Document:

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                                                                   EXHIBIT 10.36

                          SECURITIES PURCHASE AGREEMENT

         SECURITIES PURCHASE AGREEMENT (this "AGREEMENT"), dated as of February
18, 2000, by and among Spatial Technology Inc., a corporation organized under
the laws of the State of Delaware (the "COMPANY"), and the purchasers (the
"PURCHASERS") set forth on Schedule 1 attached hereto.

         WHEREAS:

         A. The Company and each Purchaser are executing and delivering this
Agreement in reliance upon the exemption from securities registration afforded
by the provisions of Regulation D ("REGULATION D"), as promulgated by the United
States Securities and Exchange Commission (the "SEC") under the Securities Act
of 1933, as amended (the "SECURITIES ACT").

         B. Each Purchaser desires to purchase, severally and not jointly,
subject to the terms and conditions stated in this Agreement, (i) the number of
shares of the Company's common stock, par value $.01 per share (the "COMMON
STOCK") set forth opposite such purchaser's name on Schedule 1 at a purchase
price of $3.60 per share, and (ii) warrants in the form attached hereto as
Exhibit A (including any warrants issued in replacement thereof, the
"WARRANTS"), to acquire shares of Common Stock in a ratio of one Warrant per
1.5833 shares of Common Stock acquired hereby (rounded up to the next whole
Warrant) at a purchase price of $.05 per Warrant. The shares of Common Stock
issuable upon exercise of or otherwise pursuant to the Warrants are referred to
herein as the "WARRANT SHARES."

         C. Contemporaneous with the execution and delivery of this Agreement,
the parties hereto are executing and delivering a Registration Rights Agreement
in the form attached hereto as Exhibit B (the "REGISTRATION RIGHTS AGREEMENT"),
pursuant to which the Company has agreed to provide certain registration rights
under the Securities Act and the rules and regulations promulgated thereunder,
and applicable state securities laws.

         NOW, THEREFORE, the Company and the Purchasers hereby agree as follows:

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1.       CERTAIN DEFINITIONS.

         For purposes of this Agreement, the following terms shall have the
meanings ascribed to them as provided below:

         "BUSINESS DAY" shall mean any day on which the American Stock Exchange
("AMEX") or, if the Common Stock is not then traded on the AMEX, other principal
United States securities exchange or trading market on which the Common Stock is
listed or traded is open for trading.

         "INVESTMENT AMOUNT" shall mean the dollar amount to be invested in the
Company at the Closing for the Shares and the Warrants pursuant to this
Agreement by any Purchaser, as set forth opposite such Purchaser's name on
Schedule 1.

         "MATERIAL ADVERSE EFFECT" shall mean any material adverse effect on (i)
the Securities, (ii) the ability of the Company to perform its obligations
hereunder (including the issuance of the Shares and the Warrants), under the
Warrants (including the issuance of the Warrant Shares) or under the
Registration Rights Agreement or (iii) the business, operations, properties or
financial condition of the Company and its subsidiaries, taken as a whole.

         "PRO RATA AMOUNT" shall mean, with respect to any Purchaser, a
percentage computed by dividing (x) the number of shares of Common Stock of the
Company then owned by such Purchaser, together with the number of shares of
Common Stock of the Company which such Purchaser is then entitled to acquire
through the exercise or conversion of outstanding securities of the Company by
(y) the total number of then outstanding shares of Common Stock of the Company.

         "SECURITIES" shall mean the Shares, the Warrants and the Warrant
Shares.

         "SHARES" means the shares of Common Stock to be issued and sold by the
Company and purchased by the Purchasers at the Closing.

         "TRADING DAY" shall mean a Business Day on which at least 10,000 shares
of Common Stock are traded on the principal United States securities exchange or
trading market on which such security is listed or traded.

2.       PURCHASE AND SALE OF SHARES AND WARRANTS.

         a. Generally. Except as otherwise provided in this Section 2 and
subject to the satisfaction (or waiver) of the conditions set forth in Section 6
and Section 7 below, each Purchaser shall purchase the number of Shares and
Warrants determined as provided in

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this Section 2, and the Company shall issue and sell such number of Shares and
Warrants to each Purchaser for such Purchaser's Investment Amount as provided
below.

         b. Number of Closing Shares and Warrants; Form of Payment; Closing
Date.

                  i. On the Closing Date (as defined below), the Company shall
sell and each Purchaser shall buy (A) the number of Shares set forth opposite
such Purchaser's name on Schedule 1 at a purchase price of $3.60 per share and
(B) a number of Warrants in a ratio of one Warrant per 1.5833 Shares to be
purchased by such Purchaser (rounded up to the next whole Warrant) at a purchase
price of $.05 per Warrant. On the Closing Date, each Purchaser shall pay the
Company an amount equal to such Purchaser's Investment Amount.

                  ii. On the Closing Date, each Purchaser shall pay its
Investment Amount by wire transfer to the Company, in accordance with the
Company's written wiring instructions against delivery of certificates
representing the Shares and duly executed Warrants being purchased by such
Purchaser, and the Company shall deliver such Shares and Warrants against
delivery of the such Purchaser's Investment Amount.

                  iii. Subject to the satisfaction (or waiver) of the conditions
thereto set forth in Section 6 and Section 7 below, the date and time of the
sale of the Shares and the Warrants pursuant to this Agreement (the "CLOSING")
shall be 12:00 p.m. New York City Time on February 18, 2000 or such other date
or time as the parties may mutually agree ("CLOSING DATE"). The Closing shall
occur at the offices of Heller Ehrman White & McAuliffe, 711 Fifth Avenue, 5th
Floor, New York, New York 10022, or at such other place as the parties may
otherwise agree.

3.       THE PURCHASER'S REPRESENTATIONS AND WARRANTIES.

         Each Purchaser severally and not jointly represents and warrants to the
Company as follows:

         a. Purchase for Own Account. The Purchaser is purchasing the Securities
for the Purchaser's own account and not with a present view towards the
distribution thereof. The Purchaser understands that the Purchaser must bear the
economic risk of this investment indefinitely, unless the Securities are
registered pursuant to the Securities Act and any applicable state securities or
blue sky laws or an exemption from such registration is available, and that the
Company has no present intention of registering any such Securities other than
as contemplated by the Registration Rights Agreement. Notwithstanding anything
in this Section 3(a) to the contrary, by making the foregoing representation,
the Purchaser does not agree to hold the Securities for any minimum or other
specific term and reserves the right to dispose of the Securities at any time in

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accordance with or pursuant to a registration statement or an exemption from
registration under the Securities Act and any applicable state securities laws.

         b. Information. The Purchaser has been furnished all materials relating
to the business, finances and operations of the Company and its subsidiaries and
materials relating to the offer and sale of the Securities which have been
requested by the Purchaser. The Purchaser has been afforded the opportunity to
ask questions of the Company and has received satisfactory answers to any such
inquiries. Neither such inquiries nor any other due diligence investigation
conducted by the Purchaser or its counsel or any of its representatives shall
modify, amend or affect the Purchaser's right to rely on the Company's
representations and warranties contained in Section 4 below.

         c. Governmental Review. The Purchaser understands that no United States
federal or state agency or any other government or governmental agency has
passed upon or made any recommendation or endorsement of the Securities.

         d. Authorization; Enforcement. The Purchaser has the requisite power
and authority to enter into and perform its obligations under this Agreement and
to purchase the Shares and the Warrants in accordance with the terms hereof.
This Agreement has been duly and validly authorized, executed and delivered on
behalf of the Purchaser and is a valid and binding agreement of the Purchaser
enforceable against the Purchaser in accordance with its terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium, fraudulent
transfer and other laws affecting creditors' rights and remedies generally and
to general principles of equity (regardless of whether enforcement is sought in
a proceeding at law or in equity).

         e. Transfer or Resale. The Purchaser understands that (i) except as
provided in the Registration Rights Agreement, the Securities have not been and
are not being registered under the Securities Act or any state securities laws,
and may not be transferred unless (a) subsequently registered thereunder, (b)
the Purchaser shall have delivered to the Company an opinion of counsel
reasonably acceptable to the Company (which opinion shall be in form, substance
and scope customary for opinions of counsel in comparable transactions) to the
effect that the Securities to be sold or transferred may be sold or transferred
under an exemption from such registration, or (c) sold under Rule 144
promulgated under the Securities Act (or a successor rule); and (ii) neither the
Company nor any other person is under any obligation to register such Securities
under the Securities Act or any state securities laws or to comply with the
terms and conditions of any exemption thereunder, in each case, other than
pursuant to the Registration Rights Agreement. Notwithstanding the foregoing, no
such registration statement or opinion of counsel shall be necessary for a
transfer by a Purchaser which is (A) a partnership to its partners or former
partners in accordance with partnership interests, (B) a corporation to its
stockholders in accordance with their interest in the corporation, (C) a limited
liability

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company to its members or former members in accordance with their interest in
the limited liability company, or (D) to the Purchaser's family member or trust
for the benefit of an individual Purchaser.

         f. Legends. The Purchaser understands that the Shares and the Warrants
and, until such time as the Shares and Warrant Shares have been registered under
the Securities Act as contemplated by the Registration Rights Agreement or
otherwise may be sold by the Purchaser under Rule 144, the certificates for the
Shares and Warrant Shares may bear a restrictive legend in substantially the
following form:

                  The securities represented by this certificate have
                  not been registered under the Securities Act of
                  1933, as amended, or the securities laws of any
                  state of the United States. The securities
                  represented hereby may not be offered or sold in the
                  absence of an effective registration statement for
                  the securities under applicable securities laws
                  unless offered, sold or transferred under an
                  available exemption from the registration
                  requirements of those laws.

         The legend set forth above shall be removed and the Company
shall issue a certificate without such legend to the holder of any
Security upon which it is stamped, if, (a) the sale of such Security
is registered under the Securities Act, (b) such holder provides the
Company with an opinion of counsel, in form and substance customary
for opinions of counsel in comparable transactions, to the effect that
a public sale or transfer of such Security may be made without
registration under the Securities Act or (c) such holder provides the
Company with reasonable assurances that such Security can be sold
under Rule 144(k). The Purchaser agrees to sell all Securities,
including those represented by a certificate(s) from which the legend
has been removed, pursuant to an effective registration statement or
under an exemption from the registration requirements of the
Securities Act. The legend shall be removed when such Security may be
sold pursuant to an effective registration statement or sold under
Rule 144(k).

         g. Accredited Investor Status. The Purchaser is an
"ACCREDITED INVESTOR" as that term is defined in Rule 501(a) of
Regulation D. The Purchaser is not registered as a broker or dealer
under Section 15(a) of the Securities Exchange Act of 1934, as
amended, or a member of the National Association of Securities
Dealers.

         h. Company Reliance. The Purchaser understands that the
Shares are being offered and sold and the Warrants are being issued to
it in reliance on specific exemptions from the registration
requirements of United States federal and state securities laws and
that the Company is relying upon the truth and accuracy of, and the
Purchaser's compliance with, the representations, warranties,
agreements, acknowledgments, and

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understandings of the Purchaser set forth herein in order to determine
the availability of such exemptions and the eligibility of the
Purchaser to acquire the Shares and the Warrants.

4.       REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

         The Company represents and warrants to each Purchaser as
follows:

         a. Organization and Qualification. The Company is a
corporation, and each of its subsidiaries is an entity, duly organized
and existing under the laws of the jurisdiction in which it is
organized, and has the requisite corporate power to own its properties
and to carry on its business as now being conducted. The Company and
each of its subsidiaries is duly qualified as a foreign entity to do
business and is in good standing in every jurisdiction in which the
nature of the business conducted by it makes such qualification
necessary and where the failure so to qualify would have a Material
Adverse Effect. The SEC Documents set forth the name of each of the
Company's subsidiaries and its jurisdiction of organization. Each of
the Company's subsidiaries are wholly-owned.

         b. Authorization; Enforcement. (i) The Company has the
requisite corporate power and authority to enter into and perform its
obligations under this Agreement, the Warrants and the Registration
Rights Agreement, to issue and sell the Shares and the Warrants in
accordance with the terms hereof and to issue the Warrant Shares upon
exercise of the Warrants in accordance with the terms of the Warrants;
(ii) the execution, delivery and performance of this Agreement, the
Warrants and the Registration Rights Agreement by the Company and the
consummation by it of the transactions contemplated hereby and thereby
(including, without limitation, the reservation for issuance and
issuance of the Shares and the issuance of the Warrants, and the
reservation for issuance and issuance of the Warrant Shares) have been
duly authorized by the Company's Board of Directors and no further
consent or authorization of the Company, its Board of Directors or its
stockholders is required; (iii) this Agreement has been duly executed
and delivered by the Company; and (iv) this Agreement constitutes,
and, upon execution and delivery by the Company of the Registration
Rights Agreement and the Warrants, such agreements will constitute,
valid and binding obligations of the Company enforceable against the
Company in accordance with their respective terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent transfer and other laws affecting creditors' rights and
remedies generally and to general principles of equity (regardless of
whether enforcement is sought in a proceeding at law or in equity).

         c. Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 25,000,000 shares, consisting
of two classes: 22,500,000 shares of Common Stock and 2,500,000 shares
of Preferred Stock. According to a certificate from the Company's
transfer agent dated February 18, 2000, an aggregate of 9,543,823
shares

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of the Company's Common stock were issued and outstanding as of the
date of such transfer agent certificate. No shares of the Company's
Preferred Stock are outstanding as of the date hereof. As of the date
hereof, there is an aggregate of 2,882,411 shares of the Company's
Common Stock reserved for issuance under the Company's option plans
and employee stock purchase plan. All of such outstanding shares of
the Company's capital stock have been, or upon issuance will be,
validly issued, fully paid and nonassessable. Except as set forth in
this Section 4(c) or on Schedule 4(c), no shares of capital stock of
the Company (including the Shares or the Warrant Shares) or any of the
subsidiaries are subject to preemptive rights or any other similar
rights of the stockholders of the Company or any liens or
encumbrances. Except for the Securities and as disclosed in this
Section 4(c) or Schedule 4(c), as of the date of this Agreement, (i)
there are no outstanding options, warrants, scrip, rights to subscribe
to, calls or commitments of any character whatsoever relating to, or
securities or rights convertible into or exercisable or exchangeable
for, any shares of capital stock of the Company or any of its
subsidiaries, or arrangements by which the Company or any of its
subsidiaries is or may become bound to issue additional shares of
capital stock of the Company or such subsidiaries, and (ii) there are
no agreements or arrangements under which the Company or any of its
subsidiaries is obligated to register the sale of any of its or their
securities under the Securities Act (except the Registration Rights
Agreement). Except as set forth on Schedule 4(c), there are no
securities or instruments containing price-based antidilution or
similar provisions that may be triggered by the issuance of the
Securities in accordance with the terms of this Agreement, the
Warrants or the Registration Rights Agreement and the holders of the
securities and instruments listed on such Schedule 4(c) have waived
any rights they may have under such antidilution or similar provisions
in connection with the issuance of the Securities in accordance with
the terms of this Agreement, the Warrants or the Registration Rights
Agreement. The Company has made available to each Purchaser and
counsel for the Purchasers true and correct copies of the Company's
Certificate of Incorporation as in effect on the date hereof
("CERTIFICATE OF INCORPORATION"), the Company's By-laws as in effect
on the date hereof (the "BY-LAWS") and all other instruments and
agreements governing securities convertible into or exercisable or
exchangeable for capital stock of the Company, except for stock
options granted under any employee benefit plan or director stock
option plan of the Company.

         d. Issuance of Shares. The Shares are duly authorized and
when issued and paid for in accordance with the terms hereof, will be
validly issued, fully paid and non-assessable, and free from all
taxes, liens, claims and encumbrances, and will not be subject to
preemptive rights or other similar rights of stockholders of the
Company and will not impose personal liability upon the holder
thereof. The Warrant Shares are duly authorized and reserved for
issuance, and, upon exercise of the Warrants in accordance with the
terms thereof, will be validly issued, fully paid and non-assessable
and free from all taxes and liens, claims and encumbrances and will
not be subject to preemptive rights

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or other similar rights of stockholders of the Company and will not
impose personal liability upon the holder thereof.

         e. No Conflicts. The execution, delivery and performance of
this Agreement, the Registration Rights Agreement and the Warrants by
the Company, and the consummation by the Company of the transactions
contemplated hereby and thereby (including, without limitation, the
reservation for issuance and issuance of the Shares, the Warrant
Shares and the issuance of the Warrants) will not (i) conflict with or
result in a violation of the Certificate of Incorporation or By-laws
or (ii) conflict with, or constitute a default (or an event which,
with notice or lapse of time or both, would become a default) under,
or give to others any rights of termination, amendment, acceleration
or cancellation of any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, or result in a
violation of any law, rule, regulation, order, judgment or decree
(including United States federal and state securities laws and
regulations and AMEX regulations) applicable to the Company or any of
its subsidiaries or by which any property or asset of the Company or
any of its subsidiaries is bound or affected (except, with respect to
clause (ii), for such conflicts, defaults, terminations, amendments,
accelerations, cancellations and violations as would not, individually
or in the aggregate, have a Material Adverse Effect). Neither the
Company nor any of its subsidiaries is in violation of its Certificate
of Incorporation, By-laws and other organizational documents and
neither the Company nor any of its subsidiaries is in default (and no
event has occurred which, with notice or lapse of time or both, would
put the Company or any of its subsidiaries in default) under, nor has
there occurred any event giving others (with notice or lapse of time
or both) any rights of termination, amendment, acceleration or
cancellation of, any agreement, indenture or instrument to which the
Company or any of its subsidiaries is a party, except for actual or
possible violations, defaults or rights as would not, individually or
in the aggregate, have a Material Adverse Effect. The businesses of
the Company and its subsidiaries are not being conducted in violation
of any law, ordinance or regulation of any governmental entity, except
for actual or possible violations, if any, the sanctions for which
either singly or in the aggregate would not have a Material Adverse
Effect. Except as specifically contemplated by this Agreement and as
required under the Securities Act and any applicable state securities
laws, the Company is not required to obtain any consent, approval,
authorization or order of, or make any filing or registration with,
any court or governmental agency or any regulatory or self regulatory
agency in order for it to execute, deliver or perform any of its
obligations under this Agreement (including, without limitation, the
issuance and sale of the Shares and Warrants as provided hereby), or
the Warrants (including the issuance of the Warrant Shares), in each
case in accordance with the terms hereof or thereof. The Company is
not in violation of the listing requirements of the AMEX and does not
reasonably anticipate that the Common Stock will be delisted by AMEX
in the foreseeable future based on its rules (and interpretations
thereof) as currently in effect.

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         f. SEC Documents; Financial Statements. Since October 1996,
the Company has timely filed all reports, schedules, forms, statements
and other documents required to be filed by it with the SEC pursuant
to the Securities Exchange Act of 1934, as amended (the "EXCHANGE
ACT"), and has filed all registration statements and other documents
required to be filed by it with the SEC pursuant to the Securities Act
(all of the foregoing filed prior to the date hereof, and all exhibits
included therein and financial statements and schedules thereto and
documents incorporated by reference therein, being hereinafter
referred to herein as the "SEC DOCUMENTS"). The Company has made
available to each Purchaser and to counsel for the Purchasers true and
complete copies of the SEC Documents not filed on EDGAR and requested
by Purchasers, except for the exhibits and schedules thereto and the
documents incorporated therein. The SEC Documents available to the
Purchasers through the EDGAR archives of the SEC are true and complete
copies of all SEC Documents filed by the Company through EDGAR. As of
their respective dates, the SEC Documents complied in all material
respects with the requirements of the Exchange Act or the Securities
Act, as the case may be, and the rules and regulations of the SEC
promulgated thereunder applicable to the SEC Documents, and none of
the SEC Documents, at the time they were filed with the SEC, contained
any untrue statement of a material fact or omitted to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading. Any statements made in any such SEC
Documents that are or were required to be updated or amended under
applicable law have been so updated or amended. As of their respective
dates, the financial statements of the Company included in the SEC
Documents complied in all material respects with applicable accounting
requirements and the published rules and regulations of the SEC
applicable with respect thereto. Such financial statements have been
prepared in accordance with United States generally accepted
accounting principles, consistently applied, during the periods
involved (except (i) as may be otherwise indicated in such financial
statements or the notes thereto, or (ii) in the case of unaudited
interim statements, to the extent they may not include footnotes or
may be condensed or summary statements) and fairly present in all
material respects the consolidated financial position of the Company
and its subsidiaries as of the dates thereof and the results of their
operations and cash flows for the periods then ended (subject, in the
case of unaudited statements, to normal and recurring year-end audit
adjustments). Except as set forth in the SEC Documents, the Company
has no liabilities, contingent or otherwise, other than (i)
liabilities incurred in the ordinary course of business subsequent to
the date of such SEC Documents and (ii) obligations under contracts
and commitments incurred in the ordinary course of business and not
required under generally accepted accounting principles to be
reflected in such SEC Documents, which liabilities and obligations
referred to in clauses (i) and (ii), individually or in the aggregate,
are not material and would not have a Material Adverse Effect.

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         g. Absence of Certain Changes. Except as disclosed in the SEC
Documents, since September 30, 1999, there has been no change or
development which individually or in the aggregate has had or could
have a Material Adverse Effect.

         h. Absence of Litigation. Except as disclosed in the SEC
Documents and set forth on Schedule 4(h), there is no action, suit,
proceeding, inquiry or investigation before or by any court, public
board, government agency, self-regulatory organization or body pending
or, or to the knowledge of the Company, threatened against or
affecting the Company, or any of its subsidiaries, or any of their
directors or officers in their capacities as such except as would not
have a Material Adverse Effect.

         i. Intellectual Property. The Company and each of its
subsidiaries owns or is licensed to use all patents, patent
applications, trademarks, trademark applications, trade names, service
marks, copyrights, copyright applications, licenses, permits, know-how
(including trade secrets and other unpatented and/or unpatentable
proprietary or confidential information, systems or procedures) and
other similar rights and proprietary knowledge (collectively,
"INTANGIBLES") necessary for the conduct of its business as now being
conducted and as proposed to be conducted. Neither the Company nor any
of its subsidiaries is infringing or in conflict with any other person
with respect to any Intangibles. Neither the Company nor any of its
subsidiaries has received written notice that it is infringing upon
third party Intangibles. Neither the Company nor any of its
subsidiaries has entered into any consent, indemnification,
forbearance to sue or settlement agreements with respect to the
validity of the Company's or such subsidiary's ownership or right to
use its Intangibles and, to the knowledge of the Company, there is no
basis for any such claim to be successful. The Intangibles are valid
and enforceable, and no registration relating thereto has lapsed,
expired or been abandoned or canceled or is the subject of
cancellation or other adversarial proceedings, and all applications
therefor are pending and in good standing. The Company has complied,
in all material respects, with its contractual obligations relating to
the protection of the Intangibles used pursuant to licenses. To the
Company's knowledge, no person is infringing on or violating the
Intangibles owned or used by the Company.

         j. Agreements. Except as filed as Exhibits to the SEC
Documents or as set forth in Schedule 4(j), there are no agreements,
understandings, instruments, contracts, proposed transactions,
judgments, orders, writs or decrees to which the Company or any of its
subsidiaries is a party or by which it is bound which may involve (i)
obligations (contingent or otherwise) of, or payments to, the Company
in excess of $250,000 (other than licenses pursuant to license
agreements entered into in the ordinary course of the Company's
business) or (ii) the license of any patent, copyright, trade secret
or other proprietary right to or from the Company (other than licenses
pursuant to license agreements entered into in the ordinary course of
the Company's business), or (iii) provisions restricting or affecting
the development, manufacture or distribution of the

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Company's or its subsidiaries' products or services, or (iv)
indemnification by the Company or any subsidiary with respect to
infringements of proprietary rights (other than indemnification
obligations arising from purchase or sale agreements entered into in
the ordinary course of business) or (v) transactions between the
Company and any of the Company's or its subsidiaries' officers,
directors, affiliates, or any affiliates thereof (other than pursuant
to employment agreements or stock or benefit plans), or (vi)
employment of the Company's officers or (vii) incurrence of any
indebtedness for money borrowed or any other liabilities (other than
with respect to dividend obligations, distributions, indebtedness and
other obligations incurred in the ordinary course of business or as
disclosed in the SEC Documents) individually in excess of $250,000 or,
in the case of indebtedness and/or liabilities individually less than
$250,000, in excess of $500,000 in the aggregate, or (viii) the making
of any loans or advances to any person, other than ordinary advances
for travel expenses, or (ix) the sale, exchange or other disposition
of any of its assets or rights, other than licenses in the ordinary
course of business.

         k. Foreign Corrupt Practices. Neither the Company, or any of
its subsidiaries, nor any director, officer, agent, employee or other
person acting on behalf of the Company or any of its subsidiaries has,
in the course of such person's actions for, or on behalf of, the
Company, or any of its subsidiaries, used any corporate funds for any
unlawful contribution, gift, entertainment or other unlawful expenses
relating to political activity; made any direct or indirect unlawful
payment to any foreign or domestic government official or employee
from corporate funds; violated or is in violation of any provision of
the United States Foreign Corrupt Practices Act of 1977; or made any
bribe, rebate, payoff, influence payment, kickback or other unlawful
payment to any foreign or domestic government official or employee.

         l. Environment. Except as disclosed in the SEC Documents (i)
there is no environmental liability, nor, to the knowledge of the
Company, factors likely to give rise to any environmental liability,
affecting any of the properties of the Company or any of its
subsidiaries that, individually or in the aggregate, would have a
Material Adverse Effect and (ii) neither the Company nor any of the
subsidiaries has violated any environmental law applicable to it now
or previously in effect, other than such violations or infringements
that, individually or in the aggregate, have not had and will not have
a Material Adverse Effect.

         m. Title. The Company does not own any real property. Any
real property and facilities held under lease by the Company or any of
its subsidiaries are held by the Company or such subsidiary under
valid, subsisting and enforceable leases with such exceptions which
have not had and will not have a Material Adverse Effect.

         n. Insurance. The Company and its subsidiaries maintain such
insurance relating to their business, operations, assets,
key-employees and officers and directors as

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is appropriate to their business, assets and operations, in such
amounts and against such risks as are customarily carried and insured
against by owners of comparable businesses, assets and operations, and
such insurance coverages will be continued in full force and effect to
and including the Closing Date other than those insurance coverages in
respect of which the failure to continue in full force and effect
could not reasonably be expected to have a Material Adverse Effect.

         o. Disclosure. All information relating to or concerning the
Company and its subsidiaries set forth in this Agreement or provided
to the Purchaser in writing in connection with the transactions
contemplated hereby is true and correct in all material respects and
the Company has not omitted to state any material fact necessary in
order to make the statements made herein or therein, in light of the
circumstances under which they were made, not misleading; provided,
however, that this representation and warranty shall not apply to any
information contained within any of the foregoing related to future
events, or the projected future financial performance of the Company,
including any financial projections, or descriptions of potential
strategic or business relationships between the Company and third
parties.

         p. No Brokers. The Company has not engaged any person to
which or to whom brokerage commissions, finder's fees, financial
advisory fees or similar payments are or will become due in connection
with this Agreement or the transactions contemplated.

         q. Tax Status. The Company and each of its subsidiaries has
made or filed all federal, state and local income and all other tax
returns, reports and declarations required by any jurisdiction to
which it is subject and has paid all taxes and other governmental
assessments and charges, shown or determined to be due on such
returns, reports and declarations, except those being contested in
good faith, and has set aside on its books provisions adequate for the
payment of all taxes for periods subsequent to the periods to which
such returns, reports or declarations apply. There are no unpaid taxes
claimed to be due by the taxing authority of any jurisdiction. The
Company has not executed a waiver with respect to any statute of
limitations relating to the assessment or collection of any federal,
state or local tax. Except as set forth in Schedule 4(q), none of the
Company's tax returns has been or is being audited by any taxing
authority.

         r. No General Solicitation. Neither the Company nor any
person participating on the Company's behalf in the transactions
contemplated hereby has conducted any "general solicitation" or
"general advertising" as such terms are used in Regulation D, with
respect to any of the Securities being offered hereby.

         s. No Integrated Offering. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, has,
directly or indirectly, made any offers or

                                  12
<PAGE>   13

sales of any security or solicited any offers to buy any security
under circumstances that would require registration of the Securities
being offered hereby under the Securities Act or cause this offering
of Securities to be integrated with any prior offering of securities
of the Company for purposes of the Securities Act or any applicable
stockholder approval provisions, including, without limitation, the
applicable AMEX regulations.

         t. Form S-3 Eligibility. The Company is currently eligible to
register the resale of its Common Stock on a registration statement on
Form S-3 under the Securities Act. Except as set forth on Schedule
4(t), to the knowledge of the Company, there exist no facts or
circumstances (including without limitation any required approvals or
waivers of any circumstances that may delay or prevent the obtaining
of accountant's consents) that would prohibit or delay the preparation
and filing of a registration statement on Form S-3 with respect to the
Registrable Securities (as defined in the Registration Rights
Agreement).

         u. Qualified Small Business. The Company represents and
warrants to the Purchasers that, to the best of its knowledge, the
Securities should qualify as "Qualified Small Business Stock" as
defined in Section 1202(c) of the Internal Revenue Code of 1986, as
amended (the "CODE") as of the date hereof. The Company will use
reasonable efforts to comply with the reporting and record keeping
requirements of Section 1202 of the Code, any regulations promulgated
thereunder and any similar state laws and regulations, and agrees not
to repurchase any stock of the Company if such repurchase would cause
such Shares not to so qualify as "Qualified Small Business Stock."

         v. Real Property Holding Corporation. Neither the Company nor
any subsidiary of the Company is a real property holding corporation
within the meaning of Section 897(c)(2) of the Code and any
regulations promulgated thereunder.

         w. ERISA. The Company has complied in all material respects
with the applicable rules and regulations of the Employee Retirement
Income Security Act of 1974, as amended, with respect to any employee
benefit plans subject thereto.

         x. Small Business Concern. The Company together with its
"affiliates" (as that term is defined in Section 121.103 of Title 13
of the Code of Federal Regulations (the "FEDERAL REGULATIONS")), is a
"small business concern" or within the meaning of the Small Business
Investment Act of 1958, as amended (the "SMALL BUSINESS ACT"), and the
regulations promulgated thereunder, including Section 121.301 of Title
13 of the Federal Regulations (a "SMALL BUSINESS CONCERN"). The
information delivered to each Purchaser that is a licensed Small
Business Investment Company (an "SBIC PURCHASER") on SBA Forms 480,
652 and 1031 delivered in connection herewith is true and correct. The
Company is not ineligible for financing by any SBIC Purchaser pursuant
to Section

                                  13
<PAGE>   14

107.720 of Title 13 of the Federal Regulations. The Company
acknowledges that each SBIC Purchaser is a Federal licensee under the
Small Business Act.

5.       COVENANTS.

         a. Best Efforts. The parties shall use their best efforts
timely to satisfy each of the conditions set forth in Section 6 and
Section 7 of this Agreement.

         b. Form D; Blue Sky Laws. The Company agrees to file a Form D
with respect to the Securities as required under Regulation D and to
provide a copy thereof to each Purchaser and to counsel for the
Purchasers as soon as practicable after such filing. The Company
shall, on or before the Closing Date, take such action as the Company
shall reasonably determine is necessary to qualify the Securities for
sale to the Purchasers pursuant to this Agreement under applicable
securities or "blue sky" laws of the states of the United States or
obtain exemption therefrom, and shall provide evidence of any such
action so taken to each Purchaser and counsel for the Purchasers as
soon as practicable after such filing.

         c. Reporting Status. So long as a Purchaser beneficially owns
any Securities or has the right to acquire any Securities pursuant to
this Agreement, the Company shall timely file all reports required to
be filed with the SEC pursuant to the Exchange Act, and shall not
terminate its status as an issuer required to file reports under the
Exchange Act even if the Exchange Act or the rules and regulations
thereunder would permit such termination.

         d. Use of Proceeds. The Company shall use the net proceeds
from the sale of the Shares and the Warrants in order to fund the
Company's sales and marketing activities, to launch its PlanetCAD
initiative, for working capital and for other general corporate
purposes, including potential strategic acquisitions, but in no event
shall the Company use such net proceeds to repurchase any outstanding
securities of the Company or for any other distribution with respect
to outstanding securities of the Company.

         e. Expenses. At the Closing, the Company shall pay the
reasonable fees and expenses of one counsel to the Purchasers, not to
exceed $25,000, and shall reimburse the Purchasers at Closing for the
cost of consulting by Russ Henke, not to exceed $5,000 (the
"EXPENSES").

         f. Reservation of Shares. The Company has and shall at all
times have authorized and reserved for the purpose of issuance a
sufficient number of shares of Common Stock to provide for the
issuance of the Shares as provided in Section 2 hereof, and the full
exercise of the Warrants and the issuance of the Warrant Shares in
connection therewith and as otherwise required hereby and by the
Warrants. The Company shall not reduce the number of shares of Common
Stock reserved for issuance under this

                                  14
<PAGE>   15

Agreement (except as a result of the issuance of the Shares
hereunder), the Warrants (except as a result of the issuance of the
Warrant Shares upon the exercise of the Warrants) or the Registration
Rights Agreement, without the consent of the Purchasers.

         g. Listing. Promptly after the Closing Date, the Company
shall secure the listing of the Shares and Warrant Shares, in each
case, upon each national securities exchange or automated quotation
system, if any, upon which shares of Common Stock are then listed or
quoted (subject to official notice of issuance) and shall maintain, so
long as any other shares of Common Stock shall be so listed, such
listing of all Shares from time to time issuable hereunder and all
Warrant Shares from time to time issuable upon exercise of the
Warrants. The Company will use its best efforts to continue the
listing and trading of its Common Stock on the AMEX, (or, if listing
is moved, the New York Stock Exchange ("NYSE") or the Nasdaq National
Market ("NASDAQ")) and will comply in all material respects with the
Company's reporting, filing and other obligations under the bylaws or
rules of the AMEX.

         h. Corporate Existence. So long as any Purchaser beneficially
owns any Securities or has the right to acquire any Securities
pursuant to this Agreement, the Warrants or the Registration Rights
Agreement, the Company shall maintain its corporate existence, except
in the event of a merger, consolidation or sale of all or
substantially all of the Company's assets, as long as the surviving or
successor entity in such transaction assumes the Company's obligations
hereunder and under the Warrants and under the agreements and
instruments entered into in connection herewith.

         i. No Integrated Offering. Neither the Company, nor any of
its affiliates, nor any person acting on its or their behalf, shall,
directly or indirectly, make any offers or sales of any security or
solicit any offers to buy any security under circumstances that would
require registration of the Securities being offered hereby under the
Securities Act or cause this offering of Securities to be integrated
with any prior or future offering of securities of the Company for
purposes of the Securities Act or any applicable stockholder approval
provisions, including, without limitation, the applicable AMEX
regulations.

         j. Designation of Director. For so long as the Purchasers
collectively own 10% of the Company's outstanding Common Stock,
Capstone Ventures SBIC, L.P. ("CV") shall have the right to designate
(the "Designation Rights") a representative to the Company's Board of
Directors. The Company shall take all necessary corporate action to
cause such nomination to be made at the next annual stockholder
meeting for which the annual proxy has not yet been mailed. The CV
Director shall be compensated in accordance with the Company's
compensation and benefit plans for its outside directors. Subject to
applicable fiduciary duties, the Company shall nominate such designees
or

                                  15
<PAGE>   16

designee on management's slate of directors at succeeding annual
meetings of stockholders.

         k. Restrictions on Purchase. Each Purchaser agrees not to
purchase any shares of the Company's Common Stock in the open market
or in privately negotiated transactions from non-affiliates for a
period of one year from the Closing Date, without the prior approval
of the Board of Directors of the Company.

         l. President of Planet CAD Division. The Company will use its
best efforts to recruit and retain a senior executive with Internet
experience to serve as President of the PlanetCAD division of the
Company as soon as practicable after the Closing Date.

         m. Indemnification by the Company. The Company shall
indemnify, defend and hold each Purchaser, and each of their
respective affiliates, officers, directors, stockholders, employees
and agents, harmless with respect to any and all demands, claims,
actions, suits, proceedings, assessments, judgments, costs, losses,
damages, liabilities and expenses (including, without limitation,
reasonable attorneys' fees) ("LOSSES") asserted against, resulting
from, imposed upon or incurred by any such indemnified party directly
relating to or arising out of: (a) the inaccuracy of any
representation or warranty of the Company contained herein or in any
instrument or certificate delivered pursuant to this Agreement, and
(b) the breach of any covenant or agreement by the Company.

         n. Indemnification by the Purchasers. Each Purchaser,
severally but not jointly, shall indemnify, defend and hold the
Company, and its affiliates, officers, directors, stockholders,
employees and agents, harmless with respect to any and all Losses
asserted against, resulting from, imposed upon or incurred by any such
indemnified party directly relating to or arising out of: (a) the
inaccuracy of any representation or warranty of such Purchaser
contained herein or in any instrument or certificate delivered
pursuant to this Agreement, and (b) the breach of any covenant or
agreement by such Purchaser.

         o. Certain Covenants Relating to SBA Matters.

                  i. Use of Proceeds. The proceeds from the issuance
and sale of the Securities pursuant to this Agreement (the "PROCEEDS")
shall be used by the Company for its growth, modernization or
expansion. Specifically, the proceeds shall be used as set forth in
Section 5(d). The Company shall provide each SBIC Purchaser and the
SBA reasonable access to the Company's books and records for the
purpose of confirming the use of Proceeds.

                                  16
<PAGE>   17

                  ii. Business Activity. For a period of one year
following the Closing, the Company shall not change the nature of its
business activity if such change would render the Company ineligible
as provided in 13 C.F.R. Section 107.720.

                  iii. Compliance. So long as any SBIC Purchaser holds
any securities of the Company, the Company will at all times comply
with the non-discrimination requirements of 13 C.F.R. Parts 112, 113
and 117.

                  iv. Information for SBIC Investor. Within forty-five
(45) days after the end of each fiscal year and at such other times as
an SBIC Investor may reasonably request, the Company shall deliver to
such SBIC Purchaser a written assessment, in form and substance
satisfactory to such SBIC Purchaser, of the economic impact of such
SBIC Purchaser's financing specifying the full-time equivalent jobs
created or retained in connection with such investment, and the impact
of the financing on the Company's business in terms of profits and on
taxes paid by the Company and its employees. Upon request, the Company
agrees to promptly provide each SBIC Purchaser with sufficient
information to permit such Purchaser to comply with their obligations
under the Small Business Act, and the regulations promulgated
thereunder and related thereto; provided, however, each SBIC Purchaser
agrees that it will protect any information which the Company labels
as confidential to the extent permitted by law. Any submission of any
financial information under this Section shall include a certificate
of the company's president, chief executive officer, treasurer or
chief financial officer.

                  v. Books and Records. The Company agrees to provide
each SBIC Purchaser and/or the SBA's examiners access to its books and
records for the purposes of verifying the certifications made under
Section 107.610 of Title 13 of the Federal Regulations.

6.       CONDITIONS TO THE COMPANY'S OBLIGATION TO SELL.

         The obligation of the Company hereunder to issue and sell
Shares and Warrants to a Purchaser at the Closing hereunder is subject
to the satisfaction, at or before the Closing Date, of each of the
following conditions thereto; provided, however, that these conditions
are for the Company's sole benefit and may be waived by the Company at
any time in its sole discretion.

         a. The applicable Purchaser shall have executed the signature
page to this Agreement and the Registration Rights Agreement, and
delivered the same to the Company.

         b. The applicable Purchaser shall have delivered such
Purchaser's Investment Amount in accordance with Section 2(b) above.

                                  17
<PAGE>   18

         c. The representations and warranties of the applicable
Purchaser shall be true and correct in all material respects as of the
date when made and as of the Closing Date as though made at that time
(except for representations and warranties that speak as of a specific
date, which representations and warranties shall be true and correct
as of such date), and the applicable Purchaser shall have performed,
satisfied and complied in all material respects with the covenants,
agreements and conditions required by this Agreement to be performed,
satisfied or complied with by the applicable Purchaser at or prior to
the Closing Date.

         d. No statute, rule, regulation, executive order, decree,
ruling or injunction shall have been enacted, entered, promulgated or
endorsed by any court or governmental authority of competent
jurisdiction or any self-regulatory organization having authority over
the matters contemplated hereby which prohibits the consummation of
any of the transactions contemplated by this Agreement.

7.       CONDITIONS TO EACH PURCHASER'S OBLIGATION TO PURCHASE SHARES AND
         WARRANTS.

         The obligation of each Purchaser hereunder to purchase Shares
and Warrants to be purchased by it hereunder is subject to the
satisfaction, at or before the Closing Date, of each of the following
conditions, provided that these conditions are for such Purchaser's
sole benefit and may be waived by such Purchaser at any time in such
Purchaser's sole discretion:

         a. The Company shall have executed the signature pages to
this Agreement and the Registration Rights Agreement, and delivered
the same to the Purchaser.

         b. The Company shall have instructed its transfer agent to
issue to the Purchaser duly executed certificates representing the
number of Shares and shall have delivered to the Purchaser duly
executed Warrants as provided in Section 2(b) above.

         c. Trading in the Common Stock (or on AMEX generally) shall
not have been suspended or be under threat of suspension by the SEC or
AMEX.

         d. The representations and warranties of the Company shall be
true and correct in all material respects as of the date when made and
as of the Closing Date as though made at that time (except for
representations and warranties that speak as of a specific date, which
representations and warranties shall be true and correct as of such
date) and the Company shall have performed, satisfied and complied in
all material respects with the covenants, agreements and conditions
required by this Agreement to be performed, satisfied or complied with
by the Company at or prior to the Closing Date. The Purchaser shall
have received a certificate, executed on behalf of the Company by its
Vice President, Administration and Corporate Controller, dated as of
the Closing Date, to the

                                  18
<PAGE>   19

foregoing effect and attaching true and correct copies of the
resolutions adopted by the Company's Board of Directors authorizing
the execution, delivery and performance by the Company of its
obligations under this Agreement, the Warrants and the Registration
Rights Agreement.

         e. No statute, rule, regulation, executive order, decree,
ruling, injunction, action, proceeding or interpretation shall have
been enacted, entered, promulgated, endorsed or adopted by any court
or governmental authority of competent jurisdiction or any
self-regulatory organization, or the staff of any thereof, having
authority over the matters contemplated hereby which questions the
validity of, or challenges or prohibits the consummation of, any of
the transactions contemplated by this Agreement.

         f. The Purchaser shall have received an opinion of the
Company's counsel, dated as of the Closing Date, in form and substance
acceptable to counsel for the Purchasers.

         g. From the date of this Agreement through the Closing Date,
there shall not have occurred any Material Adverse Effect.

         h. The Company shall have provided advance notice to AMEX of
the issuance of the Shares and provided the Purchaser with oral or
written evidence of the Company's compliance with all applicable rules
of AMEX.

         i. Each of the other Purchasers shall have delivered to the
Company its Investment Amount and, with respect to the Closing, the
aggregate amount to be invested in the Company by all of the
Purchasers shall equal approximately $6.9 million.

8.       GOVERNING LAW; MISCELLANEOUS.

         a. Governing Law; Jurisdiction. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Delaware.

         b. Counterparts. This Agreement may be executed in two or
more counterparts, all of which shall be considered one and the same
agreement and shall become effective when counterparts have been
signed by each party and delivered to the other party. This Agreement,
once executed by a party, may be delivered to the other parties hereto
by facsimile transmission of a copy of this Agreement bearing the
signature of the party so delivering this Agreement. In the event any
signature is delivered by facsimile transmission, the party using such
means of delivery shall cause the manually executed Execution Page(s)
hereof to be physically delivered to the other party within five (5)
days of the execution hereof.

                                  19
<PAGE>   20

         c. Headings. The headings of this Agreement are for
convenience of reference and shall not form part of, or affect the
interpretation of, this Agreement.

         d. Severability. If any provision of this Agreement shall be
invalid or unenforceable in any jurisdiction, such invalidity or
unenforceability shall not affect the validity or enforceability of
the remainder of this Agreement or the validity or enforceability of
this Agreement in any other jurisdiction.

         e. Entire Agreement; Amendments; Waiver. This Agreement and
the instruments referenced herein contain the entire understanding of
the parties with respect to the matters covered herein and therein
and, except as specifically set forth herein or therein, neither the
Company nor the Purchasers make any representation, warranty, covenant
or undertaking with respect to such matters. No provision of this
Agreement may be waived or amended other than by an instrument in
writing signed by the Company and by the Purchasers representing at
least two-thirds of the aggregate Investment Amounts. Any waiver by
the Purchasers, on the one hand, or the Company, on the other hand, of
a breach of any provision of this Agreement shall not operate as or be
construed to be a waiver of any other breach of such provision of or
any breach of any other provision of this Agreement. The failure of
the Purchasers, on the one hand, or the Company, on the other hand to
insist upon strict adherence to any term of this Agreement on one or
more occasions shall not be considered a waiver or deprive that party
of the right thereafter to insist upon strict adherence to that term
or any other term of this Agreement.

         f. Notices. Any notices required or permitted to be given
under the terms of this Agreement shall be sent by certified or
registered mail (return receipt requested) or delivered personally or
by courier or by confirmed telecopy, and shall be effective five days
after being placed in the mail, if mailed, or upon receipt or refusal
of receipt, if delivered personally or by courier or confirmed
telecopy, in each case addressed to a party. The addresses for such
communications shall be:

            If to the Company:

            Spatial Technology Inc.
            2425 55th Street, Ste. 100
            Boulder, CO 80301
            Telephone No.:  303-544-2900
            Facsimile No.:  303-544-3005
            Attention:  Chief Executive Officer

                                  20
<PAGE>   21

            With a copy to:

            Cooley Godward LLP
            2595 Canyon Blvd., Ste 250
            Boulder, CO 80302
            Telephone No.:  303-546-4000
            Facsimile No.:  303-546-4099
            Attention:  Michael L. Platt, Esq.

If to the Purchaser, to the address set forth under the Purchaser's
name on the Execution Page hereto executed by such Purchaser, with a
copy to:

            Heller Ehrman White & McAuliffe
            711 Fifth Avenue, 5th Floor
            New York, NY 10022
            Telephone No.:  212-832-8300
            Facsimile No.:  212-832-3353
            Attention:  Stephen M. Davis, Esq.

         Each party shall provide notice to the other parties of any
change in address.

         g. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties and their successors and
assigns. The Company shall not assign this Agreement or any rights or
obligations hereunder without the prior written consent of the
Purchasers.

         h. Third Party Beneficiaries. This Agreement is intended for
the benefit of the parties hereto and their respective permitted
successors and assigns, and is not for the benefit of, nor may any
provision hereof be enforced by any other person.

         i. Survival. The representations and warranties of the
Company and the agreements and covenants set forth in Sections 4, 5
and 8 shall survive the Closing notwithstanding any due diligence
investigation conducted by or on behalf of the Purchasers. Moreover,
none of the representations and warranties made by the Company herein
shall act as a waiver of any rights or remedies a Purchaser may have
under applicable federal or state securities laws. The Company agrees
to indemnify and hold harmless each Purchaser and each of such
Purchaser's officers, directors, employees, partners, members, agents
and affiliates for loss or damage relating to the Securities purchased
hereunder arising as a result of or related to any breach by the
Company of any of its representations or covenants set forth herein,
including advancement of expenses as they are incurred.

                                  21
<PAGE>   22

         j. Publicity. The Company and CV on behalf of the Purchasers
shall have the right to review and comment upon the issuance of any
press releases, or the filing of any SEC or AMEX filings, or any other
public statements with respect to the transactions contemplated
hereby. CV shall be provided documents to review at least 48 hours
prior to the filing or other issuance thereof except that draft press
releases shall be provided to CV at least 24 hours prior to issuance.
Within the time period required by the SEC, the Company shall file a
Current Report on Form 8-K or other appropriate form with the SEC
disclosing the transactions contemplated hereby, if required in the
judgment of counsel to the Company.

         k. Further Assurances. Each party shall do and perform, or
cause to be done and performed, all such further acts and things, and
shall execute and deliver all such other agreements, certificates,
instruments and documents, as the other party may reasonably request
in order to carry out the intent and accomplish the purposes of this
Agreement and the consummation of the transactions contemplated
hereby.

         l. Termination. In the event that the Closing Date shall not
have occurred on or before February 28, 2000, unless the parties agree
otherwise, this Agreement shall terminate at the close of business on
such date. Notwithstanding any termination of this Agreement, any
party not in breach of this Agreement shall preserve all rights and
remedies it may have against another party hereto for a breach of this
Agreement prior to or relating to the termination hereof.

         m. Equitable Relief. The Company acknowledges that a breach
by it of its obligations hereunder will cause irreparable harm to a
Purchaser by vitiating the intent and purpose of the transactions
contemplated hereby. Accordingly, the Company acknowledges that the
remedy at law for a breach of its obligations hereunder will be
inadequate and agrees, in the event of a breach or threatened breach
by the Company of the provisions of this Agreement, that a Purchaser
shall be entitled, in addition to all other available remedies, to an
injunction restraining any breach and requiring immediate issuance and
transfer, without the necessity of showing economic loss and without
any bond or other security being required.

         n. Determinations. Except as otherwise expressly provided
herein, all consents, approvals and other determinations (other than
amendments to the terms and provisions of this Agreement) to be made
by the Purchasers pursuant to this Agreement and all waivers to or of
any provisions in this Agreement prior to the Closing Date shall be
made by Purchasers that have agreed to invest a majority of the
aggregate Investment Amounts to be invested by all Purchasers and
except as otherwise expressly provided herein, all consents, approvals
and other determinations (other than amendments to the terms and
provisions of this Agreement) to be made by the Purchasers pursuant to
this Agreement and all waivers to or of any provisions in this
Agreement after the Closing

                                  22
<PAGE>   23

Date shall be made by Purchasers that have invested a majority of the
aggregate Investment Amounts invested by all Purchasers. Amendments to
the terms and provisions of this Agreement shall be made by the
Company and by the Purchasers representing at least two-thirds of the
aggregate Investment Amounts as provided in Section 8(e) hereof.

             [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

                                  23
<PAGE>   24

         IN WITNESS WHEREOF, the undersigned Purchasers and the
Company have caused this Securities Purchase Agreement to be duly
executed as of the date first above written.

                               SPATIAL TECHNOLOGY INC.

                               By:
                                  ------------------------------------
                                  Name:  R. Bruce Morgan
                                  Title: President and Chief Executive Officer

                               THE PURCHASERS:

                               By:
                                  ------------------------------------

<PAGE>   25

                              SCHEDULE I

<TABLE>
<CAPTION>

----------------------------------------------------------------------------------------
                    INVESTMENT AMOUNT ($)      NUMBER OF SHARES       NUMBER OF WARRANTS
----------------------------------------------------------------------------------------
<S>                 <C>                        <C>                    <C>
----------------------------------------------------------------------------------------

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

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

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

----------------------------------------------------------------------------------------
TOTAL                     6,900,000                1,900,000               1,200,000
----------------------------------------------------------------------------------------
</TABLE><PAGE>   1

                                                                   EXHIBIT 10.11

                         INVESTMENT MANAGEMENT AGREEMENT
                                       FOR
                           MGA INSURANCE COMPANY, INC.

     THIS INVESTMENT MANAGEMENT AGREEMENT (this "Agreement") is entered into
this 4th day of October, 1999, by and between Goff Moore Strategic Partners,
L.P., a Texas limited partnership ("GMSP"), and MGA Insurance Company, Inc., a
Texas corporation ("GNA"), an indirect subsidiary of GAINSCO, INC. ("Parent").

     WHEREAS, GNA is a regulated insurance company;

     WHEREAS, GNA desires to appoint GMSP to serve as investment manager with
respect to certain investments held by it; and

     WHEREAS, GMSP is willing to provide investment advisory services to GNA on
the terms and conditions hereinafter set forth.

     NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, GMSP and GNA hereby
agree as follows:

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

     "Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly, through one or more intermediaries controls, is
controlled by or is under common control with such specified Person. For this
purpose the term "control" (including the terms "controlling", "controlled by"
and "under common control with") shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person whether through the ownership of voting Securities, by contract, or
otherwise.

     "Agreement" has the meaning set forth in the first paragraph hereof.

     "Applicable Law" means any statute, law, rule, policy, guideline, or
regulation or any judgment, order, writ, injunction, or decree of any
Governmental Authority to which a specified Person or property is subject.

     "Associate" means (i) any corporation or entity (other than GNA, Parent or
a Subsidiary of GNA or Parent) of which such Person is an officer or partner or
is, directly or indirectly, the beneficial owner of 10 percent or more of any
class of Equity Securities, (ii) any trust or other estate in which such Person
has a substantial beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of
such Person, or any relative of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of GNA or any
of its Subsidiaries.

     "Board" means the board of directors of GNA.

INVESTMENT MANAGEMENT AGREEMENT     1
<PAGE>   2

     "Breach" means any violation or breach of, any misrepresentation or
inaccuracy in, any default under, or any failure to perform or comply with any
representation, warranty, covenant, obligation, or other provision of this
Agreement.

     "Business Day " means any day other than a Saturday or Sunday on which
national banks are open for business in Fort Worth, Texas and New York, New
York.

     "Cash" means any currency or immediately available funds on deposit with a
financial institution.

     "Cause" means that GMSP has committed or engaged in (i) any malfeasance,
bad faith or negligence in respect of GMSP's material duties pursuant to this
Agreement; (ii) any commission of any fraud by GMSP; (iii) any conviction or
indictment of or plea of no contest to any felony by GMSP or any member of the
GMSP Group; (iv) any violation of the provisions of the U. S. federal securities
laws or state securities laws by GMSP or any GMSP Principal; or (v) any material
breach by GMSP of its obligations (including, without limitation, its
obligations to observe and comply with the provisions of the Policy Letter)
under, or its representations or warranties in, this Agreement if such breach
continues for more than 10 days after GMSP receives written notice, specifying
such breach with particularity and demanding cure, from GNA.

     "Committee" means the Board's Investment Committee, none of the members of
which shall be members of the GMSP Group.

     "Confidential Information" means information received by GMSP from GNA or
received by GNA from GMSP that is not generally known or which would logically
be considered confidential or proprietary, or which would do GNA or GMSP, as
applicable, harm if divulged, or which is marked "Confidential Information."

     "Damages" has the meaning set forth in Section 10.

     "Equity Securities" means any capital stock or other equity interests of
any Person, any Securities directly or indirectly convertible into, or
exercisable or exchangeable for any capital stock or other equity interests of
any Person, or any right, option, warrant or other Security which, with the
payment of additional consideration, the expiration of time or the occurrence of
any event shall give the holder thereof the right to acquire any capital stock
or other equity interests of any Person or any Security convertible into or
exercisable or exchangeable for, any capital stock or other equity interests of
any Person.

     "Fair Market Value" means as to any Securities on any date, (a) if such
Securities are listed or admitted to trading on any national securities exchange
on any such trading day, the amount equal to the last sale price of such
Securities, regular way settlement, on such dates or, if no such sale takes
place on a date, the average of the closing bid and asked prices thereof on such
date, in each case as officially reported on the principal national securities
exchange on which such Securities are then listed or admitted to trading, (b) if
such Securities are not then listed or admitted to trading on any national
securities exchange but are reported through the automated quotation system of a
registered securities association, the last trading price of such Securities on
such dates, or if there shall have been no trading on a date, the average of the
closing bid and asked prices of such Securities on such date as shown by such
automated quotation system or (c) if such Securities are not then so listed,
admitted to trading or reported, the value determined by GMSP subject to review
and approval by the Committee, which valuation shall be equal to (i) cost or
(ii) in the event that either GMSP or the Committee determine that there has
been a material change in the value of such Securities since the date of
acquisition of such Securities, such other valuation as is reflective of the
value

INVESTMENT MANAGEMENT AGREEMENT     2
<PAGE>   3

of such Securities; provided, however, that, if GMSP and the Committee are
unable to agree on such fair market value, such Securities shall be valued by
such nationally recognized independent public accounting firm or investment
banking firm desiGNAted by the Committee and reasonably acceptable to GMSP. Any
such third-party valuation shall be final and binding on the parties and
enforceable in accordance with the provisions of the Texas General Arbitration
Act, and the costs and expenses thereof shall be shared equally by GMSP and GNA.

     "Fees" has the meaning set forth in Section 4.

     "GAAP" means generally accepted accounting principles for financial
reporting in the U.S., consistently applied.

     "GMSP" has the meaning set forth in the introductory paragraph of this
Agreement.

     "GMSP Group" means GMSP together with its Affiliates, Associates and
employees, including without limitation GMSP's partners, the partners of the
general partner of GMSP and the GMSP Principals.

     "GMSP Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability of GMSP to conduct business,
the financial condition or the results of operations of GMSP that is material to
GMSP or as to the ability of GMSP to perform its obligations pursuant to this
Agreement, excluding any such condition, circumstance or development which
adversely affects the U.S. economy, financial markets or the insurance industry
generally.

     "GMSP Principals" shall mean John C. Goff, J. Randall Chappel and any other
Persons employed by or otherwise affiliated with GMSP or its general partner who
have access to information regarding particular Securities being considered for
purchase or sale by GNA. The parties recognize that the limited partners of GMSP
as of the date hereof are not GMSP Principals.

     "GNA" has the meaning set forth in the introductory paragraph of this
Agreement.

     "GNA Applicable Insurance Department " means the Texas Department of
Insurance.

     "GNA Entities" means GAINSCO, INC., a Texas corporation; GNA Insurance
Company, Inc., a Texas corporation; GAINSCO County Mutual Insurance Company, a
Texas mutual insurance company; and General Agents Insurance Company of America,
Inc., an Oklahoma corporation.

     "GNA Investment Management Agreements" means the Investment Management
Agreements of even date herewith between GMSP and each of the GNA Entities,
including this Agreement.

     "GNA Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability to conduct business, the
financial condition or the results of operations of GNA and its Subsidiaries
that is material to Parent and its Subsidiaries taken as a whole or as to the
ability of GNA to perform its obligations pursuant to this Agreement, excluding
any such condition, circumstance or development which adversely affects the U.S.
economy, financial markets or insurance industry generally.

     "good faith", when used in respect of any action, means that the action was
taken with (i) honesty of intention, (ii) freedom from knowledge of
circumstances which ought to put the Person taking such action on inquiry or
negligence, and (iii) intention to abstain from taking any unconscientious
advantage of another.

INVESTMENT MANAGEMENT AGREEMENT     3
<PAGE>   4

     "Governmental Authority" means any U.S. federal, state, local, foreign,
supernational or supranational court or tribunal, governmental, regulatory or
administrative agency, department, bureau, authority, commission or arbitral
panel.

     "Investment Grade Debt Obligations" means any interest bearing debt
obligations issued by any Person, including a Governmental Authority, rated at
least "B minus" or the equivalent thereof by Standard & Poor's Corporation or
Moody's Investor's Service, Inc.

     "Malfunction" means any failure to: (a) accurately recognize dates falling
before, on or after the Year 2000; or (b) accurately record, store, retrieve and
process data input and date information.

     "Parent" has the meaning set forth in the first paragraph hereof.

     "Person" means any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including any
Governmental Authority.

     "Policy Letter" has the meaning set forth in Section 2.

     "Portfolio " means those investments held by GNA in Securities of the type
more particularly described under the category "Investments" in Parent's
periodic filings with the SEC.

     "Proceedings" means all proceedings, actions, suits, investigations, and
inquiries by or before any arbitrator or Governmental Authority.

     "Research" means research, statistical and similar information and
services.

     "SEC" means the Securities and Exchange Commission.

     "Security" means any capital stock, partnership interest, membership
interest, subscription, certificate of trust or other ownership interest,
warrant, bond, note, debenture, or other debt or equity interest of any Person
commonly known as a "security," and all rights and options relating to any of
the foregoing, regardless of whether traded on a national securities exchange;
but shall not include Cash Equivalents.

     "Securities Purchase Agreement" means the Securities Purchase Agreement
dated June 29, 1999, between GMSP and Parent.

     "Short Term Debt" means any note, draft, bill of exchange, or similar
security which has a maturity at the time of issuance of not exceeding nine (9)
months exclusive of days of grace, or any renewal thereof the maturity of which
is likewise limited.

     "Subsidiary" means, with respect to any Person, any corporation or other
entity (including partnerships and other business associations) in which the
Person directly or indirectly owns at least a majority of the outstanding voting
Securities or other equity interests having the power, under ordinary
circumstances, to elect a majority of the directors, or otherwise to direct the
management and policies, of such corporation or other entity.

     "U.S." means the United States of America.

INVESTMENT MANAGEMENT AGREEMENT     4
<PAGE>   5

     "Year 2000" means the calendar year 2000 A.D.

     2. INVESTMENT MANAGER. GNA hereby retains GMSP, and GMSP agrees to serve,
as investment manager with respect to the Portfolio on the terms and conditions
hereinafter set forth:

          (a) The investment policies and all other actions of the Portfolio are
and shall at all times be subject to the oversight and direction of the
Committee. GMSP shall manage the Portfolio in accordance with the investment
objectives and policies set forth in the letter (the "Policy Letter") heretofore
delivered to GMSP by GNA. GNA may amend or supplement the contents of the Policy
Letter, including the investment criteria and other instructions set forth
therein, in whole or in part and at any time and from time to time; provided,
however, that no amendment or supplement shall be binding upon GMSP until GMSP
is notified of the amendment or supplement; and provided further, that in the
event that an amended or supplemented Policy Letter shall require GMSP to make
any changes in the manner in which GMSP has performed its services pursuant to
this Agreement, GMSP shall have a reasonable time period to comply with such
changes. GMSP shall periodically evaluate the provisions of the Policy Letter
and provide GNA with any recommendations for the amendment or supplementation of
the provisions of the Policy Letter that GMSP deems advisable for the benefit of
GNA. To the extent that the provisions of the Policy Letter, as the same may be
amended or supplemented from time to time, conflict with the provisions of this
Agreement, the provisions of this Agreement shall control.

          (b) GNA will retain ownership and control of the assets in the
Portfolio at all times. The assets shall be held for the benefit of GNA solely
at one or more financial institutions or other locations specified from time to
time in the Policy Letter.

          (c) Subject to the provisions of the Policy Letter and the oversight
and direction of the Committee, GMSP shall have authority to make all specific
investment decisions with respect to the assets in the Portfolio.

          (d) GMSP shall exercise its discretion and discharge its obligations
under this Agreement in compliance with all Applicable Laws.

          (e) GMSP shall employ and dedicate to GNA continuously during the term
of this Agreement a qualified investment portfolio manager reasonably acceptable
to GNA, who shall have the primary responsibilities of coordinating all aspects
of the day-to-day investment activities of the Portfolio.

          (f) GNA acknowledges that GMSP has informed GNA that GMSP currently is
not registered as an (i) investment adviser under the Investment Advisers Act of
1940, as amended, and all other Applicable Laws or (ii) a broker or dealer under
the Securities Exchange Act of 1934, as amended, and all other Applicable Laws.

     3. REPORTS.

          (a) GMSP shall provide to GNA periodic financial reports with respect
to the assets in and investment performance of the Portfolio. The reports shall
include such financial information in such format as GNA may reasonably request
in connection with the administration of the Portfolio and a record of all
transactions effected during the interim period from the preceding report,
including the price per Security, the broker or dealer executing the transaction
and the commissions paid. The reports shall be made with such frequency, but not
less often than within 20 days following the end of each calendar month, as

INVESTMENT MANAGEMENT AGREEMENT     5
<PAGE>   6

GNA may reasonably request in connection with the administration of the
Portfolio; provided that the late delivery of a complete report no more than one
time in any three-year period with respect to any particular Security in the
Portfolio shall not constitute a Breach of this Agreement if (i) the delay was
caused by the failure of an unaffiliated Person in providing information to GMSP
that had been timely requested by GMSP, (ii) any portion of the report that is
not dependent upon the unaffiliated Person is delivered to GNA by GMSP on a
timely basis, and (iii) GMSP uses its commercially reasonable efforts to cause
such late report to be delivered as promptly as practicable.

          (b) GMSP shall (i) afford GNA and its authorized representatives
reasonable access to the GMSP Principals, GMSP's offices and other facilities,
and all books, records and other documents of GMSP relating to the Portfolio or
this Agreement and (ii) permit GNA and its authorized representatives to make
such inspections and copies of all books, records and other documents as they
may reasonably require to verify the accuracy of any report furnished pursuant
to Section 3(a).

     4. COMPENSATION; EXPENSES.

          (a) For services performed by GMSP, GNA agrees to pay to GMSP
investment management fees (the "Fees") equal on an annual basis to (i) 30 basis
points multiplied by the Fair Market Value with respect to any portion of the
Portfolio invested in Short Term Debt or Investment Grade Debt Obligations at
the end of a given calendar month or during a majority of the days in the given
calendar month and (ii) 100 basis points multiplied by the Fair Market Value
with respect to any portion of the Portfolio invested in Equity Securities or
other alternative investments in Securities which are not Investment Grade Debt
Obligations. The Fees otherwise payable with respect to any calendar month (or
prorated portion thereof) shall be reduced by an amount equal to the sum of (i)
the amount of fees, commissions and expenses paid by or on behalf of GNA to any
investment or mutual fund from which any member of the GMSP Group is eligible to
receive compensation or profits plus (ii) the amount of any fees paid by or on
behalf of GNA to or accrued for the benefit of any member of the GMSP Group
under Rule 12b-1 promulgated under the Investment Company Act of 1940, as
amended, plus (iii) the amount of any finder's fees, brokerage commissions or
other benefit or compensation paid by or on behalf of GNA to or accrued for the
benefit of any member of the GMSP Group in connection with any transaction in
Securities pursuant to this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, (x) no Fees shall be payable with respect to any
portion of the Portfolio invested in Cash during a majority of the days in the
given calendar month and (y) the Committee and GMSP may agree upon a different
Fee structure for special situations.

          (b) The Fees shall be based on the Fair Market Value of the assets in
the Portfolio at the end of each calendar month, and shall be calculated at the
end of each calendar month based upon the actual number of days elapsed during
the calendar month, during which this Agreement is in effect over a year of 365
days. Within fifteen (15) days after the end of each calendar month, GNA shall
pay to GMSP the Fees earned with respect to the preceding calendar month. In the
event of termination prior to the end of a calendar month, GNA will pay to GMSP
a prorated portion of the Fees based upon the Fair Market Value of the assets in
the Portfolio at the time of termination. No other fees, charges or assessments
shall be payable by GNA to or for the benefit of GMSP or any member of the GMSP
Group with respect to the services performed by GMSP pursuant to this Agreement,
provided that GNA shall have the responsibility to reimburse GMSP for GMSP's
payment of any amounts described pursuant to Section 4(d) below. There shall not
be any annual reconciliation, adjustment or other "true-up" at the end of each
calendar year.

          (c) GMSP shall be solely responsible for all of its general and
administrative costs and expenses incurred in connection with performing its
duties and obligations under this Agreement, which shall

INVESTMENT MANAGEMENT AGREEMENT     6
<PAGE>   7

consist of all costs and expenses in connection with the provision of office
space and facilities, equipment and personnel for servicing the investments of
the Portfolio and the salaries and fees of all personnel employed by GMSP
performing services relating to research, statistical and investment activities.

          (d) GNA shall be responsible for, and pay directly, the following
costs and expenses related to GMSP's performance of its duties pursuant to this
Agreement that are reasonable and payable to Persons not affiliated with the
GMSP Group:

               (i) brokerage commissions and other costs, fees and expenses
incurred in the purchase and sale of Securities;

               (ii) fees and expenses of custodians selected pursuant to Section
2(b);

               (iii) costs related to third party Proceedings involving GNA's
ownership of Securities pursuant to this Agreement, directly or indirectly,
including, without limitation, attorneys' fees incurred in connection therewith
(but excluding all costs related to Proceedings or other disputes between GNA
and GMSP or any member of the GMSP Group or which constitute Cause);

               (iv) interest on and fees and expenses arising out of all
borrowings made by GNA with respect to the purchase of Securities, including,
but not limited to, the arranging thereof;

               (v) taxes, fees or other governmental charges levied against GNA;
and

               (vi) any other expense, whether ordinary or extraordinary, that
is determined by the Committee to be appropriate for GNA to pay pursuant to this
Agreement.

          (e) In discharging its duties pursuant to this Agreement, GMSP may
give preference, and may cause GNA to pay higher negotiated commission rates, to
unaffiliated brokers which, in addition to having the capacity of obtaining the
best price for the Security itself and of executing the order with speed,
efficiency and confidentiality, also provide Research to GMSP or GNA. Research
furnished by brokers through whom Securities transactions are effected may be
used by GMSP in servicing all of its accounts, and there shall be no reduction
in the compensation of GMSP hereunder as a consequence of its receipt of such
Research. In the allocation of brokerage, however, GMSP must determine in good
faith, and demonstrate to GNA upon request, that the amount of the commission is
reasonable in relation to the value of the brokerage services and Research
provided by the broker, viewed in terms of either the particular transaction or
GMSP's overall responsibilities with respect to the Portfolio. In the allocation
of brokerage for the Portfolio, GMSP shall be subject always to Applicable Law
and such policies and requirements that the Committee may adopt or approve as
reflected in the Policy Letter.

          (f) In the event that, in any calendar month, the aggregate amount of
Fees (as such term is defined in the respective GNA Investment Management
Agreements) paid to GMSP by the GNA Entities pursuant to the GNA Investment
Management Agreements is less than $75,000, GNA shall pay to GMSP an amount
equal to the product of (i) the quotient of the Fair Market Value of the
Portfolio divided by the Fair Market Value of all of the Portfolios (as such
term is defined in the respective GNA Investment Management Agreements) of all
of the GNA Entities, multiplied by (ii) an amount equal to the difference
between $75,000 and the sum of the aggregate Fees paid to GMSP by all of the GNA
Entities with respect to such calendar month.

INVESTMENT MANAGEMENT AGREEMENT     7
<PAGE>   8

     5. ACTIVITIES OF GMSP.

          (a) The services of GMSP to GNA are not deemed to be exclusive, and
GMSP shall be free to engage in any other business or to render similar services
to others. GMSP and any member of the GMSP Group may engage independently or
with others, for its or their own accounts and for the accounts of others, in
other business ventures and activities of every nature and description,
including, without limitation, purchasing, selling or holding Securities for the
account of any other Person or for its or his own account, including Securities
included within the Portfolio or eligible for investment pursuant to this
Agreement; provided, that the management of such entities and accounts do not
interfere with the performance of their obligations and duties to GNA pursuant
to this Agreement. GNA shall not have any rights or obligations by virtue of
this Agreement in and to such independent ventures and activities or the income
or profits derived therefrom. The foregoing notwithstanding, without the prior
written consent of GNA in a specific case, GMSP shall at all times adhere, and
cause the members of the GMSP Group or the GMSP Principals, as the case may be,
to adhere, to the following:

               (i) Neither GMSP nor any member of the GMSP Group shall act,
either as principal or agent, on the opposite side of any transaction in which
GNA or the Portfolio is involved.

               (ii) GMSP and each GMSP Principal shall at all times (A) place
the interests of GNA before such member's personal transactional interests; (B)
conduct all personal transactions in Securities in such a manner as to avoid any
actual or potential conflict of interest or abuse of such Person's position of
trust and confidence in relation to GNA; and (C) promptly disclose to GNA all
personal transactions made by or on behalf of such Person in Securities which
are or were at any time during the preceding two years in the Portfolio or
issued by Persons whose Securities are in the Portfolio.

          (b) On any issue involving an actual or potential conflict of interest
which is not specifically authorized by or pursuant to this Agreement, GMSP
shall submit such issue to the Committee for prior approval, and shall take such
actions, if any, as are determined by the Committee to be necessary or
appropriate to ameliorate the conflict of interest. If GMSP carries out the
actions specified by the Committee in respect of a matter giving rise to a
conflict of interest, neither GMSP nor any member of the GMSP Group shall have
any liability to GNA in respect of actions taken in good faith by them as a
consequence of the approval by the Committee.

          (c) GMSP shall be liable for any breach of this Section 5 by any
member of the GMSP Group as if GMSP had committed such breach.

     6. DURATION AND TERMINATION. The term of this Agreement shall commence on
the date of this Agreement and shall continue until terminated:

          (a) by the written agreement of GNA and GMSP;

          (b) by GMSP upon not less than 90 days written notice to GNA at any
time after the third anniversary hereof;

          (c) by GNA upon not less than 90 days written notice to GMSP at any
time after the third anniversary hereof;

INVESTMENT MANAGEMENT AGREEMENT     8
<PAGE>   9

          (d) by GNA, at any time, immediately upon written notice to GMSP
following (i) the good faith determination by both the Committee and two-thirds
of the members of the Board (excluding members of the Board desiGNAted for
election by GMSP or its successors in interest under the Securities Purchase
Agreement or otherwise affiliated with GMSP) that an event that constitutes
Cause has occurred and is continuing beyond any applicable period for notice and
opportunity to cure or (ii) the commencement by a Governmental Authority of any
Proceeding alleging any matter which, if proven, would constitute Cause.

          (e) by GMSP upon not less than 10 days notice in the event that GNA
defaults in the performance of any of its material obligations hereunder and
such default continues for not less than 10 days after GNA receives notice of
such default; provided, however, that in the event that such default is of a
nature that it cannot, with due diligence, be cured within 10 days, GMSP may not
terminate this Agreement so long as GNA begins to cure such default within 10
days and thereafter diligently pursues such cure to completion.

     Termination of this Agreement shall not terminate GMSP's obligations under
Section 3 to furnish reports concerning facts and circumstances prior to
termination or under Section 11 to maintain the confidentiality of Confidential
Information , terminate GNA's obligations to pay fees earned by GMSP prior to
the date of termination, or terminate either party's obligations to indemnify
the other party pursuant to this Agreement.

     7. REPRESENTATIONS AND WARRANTIES OF GMSP.

          (a) GMSP is a limited partnership duly organized, validly existing and
in good standing under the Texas Revised Limited Partnership Act, as amended,
and has the power and authority to own all of its properties and assets and to
carry on its business as now being conducted. GMSP is duly qualified and in good
standing (to the extent applicable) to transact business in each jurisdiction in
which the performance of its obligations hereunder require such qualification
except where the failure to be duly qualified or in good standing would not have
or reasonably be expected to have a GMSP Material Adverse Effect.

          (b) GMSP has all requisite power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GMSP. This Agreement has been duly and validly executed and
delivered by GMSP and, assuming the due authorization, execution and delivery
hereof by GNA, constitutes the valid and binding obligation of GMSP, enforceable
against GMSP in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

          (c) No declaration, filing or registration with, or notice to or
authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GMSP other than
as described in the Securities Purchase Agreement or with the GNA Applicable
Insurance Department.

          (d) The execution, delivery and performance of this Agreement by GMSP
do not and will not result in any violation by GMSP under any provisions of:

               (i) the partnership agreement or similar governing documents of
GMSP;

INVESTMENT MANAGEMENT AGREEMENT     9
<PAGE>   10

               (ii) any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any Governmental Authority
applicable to GMSP or any of its properties or assets; or

               (iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other instrument,
obligation or agreement of any kind to which GMSP is now a party or by which it
or any of its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect;

          (e) There is no Proceeding pending, or to the knowledge of GMSP,
threatened against GMSP that questions the validity of this Agreement or any
action to be taken by GMSP in connection with this Agreement except as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect.

          (f) GMSP is, and during the term of this Agreement will continue to be
(i) either exempt from registration or duly registered as an investment adviser
under the Investment Advisers Act of 1940 and all Applicable Laws and (ii)
qualified and eligible to manage the Portfolio under the statutes and
regulations administered by the GNA Applicable Insurance Department, provided
that GNA shall inform GMSP immediately in the event that GNA becomes aware of
any changes in the qualification and eligibility requirements with respect to
such statutes and regulations. GMSP will provide prompt written notice to GNA if
GMSP ceases to be so registered or qualified or becomes aware of any fact, event
or circumstance which will or is reasonably likely to cause it to cease to be so
registered or qualified.

          (g) Taken in the aggregate, the factual information (including,
without limitation, information regarding its knowledge, investment experience
and investment track record) furnished by GMSP to GNA subsequent to May 11, 1999
in writing for purposes of this Agreement did not contain untrue statements of
material facts, or omit to state material facts necessary to make the statements
made not misleading in the light of the circumstances under which they were
made, as of the date as of which such information is dated. All financial
forecasts prepared and furnished by GMSP to GNA subsequent to May 11, 1999 were
prepared in good faith on the basis of assumptions believed to be reasonable and
data, information, tests or conditions believed to be valid or accurate or to
exist at the time such forecasts were prepared.

          (h) All of the equipment, Software and computer hardware owned or used
by GMSP or used and operated by third parties on behalf of GMSP, which performs
or is or may be required to perform functions involving dates or the computation
of dates, or containing date related data, has the programming, design and
performance capabilities to ensure that:

               (i) it will not suffer any Malfunction that would reasonably be
expected to have a GMSP Material Adverse Effect; and

               (ii) it will not, as a result of the date change at the end of
the twentieth century or the input, processing, storage or use of dates up to
and including December 31, 2001, (A) be adversely affected, (B) require changes
in inputting or operating practices, (C) produce invalid or incorrect output or
results, (D) cause any abnormal ending scenario, or (E) suffer any diminution in
functionality or performance that, in any of the above, could reasonably be
expected to have a GMSP Material Adverse Effect.

INVESTMENT MANAGEMENT AGREEMENT     10
<PAGE>   11

     8. REPRESENTATIONS AND WARRANTIES OF GNA.

          (a) GNA is an insurance company duly organized and validly existing
under the laws of the State of Texas, and has the power and authority to own all
of its properties and assets and to carry on its business as now being
conducted. GNA is duly qualified and in good standing to transact business in
each jurisdiction in which the performance of its obligations hereunder require
such qualification except where the failure to be duly qualified or in good
standing would not have or reasonably be expected to have a GNA Material Adverse
Effect.

          (b) GNA has all requisite power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GNA. This Agreement has been duly and validly executed and
delivered by GNA and, assuming the due authorization, execution and delivery
hereof by GMSP, constitutes the valid and binding obligation of GNA, enforceable
against GNA in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

          (c) No declaration, filing or registration with, or notice to or
authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GNA other than
as described in the Securities Purchase Agreement or with the GNA Applicable
Insurance Department.

          (d) The execution, delivery and performance of this Agreement by GNA
do not and will not result in any violation by GNA under any provisions of:

               (i) articles of incorporation or similar governing documents of
GNA;

               (ii) any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any Governmental Authority
applicable to GNA or any of its properties or assets; or

               (iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other instrument,
obligation or agreement of any kind to which GNA is now a party or by which it
or any of its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, in the aggregate, reasonably be expected to have a GNA Material Adverse
Effect.

          (e) There is no Proceeding pending, or to the knowledge of GNA,
threatened against GNA that questions the validity of this Agreement or any
action to be taken by GNA in connection with this Agreement except as could not,
in the aggregate, reasonably be expected to have a GNA Material Adverse Effect.

          (f) GNA has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of entering into
this Agreement.

INVESTMENT MANAGEMENT AGREEMENT     11
<PAGE>   12

          (g) No part of the funds to be used to purchase and hold Securities or
to pay any amounts pursuant to this Agreement constitutes an asset of any
employee benefit plan within the meaning of Section 3 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and GNA is not a "benefit
plan investor" (as such term is defined in 29 C.F.R. ss.2510.3-101(f)(2)).

     9. LIABILITY. It is recognized that decisions concerning investments or
potential investments involve the exercise of judgment and the risk of loss. To
the extent permitted by Applicable Law, neither GMSP nor any of its officers,
directors, or employees nor other members of the GMSP Group shall be liable for
any loss suffered by GNA on account of such investments, or any act taken or
omission made in good faith under this Agreement. For purposes of the foregoing
sentence, no action or omission by GMSP shall be considered to have been made
"in good faith" if GMSP was negligent, violated any law, or made any
misrepresentation (whether affirmatively or by omission).

     10. INDEMNIFICATION.

          (a) GNA shall indemnify, defend, and hold harmless GMSP and the GMSP
Principals from and against any and all claims, actions, causes of action,
demands, losses, damages, liabilities, costs, and expenses (including reasonable
attorneys' fees and expenses) (collectively, "Damages"), asserted against,
resulting to, imposed upon, or incurred by any of them, directly or indirectly,
by reason of or resulting from (i) any Breach by GNA of any of its
representations, warranties, covenants, or agreements contained in this
Agreement or in any certificate, instrument, or document delivered pursuant
hereto or (ii) any Proceeding brought against any of them by a Person other than
GNA or any of its Affiliates, Associates or shareholders in respect of any
action taken in good faith on behalf of GNA in the course of the performance of
GMSP's duties under this Agreement; provided, however, that GNA shall indemnify,
defend, and hold harmless GMSP and the GMSP Principals from and against any
reasonable expenses incurred by such Person(s) in connection with a Proceeding
brought against any of them by any of GNA's shareholders if such Person(s) is
wholly successful, on the merits or otherwise, in the defense of such
Proceeding, and provided, further, that GNA's obligation to indemnify, defend
and hold harmless as provided in this Section 10(a) shall not apply to the first
$750,000 in the aggregate of claims hereunder (other than claims for expenses in
defending a Proceeding for which the Person is entitled to indemnification under
clause (ii) of this Section) and provided, further, that such $750,000 amount
shall be reduced dollar-for-dollar by an amount equal to the cumulative
aggregate of all claims made under one or more of the GNA Investment Management
Agreements.

          (b) GMSP shall indemnify, defend, and hold harmless GNA and its
Affiliates, Associates, directors, officers and employees from and against any
and all Damages asserted against, resulting to, imposed upon, or incurred by any
of them, directly or indirectly, by reason of or resulting from any Breach by
GMSP of any of its representations, warranties, covenants, or agreements
contained in this Agreement or in any certificate, instrument, or document
delivered pursuant hereto; provided, however, that GMSP's obligation to
indemnify, defend and hold harmless as provided in this Section 10(b) shall not
apply to the first $750,000 in the aggregate of claims hereunder and provided,
further, that such $750,000 amount shall be reduced dollar-for-dollar by an
amount equal to the cumulative aggregate of all claims made under one or more of
the GNA Investment Management Agreements.

          (c) Promptly after receipt by an indemnified party under Section 10(a)
or (b) of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such Section, give written notice to the indemnifying party of the
commencement thereof, but the failure so to notify the indemnifying party shall
not relieve it of any liability

INVESTMENT MANAGEMENT AGREEMENT     12
<PAGE>   13

that it may have to any indemnified party except to the extent the indemnifying
party demonstrates that the defense of such action is prejudiced thereby. In
case any such action shall be brought against an indemnified party and it shall
give written notice to the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. If the indemnifying party elects to
assume the defense of such action, the indemnified party shall have the right to
employ separate counsel at its own expense and to participate in the defense
thereof. If the indemnifying party elects not to assume (or fails to assume) the
defense of such action, the indemnified party shall be entitled to assume the
defense of such action with counsel of its own choice, at the expense of the
indemnifying party. If the action is asserted against both the indemnifying
party and the indemnified party and there is a conflict of interests which
renders it inappropriate for the same counsel to represent both the indemnifying
party and the indemnified party, the indemnifying party shall be responsible for
paying for separate counsel for the indemnified party; provided, however, that
if there is more than one indemnified party, the indemnifying party shall not be
responsible for paying for more than one separate firm of attorneys to represent
the indemnified parties, regardless of the number of indemnified parties. The
indemnifying party shall have no liability with respect to any compromise or
settlement of any action effected without its written consent (which shall not
be unreasonably withheld).

     11. CONFIDENTIALITY. Each of GMSP and GNA shall keep all Confidential
Information in confidence, and shall not disclose said information to any other
party other than such party's employees, advisors, attorneys and accountants,
who will be advised of the confidential nature of information. Each party shall
protect the Confidential Information with the same degree of care as such party
normally uses in the protection of its confidential and proprietary information.
Each party further agrees not to use Confidential Information for any purpose
except in connection with the performance of its duties under this Agreement.
The restrictions set forth herein shall not apply with respect to Confidential
Information which (i) is already generally available to the public when received
by such party; (ii) becomes available to the public through no fault of any
member of the GMSP Group or GNA, as applicable; or (iii) is required to be
disclosed by Applicable Law or a Governmental Authority.

     12. INSURANCE. GMSP shall maintain at all times during the term of this
Agreement fiduciary liability insurance of the type customary for investment
managers in similar situations naming GNA as an insured with such limits, terms,
conditions and "tail" provisions as are reasonably acceptable to GNA and GMSP
and shall provide GNA with complete copies of all binders and other policy
information. GMSP also shall obtain and maintain a fidelity bond in the amount
of not less than $5,000,000 and otherwise containing terms and conditions
reasonably acceptable to GNA. In the event that any such policy or bond is
canceled or suspended, GMSP promptly shall notify GNA in writing.

     13. NOTICES. All notices required to be given in writing hereunder shall be
deemed to have been given if (i) delivered personally or by documented courier
or delivery service, (ii) transmitted by facsimile or (iii) mailed by registered
or certified mail (return receipt requested and postage prepaid) to the
following listed Persons at the addresses and facsimile numbers specified below,
or to such other Persons, addresses or facsimile numbers as a party entitled to
notice shall give, in the manner hereinabove described, to the others entitled
to notice:

         If to GMSP, to:  777 Main Street, Suite 2250
                          Fort Worth, Texas 76102
                          Attention:  J. Randall Chappel
                          Fax:  (817) 820-6651

INVESTMENT MANAGEMENT AGREEMENT     13
<PAGE>   14

         If to GNA, to:   500 Commerce Street
                          Fort Worth, Texas 76102-5439
                          Attention: President
                          Fax: (817) 338-1454

If given personally or by documented courier or delivery service, a notice shall
be deemed to have been given when it is received. If transmitted by facsimile, a
notice shall be deemed to have been given on the date received, if electronic
confirmation of receipt occurs during normal business hours on a Business Day,
and otherwise, on the first Business Day following electronic confirmation of
receipt. If given by mail, it shall be deemed to have been given on the third
Business Day following the day on which it was posted.

     14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.

     15. NATURE OF RELATIONSHIP. The parties hereto intend that the services
provided by GMSP to GNA pursuant to this Agreement are being provided as an
independent contractor. Nothing contained in this Agreement shall constitute or
be construed to be or create a general partnership or joint venture between GMSP
and GNA or their respective successors or assigns.

     16. BINDING EFFECT; ASSIGNMENT; NO THIRD PARTY BENEFIT. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by either of the parties hereto without the prior
written consent of the other party. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person other than the parties
hereto, and their respective heirs, legal representatives, successors, and
permitted assigns, any rights, benefits, or remedies of any nature whatsoever
under or by reason of this Agreement.

     17. INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. For purposes of this Agreement, the words "includes" and
"including" shall mean "including without limitation" and the word "or" is used
in the inclusive sense. All capitalized terms defined herein are equally
applicable to both the singular and plural forms.

     18. SEVERABILITY. In the event that this Agreement, or any of its
provisions, or the performance of any provision, is found to be illegal or
unenforceable under applicable law now or hereafter in effect, the parties shall
be excused from performance of such portions of this Agreement as shall be found
to be illegal or unenforceable under the applicable laws or regulations without
affecting the validity of the remaining provisions of the Agreement.

     19. TIME OF ESSENCE. With regard to all dates and time periods set forth in
this Agreement, time is of the essence.

     20. NO WAIVER OF PRIVILEGE. Neither GNA nor GMSP nor any of their
respective subsidiaries or affiliates waives any attorney-client, work product
or other privilege with respect to any information furnished pursuant to this
Agreement.

INVESTMENT MANAGEMENT AGREEMENT     14
<PAGE>   15

     21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

     22. COUNTERPARTS. This Agreement may be executed by the parties hereto in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.

INVESTMENT MANAGEMENT AGREEMENT     15
<PAGE>   16

     IN WITNESS WHEREOF, GMSP and GNA have caused this Agreement to be executed
all as of the day and year first above written.

                        MGA INSURANCE COMPANY, INC.
                            a Texas corporation

                        By: /s/ Glenn W. Anderson
                            ---------------------------------------------------
                            Glenn W. Anderson, President

                        GOFF MOORE STRATEGIC PARTNERS, L.P.,
                            a Texas limited partnership

                        By:  GMSP Operating Partners, L.P., its general partner
                        By:  GMSP, L.L.C., its general partner

                             By: /s/ John C. Goff
                                ----------------------------------------------
                                 John C. Goff, Managing Principal

                             By: /s/ J. Randall Chappel
                                -----------------------------------------------
                                 J. Randall Chappel, Principal

INVESTMENT MANAGEMENT AGREEMENT     16
<PAGE>   17
                        INVESTMENT MANAGEMENT AGREEMENT
                                      FOR
               GENERAL AGENTS INSURANCE COMPANY OF AMERICA, INC.

       THIS INVESTMENT MANAGEMENT AGREEMENT (this "Agreement") is entered into
this 4th day of October, 1999, by and between Goff Moore Strategic Partners,
L.P., a Texas limited partnership ("GMSP"), and General Agents Insurance Company
of America, Inc., an Oklahoma corporation ("GNA"), a subsidiary of GAINSCO, INC.
("Parent").

       WHEREAS, GNA is a regulated insurance company;

       WHEREAS, GNA desires to appoint GMSP to serve as investment manager with
respect to certain investments held by it; and

       WHEREAS, GMSP is willing to provide investment advisory services to GNA
on the terms and conditions hereinafter set forth.

       NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, GMSP and GNA hereby
agree as follows:

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

       "Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly, through one or more intermediaries controls, is
controlled by or is under common control with such specified Person. For this
purpose the term "control" (including the terms "controlling", "controlled by"
and "under common control with") shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person whether through the ownership of voting Securities, by contract, or
otherwise.

       "Agreement" has the meaning set forth in the first paragraph hereof.

       "Applicable Law" means any statute, law, rule, policy, guideline, or
regulation or any judgment, order, writ, injunction, or decree of any
Governmental Authority to which a specified Person or property is subject.

       "Associate" means (i) any corporation or entity (other than GNA, Parent
or a Subsidiary of GNA or Parent) of which such Person is an officer or partner
or is, directly or indirectly, the beneficial owner of 10 percent or more of any
class of Equity Securities, (ii) any trust or other estate in which such Person
has a substantial beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of
such Person, or any relative of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of GNA or any
of its Subsidiaries.

       "Board" means the board of directors of GNA.

INVESTMENT MANAGEMENT AGREEMENT        1

<PAGE>   18

       "Breach" means any violation or breach of, any misrepresentation or
inaccuracy in, any default under, or any failure to perform or comply with any
representation, warranty, covenant, obligation, or other provision of this
Agreement.

       "Business Day" means any day other than a Saturday or Sunday on which
national banks are open for business in Fort Worth, Texas and New York, New
York.

       "Cash" means any currency or immediately available funds on deposit with
a financial institution.

       "Cause" means that GMSP has committed or engaged in (i) any malfeasance,
bad faith or negligence in respect of GMSP's material duties pursuant to this
Agreement; (ii) any commission of any fraud by GMSP; (iii) any conviction or
indictment of or plea of no contest to any felony by GMSP or any member of the
GMSP Group; (iv) any violation of the provisions of the U. S. federal securities
laws or state securities laws by GMSP or any GMSP Principal; or (v) any material
breach by GMSP of its obligations (including, without limitation, its
obligations to observe and comply with the provisions of the Policy Letter)
under, or its representations or warranties in, this Agreement if such breach
continues for more than 10 days after GMSP receives written notice, specifying
such breach with particularity and demanding cure, from GNA.

       "Committee" means the Board's Investment Committee, none of the members
of which shall be members of the GMSP Group.

       "Confidential Information" means information received by GMSP from GNA or
received by GNA from GMSP that is not generally known or which would logically
be considered confidential or proprietary, or which would do GNA or GMSP, as
applicable, harm if divulged, or which is marked "Confidential Information."

       "Damages" has the meaning set forth in Section 10.

       "Equity Securities" means any capital stock or other equity interests of
any Person, any Securities directly or indirectly convertible into, or
exercisable or exchangeable for any capital stock or other equity interests of
any Person, or any right, option, warrant or other Security which, with the
payment of additional consideration, the expiration of time or the occurrence of
any event shall give the holder thereof the right to acquire any capital stock
or other equity interests of any Person or any Security convertible into or
exercisable or exchangeable for, any capital stock or other equity interests of
any Person.

       "Fair Market Value" means as to any Securities on any date, (a) if such
Securities are listed or admitted to trading on any national securities exchange
on any such trading day, the amount equal to the last sale price of such
Securities, regular way settlement, on such dates or, if no such sale takes
place on a date, the average of the closing bid and asked prices thereof on such
date, in each case as officially reported on the principal national securities
exchange on which such Securities are then listed or admitted to trading, (b) if
such Securities are not then listed or admitted to trading on any national
securities exchange but are reported through the automated quotation system of a
registered securities association, the last trading price of such Securities on
such dates, or if there shall have been no trading on a date, the average of the
closing bid and asked prices of such Securities on such date as shown by such
automated quotation system or (c) if such Securities are not then so listed,
admitted to trading or reported, the value determined by GMSP subject to review
and approval by the Committee, which valuation shall be equal to (i) cost or
(ii) in the event that either GMSP or the Committee determine that there has
been a material change in the value of such Securities since the date of
acquisition of such Securities, such other valuation as is reflective of the
value

INVESTMENT MANAGEMENT AGREEMENT        2
<PAGE>   19

of such Securities; provided, however, that, if GMSP and the Committee are
unable to agree on such fair market value, such Securities shall be valued by
such nationally recognized independent public accounting firm or investment
banking firm desiGNAted by the Committee and reasonably acceptable to GMSP. Any
such third-party valuation shall be final and binding on the parties and
enforceable in accordance with the provisions of the Texas General Arbitration
Act, and the costs and expenses thereof shall be shared equally by GMSP and GNA.

       "Fees" has the meaning set forth in Section 4.

       "GAAP" means generally accepted accounting principles for financial
reporting in the U.S., consistently applied.

       "GMSP" has the meaning set forth in the introductory paragraph of this
Agreement.

       "GMSP Group" means GMSP together with its Affiliates, Associates and
employees, including without limitation GMSP's partners, the partners of the
general partner of GMSP and the GMSP Principals.

       "GMSP Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability of GMSP to conduct business,
the financial condition or the results of operations of GMSP that is material to
GMSP or as to the ability of GMSP to perform its obligations pursuant to this
Agreement, excluding any such condition, circumstance or development which
adversely affects the U.S. economy, financial markets or the insurance industry
generally.

       "GMSP Principals" shall mean John C. Goff, J. Randall Chappel and any
other Persons employed by or otherwise affiliated with GMSP or its general
partner who have access to information regarding particular Securities being
considered for purchase or sale by GNA. The parties recognize that the limited
partners of GMSP as of the date hereof are not GMSP Principals.

       "GNA" has the meaning set forth in the introductory paragraph of this
Agreement.

       "GNA Applicable Insurance Department" means the Oklahoma Department of
Insurance.

       "GNA Entities" means GAINSCO, INC., a Texas corporation; MGA Insurance
Company, Inc., a Texas corporation; GAINSCO County Mutual Insurance Company, a
Texas mutual insurance company; and General Agents Insurance Company of America,
Inc., an Oklahoma corporation.

       "GNA Invest ment Management Agreements" means the Investment Management
Agreements of even date herewith between GMSP and each of the GNA Entities,
including this Agreement.

       "GNA Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability to conduct business, the
financial condition or the results of operations of GNA and its Subsidiaries
that is material to Parent and its Subsidiaries taken as a whole or as to the
ability of GNA to perform its obligations pursuant to this Agreement, excluding
any such condition, circumstance or development which adversely affects the U.S.
economy, financial markets or insurance industry generally.

       "good faith", when used in respect of any action, means that the action
was taken with (i) honesty of intention, (ii) freedom from knowledge of
circumstances which ought to put the Person taking such action on inquiry or
negligence, and (iii) intention to abstain from taking any unconscientious
advantage of another.

INVESTMENT MANAGEMENT AGREEMENT        3
<PAGE>   20

       "Governmental Authority" means any U.S. federal, state, local, foreign,
supernational or supranational court or tribunal, governmental, regulatory or
administrative agency, department, bureau, authority, commission or arbitral
panel.

       "Investment Grade Debt Obligations" means any interest bearing debt
obligations issued by any Person, including a Governmental Authority, rated at
least "B minus" or the equivalent thereof by Standard & Poor's Corporation or
Moody's Investor's Service, Inc.

       "Malfunction" means any failure to: (a) accurately recognize dates
falling before, on or after the Year 2000; or (b) accurately record, store,
retrieve and process data input and date information.

       "Parent" has the meaning set forth in the first paragraph hereof.

       "Person" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
any Governmental Authority.

       "Policy Letter" has the meaning set forth in Section 2.

       "Portfolio" means those investments held by GNA in Securities of the type
more particularly described under the category "Investments" in Parent's
periodic filings with the SEC.

       "Proceedings" means all proceedings, actions, suits, investigations, and
inquiries by or before any arbitrator or Governmental Authority.

       "Research" means research, statistical and similar information and
services.

       "SEC" means the Securities and Exchange Commission.

       "Security" means any capital stock, partnership interest, membership
interest, subscription, certificate of trust or other ownership interest,
warrant, bond, note, debenture, or other debt or equity interest of any Person
commonly known as a "security," and all rights and options relating to any of
the foregoing, regardless of whether traded on a national securities exchange;
but shall not include Cash Equivalents.

       "Securities Purchase Agreement" means the Securities Purchase Agreement
dated June 29, 1999, between GMSP and Parent.

       "Short Term Debt" means any note, draft, bill of exchange, or similar
security which has a maturity at the time of issuance of not exceeding nine (9)
months exclusive of days of grace, or any renewal thereof the maturity of which
is likewise limited.

       "Subsidiary" means, with respect to any Person, any corporation or other
entity (including partnerships and other business associations) in which the
Person directly or indirectly owns at least a majority of the outstanding voting
Securities or other equity interests having the power, under ordinary
circumstances, to elect a majority of the directors, or otherwise to direct the
management and policies, of such corporation or other entity.

       "U.S." means the United States of America.

INVESTMENT MANAGEMENT AGREEMENT        4
<PAGE>   21

       "Year 2000" means the calendar year 2000 A.D.

       2. INVESTMENT MANAGER. GNA hereby retains GMSP, and GMSP agrees to serve,
as investment manager with respect to the Portfolio on the terms and conditions
hereinafter set forth:

          (a) The investment policies and all other actions of the Portfolio are
and shall at all times be subject to the oversight and direction of the
Committee. GMSP shall manage the Portfolio in accordance with the investment
objectives and policies set forth in the letter (the "Policy Letter") heretofore
delivered to GMSP by GNA. GNA may amend or supplement the contents of the Policy
Letter, including the investment criteria and other instructions set forth
therein, in whole or in part and at any time and from time to time; provided,
however, that no amendment or supplement shall be binding upon GMSP until GMSP
is notified of the amendment or supplement; and provided further, that in the
event that an amended or supplemented Policy Letter shall require GMSP to make
any changes in the manner in which GMSP has performed its services pursuant to
this Agreement, GMSP shall have a reasonable time period to comply with such
changes. GMSP shall periodically evaluate the provisions of the Policy Letter
and provide GNA with any recommendations for the amendment or supplementation of
the provisions of the Policy Letter that GMSP deems advisable for the benefit of
GNA. To the extent that the provisions of the Policy Letter, as the same may be
amended or supplemented from time to time, conflict with the provisions of this
Agreement, the provisions of this Agreement shall control.

          (b) GNA will retain ownership and control of the assets in the
Portfolio at all times. The assets shall be held for the benefit of GNA solely
at one or more financial institutions or other locations specified from time to
time in the Policy Letter.

          (c) Subject to the provisions of the Policy Letter and the oversight
and direction of the Committee, GMSP shall have authority to make all specific
investment decisions with respect to the assets in the Portfolio.

          (d) GMSP shall exercise its discretion and discharge its obligations
under this Agreement in compliance with all Applicable Laws.

          (e) GMSP shall employ and dedicate to GNA continuously during the term
of this Agreement a qualified investment portfolio manager reasonably acceptable
to GNA, who shall have the primary responsibilities of coordinating all aspects
of the day-to-day investment activities of the Portfolio.

          (f) GNA acknowledges that GMSP has informed GNA that GMSP currently is
not registered as an (i) investment adviser under the Investment Advisers Act of
1940, as amended, and all other Applicable Laws or (ii) a broker or dealer under
the Securities Exchange Act of 1934, as amended, and all other Applicable Laws.

       3. REPORTS.

          (a) GMSP shall provide to GNA periodic financial reports with respect
to the assets in and investment performance of the Portfolio. The reports shall
include such financial information in such format as GNA may reasonably request
in connection with the administration of the Portfolio and a record of all
transactions effected during the interim period from the preceding report,
including the price per Security, the broker or dealer executing the transaction
and the commissions paid. The reports shall be made with such frequency, but not
less often than within 20 days following the end of each calendar month, as

INVESTMENT MANAGEMENT AGREEMENT        5
<PAGE>   22

GNA may reasonably request in connection with the administration of the
Portfolio; provided that the late delivery of a complete report no more than one
time in any three-year period with respect to any particular Security in the
Portfolio shall not constitute a Breach of this Agreement if (i) the delay was
caused by the failure of an unaffiliated Person in providing information to GMSP
that had been timely requested by GMSP, (ii) any portion of the report that is
not dependent upon the unaffiliated Person is delivered to GNA by GMSP on a
timely basis, and (iii) GMSP uses its commercially reasonable efforts to cause
such late report to be delivered as promptly as practicable.

          (b) GMSP shall (i) afford GNA and its authorized representatives
reasonable access to the GMSP Principals, GMSP's offices and other facilities,
and all books, records and other documents of GMSP relating to the Portfolio or
this Agreement and (ii) permit GNA and its authorized representatives to make
such inspections and copies of all books, records and other documents as they
may reasonably require to verify the accuracy of any report furnished pursuant
to Section 3(a).

       4. COMPENSATION; EXPENSES.

          (a) For services performed by GMSP, GNA agrees to pay to GMSP
investment management fees (the "Fees") equal on an annual basis to (i) 30 basis
points multiplied by the Fair Market Value with respect to any portion of the
Portfolio invested in Short Term Debt or Investment Grade Debt Obligations at
the end of a given calendar month or during a majority of the days in the given
calendar month and (ii) 100 basis points multiplied by the Fair Market Value
with respect to any portion of the Portfolio invested in Equity Securities or
other alternative investments in Securities which are not Investment Grade Debt
Obligations. The Fees otherwise payable with respect to any calendar month (or
prorated portion thereof) shall be reduced by an amount equal to the sum of (i)
the amount of fees, commissions and expenses paid by or on behalf of GNA to any
investment or mutual fund from which any member of the GMSP Group is eligible to
receive compensation or profits plus (ii) the amount of any fees paid by or on
behalf of GNA to or accrued for the benefit of any member of the GMSP Group
under Rule 12b-1 promulgated under the Investment Company Act of 1940, as
amended, plus (iii) the amount of any finder's fees, brokerage commissions or
other benefit or compensation paid by or on behalf of GNA to or accrued for the
benefit of any member of the GMSP Group in connection with any transaction in
Securities pursuant to this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, (x) no Fees shall be payable with respect to any
portion of the Portfolio invested in Cash during a majority of the days in the
given calendar month and (y) the Committee and GMSP may agree upon a different
Fee structure for special situations.

          (b) The Fees shall be based on the Fair Market Value of the assets in
the Portfolio at the end of each calendar month, and shall be calculated at the
end of each calendar month based upon the actual number of days elapsed during
the calendar month, during which this Agreement is in effect over a year of 365
days. Within fifteen (15) days after the end of each calendar month, GNA shall
pay to GMSP the Fees earned with respect to the preceding calendar month. In the
event of termination prior to the end of a calendar month, GNA will pay to GMSP
a prorated portion of the Fees based upon the Fair Market Value of the assets in
the Portfolio at the time of termination. No other fees, charges or assessments
shall be payable by GNA to or for the benefit of GMSP or any member of the GMSP
Group with respect to the services performed by GMSP pursuant to this Agreement,
provided that GNA shall have the responsibility to reimburse GMSP for GMSP's
payment of any amounts described pursuant to Section 4(d) below. There shall not
be any annual reconciliation, adjustment or other "true-up" at the end of each
calendar year.

          (c) GMSP shall be solely responsible for all of its general and
administrative costs and expenses incurred in connection with performing its
duties and obligations under this Agreement, which shall

INVESTMENT MANAGEMENT AGREEMENT        6
<PAGE>   23

consist of all costs and expenses in connection with the provision of office
space and facilities, equipment and personnel for servicing the investments of
the Portfolio and the salaries and fees of all personnel employed by GMSP
performing services relating to research, statistical and investment activities.

          (d) GNA shall be responsible for, and pay directly, the following
costs and expenses related to GMSP's performance of its duties pursuant to this
Agreement that are reasonable and payable to Persons not affiliated with the
GMSP Group:

              (i) brokerage commissions and other costs, fees and expenses
incurred in the purchase and sale of Securities;

              (ii) fees and expenses of custodians selected pursuant to Section
2(b);

              (iii) costs related to third party Proceedings involving GNA's
ownership of Securities pursuant to this Agreement, directly or indirectly,
including, without limitation, attorneys' fees incurred in connection therewith
(but excluding all costs related to Proceedings or other disputes between GNA
and GMSP or any member of the GMSP Group or which constitute Cause);

              (iv) interest on and fees and expenses arising out of all
borrowings made by GNA with respect to the purchase of Securities, including,
but not limited to, the arranging thereof;

              (v) taxes, fees or other governmental charges levied against GNA;
and

              (vi) any other expense, whether ordinary or extraordinary, that is
determined by the Committee to be appropriate for GNA to pay pursuant to this
Agreement.

          (e) In discharging its duties pursuant to this Agreement, GMSP may
give preference, and may cause GNA to pay higher negotiated commission rates, to
unaffiliated brokers which, in addition to having the capacity of obtaining the
best price for the Security itself and of executing the order with speed,
efficiency and confidentiality, also provide Research to GMSP or GNA. Research
furnished by brokers through whom Securities transactions are effected may be
used by GMSP in servicing all of its accounts, and there shall be no reduction
in the compensation of GMSP hereunder as a consequence of its receipt of such
Research. In the allocation of brokerage, however, GMSP must determine in good
faith, and demonstrate to GNA upon request, that the amount of the commission is
reasonable in relation to the value of the brokerage services and Research
provided by the broker, viewed in terms of either the particular transaction or
GMSP's overall responsibilities with respect to the Portfolio. In the allocation
of brokerage for the Portfolio, GMSP shall be subject always to Applicable Law
and such policies and requirements that the Committee may adopt or approve as
reflected in the Policy Letter.

          (f) In the event that, in any calendar month, the aggregate amount of
Fees (as such term is defined in the respective GNA Investment Management
Agreements) paid to GMSP by the GNA Entities pursuant to the GNA Investment
Management Agreements is less than $75,000, GNA shall pay to GMSP an amount
equal to the product of (i) the quotient of the Fair Market Value of the
Portfolio divided by the Fair Market Value of all of the Portfolios (as such
term is defined in the respective GNA Investment Management Agreements) of all
of the GNA Entities, multiplied by (ii) an amount equal to the difference
between $75,000 and the sum of the aggregate Fees paid to GMSP by all of the GNA
Entities with respect to such calendar month.

INVESTMENT MANAGEMENT AGREEMENT        7
<PAGE>   24

       5. ACTIVITIES OF GMSP.

          (a) The services of GMSP to GNA are not deemed to be exclusive, and
GMSP shall be free to engage in any other business or to render similar services
to others. GMSP and any member of the GMSP Group may engage independently or
with others, for its or their own accounts and for the accounts of others, in
other business ventures and activities of every nature and description,
including, without limitation, purchasing, selling or holding Securities for the
account of any other Person or for its or his own account, including Securities
included within the Portfolio or eligible for investment pursuant to this
Agreement; provided, that the management of such entities and accounts do not
interfere with the performance of their obligations and duties to GNA pursuant
to this Agreement. GNA shall not have any rights or obligations by virtue of
this Agreement in and to such independent ventures and activities or the income
or profits derived therefrom. The foregoing notwithstanding, without the prior
written consent of GNA in a specific case, GMSP shall at all times adhere, and
cause the members of the GMSP Group or the GMSP Principals, as the case may be,
to adhere, to the following:

              (i) Neither GMSP nor any member of the GMSP Group shall act,
either as principal or agent, on the opposite side of any transaction in which
GNA or the Portfolio is involved.

              (ii) GMSP and each GMSP Principal shall at all times (A) place the
interests of GNA before such member's personal transactional interests; (B)
conduct all personal transactions in Securities in such a manner as to avoid any
actual or potential conflict of interest or abuse of such Person's position of
trust and confidence in relation to GNA; and (C) promptly disclose to GNA all
personal transactions made by or on behalf of such Person in Securities which
are or were at any time during the preceding two years in the Portfolio or
issued by Persons whose Securities are in the Portfolio.

          (b) On any issue involving an actual or potential conflict of interest
which is not specifically authorized by or pursuant to this Agreement, GMSP
shall submit such issue to the Committee for prior approval, and shall take such
actions, if any, as are determined by the Committee to be necessary or
appropriate to ameliorate the conflict of interest. If GMSP carries out the
actions specified by the Committee in respect of a matter giving rise to a
conflict of interest, neither GMSP nor any member of the GMSP Group shall have
any liability to GNA in respect of actions taken in good faith by them as a
consequence of the approval by the Committee.

          (c) GMSP shall be liable for any breach of this Section 5 by any
member of the GMSP Group as if GMSP had committed such breach.

       6. DURATION AND TERMINATION. The term of this Agreement shall commence on
the date of this Agreement and shall continue until terminated:

          (a) by the written agreement of GNA and GMSP;

          (b) by GMSP upon not less than 90 days written notice to GNA at any
time after the third anniversary hereof;

          (c) by GNA upon not less than 90 days written notice to GMSP at any
time after the third anniversary hereof;

INVESTMENT MANAGEMENT AGREEMENT        8
<PAGE>   25

          (d) by GNA, at any time, immediately upon written notice to GMSP
following (i) the good faith determination by both the Committee and two-thirds
of the members of the Board (excluding members of the Board desiGNAted for
election by GMSP or its successors in interest under the Securities Purchase
Agreement or otherwise affiliated with GMSP) that an event that constitutes
Cause has occurred and is continuing beyond any applicable period for notice and
opportunity to cure or (ii) the commencement by a Governmental Authority of any
Proceeding alleging any matter which, if proven, would constitute Cause.

          (e) by GMSP upon not less than 10 days notice in the event that GNA
defaults in the performance of any of its material obligations hereunder and
such default continues for not less than 10 days after GNA receives notice of
such default; provided, however, that in the event that such default is of a
nature that it cannot, with due diligence, be cured within 10 days, GMSP may not
terminate this Agreement so long as GNA begins to cure such default within 10
days and thereafter diligently pursues such cure to completion.

       Termination of this Agreement shall not terminate GMSP's obligations
under Section 3 to furnish reports concerning facts and circumstances prior to
termination or under Section 11 to maintain the confidentiality of Confidential
Information , terminate GNA's obligations to pay fees earned by GMSP prior to
the date of termination, or terminate either party's obligations to indemnify
the other party pursuant to this Agreement.

       7. REPRESENTATIONS AND WARRANTIES OF GMSP.

          (a) GMSP is a limited partnership duly organized, validly existing and
in good standing under the Texas Revised Limited Partnership Act, as amended,
and has the power and authority to own all of its properties and assets and to
carry on its business as now being conducted. GMSP is duly qualified and in good
standing (to the extent applicable) to transact business in each jurisdiction in
which the performance of its obligations hereunder require such qualification
except where the failure to be duly qualified or in good standing would not have
or reasonably be expected to have a GMSP Material Adverse Effect.

          (b) GMSP has all requisite power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GMSP. This Agreement has been duly and validly executed and
delivered by GMSP and, assuming the due authorization, execution and delivery
hereof by GNA, constitutes the valid and binding obligation of GMSP, enforceable
against GMSP in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

          (c) No declaration, filing or registration with, or notice to or
authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GMSP other than
as described in the Securities Purchase Agreement or with the GNA Applicable
Insurance Department.

          (d) The execution, delivery and performance of this Agreement by GMSP
do not and will not result in any violation by GMSP under any provisions of:

              (i) the partnership agreement or similar governing documents of
GMSP;

INVESTMENT MANAGEMENT AGREEMENT        9
<PAGE>   26

              (ii) any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any Governmental Authority
applicable to GMSP or any of its properties or assets; or

              (iii) any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument, obligation
or agreement of any kind to which GMSP is now a party or by which it or any of
its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect;

          (e) There is no Proceeding pending, or to the knowledge of GMSP,
threatened against GMSP that questions the validity of this Agreement or any
action to be taken by GMSP in connection with this Agreement except as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect.

          (f) GMSP is, and during the term of this Agreement will continue to be
(i) either exempt from registration or duly registered as an investment adviser
under the Investment Advisers Act of 1940 and all Applicable Laws and (ii)
qualified and eligible to manage the Portfolio under the statutes and
regulations administered by the GNA Applicable Insurance Department, provided
that GNA shall inform GMSP immediately in the event that GNA becomes aware of
any changes in the qualification and eligibility requirements with respect to
such statutes and regulations. GMSP will provide prompt written notice to GNA if
GMSP ceases to be so registered or qualified or becomes aware of any fact, event
or circumstance which will or is reasonably likely to cause it to cease to be so
registered or qualified.

          (g) Taken in the aggregate, the factual information (including,
without limitation, information regarding its knowledge, investment experience
and investment track record) furnished by GMSP to GNA subsequent to May 11, 1999
in writing for purposes of this Agreement did not contain untrue statements of
material facts, or omit to state material facts necessary to make the statements
made not misleading in the light of the circumstances under which they were
made, as of the date as of which such information is dated. All financial
forecasts prepared and furnished by GMSP to GNA subsequent to May 11, 1999 were
prepared in good faith on the basis of assumptions believed to be reasonable and
data, information, tests or conditions believed to be valid or accurate or to
exist at the time such forecasts were prepared.

          (h) All of the equipment, Software and computer hardware owned or used
by GMSP or used and operated by third parties on behalf of GMSP, which performs
or is or may be required to perform functions involving dates or the computation
of dates, or containing date related data, has the programming, design and
performance capabilities to ensure that:

              (i) it will not suffer any Malfunction that would reasonably be
expected to have a GMSP Material Adverse Effect; and

              (ii) it will not, as a result of the date change at the end of the
twentieth century or the input, processing, storage or use of dates up to and
including December 31, 2001, (A) be adversely affected, (B) require changes in
inputting or operating practices, (C) produce invalid or incorrect output or
results, (D) cause any abnormal ending scenario, or (E) suffer any diminution in
functionality or performance that, in any of the above, could reasonably be
expected to have a GMSP Material Adverse Effect.

INVESTMENT MANAGEMENT AGREEMENT        10
<PAGE>   27

       8. REPRESENTATIONS AND WARRANTIES OF GNA.

          (a) GNA is an insurance company duly organized and validly existing
under the laws of the State of Oklahoma, and has the power and authority to own
all of its properties and assets and to carry on its business as now being
conducted. GNA is duly qualified and in good standing to transact business in
each jurisdiction in which the performance of its obligations hereunder require
such qualification except where the failure to be duly qualified or in good
standing would not have or reasonably be expected to have a GNA Material Adverse
Effect.

          (b) GNA has all requisite power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GNA. This Agreement has been duly and validly executed and
delivered by GNA and, assuming the due authorization, execution and delivery
hereof by GMSP, constitutes the valid and binding obligation of GNA, enforceable
against GNA in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

          (c) No declaration, filing or registration with, or notice to or
authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GNA other than
as described in the Securities Purchase Agreement or with the GNA Applicable
Insurance Department.

          (d) The execution, delivery and performance of this Agreement by GNA
do not and will not result in any violation by GNA under any provisions of:

              (i) articles of incorporation or similar governing documents of
GNA;

              (ii) any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any Governmental Authority
applicable to GNA or any of its properties or assets; or

              (iii) any note, bond, mortgage, indenture, deed of trust, license,
franchise, permit, concession, contract, lease or other instrument, obligation
or agreement of any kind to which GNA is now a party or by which it or any of
its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, in the aggregate, reasonably be expected to have a GNA Material Adverse
Effect.

          (e) There is no Proceeding pending, or to the knowledge of GNA,
threatened against GNA that questions the validity of this Agreement or any
action to be taken by GNA in connection with this Agreement except as could not,
in the aggregate, reasonably be expected to have a GNA Material Adverse Effect.

          (f) GNA has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of entering into
this Agreement.

INVESTMENT MANAGEMENT AGREEMENT        11
<PAGE>   28

          (g) No part of the funds to be used to purchase and hold Securities or
to pay any amounts pursuant to this Agreement constitutes an asset of any
employee benefit plan within the meaning of Section 3 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and GNA is not a "benefit
plan investor" (as such term is defined in 29 C.F.R. ss.2510.3-101(f)(2)).

       9. LIABILITY. It is recognized that decisions concerning investments or
potential investments involve the exercise of judgment and the risk of loss. To
the extent permitted by Applicable Law, neither GMSP nor any of its officers,
directors, or employees nor other members of the GMSP Group shall be liable for
any loss suffered by GNA on account of such investments, or any act taken or
omission made in good faith under this Agreement. For purposes of the foregoing
sentence, no action or omission by GMSP shall be considered to have been made
"in good faith" if GMSP was negligent, violated any law, or made any
misrepresentation (whether affirmatively or by omission).

       10. INDEMNIFICATION.

           (a) GNA shall indemnify, defend, and hold harmless GMSP and the GMSP
Principals from and against any and all claims, actions, causes of action,
demands, losses, damages, liabilities, costs, and expenses (including reasonable
attorneys' fees and expenses) (collectively, "Damages"), asserted against,
resulting to, imposed upon, or incurred by any of them, directly or indirectly,
by reason of or resulting from (i) any Breach by GNA of any of its
representations, warranties, covenants, or agreements contained in this
Agreement or in any certificate, instrument, or document delivered pursuant
hereto or (ii) any Proceeding brought against any of them by a Person other than
GNA or any of its Affiliates, Associates or shareholders in respect of any
action taken in good faith on behalf of GNA in the course of the performance of
GMSP's duties under this Agreement; provided, however, that GNA shall indemnify,
defend, and hold harmless GMSP and the GMSP Principals from and against any
reasonable expenses incurred by such Person(s) in connection with a Proceeding
brought against any of them by any of GNA's shareholders if such Person(s) is
wholly successful, on the merits or otherwise, in the defense of such
Proceeding, and provided, further, that GNA's obligation to indemnify, defend
and hold harmless as provided in this Section 10(a) shall not apply to the first
$750,000 in the aggregate of claims hereunder (other than claims for expenses in
defending a Proceeding for which the Person is entitled to indemnification under
clause (ii) of this Section) and provided, further, that such $750,000 amount
shall be reduced dollar-for-dollar by an amount equal to the cumulative
aggregate of all claims made under one or more of the GNA Investment Management
Agreements.

           (b) GMSP shall indemnify, defend, and hold harmless GNA and its
Affiliates, Associates, directors, officers and employees from and against any
and all Damages asserted against, resulting to, imposed upon, or incurred by any
of them, directly or indirectly, by reason of or resulting from any Breach by
GMSP of any of its representations, warranties, covenants, or agreements
contained in this Agreement or in any certificate, instrument, or document
delivered pursuant hereto; provided, however, that GMSP's obligation to
indemnify, defend and hold harmless as provided in this Section 10(b) shall not
apply to the first $750,000 in the aggregate of claims hereunder and provided,
further, that such $750,000 amount shall be reduced dollar-for-dollar by an
amount equal to the cumulative aggregate of all claims made under one or more of
the GNA Investment Management Agreements.

           (c) Promptly after receipt by an indemnified party under Section
10(a) or (b) of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such Section, give written notice to the indemnifying party of the
commencement thereof, but the failure so to notify the indemnifying party shall
not relieve it of any liability

INVESTMENT MANAGEMENT AGREEMENT        12
<PAGE>   29

that it may have to any indemnified party except to the extent the indemnifying
party demonstrates that the defense of such action is prejudiced thereby. In
case any such action shall be brought against an indemnified party and it shall
give written notice to the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. If the indemnifying party elects to
assume the defense of such action, the indemnified party shall have the right to
employ separate counsel at its own expense and to participate in the defense
thereof. If the indemnifying party elects not to assume (or fails to assume) the
defense of such action, the indemnified party shall be entitled to assume the
defense of such action with counsel of its own choice, at the expense of the
indemnifying party. If the action is asserted against both the indemnifying
party and the indemnified party and there is a conflict of interests which
renders it inappropriate for the same counsel to represent both the indemnifying
party and the indemnified party, the indemnifying party shall be responsible for
paying for separate counsel for the indemnified party; provided, however, that
if there is more than one indemnified party, the indemnifying party shall not be
responsible for paying for more than one separate firm of attorneys to represent
the indemnified parties, regardless of the number of indemnified parties. The
indemnifying party shall have no liability with respect to any compromise or
settlement of any action effected without its written consent (which shall not
be unreasonably withheld).

       11. CONFIDENTIALITY. Each of GMSP and GNA shall keep all Confidential
Information in confidence, and shall not disclose said information to any other
party other than such party's employees, advisors, attorneys and accountants,
who will be advised of the confidential nature of information. Each party shall
protect the Confidential Information with the same degree of care as such party
normally uses in the protection of its confidential and proprietary information.
Each party further agrees not to use Confidential Information for any purpose
except in connection with the performance of its duties under this Agreement.
The restrictions set forth herein shall not apply with respect to Confidential
Information which (i) is already generally available to the public when received
by such party; (ii) becomes available to the public through no fault of any
member of the GMSP Group or GNA, as applicable; or (iii) is required to be
disclosed by Applicable Law or a Governmental Authority.

       12. INSURANCE. GMSP shall maintain at all times during the term of this
Agreement fiduciary liability insurance of the type customary for investment
managers in similar situations naming GNA as an insured with such limits, terms,
conditions and "tail" provisions as are reasonably acceptable to GNA and GMSP
and shall provide GNA with complete copies of all binders and other policy
information. GMSP also shall obtain and maintain a fidelity bond in the amount
of not less than $5,000,000 and otherwise containing terms and conditions
reasonably acceptable to GNA. In the event that any such policy or bond is
canceled or suspended, GMSP promptly shall notify GNA in writing.

       13. NOTICES. All notices required to be given in writing hereunder shall
be deemed to have been given if (i) delivered personally or by documented
courier or delivery service, (ii) transmitted by facsimile or (iii) mailed by
registered or certified mail (return receipt requested and postage prepaid) to
the following listed Persons at the addresses and facsimile numbers specified
below, or to such other Persons, addresses or facsimile numbers as a party
entitled to notice shall give, in the manner hereinabove described, to the
others entitled to notice:

           If to GMSP, to:        777 Main Street, Suite 2250
                                  Fort Worth, Texas 76102
                                  Attention: J. Randall Chappel
                                  Fax: (817) 820-6651

INVESTMENT MANAGEMENT AGREEMENT        13
<PAGE>   30

           If to GNA, to:         500 Commerce Street
                                  Fort Worth, Texas 76102-5439
                                  Attention: President
                                  Fax: (817) 338-1454

If given personally or by documented courier or delivery service, a notice shall
be deemed to have been given when it is received. If transmitted by facsimile, a
notice shall be deemed to have been given on the date received, if electronic
confirmation of receipt occurs during normal business hours on a Business Day,
and otherwise, on the first Business Day following electronic confirmation of
receipt. If given by mail, it shall be deemed to have been given on the third
Business Day following the day on which it was posted.

       14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.

       15. NATURE OF RELATIONSHIP. The parties hereto intend that the services
provided by GMSP to GNA pursuant to this Agreement are being provided as an
independent contractor. Nothing contained in this Agreement shall constitute or
be construed to be or create a general partnership or joint venture between GMSP
and GNA or their respective successors or assigns.

       16. BINDING EFFECT; ASSIGNMENT; NO THIRD PARTY BENEFIT. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by either of the parties hereto without the prior
written consent of the other party. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person other than the parties
hereto, and their respective heirs, legal representatives, successors, and
permitted assigns, any rights, benefits, or remedies of any nature whatsoever
under or by reason of this Agreement.

       17. INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. For purposes of this Agreement, the words "includes" and
"including" shall mean "including without limitation" and the word "or" is used
in the inclusive sense. All capitalized terms defined herein are equally
applicable to both the singular and plural forms.

       18. SEVERABILITY. In the event that this Agreement, or any of its
provisions, or the performance of any provision, is found to be illegal or
unenforceable under applicable law now or hereafter in effect, the parties shall
be excused from performance of such portions of this Agreement as shall be found
to be illegal or unenforceable under the applicable laws or regulations without
affecting the validity of the remaining provisions of the Agreement.

       19. TIME OF ESSENCE. With regard to all dates and time periods set forth
in this Agreement, time is of the essence.

       20. NO WAIVER OF PRIVILEGE. Neither GNA nor GMSP nor any of their
respective subsidiaries or affiliates waives any attorney-client, work product
or other privilege with respect to any information furnished pursuant to this
Agreement.

INVESTMENT MANAGEMENT AGREEMENT        14
<PAGE>   31

       21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

       22. COUNTERPARTS. This Agreement may be executed by the parties hereto in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.

INVESTMENT MANAGEMENT AGREEMENT        15
<PAGE>   32

       IN WITNESS WHEREOF, GMSP and GNA have caused this Agreement to be
executed all as of the day and year first above written.

                                     GENERAL AGENTS INSURANCE COMPANY
                                     OF AMERICA, INC.,
                                         an Oklahoma corporation

                                     By:         /s/ Glenn W. Anderson
                                        ----------------------------------------
                                              Glenn W. Anderson, President

                                     GOFF MOORE STRATEGIC PARTNERS, L.P.,
                                         a Texas limited partnership

                                     By: GMSP Operating Partners, L.P., its
                                         general partner
                                     By: GMSP, L.L.C., its general partner

                                         By:          /s/ John C. Goff
                                            ------------------------------------
                                              John C. Goff, Managing Principal

                                         By:       /s/ J. Randall Chappel
                                            ------------------------------------
                                                J. Randall Chappel, Principal

INVESTMENT MANAGEMENT AGREEMENT        16

<PAGE>   33

                         INVESTMENT MANAGEMENT AGREEMENT
                                       FOR
                                  GAINSCO, INC.

     THIS INVESTMENT MANAGEMENT AGREEMENT (this "Agreement") is entered into
this 4th day of October, 1999, by and between Goff Moore Strategic Partners,
L.P., a Texas limited partnership ("GMSP"), and GAINSCO, INC., a Texas
corporation ("GNA").

     WHEREAS, GNA is a holding company whose subsidiaries are regulated
insurance companies;

     WHEREAS, GNA desires to appoint GMSP to serve as investment manager with
respect to certain investments held by it; and

     WHEREAS, GMSP is willing to provide investment advisory services to GNA on
the terms and conditions hereinafter set forth.

     NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, GMSP and GNA hereby
agree as follows:

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

     "Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly, through one or more intermediaries controls, is
controlled by or is under common control with such specified Person. For this
purpose the term "control" (including the terms "controlling", "controlled by"
and "under common control with") shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person whether through the ownership of voting Securities, by contract, or
otherwise.

     "Agreement" has the meaning set forth in the first paragraph hereof.

     "Applicable Law" means any statute, law, rule, policy, guideline, or
regulation or any judgment, order, writ, injunction, or decree of any
Governmental Authority to which a specified Person or property is subject.

     "Associate" means (i) any corporation or entity (other than GNA or a
Subsidiary of GNA) of which such Person is an officer or partner or is, directly
or indirectly, the beneficial owner of 10 percent or more of any class of Equity
Securities, (ii) any trust or other estate in which such Person has a
substantial beneficial interest or as to which such Person serves as trustee or
in a similar fiduciary capacity, and (iii) any relative or spouse of such
Person, or any relative of such Person, or any relative of such spouse, who has
the same home as such Person or who is a director or officer of GNA or any of
its Subsidiaries.

     "Board" means the board of directors of GNA.

INVESTMENT MANAGEMENT AGREEMENT     1
<PAGE>   34

     "Breach" means any violation or breach of, any misrepresentation or
inaccuracy in, any default under, or any failure to perform or comply with any
representation, warranty, covenant, obligation, or other provision of this
Agreement.

     "Business Day" means any day other than a Saturday or Sunday on which
national banks are open for business in Fort Worth, Texas and New York, New
York.

     "Cash" means any currency or immediately available funds on deposit with a
financial institution.

     "Cause" means that GMSP has committed or engaged in (i) any malfeasance,
bad faith or negligence in respect of GMSP's material duties pursuant to this
Agreement; (ii) any commission of any fraud by GMSP; (iii) any conviction or
indictment of or plea of no contest to any felony by GMSP or any member of the
GMSP Group; (iv) any violation of the provisions of the U. S. federal securities
laws or state securities laws by GMSP or any GMSP Principal; or (v) any material
breach by GMSP of its obligations (including, without limitation, its
obligations to observe and comply with the provisions of the Policy Letter)
under, or its representations or warranties in, this Agreement if such breach
continues for more than 10 days after GMSP receives written notice, specifying
such breach with particularity and demanding cure, from GNA.

     "Committee" means the Board's Investment Committee, none of the members of
which shall be members of the GMSP Group.

     "Confidential Information" means information received by GMSP from GNA or
received by GNA from GMSP that is not generally known or which would logically
be considered confidential or proprietary, or which would do GNA or GMSP, as
applicable, harm if divulged, or which is marked "Confidential Information."

     "Damages" has the meaning set forth in Section 10.

     "Equity Securities" means any capital stock or other equity interests of
any Person, any Securities directly or indirectly convertible into, or
exercisable or exchangeable for any capital stock or other equity interests of
any Person, or any right, option, warrant or other Security which, with the
payment of additional consideration, the expiration of time or the occurrence of
any event shall give the holder thereof the right to acquire any capital stock
or other equity interests of any Person or any Security convertible into or
exercisable or exchangeable for, any capital stock or other equity interests of
any Person.

     "Fair Market Value" means as to any Securities on any date, (a) if such
Securities are listed or admitted to trading on any national securities exchange
on any such trading day, the amount equal to the last sale price of such
Securities, regular way settlement, on such dates or, if no such sale takes
place on a date, the average of the closing bid and asked prices thereof on such
date, in each case as officially reported on the principal national securities
exchange on which such Securities are then listed or admitted to trading, (b) if
such Securities are not then listed or admitted to trading on any national
securities exchange but are reported through the automated quotation system of a
registered securities association, the last trading price of such Securities on
such dates, or if there shall have been no trading on a date, the average of the
closing bid and asked prices of such Securities on such date as shown by such
automated quotation system or (c) if such Securities are not then so listed,
admitted to trading or reported, the value determined by GMSP subject to review
and approval by the Committee, which valuation shall be equal to (i) cost or
(ii) in the event that either GMSP or the Committee determine that there has
been a material change in the value of such Securities since the date of
acquisition of such Securities, such other valuation as is reflective of the
value

INVESTMENT MANAGEMENT AGREEMENT     2
<PAGE>   35

of such Securities; provided, however, that, if GMSP and the Committee are
unable to agree on such fair market value, such Securities shall be valued by
such nationally recognized independent public accounting firm or investment
banking firm designated by the Committee and reasonably acceptable to GMSP. Any
such third-party valuation shall be final and binding on the parties and
enforceable in accordance with the provisions of the Texas General Arbitration
Act, and the costs and expenses thereof shall be shared equally by GMSP and GNA.

     "Fees" has the meaning set forth in Section 4.

     "GAAP" means generally accepted accounting principles for financial
reporting in the U.S., consistently applied.

     "GMSP" has the meaning set forth in the introductory paragraph of this
Agreement.

     "GMSP Group" means GMSP together with its Affiliates, Associates and
employees, including without limitation GMSP's partners, the partners of the
general partner of GMSP and the GMSP Principals.

     "GMSP Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability of GMSP to conduct business,
the financial condition or the results of operations of GMSP that is material to
GMSP or as to the ability of GMSP to perform its obligations pursuant to this
Agreement, excluding any such condition, circumstance or development which
adversely affects the U.S. economy, financial markets or the insurance industry
generally.

     "GMSP Principals" shall mean John C. Goff, J. Randall Chappel and any other
Persons employed by or otherwise affiliated with GMSP or its general partner who
have access to information regarding particular Securities being considered for
purchase or sale by GNA. The parties recognize that the limited partners of GMSP
as of the date hereof are not GMSP Principals.

     "GNA" has the meaning set forth in the introductory paragraph of this
Agreement.

     "GNA Applicable Insurance Department" means the Oklahoma Department of
Insurance and the Texas Department of Insurance.

     "GNA Entities" means GAINSCO, INC., a Texas corporation; MGA Insurance
Company, Inc., a Texas corporation; GAINSCO County Mutual Insurance Company, a
Texas mutual insurance company; and General Agents Insurance Company of America,
Inc., an Oklahoma corporation.

     "GNA Investment Management Agreements" means the Investment Management
Agreements of even date herewith between GMSP and each of the GNA Entities,
including this Agreement.

     "GNA Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability to conduct business, the
financial condition or the results of operations of GNA and its Subsidiaries
that is material to GNA and its Subsidiaries taken as a whole or as to the
ability of GNA to perform its obligations pursuant to this Agreement, excluding
any such condition, circumstance or development which adversely affects the U.S.
economy, financial markets or insurance industry generally provided, that no
change in the prices at which the Common Stock is quoted or traded on the NYSE
or otherwise shall be a GNA Material Adverse Effect

INVESTMENT MANAGEMENT AGREEMENT     3
<PAGE>   36

     "good faith", when used in respect of any action, means that the action was
taken with (i) honesty of intention, (ii) freedom from knowledge of
circumstances which ought to put the Person taking such action on inquiry or
negligence, and (iii) intention to abstain from taking any unconscientious
advantage of another.

     "Governmental Authority" means any U.S. federal, state, local, foreign,
supernational or supranational court or tribunal, governmental, regulatory or
administrative agency, department, bureau, authority, commission or arbitral
panel.

     "Investment Grade Debt Obligations" means any interest bearing debt
obligations issued by any Person, including a Governmental Authority, rated at
least "B minus" or the equivalent thereof by Standard & Poor's Corporation or
Moody's Investor's Service, Inc.

     "Malfunction" means any failure to: (a) accurately recognize dates falling
before, on or after the Year 2000; or (b) accurately record, store, retrieve and
process data input and date information.

     "Person" means any individual, corporation, partnership, limited liability
company, association, trust or other entity or organization, including any
Governmental Authority.

     "Policy Letter" has the meaning set forth in Section 2.

     "Portfolio" means those investments held by GNA at the holding company
level in Securities of the type more particularly described under the category
"Investments" in GNA's periodic filings with the SEC.

     "Proceedings" means all proceedings, actions, suits, investigations, and
inquiries by or before any arbitrator or Governmental Authority.

     "Research" means research, statistical and similar information and
services.

     "SEC" means the Securities and Exchange Commission.

     "Security" means any capital stock, partnership interest, membership
interest, subscription, certificate of trust or other ownership interest,
warrant, bond, note, debenture, or other debt or equity interest of any Person
commonly known as a "security," and all rights and options relating to any of
the foregoing, regardless of whether traded on a national securities exchange;
but shall not include Cash Equivalents.

     "Securities Purchase Agreement" means the Securities Purchase Agreement
dated June 29, 1999, between GMSP and GAINSCO, INC.

     "Short Term Debt" means any note, draft, bill of exchange, or similar
security which has a maturity at the time of issuance of not exceeding nine (9)
months exclusive of days of grace, or any renewal thereof the maturity of which
is likewise limited.

     "Subsidiary " means, with respect to any Person, any corporation or other
entity (including partnerships and other business associations) in which the
Person directly or indirectly owns at least a majority of the outstanding voting
Securities or other equity interests having the power, under ordinary
circumstances, to elect a majority of the directors, or otherwise to direct the
management and policies, of such corporation or other entity.

INVESTMENT MANAGEMENT AGREEMENT     4
<PAGE>   37

     "U.S." means the United States of America.

     "Year 2000" means the calendar year 2000 A.D.

     2. INVESTMENT MANAGER. GNA hereby retains GMSP, and GMSP agrees to serve,
as investment manager with respect to the Portfolio on the terms and conditions
hereinafter set forth:

          (a) The investment policies and all other actions of the Portfolio are
and shall at all times be subject to the oversight and direction of the
Committee. GMSP shall manage the Portfolio in accordance with the investment
objectives and policies set forth in the letter (the "Policy Letter") heretofore
delivered to GMSP by GNA. GNA may amend or supplement the contents of the Policy
Letter, including the investment criteria and other instructions set forth
therein, in whole or in part and at any time and from time to time; provided,
however, that no amendment or supplement shall be binding upon GMSP until GMSP
is notified of the amendment or supplement; and provided further, that in the
event that an amended or supplemented Policy Letter shall require GMSP to make
any changes in the manner in which GMSP has performed its services pursuant to
this Agreement, GMSP shall have a reasonable time period to comply with such
changes. GMSP shall periodically evaluate the provisions of the Policy Letter
and provide GNA with any recommendations for the amendment or supplementation of
the provisions of the Policy Letter that GMSP deems advisable for the benefit of
GNA. To the extent that the provisions of the Policy Letter, as the same may be
amended or supplemented from time to time, conflict with the provisions of this
Agreement, the provisions of this Agreement shall control.

          (b) GNA will retain ownership and control of the assets in the
Portfolio at all times. The assets shall be held for the benefit of GNA solely
at one or more financial institutions or other locations specified from time to
time in the Policy Letter.

          (c) Subject to the provisions of the Policy Letter and the oversight
and direction of the Committee, GMSP shall have authority to make all specific
investment decisions with respect to the assets in the Portfolio.

          (d) GMSP shall exercise its discretion and discharge its obligations
under this Agreement in compliance with all Applicable Laws.

          (e) GMSP shall employ and dedicate to GNA continuously during the term
of this Agreement a qualified investment portfolio manager reasonably acceptable
to GNA, who shall have the primary responsibilities of coordinating all aspects
of the day-to-day investment activities of the Portfolio.

          (f) GNA acknowledges that GMSP has informed GNA that GMSP currently is
not registered as an (i) investment adviser under the Investment Advisers Act of
1940, as amended, and all other Applicable Laws or (ii) a broker or dealer under
the Securities Exchange Act of 1934, as amended, and all other Applicable Laws.

     3. REPORTS.

          (a) GMSP shall provide to GNA periodic financial reports with respect
to the assets in and investment performance of the Portfolio. The reports shall
include such financial information in such format as GNA may reasonably request
in connection with the administration of the Portfolio and a record of all
transactions effected during the interim period from the preceding report,
including the price per

INVESTMENT MANAGEMENT AGREEMENT     5
<PAGE>   38

Security, the broker or dealer executing the transaction and the commissions
paid. The reports shall be made with such frequency, but not less often than
within 20 days following the end of each calendar month, as GNA may reasonably
request in connection with the administration of the Portfolio; provided that
the late delivery of a complete report no more than one time in any three-year
period with respect to any particular Securities in the Portfolio shall not
constitute a Breach of this Agreement if (i) the delay was caused by the failure
of an unaffiliated Person in providing information to GMSP that had been timely
requested by GMSP, (ii) any portion of the report that is not dependent upon the
unaffiliated Person is delivered to GNA by GMSP on a timely basis, and (iii)
GMSP uses its commercially reasonable efforts to cause such late report to be
delivered as promptly as practicable.

          (b) GMSP shall (i) afford GNA and its authorized representatives
reasonable access to the GMSP Principals, GMSP's offices and other facilities,
and all books, records and other documents of GMSP relating to the Portfolio or
this Agreement and (ii) permit GNA and its authorized representatives to make
such inspections and copies of all books, records and other documents as they
may reasonably require to verify the accuracy of any report furnished pursuant
to Section 3(a).

     4. COMPENSATION; EXPENSES.

          (a) For services performed by GMSP, GNA agrees to pay to GMSP
investment management fees (the "Fees") equal on an annual basis to (i) 30 basis
points multiplied by the Fair Market Value with respect to any portion of the
Portfolio invested in Short Term Debt or Investment Grade Debt Obligations at
the end of a given calendar month or during a majority of the days in the given
calendar month and (ii) 100 basis points multiplied by the Fair Market Value
with respect to any portion of the Portfolio invested in Equity Securities or
other alternative investments in Securities which are not Investment Grade Debt
Obligations. The Fees otherwise payable with respect to any calendar month (or
prorated portion thereof) shall be reduced by an amount equal to the sum of (i)
the amount of fees, commissions and expenses paid by or on behalf of GNA to any
investment or mutual fund from which any member of the GMSP Group is eligible to
receive compensation or profits plus (ii) the amount of any fees paid by or on
behalf of GNA to or accrued for the benefit of any member of the GMSP Group
under Rule 12b-1 promulgated under the Investment Company Act of 1940, as
amended, plus (iii) the amount of any finder's fees, brokerage commissions or
other benefit or compensation paid by or on behalf of GNA to or accrued for the
benefit of any member of the GMSP Group in connection with any transaction in
Securities pursuant to this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, (x) no Fees shall be payable with respect to any
portion of the Portfolio invested in Cash during a majority of the days in the
given calendar month and (y) the Committee and GMSP may agree upon a different
Fee structure for special situations.

          (b) The Fees shall be based on the Fair Market Value of the assets in
the Portfolio at the end of each calendar month, and shall be calculated at the
end of each calendar month based upon the actual number of days elapsed during
the calendar month, during which this Agreement is in effect over a year of 365
days. Within fifteen (15) days after the end of each calendar month, GNA shall
pay to GMSP the Fees earned with respect to the preceding calendar month. In the
event of termination prior to the end of a calendar month, GNA will pay to GMSP
a prorated portion of the Fees based upon the Fair Market Value of the assets in
the Portfolio at the time of termination. No other fees, charges or assessments
shall be payable by GNA to or for the benefit of GMSP or any member of the GMSP
Group with respect to the services performed by GMSP pursuant to this Agreement,
provided that GNA shall have the responsibility to reimburse GMSP for GMSP's
payment of any amounts described pursuant to Section 4(d) below. There shall not
be any annual reconciliation, adjustment or other "true-up" at the end of each
calendar year.

INVESTMENT MANAGEMENT AGREEMENT     6
<PAGE>   39

          (c) GMSP shall be solely responsible for all of its general and
administrative costs and expenses incurred in connection with performing its
duties and obligations under this Agreement, which shall consist of all costs
and expenses in connection with the provision of office space and facilities,
equipment and personnel for servicing the investments of the Portfolio and the
salaries and fees of all personnel employed by GMSP performing services relating
to research, statistical and investment activities.

          (d) GNA shall be responsible for, and pay directly, the following
costs and expenses related to GMSP's performance of its duties pursuant to this
Agreement that are reasonable and payable to Persons not affiliated with the
GMSP Group:

               (i) brokerage commissions and other costs, fees and expenses
incurred in the purchase and sale of Securities;

               (ii) fees and expenses of custodians selected pursuant to Section
2(b);

               (iii) costs related to third party Proceedings involving GNA's
ownership of Securities pursuant to this Agreement, directly or indirectly,
including, without limitation, attorneys' fees incurred in connection therewith
(but excluding all costs related to Proceedings or other disputes between GNA
and GMSP or any member of the GMSP Group or which constitute Cause);

               (iv) interest on and fees and expenses arising out of all
borrowings made by GNA with respect to the purchase of Securities, including,
but not limited to, the arranging thereof;

               (v) taxes, fees or other governmental charges levied against GNA;
and

               (vi) any other expense, whether ordinary or extraordinary, that
is determined by the Committee to be appropriate for GNA to pay pursuant to this
Agreement.

          (e) In discharging its duties pursuant to this Agreement, GMSP may
give preference, and may cause GNA to pay higher negotiated commission rates, to
unaffiliated brokers which, in addition to having the capacity of obtaining the
best price for the Security itself and of executing the order with speed,
efficiency and confidentiality, also provide Research to GMSP or GNA. Research
furnished by brokers through whom Securities transactions are effected may be
used by GMSP in servicing all of its accounts, and there shall be no reduction
in the compensation of GMSP hereunder as a consequence of its receipt of such
Research. In the allocation of brokerage, however, GMSP must determine in good
faith, and demonstrate to GNA upon request, that the amount of the commission is
reasonable in relation to the value of the brokerage services and Research
provided by the broker, viewed in terms of either the particular transaction or
GMSP's overall responsibilities with respect to the Portfolio. In the allocation
of brokerage for the Portfolio, GMSP shall be subject always to Applicable Law
and such policies and requirements that the Committee may adopt or approve as
reflected in the Policy Letter.

          (f) In the event that, in any calendar month, the aggregate amount of
Fees (as such term is defined in the respective GNA Investment Management
Agreements) paid to GMSP by the GNA Entities pursuant to the GNA Investment
Management Agreements is less than $75,000, GNA shall pay to GMSP an amount
equal to the product of (i) the quotient of the Fair Market Value of the
Portfolio divided by the Fair Market Value of all of the Portfolios (as such
term is defined in the respective GNA Investment Management Agreements) of all
of the GNA Entities, multiplied by (ii) an amount equal to the difference

INVESTMENT MANAGEMENT AGREEMENT     7
<PAGE>   40

between $75,000 and the sum of the aggregate Fees paid to GMSP by all of the GNA
Entities with respect to such calendar month.

     5. ACTIVITIES OF GMSP.

          (a) The services of GMSP to GNA are not deemed to be exclusive, and
GMSP shall be free to engage in any other business or to render similar services
to others. GMSP and any member of the GMSP Group may engage independently or
with others, for its or their own accounts and for the accounts of others, in
other business ventures and activities of every nature and description,
including, without limitation, purchasing, selling or holding Securities for the
account of any other Person or for its or his own account, including Securities
included within the Portfolio or eligible for investment pursuant to this
Agreement; provided, that the management of such entities and accounts do not
interfere with the performance of their obligations and duties to GNA pursuant
to this Agreement. GNA shall not have any rights or obligations by virtue of
this Agreement in and to such independent ventures and activities or the income
or profits derived therefrom. The foregoing notwithstanding, without the prior
written consent of GNA in a specific case, GMSP shall at all times adhere, and
cause the members of the GMSP Group or the GMSP Principals, as the case may be,
to adhere, to the following:

               (i) Neither GMSP nor any member of the GMSP Group shall act,
either as principal or agent, on the opposite side of any transaction in which
GNA or the Portfolio is involved.

               (ii) GMSP and each GMSP Principal shall at all times (A) place
the interests of GNA before such member's personal transactional interests; (B)
conduct all personal transactions in Securities in such a manner as to avoid any
actual or potential conflict of interest or abuse of such Person's position of
trust and confidence in relation to GNA; and (C) promptly disclose to GNA all
personal transactions made by or on behalf of such Person in Securities which
are or were at any time during the preceding two years in the Portfolio or
issued by Persons whose Securities are in the Portfolio.

          (b) On any issue involving an actual or potential conflict of interest
which is not specifically authorized by or pursuant to this Agreement, GMSP
shall submit such issue to the Committee for prior approval, and shall take such
actions, if any, as are determined by the Committee to be necessary or
appropriate to ameliorate the conflict of interest. If GMSP carries out the
actions specified by the Committee in respect of a matter giving rise to a
conflict of interest, neither GMSP nor any member of the GMSP Group shall have
any liability to GNA in respect of actions taken in good faith by them as a
consequence of the approval by the Committee.

          (c) GMSP shall be liable for any breach of this Section 5 by any
member of the GMSP Group as if GMSP had committed such breach.

     6. DURATION AND TERMINATION. The term of this Agreement shall commence on
the date of this Agreement and shall continue until terminated:

          (a) by the written agreement of GNA and GMSP;

          (b) by GMSP upon not less than 90 days written notice to GNA at any
time after the third anniversary hereof;

INVESTMENT MANAGEMENT AGREEMENT     8
<PAGE>   41

          (c) by GNA upon not less than 90 days written notice to GMSP at any
time after the third anniversary hereof;

          (d) by GNA, at any time, immediately upon written notice to GMSP
following (i) the good faith determination by both the Committee and two-thirds
of the members of the Board (excluding members of the Board designated for
election by GMSP or its successors in interest under the Securities Purchase
Agreement or otherwise affiliated with GMSP) that an event that constitutes
Cause has occurred and is continuing beyond any applicable period for notice and
opportunity to cure or (ii) the commencement by a Governmental Authority of any
Proceeding alleging any matter which, if proven, would constitute Cause.

          (e) by GMSP upon not less than 10 days notice in the event that GNA
defaults in the performance of any of its material obligations hereunder and
such default continues for not less than 10 days after GNA receives notice of
such default; provided, however, that in the event that such default is of a
nature that it cannot, with due diligence, be cured within 10 days, GMSP may not
terminate this Agreement so long as GNA begins to cure such default within 10
days and thereafter diligently pursues such cure to completion.

     Termination of this Agreement shall not terminate GMSP's obligations under
Section 3 to furnish reports concerning facts and circumstances prior to
termination or under Section 11 to maintain the confidentiality of Confidential
Information , terminate GNA's obligations to pay fees earned by GMSP prior to
the date of termination, or terminate either party's obligations to indemnify
the other party pursuant to this Agreement.

     7. REPRESENTATIONS AND WARRANTIES OF GMSP.

          (a) GMSP is a limited partnership duly organized, validly existing and
in good standing under the Texas Revised Limited Partnership Act, as amended,
and has the power and authority to own all of its properties and assets and to
carry on its business as now being conducted. GMSP is duly qualified and in good
standing (to the extent applicable) to transact business in each jurisdiction in
which the performance of its obligations hereunder require such qualification
except where the failure to be duly qualified or in good standing would not have
or reasonably be expected to have a GMSP Material Adverse Effect.

          (b) GMSP has all requisite power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GMSP. This Agreement has been duly and validly executed and
delivered by GMSP and, assuming the due authorization, execution and delivery
hereof by GNA, constitutes the valid and binding obligation of GMSP, enforceable
against GMSP in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

          (c) No declaration, filing or registration with, or notice to or
authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GMSP other than
as described in the Securities Purchase Agreement or with any GNA Applicable
Insurance Department.

INVESTMENT MANAGEMENT AGREEMENT     9
<PAGE>   42

          (d) The execution, delivery and performance of this Agreement by GMSP
do not and will not result in any violation by GMSP under any provisions of:

               (i) the partnership agreement or similar governing documents of
GMSP;

               (ii) any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any Governmental Authority
applicable to GMSP or any of its properties or assets; or

               (iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other instrument,
obligation or agreement of any kind to which GMSP is now a party or by which it
or any of its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect;

          (e) There is no Proceeding pending, or to the knowledge of GMSP,
threatened against GMSP that questions the validity of this Agreement or any
action to be taken by GMSP in connection with this Agreement except as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect.

          (f) GMSP is, and during the term of this Agreement will continue to be
(i) either exempt from registration or duly registered as an investment adviser
under the Investment Advisers Act of 1940 and all Applicable Laws and (ii)
qualified and eligible to manage the Portfolio under the statutes and
regulations administered by the GNA Applicable Insurance Departments, provided
that GNA shall inform GMSP immediately in the event that GNA becomes aware of
any changes in the qualification and eligibility requirements with respect to
such statutes and regulations. GMSP will provide prompt written notice to GNA if
GMSP ceases to be so registered or qualified or becomes aware of any fact, event
or circumstance which will or is reasonably likely to cause it to cease to be so
registered or qualified.

          (g) Taken in the aggregate, the factual information (including,
without limitation, information regarding its knowledge, investment experience
and investment track record) furnished by GMSP to GNA subsequent to May 11, 1999
in writing for purposes of this Agreement did not contain untrue statements of
material facts, or omit to state material facts necessary to make the statements
made not misleading in the light of the circumstances under which they were
made, as of the date as of which such information is dated. All financial
forecasts prepared and furnished by GMSP to GNA subsequent to May 11, 1999 were
prepared in good faith on the basis of assumptions believed to be reasonable and
data, information, tests or conditions believed to be valid or accurate or to
exist at the time such forecasts were prepared.

          (h) All of the equipment, Software and computer hardware owned or used
by GMSP or used and operated by third parties on behalf of GMSP, which performs
or is or may be required to perform functions involving dates or the computation
of dates, or containing date related data, has the programming, design and
performance capabilities to ensure that:

               (i) it will not suffer any Malfunction that would reasonably be
expected to have a GMSP Material Adverse Effect; and

INVESTMENT MANAGEMENT AGREEMENT     10
<PAGE>   43

               (ii) it will not, as a result of the date change at the end of
the twentieth century or the input, processing, storage or use of dates up to
and including December 31, 2001, (A) be adversely affected, (B) require changes
in inputting or operating practices, (C) produce invalid or incorrect output or
results, (D) cause any abnormal ending scenario, or (E) suffer any diminution in
functionality or performance that, in any of the above, could reasonably be
expected to have a GMSP Material Adverse Effect.

     8. REPRESENTATIONS AND WARRANTIES OF GNA.

          (a) GNA is a corporation duly organized and validly existing under the
laws of the State of Texas, and has the power and authority to own all of its
properties and assets and to carry on its business as now being conducted. GNA
is duly qualified and in good standing to transact business in each jurisdiction
in which the performance of its obligations hereunder require such qualification
except where the failure to be duly qualified or in good standing would not have
or reasonably be expected to have a GNA Material Adverse Effect.

          (b) GNA has all requisite power and authority to enter into and
perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GNA. This Agreement has been duly and validly executed and
delivered by GNA and, assuming the due authorization, execution and delivery
hereof by GMSP, constitutes the valid and binding obligation of GNA, enforceable
against GNA in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

          (c) No declaration, filing or registration with, or notice to or
authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GNA other than
as described in the Securities Purchase Agreement or with any GNA Applicable
Insurance Department.

          (d) The execution, delivery and performance of this Agreement by GNA
do not and will not result in any violation by GNA under any provisions of:

               (i) articles of incorporation or similar governing documents of
GNA;

               (ii) any statute, law, ordinance, rule, regulation, judgment,
decree, order, injunction, writ, permit or license of any Governmental Authority
applicable to GNA or any of its properties or assets; or

               (iii) any note, bond, mortgage, indenture, deed of trust,
license, franchise, permit, concession, contract, lease or other instrument,
obligation or agreement of any kind to which GNA is now a party or by which it
or any of its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, in the aggregate, reasonably be expected to have a GNA Material Adverse
Effect.

          (e) There is no Proceeding pending, or to the knowledge of GNA,
threatened against GNA that questions the validity of this Agreement or any
action to be taken by GNA in connection with this

INVESTMENT MANAGEMENT AGREEMENT     11
<PAGE>   44

Agreement except as could not, in the aggregate, reasonably be expected to have
a GNA Material Adverse Effect.

          (f) GNA has such knowledge and experience in financial and business
matters that it is capable of evaluating the risks and merits of entering into
this Agreement.

          (g) No part of the funds to be used to purchase and hold Securities or
to pay any amounts pursuant to this Agreement constitutes an asset of any
employee benefit plan within the meaning of Section 3 of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and GNA is not a "benefit
plan investor" (as such term is defined in 29 C.F.R. ss.2510.3-101(f)(2)).

     9. LIABILITY. It is recognized that decisions concerning investments or
potential investments involve the exercise of judgment and the risk of loss. To
the extent permitted by Applicable Law, neither GMSP nor any of its officers,
directors, or employees nor other members of GMSP Group shall be liable for any
loss suffered by GNA on account of such investments, or any act taken or
omission made in good faith under this Agreement. For purposes of the foregoing
sentence, no action or omission by GMSP shall be considered to have been made
"in good faith" if GMSP was negligent, violated any law, or made any
misrepresentation (whether affirmatively or by omission).

     10. INDEMNIFICATION.

          (a) GNA shall indemnify, defend, and hold harmless GMSP and the GMSP
Principals from and against any and all claims, actions, causes of action,
demands, losses, damages, liabilities, costs, and expenses (including reasonable
attorneys' fees and expenses) (collectively, "Damages"), asserted against,
resulting to, imposed upon, or incurred by any of them, directly or indirectly,
by reason of or resulting from (i) any Breach by GNA of any of its
representations, warranties, covenants, or agreements contained in this
Agreement or in any certificate, instrument, or document delivered pursuant
hereto or (ii) any Proceeding brought against any of them by a Person other than
GNA or any of its Affiliates, Associates or shareholders in respect of any
action taken in good faith on behalf of GNA in the course of the performance of
GMSP's duties under this Agreement; provided, however, that GNA shall indemnify,
defend, and hold harmless GMSP and the GMSP Principals from and against any
reasonable expenses incurred by such Person(s) in connection with a Proceeding
brought against any of them by any of GNA's shareholders if such Person(s) is
wholly successful, on the merits or otherwise, in the defense of such
Proceeding, and provided, further, that GNA's obligation to indemnify, defend
and hold harmless as provided in this Section 10(a) shall not apply to the first
$750,000 in the aggregate of claims hereunder (other than claims for expenses in
defending a Proceeding for which the Person is entitled to indemnification under
clause (ii) of this Section) and provided, further, that such $750,000 amount
shall be reduced dollar-for-dollar by an amount equal to the cumulative
aggregate of all claims made under one or more of the GNA Investment Management
Agreements.

          (b) GMSP shall indemnify, defend, and hold harmless GNA and its
Affiliates, Associates, directors, officers and employees from and against any
and all Damages asserted against, resulting to, imposed upon, or incurred by any
of them, directly or indirectly, by reason of or resulting from any Breach by
GMSP of any of its representations, warranties, covenants, or agreements
contained in this Agreement or in any certificate, instrument, or document
delivered pursuant hereto; provided, however, that GMSP's obligation to
indemnify, defend and hold harmless as provided in this Section 10(b) shall not
apply to the first $750,000 in the aggregate of claims hereunder and provided,
further, that such $750,000 amount

INVESTMENT MANAGEMENT AGREEMENT     12
<PAGE>   45

shall be reduced dollar-for-dollar by an amount equal to the cumulative
aggregate of all claims made under one or more of the GNA Investment Management
Agreements.

          (c) Promptly after receipt by an indemnified party under Section 10(a)
or (b) of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against an indemnifying party
under such Section, give written notice to the indemnifying party of the
commencement thereof, but the failure so to notify the indemnifying party shall
not relieve it of any liability that it may have to any indemnified party except
to the extent the indemnifying party demonstrates that the defense of such
action is prejudiced thereby. In case any such action shall be brought against
an indemnified party and it shall give written notice to the indemnifying party
of the commencement thereof, the indemnifying party shall be entitled to
participate therein and, to the extent that it may wish, to assume the defense
thereof with counsel reasonably satisfactory to such indemnified party. If the
indemnifying party elects to assume the defense of such action, the indemnified
party shall have the right to employ separate counsel at its own expense and to
participate in the defense thereof. If the indemnifying party elects not to
assume (or fails to assume) the defense of such action, the indemnified party
shall be entitled to assume the defense of such action with counsel of its own
choice, at the expense of the indemnifying party. If the action is asserted
against both the indemnifying party and the indemnified party and there is a
conflict of interests which renders it inappropriate for the same counsel to
represent both the indemnifying party and the indemnified party, the
indemnifying party shall be responsible for paying for separate counsel for the
indemnified party; provided, however, that if there is more than one indemnified
party, the indemnifying party shall not be responsible for paying for more than
one separate firm of attorneys to represent the indemnified parties, regardless
of the number of indemnified parties. The indemnifying party shall have no
liability with respect to any compromise or settlement of any action effected
without its written consent (which shall not be unreasonably withheld).

     11. CONFIDENTIALITY. Each of GMSP and GNA shall keep all Confidential
Information in confidence, and shall not disclose said information to any other
party other than such party's employees, advisors, attorneys and accountants,
who will be advised of the confidential nature of information. Each party shall
protect the Confidential Information with the same degree of care as such party
normally uses in the protection of its confidential and proprietary information.
Each party further agrees not to use Confidential Information for any purpose
except in connection with the performance of its duties under this Agreement.
The restrictions set forth herein shall not apply with respect to Confidential
Information which (i) is already generally available to the public when received
by such party; (ii) becomes available to the public through no fault of any
member of the GMSP Group or GNA, as applicable; or (iii) is required to be
disclosed by Applicable Law or a Governmental Authority.

     12. INSURANCE. GMSP shall maintain at all times during the term of this
Agreement fiduciary liability insurance of the type customary for investment
managers in similar situations naming GNA as an insured with such limits, terms,
conditions and "tail" provisions as are reasonably acceptable to GNA and GMSP
and shall provide GNA with complete copies of all binders and other policy
information. GMSP also shall obtain and maintain a fidelity bond in the amount
of not less than $5,000,000 and otherwise containing terms and conditions
reasonably acceptable to GNA. In the event that any such policy or bond is
canceled or suspended, GMSP promptly shall notify GNA in writing.

     13. NOTICES. All notices required to be given in writing hereunder shall be
deemed to have been given if (i) delivered personally or by documented courier
or delivery service, (ii) transmitted by facsimile or (iii) mailed by registered
or certified mail (return receipt requested and postage prepaid) to the
following listed Persons at the addresses and facsimile numbers specified below,
or to such other Persons, addresses

INVESTMENT MANAGEMENT AGREEMENT     13
<PAGE>   46

or facsimile numbers as a party entitled to notice shall give, in the manner
hereinabove described, to the others entitled to notice:

       If to GMSP, to:  777 Main Street, Suite 2250
                        Fort Worth, Texas 76102
                        Attention:  J. Randall Chappel
                        Fax:  (817) 820-6651

       If to GNA, to:   500 Commerce Street
                        Fort Worth, Texas 76102-5439
                        Attention:  Chief Executive Officer
                        Fax: (817) 338-1454

If given personally or by documented courier or delivery service, a notice shall
be deemed to have been given when it is received. If transmitted by facsimile, a
notice shall be deemed to have been given on the date received, if electronic
confirmation of receipt occurs during normal business hours on a Business Day,
and otherwise, on the first Business Day following electronic confirmation of
receipt. If given by mail, it shall be deemed to have been given on the third
Business Day following the day on which it was posted.

     14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.

     15. NATURE OF RELATIONSHIP. The parties hereto intend that the services
provided by GMSP to GNA pursuant to this Agreement are being provided as an
independent contractor. Nothing contained in this Agreement shall constitute or
be construed to be or create a general partnership or joint venture between GMSP
and GNA or their respective successors or assigns.

     16. BINDING EFFECT; ASSIGNMENT; NO THIRD PARTY BENEFIT. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by either of the parties hereto without the prior
written consent of the other party. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person other than the parties
hereto, and their respective heirs, legal representatives, successors, and
permitted assigns, any rights, benefits, or remedies of any nature whatsoever
under or by reason of this Agreement.

     17. INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. For purposes of this Agreement, the words "includes" and
"including" shall mean "including without limitation" and the word "or" is used
in the inclusive sense. All capitalized terms defined herein are equally
applicable to both the singular and plural forms.

     18. SEVERABILITY. In the event that this Agreement, or any of its
provisions, or the performance of any provision, is found to be illegal or
unenforceable under applicable law now or hereafter in effect, the parties shall
be excused from performance of such portions of this Agreement as shall be found
to be illegal or unenforceable under the applicable laws or regulations without
affecting the validity of the remaining provisions of the Agreement.

INVESTMENT MANAGEMENT AGREEMENT     14
<PAGE>   47

     19. TIME OF ESSENCE. With regard to all dates and time periods set forth in
this Agreement, time is of the essence.

     20. NO WAIVER OF PRIVILEGE. Neither GNA nor GMSP nor any of their
respective subsidiaries or affiliates waives any attorney-client, work product
or other privilege with respect to any information furnished pursuant to this
Agreement.

     21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

     22. COUNTERPARTS. This Agreement may be executed by the parties hereto in
any number of counterparts, each of which shall be deemed an original, but all
of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.

INVESTMENT MANAGEMENT AGREEMENT     15
<PAGE>   48

     IN WITNESS WHEREOF, GMSP and GNA have caused this Agreement to be executed
all as of the day and year first above written.

                          GAINSCO, INC.

                          By: /s/ Glenn W. Anderson
                              --------------------------------------------------
                              Glenn W. Anderson
                              President and Chief Executive Officer

                          GOFF MOORE STRATEGIC PARTNERS, L.P.,
                              a Texas limited partnership

                          By: GMSP Operating Partners, L.P., its general partner
                          By: GMSP, L.L.C., its general partner

                              By: /s/ John C. Goff
                                  ----------------------------------------------
                                  John C. Goff, Managing Principal

                              By: /s/ J. Randall Chappel
                                  ----------------------------------------------
                                  J. Randall Chappel, Principal

INVESTMENT MANAGEMENT AGREEMENT     16
<PAGE>   49

                         INVESTMENT MANAGEMENT AGREEMENT
                                       FOR
                     GAINSCO COUNTY MUTUAL INSURANCE COMPANY

         THIS INVESTMENT MANAGEMENT AGREEMENT (this "Agreement") is entered into
this 4th day of October, 1999, by and between Goff Moore Strategic Partners,
L.P., a Texas limited partnership ("GMSP"), and GAINSCO COUNTY MUTUAL INSURANCE
COMPANY ("GNA"), a Texas county mutual insurance company which on October 13,
1996 entered into a management contract with GAINSCO Services Corp., a Texas
corporation which is wholly-owned subsidiary of GAINSCO, INC. ("Parent") and
owns the charter of GNA.

         WHEREAS, GNA is a regulated insurance company;

         WHEREAS, GNA desires to appoint GMSP to serve as investment manager
with respect to certain investments held by it; and

         WHEREAS, GMSP is willing to provide investment advisory services to GNA
on the terms and conditions hereinafter set forth.

         NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, GMSP and GNA hereby
agree as follows:

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

         "Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly, through one or more intermediaries controls, is
controlled by or is under common control with such specified Person. For this
purpose the term "control" (including the terms "controlling", "controlled by"
and "under common control with") shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person whether through the ownership of voting Securities, by contract, or
otherwise.

         "Agreement" has the meaning set forth in the first paragraph hereof.

         "Applicable Law" means any statute, law, rule, policy, guideline, or
regulation or any judgment, order, writ, injunction, or decree of any
Governmental Authority to which a specified Person or property is subject.

         "Associate" means (i) any corporation or entity (other than GNA, Parent
or a Subsidiary of GNA or Parent) of which such Person is an officer or partner
or is, directly or indirectly, the beneficial owner of 10 percent or more of any
class of Equity Securities, (ii) any trust or other estate in which such Person
has a substantial beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of
such Person, or any relative of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of GNA or any
of its Subsidiaries.

         "Board" means the board of directors of GNA.

INVESTMENT MANAGEMENT AGREEMENT
                                       1
<PAGE>   50

         "Breach" means any violation or breach of, any misrepresentation or
inaccuracy in, any default under, or any failure to perform or comply with any
representation, warranty, covenant, obligation, or other provision of this
Agreement.

         "Business Day" means any day other than a Saturday or Sunday on which
national banks are open for business in Fort Worth, Texas and New York, New
York.

         "Cash" means any currency or immediately available funds on deposit
with a financial institution.

         "Cause" means that GMSP has committed or engaged in (i) any
malfeasance, bad faith or negligence in respect of GMSP's material duties
pursuant to this Agreement; (ii) any commission of any fraud by GMSP; (iii) any
conviction or indictment of or plea of no contest to any felony by GMSP or any
member of the GMSP Group; (iv) any violation of the provisions of the U. S.
federal securities laws or state securities laws by GMSP or any GMSP Principal;
or (v) any material breach by GMSP of its obligations (including, without
limitation, its obligations to observe and comply with the provisions of the
Policy Letter) under, or its representations or warranties in, this Agreement if
such breach continues for more than 10 days after GMSP receives written notice,
specifying such breach with particularity and demanding cure, from GNA.

         "Committee" means the Board's Investment Committee, none of the members
of which shall be members of the GMSP Group.

         "Confidential Information" means information received by GMSP from GNA
or received by GNA from GMSP that is not generally known or which would
logically be considered confidential or proprietary, or which would do GNA or
GMSP, as applicable, harm if divulged, or which is marked "Confidential
Information."

         "Damages" has the meaning set forth in Section 10.

         "Equity Securities" means any capital stock or other equity interests
of any Person, any Securities directly or indirectly convertible into, or
exercisable or exchangeable for any capital stock or other equity interests of
any Person, or any right, option, warrant or other Security which, with the
payment of additional consideration, the expiration of time or the occurrence of
any event shall give the holder thereof the right to acquire any capital stock
or other equity interests of any Person or any Security convertible into or
exercisable or exchangeable for, any capital stock or other equity interests of
any Person.

         "Fair Market Value" means as to any Securities on any date, (a) if such
Securities are listed or admitted to trading on any national securities exchange
on any such trading day, the amount equal to the last sale price of such
Securities, regular way settlement, on such dates or, if no such sale takes
place on a date, the average of the closing bid and asked prices thereof on such
date, in each case as officially reported on the principal national securities
exchange on which such Securities are then listed or admitted to trading, (b) if
such Securities are not then listed or admitted to trading on any national
securities exchange but are reported through the automated quotation system of a
registered securities association, the last trading price of such Securities on
such dates, or if there shall have been no trading on a date, the average of the
closing bid and asked prices of such Securities on such date as shown by such
automated quotation system or (c) if such Securities are not then so listed,
admitted to trading or reported, the value determined by GMSP subject to review
and approval by the Committee, which valuation shall be equal to (i) cost or
(ii) in the event that either GMSP or the Committee determine that there has
been a material change in the value of such Securities since the date of
acquisition of such Securities, such other valuation as is reflective of the
value

INVESTMENT MANAGEMENT AGREEMENT
                                       2
<PAGE>   51
of such Securities; provided, however, that, if GMSP and the Committee are
unable to agree on such fair market value, such Securities shall be valued by
such nationally recognized independent public accounting firm or investment
banking firm designated by the Committee and reasonably acceptable to GMSP. Any
such third-party valuation shall be final and binding on the parties and
enforceable in accordance with the provisions of the Texas General Arbitration
Act, and the costs and expenses thereof shall be shared equally by GMSP and GNA.

         "Fees" has the meaning set forth in Section 4.

         "GAAP" means generally accepted accounting principles for financial
reporting in the U.S., consistently applied.

         "GMSP" has the meaning set forth in the introductory paragraph of this
Agreement.

         "GMSP Group" means GMSP together with its Affiliates, Associates and
employees, including without limitation GMSP's partners, the partners of the
general partner of GMSP and the GMSP Principals.

         "GMSP Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability of GMSP to conduct business,
the financial condition or the results of operations of GMSP that is material to
GMSP or as to the ability of GMSP to perform its obligations pursuant to this
Agreement, excluding any such condition, circumstance or development which
adversely affects the U.S. economy, financial markets or the insurance industry
generally.

         "GMSP Principals" shall mean John C. Goff, J. Randall Chappel and any
other Persons employed by or otherwise affiliated with GMSP or its general
partner who have access to information regarding particular Securities being
considered for purchase or sale by GNA. The parties recognize that the limited
partners of GMSP as of the date hereof are not GMSP Principals.

         "GNA" has the meaning set forth in the introductory paragraph of this
Agreement.

         "GNA Applicable Insurance Department" means the Texas Department of
Insurance.

         "GNA Entities" means GAINSCO, INC., a Texas corporation; MGA Insurance
Company, Inc., a Texas corporation; GAINSCO County Mutual Insurance Company, a
Texas mutual insurance company; and General Agents Insurance Company of America,
Inc., an Oklahoma corporation.

         "GNA Investment Management Agreements" means the Investment Management
Agreements of even date herewith between GMSP and each of the GNA Entities,
including this Agreement.

         "GNA Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability to conduct business, the
financial condition or the results of operations of GNA and its Subsidiaries
that is material to Parent and its Subsidiaries taken as a whole or as to the
ability of GNA to perform its obligations pursuant to this Agreement, excluding
any such condition, circumstance or development which adversely affects the U.S.
economy, financial markets or insurance industry generally.

         "good faith", when used in respect of any action, means that the action
was taken with (i) honesty of intention, (ii) freedom from knowledge of
circumstances which ought to put the Person taking such action on inquiry or
negligence, and (iii) intention to abstain from taking any unconscientious
advantage of another.

INVESTMENT MANAGEMENT AGREEMENT
                                       3
<PAGE>   52

         "Governmental Authority" means any U.S. federal, state, local, foreign,
supernational or supranational court or tribunal, governmental, regulatory or
administrative agency, department, bureau, authority, commission or arbitral
panel.

         "Investment Grade Debt Obligations" means any interest bearing debt
obligations issued by any Person, including a Governmental Authority, rated at
least "B minus" or the equivalent thereof by Standard & Poor's Corporation or
Moody's Investor's Service, Inc.

         "Malfunction" means any failure to: (a) accurately recognize dates
falling before, on or after the Year 2000; or (b) accurately record, store,
retrieve and process data input and date information.

         "Parent" has the meaning set forth in the first paragraph hereof.

         "Person" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
any Governmental Authority.

         "Policy Letter" has the meaning set forth in Section 2.

         "Portfolio" means those investments held by GNA in Securities of the
type more particularly described under the category "Investments" in Parent's
periodic filings with the SEC.

         "Proceedings" means all proceedings, actions, suits, investigations,
and inquiries by or before any arbitrator or Governmental Authority.

         "Research" means research, statistical and similar information and
services.

         "SEC" means the Securities and Exchange Commission.

         "Security" means any capital stock, partnership interest, membership
interest, subscription, certificate of trust or other ownership interest,
warrant, bond, note, debenture, or other debt or equity interest of any Person
commonly known as a "security," and all rights and options relating to any of
the foregoing, regardless of whether traded on a national securities exchange;
but shall not include Cash Equivalents.

         "Securities Purchase Agreement" means the Securities Purchase Agreement
dated June 29, 1999, between GMSP and Parent.

         "Short Term Debt" means any note, draft, bill of exchange, or similar
security which has a maturity at the time of issuance of not exceeding nine (9)
months exclusive of days of grace, or any renewal thereof the maturity of which
is likewise limited.

         "Subsidiary" means, with respect to any Person, any corporation or
other entity (including partnerships and other business associations) in which
the Person directly or indirectly owns at least a majority of the outstanding
voting Securities or other equity interests having the power, under ordinary
circumstances, to elect a majority of the directors, or otherwise to direct the
management and policies, of such corporation or other entity.

         "U.S." means the United States of America.

INVESTMENT MANAGEMENT AGREEMENT
                                       4
<PAGE>   53

         "Year 2000" means the calendar year 2000 A.D.

         2. INVESTMENT MANAGER. GNA hereby retains GMSP, and GMSP agrees to
serve, as investment manager with respect to the Portfolio on the terms and
conditions hereinafter set forth:

                  (a) The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the oversight and direction
of the Committee. GMSP shall manage the Portfolio in accordance with the
investment objectives and policies set forth in the letter (the "Policy Letter")
heretofore delivered to GMSP by GNA. GNA may amend or supplement the contents of
the Policy Letter, including the investment criteria and other instructions set
forth therein, in whole or in part and at any time and from time to time;
provided, however, that no amendment or supplement shall be binding upon GMSP
until GMSP is notified of the amendment or supplement; and provided further,
that in the event that an amended or supplemented Policy Letter shall require
GMSP to make any changes in the manner in which GMSP has performed its services
pursuant to this Agreement, GMSP shall have a reasonable time period to comply
with such changes. GMSP shall periodically evaluate the provisions of the Policy
Letter and provide GNA with any recommendations for the amendment or
supplementation of the provisions of the Policy Letter that GMSP deems advisable
for the benefit of GNA. To the extent that the provisions of the Policy Letter,
as the same may be amended or supplemented from time to time, conflict with the
provisions of this Agreement, the provisions of this Agreement shall control.

                  (b) GNA will retain ownership and control of the assets in the
Portfolio at all times. The assets shall be held for the benefit of GNA solely
at one or more financial institutions or other locations specified from time to
time in the Policy Letter.

                  (c) Subject to the provisions of the Policy Letter and the
oversight and direction of the Committee, GMSP shall have authority to make all
specific investment decisions with respect to the assets in the Portfolio.

                  (d) GMSP shall exercise its discretion and discharge its
obligations under this Agreement in compliance with all Applicable Laws.

                  (e) GMSP shall employ and dedicate to GNA continuously during
the term of this Agreement a qualified investment portfolio manager reasonably
acceptable to GNA, who shall have the primary responsibilities of coordinating
all aspects of the day-to-day investment activities of the Portfolio.

                  (f) GNA acknowledges that GMSP has informed GNA that GMSP
currently is not registered as an (i) investment adviser under the Investment
Advisers Act of 1940, as amended, and all other Applicable Laws or (ii) a broker
or dealer under the Securities Exchange Act of 1934, as amended, and all other
Applicable Laws.

         3.       REPORTS.

                  (a) GMSP shall provide to GNA periodic financial reports with
respect to the assets in and investment performance of the Portfolio. The
reports shall include such financial information in such format as GNA may
reasonably request in connection with the administration of the Portfolio and a
record of all transactions effected during the interim period from the preceding
report, including the price per Security, the broker or dealer executing the
transaction and the commissions paid. The reports shall be made with such
frequency, but not less often than within 20 days following the end of each
calendar month, as

INVESTMENT MANAGEMENT AGREEMENT
                                       5
<PAGE>   54

GNA may reasonably request in connection with the administration of the
Portfolio; provided that the late delivery of a complete report no more than one
time in any three-year period with respect to any particular Security in the
Portfolio shall not constitute a Breach of this Agreement if (i) the delay was
caused by the failure of an unaffiliated Person in providing information to GMSP
that had been timely requested by GMSP, (ii) any portion of the report that is
not dependent upon the unaffiliated Person is delivered to GNA by GMSP on a
timely basis, and (iii) GMSP uses its commercially reasonable efforts to cause
such late report to be delivered as promptly as practicable.

                  (b) GMSP shall (i) afford GNA and its authorized
representatives reasonable access to the GMSP Principals, GMSP's offices and
other facilities, and all books, records and other documents of GMSP relating to
the Portfolio or this Agreement and (ii) permit GNA and its authorized
representatives to make such inspections and copies of all books, records and
other documents as they may reasonably require to verify the accuracy of any
report furnished pursuant to Section 3(a).

         4. COMPENSATION; EXPENSES.

                  (a) For services performed by GMSP, GNA agrees to pay to GMSP
investment management fees (the "Fees") equal on an annual basis to (i) 30 basis
points multiplied by the Fair Market Value with respect to any portion of the
Portfolio invested in Short Term Debt or Investment Grade Debt Obligations at
the end of a given calendar month or during a majority of the days in the given
calendar month and (ii) 100 basis points multiplied by the Fair Market Value
with respect to any portion of the Portfolio invested in Equity Securities or
other alternative investments in Securities which are not Investment Grade Debt
Obligations. The Fees otherwise payable with respect to any calendar month (or
prorated portion thereof) shall be reduced by an amount equal to the sum of (i)
the amount of fees, commissions and expenses paid by or on behalf of GNA to any
investment or mutual fund from which any member of the GMSP Group is eligible to
receive compensation or profits plus (ii) the amount of any fees paid by or on
behalf of GNA to or accrued for the benefit of any member of the GMSP Group
under Rule 12b-1 promulgated under the Investment Company Act of 1940, as
amended, plus (iii) the amount of any finder's fees, brokerage commissions or
other benefit or compensation paid by or on behalf of GNA to or accrued for the
benefit of any member of the GMSP Group in connection with any transaction in
Securities pursuant to this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, (x) no Fees shall be payable with respect to any
portion of the Portfolio invested in Cash during a majority of the days in the
given calendar month and (y) the Committee and GMSP may agree upon a different
Fee structure for special situations.

                  (b) The Fees shall be based on the Fair Market Value of the
assets in the Portfolio at the end of each calendar month, and shall be
calculated at the end of each calendar month based upon the actual number of
days elapsed during the calendar month, during which this Agreement is in effect
over a year of 365 days. Within fifteen (15) days after the end of each calendar
month, GNA shall pay to GMSP the Fees earned with respect to the preceding
calendar month. In the event of termination prior to the end of a calendar
month, GNA will pay to GMSP a prorated portion of the Fees based upon the Fair
Market Value of the assets in the Portfolio at the time of termination. No other
fees, charges or assessments shall be payable by GNA to or for the benefit of
GMSP or any member of the GMSP Group with respect to the services performed by
GMSP pursuant to this Agreement, provided that GNA shall have the responsibility
to reimburse GMSP for GMSP's payment of any amounts described pursuant to
Section 4(d) below. There shall not be any annual reconciliation, adjustment or
other "true-up" at the end of each calendar year.

                  (c) GMSP shall be solely responsible for all of its general
and administrative costs and expenses incurred in connection with performing its
duties and obligations under this Agreement, which shall

INVESTMENT MANAGEMENT AGREEMENT
                                       6
<PAGE>   55

consist of all costs and expenses in connection with the provision of office
space and facilities, equipment and personnel for servicing the investments of
the Portfolio and the salaries and fees of all personnel employed by GMSP
performing services relating to research, statistical and investment activities.

                  (d) GNA shall be responsible for, and pay directly, the
following costs and expenses related to GMSP's performance of its duties
pursuant to this Agreement that are reasonable and payable to Persons not
affiliated with the GMSP Group:

                           (i) brokerage commissions and other costs, fees and
expenses incurred in the purchase and sale of Securities;

                           (ii) fees and expenses of custodians selected
pursuant to Section 2(b);

                           (iii) costs related to third party Proceedings
involving GNA's ownership of Securities pursuant to this Agreement, directly or
indirectly, including, without limitation, attorneys' fees incurred in
connection therewith (but excluding all costs related to Proceedings or other
disputes between GNA and GMSP or any member of the GMSP Group or which
constitute Cause);

                           (iv) interest on and fees and expenses arising out of
all borrowings made by GNA with respect to the purchase of Securities,
including, but not limited to, the arranging thereof;

                           (v) taxes, fees or other governmental charges levied
against GNA; and

                           (vi) any other expense, whether ordinary or
extraordinary, that is determined by the Committee to be appropriate for GNA to
pay pursuant to this Agreement.

                  (e) In discharging its duties pursuant to this Agreement, GMSP
may give preference, and may cause GNA to pay higher negotiated commission
rates, to unaffiliated brokers which, in addition to having the capacity of
obtaining the best price for the Security itself and of executing the order with
speed, efficiency and confidentiality, also provide Research to GMSP or GNA.
Research furnished by brokers through whom Securities transactions are effected
may be used by GMSP in servicing all of its accounts, and there shall be no
reduction in the compensation of GMSP hereunder as a consequence of its receipt
of such Research. In the allocation of brokerage, however, GMSP must determine
in good faith, and demonstrate to GNA upon request, that the amount of the
commission is reasonable in relation to the value of the brokerage services and
Research provided by the broker, viewed in terms of either the particular
transaction or GMSP's overall responsibilities with respect to the Portfolio. In
the allocation of brokerage for the Portfolio, GMSP shall be subject always to
Applicable Law and such policies and requirements that the Committee may adopt
or approve as reflected in the Policy Letter.

                  (f) In the event that, in any calendar month, the aggregate
amount of Fees (as such term is defined in the respective GNA Investment
Management Agreements) paid to GMSP by the GNA Entities pursuant to the GNA
Investment Management Agreements is less than $75,000, GNA shall pay to GMSP an
amount equal to the product of (i) the quotient of the Fair Market Value of the
Portfolio divided by the Fair Market Value of all of the Portfolios (as such
term is defined in the respective GNA Investment Management Agreements) of all
of the GNA Entities, multiplied by (ii) an amount equal to the difference
between $75,000 and the sum of the aggregate Fees paid to GMSP by all of the GNA
Entities with respect to such calendar month.

INVESTMENT MANAGEMENT AGREEMENT
                                       7
<PAGE>   56

         5.       ACTIVITIES OF GMSP.

                  (a) The services of GMSP to GNA are not deemed to be
exclusive, and GMSP shall be free to engage in any other business or to render
similar services to others. GMSP and any member of the GMSP Group may engage
independently or with others, for its or their own accounts and for the accounts
of others, in other business ventures and activities of every nature and
description, including, without limitation, purchasing, selling or holding
Securities for the account of any other Person or for its or his own account,
including Securities included within the Portfolio or eligible for investment
pursuant to this Agreement; provided, that the management of such entities and
accounts do not interfere with the performance of their obligations and duties
to GNA pursuant to this Agreement. GNA shall not have any rights or obligations
by virtue of this Agreement in and to such independent ventures and activities
or the income or profits derived therefrom. The foregoing notwithstanding,
without the prior written consent of GNA in a specific case, GMSP shall at all
times adhere, and cause the members of the GMSP Group or the GMSP Principals, as
the case may be, to adhere, to the following:

                           (i) Neither GMSP nor any member of the GMSP Group
shall act, either as principal or agent, on the opposite side of any transaction
in which GNA or the Portfolio is involved.

                           (ii) GMSP and each GMSP Principal shall at all times
(A) place the interests of GNA before such member's personal transactional
interests; (B) conduct all personal transactions in Securities in such a manner
as to avoid any actual or potential conflict of interest or abuse of such
Person's position of trust and confidence in relation to GNA; and (C) promptly
disclose to GNA all personal transactions made by or on behalf of such Person in
Securities which are or were at any time during the preceding two years in the
Portfolio or issued by Persons whose Securities are in the Portfolio.

                  (b) On any issue involving an actual or potential conflict of
interest which is not specifically authorized by or pursuant to this Agreement,
GMSP shall submit such issue to the Committee for prior approval, and shall take
such actions, if any, as are determined by the Committee to be necessary or
appropriate to ameliorate the conflict of interest. If GMSP carries out the
actions specified by the Committee in respect of a matter giving rise to a
conflict of interest, neither GMSP nor any member of the GMSP Group shall have
any liability to GNA in respect of actions taken in good faith by them as a
consequence of the approval by the Committee.

                  (c) GMSP shall be liable for any breach of this Section 5 by
any member of the GMSP Group as if GMSP had committed such breach.

         6. DURATION AND TERMINATION. The term of this Agreement shall commence
on the date of this Agreement and shall continue until terminated:

                  (a) by the written agreement of GNA and GMSP;

                  (b) by GMSP upon not less than 90 days written notice to GNA
at any time after the third anniversary hereof;

                  (c) by GNA upon not less than 90 days written notice to GMSP
at any time after the third anniversary hereof;

INVESTMENT MANAGEMENT AGREEMENT
                                       8
<PAGE>   57

                  (d) by GNA, at any time, immediately upon written notice to
GMSP following (i) the good faith determination by both the Committee and
two-thirds of the members of the Board (excluding members of the Board
designated for election by GMSP or its successors in interest under the
Securities Purchase Agreement or otherwise affiliated with GMSP) that an event
that constitutes Cause has occurred and is continuing beyond any applicable
period for notice and opportunity to cure or (ii) the commencement by a
Governmental Authority of any Proceeding alleging any matter which, if proven,
would constitute Cause.

                  (e) by GMSP upon not less than 10 days notice in the event
that GNA defaults in the performance of any of its material obligations
hereunder and such default continues for not less than 10 days after GNA
receives notice of such default; provided, however, that in the event that such
default is of a nature that it cannot, with due diligence, be cured within 10
days, GMSP may not terminate this Agreement so long as GNA begins to cure such
default within 10 days and thereafter diligently pursues such cure to
completion.

         Termination of this Agreement shall not terminate GMSP's obligations
under Section 3 to furnish reports concerning facts and circumstances prior to
termination or under Section 11 to maintain the confidentiality of Confidential
Information , terminate GNA's obligations to pay fees earned by GMSP prior to
the date of termination, or terminate either party's obligations to indemnify
the other party pursuant to this Agreement.

         7. REPRESENTATIONS AND WARRANTIES OF GMSP.

                  (a) GMSP is a limited partnership duly organized, validly
existing and in good standing under the Texas Revised Limited Partnership Act,
as amended, and has the power and authority to own all of its properties and
assets and to carry on its business as now being conducted. GMSP is duly
qualified and in good standing (to the extent applicable) to transact business
in each jurisdiction in which the performance of its obligations hereunder
require such qualification except where the failure to be duly qualified or in
good standing would not have or reasonably be expected to have a GMSP Material
Adverse Effect.

                  (b) GMSP has all requisite power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GMSP. This Agreement has been duly and validly executed and
delivered by GMSP and, assuming the due authorization, execution and delivery
hereof by GNA, constitutes the valid and binding obligation of GMSP, enforceable
against GMSP in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

                  (c) No declaration, filing or registration with, or notice to
or authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GMSP other than
as described in the Securities Purchase Agreement or with the GNA Applicable
Insurance Department.

                  (d) The execution, delivery and performance of this Agreement
by GMSP do not and will not result in any violation by GMSP under any provisions
of:

                           (i) the partnership agreement or similar governing
documents of GMSP;

INVESTMENT MANAGEMENT AGREEMENT
                                       9
<PAGE>   58

                           (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any Governmental
Authority applicable to GMSP or any of its properties or assets; or

                           (iii) any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which GMSP is now a party or
by which it or any of its properties or assets may be bound or affected;
excluding from the foregoing clauses (ii) and (iii) such violations as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect;

                  (e) There is no Proceeding pending, or to the knowledge of
GMSP, threatened against GMSP that questions the validity of this Agreement or
any action to be taken by GMSP in connection with this Agreement except as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect.

                  (f) GMSP is, and during the term of this Agreement will
continue to be (i) either exempt from registration or duly registered as an
investment adviser under the Investment Advisers Act of 1940 and all Applicable
Laws and (ii) qualified and eligible to manage the Portfolio under the statutes
and regulations administered by the GNA Applicable Insurance Department,
provided that GNA shall inform GMSP immediately in the event that GNA becomes
aware of any changes in the qualification and eligibility requirements with
respect to such statutes and regulations. GMSP will provide prompt written
notice to GNA if GMSP ceases to be so registered or qualified or becomes aware
of any fact, event or circumstance which will or is reasonably likely to cause
it to cease to be so registered or qualified.

                  (g) Taken in the aggregate, the factual information
(including, without limitation, information regarding its knowledge, investment
experience and investment track record) furnished by GMSP to GNA subsequent to
May 11, 1999 in writing for purposes of this Agreement did not contain untrue
statements of material facts, or omit to state material facts necessary to make
the statements made not misleading in the light of the circumstances under which
they were made, as of the date as of which such information is dated. All
financial forecasts prepared and furnished by GMSP to GNA subsequent to May 11,
1999 were prepared in good faith on the basis of assumptions believed to be
reasonable and data, information, tests or conditions believed to be valid or
accurate or to exist at the time such forecasts were prepared.

                  (h) All of the equipment, Software and computer hardware owned
or used by GMSP or used and operated by third parties on behalf of GMSP, which
performs or is or may be required to perform functions involving dates or the
computation of dates, or containing date related data, has the programming,
design and performance capabilities to ensure that:

                           (i) it will not suffer any Malfunction that would
reasonably be expected to have a GMSP Material Adverse Effect; and

                           (ii) it will not, as a result of the date change at
the end of the twentieth century or the input, processing, storage or use of
dates up to and including December 31, 2001, (A) be adversely affected, (B)
require changes in inputting or operating practices, (C) produce invalid or
incorrect output or results, (D) cause any abnormal ending scenario, or (E)
suffer any diminution in functionality or performance that, in any of the above,
could reasonably be expected to have a GMSP Material Adverse Effect.

INVESTMENT MANAGEMENT AGREEMENT
                                       10
<PAGE>   59

         8. REPRESENTATIONS AND WARRANTIES OF GNA.

                  (a) GNA is an insurance company duly organized and validly
existing under the laws of the State of Texas, and has the power and authority
to own all of its properties and assets and to carry on its business as now
being conducted. GNA is duly qualified and in good standing to transact business
in each jurisdiction in which the performance of its obligations hereunder
require such qualification except where the failure to be duly qualified or in
good standing would not have or reasonably be expected to have a GNA Material
Adverse Effect.

                  (b) GNA has all requisite power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GNA. This Agreement has been duly and validly executed and
delivered by GNA and, assuming the due authorization, execution and delivery
hereof by GMSP, constitutes the valid and binding obligation of GNA, enforceable
against GNA in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

                  (c) No declaration, filing or registration with, or notice to
or authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GNA other than
as described in the Securities Purchase Agreement or with the GNA Applicable
Insurance Department.

                  (d) The execution, delivery and performance of this Agreement
by GNA do not and will not result in any violation by GNA under any provisions
of:

                           (i) articles of incorporation or similar governing
documents of GNA;

                           (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any Governmental
Authority applicable to GNA or any of its properties or assets; or

                           (iii) any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which GNA is now a party or
by which it or any of its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, in the aggregate, reasonably be expected to have a GNA Material Adverse
Effect.

                  (e) There is no Proceeding pending, or to the knowledge of
GNA, threatened against GNA that questions the validity of this Agreement or any
action to be taken by GNA in connection with this Agreement except as could not,
in the aggregate, reasonably be expected to have a GNA Material Adverse Effect.

                  (f) GNA has such knowledge and experience in financial and
business matters that it is capable of evaluating the risks and merits of
entering into this Agreement.

INVESTMENT MANAGEMENT AGREEMENT
                                       11
<PAGE>   60

                  (g) No part of the funds to be used to purchase and hold
Securities or to pay any amounts pursuant to this Agreement constitutes an asset
of any employee benefit plan within the meaning of Section 3 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and GNA is not a
"benefit plan investor" (as such term is defined in 29 C.F.R. Section
2510.3-101(f)(2)).

         9. LIABILITY. It is recognized that decisions concerning investments or
potential investments involve the exercise of judgment and the risk of loss. To
the extent permitted by Applicable Law, neither GMSP nor any of its officers,
directors, or employees nor other members of the GMSP Group shall be liable for
any loss suffered by GNA on account of such investments, or any act taken or
omission made in good faith under this Agreement. For purposes of the foregoing
sentence, no action or omission by GMSP shall be considered to have been made
"in good faith" if GMSP was negligent, violated any law, or made any
misrepresentation (whether affirmatively or by omission).

         10. INDEMNIFICATION.

                  (a) GNA shall indemnify, defend, and hold harmless GMSP and
the GMSP Principals from and against any and all claims, actions, causes of
action, demands, losses, damages, liabilities, costs, and expenses (including
reasonable attorneys' fees and expenses) (collectively, "Damages"), asserted
against, resulting to, imposed upon, or incurred by any of them, directly or
indirectly, by reason of or resulting from (i) any Breach by GNA of any of its
representations, warranties, covenants, or agreements contained in this
Agreement or in any certificate, instrument, or document delivered pursuant
hereto or (ii) any Proceeding brought against any of them by a Person other than
GNA or any of its Affiliates, Associates or shareholders in respect of any
action taken in good faith on behalf of GNA in the course of the performance of
GMSP's duties under this Agreement; provided, however, that GNA shall indemnify,
defend, and hold harmless GMSP and the GMSP Principals from and against any
reasonable expenses incurred by such Person(s) in connection with a Proceeding
brought against any of them by any of GNA's shareholders if such Person(s) is
wholly successful, on the merits or otherwise, in the defense of such
Proceeding, and provided, further, that GNA's obligation to indemnify, defend
and hold harmless as provided in this Section 10(a) shall not apply to the first
$750,000 in the aggregate of claims hereunder (other than claims for expenses in
defending a Proceeding for which the Person is entitled to indemnification under
clause (ii) of this Section) and provided, further, that such $750,000 amount
shall be reduced dollar-for-dollar by an amount equal to the cumulative
aggregate of all claims made under one or more of the GNA Investment Management
Agreements.

                  (b) GMSP shall indemnify, defend, and hold harmless GNA and
its Affiliates, Associates, directors, officers and employees from and against
any and all Damages asserted against, resulting to, imposed upon, or incurred by
any of them, directly or indirectly, by reason of or resulting from any Breach
by GMSP of any of its representations, warranties, covenants, or agreements
contained in this Agreement or in any certificate, instrument, or document
delivered pursuant hereto; provided, however, that GMSP's obligation to
indemnify, defend and hold harmless as provided in this Section 10(b) shall not
apply to the first $750,000 in the aggregate of claims hereunder and provided,
further, that such $750,000 amount shall be reduced dollar-for-dollar by an
amount equal to the cumulative aggregate of all claims made under one or more of
the GNA Investment Management Agreements.

                  (c) Promptly after receipt by an indemnified party under
Section 10(a) or (b) of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such Section, give written notice to the indemnifying
party of the commencement thereof, but the failure so to notify the indemnifying
party shall not relieve it of any liability

INVESTMENT MANAGEMENT AGREEMENT
                                       12
<PAGE>   61

that it may have to any indemnified party except to the extent the indemnifying
party demonstrates that the defense of such action is prejudiced thereby. In
case any such action shall be brought against an indemnified party and it shall
give written notice to the indemnifying party of the commencement thereof, the
indemnifying party shall be entitled to participate therein and, to the extent
that it may wish, to assume the defense thereof with counsel reasonably
satisfactory to such indemnified party. If the indemnifying party elects to
assume the defense of such action, the indemnified party shall have the right to
employ separate counsel at its own expense and to participate in the defense
thereof. If the indemnifying party elects not to assume (or fails to assume) the
defense of such action, the indemnified party shall be entitled to assume the
defense of such action with counsel of its own choice, at the expense of the
indemnifying party. If the action is asserted against both the indemnifying
party and the indemnified party and there is a conflict of interests which
renders it inappropriate for the same counsel to represent both the indemnifying
party and the indemnified party, the indemnifying party shall be responsible for
paying for separate counsel for the indemnified party; provided, however, that
if there is more than one indemnified party, the indemnifying party shall not be
responsible for paying for more than one separate firm of attorneys to represent
the indemnified parties, regardless of the number of indemnified parties. The
indemnifying party shall have no liability with respect to any compromise or
settlement of any action effected without its written consent (which shall not
be unreasonably withheld).

         11. CONFIDENTIALITY. Each of GMSP and GNA shall keep all Confidential
Information in confidence, and shall not disclose said information to any other
party other than such party's employees, advisors, attorneys and accountants,
who will be advised of the confidential nature of information. Each party shall
protect the Confidential Information with the same degree of care as such party
normally uses in the protection of its confidential and proprietary information.
Each party further agrees not to use Confidential Information for any purpose
except in connection with the performance of its duties under this Agreement.
The restrictions set forth herein shall not apply with respect to Confidential
Information which (i) is already generally available to the public when received
by such party; (ii) becomes available to the public through no fault of any
member of the GMSP Group or GNA, as applicable; or (iii) is required to be
disclosed by Applicable Law or a Governmental Authority.

         12. INSURANCE. GMSP shall maintain at all times during the term of this
Agreement fiduciary liability insurance of the type customary for investment
managers in similar situations naming GNA as an insured with such limits, terms,
conditions and "tail" provisions as are reasonably acceptable to GNA and GMSP
and shall provide GNA with complete copies of all binders and other policy
information. GMSP also shall obtain and maintain a fidelity bond in the amount
of not less than $5,000,000 and otherwise containing terms and conditions
reasonably acceptable to GNA. In the event that any such policy or bond is
canceled or suspended, GMSP promptly shall notify GNA in writing.

         13. NOTICES. All notices required to be given in writing hereunder
shall be deemed to have been given if (i) delivered personally or by documented
courier or delivery service, (ii) transmitted by facsimile or (iii) mailed by
registered or certified mail (return receipt requested and postage prepaid) to
the following listed Persons at the addresses and facsimile numbers specified
below, or to such other Persons, addresses or facsimile numbers as a party
entitled to notice shall give, in the manner hereinabove described, to the
others entitled to notice:

             If to GMSP, to:                    777 Main Street, Suite 2250
                                                Fort Worth, Texas 76102
                                                Attention:  J. Randall Chappel
                                                Fax:  (817) 820-6651

INVESTMENT MANAGEMENT AGREEMENT
                                       13
<PAGE>   62

            If to GNA, to:                     500 Commerce Street
                                               Fort Worth, Texas 76102-5439
                                               Attention: President
                                               Fax: (817) 338-1454

If given personally or by documented courier or delivery service, a notice shall
be deemed to have been given when it is received. If transmitted by facsimile, a
notice shall be deemed to have been given on the date received, if electronic
confirmation of receipt occurs during normal business hours on a Business Day,
and otherwise, on the first Business Day following electronic confirmation of
receipt. If given by mail, it shall be deemed to have been given on the third
Business Day following the day on which it was posted.

         14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.

         15. NATURE OF RELATIONSHIP. The parties hereto intend that the services
provided by GMSP to GNA pursuant to this Agreement are being provided as an
independent contractor. Nothing contained in this Agreement shall constitute or
be construed to be or create a general partnership or joint venture between GMSP
and GNA or their respective successors or assigns.

         16. BINDING EFFECT; ASSIGNMENT; NO THIRD PARTY BENEFIT. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by either of the parties hereto without the prior
written consent of the other party. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person other than the parties
hereto, and their respective heirs, legal representatives, successors, and
permitted assigns, any rights, benefits, or remedies of any nature whatsoever
under or by reason of this Agreement.

         17. INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. For purposes of this Agreement, the words "includes" and
"including" shall mean "including without limitation" and the word "or" is used
in the inclusive sense. All capitalized terms defined herein are equally
applicable to both the singular and plural forms.

         18. SEVERABILITY. In the event that this Agreement, or any of its
provisions, or the performance of any provision, is found to be illegal or
unenforceable under applicable law now or hereafter in effect, the parties shall
be excused from performance of such portions of this Agreement as shall be found
to be illegal or unenforceable under the applicable laws or regulations without
affecting the validity of the remaining provisions of the Agreement.

         19. TIME OF ESSENCE. With regard to all dates and time periods set
forth in this Agreement, time is of the essence.

         20. NO WAIVER OF PRIVILEGE. Neither GNA nor GMSP nor any of their
respective subsidiaries or affiliates waives any attorney-client, work product
or other privilege with respect to any information furnished pursuant to this
Agreement.

INVESTMENT MANAGEMENT AGREEMENT
                                       14
<PAGE>   63

         21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

         22. COUNTERPARTS. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.

                           [Intentionally Left Blank]

INVESTMENT MANAGEMENT AGREEMENT
                                       15
<PAGE>   64

         IN WITNESS WHEREOF, GMSP and GNA have caused this Agreement to be
executed all as of the day and year first above written.

                       GAINSCO SERVICES CORP.,
                           a Texas corporation

                       By:       /s/ Glenn W. Anderson
                           -----------------------------------------------------
                           Glenn W. Anderson, President

                       GOFF MOORE STRATEGIC PARTNERS, L.P.,
                           a Texas limited partnership

                       By:  GMSP Operating Partners, L.P., its general partner
                       By:  GMSP, L.L.C., its general partner

                           By:   /s/ John C. Goff
                               -------------------------------------------------
                               John C. Goff, Managing Principal

                           By:   /s/ J. Randall Chappell
                               -------------------------------------------------
                                J. Randall Chappel, Principal

INVESTMENT MANAGEMENT AGREEMENT
                                       16
<PAGE>   65

                         INVESTMENT MANAGEMENT AGREEMENT
                                       FOR
                       MIDWEST CASUALTY INSURANCE COMPANY

         THIS INVESTMENT MANAGEMENT AGREEMENT (this "Agreement") is entered into
this 1st day of January, 2000, by and between Goff Moore Strategic Partners,
L.P., a Texas limited partnership ("GMSP"), and Midwest Casualty Insurance
Company, a North Dakota insurance corporation ("GNA"), an indirect subsidiary of
GAINSCO, INC. ("Parent").

         WHEREAS, GNA is a regulated insurance company;

         WHEREAS, GNA desires to appoint GMSP to serve as investment manager
with respect to certain investments held by it; and

         WHEREAS, GMSP is willing to provide investment advisory services to GNA
on the terms and conditions hereinafter set forth.

         NOW, THEREFORE, for and in consideration of the premises, the mutual
covenants herein contained and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, GMSP and GNA hereby
agree as follows:

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

         "Affiliate" means, with respect to any Person, any other Person that
directly, or indirectly, through one or more intermediaries controls, is
controlled by or is under common control with such specified Person. For this
purpose the term "control" (including the terms "controlling", "controlled by"
and "under common control with") shall mean the possession, direct or indirect,
of the power to direct or cause the direction of the management and policies of
a Person whether through the ownership of voting Securities, by contract, or
otherwise.

         "Agreement" has the meaning set forth in the first paragraph hereof.

         "Applicable Law" means any statute, law, rule, policy, guideline, or
regulation or any judgment, order, writ, injunction, or decree of any
Governmental Authority to which a specified Person or property is subject.

         "Associate" means (i) any corporation or entity (other than GNA, Parent
or a Subsidiary of GNA or Parent) of which such Person is an officer or partner
or is, directly or indirectly, the beneficial owner of 10 percent or more of any
class of Equity Securities, (ii) any trust or other estate in which such Person
has a substantial beneficial interest or as to which such Person serves as
trustee or in a similar fiduciary capacity, and (iii) any relative or spouse of
such Person, or any relative of such Person, or any relative of such spouse, who
has the same home as such Person or who is a director or officer of GNA or any
of its Subsidiaries.

         "Board" means the board of directors of GNA.

INVESTMENT MANAGEMENT AGREEMENT     1
<PAGE>   66

         "Breach" means any violation or breach of, any misrepresentation or
inaccuracy in, any default under, or any failure to perform or comply with any
representation, warranty, covenant, obligation, or other provision of this
Agreement.

         "Business Day" means any day other than a Saturday or Sunday on which
national banks are open for business in Fort Worth, Texas and New York, New
York.

         "Cash" means any currency or immediately available funds on deposit
with a financial institution.

         "Cause" means that GMSP has committed or engaged in (i) any
malfeasance, bad faith or negligence in respect of GMSP's material duties
pursuant to this Agreement; (ii) any commission of any fraud by GMSP; (iii) any
conviction or indictment of or plea of no contest to any felony by GMSP or any
member of the GMSP Group; (iv) any violation of the provisions of the U. S.
federal securities laws or state securities laws by GMSP or any GMSP Principal;
or (v) any material breach by GMSP of its obligations (including, without
limitation, its obligations to observe and comply with the provisions of the
Policy Letter) under, or its representations or warranties in, this Agreement if
such breach continues for more than 10 days after GMSP receives written notice,
specifying such breach with particularity and demanding cure, from GNA.

         "Committee" means the Board's Investment Committee, none of the members
of which shall be members of the GMSP Group.

         "Confidential Information" means information received by GMSP from GNA
or received by GNA from GMSP that is not generally known or which would
logically be considered confidential or proprietary, or which would do GNA or
GMSP, as applicable, harm if divulged, or which is marked "Confidential
Information."

         "Damages" has the meaning set forth in Section 10.

         "Equity Securities" means any capital stock or other equity interests
of any Person, any Securities directly or indirectly convertible into, or
exercisable or exchangeable for any capital stock or other equity interests of
any Person, or any right, option, warrant or other Security which, with the
payment of additional consideration, the expiration of time or the occurrence of
any event shall give the holder thereof the right to acquire any capital stock
or other equity interests of any Person or any Security convertible into or
exercisable or exchangeable for, any capital stock or other equity interests of
any Person.

         "Fair Market Value" means as to any Securities on any date, (a) if such
Securities are listed or admitted to trading on any national securities exchange
on any such trading day, the amount equal to the last sale price of such
Securities, regular way settlement, on such dates or, if no such sale takes
place on a date, the average of the closing bid and asked prices thereof on such
date, in each case as officially reported on the principal national securities
exchange on which such Securities are then listed or admitted to trading, (b) if
such Securities are not then listed or admitted to trading on any national
securities exchange but are reported through the automated quotation system of a
registered securities association, the last trading price of such Securities on
such dates, or if there shall have been no trading on a date, the average of the
closing bid and asked prices of such Securities on such date as shown by such
automated quotation system or (c) if such Securities are not then so listed,
admitted to trading or reported, the value determined by GMSP subject to review
and approval by the Committee, which valuation shall be equal to (i) cost or
(ii) in the event that either GMSP or the Committee determine that there has
been a material change in the value of such Securities since the date of
acquisition of such Securities, such other valuation as is reflective of the
value

INVESTMENT MANAGEMENT AGREEMENT     2
<PAGE>   67

of such Securities; provided, however, that, if GMSP and the Committee are
unable to agree on such fair market value, such Securities shall be valued by
such nationally recognized independent public accounting firm or investment
banking firm designated by the Committee and reasonably acceptable to GMSP. Any
such third-party valuation shall be final and binding on the parties and
enforceable in accordance with the provisions of the Texas General Arbitration
Act, and the costs and expenses thereof shall be shared equally by GMSP and GNA.

         "Fees" has the meaning set forth in Section 4.

         "GAAP" means generally accepted accounting principles for financial
reporting in the U.S., consistently applied.

         "GMSP" has the meaning set forth in the introductory paragraph of this
Agreement.

         "GMSP Group" means GMSP together with its Affiliates, Associates and
employees, including without limitation GMSP's partners, the partners of the
general partner of GMSP and the GMSP Principals.

         "GMSP Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability of GMSP to conduct business,
the financial condition or the results of operations of GMSP that is material to
GMSP or as to the ability of GMSP to perform its obligations pursuant to this
Agreement, excluding any such condition, circumstance or development which
adversely affects the U.S. economy, financial markets or the insurance industry
generally.

         "GMSP Principals" shall mean John C. Goff, J. Randall Chappel and any
other Persons employed by or otherwise affiliated with GMSP or its general
partner who have access to information regarding particular Securities being
considered for purchase or sale by GNA. The parties recognize that the limited
partners of GMSP as of the date hereof are not GMSP Principals.

         "GNA" has the meaning set forth in the introductory paragraph of this
Agreement.

         "GNA Applicable Insurance Department" means the Insurance Department
of North Dakota.

         "GNA Entities" means GAINSCO, INC., a Texas corporation; GNA Insurance
Company, Inc., a Texas corporation; GAINSCO County Mutual Insurance Company, a
Texas mutual insurance company; General Agents Insurance Company of America,
Inc., an Oklahoma corporation and Midwest Casualty Insurance Company, a North
Dakota insurance corporation.

         "GNA Investment Management Agreements" means the Investment Management
Agreements of even date herewith between GMSP and each of the GNA Entities,
including this Agreement.

         "GNA Material Adverse Effect" means any condition, circumstance or
development having an adverse effect on the ability to conduct business, the
financial condition or the results of operations of GNA and its Subsidiaries
that is material to Parent and its Subsidiaries taken as a whole or as to the
ability of GNA to perform its obligations pursuant to this Agreement, excluding
any such condition, circumstance or development which adversely affects the U.S.
economy, financial markets or insurance industry generally.

INVESTMENT MANAGEMENT AGREEMENT     3
<PAGE>   68

         "good faith", when used in respect of any action, means that the action
was taken with (i) honesty of intention, (ii) freedom from knowledge of
circumstances which ought to put the Person taking such action on inquiry or
negligence, and (iii) intention to abstain from taking any unconscientious
advantage of another.

         "Governmental Authority" means any U.S. federal, state, local, foreign,
supernational or supranational court or tribunal, governmental, regulatory or
administrative agency, department, bureau, authority, commission or arbitral
panel.

         "Investment Grade Debt Obligations" means any interest bearing debt
obligations issued by any Person, including a Governmental Authority, rated at
least "B minus" or the equivalent thereof by Standard & Poor's Corporation or
Moody's Investor's Service, Inc.

         "Malfunction" means any failure to: (a) accurately recognize dates
falling before, on or after the Year 2000; or (b) accurately record, store,
retrieve and process data input and date information.

         "Parent" has the meaning set forth in the first paragraph hereof.

         "Person" means any individual, corporation, partnership, limited
liability company, association, trust or other entity or organization, including
any Governmental Authority.

         "Policy Letter" has the meaning set forth in Section 2.

         "Portfolio" means those investments held by GNA in Securities of the
type more particularly described under the category "Investments" in Parent's
periodic filings with the SEC.

         "Proceedings" means all proceedings, actions, suits, investigations,
and inquiries by or before any arbitrator or Governmental Authority.

         "Research" means research, statistical and similar information and
services.

         "SEC" means the Securities and Exchange Commission.

         "Security" means any capital stock, partnership interest, membership
interest, subscription, certificate of trust or other ownership interest,
warrant, bond, note, debenture, or other debt or equity interest of any Person
commonly known as a "security," and all rights and options relating to any of
the foregoing, regardless of whether traded on a national securities exchange;
but shall not include Cash Equivalents.

         "Securities Purchase Agreement" means the Securities Purchase Agreement
dated June 29, 1999, between GMSP and Parent.

         "Short Term Debt" means any note, draft, bill of exchange, or similar
security which has a maturity at the time of issuance of not exceeding nine (9)
months exclusive of days of grace, or any renewal thereof the maturity of which
is likewise limited.

         "Subsidiary" means, with respect to any Person, any corporation or
other entity (including partnerships and other business associations) in which
the Person directly or indirectly owns at least a majority of the outstanding
voting Securities or other equity interests having the power, under ordinary

INVESTMENT MANAGEMENT AGREEMENT     4
<PAGE>   69

circumstances, to elect a majority of the directors, or otherwise to direct the
management and policies, of such corporation or other entity.

         "U.S." means the United States of America.

         "Year 2000" means the calendar year 2000 A.D.

         2. INVESTMENT MANAGER. GNA hereby retains GMSP, and GMSP agrees to
serve, as investment manager with respect to the Portfolio on the terms and
conditions hereinafter set forth:

                  (a) The investment policies and all other actions of the
Portfolio are and shall at all times be subject to the oversight and direction
of the Committee. GMSP shall manage the Portfolio in accordance with the
investment objectives and policies set forth in the letter (the "Policy Letter")
heretofore delivered to GMSP by GNA. GNA may amend or supplement the contents of
the Policy Letter, including the investment criteria and other instructions set
forth therein, in whole or in part and at any time and from time to time;
provided, however, that no amendment or supplement shall be binding upon GMSP
until GMSP is notified of the amendment or supplement; and provided further,
that in the event that an amended or supplemented Policy Letter shall require
GMSP to make any changes in the manner in which GMSP has performed its services
pursuant to this Agreement, GMSP shall have a reasonable time period to comply
with such changes. GMSP shall periodically evaluate the provisions of the Policy
Letter and provide GNA with any recommendations for the amendment or
supplementation of the provisions of the Policy Letter that GMSP deems advisable
for the benefit of GNA. To the extent that the provisions of the Policy Letter,
as the same may be amended or supplemented from time to time, conflict with the
provisions of this Agreement, the provisions of this Agreement shall control.

                  (b) GNA will retain ownership and control of the assets in the
Portfolio at all times. The assets shall be held for the benefit of GNA solely
at one or more financial institutions or other locations specified from time to
time in the Policy Letter.

                  (c) Subject to the provisions of the Policy Letter and the
oversight and direction of the Committee, GMSP shall have authority to make all
specific investment decisions with respect to the assets in the Portfolio.

                  (d) GMSP shall exercise its discretion and discharge its
obligations under this Agreement in compliance with all Applicable Laws.

                  (e) GMSP shall employ and dedicate to GNA continuously during
the term of this Agreement a qualified investment portfolio manager reasonably
acceptable to GNA, who shall have the primary responsibilities of coordinating
all aspects of the day-to-day investment activities of the Portfolio.

                  (f) GNA acknowledges that GMSP has informed GNA that GMSP
currently is not registered as an (i) investment adviser under the Investment
Advisers Act of 1940, as amended, and all other Applicable Laws or (ii) a broker
or dealer under the Securities Exchange Act of 1934, as amended, and all other
Applicable Laws.

INVESTMENT MANAGEMENT AGREEMENT     5
<PAGE>   70

         3. REPORTS.

                  (a) GMSP shall provide to GNA periodic financial reports with
respect to the assets in and investment performance of the Portfolio. The
reports shall include such financial information in such format as GNA may
reasonably request in connection with the administration of the Portfolio and a
record of all transactions effected during the interim period from the preceding
report, including the price per Security, the broker or dealer executing the
transaction and the commissions paid. The reports shall be made with such
frequency, but not less often than within 20 days following the end of each
calendar month, as GNA may reasonably request in connection with the
administration of the Portfolio; provided that the late delivery of a complete
report no more than one time in any three-year period with respect to any
particular Security in the Portfolio shall not constitute a Breach of this
Agreement if (i) the delay was caused by the failure of an unaffiliated Person
in providing information to GMSP that had been timely requested by GMSP, (ii)
any portion of the report that is not dependent upon the unaffiliated Person is
delivered to GNA by GMSP on a timely basis, and (iii) GMSP uses its commercially
reasonable efforts to cause such late report to be delivered as promptly as
practicable.

                  (b) GMSP shall (i) afford GNA and its authorized
representatives reasonable access to the GMSP Principals, GMSP's offices and
other facilities, and all books, records and other documents of GMSP relating to
the Portfolio or this Agreement and (ii) permit GNA and its authorized
representatives to make such inspections and copies of all books, records and
other documents as they may reasonably require to verify the accuracy of any
report furnished pursuant to Section 3(a).

         4. COMPENSATION; EXPENSES.

                  (a) For services performed by GMSP, GNA agrees to pay to GMSP
investment management fees (the "Fees") equal on an annual basis to (i) 30 basis
points multiplied by the Fair Market Value with respect to any portion of the
Portfolio invested in Short Term Debt or Investment Grade Debt Obligations at
the end of a given calendar month or during a majority of the days in the given
calendar month and (ii) 100 basis points multiplied by the Fair Market Value
with respect to any portion of the Portfolio invested in Equity Securities or
other alternative investments in Securities which are not Investment Grade Debt
Obligations. The Fees otherwise payable with respect to any calendar month (or
prorated portion thereof) shall be reduced by an amount equal to the sum of (i)
the amount of fees, commissions and expenses paid by or on behalf of GNA to any
investment or mutual fund from which any member of the GMSP Group is eligible to
receive compensation or profits plus (ii) the amount of any fees paid by or on
behalf of GNA to or accrued for the benefit of any member of the GMSP Group
under Rule 12b-1 promulgated under the Investment Company Act of 1940, as
amended, plus (iii) the amount of any finder's fees, brokerage commissions or
other benefit or compensation paid by or on behalf of GNA to or accrued for the
benefit of any member of the GMSP Group in connection with any transaction in
Securities pursuant to this Agreement. Notwithstanding anything to the contrary
contained in this Agreement, (x) no Fees shall be payable with respect to any
portion of the Portfolio invested in Cash during a majority of the days in the
given calendar month and (y) the Committee and GMSP may agree upon a different
Fee structure for special situations.

                  (b) The Fees shall be based on the Fair Market Value of the
assets in the Portfolio at the end of each calendar month, and shall be
calculated at the end of each calendar month based upon the actual number of
days elapsed during the calendar month, during which this Agreement is in effect
over a year of 365 days. Within fifteen (15) days after the end of each calendar
month, GNA shall pay to GMSP the Fees earned with respect to the preceding
calendar month. In the event of termination prior to the end of a calendar
month, GNA will pay to GMSP a prorated portion of the Fees based upon the Fair
Market

INVESTMENT MANAGEMENT AGREEMENT     6
<PAGE>   71

Value of the assets in the Portfolio at the time of termination. No other fees,
charges or assessments shall be payable by GNA to or for the benefit of GMSP or
any member of the GMSP Group with respect to the services performed by GMSP
pursuant to this Agreement, provided that GNA shall have the responsibility to
reimburse GMSP for GMSP's payment of any amounts described pursuant to Section
4(d) below. There shall not be any annual reconciliation, adjustment or other
"true-up" at the end of each calendar year.

                  (c) GMSP shall be solely responsible for all of its general
and administrative costs and expenses incurred in connection with performing its
duties and obligations under this Agreement, which shall consist of all costs
and expenses in connection with the provision of office space and facilities,
equipment and personnel for servicing the investments of the Portfolio and the
salaries and fees of all personnel employed by GMSP performing services relating
to research, statistical and investment activities.

                  (d) GNA shall be responsible for, and pay directly, the
following costs and expenses related to GMSP's performance of its duties
pursuant to this Agreement that are reasonable and payable to Persons not
affiliated with the GMSP Group:

                           (i) brokerage commissions and other costs, fees and
expenses incurred in the purchase and sale of Securities;

                           (ii) fees and expenses of custodians selected
pursuant to Section 2(b);

                           (iii) costs related to third party Proceedings
involving GNA's ownership of Securities pursuant to this Agreement, directly or
indirectly, including, without limitation, attorneys' fees incurred in
connection therewith (but excluding all costs related to Proceedings or other
disputes between GNA and GMSP or any member of the GMSP Group or which
constitute Cause);

                           (iv) interest on and fees and expenses arising out of
all borrowings made by GNA with respect to the purchase of Securities,
including, but not limited to, the arranging thereof;

                           (v) taxes, fees or other governmental charges levied
against GNA; and

                           (vi) any other expense, whether ordinary or
extraordinary, that is determined by the Committee to be appropriate for GNA to
pay pursuant to this Agreement.

                  (e) In discharging its duties pursuant to this Agreement, GMSP
may give preference, and may cause GNA to pay higher negotiated commission
rates, to unaffiliated brokers which, in addition to having the capacity of
obtaining the best price for the Security itself and of executing the order with
speed, efficiency and confidentiality, also provide Research to GMSP or GNA.
Research furnished by brokers through whom Securities transactions are effected
may be used by GMSP in servicing all of its accounts, and there shall be no
reduction in the compensation of GMSP hereunder as a consequence of its receipt
of such Research. In the allocation of brokerage, however, GMSP must determine
in good faith, and demonstrate to GNA upon request, that the amount of the
commission is reasonable in relation to the value of the brokerage services and
Research provided by the broker, viewed in terms of either the particular
transaction or GMSP's overall responsibilities with respect to the Portfolio. In
the allocation of brokerage for the Portfolio, GMSP shall be subject always to
Applicable Law and such policies and requirements that the Committee may adopt
or approve as reflected in the Policy Letter.

INVESTMENT MANAGEMENT AGREEMENT     7
<PAGE>   72

                  (f) In the event that, in any calendar month, the aggregate
amount of Fees (as such term is defined in the respective GNA Investment
Management Agreements) paid to GMSP by the GNA Entities pursuant to the GNA
Investment Management Agreements is less than $75,000, GNA shall pay to GMSP an
amount equal to the product of (i) the quotient of the Fair Market Value of the
Portfolio divided by the Fair Market Value of all of the Portfolios (as such
term is defined in the respective GNA Investment Management Agreements) of all
of the GNA Entities, multiplied by (ii) an amount equal to the difference
between $75,000 and the sum of the aggregate Fees paid to GMSP by all of the GNA
Entities with respect to such calendar month.

         5. ACTIVITIES OF GMSP.

                  (a) The services of GMSP to GNA are not deemed to be
exclusive, and GMSP shall be free to engage in any other business or to render
similar services to others. GMSP and any member of the GMSP Group may engage
independently or with others, for its or their own accounts and for the accounts
of others, in other business ventures and activities of every nature and
description, including, without limitation, purchasing, selling or holding
Securities for the account of any other Person or for its or his own account,
including Securities included within the Portfolio or eligible for investment
pursuant to this Agreement; provided, that the management of such entities and
accounts do not interfere with the performance of their obligations and duties
to GNA pursuant to this Agreement. GNA shall not have any rights or obligations
by virtue of this Agreement in and to such independent ventures and activities
or the income or profits derived therefrom. The foregoing notwithstanding,
without the prior written consent of GNA in a specific case, GMSP shall at all
times adhere, and cause the members of the GMSP Group or the GMSP Principals, as
the case may be, to adhere, to the following:

                           (i) Neither GMSP nor any member of the GMSP Group
shall act, either as principal or agent, on the opposite side of any transaction
in which GNA or the Portfolio is involved.

                           (ii) GMSP and each GMSP Principal shall at all times
(A) place the interests of GNA before such member's personal transactional
interests; (B) conduct all personal transactions in Securities in such a manner
as to avoid any actual or potential conflict of interest or abuse of such
Person's position of trust and confidence in relation to GNA; and (C) promptly
disclose to GNA all personal transactions made by or on behalf of such Person in
Securities which are or were at any time during the preceding two years in the
Portfolio or issued by Persons whose Securities are in the Portfolio.

                  (b) On any issue involving an actual or potential conflict of
interest which is not specifically authorized by or pursuant to this Agreement,
GMSP shall submit such issue to the Committee for prior approval, and shall take
such actions, if any, as are determined by the Committee to be necessary or
appropriate to ameliorate the conflict of interest. If GMSP carries out the
actions specified by the Committee in respect of a matter giving rise to a
conflict of interest, neither GMSP nor any member of the GMSP Group shall have
any liability to GNA in respect of actions taken in good faith by them as a
consequence of the approval by the Committee.

                  (c) GMSP shall be liable for any breach of this Section 5 by
any member of the GMSP Group as if GMSP had committed such breach.

         6. DURATION AND TERMINATION. The term of this Agreement shall commence
on the date of this Agreement and shall continue until terminated:

INVESTMENT MANAGEMENT AGREEMENT     8
<PAGE>   73

                  (a) by the written agreement of GNA and GMSP;

                  (b) by GMSP upon not less than 90 days written notice to GNA
at any time after the third anniversary hereof;

                  (c) by GNA upon not less than 90 days written notice to GMSP
at any time after the third anniversary hereof;

                  (d) by GNA, at any time, immediately upon written notice to
GMSP following (i) the good faith determination by both the Committee and
two-thirds of the members of the Board (excluding members of the Board
designated for election by GMSP or its successors in interest under the
Securities Purchase Agreement or otherwise affiliated with GMSP) that an event
that constitutes Cause has occurred and is continuing beyond any applicable
period for notice and opportunity to cure or (ii) the commencement by a
Governmental Authority of any Proceeding alleging any matter which, if proven,
would constitute Cause.

                  (e) by GMSP upon not less than 10 days notice in the event
that GNA defaults in the performance of any of its material obligations
hereunder and such default continues for not less than 10 days after GNA
receives notice of such default; provided, however, that in the event that such
default is of a nature that it cannot, with due diligence, be cured within 10
days, GMSP may not terminate this Agreement so long as GNA begins to cure such
default within 10 days and thereafter diligently pursues such cure to
completion.

         Termination of this Agreement shall not terminate GMSP's obligations
under Section 3 to furnish reports concerning facts and circumstances prior to
termination or under Section 11 to maintain the confidentiality of Confidential
Information, terminate GNA's obligations to pay fees earned by GMSP prior to
the date of termination, or terminate either party's obligations to indemnify
the other party pursuant to this Agreement.

         7. REPRESENTATIONS AND WARRANTIES OF GMSP.

                  (a) GMSP is a limited partnership duly organized, validly
existing and in good standing under the Texas Revised Limited Partnership Act,
as amended, and has the power and authority to own all of its properties and
assets and to carry on its business as now being conducted. GMSP is duly
qualified and in good standing (to the extent applicable) to transact business
in each jurisdiction in which the performance of its obligations hereunder
require such qualification except where the failure to be duly qualified or in
good standing would not have or reasonably be expected to have a GMSP Material
Adverse Effect.

                  (b) GMSP has all requisite power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GMSP. This Agreement has been duly and validly executed and
delivered by GMSP and, assuming the due authorization, execution and delivery
hereof by GNA, constitutes the valid and binding obligation of GMSP, enforceable
against GMSP in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

INVESTMENT MANAGEMENT AGREEMENT     9
<PAGE>   74

                  (c) No declaration, filing or registration with, or notice to
or authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GMSP other than
with the GNA Applicable Insurance Department.

                  (d) The execution, delivery and performance of this Agreement
by GMSP do not and will not result in any violation by GMSP under any provisions
of:

                           (i) the partnership agreement or similar governing
documents of GMSP;

                           (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any Governmental
Authority applicable to GMSP or any of its properties or assets; or

                           (iii) any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which GMSP is now a party or
by which it or any of its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect;

                  (e) There is no Proceeding pending, or to the knowledge of
GMSP, threatened against GMSP that questions the validity of this Agreement or
any action to be taken by GMSP in connection with this Agreement except as could
not, individually or in the aggregate, reasonably be expected to have a GMSP
Material Adverse Effect.

                  (f) GMSP is, and during the term of this Agreement will
continue to be (i) either exempt from registration or duly registered as an
investment adviser under the Investment Advisers Act of 1940 and all Applicable
Laws and (ii) qualified and eligible to manage the Portfolio under the statutes
and regulations administered by the GNA Applicable Insurance Department,
provided that GNA shall inform GMSP immediately in the event that GNA becomes
aware of any changes in the qualification and eligibility requirements with
respect to such statutes and regulations. GMSP will provide prompt written
notice to GNA if GMSP ceases to be so registered or qualified or becomes aware
of any fact, event or circumstance which will or is reasonably likely to cause
it to cease to be so registered or qualified.

                  (g) Taken in the aggregate, the factual information
(including, without limitation, information regarding its knowledge, investment
experience and investment track record) furnished by GMSP to GNA in writing for
purposes of this Agreement did not contain untrue statements of material facts,
or omit to state material facts necessary to make the statements made not
misleading in the light of the circumstances under which they were made, as of
the date as of which such information is dated. All financial forecasts prepared
and furnished by GMSP to GNA were prepared in good faith on the basis of
assumptions believed to be reasonable and data, information, tests or conditions
believed to be valid or accurate or to exist at the time such forecasts were
prepared.

                  (h) All of the equipment, Software and computer hardware owned
or used by GMSP or used and operated by third parties on behalf of GMSP, which
performs or is or may be required to perform functions involving dates or the
computation of dates, or containing date related data, has the programming,
design and performance capabilities to ensure that:

INVESTMENT MANAGEMENT AGREEMENT     10
<PAGE>   75

                           (i) it will not suffer any Malfunction that would
reasonably be expected to have a GMSP Material Adverse Effect; and

                           (ii) it will not, as a result of the date change at
the end of the twentieth century or the input, processing, storage or use of
dates up to and including December 31, 2001, (A) be adversely affected, (B)
require changes in inputting or operating practices, (C) produce invalid or
incorrect output or results, (D) cause any abnormal ending scenario, or (E)
suffer any diminution in functionality or performance that, in any of the above,
could reasonably be expected to have a GMSP Material Adverse Effect.

         8. REPRESENTATIONS AND WARRANTIES OF GNA.

                  (a) GNA is an insurance company duly organized and validly
existing under the laws of the State of North Dakota, and has the power and
authority to own all of its properties and assets and to carry on its business
as now being conducted. GNA is duly qualified and in good standing to transact
business in each jurisdiction in which the performance of its obligations
hereunder require such qualification except where the failure to be duly
qualified or in good standing would not have or reasonably be expected to have a
GNA Material Adverse Effect.

                  (b) GNA has all requisite power and authority to enter into
and perform its obligations under this Agreement. The execution, delivery and
performance of this Agreement have been duly authorized by all necessary action
on the part of GNA. This Agreement has been duly and validly executed and
delivered by GNA and, assuming the due authorization, execution and delivery
hereof by GMSP, constitutes the valid and binding obligation of GNA, enforceable
against GNA in accordance with its terms, except as would be limited by
applicable bankruptcy, insolvency, reorganization, fraudulent conveyance or
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of equitable remedies, including specific
performance, may be subject to the discretion of any court before which any
proceeding therefor may be brought.

                  (c) No declaration, filing or registration with, or notice to
or authorization, consent or approval of any Governmental Authority is necessary
for the execution, delivery and performance of this Agreement by GNA other than
with the GNA Applicable Insurance Department.

                  (d) The execution, delivery and performance of this Agreement
by GNA do not and will not result in any violation by GNA under any provisions
of:

                           (i) articles of incorporation or similar governing
documents of GNA;

                           (ii) any statute, law, ordinance, rule, regulation,
judgment, decree, order, injunction, writ, permit or license of any Governmental
Authority applicable to GNA or any of its properties or assets; or

                           (iii) any note, bond, mortgage, indenture, deed of
trust, license, franchise, permit, concession, contract, lease or other
instrument, obligation or agreement of any kind to which GNA is now a party or
by which it or any of its properties or assets may be bound or affected;

excluding from the foregoing clauses (ii) and (iii) such violations as could
not, in the aggregate, reasonably be expected to have a GNA Material Adverse
Effect.

INVESTMENT MANAGEMENT AGREEMENT     11
<PAGE>   76

                  (e) There is no Proceeding pending, or to the knowledge of
GNA, threatened against GNA that questions the validity of this Agreement or any
action to be taken by GNA in connection with this Agreement except as could not,
in the aggregate, reasonably be expected to have a GNA Material Adverse Effect.

                  (f) GNA has such knowledge and experience in financial and
business matters that it is capable of evaluating the risks and merits of
entering into this Agreement.

                  (g) No part of the funds to be used to purchase and hold
Securities or to pay any amounts pursuant to this Agreement constitutes an asset
of any employee benefit plan within the meaning of Section 3 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), and GNA is not a
"benefit plan investor" (as such term is defined in 29 C.F.R.
ss.2510.3-101(f)(2)).

         9. LIABILITY. It is recognized that decisions concerning investments or
potential investments involve the exercise of judgment and the risk of loss. To
the extent permitted by Applicable Law, neither GMSP nor any of its officers,
directors, or employees nor other members of the GMSP Group shall be liable for
any loss suffered by GNA on account of such investments, or any act taken or
omission made in good faith under this Agreement. For purposes of the foregoing
sentence, no action or omission by GMSP shall be considered to have been made
"in good faith" if GMSP was negligent, violated any law, or made any
misrepresentation (whether affirmatively or by omission).

         10. INDEMNIFICATION.

                  (a) GNA shall indemnify, defend, and hold harmless GMSP and
the GMSP Principals from and against any and all claims, actions, causes of
action, demands, losses, damages, liabilities, costs, and expenses (including
reasonable attorneys' fees and expenses) (collectively, "Damages"), asserted
against, resulting to, imposed upon, or incurred by any of them, directly or
indirectly, by reason of or resulting from (i) any Breach by GNA of any of its
representations, warranties, covenants, or agreements contained in this
Agreement or in any certificate, instrument, or document delivered pursuant
hereto or (ii) any Proceeding brought against any of them by a Person other than
GNA or any of its Affiliates, Associates or shareholders in respect of any
action taken in good faith on behalf of GNA in the course of the performance of
GMSP's duties under this Agreement; provided, however, that GNA shall indemnify,
defend, and hold harmless GMSP and the GMSP Principals from and against any
reasonable expenses incurred by such Person(s) in connection with a Proceeding
brought against any of them by any of GNA's shareholders if such Person(s) is
wholly successful, on the merits or otherwise, in the defense of such
Proceeding, and provided, further, that GNA's obligation to indemnify, defend
and hold harmless as provided in this Section 10(a) shall not apply to the first
$750,000 in the aggregate of claims hereunder (other than claims for expenses in
defending a Proceeding for which the Person is entitled to indemnification under
clause (ii) of this Section) and provided, further, that such $750,000 amount
shall be reduced dollar-for-dollar by an amount equal to the cumulative
aggregate of all claims made under one or more of the GNA Investment Management
Agreements.

                  (b) GMSP shall indemnify, defend, and hold harmless GNA and
its Affiliates, Associates, directors, officers and employees from and against
any and all Damages asserted against, resulting to, imposed upon, or incurred by
any of them, directly or indirectly, by reason of or resulting from any Breach
by GMSP of any of its representations, warranties, covenants, or agreements
contained in this Agreement or in any certificate, instrument, or document
delivered pursuant hereto; provided, however, that GMSP's obligation to
indemnify, defend and hold harmless as provided in this Section 10(b) shall not
apply

INVESTMENT MANAGEMENT AGREEMENT     12
<PAGE>   77

to the first $750,000 in the aggregate of claims hereunder and provided,
further, that such $750,000 amount shall be reduced dollar-for-dollar by an
amount equal to the cumulative aggregate of all claims made under one or more of
the GNA Investment Management Agreements.

                  (c) Promptly after receipt by an indemnified party under
Section 10(a) or (b) of notice of the commencement of any action, such
indemnified party shall, if a claim in respect thereof is to be made against an
indemnifying party under such Section, give written notice to the indemnifying
party of the commencement thereof, but the failure so to notify the indemnifying
party shall not relieve it of any liability that it may have to any indemnified
party except to the extent the indemnifying party demonstrates that the defense
of such action is prejudiced thereby. In case any such action shall be brought
against an indemnified party and it shall give written notice to the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it may wish, to assume
the defense thereof with counsel reasonably satisfactory to such indemnified
party. If the indemnifying party elects to assume the defense of such action,
the indemnified party shall have the right to employ separate counsel at its own
expense and to participate in the defense thereof. If the indemnifying party
elects not to assume (or fails to assume) the defense of such action, the
indemnified party shall be entitled to assume the defense of such action with
counsel of its own choice, at the expense of the indemnifying party. If the
action is asserted against both the indemnifying party and the indemnified party
and there is a conflict of interests which renders it inappropriate for the same
counsel to represent both the indemnifying party and the indemnified party, the
indemnifying party shall be responsible for paying for separate counsel for the
indemnified party; provided, however, that if there is more than one indemnified
party, the indemnifying party shall not be responsible for paying for more than
one separate firm of attorneys to represent the indemnified parties, regardless
of the number of indemnified parties. The indemnifying party shall have no
liability with respect to any compromise or settlement of any action effected
without its written consent (which shall not be unreasonably withheld).

         11. CONFIDENTIALITY. Each of GMSP and GNA shall keep all Confidential
Information in confidence, and shall not disclose said information to any other
party other than such party's employees, advisors, attorneys and accountants,
who will be advised of the confidential nature of information. Each party shall
protect the Confidential Information with the same degree of care as such party
normally uses in the protection of its confidential and proprietary information.
Each party further agrees not to use Confidential Information for any purpose
except in connection with the performance of its duties under this Agreement.
The restrictions set forth herein shall not apply with respect to Confidential
Information which (i) is already generally available to the public when received
by such party; (ii) becomes available to the public through no fault of any
member of the GMSP Group or GNA, as applicable; or (iii) is required to be
disclosed by Applicable Law or a Governmental Authority.

         12. INSURANCE. GMSP shall maintain at all times during the term of this
Agreement fiduciary liability insurance of the type customary for investment
managers in similar situations naming GNA as an insured with such limits, terms,
conditions and "tail" provisions as are reasonably acceptable to GNA and GMSP
and shall provide GNA with complete copies of all binders and other policy
information. GMSP also shall obtain and maintain a fidelity bond in the amount
of not less than $5,000,000 and otherwise containing terms and conditions
reasonably acceptable to GNA. In the event that any such policy or bond is
canceled or suspended, GMSP promptly shall notify GNA in writing.

         13. NOTICES. All notices required to be given in writing hereunder
shall be deemed to have been given if (i) delivered personally or by documented
courier or delivery service, (ii) transmitted by facsimile or (iii) mailed by
registered or certified mail (return receipt requested and postage prepaid) to
the following

INVESTMENT MANAGEMENT AGREEMENT     13
<PAGE>   78

listed Persons at the addresses and facsimile numbers specified below, or to
such other Persons, addresses or facsimile numbers as a party entitled to notice
shall give, in the manner hereinabove described, to the others entitled to
notice:

         If to GMSP, to:                    777 Main Street, Suite 2250
                                            Fort Worth, Texas 76102
                                            Attention: J. Randall Chappel
                                            Fax: (817) 820-6651

         If to GNA, to:                     500 Commerce Street
                                            Fort Worth, Texas 76102-5439
                                            Attention: President
                                            Fax: (817) 338-1454

If given personally or by documented courier or delivery service, a notice shall
be deemed to have been given when it is received. If transmitted by facsimile, a
notice shall be deemed to have been given on the date received, if electronic
confirmation of receipt occurs during normal business hours on a Business Day,
and otherwise, on the first Business Day following electronic confirmation of
receipt. If given by mail, it shall be deemed to have been given on the third
Business Day following the day on which it was posted.

         14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings, both written and oral,
between the parties with respect to the subject matter hereof.

         15. NATURE OF RELATIONSHIP. The parties hereto intend that the services
provided by GMSP to GNA pursuant to this Agreement are being provided as an
independent contractor. Nothing contained in this Agreement shall constitute or
be construed to be or create a general partnership or joint venture between GMSP
and GNA or their respective successors or assigns.

         16. BINDING EFFECT; ASSIGNMENT; NO THIRD PARTY BENEFIT. This Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective heirs, legal representatives, successors, and permitted assigns.
Neither this Agreement nor any of the rights, interests, or obligations
hereunder may be assigned by either of the parties hereto without the prior
written consent of the other party. Nothing in this Agreement, express or
implied, is intended to or shall confer upon any Person other than the parties
hereto, and their respective heirs, legal representatives, successors, and
permitted assigns, any rights, benefits, or remedies of any nature whatsoever
under or by reason of this Agreement.

         17. INTERPRETATION. The headings contained in this Agreement are for
reference purposes only and shall not affect the meaning or interpretation of
this Agreement. For purposes of this Agreement, the words "includes" and
"including" shall mean "including without limitation" and the word "or" is used
in the inclusive sense. All capitalized terms defined herein are equally
applicable to both the singular and plural forms.

         18. SEVERABILITY. In the event that this Agreement, or any of its
provisions, or the performance of any provision, is found to be illegal or
unenforceable under applicable law now or hereafter in effect, the parties shall
be excused from performance of such portions of this Agreement as shall be found
to be illegal or unenforceable under the applicable laws or regulations without
affecting the validity of the remaining provisions of the Agreement.

INVESTMENT MANAGEMENT AGREEMENT     14
<PAGE>   79

         19. TIME OF ESSENCE. With regard to all dates and time periods set
forth in this Agreement, time is of the essence.

         20. NO WAIVER OF PRIVILEGE. Neither GNA nor GMSP nor any of their
respective subsidiaries or affiliates waives any attorney-client, work product
or other privilege with respect to any information furnished pursuant to this
Agreement.

         21. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT REGARD
TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

         22. COUNTERPARTS. This Agreement may be executed by the parties hereto
in any number of counterparts, each of which shall be deemed an original, but
all of which shall constitute one and the same agreement. Each counterpart may
consist of a number of copies hereof each signed by less than all, but together
signed by all, the parties hereto.

INVESTMENT MANAGEMENT AGREEMENT     15
<PAGE>   80

         IN WITNESS WHEREOF, GMSP and GNA have caused this Agreement to be
executed all as of the day and year first above written.

                                   MIDWEST CASUALTY INSURANCE COMPANY
                                       a North Dakota insurance corporation

                                   By:          /s/ Herbert A. Hill
                                      ------------------------------------------
                                       Herbert A. Hill, President

                                   GOFF MOORE STRATEGIC PARTNERS, L.P.,
                                       a Texas limited partnership

                                   By:  GMSP Operating Partners, L.P., its
                                             general partner
                                   By:  GMSP, L.L.C., its general partner

                                        By:     /s/ John C. Goff
                                           -------------------------------------
                                            John C. Goff, Managing Principal

                                        By:     /s/ J. Randall Chappel
                                           -------------------------------------
                                            J. Randall Chappel, Principal

INVESTMENT MANAGEMENT AGREEMENT     16

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