<PAGE>

                          PLEDGE AND SECURITY AGREEMENT

       This PLEDGE AND SECURITY AGREEMENT, dated as of September 15, 1998 (as
amended, supplemented or otherwise modified and in effect from time to time,
this "AGREEMENT"), is made by 212 CERTIFICATE COMPANY, a corporation
organized and existing under the laws of the State of Delaware (the
"PLEDGOR"), in favor of THE CHASE MANHATTAN BANK, a New York banking
corporation, as funding agent (in such capacity, the "FUNDING AGENT") for the
benefit of Park Avenue Receivables Corporation, a corporation organized and
existing under the laws of the State of Delaware, as purchaser (in such
capacity, the "PURCHASER") and its assignees, pursuant to the Face-Amount
Certificate Agreement.

                               W I T N E S S E T H:


       WHEREAS, it is a condition precedent to the obligation of the Purchaser
to enter into the Face-Amount Certificate Agreement that the Pledgor shall have
executed and delivered this Agreement to the Purchaser;

       NOW, THEREFORE, in consideration of the premises and in order to induce
the Purchaser to enter into the Face-Amount Certificate Agreement and to
purchase the Face-Amount Certificate, as defined therein, and for other good and
valuable consideration, receipt and sufficiency of which is hereby acknowledged,
the Pledgor hereby agrees with the Purchaser as follows:

       1.    DEFINED TERMS. Capitalized terms used herein and not otherwise
defined herein shall have the meanings assigned to such terms in Annex X to that
certain Face-Amount Certificate Agreement, dated as of September 15, 1998,
between the Pledgor, the Purchaser and the Funding Agent, as the same may from
time to time be amended, supplemented or otherwise modified and in effect, which
Annex X is hereby incorporated by reference herein.

       2.    PLEDGE; GRANT OF SECURITY INTEREST. To secure the prompt and
complete payment and performance of the Obligations, the Pledgor hereby (a)
pledges, assigns, hypothecates, transfers, and delivers to the Funding Agent, on
behalf of and for the benefit of the Certificateholders, all of its right, title
and interest to the Certificate Purchase Payments and (b) grants to the Funding
Agent, for the benefit of the Certificateholders, a first priority lien on, and
a security interest in, all of the Pledgor's right, title and interest, whether
now owned or hereafter acquired and


<PAGE>

wherever located, in, to and under all accounts, contract rights, general
intangibles, chattel paper, instruments, documents, money, cash, deposit
accounts, certificates of deposit, goods, letters of credit, securities
investment property, financial assets or security entitlements consisting of,
arising from or relating to any of the Pledged Collateral.

       3.    RIGHTS OF THE FUNDING AGENT AND THE CERTIFICATEHOLDERS. Neither the
Funding Agent nor any Certificateholder shall be liable for any failure to
collect or realize upon the Obligations or any Pledged Collateral security or
guarantee therefor, or any part thereof, or for any delay in so doing, nor shall
any of them be under any obligation to take any action whatsoever with regard
thereto. If a Liquidation Event has occurred and is continuing, the Funding
Agent, for the benefit of the Certificateholders, may thereafter, upon notice to
the Pledgor, exercise all rights, privileges or options pertaining to any
Certificate Purchase Payments as if it were the absolute owner thereof, upon
such terms and conditions as it may determine, all without liability except to
account for property actually received by it, but the Funding Agent, for the
benefit of the Certificateholders, shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.

       4.    DELIVERY; TRANSFER OF PLEDGED COLLATERAL. The Issuer shall cause,
or direct the Portfolio Manager to cause, all instruments, chattel paper and
certificated securities representing or evidencing any Pledged Collateral to be
delivered to, and held by, the Custodian on behalf of the Funding Agent and, in
suitable form for transfer by delivery, or accompanied by duly executed
instruments of transfer or assignment in blank, all in form and substance
satisfactory to the Funding Agent. Notwithstanding the preceding sentence, the
Issuer shall deliver the Swap Agreement directly to the Funding Agent on the
date hereof. Following the occurrence of (i) a Liquidation Event or (ii) the
270th day following the commencement of the Amortization Period, the Funding
Agent shall have the right, at any time in its discretion and without notice to
the Pledgor, to deliver to the Custodian a "Notice of Exclusive Control" under
and as defined in the Control Agreement stating that the Funding Agent is
exercising exclusive control over the Custodial Account. Following delivery of
such notice, neither the Pledgor nor the Portfolio Manager (i) shall issue any
entitlement order to the Custodian withdrawing any financial assets from the
Custodial Account or (ii) accept delivery of any such financial assets
including, without limitation, any instruments, chattel paper or certificated
securities or any free credit balance or other amount owing from the Custodian
to the Issuer with respect to the Custodial Account.


                                        2

<PAGE>

       5.    REMEDIES. If a Liquidation Event shall have occurred and be
continuing, the Funding Agent, for the benefit of the Certificateholders,
without demand of performance or other demand, advertisement or notice of any
kind (except the notice specified below of time and place of public or
private sale), to or upon the Pledgor or any other Person (all and each of
which demands, advertisements and/or notices are hereby expressly waived),
may forthwith collect, receive, appropriate and realize upon the Pledged
Collateral, or any part thereof, and/or may forthwith sell, assign, give
option or options to purchase, contract to sell or otherwise dispose of and
deliver such Pledged Collateral, or any part thereof, in one or more parcels
at public or private sale or sales, at any exchange, broker's board or at any
of the Funding Agent's offices or elsewhere upon such terms and conditions as
it may deem advisable and at such prices as it may deem best, for cash or on
credit or for future delivery without assumption of any credit risk, with the
right to the Funding Agent upon any such sale or sales, public or private, to
purchase the whole or any part of such Pledged Collateral so sold, free of
any right or equity of redemption in the Pledgor, which right or equity is
hereby expressly waived or released. The Funding Agent shall apply the net
proceeds of any such collection, recovery, receipt, appropriation,
realization or sale, after deducting all reasonable costs and expenses of
every kind incurred therein or incidental to the care, safekeeping or
otherwise of any and all of the Pledged Collateral or in any way relating to
the rights of the Certificateholders hereunder, including reasonable
attorney's fees and legal expenses to the payment, in whole or in part, of
the Obligations in such order as the Certificateholders may elect, the
Pledgor remaining liable for any deficiency remaining unpaid after such
application, and only after so applying such net proceeds and after the
payment by the Funding Agent (for the account of the Certificateholders) of
any other amount required to be paid by any provision of law, need the
Funding Agent, on behalf of and for the account of the Certificateholders,
account for the surplus, if any, to the Pledgor. The Pledgor agrees that the
funding Agent need not give more than five days' notice of the time and place
of any public sale or of the time after which a private sale or other
intended disposition is to take place and that such notice is reasonable
notification of such matters. No notification need be given to the Pledgor if
it has signed, after default, a statement renouncing or modifying any right
to notification of sale or other intended disposition. In addition to the
rights and remedies granted to it in this Agreement and in any other
instrument or agreement securing, evidencing or relating to any of the
Obligations, the Funding Agent, for the benefit of the Certificateholders,
shall have all the rights and remedies of a secured party under applicable
law. The Pledgor shall be liable for the deficiency if the proceeds of any
sale or other disposition of the Pledged Collateral is insufficient to pay
all amounts to which the Funding Agent, on behalf of the Certificateholders,
is

                                        3

<PAGE>

entitled, and the fees of any attorneys employed by the Funding Agent or
any Certificateholder to collect such deficiency.

       6.    REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGOR. The
Pledgor hereby reaffirms its representations, warranties and covenants set forth
in Exhibit C to the Face-Amount Certificate Agreement. The Pledgor covenants and
agrees that it will protect and defend the right, title and interest of the
Funding Agent, for the benefit of the Certificateholders, in, to and under the
Pledged Collateral and the proceeds thereof against the claims and demands of
any and all Persons.

       7.    NO DISPOSITION, ETC. Without the prior written consent of the
Funding Agent, the Pledgor agrees that it will not sell, assign, transfer,
exchange or otherwise dispose of, or grant any option with respect to, the
Pledged Collateral, except as set forth in, and as permitted by, the Face-Amount
Certificate Agreement and/or the other Transaction Documents, nor will it
create, incur or permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance with respect to any
of the Pledged Collateral, or any interest therein, or any proceeds thereof,
except for the lien and security interest provided for by this Agreement.


       8.    FURTHER ASSURANCES. The Pledgor agrees that, at any time and from
time to time upon the written request of the Funding Agent, the Pledgor will
execute and deliver such further documents and do such further acts and things
as the Funding Agent, on behalf of the Certificateholders, may reasonably
request in order to effect the purposes of this Agreement.

       9.    PLACE OF PERFECTION; RECORDS. The Pledgor shall keep its chief
place of business, chief executive office, registered agent for service of
process within the Commonwealth of Kentucky and the office where it keeps its
records concerning the Pledged Collateral at the location therefor specified in
the Face-Amount Certificate Agreement or, upon 30 days' prior written notice to
the Funding Agent, at any other locations in a jurisdiction where all actions
required by Section 8 shall have been taken with respect to the Pledged
Collateral. The Pledgor will hold and preserve such records and will permit
representatives of the Funding Agent at any time during normal business hours to
inspect and make abstracts from such records.

       10.   FUNDING AGENT APPOINTED ATTORNEY-IN-FACT. The Pledgor hereby
irrevocably appoints the Funding Agent as the Pledgor's attorney-in-fact, with


                                        4

<PAGE>

full authority in the place and stead of the Pledgor and in the name of the
Pledgor or otherwise, from time to time to take any action and execute any
instrument which the Funding Agent may deem necessary or appropriate in order to
perfect its interest granted under this Agreement, or following a (i) a
Liquidation Event or (ii) the 270th day following the commencement of the
Amortization Period, exercise its remedies hereunder, including, without
limitation:

       (a) to ask, demand, collect, sue for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Pledged Collateral,

       (b) to receive, indorse, and collect any drafts or other instruments,
documents, security certificates and chattel paper, in connection therewith, and

       (c) to file any claims or take any action or institute any proceedings
which the Funding Agent may deem necessary or desirable for the collection of
any of the Pledged Collateral or otherwise to enforce compliance with the terms,
conditions or rights of the Funding Agent with respect to any of the Pledged
Collateral.

       11.    FUNDING AGENT MAY PERFORM. If the Pledgor fails to perform any
agreement contained herein, the Funding Agent may itself perform, or cause
performance of, such agreement, and the reasonable expenses of the Funding Agent
incurred in connection therewith shall be payable by the Pledgor.

       12.    DUTIES OF THE FUNDING AGENT. The powers conferred on the Funding
Agent hereunder are solely to protect its interest in the Pledged Collateral and
shall not impose any duty upon it to exercise any such powers. Except for the
safe custody of any Pledged Collateral in its possession and the accounting for
moneys actually received by it hereunder, the Funding Agent shall have no duty
as to any Pledged Collateral, as to ascertaining or taking action with respect
to matters relative to any of the Pledged Collateral, whether or not the Funding
Agent has or is deemed to have knowledge of such matters, or as to the taking of
any necessary steps to preserve rights against prior parties or any other rights
pertaining to any Pledged Collateral. The Funding Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Pledged
Collateral in its possession if such Pledged Collateral is accorded treatment
substantially equal to that which the Funding Agent accords its own property.


                                        5

<PAGE>

       13.    CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER FACE-AMOUNT
CERTIFICATE AGREEMENT. This Agreement shall create a continuing security
interest in the Pledged Collateral and shall (i) remain in full force and
effect until the later of (x) the payment in full of the Obligations and (y)
the date on which the Face Amount Certificate Agreement has terminated in
accordance with the terms hereof, (ii) be binding upon the Pledgor, its
successors and assigns, and (iii) inure to the benefit of, and be enforceable
by, the Funding Agent, the Certificateholders and their respective
successors, transferees and assigns. On the ninety-first day following the
Termination Date, the security interest granted hereby shall terminate and
all rights to the Pledged Collateral shall revert to the Pledgor. Upon any
such termination, the Funding Agent will, at the Pledgor's expense, execute
and deliver to the Pledgor such documents as the Pledgor shall reasonably
request to evidence such termination.

       14.    SEVERABILITY. If any term or provision set forth in this Agreement
shall be invalid or unenforceable, the remainder of this Agreement, or the
application of such terms or provisions to persons or circumstances, other than
those to which it is held invalid or unenforceable, shall be construed in all
respects as if such invalid or unenforceable term or provision were omitted.

       15.    NO WAIVER; REMEDIES CUMULATIVE. Neither the Funding Agent nor any
Certificateholder shall, by any act, delay, omission or otherwise, be deemed to
have waived any of its rights or remedies hereunder, and no waiver shall be
valid unless in writing, signed by the Funding Agent, for the benefit of each
Certificateholder, and then only to the extent therein set forth. A waiver by
the Funding Agent, on behalf of any Certificateholder, of any right or remedy
hereunder on any one occasion shall not be construed as a bar to any right or
remedy which the Funding Agent or such Certificateholder would otherwise have on
any future occasion. No failure to exercise nor any delay in exercising on the
part of the Funding Agent or any Certificateholder any right, power or privilege
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof of any other right, power or privilege. The rights and
remedies herein provided are cumulative and may be exercised singly or
concurrently, and are not exclusive of any rights or remedies provided by the
operative documents or by law.

       16. WAIVERS, AMENDMENTS; APPLICABLE LAW. None of the terms or provisions
of this Agreement may be waived, altered, modified or amended except by an
instrument in writing, duly executed by the Funding Agent on behalf of the
Certificateholders. This Agreement and all obligations of the Pledgor hereunder


                                        6

<PAGE>

shall be binding upon the successors and assigns of the Pledgor and shall,
together  with the rights and remedies of the Funding Agent and each
Certificateholder hereunder, inure to the benefit of the Funding Agent, the
Certificateholders and their respective successors and assigns. This Agreement
shall be governed by, and be construed and interpreted in accordance with, the
laws of the State of New York.




                [REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]


                                        7

<PAGE>

          IN WITNESS WHEREOF, the Pledgor has caused this Pledge and Security
Agreement to be duly executed and delivered on the day and year first above
written.

                                     212 CERTIFICATE COMPANY


                                     By: /s/ Robert L. Maddox
                                        -------------------------------
                                        Name:  Robert L. Maddox
                                        Title: President



Accepted and agreed as of the date
first above written:


THE CHASE MANHATTAN BANK,
as Funding Agent for the benefit of the
Certificateholders

By: /s/ Andrew Taylor
   -------------------------------
   Name:  Andrew Taylor
   Title: Vice President


                                        8