  financial or corporate affairs of Borrower or any Subsidiary
                  as Bank may from time to time request.

         Section 6.3 Insurance Matters. Upon Bank's request, deliver to Bank,
and cause each Material Subsidiary to deliver to Bank, promptly after receipt
and/or becoming available, copies of (a) each material registration, filing or
submission made by or on behalf of any Material Subsidiary with any Insurance
Regulatory Authority, (b) each material examination and/or audit report or other
similar report submitted to any Material Subsidiary by any Insurance Regulatory
Authority, (c) all material information which Bank may from time to time request
with respect to the nature or status of any material deficiencies or violations
reflected in any examination report or other similar report and (d) each
material report, order, direction, instruction, approval,

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<PAGE>

authorization, license or other notice which Borrower or any Material Subsidiary
may at any time receive from any Insurance Regulatory Authority.

         Section 6.4 Notice of Litigation or Changes in Fact. Promptly notify
Bank of (a) the existence and status of any Litigation or the occurrence of any
event which has resulted in, or could result in, a Material Adverse Effect, and
(b) the occurrence of a Default or any event which, with notice or lapse of time
or both, could become a Default.

         Section 6.5 Taxes. Duly pay and discharge all its material Taxes,
assessments, and governmental charges prior to the date on which penalties will
attach thereto, other than Taxes being contested in good faith by appropriate
proceedings for which adequate reserves have been established.

         Section 6.6 Payment of Debts. Pay all of its material Indebtedness
prior to the date on which penalties attach thereto.

         Section 6.7 Insurance. Maintain or cause to be maintained with
financially sound and reputable insurers, insurance with respect to its
properties and business against such casualties and contingencies and of such
types and in such amounts as is customary in the case of businesses engaged in
the same or a similar business or having similar properties similarly situated
with such deviations therefrom as may be agreed upon by Bank from time to time.

         Section 6.8 Maintenance of Existence. At all times maintain its
existence and good standing and authority to transact business in all
jurisdictions where the same may be necessary, and where the failure to do so
could have a Material Adverse Effect.

         Section 6.9 Maintenance of Assets. (a) Maintain in full force and
effect all material Rights, leases, franchise agreements, government clearances
or certificates and all other licenses or rights necessary to comply with all
Laws and other provisions applicable to the business of Borrower and its
Subsidiaries where a failure to do so could have a Material Adverse Effect, and
(b) maintain the assets used in their respective businesses in good repair,
working order, and condition (normal wear and tear excluded) and make such
proper repairs, renewals, and replacements as may be reasonably required except
where a failure to so maintain could reasonably be expected not to have a
Material Adverse Effect.

         Section 6.10 Expenses of Bank. Promptly pay all reasonable costs, fees,
and expenses paid or incurred by Bank incident to any of the Loan Documents
(including reasonable attorneys' fees and expenses incurred in connection with
the negotiation, preparation, and execution thereof and any amendment thereto
and the making of the Revolving Loan, whether or not the transactions
contemplated hereby are consummated) or the valid enforcement of the obligations
of Borrower, or the valid exercise of any Rights (including, but not limited to,
reasonable attorneys' fees and court costs), all of which shall be and become a
part of the Obligations.

         Section 6.11 Compliance with Material Agreements. Comply in all
material respects with all material contracts, leases, agreements, indentures,
mortgages or documents binding on it or affecting its properties or business
where the failure to do so could have a Material Adverse Effect.

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<PAGE>

         Section 6.12 Books and Records: Access. Give any representative of Bank
access during all reasonable business hours to, and permit such representative
to examine, copy or make excerpts from, any and all books, records and documents
of Borrower or any Subsidiary in the possession of such corporation and relating
to its affairs, and to inspect any of the properties of each such corporation.
Borrower and each Subsidiary will maintain complete and accurate books and
records of its transactions in accordance with GAAP and SAP, as appropriate

         Section 6.13 Compliance with Law. Comply with all Laws applicable to
the conduct of its business or operations except to the extent that the failure
to so comply could not have a Material Adverse Effect.

         Section 6.14 Authorization and Approvals. Promptly obtain from time to
time at its own expense, all such governmental licenses, authorizations,
consents, permits and approvals as may be required to enable it to comply with
its obligations hereunder and under the other Loan Documents and to carry on in
all material respects such corporation's business substantially as currently
conducted.

         Section 6.15 Information and Other Documents. Promptly deliver to Bank
such information (not otherwise required to be furnished herein) respecting the
business affairs, assets, and liabilities of Borrower and the Subsidiaries, and
such opinions, certifications, and documents, in addition to those herein
mentioned, as Bank may reasonably request.

         Section 6.16 Environmental Law Compliance. Promptly pay and discharge
when due all debts, claims, liabilities and obligations with respect to any
clean-up measures necessary for Borrower and its Subsidiaries to comply with
Applicable Environmental Laws affecting Borrower and its Subsidiaries.

         Section 6.17 Acquisitions and Subsidiaries. Upon acquisition of a
Subsidiary in an Acquisition or formation of a new Subsidiary, in either case
with proceeds of an Acquisition Advance, promptly (a) cause 100% of the
outstanding capital stock or equity interests of such acquired or newly-formed
Subsidiary to be pledged to Bank to secure the Obligations, (b) in the case of
an Insurance Subsidiary, cause CICA to duly execute and deliver a Surplus
Debenture to Borrower in at least the amount of any Acquisition Advance, a
portion of the proceeds of which were used to acquire such Insurance Subsidiary,
(c) deliver to Bank an assignment of the proceeds of such Surplus Debenture, (d)
deliver to Bank evidence that the Acquisition to which such requested
Acquisition Advance relates has been approved by the board of directors or other
governing body of the Person being acquired, (e) deliver to Bank evidence that
the Surplus Debenture has been approved by the appropriate Insurance Regulatory
Authorities, and (f) deliver to Bank of such other certificates, documents and
opinions as may reasonably be required by Bank with respect thereto.

         Section 6.18 Preferred Stock. Borrower shall deliver to Bank all
documents related to any proposed issuance of Preferred Stock by Borrower no
less than ten Business Days prior to any such issuance.

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                                   ARTICLE VII

                               NEGATIVE COVENANTS

         Unless Bank shall otherwise consent in writing, until payment and
performance in full of the Obligations and termination of the Revolving
Commitment, Borrower agrees with Bank that it will not, and will not permit any
Material Subsidiary to, directly or indirectly:

         Section 7.1 Indebtedness. Create or suffer to exist any direct,
indirect, fixed, or contingent liability for, or incur, any Indebtedness, except
(a) the Obligations, (b) Indebtedness set forth and described in the Current
Financials or on Schedule 4.13, (c) other Indebtedness to Bank, (d) the Surplus
Debentures, (e) current trade payables incurred in the ordinary course of
business, (f) liabilities of Insurance Subsidiaries under insurance policies and
reinsurance agreements issued in the ordinary course of business, (g) purchase
money Liens relating to the acquisition of machinery and equipment of Borrower
not exceeding the lesser of (i) $3,000,000 in the aggregate during any fiscal
year of Borrower or (ii) an amount that would cause the Aggregate Permitted
Exceptions during any fiscal year of Borrower to be equal to the Aggregate
Permitted Exceptions Amount, and (h) Indebtedness in respect of Capital Leases
not exceeding the lesser of (i) $3,000,000 in the aggregate during any fiscal
year of Borrower or (ii) an amount that would cause the Aggregate Permitted
Exceptions during any fiscal year of Borrower to be equal to the Aggregate
Permitted Exceptions Amount.

         Section 7.2 Negative Pledge. Grant, create, incur, permit or suffer to
exist any mortgage, pledge, security interest, conditional sale or other title
retention agreement, charge, encumbrance or other Lien upon any of its assets or
properties, except for Permitted Liens, or agree with any Person (other than in
this Agreement and the other Loan Documents) that they will not grant, create,
incur, permit or suffer to exist any Lien upon any of such assets.

         Section 7.3 Restrictions on Dividends. Directly or indirectly declare
or make, or incur any liability to make, any Dividend (other than Dividends
payable solely in capital stock and any Dividend paid by any Subsidiary of
Borrower to Borrower or to another Subsidiary of Borrower that is the direct
parent company of such Subsidiary), or any purchase or redemption of any
outstanding shares of stock or other equity securities issued by Borrower or any
Subsidiary.

         Section 7.4 Limitation on Liquidation, Merger, Consolidation, and
Disposition of Assets. At any time dissolve or liquidate, or consolidate with or
merge into or with any Person or Persons, or enter into or undertake any plan of
consolidation or merger with any Person or Persons, or convey, sell, lease (as
lessor) or otherwise transfer or dispose of all or, except in the ordinary
course of business, any portion of its property or assets (either by or through
a single transaction or through a series of separate but related transactions)
other than the disposition of obsolete or worn assets. Notwithstanding the
foregoing, any Subsidiary of Borrower (a) may be merged or consolidated with or
into (i) Borrower, provided that Borrower shall be the continuing or surviving
corporation, or (ii) CICA, provided that CICA shall be the continuing or
surviving corporation, and (b) may dispose of any or all of its assets (upon
voluntary liquidation or otherwise) to Borrower or CICA.

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         Section 7.5 No Assignment. Assign or transfer, or attempt to assign or
transfer, any of their respective Rights, duties, or obligations under any of
the Loan Documents.

         Section 7.6 Prepayments. Pay any of its Indebtedness prior to the date
on which such Indebtedness is due and payable in accordance with the terms
thereof, except (a) the Obligations, (b) other Indebtedness to Bank, and (c) the
Surplus Debenture, provided that any prepayment of the Surplus Debenture shall
within three (3) Business Days be applied by Borrower as a prepayment of the
Obligations.

         Section 7.7 Loans, Advances and Investments. Make any Investment in, or
otherwise acquire any interest in, or control of, another company, business or
Person, except for Permitted Investments.

         Section 7.8 Surplus Debenture. At any time amend, modify, cancel,
terminate or discharge, or waive compliance with, or fail to enforce, the terms
of any Surplus Debenture.

         Section 7.9 Leverage Ratio. Permit the Leverage Ratio to be greater
than 2.5 to 1.0 as of the end of any fiscal quarter of Borrower.

         Section 7.10 Fixed Charge Coverage Ratio. Permit the Fixed Charges
Coverage Ratio to be less than 3.00 to 1.0 as of the end of any fiscal quarter
of Borrower.

         Section 7.11 Funded Debt to Equity Ratio. Permit the Funded Debt to
Equity Ratio to be greater than 0.5 to 1.0 as of the end of any fiscal quarter
of Borrower.

         Section 7.12 Reinsurance. Permit any Material Subsidiary to enter into
any reinsurance agreements of any kind except for risk transfer reinsurance
agreements entered into in the ordinary course of business by such Subsidiaries
in accordance with their historical practice.

         Section 7.13 Transactions With Affiliates. Enter into or be a party to,
or permit any Subsidiary to enter into or be a party to, any transaction with
any Affiliate of Borrower or any Subsidiary, except (and in any event only if
such transactions are effected in accordance with all applicable insurance laws
and regulations governing transactions among insurance holding company system
affiliates, including obtaining any necessary consents or approvals of such
transaction by applicable Insurance Regulatory Authorities) (a) as provided
herein, (b) in the ordinary course of and pursuant to the reasonable
requirements of Borrower's or Subsidiary's business and upon fair and reasonable
terms that are no less favorable to Borrower or Subsidiary than would be
obtained at the time of such transaction in a comparable arm's length
transaction with a Person not an Affiliate of Borrower or Subsidiary and (c) in
respect of transactions with Affiliates of Borrower which do not meet the
requirements of clause (b) immediately preceding provided the aggregate amount
of such transactions do not exceed $1,000,000.

         Section 7.14 Business. Engage directly or indirectly through other
Persons in any material line of business substantially different from those
lines of business conducted by Borrower and its Subsidiaries on the date hereof
or any business substantially related or incidental thereto.

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<PAGE>

         Section 7.15 Limitation on Issuance of Capital Stock. Issue, sell or
otherwise dispose of any shares of its capital stock or other securities, or
rights, warrants or options to purchase or acquire any such shares or securities
other than (a) in respect of stock issued by Borrower (i) as stock Dividends,
(ii) in connection with the Shemano/Stonegate Warrants, (iii) as consideration
for an Acquisition provided that no Default has occurred and is continuing or
would result therefrom, and (iv) as part of a public offering provided that no
Default has occurred and is continuing or would result therefrom, and (b)
provided that no Default has occurred or is continuing or would result
therefrom, the Preferred Stock.

         Section 7.16 Limitation on Leases. Except in the ordinary course of its
business, enter into any agreement, or be or become liable under any agreement,
not in existence on the Closing Date, for the lease, hire or use of any real or
personal property except for leases or other agreements entered into after the
Closing Date for which the amount of liability does not exceed the lesser of (a)
$3,000,000 in the aggregate during any fiscal year of Borrower of (b) an amount
that would cause the Aggregate Permitted Exceptions during any fiscal year of
Borrower to be equal to the Aggregate Permitted Exceptions Amount.

         Section 7.17 Capital Expenditures. Make any capital expenditures
(excluding capital expenditures which are a portion of the purchase price of any
Acquisitions permitted hereunder) except in the ordinary course of business
consistent with past practices not to exceed in aggregate amount the lesser of
(a) $3,000,000 in the aggregate during any fiscal year of Borrower or (b) an
amount that would cause the Aggregate Permitted Exceptions during any fiscal
year of Borrower to be equal to the Aggregate Permitted Exceptions Amount.

         Section 7.18 Employee Plans.

         (a)      Permit or suffer to exist any circumstances with respect to
any Employee Plan that is likely to have a Material Adverse Effect. Borrower
shall use its best efforts to maintain and administer, and to cause each member
of its Controlled Group (as that term is defined in the Code) to maintain and
administer, any Employee Plan in accordance with the applicable requirements of
the Code and ERISA.

         (b)      With respect to any Pension Plan (i) permit any accumulated
funding deficiency (within the meaning of Section 412(a) of the Code), whether
waived or unwaived, to exist; (ii) permit the present value of accrued benefits
(based on the most recent actuarial valuation prepared for each such plan, if
any, in accordance with ongoing actuarial assumptions) to exceed the current
value of plan assets allocable to such benefits by a material amount; (iii)
permit any reportable event (within the meaning of Section 4043 of ERISA) to
occur, other than a reportable event with respect to which the 30-day notice
requirement has been waived by regulation; (iv) permit a prohibited transaction
(within the meaning of Section 4975 of the Code) for which there exists no
statutory or regulatory exception to occur which has or could have a Material
Adverse Effect; (v) incur any material liability to the PBGC; or (vi) incur any
material withdrawal liability (within the meaning of Section 4201(a) of ERISA).

Loan Agreement - Page 31

<PAGE>

         (c)      Incur a material obligation to provide post-employment health
care benefits to any of its current or former employees, except as may be
required by Section 4980B of the Code or otherwise required by law.

         Section 7.19 Subsidiaries. Own or acquire any Material Subsidiary that
is not an operating insurance company or a holding company for an operating
insurance company.

         Section 7.20 Use of Proceeds. Use the proceeds of any portion of the
Revolving Loan to directly or indirectly purchase or carry Margin Stock.

         Section 7.21 Composition of Corporate Group. Permit at any time (i) the
fair value of the assets of the Borrower and its Material Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, to be less than 75%
of the fair value of the assets of the Borrower and all of its Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, and (ii) the EBITDA,
calculated solely with respect to the Borrower and its Material Subsidiaries, as
determined on a consolidated basis in accordance with GAAP, to be less than 75%
of the EBITDA for the Borrower and all of its Subsidiaries, as determined on a
consolidated basis in accordance with GAAP.

         Section 7.22 Preferred Stock. Pay any obligations in respect of the
Preferred Stock other than in common stock of Borrower.

                                  ARTICLE VIII

                                     DEFAULT

         The term "Default," as used herein, means the occurrence of any one or
more of the following events (including the passage of time, if any, specified
therefor) provided that if any such event occurs and Bank subsequently agrees in
writing that it will not exercise any remedies hereunder as a result thereof,
the occurrence of such event shall no longer be deemed a "Default" hereunder
insofar as the state of facts giving rise to such event is concerned, but the
same shall not operate as or be deemed to be a waiver with respect to any
identical or similar state of facts which occurs thereafter:

         Section 8.1 Payment of Obligations. The failure or refusal of Borrower
to pay (a) principal of the Obligations, or any part thereof, as it becomes due
in accordance with the terms of the Loan Documents or (b) interest on the
Obligations, or any other amounts due hereunder, upon the earlier of (i) five
days after it becomes due in accordance with the terms of the Loan Documents, or
(ii) one Business Day after notice of such failure to Borrower by Bank.

         Section 8.2 Certain Covenants. The failure or refusal of Borrower or
any Subsidiary to punctually and properly perform, observe, and comply with any
covenant, agreement, or condition contained in Sections 6.1, 6.8, 6.12, or any
section of Article VII.

         Section 8.3 Default under Loan Documents. The occurrence of an event of
default or default as defined in and under any of the Loan Documents.

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         Section 8.4 Other Covenants. The failure or refusal of Borrower or any
Subsidiary to punctually and properly perform, observe, and comply with any
covenant, agreement, or condition contained in any of the Loan Documents (other
than covenants to pay the Obligations and those referenced in Section 8.2) and
such failure shall not have been remedied within the earlier of (a) 30 days
after such occurrence or (b) ten (10) days after notice of such failure to
Borrower by Bank.

         Section 8.5 Voluntary Debtor Relief. Borrower or any Subsidiary shall
(a) execute an assignment for the benefit of creditors, or (b) admit in writing
its inability to pay its debts generally as they become due, or (c) voluntarily
seek the benefit or benefits of any Debtor Relief Law or become a party to any
proceeding provided for by any Debtor Relief Law that could suspend or otherwise
affect any of the Rights of Bank granted in the Loan Documents.

         Section 8.6 Involuntary Proceedings. Borrower or any Subsidiary shall
involuntarily (a) have an order, judgment, or decree entered against it by any
Governmental Authority pursuant to any Debtor Relief Law that could suspend or
otherwise affect any of the Rights granted to Bank in any of the Loan Documents,
and such order, judgment, or decree is not permanently stayed or reversed within
30 days after the entry thereof, or (b) have a petition filed against it seeking
the benefit or benefits provided for by any Debtor Relief Law that would suspend
or otherwise affect any of the Rights granted to Bank in any of the Loan
Documents, and such petition is not discharged within 30 days after the filing
thereof.

         Section 8.7 Judgments. The entry of a final judgment or judgments, from
which no further appeal can be taken, against Borrower or any Subsidiary for the
payment of money in an aggregate amount in excess of $500,000 and the same shall
remain in effect and unstayed for a period of thirty (30) consecutive days.

         Section 8.8 Attachment. The attachment, sequestration, levy, tax lien,
forfeiture or similar proceeding against the Collateral or any of the material
assets of Borrower or any Material Subsidiary.

         Section 8.9 Material Agreements. The occurrence of a default by
Borrower or any Material Subsidiary under any Material Agreement.

         Section 8.10 Other Indebtedness. Borrower or any Material Subsidiary
shall fail to pay when due any principal of or interest on any Indebtedness
(other than the Obligations) of having an aggregate principal amount of
$500,000, and such failure shall continue beyond any applicable grace period, or
the maturity of any such Indebtedness shall have been accelerated, or any such
Indebtedness shall have been required to be prepaid, repurchased or redeemed
prior to the stated maturity thereof, or any event shall have occurred that (a)
permits (or, with the giving of notice or lapse of time or both, would permit)
any holder or holders of such Indebtedness or any person acting on behalf of
such holder or holders to accelerate the maturity thereof or require any such
prepayment, repurchase or redemption, or (b) causes an offer to prepay,
repurchase or redeem (automatically or otherwise) to be made.

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<PAGE>

         Section 8.11 Misrepresentation. The discovery by Bank that any material
statement, representation, or warranty in the Loan Documents or in any writing
ever delivered to Bank pursuant to the Loan Documents, is false, misleading, or
erroneous in any material respect.

         Section 8.12 Surplus Debenture Payments. Any Subsidiary liable on any
Surplus Debenture shall fail to make a scheduled payment on or otherwise comply
with the terms of the Surplus Debenture.

         Section 8.13 Action by Governmental Authority. (a) Any Governmental
Authority shall issue any order of conservation, supervision or any other order
of like effect relating to Borrower or any Subsidiary which could cause a
Material Adverse Effect, (b) any License shall be revoked, the revocation of
which could cause a Material Adverse Effect, or (c) any insurance commissioner
or any other insurance regulator of any state intervenes or takes any steps
towards intervening in the management of the business or operations of Borrower
or any Subsidiary, or Borrower or any Subsidiary facilitates or takes any
affirmative action with the intention of facilitating such intervention.

         Section 8.14 Full Force and Effect. This Agreement, or any other Loan
Document shall cease to be in full force and effect or shall be declared null
and void or the validity or enforceability thereof shall be contested or
challenged by Borrower or any Subsidiary or any of their respective
shareholders, or Borrower or any Subsidiary shall deny that it has any further
liability or obligation under any of the Loan Documents, or any lien or security
interest created by the Loan Documents shall for any reason cease to be a valid,
first priority perfected security interest in and lien upon any of the
Collateral covered thereby.

         Section 8.15 Stock Ownership. Borrower shall cease to own, legally and
beneficially, directly or indirectly (a) 100% of the outstanding capital stock
that constitutes Collateral, or (b) at any time 100% of the outstanding capital
stock of any Material Subsidiary not constituting Collateral, unless with
respect to clause (b) only 100% of the proceeds of such sale or other
disposition are promptly to Borrower.

         Section 8.16 Change of Control. The occurrence of a Change of Control.

         Section 8.17 Liquidation or Dissolution. Borrower or any Subsidiary
shall liquidate, dissolve, terminate or suspend its business operations or
otherwise fail to operate its business in the ordinary course, or sell or
attempt to sell all or substantially all of its assets, without Bank's prior
written consent.

         Section 8.18 Preferred Stock. Any Preferred Stock shall be issued in
which, or thereafter amended or modified in a manner such that, (a) the
obligations of Borrower with respect thereto are not subordinated to the payment
by Borrower of the Obligations or (b) the terms thereof affect Bank's rights
against Borrower or otherwise as a creditor.

Loan Agreement - Page 34

<PAGE>

                                   ARTICLE IX

                                 RIGHTS OF BANK

         Section 9.1 Remedies Upon Default. Should a Default occur and be
continuing, Bank may at its election, do any one or more of the following:

         (a)      Acceleration. Terminate the Revolving Commitment and/or
                  declare the entire unpaid balance of the Obligations and all
                  other Indebtedness of Borrower to Bank, or any part thereof,
                  immediately due and payable, whereupon it shall be due and
                  payable without any action by Bank, and without diligence,
                  presentment, demand, protest, notice of default, notice of
                  intention to accelerate, notice of acceleration or other
                  notice of any kind, all of which Borrower hereby expressly
                  waives, anything contained herein or in any other Loan
                  Document to the contrary notwithstanding; provided, however,
                  that upon the occurrence of a Default specified in Sections
                  8.5 or 8.6 hereof, such Obligations shall become due and
                  payable without declaration, notice, demand or any other
                  action by Bank and the Revolving Commitment shall
                  automatically terminate.

         (b)      Judgment. Reduce any claim to judgment.

         (c)      Foreclosure. Take such steps legally permissible as Bank may
                  deem appropriate to foreclose or otherwise enforce the
                  Security Interests and all Liens granted to Bank to secure
                  payment and performance of the Obligations.

         (d)      Rights. Exercise any and all Rights afforded by the Laws of
                  the State of Texas or any other jurisdiction as Bank shall
                  deem appropriate, including, but not limited to, the Uniform
                  Commercial Code of Texas or of such other jurisdiction, or by
                  any of the Loan Documents, or by Law or equity, or otherwise.

         Section 9.2 Cumulative Rights. All Rights available to Bank under the
Loan Documents shall be cumulative of and in addition to all other Rights
granted to Bank at Law or in equity, whether or not the Obligations are due and
payable and whether or not Bank shall have instituted any suit for collection,
foreclosure, or other action in connection with the Loan Documents.

         Section 9.3 Reimbursement of Expenses. Any reasonable expenses incurred
by Bank pursuant to the exercise of any Right provided herein shall become part
of the Obligations and shall bear interest at the rate of interest then in
effect under the Note from the date notice of such expense is sent by Bank until
the date repaid by Borrower.

         Section 9.4 Performance by Bank. Should any covenant, duty, or
agreement of Borrower fail to be performed in accordance with the terms of the
Loan Documents, Bank may, at its option, perform, or attempt to perform, such
covenant, duty, or agreement on behalf of Borrower. In such event, Borrower
shall, at the request of Bank, promptly pay any reasonable amount expended by
Bank in such performance or attempted performance to Bank at Bank's principal
office, together with interest thereon at the rate of interest then in effect
under the Note

Loan Agreement - Page 35

<PAGE>

from the date of such expenditure by Bank until paid. Notwithstanding the
foregoing, it is expressly understood that Bank does not assume and shall never
have, except by express written consent of Bank, any liability or responsibility
for the performance of any duties of Borrower hereunder, or under, or in
connection with all or any part of the Collateral.

         Section 9.5 Bank Not in Control. None of the covenants or other
provisions contained in this Agreement shall, or shall be deemed to, give Bank
the Rights or power to exercise control over the affairs and/or management of
Borrower, the power of Bank being limited to the Right to exercise the remedies
provided in the other subsections of this Article; provided that, if Bank
becomes the owner of any stock of any Person, whether through foreclosure or
otherwise, Bank shall be entitled to exercise such legal Rights as it may have
by being a shareholder of such Person.

         Section 9.6 Waivers. The acceptance by Bank at any time and from time
to time of part payment on the Obligations shall not be deemed to be a waiver of
any Default then existing. No waiver by Bank of any Default shall be deemed to
be a waiver of any other then existing or subsequent Default. No delay or
omission by Bank in exercising any Right under the Loan Documents shall impair
such Right or be construed as a waiver thereof or any acquiescence therein, nor
shall any single or partial exercise of any such Right preclude other or further
exercise thereof, or the exercise of any other Right under the Loan Documents or
otherwise.

         Section 9.7 Application of Proceeds. Any and all proceeds ever received
by Bank from any disposition of the Collateral, or any part thereof, or the
exercise of any other Right pursuant to the Loan Documents shall be applied by
Bank to the Obligations in the order and manner set forth herein,
notwithstanding any instructions to the contrary by Borrower; provided, that
Borrower shall remain liable to Bank for any deficiency.

                                    ARTICLE X

                                  MISCELLANEOUS

         Section 10.1 Notices. Except as otherwise permitted herein, whenever
this Agreement requires or permits any consent, approval, notice, request, or
demand from one party to another, the consent, approval, notice, request, or
demand must be in writing to be effective and shall be deemed to have been given
or made (a) when personally delivered, (b) if mailed, when sent by registered or
certified mail, postage prepaid, (c) if sent by a nationally recognized
overnight delivery service, on the next business day after delivery to such
service specifying delivery on the next business day or (d) if transmitted by
telex, telecopier or facsimile machine, on the day that such notice is
transmitted and received. The address of each party for the purposes hereof is
as follows:

                  BANK:             REGIONS BANK
                                    4314 West Braker Lane, Suite 100
                                    Austin, Texas 78759
                                    Attn: Todd A. Self
                                    Telecopy: (512) 372-2301

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<PAGE>

                                    with a copy to:

                                    Winstead Sechrest & Minick P.C.
                                    1201 Elm Street, Suite 5400
                                    Dallas, Texas 75202
                                    Attn: James R. Littlejohn
                                    Telecopy: (214) 745-5390

                  BORROWER:         Citizens, Inc.
                                    400 East Anderson Lane
                                    Austin, Texas 78752
                                    Attn: Mark A. Oliver, President
                                    Telecopy: (512) 836-9334

                                    with a copy to:

                                    Jones & Keller, P.C.
                                    1625 Broadway, 16th Floor
                                    Denver, Colorado 80202
                                    Attn: Reid A. Godbolt
                                    Telecopy: (303) 573-8133

         Section 10.2 GOVERNING LAW. THE LOAN DOCUMENTS ARE BEING EXECUTED AND
DELIVERED, AND ARE INTENDED TO BE PERFORMED, IN THE STATE OF TEXAS, AND THE
SUBSTANTIVE LAWS OF SUCH STATE AND THE APPLICABLE FEDERAL LAWS OF THE UNITED
STATES OF AMERICA SHALL GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT, AND
INTERPRETATION OF THE LOAN DOCUMENTS, UNLESS OTHERWISE SPECIFIED THEREIN. IT IS
AGREED THAT THE PROVISIONS OF CHAPTER 346 OF THE TEXAS FINANCE CODE SHALL NOT
APPLY TO THE REVOLVING LOAN, THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

         Section 10.3 Choice of Forum: Service of Process and Jurisdiction. Any
suit, action or proceeding against Borrower with respect to the Loan Documents
or any judgment entered by any court in respect thereof, may be brought in the
courts of the State of Texas, County of Travis, or in the United States courts
located in the State of Texas as Bank may elect and Borrower hereby submits to
the non-exclusive jurisdiction of such courts for the purpose of any such suit,
action or proceeding. Borrower hereby irrevocably consents to the service of
process in any suit, action or proceeding in said court by the mailing thereof
by Bank by registered or certified mail, return receipt requested, postage
prepaid, to Borrower's address set forth in this Agreement or any other address
provided by Borrower to Bank in writing. Borrower hereby irrevocably waives any
objections which it may now or hereafter have to the laying of venue of any
suit, action or proceeding arising out of or relating to the Loan Documents
brought in the courts located in the State of Texas, County of Travis, and
hereby further irrevocably waives any

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<PAGE>

claim that any such suit, action or proceeding brought in any such court has
been brought in any inconvenient forum.

         Section 10.4 Expenses; Indemnification.

         (a)      Borrower agrees to pay on demand all reasonable costs and
expenses of Bank in connection with the preparation, execution, delivery,
modification, and amendment of this Agreement, the other Loan Documents, and the
other documents to be delivered hereunder, including, without limitation, the
reasonable fees and expenses of counsel for Bank with respect thereto and with
respect to advising Bank as to its rights and responsibilities under the Loan
Documents. Borrower further agrees to pay on demand all costs and expenses of
Bank, if any (including, without limitation, reasonable attorneys' fees and
expenses and the cost of internal counsel), in connection with the enforcement
(whether through negotiations, legal proceedings, or otherwise) of the Loan
Documents and the other documents to be delivered hereunder.

         (b)      BORROWER AGREES TO INDEMNIFY AND HOLD HARMLESS BANK AND EACH
OF ITS AFFILIATES AND OFFICERS, DIRECTORS, EMPLOYEES, AGENTS, AND ADVISORS
(EACH, AN "INDEMNIFIED PARTY") FROM AND AGAINST ANY AND ALL CLAIMS, DAMAGES,
LOSSES, LIABILITIES, COSTS, AND EXPENSES (INCLUDING, WITHOUT LIMITATION,
REASONABLE ATTORNEYS' FEES) THAT MAY BE INCURRED BY OR ASSERTED OR AWARDED
AGAINST ANY INDEMNIFIED PARTY, IN EACH CASE ARISING OUT OF OR IN CONNECTION WITH
OR BY REASON OF (INCLUDING, WITHOUT LIMITATION, IN CONNECTION WITH ANY
INVESTIGATION, LITIGATION, OR PROCEEDING OR PREPARATION OF DEFENSE IN CONNECTION
THEREWITH) THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE REVOLVING LOAN, EXCEPT TO THE
EXTENT SUCH CLAIM, DAMAGE, LOSS, LIABILITY, COST, OR EXPENSE IS FOUND IN A
FINAL, NON-APPEALABLE JUDGMENT BY A COURT OF COMPETENT JURISDICTION TO HAVE
RESULTED FROM SUCH INDEMNIFIED PARTY'S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.
IN THE CASE OF AN INVESTIGATION, LITIGATION OR OTHER PROCEEDING TO WHICH THE
INDEMNITY IN THIS SECTION 11.4 APPLIES, SUCH INDEMNITY SHALL BE EFFECTIVE
WHETHER OR NOT SUCH INVESTIGATION, LITIGATION OR PROCEEDING IS BROUGHT BY
BORROWER, ITS DIRECTORS, SHAREHOLDERS OR CREDITORS OR AN INDEMNIFIED PARTY OR
ANY OTHER PERSON OR ANY INDEMNIFIED PARTY IS OTHERWISE A PARTY THERETO AND
WHETHER OR NOT THE TRANSACTIONS CONTEMPLATED HEREBY ARE CONSUMMATED. BORROWER
AGREES NOT TO ASSERT ANY CLAIM AGAINST BANK, ANY ASSIGNEE OF BANK, ANY OF THEIR
AFFILIATES, OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES,
ATTORNEYS, AGENTS, AND ADVISERS, ON ANY THEORY OF LIABILITY, FOR SPECIAL,
INDIRECT, CONSEQUENTIAL, OR PUNITIVE DAMAGES ARISING OUT OF OR OTHERWISE
RELATING TO THE LOAN DOCUMENTS, ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
THE ACTUAL OR PROPOSED USE OF THE PROCEEDS OF THE REVOLVING LOAN.

Loan Agreement - Page 38

<PAGE>

         (c)      Without prejudice to the survival of any other agreement of
Borrower hereunder, the agreements and obligations of Borrower contained in this
Section 10.4 shall survive the payment in full of the Revolving Loan and all
other amounts payable under this Agreement.

         Section 10.5 Right of Set-off. Upon the occurrence and during the
continuance of any Default under Sections 7.9, 7.10, 7.11 and 8.1, Bank (and
each of its affiliates) is hereby authorized at any time and from time to time,
to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by Bank (or any of its affiliates)
to or for the credit or the account of Borrower against any and all of the
obligations of Borrower now or hereafter existing under this Agreement and the
Note, irrespective of whether Bank shall have made any demand under this
Agreement or the Note and although such obligations may be unmatured. Bank
agrees promptly to notify Borrower after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of Bank under this Section
10.5 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that Bank may have.

         Section 10.6 Severability. If any provision of any of the Loan
Documents is held to be illegal, invalid, or unenforceable under present or
future Laws effective during the term thereof, such provision shall be fully
severable; the appropriate Loan Document shall be construed and enforced as if
such illegal, invalid, or unenforceable provision had never comprised a part
thereof; and the remaining provisions thereof shall remain in full force and
effect and shall not be affected by the illegal, invalid, or unenforceable
provision or by its severance therefrom. Furthermore, in lieu of such illegal,
invalid, or unenforceable provision there shall be added automatically as a part
of such Loan Documents a provision as similar in terms to such illegal, invalid,
or unenforceable provision as may be possible and be legal, valid, and
enforceable.

         Section 10.7 Survival. Except as specifically provided herein, all
representations, warranties, covenants and agreements of Borrower contained
herein shall continue in full force and effect so long as any part of the
Obligations remains unpaid and, except as otherwise indicated, shall not be
affected by any investigation made by any party.

         Section 10.8 Further Assurances. Borrower agrees that at any time and
from time to time, upon the written request of Bank, it will, and will cause its
Subsidiaries to, execute and deliver such further documents and do such further
acts and things as Bank may reasonably request in order to fully effect the
purpose of this Agreement and the other Loan Documents and to provide for the
payment of the principal and interest on the Obligations in accordance with the
terms and provisions of the Loan Documents.

         Section 10.9 Counterparts. This Agreement has been executed in a number
of identical counterparts, each of which, for all purposes, is to be deemed an
original, and all of which constitute, collectively, one agreement, but, in
making proof of this Agreement, it shall not be necessary to produce or account
for more than one such counterpart.

         Section 10.10 Parties Bound. This Agreement shall be binding upon, and
shall inure to the benefit of Borrower and Bank and their respective successors
and assigns; provided that

Loan Agreement - Page 39

<PAGE>

Borrower may not, without the prior written consent of Bank, assign any rights,
powers, duties, or obligations hereunder.

         Section 10.11 Amendments and Waivers. Any provision of this Agreement
or any other Loan Document may be amended or waived if, but only if, such
amendment or waiver is in writing and is signed by Borrower and Bank.

         Section 10.12 Form of Documents. Each agreement, document, instrument,
or other writing to be furnished to Bank under any provision of this Agreement
must be in form and substance satisfactory to Bank and its counsel.

         Section 10.13 Confidentiality. Bank agrees to keep confidential any
information furnished or made available to it by Borrower pursuant to this
Agreement that is marked confidential; provided that nothing herein shall
prevent Bank from disclosing such information (a) to any other Person if
reasonably incidental to the administration of the credit facility provided
herein, (b) as required by any law, rule, or regulation, (c) upon the order of
any court or administrative agency, (d) upon the request or demand of any
regulatory agency or authority, (e) that is or becomes available to the public
or that is or becomes available to Bank other than as a result of a disclosure
by Bank prohibited by this Agreement, (f) in connection with any litigation to
which such Bank or any of its affiliates may be a party, (g) to the extent
necessary in connection with the exercise of any remedy under this Agreement or
any other Loan Document, and (h) subject to provisions substantially similar to
those contained in this Section, to any actual or proposed participant or
assignee.

         Section 10.14 Exception to Covenants. Borrower shall not be deemed to
be permitted to take any action or fail to take any action which is permitted as
an exception to any of the covenants contained herein or which is within the
permissible limits of any of the covenants contained herein if such action or
omission would result in the breach of any other covenant contained herein.

         Section 10.15 No Usury Intended; Usury Savings Clause. In no event
shall interest contracted for, charged or received under this Agreement, the
Note or any other Loan Document, plus any other charges in connection herewith
or therewith which constitute interest exceed the Highest Lawful Rate permitted
by applicable Law. If Bank shall receive interest (including any charges or
other amounts which constitute interest) in an amount that exceeds the Highest
Lawful Rate, the excess interest shall be applied to the principal of the
Revolving Loan or, if it exceeds such unpaid principal, refunded to Borrower. In
determining whether the interest contracted for, charged, or received by Bank
exceeds the Highest Lawful Rate, Bank may, to the extent permitted by applicable
Law, (a) characterize any payment that is not principal as an expense, fee, or
premium rather than interest, (b) exclude voluntary prepayments and the effects
thereof, and (c) amortize, prorate, allocate, and spread in equal or unequal
parts the total amount of interest throughout the contemplated term of the
Obligations hereunder.

         Section 10.16 WAIVER OF JURY TRIAL. THE PARTIES TO THIS AGREEMENT
HEREBY WAIVE TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM BROUGHT BY
EITHER OF THE PARTIES HERETO

Loan Agreement - Page 40

<PAGE>

AGAINST THE OTHER TO ENFORCE THIS AGREEMENT, TO COLLECT DAMAGES FOR THE BREACH
OF THIS AGREEMENT, OR WHICH IN ANY OTHER WAY ARISE OUT OF, ARE CONNECTED TO OR
ARE RELATED TO THIS AGREEMENT OR THE SUBJECT MATTER OF THIS AGREEMENT. ANY SUCH
ACTION SHALL BE TRIED BY THE JUDGE WITHOUT A JURY.

         Section 10.17 ENTIRE AGREEMENT. THIS WRITTEN AGREEMENT, TOGETHER WITH
THE OTHER LOAN DOCUMENTS, REPRESENTS THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES HERETO. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN
THE PARTIES.

                   REMAINDER OF PAGE LEFT INTENTIONALLY BLANK

Loan Agreement - Page 41

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered by their duly authorized officers to be effective as of
the date first hereinabove written.

                                        BORROWER:

                                        CITIZENS, INC.

                                        By: /s/ Mark A. Oliver
                                            ------------------------------------
                                            Mark A. Oliver
                                            President

Loan Agreement - Page 42

<PAGE>

                                        BANK:

                                        REGIONS BANK

                                        By: /s/ Todd A. Self
                                            ------------------------------------
                                            Todd A. Self
                                            Vice President

Loan Agreement - Page 43
<PAGE>

                                                                  Winstead Draft
                                                        Dated: February 20, 2004

                               SECURITY AGREEMENT

         THIS SECURITY AGREEMENT ("Agreement") is made as of the 22nd day of
March, 2004, by Citizens, Inc., a Colorado corporation ("Debtor"), in favor of
REGIONS BANK, an Alabama banking corporation ("Bank"). Debtor hereby agrees with
Secured Party as follows:

         1.       DEFINITIONS. As used in this Agreement, the following terms
shall have the meanings indicated below:

                  (a)      The term "Code" shall mean the Uniform Commercial
         Code as in effect in the State of Texas on the date of this Agreement
         or as it may hereafter be amended from time to time.

                  (b)      The term "Collateral" shall mean (a) any and all
         shares of capital stock of any subsidiary acquired by Debtor after the
         date hereof using all or a portion of proceeds from any Revolving
         Advance as defined in and under the Loan Agreement, which shall be not
         less than 100% of issued and outstanding capital stock or other equity
         interests of such entity, (b) proceeds of the Surplus Debentures,
         whether or not such Surplus Debentures are specifically described on
         Schedule A attached hereto and made a part hereof, and as such Schedule
         may be amended upon the consent of Secured Party from time to time. The
         term Collateral, as used herein, shall also include (i) all
         certificates, instruments and/or other documents evidencing the
         foregoing, (ii) all renewals, replacements and substitutions of all of
         the foregoing, (iii) all Additional Property (as hereinafter defined),
         and (iv) all products and proceeds of all of the foregoing. The
         designation of proceeds does not authorize Debtor to sell, transfer or
         otherwise convey any of the foregoing property. The delivery at any
         time by Debtor to Secured Party of any property as a pledge to secure
         payment or performance of any indebtedness or obligation whatsoever
         shall also constitute a pledge of such property as Collateral
         hereunder.

                  (c)      The term "Debtor" shall mean Citizens, Inc., a
         Colorado corporation.

                  (d)      The term "Indebtedness" shall mean all indebtedness,
         obligations and liabilities of Debtor to Secured Party of any kind or
         character, now existing or hereafter arising, whether direct, indirect,
         related, unrelated, fixed, contingent, liquidated, unliquidated, joint,
         several or joint and several, and regardless of whether such
         indebtedness, obligations and liabilities may, prior to their
         acquisition by Secured Party, be or have been payable to or in favor of
         a third party and subsequently acquired by Secured Party (it being
         contemplated that Secured Party may make such acquisitions from third
         parties), including without limitation all indebtedness, obligations
         and liabilities of Debtor to Secured Party now existing or hereafter
         arising by note, draft, acceptance, guaranty, endorsement, letter of
         credit, assignment, purchase, overdraft, discount, indemnity agreement
         or otherwise, including without limitation that certain promissory note
         of Debtor, dated as of even date herewith, payable to the order of
         Secured Party in the original principal amount of $30,000,000, and any
         and all

<PAGE>

         amendments, renewals, extensions, modifications, supplements and
         restatements thereof, (ii) all accrued but unpaid interest on any of
         the indebtedness described in (i) above, (iii) all obligations of
         Debtor to Secured Party under any documents evidencing, securing,
         governing and/or pertaining to all or any part of the indebtedness
         described in (i) and (ii) above, (iv) all costs and expenses incurred
         by Secured Party in connection with the collection and administration
         of all or any part of the indebtedness and obligations described in
         (i), (ii) and (iii) above or the protection or preservation of, or
         realization upon, the collateral securing all or any part of such
         indebtedness and obligations, including without limitation all
         reasonable attorneys' fees, (v) all renewals, extensions, modifications
         and rearrangements of the indebtedness and obligations described in
         (i), (ii), (iii) and (iv) above, and all amounts that would be owed by
         Debtor under any Loan Document but for the fact that such amounts are
         unenforceable or not allowable due to the existence of a proceeding
         pursuant to any Applicable Bankruptcy Law (as hereafter defined)
         involving Debtor (including all such amounts that would become due or
         would be secured but for the filing of any petition, or the
         commencement of any proceeding, under Applicable Bankruptcy Laws.

                  (e)      The term "Loan Agreement" shall mean that certain
         Loan Agreement between Debtor, as the borrower, and Secured Party, as
         the lender, dated as of even date herewith, and any and all amendments,
         renewals, extensions, modifications, supplements and restatements
         thereof.

                  (f)      The term "Loan Documents" shall mean all instruments
         and documents evidencing, securing, governing, guaranteeing and/or
         pertaining to the Indebtedness, as such instruments and documents may
         be amended, renewed, extended, modified, supplemented, or restated from
         time to time.

                  (g)      The term "Obligated Party" shall mean any party other
         than Debtor who secures, guarantees and/or is otherwise obligated to
         pay all or any portion of the Indebtedness.

                  (h)      The term "Secured Party" shall mean Bank, its
         successors and assigns, including without limitation, any party to whom
         Bank, or its successors or assigns, may assign its rights and interests
         under this Agreement.

All words and phrases used herein which are expressly defined in Section 1.201,
Chapter 8 or Chapter 9 of the Code shall have the meaning provided for therein.
Other words and phrases defined elsewhere in the Code shall have the meaning
specified therein except to the extent such meaning is inconsistent with a
definition in Section 1.201, Chapter 8 or Chapter 9 of the Code.

         2.       SECURITY INTEREST. As security for the Indebtedness, Debtor,
for value received, hereby grants to Secured Party a continuing security
interest in the Collateral.

         3.       ADDITIONAL PROPERTY. Collateral shall also include the
following property (collectively, the "Additional Property") which Debtor
becomes entitled to receive or shall receive in connection with any Collateral:
(a) any stock certificate including without

Security Agreement - Page 2

<PAGE>

limitation, any certificate representing a stock dividend or any certificate in
connection with any recapitalization, reclassification, merger, consolidation,
conversion, combination of shares, stock split or spin-off; (b) any option,
warrant, subscription or right, whether as an addition to or in substitution of
any Collateral; (c) any dividends or distributions of any kind whatsoever,
whether distributable in cash, stock or other property; (d) any interest or
principal payments; and (e) any conversion or redemption proceeds; provided,
however, that until the occurrence of an Event of Default (as hereinafter
defined), Debtor shall be entitled to all cash dividends and all principal and
interest paid on the Collateral free of the security interest created under this
Agreement. All Additional Property received by Debtor shall be received in trust
for the benefit of Secured Party. All Additional Property and all certificates
or other written instruments or documents evidencing and/or representing the
Additional Property that is received by Debtor, together with such instruments
of transfer as Secured Party may request, shall immediately be delivered to or
deposited with Secured Party and held by Secured Party as Collateral under the
terms of this Agreement. If the Additional Property received by Debtor shall be
shares of stock or other securities, such shares of stock or other securities
shall be duly endorsed in blank or accompanied by proper instruments of transfer
and assignment duly executed in blank with, if requested by Secured Party,
signatures guaranteed by a bank or member firm of the New York Stock Exchange,
all in form and substance satisfactory to Secured Party. Secured Party shall be
deemed to have possession of any Collateral in transit to Secured Party or its
agent.

         4.       VOTING RIGHTS. As long as no Event of Default shall have
occurred hereunder, any voting rights incident to any stock or other securities
pledged as Collateral may be exercised by Debtor; provided, however, that Debtor
will not exercise, or cause to be exercised, any such voting rights, without the
prior written consent of Secured Party, if the direct or indirect effect of such
vote will result in an Event of Default hereunder.

         5.       MAINTENANCE OF COLLATERAL. Other than the exercise of
reasonable care to assure the safe custody of any Collateral in Secured Party's
possession from time to time, Secured Party does not have any obligation, duty
or responsibility with respect to the Collateral. Without limiting the
generality of the foregoing, Secured Party shall not have any obligation, duty
or responsibility to do any of the following: (a) ascertain any maturities,
calls, conversions, exchanges, offers, tenders or similar matters relating to
the Collateral or informing Debtor with respect to any such matters; (b) fix,
preserve or exercise any right, privilege or option (whether conversion,
redemption or otherwise) with respect to the Collateral unless (i) Debtor makes
written demand to Secured Party to do so, (ii) such written demand is received
by Secured Party in sufficient time to permit Secured Party to take the action
demanded in the ordinary course of its business, and (iii) Debtor provides
additional collateral, acceptable to Secured Party in its sole discretion; (c)
collect any amounts payable in respect of the Collateral (Secured Party being
liable to account to Debtor only for what Secured Party may actually receive or
collect thereon); (d) sell all or any portion of the Collateral to avoid market
loss; (e) sell all or any portion of the Collateral unless and until (i) Debtor
makes written demand upon Secured Party to sell the Collateral, and (ii) Debtor
provides additional collateral, acceptable to Secured Party in its sole
discretion; or (f) hold the Collateral for or on behalf of any party other than
Debtor.

         6.       REPRESENTATIONS AND WARRANTIES. Debtor hereby represents and
warrants the following to Secured Party:

Security Agreement - Page 3

<PAGE>

                  (a)      Due Authorization. The execution, delivery and
         performance of this Agreement and all of the other Loan Documents by
         Debtor have been duly authorized by all necessary corporate action of
         Debtor, to the extent Debtor is a corporation, or by all necessary
         partnership action, to the extent Debtor is a partnership.

                  (b)      Enforceability. This Agreement and the other Loan
         Documents constitute legal, valid and binding obligations of Debtor,
         enforceable in accordance with their respective terms, except as
         limited by bankruptcy, insolvency or similar laws of general
         application relating to the enforcement of creditors' rights and except
         to the extent specific remedies may generally be limited by equitable
         principles.

                  (c)      Ownership and Liens. Debtor has good and marketable
         title to the Collateral free and clear of all liens, security
         interests, encumbrances or adverse claims, except for the security
         interest created by this Agreement. No dispute, right of setoff,
         counterclaim or defense exists with respect to all or any part of the
         Collateral. Debtor has not executed any other security agreement
         currently affecting the Collateral and no financing statement or other
         instrument similar in effect covering all or any part of the Collateral
         is on file in any recording office except as may have been executed or
         filed in favor of Secured Party.

                  (d)      No Conflicts or Consents. Neither the ownership, the
         intended use of the Collateral by Debtor, the grant of the security
         interest by Debtor to Secured Party herein nor the exercise by Secured
         Party of its rights or remedies hereunder, will (i) conflict with any
         provision of (A) any domestic or foreign law, statute, rule or
         regulation, (B) the articles or certificate of incorporation, charter,
         bylaws or partnership agreement, as the case may be, of Debtor, or (C)
         any agreement, judgment, license, order or permit applicable to or
         binding upon Debtor or otherwise affecting the Collateral, or (ii)
         result in or require the creation of any lien, charge or encumbrance
         upon any assets or properties of Debtor or of any person except as may
         be expressly contemplated in the Loan Documents. Except as expressly
         contemplated in the Loan Documents, no consent, approval, authorization
         or order of, and no notice to or filing with, any court, governmental
         authority or third party is required in connection with the grant by
         Debtor of the security interest herein or the exercise by Secured Party
         of its rights and remedies hereunder.

                  (e)      Security Interest. Debtor has and will have at all
         times full right, power and authority to grant a security interest in
         the Collateral to Secured Party in the manner provided herein, free and
         clear of any lien, security interest or other charge or encumbrance.
         This Agreement creates a legal, valid and binding security interest in
         favor of Secured Party in the Collateral.

                  (f)      Location. Debtor's residence or chief executive
         office, as the case may be, and the office where the records concerning
         the Collateral are kept is located at its address set forth on the
         signature page hereof.

                  (g)      Solvency of Debtor. As of the date hereof, and after
         giving effect to this Agreement and the completion of all other
         transactions contemplated by Debtor at the

Security Agreement - Page 4

<PAGE>

         time of the execution of this Agreement, (i) Debtor is and will be
         solvent, (ii) the fair saleable value of Debtor's assets exceeds and
         will continue to exceed Debtor's liabilities (both fixed and
         contingent), (iii) Debtor is and will continue to be able to pay its
         debts as they mature, and (iv) if Debtor is not an individual, Debtor
         has and will have sufficient capital to carry on Debtor's businesses
         and all businesses in which Debtor is about to engage.

                  (h)      Nature of Ownership. Debtor is the registered owner
         of the securities pledged as Collateral and a certificate has been
         issued in Debtor's name to evidence Debtor's ownership in such
         securities.

                  (i)      Securities. Any certificates evidencing securities
         pledged as Collateral are valid and genuine and have not been altered.
         All securities pledged as Collateral have been duly authorized and
         validly issued, are fully paid and non-assessable, and were not issued
         in violation of the preemptive rights of any party or of any agreement
         by which Debtor or the issuer thereof is bound. No restrictions or
         conditions exist with respect to the transfer or voting of any
         securities pledged as Collateral, except as has been disclosed to
         Secured Party in writing. To the best of Debtor's knowledge, no issuer
         of such securities (other than securities of a class which are publicly
         traded) has any outstanding stock rights, rights to subscribe, options,
         warrants or convertible securities outstanding or any other rights
         outstanding entitling any party to have issued to such party capital
         stock of such issuer, except as has been disclosed to Secured Party in
         writing.

                  (j)      Chattel Paper, Documents and Instruments. The
         security interest in chattel paper, documents and instruments of Debtor
         granted hereunder is valid and genuine, and all such chattel paper,
         documents and instruments have only one original counterpart. No party
         other than Debtor or Secured Party is in actual or constructive
         possession of any such chattel paper, documents or instruments.

                  (k)      Surplus Debenture. No dispute, right of setoff,
         counterclaim or defense exists with respect to any Surplus Debenture.

         7.       AFFIRMATIVE COVENANTS. Debtor will comply with the covenants
contained in this Section at all times during the period of time this Agreement
is effective unless Secured Party shall otherwise consent in writing.

                  (a)      Ownership and Liens. Debtor will maintain good and
         marketable title to all Collateral free and clear of all liens,
         security interests, encumbrances or adverse claims, except for the
         security interest created by this Agreement and the security interests
         and other encumbrances expressly permitted by the other Loan Documents.
         Debtor will not permit any dispute, right of setoff, counterclaim or
         defense to exist with respect to all or any part of the Collateral.
         Debtor will cause any financing statement or other security instrument
         with respect to the Collateral to be terminated, except as may exist or
         as may have been filed in favor of Secured Party. Debtor will defend at
         its expense Secured Party's right, title and security interest in and
         to the Collateral against the claims of any third party.

Security Agreement - Page 5

<PAGE>

                  (b)      Inspection of Books and Records. Debtor will keep
         adequate records concerning the Collateral and will permit Secured
         Party and all representatives and agents appointed by Secured Party to
         inspect Debtor's books and records of or relating to the Collateral at
         any time during normal business hours, to make and take away
         photocopies, photographs and printouts thereof and to write down and
         record any such information.

                  (c)      Adverse Claim. Debtor covenants and agrees to
         promptly notify Secured Party of any claim, action or proceeding
         affecting title to the Collateral, or any part thereof, or the security
         interest created hereunder and, at Debtor's expense, defend Secured
         Party's security interest in the Collateral against the claims of any
         third party. Debtor also covenants and agrees to promptly deliver to
         Secured Party a copy of all written notices received by Debtor with
         respect to the Collateral, including without limitation, notices
         received from the issuer of any securities pledged hereunder as
         Collateral.

                  (d)      Delivery of Instruments and/or Certificates.
         Contemporaneously herewith, Debtor covenants and agrees to deliver to
         Secured Party any certificates, documents or instruments representing
         or evidencing the Collateral, together with Debtor's endorsement
         thereon and/or accompanied by proper instruments of transfer and
         assignment duly executed in blank with, if requested by Secured Party,
         signatures guaranteed by a bank or member firm of the New York Stock
         Exchange, all in form and substance satisfactory to Secured Party. If
         required by Secured Party, Debtor also covenants and agrees to
         cooperate with Secured Party in registering the pledge of the
         securities pledged as Collateral with the issuer of such securities.

                  (e)      Further Assurances. Debtor will from time to time at
         its expense promptly execute and deliver all further instruments and
         documents and take all further action necessary or appropriate or that
         Secured Party may request in order (i) to perfect and protect the
         security interest created or purported to be created hereby and the
         first priority of such security interest, (ii) to enable Secured Party
         to exercise and enforce its rights and remedies hereunder in respect of
         the Collateral, and (iii) to otherwise effect the purposes of this
         Agreement, including without limitation, executing and filing such
         financing or continuation statements, or any amendments thereto. Upon
         acquisition of a subsidiary of Debtor in an Acquisition or the
         formation of any new subsidiary using proceeds from any Revolving
         Advance, 100% of the capital stock or equity interests of such acquired
         or newly-formed subsidiary and the proceeds of any Surplus Debenture
         issued with respect to such Acquisition shall constitute Collateral
         under this Agreement. Debtor shall deliver promptly within 3 days of
         such Acquisition or formation of a new subsidiary (i) an amended
         Schedule A listing the name of such subsidiary, the class of capital
         stock or other equity interest issued, stock certificate numbers, if
         any, percentage of stock issued and outstanding, and the number of
         shares issued and outstanding, and describing the Surplus Debenture
         issued by CICA, and (ii) the original certificates evidencing the
         equity interests issued by the newly acquired or formed subsidiary
         together with duly executed stock powers and the original Surplus
         Debenture issued with respect to such new subsidiary.

                  (f)      Chattel Paper, Documents and Instruments. Debtor will
         take such action as may be requested by Secured Party in order to cause
         any chattel paper, documents or

Security Agreement - Page 6

<PAGE>

         instruments to be valid and enforceable and will cause all chattel
         paper to have only one original counterpart. Upon request by Secured
         Party, Debtor will deliver to Secured Party all originals of chattel
         paper, documents or instruments and will mark all chattel paper with a
         legend indicating that such chattel paper is subject to the security
         interest granted hereunder.

         8.       NEGATIVE COVENANTS. Debtor will comply with the covenants
contained in this Section at all times during the period of time this Agreement
is effective, unless Secured Party shall otherwise consent in writing.

                  (a)      Transfer or Encumbrance. Debtor will not (i) sell,
         assign (by operation of law or otherwise) or transfer Debtor's rights
         in any of the Collateral, (ii) grant a lien or security interest in or
         execute, file or record any financing statement or other security
         instrument with respect to the Collateral to any party other than
         Secured Party, or (iii) deliver actual or constructive possession of
         any certificate, instrument or document evidencing and/or representing
         any of the Collateral to any party other than Secured Party.

                  (b)      Impairment of Security Interest. Debtor will not take
         or fail to take any action which would in any manner impair the value
         or enforceability of Secured Party's security interest in any
         Collateral.

                  (c)      Dilution of Ownership. As to any securities pledged
         as Collateral (other than securities of a class which are publicly
         traded), Debtor will not consent to or approve of the issuance of (i)
         any additional shares of any class of securities of such issuer (unless
         immediately upon issuance additional securities are pledged and
         delivered to Secured Party pursuant to the terms hereof to the extent
         necessary to give Secured Party a security interest after such issuance
         in at least the same percentage of such issuer's outstanding securities
         as Secured Party had before such issuance), (ii) any instrument
         convertible voluntarily by the holder thereof or automatically upon the
         occurrence or non-occurrence of any event or condition into, or
         exchangeable for, any such securities, or (iii) any warrants, options,
         contracts or other commitments entitling any third party to purchase or
         otherwise acquire any such securities.

                  (d)      Restrictions on Securities. Debtor will not enter
         into any agreement creating, or otherwise permit to exist, any
         restriction or condition upon the transfer, voting or control of any
         securities pledged as Collateral, except as consented to in writing by
         Secured Party.

         9.       RIGHTS OF SECURED PARTY. Secured Party shall have the rights
contained in this Section at all times during the period of time this Agreement
is effective.

                  (a)      Power of Attorney. Debtor hereby irrevocably appoints
         Secured Party as Debtor's attorney-in-fact, such power of attorney
         being coupled with an interest, with full authority in the place and
         stead of Debtor and in the name of Debtor or otherwise, to take any
         action and to execute any instrument which Secured Party may from time
         to time in Secured Party's discretion deem necessary or appropriate to
         accomplish the purposes of

Security Agreement - Page 7

<PAGE>

         this Agreement, including without limitation, the following action: (i)
         transfer any securities, instruments, documents or certificates pledged
         as Collateral in the name of Secured Party or its nominee; (ii) use any
         interest, premium or principal payments, conversion or redemption
         proceeds or other cash proceeds received in connection with any
         Collateral to reduce any of the Indebtedness; (iii) exchange any of the
         securities pledged as Collateral for any other property upon any
         merger, consolidation, reorganization, recapitalization or other
         readjustment of the issuer thereof, and, in connection therewith, to
         deposit and deliver any and all of such securities with any committee,
         depository, transfer agent, registrar or other designated agent upon
         such terms and conditions as Secured Party may deem necessary or
         appropriate; (iv) exercise or comply with any conversion, exchange,
         redemption, subscription or any other right, privilege or option
         pertaining to any securities pledged as Collateral; provided, however,
         except as provided herein, Secured Party shall not have a duty to
         exercise or comply with any such right, privilege or option (whether
         conversion, redemption or otherwise) and shall not be responsible for
         any delay or failure to do so; and (v) file any claims or take any
         action or institute any proceedings which Secured Party may deem
         necessary or appropriate for the collection and/or preservation of the
         Collateral or otherwise to enforce the rights of Secured Party with
         respect to the Collateral.

                  (b)      Performance by Secured Party. If Debtor fails to
         perform any agreement or obligation provided herein, Secured Party may
         itself perform, or cause performance of, such agreement or obligation,
         and the expenses of Secured Party incurred in connection therewith
         shall be a part of the Indebtedness, secured by the Collateral and
         payable by Debtor on demand.

                  (c)      Notification of Account Debtors and Other Rights.
         With respect to chattel paper or instruments which are Collateral,
         Secured Party, without notice to Debtor, shall have the right at any
         time and from time to time to notify and direct the account debtor or
         obligor thereon to thereafter make all payments on such Collateral
         directly to Secured Party, regardless of whether Debtor was previously
         making collections thereon. Each account debtor and obligor making
         payment to Secured Party hereunder shall be fully protected in relying
         on the written statement of Secured Party that it then holds a security
         interest which entitles it to receive such payment, and the receipt of
         Secured Party for such payment shall be full acquittance therefor to
         the party making such payment. Payments received by Secured Party shall
         be held or disposed of by it in accordance with the terms of this
         Agreement. Secured Party shall, however, never be obligated to collect,
         or use any effort to collect, any such payments, its sole liability to
         the Debtor being to account for payments, if any, actually received.

Notwithstanding any other provision herein to the contrary, Secured Party does
not have any duty to exercise or continue to exercise any of the foregoing
rights and shall not be responsible for any failure to do so or for any delay in
doing so.

         10.      EVENTS OF DEFAULT. Each of the following constitutes an "Event
of Default" under this Agreement:

Security Agreement - Page 8

<PAGE>

                  (a)      Failure to Pay Indebtedness. The failure, refusal or
         neglect of Debtor to make any payment of principal or interest on the
         Indebtedness, any other amounts due under the Loan Documents, or any
         portion thereof, as the same shall become due and payable; or

                  (b)      Non-Performance of Covenants. The failure of Debtor
         or any Obligated Party to punctually and properly perform, observe, or
         comply with any covenant, agreement, warranty or condition required
         herein or in any of the other Loan Documents; or

                  (c)      Default Under other Loan Documents. The occurrence of
         a default or an event of default under the Loan Agreement or any of the
         other Loan Documents; or

                  (d)      Misrepresentation. Any representation contained
         herein or in any of the other Loan Documents made by Debtor or any
         Obligated Party is false, misleading or erroneous in any material
         respect; or

                  (e)      Default to Third Party. The occurrence of any event
         which permits the acceleration of the maturity of any indebtedness
         owing by Debtor or any Obligated Party to any third party under any
         agreement or undertaking; or

                  (f)      Execution on Collateral. The Collateral or any
         portion thereof is taken on execution or other process of law in any
         action against Debtor; or

                  (g)      Abandonment. Debtor abandons the Collateral or any
         portion thereof; or

                  (h)      Action by Other Lienholder. The holder of any lien or
         security interest on any of the assets of Debtor, including without
         limitation, the Collateral (without hereby implying the consent of
         Secured Party to the existence or creation of any such lien or security
         interest on the Collateral), declares a default thereunder or
         institutes foreclosure or other proceedings for the enforcement of its
         remedies thereunder; or

                  (i)      Liquidation, Death and Related Events. If Debtor or
         any Obligated Party is an entity, the liquidation, dissolution, merger
         or consolidation of any such entity or, if Debtor or any Obligated
         Party is an individual, the death or legal incapacity of any such
         individual; or

                  (j)      Dilution of Ownership. The issuer of any securities
         (other than securities of a class which are publicly traded)
         constituting Collateral hereafter issues any shares of any class of
         capital stock (unless immediately upon issuance, additional securities
         are pledged and delivered to Secured Party pursuant to the terms hereof
         to the extent necessary to give Secured Party a security interest after
         such issuance in at least the same percentage of such issuer's
         outstanding securities as Secured Party had before such issuance) or
         any options, warrants or other rights to purchase any such capital
         stock; or

                  (k)      Bankruptcy of Issuer. (i) The issuer of any
         securities constituting Collateral files a petition for relief under
         any Applicable Bankruptcy Law, (ii) an involuntary petition for relief
         is filed against any such issuer under any Applicable

Security Agreement - Page 9

<PAGE>

         Bankruptcy Law and such involuntary petition is not dismissed within
         thirty (30) days after the filing thereof, or (iii) an order for relief
         naming any such issuer is entered under any Applicable Bankruptcy Law.

         11.      REMEDIES AND RELATED RIGHTS. If an Event of Default shall have
occurred, and without limiting any other rights and remedies provided herein,
under any of the other Loan Documents or otherwise available to Secured Party,
Secured Party may exercise one or more of the rights and remedies provided in
this Section.

                  (a)      Remedies. Secured Party may from time to time at its
         discretion, without limitation and without notice except as expressly
         provided in any of the Loan Documents:

                           (i)      exercise in respect of the Collateral all
                  the rights and remedies of a secured party under the Code
                  (whether or not the Code applies to the affected Collateral);

                           (ii)     reduce its claim to judgment or foreclose or
                  otherwise enforce, in whole or in part, the security interest
                  granted hereunder by any available judicial procedure;

                           (iii)    sell or otherwise dispose of, at its office,
                  on the premises of Debtor or elsewhere, the Collateral, as a
                  unit or in parcels, by public or private proceedings, and by
                  way of one or more contracts (it being agreed that the sale or
                  other disposition of any part of the Collateral shall not
                  exhaust Secured Party's power of sale, but sales or other
                  dispositions may be made from time to time until all of the
                  Collateral has been sold or disposed of or until the
                  Indebtedness has been paid and performed in full), and at any
                  such sale or other disposition it shall not be necessary to
                  exhibit any of the Collateral;

                           (iv)     buy the Collateral, or any portion thereof,
                  at any public sale;

                           (v)      buy the Collateral, or any portion thereof,
                  at any private sale if the Collateral is of a type customarily
                  sold in a recognized market or is of a type which is the
                  subject of widely distributed standard price quotations;

                           (vi)     apply for the appointment of a receiver for
                  the Collateral, and Debtor hereby consents to any such
                  appointment; and

                           (vii)    at its option, retain the Collateral in
                  satisfaction of the Indebtedness whenever the circumstances
                  are such that Secured Party is entitled to do so under the
                  Code or otherwise.

         Debtor agrees that in the event Debtor is entitled to receive any
         notice under the Uniform Commercial Code, as it exists in the state
         governing any such notice, of the sale or other disposition of any
         Collateral, reasonable notice shall be deemed given when such notice is
         deposited in a depository receptacle under the care and custody of the
         United States Postal Service, postage prepaid, at Debtor's address set
         forth on the signature page hereof,

Security Agreement - Page 10

<PAGE>

         five (5) days prior to the date of any public sale, or after which a
         private sale, of any of such Collateral is to be held. Secured Party
         shall not be obligated to make any sale of Collateral regardless of
         notice of sale having been given. Secured Party may adjourn any public
         or private sale from time to time by announcement at the time and place
         fixed therefor, and such sale may, without further notice, be made at
         the time and place to which it was so adjourned. Debtor further
         acknowledges and agrees that the redemption by Secured Party of any
         certificate of deposit pledged as Collateral shall be deemed to be a
         commercially reasonable disposition under Section 9.627(b) of the Code.

                  (b)      Private Sale of Securities. Debtor recognizes that
         Secured Party may be unable to effect a public sale of all or any part
         of the securities pledged as Collateral because of restrictions in
         applicable federal and state securities laws and that Secured Party
         may, therefore, determine to make one or more private sales of any such
         securities to a restricted group of purchasers who will be obligated to
         agree, among other things, to acquire such securities for their own
         account, for investment and not with a view to the distribution or
         resale thereof. Debtor acknowledges that each any such private sale may
         be at prices and other terms less favorable then what might have been
         obtained at a public sale and, notwithstanding the foregoing, agrees
         that each such private sale shall be deemed to have been made in a
         commercially reasonable manner and that Secured Party shall have no
         obligation to delay the sale of any such securities for the period of
         time necessary to permit the issuer to register such securities for
         public sale under any federal or state securities laws. Debtor further
         acknowledges and agrees that any offer to sell such securities which
         has been made privately in the manner described above to not less than
         five (5) bona fide offerees shall be deemed to "commercially
         reasonable" for the purposes of Section 9.627(b) of the Code,
         notwithstanding that such sale may not constitute a "public offering"
         under any federal or state securities laws and that Secured Party may,
         in such event, bid for the purchase of such securities.

                  (c)      Application of Proceeds. If any Event of Default
         shall have occurred, Secured Party may at its discretion apply or use
         any cash held by Secured Party as Collateral, and any cash proceeds
         received by Secured Party in respect of any sale or other disposition
         of, collection from, or other realization upon, all or any part of the
         Collateral as follows in such order and manner as Secured Party may
         elect:

                           (i)      to the repayment or reimbursement of the
                  reasonable costs and expenses (including, without limitation,
                  reasonable attorneys' fees and expenses) incurred by Secured
                  Party in connection with (A) the administration of the Loan
                  Documents, (B) the custody, preservation, use or operation of,
                  or the sale of, collection from, or other realization upon,
                  the Collateral, and (C) the exercise or enforcement of any of
                  the rights and remedies of Secured Party hereunder;

                           (ii)     to the payment or other satisfaction of any
                  liens and other encumbrances upon the Collateral;

                           (iii)    to the satisfaction of the Indebtedness;

                           (iv)     by holding such cash and proceeds as
                  Collateral;

Security Agreement - Page 11

<PAGE>

                           (v)      to the payment of any other amounts required
                  by applicable law (including without limitation, Section 9.615
                  of the Code or any other applicable statutory provision); and

                           (vi)     by delivery to Debtor or any other party
                  lawfully entitled to receive such cash or proceeds whether by
                  direction of a court of competent jurisdiction or otherwise.

                  (d)      Deficiency. In the event that the proceeds of any
         sale of, collection from, or other realization upon, all or any part of
         the Collateral by Secured Party are insufficient to pay all amounts to
         which Secured Party is legally entitled, Debtor and any party who
         guaranteed or is otherwise obligated to pay all or any portion of the
         Indebtedness shall be liable for the deficiency, together with interest
         thereon as provided in the Loan Documents.

                  (e)      Non-Judicial Remedies. In granting to Secured Party
         the power to enforce its rights hereunder without prior judicial
         process or judicial hearing, Debtor expressly waives, renounces and
         knowingly relinquishes any legal right which might otherwise require
         Secured Party to enforce its rights by judicial process. Debtor
         recognizes and concedes that non judicial remedies are consistent with
         the usage of trade, are responsive to commercial necessity and are the
         result of a bargain at arm's length. Nothing herein is intended to
         prevent Secured Party or Debtor from resorting to judicial process at
         either party's option.

                  (f)      Other Recourse. Debtor waives any right to require
         Secured Party to proceed against any third party, exhaust any
         Collateral or other security for the Indebtedness, or to have any third
         party joined with Debtor in any suit arising out of the Indebtedness or
         any of the Loan Documents, or pursue any other remedy available to
         Secured Party. Debtor further waives any and all notice of acceptance
         of this Agreement and of the creation, modification, rearrangement,
         renewal or extension of the Indebtedness. Debtor further waives any
         defense arising by reason of any disability or other defense of any
         third party or by reason of the cessation from any cause whatsoever of
         the liability of any third party. Until all of the Indebtedness shall
         have been paid in full, Debtor shall have no right of subrogation and
         Debtor waives the right to enforce any remedy which Secured Party has
         or may hereafter have against any third party, and waives any benefit
         of and any right to participate in any other security whatsoever now or
         hereafter held by Secured Party. Debtor authorizes Secured Party, and
         without notice or demand and without any reservation of rights against
         Debtor and without affecting Debtor's liability hereunder or on the
         Indebtedness, to (i) take or hold any other property of any type from
         any third party as security for the Indebtedness, and exchange,
         enforce, waive and release any or all of such other property, (ii)
         apply such other property and direct the order or manner of sale
         thereof as Secured Party may in its discretion determine, (iii) renew,
         extend, accelerate, modify, compromise, settle or release any of the
         Indebtedness or other security for the Indebtedness, (iv) waive,
         enforce or modify any of the provisions of any of the Loan Documents
         executed by any third party, and (v) release or substitute any third
         party.

Security Agreement - Page 12

<PAGE>

                  (g)      Voting Rights. Upon the occurrence of an Event of
         Default, Debtor will not exercise any voting rights with respect to
         securities pledged as Collateral. Debtor hereby irrevocably appoints
         Secured Party as Debtor's attorney-in-fact (such power of attorney
         being coupled with an interest) and proxy to exercise any voting rights
         with respect to Debtor's securities pledged as Collateral upon the
         occurrence of an Event of Default.

                  (h)      Dividend Rights and Interest Payments. Upon the
         occurrence of an Event of Default:

                           (i)      all rights of Debtor to receive and retain
                  the dividends and interest payments which it would otherwise
                  be authorized to receive and retain pursuant to Section 3
                  shall automatically cease, and all such rights shall thereupon
                  become vested with Secured Party which shall thereafter have
                  the sole right to receive, hold and apply as Collateral such
                  dividends and interest payments; and

                           (ii)     all dividend and interest payments which are
                  received by Debtor contrary to the provisions of clause (i) of
                  this Subsection shall be received in trust for the benefit of
                  Secured Party, shall be segregated from other funds of Debtor,
                  and shall be forthwith paid over to Secured Party in the exact
                  form received (properly endorsed or assigned if requested by
                  Secured Party), to be held by Secured Party as Collateral.

                  (i)      Insurance Holding Company Laws. Because of laws and
         regulations governing change of control of insurance companies that may
         be applicable (collectively, the "Insurance Holding Company Laws"),
         certain purchasers of the Collateral at foreclosure may be required to
         obtain regulatory approval prior to a final and binding acquisition of
         the Collateral. The Debtor acknowledges that such laws and regulations
         may adversely affect the purchase price to be paid by a purchaser of
         the Collateral, or any part thereof, at a private or public foreclosure
         sale, and that the Secured Party may (and is hereby authorized by the
         Debtor to) modify the notices, advertisements, terms and procedures of
         any foreclosure sale of the Collateral in order to comply with
         Insurance Holding Company Laws. Without limiting the foregoing, the
         Debtor acknowledges that the Secured Party may accept bids at
         foreclosure sale on a provisional basis, pending receipt by the
         successful bidder of necessary regulatory approvals under the Insurance
         Holding Company Laws. In addition, the Debtor acknowledges that the
         Secured Party may (but shall not be required to) limit bidding at
         foreclosure sales to those parties which have demonstrated an ability
         to comply with requirements of the Insurance Holding Company Laws.
         Moreover, the Debtor acknowledges that the Secured Party may require
         the successful bidder at a foreclosure sale to execute a purchase
         agreement, deposit a portion of the purchase price, and take other
         actions reflecting the requirements of the Insurance Holding Company
         Laws and the resulting delay in consummating a foreclosure sale.

Security Agreement - Page 13

<PAGE>

         12.      MISCELLANEOUS.

                  (a)      Entire Agreement. This Agreement contains the entire
         agreement of Secured Party and Debtor with respect to the Collateral.
         If the parties hereto are parties to any prior agreement, either
         written or oral, relating to the Collateral, the terms of this
         Agreement shall amend and supersede the terms of such prior agreements
         as to transactions on or after the effective date of this Agreement,
         but all security agreements, financing statements, guaranties, other
         contracts and notices for the benefit of Secured Party shall continue
         in full force and effect to secure the Indebtedness unless Secured
         Party specifically releases its rights thereunder by separate release.

                  (b)      Amendment. No modification, consent or amendment of
         any provision of this Agreement or any of the other Loan Documents
         shall be valid or effective unless the same is in writing and signed by
         the party against whom it is sought to be enforced.

                  (c)      Actions by Secured Party. The lien, security interest
         and other security rights of Secured Party hereunder shall not be
         impaired by (i) any renewal, extension, increase or modification with
         respect to the Indebtedness, (ii) any surrender, compromise, release,
         renewal, extension, exchange or substitution which Secured Party may
         grant with respect to the Collateral, or (iii) any release or
         indulgence granted to any endorser, guarantor or surety of the
         Indebtedness. The taking of additional security by Secured Party shall
         not release or impair the lien, security interest or other security
         rights of Secured Party hereunder or affect the obligations of Debtor
         hereunder.

                  (d)      Waiver by Secured Party. Secured Party may waive any
         Event of Default without waiving any other prior or subsequent Event of
         Default. Secured Party may remedy any default without waiving the Event
         of Default remedied. Neither the failure by Secured Party to exercise,
         nor the delay by Secured Party in exercising, any right or remedy upon
         any Event of Default shall be construed as a waiver of such Event of
         Default or as a waiver of the right to exercise any such right or
         remedy at a later date. No single or partial exercise by Secured Party
         of any right or remedy hereunder shall exhaust the same or shall
         preclude any other or further exercise thereof, and every such right or
         remedy hereunder may be exercised at any time. No waiver of any
         provision hereof or consent to any departure by Debtor therefrom shall
         be effective unless the same shall be in writing and signed by Secured
         Party and then such waiver or consent shall be effective only in the
         specific instances, for the purpose for which given and to the extent
         therein specified. No notice to or demand on Debtor in any case shall
         of itself entitle Debtor to any other or further notice or demand in
         similar or other circumstances.

                  (e)      Costs and Expenses. Debtor will upon demand pay to
         Secured Party the amount of any and all costs and expenses (including
         without limitation, attorneys' fees and expenses), which Secured Party
         may incur in connection with (i) the transactions which give rise to
         the Loan Documents, (ii) the preparation of this Agreement and the
         perfection and preservation of the security interests granted under the
         Loan Documents, (iii) the administration of the Loan Documents, (iv)
         the custody, preservation, use or operation of, or the sale of,
         collection from, or other realization upon, the Collateral, (v) the
         exercise or enforcement of any of the rights of Secured Party under the
         Loan

Security Agreement - Page 14

<PAGE>

         Documents, or (vi) the failure by Debtor to perform or observe any of
         the provisions hereof.

                  (f)      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
         AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND
         APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT
         OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED
         HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE
         LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.

                  (g)      Choice of Forum: Service of Process and Jurisdiction.
         Any suit, action or proceeding against Debtor with respect to the Loan
         Documents or any judgment entered by any court in respect thereof, may
         be brought in the courts of the State of Texas, County of Travis, or in
         the United States courts located in the State of Texas as Secured Party
         may elect and Debtor hereby submits to the non-exclusive jurisdiction
         of such courts for the purpose of any such suit, action or proceeding.
         Debtor hereby irrevocably consents to the service of process in any
         suit, action or proceeding in said court by the mailing thereof by
         Secured Party by registered or certified mail, return receipt
         requested, postage prepaid, to Debtor's address set forth on the
         signature page of this Agreement or any other address provided by
         Debtor to Secured Party in writing. Debtor hereby irrevocably waives
         any objections which it may now or hereafter have to the laying of
         venue of any suit, action or proceeding arising out of or relating to
         the Loan Documents brought in the courts located in the State of Texas,
         County of Travis, and hereby further irrevocably waives any claim that
         any such suit, action or proceeding brought in any such court has been
         brought in any inconvenient forum.

                  (h)      Severability. If any provision of this Agreement is
         held by a court of competent jurisdiction to be illegal, invalid or
         unenforceable under present or future laws, such provision shall be
         fully severable, shall not impair or invalidate the remainder of this
         Agreement and the effect thereof shall be confined to the provision
         held to be illegal, invalid or unenforceable.

                  (i)      No Obligation. Nothing contained herein shall be
         construed as an obligation on the part of Secured Party to extend or
         continue to extend credit to Debtor.

                  (j)      Notices. All notices, requests, demands or other
         communications required or permitted to be given pursuant to this
         Agreement shall be in writing and shall be deemed to have been given or
         made (a) when personally delivered, (b) if mailed, when sent by
         registered or certified mail, postage prepaid, (c) if sent by a
         nationally recognized overnight delivery service, on the next business
         day after delivery to such service specifying delivery on the next
         business day or (d) if transmitted by telex, telecopier or facsimile
         machine, on the day that such notice is transmitted and received. The
         address of each party for the purposes hereof is set forth on the
         signature page of this Agreement.

                  (k)      Binding Effect and Assignment. This Agreement (i)
         creates a continuing security interest in the Collateral, (ii) shall be
         binding on Debtor and the heirs, executors,

Security Agreement - Page 15

<PAGE>

         administrators, personal representatives, successors and assigns of
         Debtor, and (iii) shall inure to the benefit of Secured Party and its
         successors and assigns. Without limiting the generality of the
         foregoing, Secured Party may pledge, assign or otherwise transfer the
         Indebtedness and its rights under this Agreement and any of the other
         Loan Documents to any other party. Debtor's rights and obligations
         hereunder may not be assigned or otherwise transferred without the
         prior written consent of Secured Party.

                  (l)      Termination. It is contemplated by the parties hereto
         that from time to time there may be no outstanding Indebtedness, but
         notwithstanding such occurrences, this Agreement shall remain valid and
         shall be in full force and effect as to subsequent outstanding
         Indebtedness. Upon (i) the satisfaction in full of the Indebtedness,
         (ii) the termination or expiration of any commitment of Secured Party
         to extend credit to Debtor, (iii) written request for the termination
         hereof delivered by Debtor to Secured Party, and (iv) written release
         delivered by Secured Party to Debtor, this Agreement and the security
         interests created hereby shall terminate. Upon termination of this
         Agreement and Debtor's written request, Secured Party will, at Debtor's
         sole cost and expense, return to Debtor such of the Collateral as shall
         not have been sold or otherwise disposed of or applied pursuant to the
         terms hereof and execute and deliver to Debtor such documents as Debtor
         shall reasonably request to evidence such termination.

                  (m)      JURY TRIAL WAIVER. DEBTOR AND SECURED PARTY EACH
         HEREBY WAIVE ANY RIGHT TO A JURY TRIAL WITH RESPECT TO ANY MATTER
         ARISING OR RELATING TO THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS OR
         THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.

                  (n)      Cumulative Rights. All rights and remedies of Secured
         Party hereunder are cumulative of each other and of every other right
         or remedy which Secured Party may otherwise have at law or in equity or
         under any of the other Loan Documents, and the exercise of one or more
         of such rights or remedies shall not prejudice or impair the concurrent
         or subsequent exercise of any other rights or remedies.

                  (o)      Gender and Number. Within this Agreement, words of
         any gender shall be held and construed to include the other gender, and
         words in the singular number shall be held and construed to include the
         plural and words in the plural number shall be held and construed to
         include the singular, unless in each instance the context requires
         otherwise.

                  (p)      Descriptive Headings. The headings in this Agreement
         are for convenience only and shall in no way enlarge, limit or define
         the scope or meaning of the various and several provisions hereof.

                  (q)      Financing Statements. By signing below, Debtor
         authorizes Secured Party to file financing statements and/or amendments
         thereto and continuations thereof under the provisions of the Code.

Security Agreement - Page 16

<PAGE>

         EXECUTED as of the date first written above.

Debtor's Address:                              DEBTOR:

Citizens, Inc.                                 CITIZENS, INC.,
400 East Anderson Lane                         a Colorado corporation
Austin, Texas 78752

Attention: Mark A. Oliver, President           By: _____________________________
                                                    Name:  Mark A. Oliver
                                                    Title: President

Secured Party's Address:

Regions Bank
4314 West Braker Lane, Suite 110
Austin, Texas 78759
Attention: Todd A. Self

Security Agreement - Page 17

<PAGE>

                                  SCHEDULE A TO
                               SECURITY AGREEMENT
                              DATED March 22, 2004

The following property is a part of the Collateral as defined in Subsection
1(b):

         Surplus Debenture No. _____ dated __________, in the original principal
         amount of $__________ executed by Citizens Insurance Company of
         America, a Colorado insurance company and payable to the order of
         Debtor.
<PAGE>

                                      NOTE

$30,000,000.00                                                    March 22, 2004

         FOR VALUE RECEIVED, the undersigned, CITIZENS, INC., a Colorado
corporation ("Maker"), hereby unconditionally promises to pay to the order of
REGIONS BANK, an Alabama banking association ("Bank"), at the Principal Office
specified in the hereinafter defined Loan Agreement, the principal amount of
THIRTY MILLION AND No/100 DOLLARS ($30,000,000.00) or so much thereof as may be
disbursed and outstanding hereunder, under the Loan Agreement or under the other
Loan Documents, such amount being due and payable in the amounts and at such
times as are specified in the Loan Agreement.

         Maker further agrees to pay interest at the Principal Office of Bank on
the unpaid principal amount hereof from time to time at the applicable rate per
annum and on the dates set forth in the Loan Agreement until such principal
amount is paid in full (both before and after judgment).

         This Note evidences Revolving Loans made pursuant to, and has been
executed and delivered under, and is subject to the terms and conditions, of,
that certain Loan Agreement dated effective as of March 22, 2004 (as the same
may be amended, modified, supplemented, renewed, extended, restated,
substituted, increased, rearranged and/or replaced from time to time, the "Loan
Agreement"), among the Maker and Bank, and is the Note referred to therein.
Unless otherwise defined herein or unless the context hereof otherwise requires
each term used herein with its initial letter capitalized has the meaning given
to such term in the Loan Agreement. Reference is made to the Loan Agreement and
the other Loan Documents for provisions affecting this Note regarding payments
and mandatory and voluntary prepayments, acceleration of maturity, exercise of
Rights, payment of attorneys' fees, court costs, and other costs of collection,
certain waivers by Maker and others now or hereafter obligated for payment of
any sums due hereunder, and security for the payment hereof.

         All payments due to the Bank hereunder shall be made in Dollars in
immediately available funds a the place and in the manner specified in the Loan
Agreement.

         This Note is (a) entitled to the benefits of the Loan Documents and (b)
secured by the Collateral.

         Upon the occurrence of any one or more Defaults specified in the Loan
Agreement, all amounts then remaining unpaid on this Note shall become, or may
be declared to be, immediately due and payable, all as provided herein. The
Maker hereby waives diligence, presentment, demand, protest, notice of default,
notice of intention to accelerate, notice of acceleration and notice of any kind
whatsoever.

         THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF TEXAS.

<PAGE>

         THIS NOTE AND THE OTHER LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.

         EXECUTED and delivered on the first date written above.

                                         CITIZENS, INC.

                                         By: /s/ Mark A. Oliver
                                             -----------------------------------
                                             Mark A. Oliver
                                             President

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