PLEDGE AGREEMENT

                                     between

                             ASCENT ASSURANCE, INC.

                                   as Pledgor

                                       and

                CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION

                                   as Pledgee

                           Dated: As of April 17, 2001









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                                PLEDGE AGREEMENT

                  THIS PLEDGE  AGREEMENT is made as of April 17,  2001,  between
ASCENT  ASSURANCE,  INC., a Delaware  corporation  (the  "Pledgor"),  and CREDIT
SUISSE FIRST BOSTON MANAGEMENT CORPORATION, as pledgee hereunder (the "Pledgee")
for its  benefit in its  capacity  as  Administrative  Agent for the Lenders (as
those terms are defined below) and for its own benefit as  Administrative  Agent
(as that term is so defined).

                                    RECITALS

     A.   Each of the  entities  identified  in Annex 1 (each a  "Company"  and,
          collectively, the "Companies") is a Subsidiary of the Pledgor.

     B.   Pursuant  to the Credit  Agreement  dated as of the date hereof (as it
          may be amended, restated, supplemented or otherwise modified from time
          to time,  the "Credit  Agreement")  among the  Pledgor,  as  borrower,
          Credit Suisse First Boston Management  Corporation,  as Administrative
          Agent (in that capacity, the "Administrative Agent") and Arranger, and
          the  Lenders  from time to time party  thereto  (the  "Lenders"),  the
          Lenders have agreed, on the terms and subject to the conditions of the
          Credit Agreement, to make loans (the "Loans") to the Borrower.

     C.   It is a condition  precedent  to the making of the initial  Loans that
          the Pledgor  enter into this  Agreement  granting  the  Administrative
          Agent a Lien (as defined  below) on and in the Pledged  Collateral (as
          defined  below) as security  for the payment  and  performance  of the
          Pledgor's  obligations  under the Credit  Agreement  and the Notes (as
          defined in the Credit Agreement).

     NOW,  THEREFORE,  for good and  valuable  consideration,  the  receipt  and
sufficiency of which are hereby acknowledged, it is agreed as follows:

                            SECTION 1. Definitions.

     Terms used herein that are defined in the New York Uniform  Commercial Code
(as amended from time to time, the "UCC"), unless otherwise defined herein, have
the meanings given to them from time to time by the UCC.  Capitalized terms used
herein without  definition  have the meanings given to those terms in the Credit
Agreement.  Certain terms  relating to the  Collateral are defined in Section 2.
The  following  terms,  as used herein,  have the meanings set forth below,  and
shall be equally applicable to both the singular and the plural forms thereof:

               "Event of Default" has the meaning set forth in Section 11.

               "Law" means any treaty, foreign, federal, state or local statute,
          law,  rule,  regulation,  ordinance,  order,  code,  policy or rule of
          common law, now or hereafter in effect,  in each case as amended,  and
          any   judicial   or   administrative   interpretation   thereof  by  a
          governmental  authority  or  otherwise,   including  any  judicial  or
          administrative order, consent decree or judgment.

               "Pledged Collateral" has the meaning set forth in Section 2.

               "Pledged Notes" has the meaning set forth in Section 2.

               "Pledged Stock" has the meaning set forth in Section 2.

               "Pledgor  Documents"  means  this  Agreement,  the Notes and each
          other Loan  Document to which the Pledgor is or at any time  hereafter
          becomes a party.

               "Secured Obligations" has the meaning set forth in Section 3.

               "Surplus  Notes" means all surplus  notes issued by any Insurance
          Subsidiary  that are  purchased  by the Pledgor from time to time with
          the  proceeds of any of the Loans as  contemplated  in Section 5.10 of
          the Credit Agreement and identified as Pledged Notes on Annex 2).

                               SECTION 2. Pledge.

     The  Pledgor   hereby   pledges  to  the   Pledgee,   in  its  capacity  as
Administrative  Agent for the  benefit of the Lenders and for its own benefit as
Administrative  Agent, and grants to the Pledgee a security interest in and lien
on all of the  Pledgor's  right,  title and  interest  in and to the  following,
whether  now owned or  hereafter  acquired  or existing  (the  "Pledged
Collateral"):

     (a)  all shares of  Capital  Stock of each of the  Companies  to the extent
          that such Capital Stock is now owned by the Pledgor, regardless of the
          class  of  that  Capital  Stock,   in  each  case  together  with  the
          certificates evidencing the same, all of which are identified in Annex
          1, and (ii) any  options,  warrants or other  rights to purchase  such
          interests  or  stock  at any time  owned  by the  Pledgor,  including,
          without limitation,  all such interests or stock, options, warrants or
          other  rights  acquired  by the  Pledgor in the future  (the  "Pledged
          Stock");

     (b)  all shares, securities,  moneys or property representing a dividend on
          any of the Pledged Stock,  representing  a  distribution  or return of
          capital  upon or in respect of the  Pledged  Stock,  resulting  from a
          split-up,  revision,  reclassification  or other  like  change  of the
          Pledged  Stock or  otherwise  received in exchange  therefor,  and any
          subscription warrants,  rights or options issued to the holders of, or
          otherwise in respect of, the Pledged Stock;

     (c)  all supporting  obligations  for any of the property  described in the
          foregoing clauses of this Section 2;

     (d)  subject to the proviso at the end of this Section 2, all Surplus Notes
          (collectively, the "Pledged Notes");

     (e)  all securities or other investment property, of any nature whatsoever,
          received or  receivable in  substitution  for or in addition to any of
          the Pledged Notes,  any  certificates  representing or evidencing such
          securities, and all cash, distributions and other property at any time
          and from time to time received, receivable or otherwise distributed in
          respect of or in exchange for any or all of the Pledged Notes, and all
          securities  accounts to which any or all of the  foregoing  may at any
          time be credited; and

     (f)  all proceeds of and to any of the property of the Pledgor described in
          the foregoing clauses in this Section 2, in whatever form,  including,
          without  limitation,  in the form of  accounts,  instruments,  chattel
          paper,  documents,  goods,  investment  property,  letters  of credit,
          letter-of-credit rights, money, deposit accounts,  claims or causes of
          action or general intangibles;

          provided,  however,  that,  if  the  authorization  of  any  Insurance
          Regulatory  Authority must, as disclosed in Schedule 3.4 of the Credit
          Agreement,  be obtained  under any  applicable  Requirement  of Law to
          enable the Pledgor to  lawfully  make the pledge and grant of security
          interest  contemplated  in this  Section 2 in respect  of any  Surplus
          Notes or Pledged Stock of an Insurance  Subsidiary those Surplus Notes
          (the "Committed  Notes") or that Pledged Stock (the "Committed Stock")
          will  constitute  Pledged  Notes or Pledged Stock for purposes of this
          Agreement  subject  to  the  issuance  of  that  authorization  by the
          relevant Insurance  Regulatory  Authority.  The Pledgor shall promptly
          give the Pledgee notice of the issuance of any such authorization that
          has not been  obtained  on or before  the date of this  Agreement  and
          shall,  from time to time,  after  request from the Pledgee,  give the
          Pledgee  notice of the status of the Pledgor's  request or application
          for any such authorization that is pending.  The Pledgor shall use its
          best   efforts   actively   and   vigorously   to   pursue   all  such
          authorizations.

 .
                      SECTION 3. Security for Obligations

     (a)  . (a) This  Agreement  secures the payment and  performance of any and
          all obligations of the Pledgor now existing or hereafter arising under
          or in respect of the Credit Agreement and each other Pledgor Document,
          including this Agreement (the "Secured Obligations").

     (b)  The term  "obligations"  is used  herein,  and in each  other  Pledgor
          Document, in the broadest sense possible, and includes all payment and
          performance  obligations  of the  Pledgor  in  respect  of any and all
          advances,  debts,  reimbursement or indemnity obligations,  guarantees
          and  liabilities  heretofore,  now,  or  hereafter  made,  incurred or
          created, whether in respect of principal,  interest, fees or any other
          amount  and  whether   accruing   before  or  after  judgment  or  the
          commencement of any bankruptcy or insolvency proceedings in respect of
          the Pledgor,  whether  voluntary or involuntary  and however  arising,
          whether  due  or  not  due,  absolute  or  contingent,  liquidated  or
          unliquidated,  determined or undetermined, and whether the Pledgor may
          be liable  individually  or  jointly  with  others,  whether  recovery
          thereon  may  be  or  hereafter  becomes  barred  by  any  statute  of
          limitations  or  whether  any of  the  foregoing  may be or  hereafter
          becomes otherwise unenforceable.

                   SECTION 4. Delivery of Pledged Collateral

     All  certificates  or  instruments  representing  or evidencing the Pledged
Collateral  shall  be  delivered  to and  held by or on  behalf  of the  Pledgee
pursuant  hereto and shall be (a) in suitable  form for  transfer by delivery or
(b) accompanied by duly executed instruments of transfer or assignment in blank,
all in form and substance  satisfactory  to the Pledgee.  The Pledgee shall have
the right,  at any time in its discretion and without notice to the Pledgor,  to
transfer  to, or to register in the name of, the Pledgee or any of its  nominees
any or all of the  Pledged  Collateral,  subject  only to the  revocable  rights
specified in Section 6.

                           SECTION 5. Distributions.

     So long as no Default or Event of Default is continuing, any cash dividends
or other cash  distributions  on the Pledged  Stock and any interest paid on the
Pledged  Notes may be paid  directly to the Pledgor.  If an Event of Default has
occurred and is continuing,  upon request of the Secured Party, the principal of
the Surplus Notes and all other dividends or  distributions in respect of any of
the Pledged Collateral shall be paid or delivered directly to the Pledgee, to be
held as additional  Pledged  Collateral  hereunder or, if the Pledgee so elects,
applied to payment of the Secured Obligations,  in such order as the Pledgee may
determine  in its sole  discretion,  until all Secured  Obligations  are paid in
full.  Any  dividends,  interest  or  distributions  received  by the Pledgor in
contravention  of the  preceding  sentence of this Section 5 shall be segregated
from all other  property  of the  Pledgor,  held in trust for the  Pledgee,  and
delivered  to the  Pledgee  in  exactly  the form  received,  together  with any
necessary endorsements, for application in accordance with this Section 5.

                           SECTION 6. Voting Rights.

     During  the term of this  Agreement,  and so long as no Default or Event of
Default  has  occurred  and is  continuing,  the  Pledgor  shall be  entitled to
exercise all of its voting and other consensual rights pertaining to the Pledged
Collateral or any part thereof; provided that, without the prior written consent
of the Pledgee (which consent shall not be unreasonably withheld or delayed): to
the extent that any such  matter is subject to the vote or other  consent of the
Pledgor, the Pledgor shall not vote or give consent (i) to amend the certificate
of incorporation or bylaws of any Company;  (ii) to sell or otherwise dispose of
or  transfer,  or grant any Lien (other  than a  Permitted  Lien) on, all or any
portion  of the  assets of any  Company;  (iii) to  terminate  or  dissolve  any
Company;  (iv) to cause the  redemption  of all or any portion of the  Pledgor's
interest in any Company; (v) to admit any additional shareholder to any Company;
(vi) to permit any  additional  shares of the Capital Stock of any Company to be
issued;  (vii) to alter  the  terms of any  Surplus  Notes or waive any of their
conditions,  or (viii) to take or  approve  any  action  that  could  reasonably
expected to adversely affect the Pledgee's security hereunder.  To this end, the
Pledgee  shall  execute  and  deliver  to the  Pledgor  all  proxies  and  other
instruments  that the Pledgor may  reasonably  request.  Upon the occurrence and
during the  continuation of a Default or an Event of Default,  all rights of the
Pledgor to  exercise  the voting and other  consensual  rights  that the Pledgor
would otherwise be entitled to exercise  pursuant to this Section 6 shall cease,
and all such rights shall  thereupon  become  vested in the  Pledgee,  who shall
thereupon  have the sole right to  exercise  such  voting  and other  consensual
rights.

       SECTION 7. Payment of Secured Obligations; Release of Collateral.

     This  Agreement  shall  create  a  continuing  Lien  on and in the  Pledged
Collateral  and shall remain in full force and effect until the  termination  of
the  Commitments  and  the  payment  and  performance  in  full  of the  Secured
Obligations.  Upon termination of all Commitments and payment and performance in
full of all of the Secured  Obligations,  the  Pledgor  shall be entitled to the
return,  upon the Pledgor's request and at the Pledgor's expense, of such of the
Pledged  Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof, and the Pledgee shall, at the Pledgor's  expense,  execute and
deliver to the Pledgor such documents,  and take such other acts, as the Pledgor
shall reasonably request to evidence, or give effect to, such termination.

                  SECTION 8. Protection of Pledged Collateral.

     The  Pledgor  shall pay all taxes,  charges  and  assessments  against  the
Pledged  Collateral  and do all acts  necessary and  appropriate to preserve and
maintain the Collateral  free of any Liens other than Permitted  Liens.  Without
limiting the generality of the foregoing,  the Pledgor shall not grant a Lien on
or in the Pledged  Collateral  to any other  Person  without  the prior  written
consent of the Pledgee  thereto.  Upon the failure of the Pledgor to comply with
any of the  foregoing  provisions  of this  Section 8, the Pledgee may make such
payments  and take such  actions  on  account  thereof  as the  Pledgee,  in its
discretion,  deems  necessary or  appropriate.  The Pledgor shall  reimburse the
Pledgee  immediately upon demand for any and all such payments and related costs
so incurred,  together  with  interest  thereon,  from the date  incurred by the
Pledgor  until paid,  calculated  on the basis of a year of 360 days and for the
actual number of days elapsed,  at the highest rate of interest then  applicable
to any of the Secured Obligations.

           SECTION 9. Representations and Warranties of the Pledgor.

     The Pledgor  hereby  represents and warrants to the Pledgee and each of the
Lenders as follows:

     (a)  True and correct copies of the certificate of incorporation and bylaws
          of each of the Companies,  as currently in full force and effect, have
          been delivered to the Pledgee.  Except for those agreements identified
          in Exhibit A, true and correct  copies of which have been delivered to
          the Pledgee,  there are no stockholder or other agreements relating to
          the management of any of the Companies.

     (b)  Except for the Committed Stock and Committed  Notes,  if any,  pending
          its becoming Pledged  Collateral  hereunder pursuant to the proviso at
          the end of  Section  2, the  Pledged  Collateral  includes  all of the
          issued and  outstanding  Capital Stock of the Companies and all of the
          Surplus  Notes.  The  Pledgor is or, upon its  acquisition  of Pledged
          Collateral  not currently  owned by it, will be, the legal,  record or
          beneficial owner of, and has, or at the time of that acquisition, will
          have, good and marketable title to, the Pledged  Collateral,  free and
          clear of any Lien whatsoever, except for the Lien created hereby.

     (c)  This Agreement has been duly executed and delivered by the Pledgor and
          constitutes  a valid,  legal and  binding  obligation  of the  Pledgor
          enforceable in accordance  with the terms of this Agreement  except to
          the  extent  that  such  enforcement  may  be  limited  by  applicable
          bankruptcy,  insolvency,  reorganization,  moratorium  or similar laws
          affecting  creditors'  rights  generally and by general  principles of
          equity  (whether  enforcement is sought by proceedings in equity or at
          law).

     (d)  The  execution  and  delivery  of  this   Agreement  by  the  Pledgor,
          performance  by it of its  obligations  hereunder and the grant of the
          Lien  hereunder  do not (i)  require  any  consent or  approval of the
          Pledgor's stockholders,  except for such consents or approvals as have
          been duly  obtained  and are in full  force and  effect as of the date
          hereof;  (ii)  contravene  any  Requirement  of Law; (iii) violate any
          provisions  of, or require  any filing  (other  than the filing of the
          financing statements  contemplated hereby),  registration,  consent or
          approval under any Law, order writ, injunction, determination or award
          currently in effect  applicable to the Pledgor or any of the Companies
          or the property of the Pledgor or any of the Companies  except for the
          authorizations   of  applicable   Insurance   Regulatory   Authorities
          identified in Schedule 3.4 of the Credit Agreement,  each of which has
          been requested by the Pledgor on or before the date of this Agreement;
          (iv) result in a breach of,  constitute a default under,  or otherwise
          contravene,  any Contractual Obligation of the Pledgor or any Company;
          or (v) cause either the Pledgor or any Company to be in default  under
          any such Law, order, writ, judgment, injunction, decree, determination
          or award or any such  Contractual  Obligation  or in  violation of any
          other obligation with respect to the Pledged Collateral.

     (e)  No consent or  authorization,  filing with, notice to, or other act by
          or in respect of, any  Governmental  Authority  or any other Person is
          required with respect to the Pledgor in connection with either (i) the
          grant by the Pledgor of the Lien created  hereunder or the  execution,
          delivery or  performance  of this Agreement by the Pledgor or (ii) for
          the  perfection  of or the  exercise  by the  Pledgee of the voting or
          other rights,  remedies,  powers or privileges provided for hereunder,
          except as identified in Schedule 3.4 of the Credit Agreement.

     (f)  The pledge, assignment and delivery of the Pledged Collateral pursuant
          to this  Agreement  creates a valid  first lien and a first  perfected
          security interest in the Pledged Collateral,  subject to no prior Lien
          or to any  agreement  to grant to any third  party a Lien on or in the
          property  or assets of the  Pledgor  that would  include  the  Pledged
          Collateral.

     (g)  Except  for  such  restrictions  as may  appear  on  the  certificates
          evidencing  the  Pledged  Stock  and  the   restrictions   imposed  by
          applicable  Law which are  identified  in  Schedule  3.4 of the Credit
          Agreement,  there are no restrictions  upon the transfer of any of the
          Pledged Stock.

     (h)  The chief place of business and chief executive  office of the Pledgor
          are  located at the  address  specified  for  notices  to the  Pledgor
          herein.  The Pledgor does not conduct any  business  under any name or
          tradenames other than its proper corporate name, which is the name set
          forth in the first paragraph of this Agreement.  The Pledgor maintains
          no other place of business.

                      SECTION 10. Covenants of the Pledgor

     (a)  . (a) The Pledgor shall defend the  Pledgee's  right and title to, and
          Lien on and in,  the  Pledged  Collateral  and  the  proceeds  thereof
          against the claims of all Persons.

     (b)  The Pledgor  shall not (i) change the location of its chief  executive
          office/chief  place of business from its address specified for notices
          herein,  or (ii) change its name  (including  the  adoption of any new
          trade  name),  jurisdiction  of  incorporation,  identity or corporate
          structure,  unless,  in any such case, it shall have provided at least
          thirty  (30) days'  prior  written  notice to the  Pledgee of any such
          change and until such  filings  and other  measures as may be required
          under applicable law to continue  uninterrupted  the perfected Lien of
          the  Pledgee on and in the Pledged  Collateral  shall have been taken,
          and until the Pledgee  shall have  received  such  opinions of counsel
          with respect thereto as it may have reasonably requested.

     (c)  Pursuant  to Section  5.10 of the Credit  Agreement,  when the Pledgor
          shall at any time  acquire any Surplus  Notes,  the Pledgor  shall (i)
          immediately deliver those Surplus Notes to the Administrative Agent to
          be held as additional  collateral security for the Secured Obligations
          hereunder,  (ii)  promptly  deliver  to  the  Administrative  Agent  a
          supplement  to this Pledge  Agreement,  substantially  in the form set
          forth in Exhibit B to this  Agreement,  and (iii)  promptly  cause the
          Subsidiary  that issued those  Surplus Notes to execute and deliver an
          acknowledgment  and  consent  substantially  in the form  appended  as
          Schedule I to Exhibit B to this  Agreement  unless it has already done
          so at an earlier time.

                              SECTION 11. Default.

     The  occurrence  of any  Event of  Default  shall  constitute  an "Event of
Default"  hereunder,  whether such  occurrence  is voluntary or  involuntary  or
occurs by  operation of law or  otherwise.  If any Event of Default has occurred
and is continuing:

     (a)  In  addition to any and all other  rights and  remedies  provided  for
          herein or otherwise  available to the Pledgee,  the Pledgee shall have
          all the rights and  remedies of a secured  party on default  under the
          UCC. The Pledgee (personally or through an agent) is hereby authorized
          and empowered,  upon the occurrence and during the  continuation of an
          Event of Default,  to transfer and register in its name or in the name
          of its  nominee the whole or any part of the  Pledged  Collateral,  to
          exercise  all voting  rights  with  respect  thereto,  to collect  and
          receive all cash dividends and other  distributions made thereon,  and
          to otherwise act with respect to the Pledged  Collateral as though the
          Pledgee  were the  outright  owner  thereof,  the Pledgor  irrevocably
          constituting   and   appointing   the   Pledgee   as  the   proxy  and
          attorney-in-fact of the Pledgor,  with full power of substitution,  to
          do so;  provided,  however,  that the  Pledgor  shall  have no duty to
          exercise or to preserve any such right and shall not be liable for any
          failure to do so or for any delay in doing so.

     (b)  With respect to the Pledged  Collateral or any part thereof that shall
          then be in or shall  thereafter come into possession or custody of the
          Pledgee  or that the  Pledgee  shall  otherwise  have the  ability  to
          transfer  under   applicable   law,  the  Pledgee  may,  in  its  sole
          discretion,  without  notice  except  as set  forth  below,  after the
          occurrence  of an  Event  of  Default,  sell  or  cause  such  Pledged
          Collateral to be sold at any exchange or broker's board or at a public
          or private  sale,  in one or more sales or lots,  at such price as the
          Pledgee may deem best,  for cash or on credit or for future  delivery,
          without assumption of any credit risk, and the purchaser of any or all
          of the Pledged  Collateral  so sold shall  thereafter  own the Pledged
          Collateral  so purchased  absolutely  free of any adverse claim of any
          kind whatsoever. The Pledgee may, in its own name, or in the name of a
          designee or nominee,  buy the Pledged  Collateral  at any public sale,
          and, if permitted by applicable  law, at any private  sale;  and shall
          have the right to credit  against the amount of the bid made  therefor
          the amount  payable to the  Pledgee  out of the net  proceeds  of such
          sale.

     (c)  Unless any of the Pledged Collateral  threatens to decline speedily in
          value or is or  becomes  of a type sold on a  recognized  market,  the
          Pledgee will give the Pledgor  reasonable notice of the time and place
          of any public  sale  thereof,  or of the time after  which any private
          sale or other  intended  disposition  is to be  made.  Any sale of the
          Pledged Collateral conducted in conformity with reasonable  commercial
          practices of banks, commercial finance companies,  insurance companies
          or other financial  institutions  disposing of property similar to the
          Pledged  Collateral  shall be  deemed to be  commercially  reasonable.
          Notwithstanding  any provision to the contrary  contained herein,  the
          Pledgor agrees that any requirements of reasonable notice shall be met
          by  notice  given  to  the  Pledgor  in  accordance  with  the  notice
          provisions  hereof at least ten (10)  business days before the time of
          the sale or other disposition, provided, however, that the Pledgee may
          give any shorter  notice  that is  commercially  reasonable  under the
          circumstances.  Any requirement of notice, demand or advertisement for
          sale is  waived,  to the  extent  permitted  by law.  Proceeds  of any
          realization  upon all or any part of the Pledged  Collateral  shall be
          applied   first,   to  the   payment  of  the   Pledgee's   reasonable
          out-of-pocket  expenses  (including  reasonable  attorneys'  fees  and
          expenses and reasonable  expert  witnesses' and consultants'  fees and
          expenses)  incurred in retaking,  collecting,  selling or disposing of
          the Pledged  Collateral and other expenses  payable under the terms of
          any  Secured  Obligation,  and  second,  to payment  of the  remaining
          Secured Obligations, in such order as the Pledgee may determine in its
          sole discretion.  Any surplus of such proceeds held by the Pledgee and
          remaining  after  payment  in full of all of the  Secured  Obligations
          shall be paid over to the  Pledgor or to  whomsoever  may be  lawfully
          entitled to receive such surplus.

     (d)  The  Pledgee  shall  not be  obligated  to make  any  sale of  Pledged
          Collateral regardless of notice of sale having been given. The Pledgee
          may  adjourn  any  public  or  private  sale  from  time  to  time  by
          announcement at the time and place fixed therefor,  and such sale may,
          without  further  notice,  be made at the  time  and  place  it was so
          adjourned.  If sale of all or any part of the  Pledged  Collateral  is
          made on credit or for future delivery:  (i) the Pledged  Collateral so
          sold may be retained  by the  Pledgee  until the sale price is paid by
          the  purchaser or  purchasers  thereof,  (ii) the Secured  Obligations
          shall be reduced only to the extent that payment is actually  received
          by the Pledgee in respect of such sale,  and (iii) the  Pledgee  shall
          not incur any  liability in the event that any purchaser or purchasers
          shall fail to take up and pay for the Pledged  Collateral so sold and,
          in case of any such failure, such Pledged Collateral may be sold again
          upon like notice.

     (e)  The  Pledgor  recognizes  that the  Pledgee  may be unable to effect a
          public  sale of all or part of the  Pledged  Collateral  by  reason of
          certain  prohibitions  contained  in the  Securities  Act of 1933,  as
          amended, or in applicable New York or other states' securities laws as
          now or hereafter in effect,  unless registration or qualification,  as
          the case may be, is accomplished.  The Pledgor  acknowledges  that the
          Pledgee may resort to one or more private sales to a single  purchaser
          or a  restricted  group of  purchasers  who will be  obliged to agree,
          among other things,  to acquire such securities for their own account,
          for  investment  and not  with a view to the  distribution  or  resale
          thereof.  The Pledgor  agrees that private  sales may be at prices and
          other terms less favorable to the Pledgor than if such securities were
          sold at a public sale and that the Pledgee shall have no obligation to
          delay the sale of any such portion of the Pledged  Collateral  for the
          period of time  necessary to permit the issuer of such  securities  to
          register or qualify such  securities,  even if such issuer  would,  or
          should,  proceed to register  or qualify  such  securities  for public
          sale.  The Pledgor  agrees that private sales made under the foregoing
          circumstances  shall be deemed  to have  been made in a  "commercially
          reasonable" manner.

     (f)  Notwithstanding the foregoing, insofar as any Pledged Stock or Pledged
          Notes  of an  Insurance  Subsidiary  are  concerned,  the  rights  and
          remedies of the Pledgee provided for above in this Section 11 shall be
          exercised  only in  accordance  with  any  restriction  imposed  by an
          applicable  Requirement  of Law or  under  an  authorization  from  an
          Insurance  Regulatory Authority that was necessary for the creation of
          the Lien of this  Agreement on that Pledged  Stock or, as the case may
          be, those Pledged Notes.

                  SECTION 12. Possession of Pledged Collateral

     (a)  . (a) The Pledgee  will hold in  accordance  with this  Agreement  all
          items of the  Pledged  Collateral  at any  time  received  under  this
          Agreement.  It is understood  and agreed that the  obligations  of the
          Pledgee as holder of the Pledged  Collateral and interests therein and
          with respect to the  disposition  thereof,  and  otherwise  under this
          Agreement,  are only those expressly set forth in this  Agreement.  If
          the  Pledgor  takes  possession  of any items of  Pledged  Collateral,
          pursuant  to  this   Agreement  or   otherwise,   including,   without
          limitation,  the  certificates  representing  the Pledged Stock or the
          Pledged Notes and any  assignments  separate from any  certificate  or
          other documents  relating thereto,  the Pledgor agrees (subject to the
          provisions of Section 5) to  immediately  transfer  possession of such
          items of Pledged  Collateral  to the Pledgee  and,  until such time as
          such transfer of possession is effected,  agrees to hold such items of
          Pledged Collateral in trust for the Pledgee and the Lenders.

     (b)  The  Pledgee  shall  have no  obligation  in  respect  of the  Pledged
          Collateral,  except as set forth in this  Agreement  and except to use
          reasonable care in the custody and preservation of Pledged  Collateral
          in its  possession.  The  obligations of the Pledgee shall not include
          any  obligation to ascertain or to initiate any action with respect to
          or to inform the  Pledgor of  maturity  dates,  conversion,  call,  or
          exchange  rights,  offers to purchase  the Pledged  Collateral  or any
          similar matters,  notwithstanding the Pledgee's knowledge. The Pledgee
          shall have no duty to take any steps  necessary to preserve the rights
          of the Pledgor  against  prior  parties or to  initiate  any action to
          protect  against  the  possibility  of a  decline  in the value of the
          Pledged  Collateral.  The Pledgee  shall not be  obligated to take any
          actions  that may be  requested  by the  Pledgor  with  respect to the
          Pledged  Collateral  unless  such  request is made in writing  and the
          Pledgee  determines,  in its sole and  absolute  discretion,  that the
          requested  actions would not unreasonably  jeopardize the value of the
          Pledged  Collateral  as  security  for the  Secured  Obligations.  The
          Pledgee may at any time  deliver the Pledged  Collateral,  or any part
          thereof, to the Pledgor,  and the receipt thereof by the Pledgor shall
          be a complete  and full  acquittance  for the  Pledged  Collateral  so
          delivered,  and the Pledgee shall  thereafter  be discharged  from any
          liability or responsibility therefor.

                              SECTION 13. Waivers

     (a)  . The Pledgee shall have no duty with respect to the  preservation  or
          protection  of the  Pledged  Collateral  or any income  thereof or the
          preservation  or protection  of any rights  against other parties with
          respect  thereto.  The  Pledgee  may  exercise  any rights it may have
          hereunder against the Pledgor or the Pledged Collateral,  after having
          given  notice to the  Pledgor as provided  herein or under  applicable
          law,  whether  or not it has  given  notice  to any  other  Person  or
          otherwise taken any action against any other Person,  or other assets,
          for  the   enforcement  of  its  rights  in  respect  of  any  Secured
          Obligation.  Without limiting the generality of the foregoing:  to the
          extent that the Secured  Obligations  are now or hereafter  secured or
          otherwise  supported by any assets or property  other than the Pledged
          Collateral or by the guarantee, endorsement, assets or property of any
          other  Person,  then the  Pledgee  shall  have  the  right in its sole
          discretion to determine which rights,  security, Liens or remedies the
          Pledgee  shall  at  any  time  pursue,   foreclose  upon,  relinquish,
          subordinate,  modify or take any other action with respect to, without
          in any way modifying or affecting any of them, or any of the Pledgee's
          rights hereunder.

                      SECTION 14. Indemnity and Expenses.

     The Pledgor shall, on demand,  (a) pay or reimburse the Pledgee for all its
reasonable  out-of-pocket  costs and expenses  incurred in  connection  with the
development,  preparation  and  execution of, and any  amendment,  supplement or
modification  to,  this  Agreement  and the other Loan  Documents  and any other
documents prepared in connection herewith or therewith, and the consummation and
administration of the transactions  contemplated hereby and thereby,  including,
without  limitation,  the reasonable  fees and  disbursements  of counsel to the
Pledgee,  (b) pay or  reimburse  the Pledgee and each of the Lenders for all its
costs and expenses  incurred in connection  with the enforcement or preservation
of any rights under this Agreement,  the other Loan Documents and any such other
documents,  including, without limitation, the fees and disbursements of counsel
to the Pledgee and each of the  Lenders,  and (c) pay,  and  indemnify  and hold
harmless the Pledgee and each of the Lenders  from,  any and all  recording  and
filing fees and any and all  liabilities  with respect to, or resulting from any
delay in paying,  stamp, excise and other taxes, if any, which may be payable or
determined  to be payable in  connection  with the execution and delivery of, or
consummation or  administration  of any of the transactions  contemplated by, or
any amendment,  supplement or modification of, or any waiver or consent under or
in respect  of,  this  Agreement,  the other Loan  Documents  and any such other
documents,  and (d) pay, and indemnify and hold harmless the Pledgee and each of
the Lenders (including each of their respective parents, subsidiaries, officers,
directors, employees, agents and affiliates) from and against, any and all other
claims, demands, liabilities,  obligations, losses, damages, penalties, actions,
judgments, suits, costs, settlements, expenses or disbursements of whatever kind
or nature  arising from, in  connection  with or with respect to the  execution,
delivery,  enforcement,  performance and  administration of this Agreement,  the
other Loan  Documents,  or any other documents or the use of the proceeds of the
Loans or any other purpose (all the foregoing in this clause (d),  collectively,
the  "indemnified  liabilities");  provided  that  the  Pledgor  shall  have  no
obligation  hereunder to the Pledgee or any Lender with  respect to  indemnified
liabilities  arising  from the gross  negligence  or willful  misconduct  of the
Pledgee  or that  Lender.  The  agreements  in this  Section  14  shall  survive
repayment of the Secured Obligations hereunder.

                            SECTION 15. Assignment.

     The Pledgor  shall not pledge,  assign or otherwise  transfer any or all of
its rights,  obligations or duties in, or in respect of, the Pledged  Collateral
or hereunder,  without the prior written consent of the Pledgee.  This Agreement
(a) shall be binding in accordance  with and to the extent of its terms upon the
Pledgor and its  successors  and assigns and each other Person who becomes bound
as a debtor  to this  Agreement  under  applicable  law,  and (b)  shall  inure,
together  with all  rights,  remedies,  powers  and  privileges  of the  Pledgee
hereunder,  to the  benefit of the  Pledgee  and the  Lenders  and its and their
respective successors,  endorsees, transferees and assigns. Without limiting the
generality of clause (b) of the immediately preceding sentence,  the Pledgee may
assign or otherwise transfer its rights under this Agreement to any other Person
in  connection  with  any  assignment  or  transfer  of its  rights  as Agent in
accordance  with the provisions of the Credit  Agreement,  and such other Person
shall  thereupon  become  vested  with all of the  benefits  in respect  thereof
granted to the Pledgee herein or otherwise.

                        SECTION 16. Further Assurances.

     The  Pledgor  shall  cooperate  with the  Pledgee,  and shall  execute  and
deliver,  or cause to be executed and  delivered,  all such other stock  powers,
proxies,  instruments  and  documents,  and shall take all such  other  actions,
including,  without  limitation,  the  execution  and  filing or  recording,  as
applicable,   of  financing   statements,   amendments   thereto,   continuation
statements,  and  agreements  granting  control to the  Pledgee  over all or any
portion of the Pledged Collateral, and such other instruments or notices, as may
be necessary or reasonably  desirable,  or as the Pledgee may reasonably request
from time to time,  in order to carry out the  provisions  and  purposes of this
Agreement.  The Pledgor hereby irrevocably  makes,  constitutes and appoints the
Pledgee  (and all  persons  designated  by the  Pledgee  for that  purpose)  the
Pledgor's  true and lawful  attorney-in-fact  to sign the name of the Pledgor on
any  financing  statement,  amendment  thereto,  continuation  sttement or other
writing  necessary  or  requested  by the  Pledgee  to  perfect  and  maintain a
perfected  Lien on and in any of the  Pledged  Collateral.  The  Pledgor  hereby
authorizes the Pledgee, where permitted by law, to file any financing statement,
amendment thereto, or continuation statement without the Pledgor's signature. If
at any time after the date hereof all or any  portion of the Pledged  Collateral
shall be represented or evidenced by certificates or instruments not theretofore
delivered to the Pledgee,  all such certificates or instruments  representing or
evidencing the Pledged  Collateral shall be delivered to and held by the Pledgee
pursuant hereto and shall be in suitable form for transfer by delivery, or shall
be accompanied by duly executed  instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Pledgee.

                         SECTION 17. Power of Attorney.

     The  Pledgor  hereby  irrevocably  appoints  the  Pledgee as the  Pledgor's
attorney-in-fact,  with full power of  substitution,  and with full authority in
the place and stead of and in the name of the Pledgor, the Pledgee or otherwise,
to take any action and to execute  any  instrument,  that the  Pledgee  may deem
necessary or advisable to accomplish the purposes of this Agreement,  including,
without limitation:

     (a)  to perform or cause the  performance  of any obligation of the Pledgor
          hereunder;

     (b)  during the  continuance  of any Event of  Default,  to  liquidate  any
          Pledged  Collateral  and  otherwise  to deal in or  with  the  Pledged
          Collateral or the proceeds or avails thereof,  as full and effectually
          as if the Pledgee were the absolute  owner  thereof,  and to apply the
          proceeds   thereof   to   payment   of   the   Secured    Obligations,
          notwithstanding  the fact  that  such  liquidation  may  give  rise to
          penalties;

     (c)  to ask, demand,  collect,  sue for, recover,  compromise,  receive and
          give  acquittance  and receipts for moneys due and to become due under
          or in respect of any of the Pledged Collateral;

     (d)  to receive,  endorse,  assign and  collect any and all checks,  notes,
          drafts and other negotiable and non-negotiable instruments,  documents
          and chattel paper  constituting  Pledged Collateral in connection with
          clause (b) or (c) above, and the Pledgor waives notice of presentment,
          protest and non-payment of any  instrument,  document or chattel paper
          so endorsed or assigned;  (e) during the  continuance  of any Event of
          Default,  to file  any  claims,  take  any  action  or  institute  any
          proceedings  that the Pledgee may deem  necessary or desirable for the
          collection  of any of the Pledged  Collateral  or otherwise to enforce
          the rights of the  Pledgee or the Pledgor  with  respect to any of the
          Pledged Collateral;

     (f)  to notify  any  Person  obligated  on any  Pledged  Collateral  of the
          Pledgee's rights hereunder; and

     (g)  to enter  into  any  extension,  reorganization,  deposit,  merger  or
          consolidation   agreement  or  any  other  agreement  relating  to  or
          affecting  the Pledged  Collateral  and, in connection  therewith,  to
          deposit or surrender  control of the Pledged  Collateral and to accept
          other  property  in  exchange  for  the  Pledged  Collateral,  subject
          otherwise to this Agreement.

     The Pledgor  hereby  ratifies and  approves  all acts of the Pledgee  taken
pursuant  to  the  foregoing  appointment,   other  than  acts  of  the  Pledgee
constituting  gross negligence or willful  misconduct,  and the Pledgee,  as the
Pledgor's  attorney-in-fact,  will not be liable for any acts of  commission  or
omission,  or for any error of  judgment  or mistake of fact or law,  other than
those that result from the Pledgee's gross negligence or willful misconduct. The
foregoing power,  being coupled with an interest,  is irrevocable for so long as
this Agreement remains in effect.

                              SECTION 18. Notices.

     All notices,  requests and demands to or upon the respective parties hereto
to be  effective,  shall be in  writing  (including  by  telecopy)  and,  unless
otherwise expressly provided herein,  shall be deemed to have been duly given or
made (a) when delivered by hand, (b) five Business Days after being deposited in
the mail, postage prepaid,  or (c) in the case of telecopy notice or delivery by
a  nationally  recognized  overnight  courier,  when  received,  in  each  case,
addressed as follows:

(a)      To the Pledgor:

                            Ascent Assurance, Inc.
                            110 W. 7th St., Suite 300
                            Fort Worth, TX 76102
                            Attention: President
                            Telecopy:  (817) 878 3672

(b) if to the Pledgee:

                            Credit Suisse First Boston Management Corporation
                            277 Park Avenue, 11th Floor
                            New York, NY 10172
                            Attention: Mr. Alex Lagetko,
                            Ms. Donna P. Alderman
                            Telecopy:  (212) 325-8290

or to such other  address  for  notices as such  Person may deliver to the other
party in accordance with this Section 18;  provided that any notice,  request or
demand to or upon the Pledgee shall not be effective until received.

                           SECTION 19. Governing Law.

     THIS  AGREEMENT  AND THE RIGHTS AND  OBLIGATIONS  OF THE PARTIES UNDER THIS
AGREEMENT  SHALL BE GOVERNED BY, AND  CONSTRUED  AND  INTERPRETED  IN ACCORDANCE
WITH,  THE LAWS OF THE  STATE OF NEW  YORK,  WITHOUT  REGARD  TO  PRINCIPLES  OF
CONFLICT OF LAWS OTHER THAN SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW OF THE
STATE OF NEW YORK,  EXCEPT TO THE EXTENT THAT THE VALIDITY OR  PERFECTION OF THE
LIEN PROVIDED FOR HEREIN, OR ANY REMEDY HEREUNDER,  IN RESPECT OF ANY PARTICULAR
PLEDGED  COLLATERAL  IS  GOVERNED BY THE LAWS OF A  JURISDICTION  OTHER THAN THE
STATE OF NEW YORK.

                           SECTION 20. Miscellaneous

     (a)  .  (a)  Any  provision  of  this   Agreement  that  is  prohibited  or
          unenforceable in any jurisdiction  shall, as to such jurisdiction,  be
          ineffective  to the  extent of such  prohibition  or  unenforceability
          without  invalidating the remaining provisions hereof or affecting the
          validity   or   enforceability   of  such   provision   in  any  other
          jurisdiction.  If and to the extent  that  applicable  Law confers any
          rights in addition to any of the  provisions  of this  Agreement,  the
          affected provision shall be considered amended to conform thereto.

     (b)  The failure of the Pledgee to exercise,  or delay in  exercising,  any
          right, remedy,  power or privilege  hereunder,  shall not operate as a
          waiver  thereof,  nor shall  any  single or  partial  exercise  by the
          Pledgee of any right, remedy or privilege hereunder preclude any other
          or future  exercise  thereof,  or the  exercise  of any  other  right,
          remedy,  power or privilege.  This Agreement is in addition to and not
          in limitation of any other rights, remedies, powers and privileges the
          Pledgee  may have by  virtue  of any  other  instrument  or  agreement
          heretofore,  contemporaneously  herewith or hereafter  executed by the
          Pledgor or any other Person or by  applicable  Law or  otherwise.  All
          rights,  remedies,  powers  and  privileges  of the  Pledgor  shall be
          cumulative and may be exercised singly or concurrently.

     (c)  The  representations,  covenants and  agreements of the Pledgor herein
          contained  shall survive the date hereof,  and shall be deemed to have
          been  remade  on and as of the date on which  any  additional  Secured
          Obligations are created.

     (d)  Neither  this  Agreement  nor  any of  the  provisions  hereof  can be
          changed, waived or terminated orally. No waiver or modification of any
          of the  provisions  hereof shall be binding upon the Pledgee unless in
          writing and signed by a duly authorized representative thereof.

     (e)  This  Agreement may be executed in  counterparts,  each of which shall
          constitute an original but all of which,  when taken  together,  shall
          constitute one instrument.

     (f)  The headings herein are included for convenience of reference only and
          shall be ignored in the construction or  interpretation  hereof.  When
          used in this Agreement: (i) "or" is not exclusive; (ii) "including" is
          not  limiting;  (iii) a  reference  to any  law,  rule  or  regulation
          includes any amendment or modification  thereto or thereof, as well as
          any replacement  therefor;  and (iv) unless otherwise  provided for in
          this  Agreement,   a  reference  to  any  Pledgor  Document  or  other
          agreement,   instrument  or  document,   shall  include  such  Pledgor
          Document,  other  agreement,  instrument  or  document,  as it  may be
          amended,  restated,  supplemented  or otherwise  modified from time to
          time in  accordance  with its terms.  References  herein to  Sections,
          paragraphs,  Annexes  and  Schedules  and the like,  unless  otherwise
          stated,  are  references to Sections or  paragraphs  of, or Annexes or
          Schedules to, this  Agreement.  Terms such as "herein",  "hereof",  or
          "hereunder"  refer  to  this  Agreement  as a  whole,  and  not to any
          particular provision hereof.

                      SECTION 21. Waiver of Trial By Jury.

     TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, THE PLEDGOR, THE PLEDGEE
AND (BY THEIR ACCEPTANCE OF THE BENEFITS OF THIS AGREEMENT) EACH OF THE LENDERS,
HEREBY IRREVOCABLY AND  UNCONDITIONALLY  WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING  RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

                           SECTION 22. Jurisdiction.

     Each of the Pledgor and the Pledgee and (by its  acceptance of the benefits
of this  Agreement) each of the Lenders hereby  irrevocably and  unconditionally
(i)  submits  for itself and its  property,  in any legal  action or  proceeding
relating to this  Agreement or any other  Pledgor  Document or the  transactions
contemplated hereunder or thereunder,  or for recognition and enforcement of any
judgment in respect thereof,  to the non-exclusive  general  jurisdiction of the
courts of the State of New York,  the courts of the United States of America for
the Southern  District of New York, and appellate courts from any thereof;  (ii)
agrees that all claims in respect of any such action or proceeding  may be heard
or determined  in such New York State court or, to the extent  permitted by law,
in such federal court;  (iii) consents that any such action or proceeding may be
brought in such courts and, to the extent  permitted by applicable  Law,  waives
and agrees not to assert,  by way of motion,  as a defense or otherwise,  in any
such action or proceeding,  any claim that it is not  personally  subject to the
jurisdiction  of such  courts,  that the action or  proceeding  is brought in an
inconvenient  forum,  that the venue of the action or  proceeding is improper or
that this  Agreement or the subject  matter hereof may not be litigated in or by
such  courts;  and (iv)  agrees  that a final  judgment  in any such  action  or
proceeding  shall be conclusive  and may be enforced in other  jurisdictions  by
suit on the judgment or in any other manner  provided by Law. The Pledgor agrees
that  service of process in any such  action or  proceeding  may be  effected by
mailing a copy thereof by  registered  or certified  mail (or any  substantially
similar  form of mail),  postage  prepaid,  to such  party,  at the  address for
Pledgor specified in Section 18 or at such other address of the Pledgor of which
the Pledgee shall have been notified pursuant  thereto;  and agrees that nothing
herein shall  affect the right to effect  service of process in any other manner
permitted by law or shall limit the right to sue in any other jurisdiction.

<PAGE>


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

PLEDGOR:                                             ASCENT ASSURANCE, INC.

                                                     By: /s/Patrick J. Mitchell
                                                     Name: Patrick J. Mitchell
                                                     Title:


PLEDGEE:                                             CREDIT SUISSE FIRST BOSTON
                                                     MANAGEMENT CORPORATION


                                                     By:/s/Donna P. Alderman
                                                     Name: Donna P. Alderman
                                                     Title: Director











                      [Signature Page to Pledge Agreement]


<PAGE>


                                 ACKNOWLEDGMENT

Each of the  undersigned,  the  Companies  referred to in the  foregoing  Pledge
Agreement, hereby acknowledges receipt of a copy thereof and agrees to cooperate
in the  implementation of the terms thereof insofar as such terms are applicable
to it or to exercise by the Pledgee of its rights and remedies under that Pledge
Agreement  in  respect of the  Pledged  Stock or  Pledged  Notes  issued by that
company, including their registration in the name of the Pledgee or its nominee.

                       Pacific Casualty Company, Inc.

                       By: /s/Patrick J. Mitchell
                       Name: Patrick J. Mitchell
                       Title: Chairman


                       Foundation Financial Services, Inc.

                       By: /s/Patrick J. Mitchell
                       Name: Patrick J. Mitchell
                       Title: Chairman


                       Westbridge Printing Services, Inc.

                       By: /s/Patrick J. Mitchell
                       Name: Patrick J. Mitchell
                       Title: Chairman



<PAGE>





                                                                         ANNEX 1
                                                         to the Pledge Agreement

                                  Pledged Stock

Company                    No. of Shares      Class of Stock    Certificate Nos.

Foundation Financial            1                 common               2
Services, Inc.

Westbridge Printing             1                 common               3
Services, Inc.

Pacific Casualty             1,000                common               1
Company, Inc.





<PAGE>


                                                                         ANNEX 2
                                                         to the Pledge Agreement

                                  Pledged Notes

                                 Initially none


<PAGE>


                                                                       EXHIBIT A
                                                         to the Pledge Agreement

                   AGREEMENTS AFFECTING MANAGEMENT OF COMPANY

                                      None.


<PAGE>


                                                                       EXHIBIT B
                                                         to the Pledge Agreement

                           PLEDGE AGREEMENT SUPPLEMENT

                  PLEDGE AGREEMENT SUPPLEMENT, dated as of ____________, made by
Ascent  Assurance,  Inc., a Delaware  corporation (the  "Pledgor"),  in favor of
Credit Suisse First Boston Management  Corporation,  as pledgee under the Pledge
Agreement referred to below (in such capacity, the "Pledgee").

                  1. Reference is hereby made to the Pledge Agreement,  dated as
         of April 17,  2001,  made by the  Pledgor in favor of the  Pledgee  (as
         amended,  supplemented or otherwise modified as of the date hereof, the
         "Pledge  Agreement").  Terms  defined in the Pledge  Agreement are used
         herein as therein defined.

                  2. The Pledgor  hereby  confirms  and  reaffirms  the security
         interest  in the  Pledged  Collateral  granted to the  Pledgee  for the
         benefit of the  Lenders  and its own  benefit as provided in the Pledge
         Agreement,  and, as additional  collateral  security for the prompt and
         complete payment when due (whether at stated maturity,  by acceleration
         or  otherwise)  of the Secured  Obligations  and in order to induce the
         Lenders to make their  Loans under the Credit  Agreement  and the other
         Loan  Documents,  the Pledgor hereby  delivers to the Pledgee,  for the
         benefit of the Lenders and for the benefit of the Administrative Agent,
         as  security  for  the  Secured  Obligations,  the  Surplus  Note  in a
         principal  amount equal to the aggregate  principal amount of the Loans
         made on the date hereof  under the Credit  Agreement,  as  described in
         Schedule  1 to this  Supplement  (the  "Additional  Pledged  Note") and
         hereby confirms its grant to the Administrative  Agent, for the ratable
         benefit of the Lenders and for the benefit of the Administrative Agent,
         as security for the Secured  Obligations,  of a first priority security
         interest in the Additional Pledged Note and all Proceeds thereof.  From
         and after the date of this Supplement,  as used in the Pledge Agreement
         as  supplemented  by this Supplement and for all purposes of the Pledge
         Agreement  as so  supplemented,  "Pledged  Notes"  shall be  deemed  to
         include the Additional Pledged Note.

                  3.  The  Pledgor  hereby  represents  and  warrants  that  the
         representations  and  warranties  contained  in Section 9 of the Pledge
         Agreement  are true and  correct  on the date of this  Supplement  with
         references  therein to the  "Pledged  Note" to include  the  Additional
         Pledged Note, and with  references to the Pledge  Agreement to mean the
         Pledge Agreement as supplemented hereby.

                  4. This  Supplement  shall be  governed  by,  and  construed
        and interpreted in accordance with, the laws of the State of New York.

                  IN WITNESS WHEREOF, the undersigned has caused this Supplement
to be duly executed and delivered as of the date first above written.

                                     ASCENT ASSURANCE, INC.

                                     By:  ________________________
                                          Name:

                                          Title:


<PAGE>


                                                                      SCHEDULE I
                                              to the Pledge Agreement Supplement

                     DESCRIPTION OF ADDITIONAL PLEDGED NOTE

                                 Name of Issuer