Document:

GUARANTY AND SECURITY AGREEMENT

                                      among

                      FOUNDATION FINANCIAL SERVICES, INC.,

                        NATIONALCARE(R) MARKETING, INC.,

                        LIFESTYLES MARKETING GROUP, INC.,

                        PRECISION DIALING SERVICES, INC.,

                          SENIOR BENEFITS, L.L.C., and

                       WESTBRIDGE PRINTING SERVICES, INC.,

                                each, as Grantor,

         each Lender which is a Beneficiary hereunder from time to time

                                       and

                CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION

                    as Administrative Agent and Secured Party

                           Dated: As of April 17, 2001

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* Identify  any imposed by  applicable  Law,  other than any which appear on the
certificates  evidencing  the  relevant  Pledged  Stock.  * Other  than the Lien
created by this Agreement.

<PAGE>
                        GUARANTY AND SECURITY AGREEMENT

     THIS  GUARANTY AND SECURITY  AGREEMENT is made as of April 17, 2001,  among
(a)   Foundation   Financial   Services,   Inc.,  a  Nevada   corporation,   (b)
NationalCare(R)  Marketing, Inc., a Delaware corporation ("NCM"), (c) LifeStyles
Marketing Group, Inc., a Delaware  corporation,  (d) Precision Dialing Services,
Inc., a Delaware  corporation,  (e) Senior Benefits,  L.L.C., an Arizona limited
liability company ("Senior  Benefits"),  and (f) Westbridge  Printing  Services,
Inc., a Delaware corporation (each, a "Grantor"), and Credit Suisse First Boston
Management  Corporation as secured party hereunder (the "Secured Party") for the
ratable benefit of the Lenders in its capacity as Administrative Agent (as those
terms are  defined  below) and for its own benefit as  Administrative  Agent (as
that term is so defined),  and the Administrative  Agent and each of the Lenders
party to the Credit  Agreement (as so defined) from time to time, as Beneficiary
of the Guaranty provided for herein.

     A. 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 Ascent Assurance,  Inc., a Delaware  corporation,  as
borrower (the "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.

     B.  As a  Subsidiary,  each  Grantor  acknowledges  that  it  will  benefit
materially  from the Loans to be made to the Borrower and is willing to guaranty
the Borrower's  obligations under the Credit Agreement,  the Notes and the other
Loan  Documents  and to grant a security  interest in its personal  property and
assets to the  Administrative  Agent for the ratable  benefit of the Lenders and
the Administrative Agent to secure that Grantor's obligations under its guaranty
of the Borrower's obligations.

     C. It is a condition  precedent to the making of the initial Loan that each
Grantor,  among other  things,  shall have executed and delivered to the Secured
Party this Agreement.

     NOW,  THEREFORE,  in order to induce the  Lenders to make the Loans and for
other good and valuable  consideration  the receipt and  sufficiency of which is
hereby acknowledged, each Grantor hereby agrees as follows:

Section 1. Definitions.
           -----------

     (a) 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  in the  UCC.  The  term
"Obligations"  and all other  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 3. 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:

     "Bankruptcy   Code"   means  the  United   States   Bankruptcy   Code,   11
U.S.C.ss.ss.101 et seq.

     "Beneficiary" has the meaning set forth in Section 2.

     "Collateral"  has the  meaning  set forth in  Section  3 and,  when used in
relation to a particular Grantor,  means all of such Grantor's personal property
identified therein as Collateral.

     "Contractual  Obligation" means, as to any Person, any indenture or loan or
credit  agreement,  security  (including,  but not limited to any capital stock,
convertible  debt  instrument,  warrant,  option or other  right to acquire  any
security of such Person) or other agreement,  lease or instrument issued by such
Person  or to  which  such  Person  is a party or by which  such  Person  or its
properties may be bound or affected.

     "Event of Default" has the meaning set forth in Section 14.

     "Excluded Property" means, in relation to each Grantor the property of such
Grantor  identified in Schedule IV, for so long as such property remains subject
to a Permitted Lien.

     "Grantor  Documents"  means,  as to each Grantor,  this  Agreement and each
other Loan Document to which such Grantor is or at any time hereafter  becomes a
party.

     "Guaranty" means, in respect of each Grantor,  the guaranty of payment made
by it in Section 2(a) of this Agreement.

     "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.

     "Lien"  means any  mortgage,  deed of  trust,  pledge,  security  interest,
hypothecation,  assignment, deposit arrangement, encumbrance, lien (statutory or
other),  preference or other  security  agreement or  preferential  arrangement,
charge or  encumbrance  of any kind or  nature  whatsoever  (including,  without
limitation,  any  conditional  sale or  other  title  retention  agreement,  any
financing  lease having  substantially  the same  economic  effect as any of the
foregoing, and the filing of any financing statement under the UCC or comparable
law of any jurisdiction to evidence any of the foregoing).

     "Pledged  Membership  Interests"  means all Collateral  subject to the Lien
created herein by NCM which  represents its interests in Senior  Benefits,  as a
member thereof.

     "Pledged Stock" has the meaning set forth in Section 3.

     "Secured Obligations" has the meaning set forth in Section 4(a).

Section 2. Guaranty.
           --------

     (a) Each Grantor, severally, as primary obligor and not merely as a surety,
hereby   irrevocably,   absolutely   and   unconditionally   guarantees  to  the
Administrative Agent and the Lenders (each a "Beneficiary" and collectively, the
"Beneficiaries"),  the prompt and complete payment by the Borrower,  as and when
due and payable, of the Obligations.

     (b) The  term  "obligations"  is used  herein,  and in each  other  Grantor
Document,  in the  broadest  sense  possible,  and (i) in  relation  to Grantor,
includes all payment and  performance  obligations  of such  Grantor  under this
Agreement  and any other  Grantor  Document to which it is a party,  and (ii) in
relation to  obligations of the Borrower,  includes all payment and  performance
obligations  of  the  Borrower  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 Borrower or any other Person,  whether  voluntary or involuntary and however
arising,  whether  due  or  not  due,  absolute  or  contingent,  liquidated  or
unliquidated,  determined or undetermined, and whether any Grantor 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.

     (c) Each Grantor hereby severally guarantees that it will pay, or cause the
Obligations  to be paid,  strictly  in  accordance  with  the  terms of the Loan
Documents,  regardless of any Law now or hereafter in effect in any jurisdiction
affecting  any such  terms  or the  rights  of the  Beneficiaries  with  respect
thereto.  The  obligations  and  liabilities  of each Grantor under the Guaranty
shall be absolute and unconditional irrespective of: (A) any lack of validity or
enforceability  of any of the  Obligations or any Loan  Document,  or any delay,
failure or  omission  to enforce or  agreement  not to  enforce,  or the stay or
enjoining,  by order of court, by operation of law or otherwise, of the exercise
of any right with respect to the  foregoing  (including,  in each case,  without
limitation,  as a result of the insolvency,  bankruptcy or reorganization of any
Beneficiary,  the  Borrower,  any other  Grantor or any other  Person);  (B) any
change  in the  time,  manner or place of  payment  of, or in any other  term in
respect of, all or any of the Obligations or any other amendment or waiver of or
consent to any departure  from the Loan Documents or any agreement or instrument
relating thereto; (C) any exchange or release of, or non-perfection of, any Lien
on or in any collateral,  or any release,  amendment or waiver of, or consent to
any departure from, any other guaranty of, or agreement  granting  security for,
all or any of the Obligations; (D) any claim, set-off, counterclaim,  defense or
other rights that the Grantor may have at any time and from time to time against
any  Beneficiary,  any other Grantor or any other Person,  whether in connection
with this Agreement,  the Obligations or any unrelated  transaction;  or (E) any
other circumstance that might otherwise  constitute a defense available to, or a
discharge  of, the  Borrower,  such Grantor or any other  guarantor or surety in
respect of the Obligations.

     (d) The  Guaranty  (A) is a  continuing  guaranty of each Grantor and shall
remain in full force and effect until the  termination of the  Commitments,  the
payment in full of the Obligations and the payment of all other amounts required
to be paid by each  Grantor  pursuant  hereto;  and  (b)  shall  continue  to be
effective  or  shall  be  reinstated,  as the  case  may be,  if at any time any
payment,  or any part thereof,  of any of the  Obligations  is rescinded or must
otherwise  be  returned  by any  Beneficiary  upon the  insolvency,  bankruptcy,
dissolution,  liquidation  or  reorganization  of the  Borrower,  any Grantor or
otherwise, all as though such payment had not been made.

     (e) The  obligations  and  liabilities  of each Grantor  under the Guaranty
shall not be  conditioned or contingent  upon the pursuit by any  Beneficiary or
any other Person at any time of any right or remedy  against the  Borrower,  any
other  Grantor or any other Person that may be or become liable in respect of or
any part of the  Obligations  or against  any  collateral  security  or guaranty
therefor or any right of setoff with respect thereto.

     (f) Each  Grantor  hereby  consents  that,  without  the  necessity  of any
reservation  of rights  against  such  Grantor and without  notice to or further
assent by such  Grantor or any other  Grantor,  any demand for payment of any of
the Obligations  made by any  Beneficiary may be rescinded by such  Beneficiary,
and any of the Obligations may be continued after such rescission.

Section 3. Grant of Security.

Each  Grantor  hereby  grants  to  the  Secured   Party,   in  its  capacity  as
Administrative  Agent for the  ratable  benefit of the  Lenders  and for its own
benefit as Administrative  Agent, a security interest in and lien on all of such
Grantor's  right,  title and interest in and to all of such  Grantor's  personal
property assets, including but not limited to all of the following,  whether now
owned or existing or hereafter acquired or existing, and wherever located except
for the Excluded  Property  (subject to that  exception,  the  "Collateral")  to
secure the Secured Obligations:

(a)  All machinery, furnishings,  fixtures, service vehicles, supplies and other
     equipment, together with all attachments, components, parts and accessories
     installed thereon or affixed thereto ("Equipment");

(b)  All goods  held for sale or lease or to be  furnished  under  contracts  of
     service,  and  all  additions,   substitutions  and  replacements  thereof,
     wherever  located,  together with all goods and materials used or usable in
     manufacturing,   processing,  packaging  or  shipping;  in  all  stages  of
     production,  from raw materials through  work-in-process  to finished goods
     ("Inventory");

(c)  All other goods, of any nature whatsoever;

(d)  All (i) (A) rights to payment for goods sold or  services  rendered by such
     Grantor, including all accounts arising from sales or rendition of services
     made under any of such  Grantor's  trade  names or styles or through any of
     such  Grantor's  divisions,  regardless  of how such  right  is  evidenced,
     whether  secured or unsecured  (and whether or not  specifically  listed on
     schedules furnished to the Secured Party) ("Accounts Receivable"),  and (B)
     other  accounts;   (ii)  unpaid  seller's  rights   (including   rights  of
     rescission,  replevin, reclamation and stoppage in transit) relating to the
     foregoing or arising  therefrom;  (iii) rights to any goods  represented by
     any of the foregoing,  including  rights to returned or repossessed  goods;
     (iv) reserves and credit balances  arising under any of the foregoing;  (v)
     guarantees,  letters of credit,  collateral or other supporting obligations
     supporting or securing any of the foregoing; and (vi) insurance policies or
     rights relating to any of the foregoing  (collectively,  including Accounts
     Receivable, the "Accounts");

(e)  All (i) instruments,  (ii) documents,  (iii) contract rights,  (iv) chattel
     paper, (v) letters of credit, (vi)  letter-of-credit  rights,  (vii) claims
     and causes of action against any other Person,  however arising, and (viii)
     general  intangibles,  whether or not for the payment of money,  including,
     but not  limited  to, all (A) rights to tax  refunds or other  payments  of
     every kind or nature, including rights to the payment of letters of credit;
     (B)  copyrights,  rights in or licenses of copyrights  and marks subject to
     copyright  protection,  in whole or in part, and all renewals or extensions
     of any of the foregoing; (C) trade names, trademarks,  service marks, trade
     styles,  designs,  logos,  indicia,  corporate  names,  company  names  and
     fictitious  business  names,  in each case,  together  with all  associated
     goodwill;  (D) patents and patent applications and rights in or licenses of
     patents or patent applications;  (E) computer programs and all intellectual
     property  rights therein (other than such programs and rights in which,  by
     their terms  enforceable  under applicable law, no security interest may be
     granted); and (F) other proprietary information;

(f)  All investment property,  including, without limitation, all securities and
     capital stock or other  interests in any other Person whether  certificated
     or  uncertificated;  all  warrants,  options  and other  rights to  acquire
     securities,  capital  stock or other  interests  in any other  Person;  all
     securities  entitlements;  and all securities  accounts,  together with all
     financial assets credited thereto;

(g)  All cash and cash equivalents, including, without limitation, money, demand
     deposit accounts and other deposit accounts;

(h)  All governmental approvals, licenses, franchises and authorizations, to the
     maximum extent permitted by applicable law;

(i)  All  property  and  interests  in property of such Grantor now or hereafter
     coming into the actual possession,  custody or control of the Secured Party
     in any way and for any purpose (whether for safekeeping,  deposit, custody,
     pledge, transmission, collection or otherwise);

(j)  All books and records;

(k)  All other  property  and  interests  in property of such  Grantor
     constituting personal property; and

(l)  All accessions and additions to,  substitutions  for, and replacements,
     products  and  proceeds  of any of the  foregoing  (including,  without
     limitation, proceeds that constitute property of the types described in
     clauses  (a)  through  (k) of this  Section  3, and,  to the extent not
     otherwise  included,  all (i) payments under insurance  (whether or not
     the  Secured  Party  is the  loss  payee  thereof),  or any  indemnity,
     warranty,  guaranty  or letter of credit,  payable by reason of loss or
     damage to or otherwise with respect to any of the  foregoing;  and (ii)
     any and all supporting obligations in respect of any of the foregoing).

At the time of its  execution  of this  Agreement,  NCM shall,  in its  capacity
hereunder  as  Grantor,  deliver  to  the  Secured  Party  all  certificates  or
instruments  representing  or evidencing the Collateral  that consists of all of
the  common  stock  of  each  of the  companies  identified  in  Annex 1 to this
Agreement  (the  "Companies")  represented by the  certificate(s)  identified in
Annex 1 to this Agreement (the "Pledged  Stock"),  to be held by or on behalf of
the Secured Party pursuant hereto.  Each such certificate or instrument 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 Secured Party. For the sake of clarity, NCM hereby
expressly  grants a security  interest  in all of the  membership  interests  of
Senior  Benefits,  L.L.C. The Secured Party shall have the right, at any time in
its  discretion and without notice to NCM, to transfer to, or to register in the
name of, the  Secured  Party or any of its  nominees  any or all of the  Pledged
Stock, subject only to the revocable rights specified in Section 22.

Section 4. Security for Secured Obligations.

(a)  (a) The Lien  created by each  Grantor  under this  Agreement  secures  the
     payment and  performance  of any and all  obligations  of the  Borrower now
     existing or hereafter  arising under or in respect of the Credit  Agreement
     or any other Loan Document, and any and all obligations of such Grantor now
     existing or hereafter  arising  under the Guaranty or otherwise  under this
     Agreement or any other Grantor Document (the "Secured Obligations").

(b)  Senior Benefits, as issuer of the Pledged Membership Interests made subject
     to the  Lien of this  Agreement  by NCM,  hereby  agrees  that (i) it shall
     comply  with any  notification  originated  and  communicated  to it by the
     Secured  Party which  directs that the  transfer of the Pledged  Membership
     Interests  be  registered  or that  the  Pledged  Membership  Interests  be
     redeemed  ("Instructions")  without  further consent from NCM, (ii) it will
     cause such  registration  to remain in effect,  and (iii) it will disregard
     Instructions  from any Person other than the Secured  Party and will comply
     with its agreement set forth in this provision until it shall have received
     a written  agreement of the Secured  Party  releasing it from its agreement
     set forth in this paragraph.

Section 5. Representations and Warranties.

     Each Grantor  hereby  represents and warrants to the Secured Party and each
of the Lenders as follows:

(a)  All of the Inventory and Equipment of such Grantor is located at the places
     specified  on Schedule I. The chief place of business  and chief  executive
     office of such  Grantor,  the office where such  Grantor  keeps its records
     concerning Accounts  Receivable and other Collateral,  and each other place
     of  business of the  Grantor,  are located at the  addresses  specified  on
     Schedule I. None of the  Accounts  Receivable  is evidenced by a promissory
     note or other instrument or by chattel paper.

(b)  Such  Grantor is a duly  incorporated  or  organized  and validly  existing
     corporation  under the laws of its state of organization,  and is qualified
     to do business and in good  standing in all states and other  jurisdictions
     in which the failure to be so qualified and in good  standing  would have a
     Material Adverse Effect or a material adverse effect on the ability of such
     Grantor to enforce the collection of Accounts Receivable due from customers
     residing in such locations.

(c)  This  Agreement  has been duly  executed and  delivered by each Grantor and
     constitutes  a  legal,   valid  and  binding  obligation  of  such  Grantor
     enforceable  in accordance  with its terms,  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).  Neither  the  execution  and
     delivery nor the performance  hereof:  (i) requires any consent or approval
     of such Grantor's  stockholders,  except for such consents and approvals as
     have been duly obtained and are in full force and effect;  (ii) contravenes
     such   Grantor's   certificate  of   incorporation   or  by-laws  or  other
     organizational documents;  (iii) violates any provision of, or requires any
     filing  (other  than the filing of the  financing  statements  contemplated
     hereby),  registration,  consent or approval under,  any Law, order,  writ,
     judgment,  injunction,  decree,  determination or award currently in effect
     applicable  to such Grantor or its  property;  (iv) results in a breach of,
     constitutes a default  under,  or otherwise  contravenes,  any  Contractual
     Obligation  of such  Grantor;  or (v) causes such  Grantor 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 Collateral.

(d)  Such Grantor is the legal,  record or beneficial owner of, and has good and
     marketable  title  to,  the  property  of  such  Grantor  that  constitutes
     Collateral, free and clear of any Lien whatsoever,  except for (A) the Lien
     created hereby,  and (B) other Permitted Liens, and in the case of NCM, the
     Pledged Stock includes all of the issued and  outstanding  Capital Stock of
     the Companies.  No financing  statement or other security  instrument is on
     file in any jurisdiction covering any such Collateral,  other than any that
     has been filed with respect to either (i) the Lien  created  hereby or (ii)
     another Permitted Lien.  Schedule II identifies all Permitted Liens,  other
     than the Lien  created  hereby,  existing on the date of this  Agreement in
     respect of personal property of such Grantor and the Contractual Obligation
     secured by such Permitted Lien.

(e)  Except for such  defaults as have been waived  pursuant to waivers that are
     in full force and effect, such Grantor is not in default under the terms of
     any  Contractual  Obligation  of such  Grantor  with  respect  to any loan,
     borrowing  or  indebtedness  to which such Grantor is a party of any nature
     whatsoever or any other Contractual Obligation of such Grantor, contract or
     agreement  to which  such  Grantor is a party,  the  result of which  could
     reasonably be expected to have a material  adverse  effect on the condition
     (financial or otherwise),  results of operations,  property or prospects of
     such  Grantor,  or  upon  such  Grantor's  ability  to  perform  any of its
     obligations  under this  Agreement or any other Loan Document to which such
     Grantor is a party.

(f)  Such Grantor has  established  adequate means of keeping itself informed of
     the Borrower's financial condition and of other circumstances affecting the
     Borrower's ability to perform the Obligations.

(g)  Such  Grantor  does not conduct any  business  under any name or trade name
     other than its proper  name,  which is set forth in the first  paragraph of
     this Agreement.  The taxpayer  identification number of such Grantor is set
     forth on Schedule I.

(h)  Schedule IV  identifies  all of the property of such  Grantor  subject to a
     Permitted  Lien on the date of this  Agreement.  Except  for  Inventory  in
     transit in the ordinary course of such Grantor's business, such Grantor has
     exclusive   possession   and  control  of  the   Inventory   and  Equipment
     constituting Collateral.

(i)  As of the date of this Agreement,  this Agreement creates a continuing Lien
     in the Collateral, securing the payment of the Secured Obligations.

(j)  No consent or authorization  of, filing with, notice to, or other act by or
     in respect of, any  Governmental  Authority or any other Person is required
     with respect to any Grantor in connection with either (i) the grant by such
     Grantor of the Guaranty and Lien created hereby or the execution,  delivery
     or performance of this Agreement by such Grantor or (ii) for the perfection
     of or the  exercise  by  the  Secured  Party  of its  rights  and  remedies
     hereunder, other than the filing of financing statements with the Secretary
     as set forth in Schedule II or otherwise specified in Schedule III.

(k)  There is no action,  suit or proceeding  pending or  threatened  against or
     otherwise  affecting  such Grantor  before any court or other  Governmental
     Authority or before any arbitrator or mediator the result of which,  either
     singly or in the aggregate, could reasonably be expected to have a Material
     Adverse Effect.

(l)  In the case of NCM, there are no  restrictions  upon the transfer of any of
     the Pledged Stock or any of the Pledged  Membership  Interests,  except for
     any which appear on the  certificates  evidencing such Pledged Stock or any
     restrictions imposed by Law which are identified in Annex 1.

Section 6. Subordination and Waiver.

(a)  (i)

     (i)  All  existing  or  future  obligations  owed  to each  Grantor  by the
          Borrower or any other  Person  liable in respect of all or any portion
          of the  Obligations  (collectively,  whether for principal,  interest,
          fees or any other amount, "Subordinated Indebtedness"),  and any Lien,
          of  any  nature  whatsoever,  securing  all  or any  portion  of  such
          Subordinated Indebtedness,  are hereby subordinated,  respectively, to
          all Secured  Obligations and to such Lien.  Until the Commitments have
          been  terminated and all  Obligations  have been paid in full in cash,
          except with the Administrative  Agent's prior written consent:  (A) no
          payment in respect of any Subordinated Indebtedness shall be demanded,
          created or accepted by or for the benefit of such Grantor;  and (B) no
          Lien  securing  the  payment  or  performance   of  any   Subordinated
          Indebtedness  shall be  demanded,  created or  accepted  by or for the
          benefit of such  Grantor.  If any amount is received by any Grantor in
          respect of any Subordinated Indebtedness in violation of the foregoing
          prohibition,  such Grantor  shall  receive such amount as the property
          of, and as trustee for, the Administrative  Agent and the Lenders, and
          shall pay such amount over to the  Administrative  Agent on account of
          the Secured  Obligations in exactly the form  received,  together with
          any required  endorsement  or assignment of such Grantor,  but without
          reducing or  affecting  in any manner the  liability  of such  Grantor
          under the other provisions of this Agreement.

     (ii) In the event of any  insolvency  of the  Borrower or any other  Person
          liable in respect of all or any portion of the Obligations,  or of any
          distribution,  division or  application,  whether partial or complete,
          voluntary or involuntary,  by operation of law or otherwise, of all or
          any part of the assets (or proceeds of assets) of any Person obligated
          in respect of Subordinated Indebtedness, the Secured Obligations shall
          be  paid  in  full,  in  cash,  before  any  payment  is  made on such
          Subordinated  Indebtedness,  and all  dividends,  payments  and  other
          distributions  of any nature  whatsoever,  whether in cash or in other
          property,  that would  otherwise be payable or deliverable  upon or in
          respect  of the  Subordinated  Indebtedness  shall  be  paid  over  or
          delivered directly to the Administrative Agent, for application to the
          Secured Obligations until they have been paid in full.

(b)  The  subordination  provided  for herein  shall  apply to all  Subordinated
     Indebtedness and its subordintion to all Secured Obligations, in each case,
     whether  in  respect  of  principal,  interest,  fees,  charges,  indemnity
     obligations  or  constituting  a payment  obligation  of any  other  nature
     whatsoever,  and whether  accrued before or after the  commencement  of any
     bankruptcy,  insolvency  or  reorganization  proceeding  in  respect of the
     Borrower  or any other  Person  obligated  in respect  of any  Subordinated
     Indebtedness.

(c)  All existing or future  Subordinated  Indebtedness  owed to each Grantor is
     hereby assigned to the Administrative Agent by such Grantor as security for
     the Secured  Obligations  and, if  requested  by the  Administrative  Agent
     during the  continuance  of any Event of Default,  shall be  collected  and
     received by each such Grantor as trustee for the  Administrative  Agent and
     the Lenders and paid over to the  Administrative  Agent,  on account of the
     Secured  Obligations,  as the  Administrative  Agent may elect, but without
     reducing or affecting in any manner the  liability of any Grantor under the
     other provisions of this Agreement.  All notes now or hereafter  evidencing
     Subordinated  Indebtedness  shall be  marked  with a legend  that  they are
     subject to the Lien created by, and the other provisions of, this Agreement
     and, if the  Administrative  Agent so  requests,  shall be delivered to the
     Administrative Agent,  endorsed in blank. In addition,  each Grantor shall,
     upon request, provide the Administrative Agent with access to and copies of
     such Grantor's  records that pertain to the  Subordinated  Indebtedness and
     shall  execute such  instruments  as may be required by the  Administrative
     Agent to enable it to enforce all claims of such Grantor in respect of such
     Subordinated  Indebtedness and to collect all dividends,  payments or other
     disbursements that may be made on account thereof. For such purposes,  each
     Grantor hereby  irrevocably  authorizes the  Administrative  Agent,  in its
     discretion,  to make and  present  for or on  behalf of such  Grantor  such
     proofs  of  claim  on  account   of   Subordinated   Indebtedness   as  the
     Administrative  Agent may deem expedient or proper,  to vote such claims in
     any bankruptcy,  insolvency or  reorganization  proceeding,  to receive and
     collect  any  and all  dividends,  payments  or  other  disbursements  made
     thereon,  in whatever form, and to apply such dividends,  payments or other
     disbursements to the Secured  Obligations,  as the Administrative Agent may
     elect.

(d)  Each Grantor hereby  acknowledges  and agrees that,  until the  Commitments
     have been terminated and all of the  Obligations  have been paid in full in
     cash, under no  circumstances  shall it be entitled to be subrogated to any
     rights of any  Beneficiary  in respect of the  Obligations  performed by it
     hereunder or otherwise,  and each Grantor hereby  expressly and irrevocably
     waives,  until  the  Commitments  have  been  terminated  and  all  of  the
     Obligations  have been paid in full in cash,  (i) each and every such right
     of  subrogation  and any claims,  reimbursements,  right or right of action
     relating  thereto  (howsoever  arising),  and (ii) each and every  right to
     contribution,  indemnification,  set-off or reimbursement, whether from the
     Borrower or any other  Person now or  hereafter  primarily  or  secondarily
     liable for any of the  Obligations,  and  whether  arising by  contract  or
     operation  of law or  otherwise  by  reason  of such  Grantor's  execution,
     delivery or performance of this Agreement.

Section 7. Financing Statements.

     At the time of execution of this  Agreement,  each Grantor shall furnish to
the  Administrative  Agent properly executed financing  statements,  registrar's
certificates, amendments and assignments as prescribed by the Uniform Commercial
Code as presently in effect in the states where the  Collateral  is located and,
insofar as a particular  Grantor is  concerned,  in the state where it maintains
any office.  All such statements shall be prepared in form and number sufficient
for filing wherever  required with respect to the Collateral,  in order that the
Administrative Agent, for the benefit of the Secured Parties,  shall have a duly
perfected  security  interest  of  record  in the  Collateral,  to the  extent a
security  interest in such  Collateral  can be  perfected  by filing a financing
statement,   following  the  filing  of  such  financing   statements  with  the
appropriate local and state governmental authorities,  subject only to Permitted
Liens.

Section 8. Further Assurances.

     Each  Grantor  shall,  from time to time,  at the expense of such  Grantor,
promptly execute and deliver all further instruments and documents, and take all
further  action,  that may be necessary  or  reasonably  desirable,  or that the
Secured Party may reasonably  request,  in order to perfect and protect any Lien
granted or purported to be granted by such  Grantor  under this  Agreement or to
enable the  Secured  Party to  exercise  and  enforce  its  rights and  remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing,  such Grantor shall:  (i) at the request of the Secured  Party,  mark
conspicuously each document and agreement  included in the Collateral,  and each
of its  records  pertaining  to the  Collateral,  with a  legend,  in  form  and
substance satisfactory to the Secured Party,  indicating that such Collateral is
subject to the Lien granted hereby; (ii) if any Collateral shall be, or shall be
evidenced by, a promissory  note or other  instrument or chattel paper,  deliver
such item to the Secured  Party duly endorsed and  accompanied  by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Secured Party;  and (iii) execute and file or record,  as  applicable,  such
financing statements,  amendments thereto,  continuation statements,  agreements
granting control to the Secured Party over all or any portion of the Collateral,
and such other instruments or notices,  as may be necessary or desirable,  or as
the Secured Party may  reasonably  request from time to time in order to perfect
and preserve the Lien granted or purported to be granted hereby, all in form and
substance  reasonably  satisfactory  to the Secured  Party.  Each Grantor hereby
authorizes  the Secured  Party,  where  permitted by Law, to file any  financing
statement,  amendment thereto, or continuation statement, without such Grantor's
signature  thereon.  Each Grantor  hereby  irrevocably  makes,  constitutes  and
appoints the Secured Party (and all Persons  designated by the Secured Party for
that purpose) such Grantor's true and lawful  attorney-in-fact  to sign the name
of such  Grantor  on any  financing  statement  or other  writing  necessary  or
requested  by  the  Secured  Party  to  perfect  its  Lien  on or in  any of the
Collateral or to maintain the perfection thereof.

(a)  Each  Grantor  shall  furnish to the  Secured  Party from time to time such
     statements and schedules further identifying and describing the Collateral,
     and such other reports in connection  with the  Collateral,  as the Secured
     Party may reasonably  request,  all in reasonable detail.  Without limiting
     the  generality of the foregoing,  each Grantor  shall,  from time to time,
     execute and deliver to the  Secured  Party,  in such form and manner as the
     Secured  Party may  reasonably  require,  solely  for the  Secured  Party's
     convenience in maintaining  records of the  Collateral,  such  confirmatory
     schedules  of  Accounts  Receivable,  and such  other  appropriate  reports
     designating,  identifying  and describing the Accounts  Receivable,  as the
     Secured Party may reasonably request. In addition, upon the Secured Party's
     request,  each  Grantor  shall  provide  the  Secured  Party with copies of
     agreements  with, or purchase  orders from,  such Grantor's  customers,  of
     invoices to  customers  and proof of  shipment  or delivery  and such other
     documentation and information relating to the Accounts Receivable and other
     Collateral as the Secured Party may from time to time  reasonably  request.
     Failure to provide the Secured Party with any of the foregoing  shall in no
     way affect,  diminish,  modify or otherwise  limit the Lien granted herein.
     Each Grantor hereby authorizes the Secured Party to regard its printed name
     or rubber  stamp  signature  on  assignment  schedules  or  invoices as the
     equivalent of a manual signature by an authorized  officer or agent of such
     Grantor.

(b)  Each Grantor agrees to maintain such books and records  regarding  Accounts
     Receivable  and the other  Collateral as the Secured  Party may  reasonably
     require, and agrees that the books and records of such Grantor will reflect
     the  Secured  Party's  Liens on and in the  Accounts  Receivable  and other
     Collateral.  All of the books and records of each  Grantor,  including  any
     records  handled or  maintained  for each such Grantor by any other Person,
     shall be made  available to the Secured Party and to any Lender,  or to any
     of its or their  representatives,  during  normal  business  hours and upon
     reasonable  notice.  No Grantor  shall (i) change the location of its chief
     executive  office/chief place of business from that specified on Schedule I
     or remove its books and records from the location  specified on Schedule I,
     (ii)  change  its name  (including  the  adoption  of any new trade  name),
     jurisdiction of incorporation,  identity or corporate  structure,  or (iii)
     change the  location of any other  Collateral  to a location  not listed on
     Schedule  I,  unless,  in any such case,  it shall have  provided  at least
     thirty (30) days'  prior  written  notice to the Secured  Party of any such
     change.  Each Grantor  shall from time to time notify the Secured  Party of
     each  location  at which any  portion of the  Collateral  or such books and
     records  are to be  kept  for  temporary  processing,  storage  or  similar
     purposes.  No action  requiring  notice to the  Secured  Party  under  this
     paragraph shall be effected until such filings and other measures as may be
     required under applicable law to continue  uninterrupted the perfected Lien
     of the Secured Party on and in the Collateral  affected  thereby shall have
     been taken,  and until the Secured  Party shall have received such opinions
     of counsel with respect thereto as it may have reasonably requested.

(c)  Each Grantor shall defend the Collateral  against all claims and demands of
     all Persons  (other than the Secured Party and holders of Permitted  Liens)
     claiming an interest therein.  Each Grantor shall pay promptly when due all
     property and other taxes,  assessments and  governmental  charges or levies
     imposed upon,  and all claims  (including  claims for labor,  materials and
     supplies)  against,  the  Collateral,  except to the  extent  that (i) such
     Grantor is, in good faith and by  appropriate  proceedings,  contesting the
     validity thereof and (ii) the Collateral that is the subject thereof is not
     in imminent risk of seizure, levy, sale, execution or other process.

(d)  Each Grantor  confirms to the Secured  Party that any and all taxes or fees
     relating to its  business,  including,  but not limited to, its sales,  the
     Accounts   Receivable  and  all  goods  relating  thereto,   are  its  sole
     responsibility  and shall be paid by such Grantor when due and that none of
     said taxes or fees represent a Lien on the  Collateral.  Each Grantor shall
     maintain  its  status  as a  validly  existing  corporation  (or,  if not a
     corporation  on the date of this  Agreement,  as such  other  kind of legal
     entity as is specified  in Schedule  I), and shall  remain  qualified to do
     business  and in good  standing  in all states and other  jurisdictions  in
     which the  failure to be so  qualified  and in good  standing  would have a
     Material Adverse Effect or a material adverse effect on the ability of such
     Grantor to enforce  collection of Accounts  Receivable  due from  customers
     residing in such locations.

(e)  Upon the occurrence and during the continuation of any Event of Default, if
     so  requested  by the  Secured  Party,  each  Grantor  shall  set aside all
     returned, reclaimed or repossessed merchandise or goods, mark them with the
     Secured  Party's  name and hold them for the  Secured  Party's  account  as
     owner.

(f)  Each Grantor agrees that all Collateral  consisting of tangible property is
     now and shall remain personal property, notwithstanding the manner in which
     such  Collateral  or any part thereof  shall now or hereafter be affixed or
     annexed to real estate.  Each  Grantor  shall use  commercially  reasonable
     efforts to obtain and deliver to the Secured Party such  instruments as may
     reasonably be requested by the Secured  Party  pursuant to which any Person
     with an  interest  in any real  property  upon which all or any part of the
     tangible  Collateral  is now or may  hereafter  be located  consents to the
     Liens  created  hereby,  disclaims  any  Lien on or other  interest  in the
     tangible  Collateral,  waives  in favor of the  Secured  Party all right to
     distrain or levy upon such  Collateral for rent or other payments due or to
     become due to such Person,  and  authorizes the Secured Party to enter upon
     the relevant premises at any time to remove such Collateral.

(g)  If any of the property of a Grantor identified in Schedule IV ceases at any
     time to be subject to a Permitted  Lien,  whether  because the  obligations
     secured thereby are paid or otherwise  performed or discharged,  or for any
     other  reason,  such  Grantor  shall give the  Administrative  Agent prompt
     notice of the  circumstances,  identifying  the relevant  item of property.
     Such Grantor shall also promptly  execute and deliver such documents as the
     Administrative  Agent may  request to  confirm  that the  relevant  item of
     property has ceased to be Excluded Property hereunder and is subject to the
     negative  covenant  in Section  6.4 of the Credit  Agreement.  A  Grantor's
     failure  to do so will not,  however,  alter the fact that any such item of
     property will automatically cease to be Excluded Property when it ceases to
     secure a Permitted Lien.

Section 9. Actions Affecting the Collateral

(a)  . (a) Except with the Secured Party's prior written consent or as otherwise
     expressly  permitted in the Credit  Agreement,  each Grantor agrees that it
     shall not sell or otherwise dispose of any Collateral, except for Inventory
     sold in accordance with Section 9(b).

(b)  Each  Grantor  shall  safeguard,  protect  and hold all  Inventory  for the
     Secured  Party's  account  and make no  disposition  thereof  except in the
     regular course of the business of such Grantor as herein  provided.  Unless
     the Secured Party has given a Grantor  notice to the contrary,  as provided
     for below,  any  Inventory  may be sold and  shipped by any  Grantor to its
     customers  in the  ordinary  course  of such  Grantor's  business,  on open
     account and on terms  generally  extended by such Grantor to its customers.
     The  Secured   Party  shall  have  the  right  to  withdraw  the  foregoing
     authorization   at  any  time  following  the  occurrence  and  during  the
     continuation of an Event of Default,  in which event no further disposition
     shall be made of the Inventory by any Grantor  without the Secured  Party's
     prior written approval.  Upon the sale,  exchange,  or other disposition of
     Inventory,  the Lien provided for herein shall, without break in continuity
     and  without  further  formality  or act,  continue  in, and attach to, all
     proceeds  thereof,  including  any  instruments  for the  payment of money,
     Accounts  Receivable,   contract  rights,   documents  of  title,  shipping
     documents,  chattel paper and all other cash and non-cash  proceeds of such
     sale,  exchange  or  disposition.  As to any such sale,  exchange  or other
     disposition,  the  Secured  Party shall have all of the rights of an unpaid
     seller,   including   stoppage  in  transit,   replevin,   rescission   and
     reclamation.

(c)  Each Grantor  shall take all  necessary  action to ensure that,  except for
     Permitted  Liens,  such  Grantor  is (or,  at all  times  after  additional
     Collateral is acquired by it, will be) the absolute owner of the Collateral
     other than  Inventory  obtained on  consignment  or pursuant to any similar
     arrangement,  with full right to create a Lien  thereon,  free and clear of
     any and all claims or Liens in favor of others other than the Lien in favor
     of the Secured Party created hereby and other Permitted Liens. Each Grantor
     agrees that it shall not grant, create or permit to exist any Lien upon all
     or any portion of the Collateral,  or any proceeds thereof, in favor of any
     other Person other than the Secured Party or holders of the Permitted Liens
     and  the  rights  of  vendors  providing   Inventory  to  such  Grantor  on
     consignment  or  pursuant  to  a  similar  arrangement,  which  rights  are
     subordinate to the Lien of the Secured Party in such  Inventory;  and shall
     not create,  or permit to exist, any obligations,  other than those secured
     by the Permitted Liens, that are secured thereby.

(d)  Each  Grantor  shall permit the Secured  Party and the  Lenders,  or its or
     their respective  representatives,  to have access to the Inventory and the
     Equipment,  and other tangible Collateral for purposes of inspection during
     normal business hours and upon reasonable notice to such Grantor; and shall
     promptly notify the Secured Party in writing of any material loss or damage
     to the Inventory, Equipment or other Collateral.

(e)  No Grantor shall use, or permit any of the  Collateral in its possession or
     subject to its control to be used, for any unlawful purpose or in violation
     of any applicable Law or for hire.

(f)  Each Grantor agrees that it shall not (i) other than in the ordinary course
     of  business  as  generally  conducted  by such  Grantor  prior to the date
     hereof,  (A)  grant any  extension  of the time for  payment  of any of the
     Accounts, (B) compromise,  compound or settle any Account for less than the
     full amount thereof,  (C) release,  wholly or partially,  any Person liable
     for the payment  thereof,  or (D) allow any credit or  discount  whatsoever
     thereon;  or (ii) amend,  modify,  terminate or waive any  provision of any
     contract, license or agreement giving rise to an Account in any manner that
     could  reasonably be expected to materially  adversely  affect the value of
     such  contract,  license or  Account  as  Collateral.  Each  Grantor  shall
     exercise  promptly and diligently each and every material right it may have
     under any material contract, license or agreement giving rise to an Account
     (other  than any right of  termination),  in a manner  consistent  with the
     ordinary and customary  conduct of its  business;  and shall deliver to the
     Secured  Party,  upon request,  a copy of each material  demand,  notice or
     document  received  by it  relating  in any way to any  material  contract,
     license or agreement giving rise to an Account.

(g)  Subject to the other  provisions  of this  Agreement,  each  Grantor  shall
     continue to collect,  at its own expense,  all amounts due or to become due
     to such Grantor under the Collateral.  In connection with such collections,
     any Grantor may take (and, at the Secured  Party's  direction,  shall take)
     such action as such  Grantor or the  Secured  Party may deem  necessary  or
     advisable to enforce collection thereof. Upon the occurrence and during the
     continuation  of any  Event  of  Default,  (i)  all  amounts  and  proceeds
     (including  instruments)  received  by  each  Grantor  in  respect  of  the
     Collateral shall be received in trust for the benefit of the Secured Party,
     shall be  segregated  from  other  property  of such  Grantor  and shall be
     forthwith  paid over to the  Secured  Party in the same form as so received
     (with any necessary  endorsement) to be held as Collateral or to be applied
     as provided by Section 14(e), as determined by the Secured Party.

Section 10. Insurance

(a)  (a) Each Grantor shall, at its own expense, maintain insurance with respect
     to the  Collateral  in such amounts,  against such risks,  in such form and
     with such insurers, as is commonly maintained by prudent Persons engaged in
     businesses  similar  to the  business  engaged  in by  such  Grantor  or as
     otherwise  may be  required  under the  Credit  Agreement.  Each  policy of
     liability  insurance  shall  provide for all losses to be paid on behalf of
     the Secured Party and the applicable Grantor as their respective  interests
     may appear;  and, if so  requested  by the  Secured  Party,  each policy of
     property damage  insurance shall provide for all losses to be paid directly
     to the Secured  Party.  Each such policy  shall in  addition:  (i) name the
     Secured Party as an insured party thereunder (without any representation or
     warranty by or  obligation  upon the  Secured  Party) as its  interest  may
     appear;  (ii) contain the agreement by the insurer that any loss thereunder
     shall be payable to the Secured Party notwithstanding any action,  inaction
     or breach of representation and warranty by the Grantor; (iii) provide that
     there  shall be no  recourse  against  the  Secured  Party for  payment  of
     premiums or other  amounts with respect  thereto;  and (iv) provide that at
     least  thirty  (30)  days'  prior   written   notice  of  amendment  to  or
     cancellation or lapse of such policy shall be given to the Secured Party by
     the insurer.  Each  Grantor  shall,  if so requested by the Secured  Party,
     deliver to the Secured  Party  original or  duplicate  policies of all such
     insurance  and, as often as the Secured  Party may  request,  a report of a
     reputable  insurance broker with respect to such insurance.  Further,  each
     Grantor  shall,  at the  request of the  Secured  Party,  duly  execute and
     deliver such  instruments of assignment of such  insurance  policies as the
     Secured  Party  may  reasonably  request  for  purposes  of  perfecting  or
     protecting  its interest  therein or with respect  thereto,  and cause each
     affected insurer to acknowledge notice of such assignment.

(b)  Amounts  payable  under any liability  insurance  maintained by any Grantor
     pursuant  to this  Section 10 may be paid  directly to the Person who shall
     have  incurred  liability  covered  by  such  insurance.  All  proceeds  of
     insurance  payable with respect to any loss involving  damage to or loss of
     any  Collateral  shall be paid  directly to the  Secured  Party and, in the
     Secured Party's  discretion,  applied to payment of the Secured Obligations
     in such order as the Secured Party may determine in its sole  discretion or
     held as Collateral  hereunder.  If, in the Secured Party's  discretion,  it
     elects to permit the use of all or any  portion of such  proceeds to repair
     or replace the affected  Collateral,  the applicable  Grantor shall make or
     cause  to be  made  the  necessary  repairs  to  or  replacements  of  such
     Collateral,  and,  upon receipt by the Secured  Party of invoices and other
     documentation,  in reasonable detail, evidencing such repair or replacement
     and the cost thereof,  the Secured Party shall release to such Grantor,  as
     reimbursement therefor (but only to the extent of the lesser of the cost of
     such repair or  replacement  and the amount of any such  proceeds  actually
     received by the Secured Party), the insurance proceeds paid with respect to
     such loss.

Section 11. The Secured Party  Appointed  Attorney-in-Fact.

     Each  Grantor  hereby  irrevocably  appoints  the  Secured  Party  as  such
Grantor's  attorney-in-fact,  with  full  power of  substitution  and with  full
authority in the place and stead of and in the name of such Grantor, the Secured
Party or otherwise,  to take any action and to execute any instrument,  that the
Secured Party 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 such  Grantor
     hereunder;

(b)  to obtain and adjust  insurance  required to be paid to the  Secured  Party
     pursuant to Section 10;

(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 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 in  connection  with clause (b) or (c) above,  and each such  Grantor
     waives notice of  presentment,  protest and  non-payment of any instrument,
     document or chattel paper so endorsed or assigned;

(e)  to file any claims,  take any action or institute any proceedings  that the
     Secured Party may deem  necessary or desirable for the collection of any of
     the  Collateral  or otherwise to enforce the rights of the Secured Party or
     the applicable Grantor with respect to any of the Collateral;

(f)  to sell,  transfer,  assign or otherwise  deal in or with the Collateral or
     the proceeds or avails  thereof,  as full and effectually as if the Secured
     Party were the absolute owner thereof;

(g)  to receive,  open and dispose of all mail  addressed to such Grantor and to
     notify  postal  authorities  to change the address for delivery  thereof to
     such address as the Secured Party may designate; and

(h)  to transmit to customers indebted on Accounts notice of the Secured Party's
     interest  therein  and to notify  customers  indebted  on  Accounts to make
     payment directly to the Secured Party for such Grantor's account.

     Each Grantor  hereby  ratifies  and approves all acts of the Secured  Party
taken  pursuant  to the  foregoing  appointment,  other than acts of the Secured
Party  constituting  gross  negligence  or willful  misconduct,  and the Secured
Party,  as such Grantor'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  Secured  Party'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.

     Each Grantor also  authorizes the Secured Party,  at any time and from time
to time, (i) to request from customers indebted on Accounts  Receivable,  in the
name of the  Secured  Party  or such  Grantor  or  that of the  Secured  Party's
designee,  information  concerning the amounts owing on the Accounts Receivable;
and  (ii) to  communicate  in its own  name  with  any  party  to any  contract,
agreement or instrument included in the Collateral with regard to the assignment
of such contract, agreement or instrument and other matters relating thereto.

Section 12. Secured Party May Perform.

     If any Grantor fails to perform any agreement contained herein, the Secured
Party may itself  perform,  or cause  performance  of, such  agreement,  and the
expenses of the Secured Party incurred in connection  therewith shall be payable
by such Grantor under Section 15(b).

Section 13. Secured Party's Duties.

     The powers  conferred on the Secured Party  hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the safe custody of any Collateral in its possession
and the accounting  for moneys  actually  received by it hereunder,  the Secured
Party  shall not have any duty as to any  Collateral  or as to the taking of any
necessary  steps to preserve  rights  against  prior parties or any other rights
pertaining to any Collateral.  Without limiting the generality of the foregoing,
the Secured  Party shall have no  obligation  to  ascertain  or to initiate  any
action with respect to or to inform the Grantor of maturity  dates,  conversion,
call or  exchange  rights,  offers to  purchase  the  Collateral  or any similar
matters,  notwithstanding the Secured Party's knowledge. The Secured Party shall
have no duty to  initiate  any action to protect  against the  possibility  of a
decline in the value of the Collateral.

Section 14. Events of Default; Remedies.

     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 Secured Party, the Secured Party shall have all
     the  rights  and  remedies  of a  secured  party on  default  under the UCC
     (whether  or not the UCC  applies to the  affected  Collateral)  or, to the
     extent required by applicable law, the Uniform Commercial Code as in effect
     in the  jurisdiction  where the  Secured  Party  enforces  such  rights and
     remedies,  and also may (i) require  each Grantor to, and each such Grantor
     hereby  agrees  that it shall at its  expense  and upon the  request of the
     Secured Party forthwith, assemble all or part of the Collateral as directed
     by the Secured Party and make it available to the Secured Party at a place,
     to be designated  by the Secured  Party,  that is reasonably  convenient to
     both  parties;  (ii)  enter the  premises  where any of the  Collateral  is
     located  and take and carry away all or any portion of the  Collateral,  by
     any of its  representatives,  with or without legal process,  to a place of
     storage;  and (iii)  without  notice  except as specified  below,  sell the
     Collateral  or any part thereof in one or more parcels at public or private
     sale,  at any of the Secured  Party's  offices or  elsewhere,  for cash, on
     credit or for  future  delivery  and upon such other  terms as the  Secured
     Party may deem commercially  reasonable,  without  assumption of any credit
     risk.  The Secured Party may, in its own name, or in the name of a designee
     or nominee,  buy the  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
     Secured Party out of the net proceeds of such sale.

(b)  Each  Grantor  agrees  that,  to the  extent  that  notice of sale shall be
     required  by law,  at least  ten (10)  business  days'  notice  to any such
     Grantor of the time and place of any  public or private  sale is to be made
     shall constitute  reasonable  notification.  The Secured Party shall not be
     obligated  to make any sale of  Collateral  regardless  of  notice  of sale
     having been given. The Secured Party may adjourn any public or private sale
     from time to time by announcement at the time and place fixed therefor, and
     such sale may, without further notice, be made at the time and place it was
     so  adjourned.  If sale of all or any  part  of the  Collateral  is made on
     credit or for future  delivery:  (i) the Collateral so sold may be retained
     by the  Secured  Party  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  Secured  Party in
     respect  of such  sale,  and (iii) the  Secured  Party  shall not incur any
     liability if any purchaser or purchasers  shall fail to take up and pay for
     the  Collateral so sold and, in case of any such failure,  such  Collateral
     may be sold again upon like notice.  Each  Grantor  agrees that any sale of
     the 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  Collateral
     shall be deemed to be commercially reasonable.

(c)  Immediately upon the occurrence of any Event of Default and so long as such
     Event of Default  is  continuing,  the  Secured  Party  may,  to the extent
     permitted by Law:  (i) remove from any  premises  where they may be located
     any and all documents,  instruments, files and records, and any receptacles
     or cabinets  containing same,  relating to the Accounts and other rights to
     payment of any  Grantor,  or the Secured  Party may use, at such  Grantor's
     expense,  any of  such  Grantor's  personnel,  supplies  or  space  at such
     Grantor's places of business or otherwise,  as may be necessary to properly
     administer  and control  the  Accounts  and other  rights of payment or the
     handling of collections and realizations  thereon;  and (ii) bring suit, in
     the name of such Grantor or the Secured Party, and generally shall have all
     other  rights   respecting  said  Accounts  or  other  rights  to  payment,
     including,  without limitation,  the right to accelerate or extend the time
     of  payment,  to  settle,  compromise  or  release  in whole or in part any
     amounts  owing  thereon and to issue credits in the name of such Grantor or
     the Secured Party.

(d)  Each Grantor  recognizes  that the Secured  Party may be unable to effect a
     public  sale of all or  part of the  Collateral  consisting  of  investment
     property 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.  Each Grantor  acknowledges  that the
     Secured Party 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  investment  property for their own account,
     for investment and not with a view to the  distribution  or resale thereof.
     Each  Grantor  agrees that  private  sales may be at prices and other terms
     less favorable to such Grantor than if such  investment  property were sold
     at a public sale and that the Secured  Party  shall have no  obligation  to
     delay the sale of any such portion of the Collateral for the period of time
     necessary to permit the issuer of such  investment  property to register or
     qualify such  investment  property,  even if such issuer would,  or should,
     proceed to register or qualify  such  investment  property for public sale.
     Each  Grantor   agrees  that  private   sales  made  under  the   foregoing
     circumstances  shall  be  deemed  to  have  been  made  in a  "commercially
     reasonable" manner.

(e)  All cash proceeds  received by the Secured Party in respect of any sale of,
     collection  from,  or  other  realization  upon  all  or  any  part  of the
     Collateral, and all payments made in respect of the Collateral and received
     by the Secured Party may, in the discretion of the Secured  Party,  be held
     by the Secured Party as collateral  for the Secured  Obligations  or may be
     applied  (after  payment to the Secured Party of the  reasonable  expenses,
     including  reasonable  attorneys' fees and expenses,  expert witnesses' and
     consultants'  reasonable fees and expenses, and other amounts payable under
     Section  15) at any time in whole or in part by the Secured  Party  against
     all or any part of the  Secured  Obligations  in such order as the  Secured
     Party shall elect,  in its sole  discretion.  Any surplus of such  payments
     held by the Secured Party and remaining after payment in full of all of the
     Secured  Obligations  shall be paid over to the  applicable  Grantor  or to
     whomsoever may lawfully be entitled to receive such surplus.

(f)  The  Secured  Party may use (and is hereby  granted a license  to use),  in
     connection with any assembly, preparation for disposition or disposition of
     the  Collateral,  any of the  trademarks,  copyrights,  patents,  technical
     processes,   trade  names,   service   marks  or  trade  styles  and  other
     intellectual  property used by any Grantor,  without  payment or additional
     compensation therefor.

(g)  For the purposes of determining  the rights of any purchaser of Collateral,
     recitals  contained  in any  conveyance  to any  purchaser at any sale made
     hereunder  shall  conclusively  establish  the  truth and  accuracy  of the
     matters therein stated,  including,  without limitation,  nonpayment of the
     Secured  Obligations  and  advertisement  and  conduct  of such sale in the
     manner  provided  herein;  and the Grantor hereby ratifies and confirms all
     legal acts that the Secured Party may do in carrying out the  provisions of
     this Agreement.  Any sale of the Collateral or any part thereof pursuant to
     the provisions of this Section 14 shall operate to divest all right, title,
     interest, claim and demand of the applicable Grantor in and to the property
     sold and shall be a perpetual  bar against such Grantor.  Nevertheless,  if
     requested  by the  Secured  Party so to do, the  Grantor  shall join in the
     execution,   acknowledgment   and  delivery  of  all  proper   conveyances,
     assignments  and  transfers  of the  property  so  sold.  It  shall  not be
     necessary   for  the   Secured   Party  to  have   physically   present  or
     constructively  in its  possession  any of the Collateral at any such sale,
     and the Secured Party shall deliver all of the Collateral under its control
     to the purchaser thereof at such sale on the date of sale and, if it should
     be  impossible  or  impracticable  then  to  take  actual  delivery  of the
     Collateral, the title and right of possession to that Collateral shall pass
     to the purchaser at such sale as completely as if such  Collateral had been
     actually present and delivered.

(h)  NCM hereby authorizes and empowers the Secured Party (personally or through
     an agent),  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 Secured  Party were the  outright  owner
     thereof, and NCM irrevocably  constitutes and appoints the Secured Party as
     the proxy and attorney-in-fact of NCM, with full power of substitution,  to
     do so;  provided,  however,  that the  Secured  Party 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.

Section 15. Indemnity and Expenses.

(a)  Each Grantor shall, upon demand, (a) pay or reimburse the Secured Party 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,  the other Loan Documents to
     which  such  Grantor  is a  party  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 Secured
     Party,  (b) pay or reimburse  the Secured Party and each Lender for all its
     costs  and  expenses   incurred  in  connection  with  the  enforcement  or
     preservation  of any  rights  under  this  Agreement  and  the  other  Loan
     Documents to which such Grantor is or becomes a party,  including,  without
     limitation,  the fees and disbursements of counsel to the Secured Party and
     each Lender, and (c) pay, and indemnify and hold harmless the Secured Party
     and each Lender 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 or any such other Loan Document and (d) pay,
     and  indemnify  and  hold  harmless  the  Secured  Party  and  each  Lender
     (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 and such other Loan  Documents,  (all the
     foregoing in this clause (d), collectively, the "indemnified liabilities");
     provided that no Grantor shall have any obligation hereunder to the Secured
     Party or any Lender with respect to  indemnified  liabilities  arising from
     the gross  negligence  or willful  misconduct  of the Secured Party or that
     Lender.  The  agreements in this Section 15 shall survive  repayment of the
     Secured Obligations hereunder.

Section 16. Assignment.

     No Grantor  shall  pledge,  assign or otherwise  transfer any or all of its
rights,  obligations or duties hereunder,  except with the prior written consent
of the Secured Party. This Agreement (a) shall be binding in accordance with and
to the extent of its terms upon each Grantor 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 Secured Party  hereunder,  to the benefit of the Secured
Party  and each  Lender  and its and  their  respective  successors,  endorsees,
transferees  and assigns.  Without  limiting the generality of clause (b) of the
immediately  preceding  sentence,  the  Secured  Party may  assign or  otherwise
transfer its rights under this Agreement to another Person in connection with an
assignment or transfer of its rights as Administrative  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 Secured
Party herein or otherwise.

Section 17. Notices etc.

     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:

          (i)  if to a Grantor, at:

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

          (ii) if to the Administrative Agent at:

                  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

          (iii)if to any  Lender:  To it,  care of and at the  address  of,  the
               Administrative  Agent  specified  above, or to such other address
               for notices as such Person may have delivered to the party giving
               the notice in accordance  with this Section 17; provided that any
               notice,  request or demand to or upon the Secured Party shall not
               be effective until received.

Section 18. Continuing Obligations.

(a)  The  obligations  of each Grantor under the Guaranty  shall not be reduced,
     limited,  impaired,  discharged,  deferred,  suspended or terminated by any
     proceeding or action,  voluntary or involuntary,  involving the bankruptcy,
     insolvency, receivership, reorganization, marshalling of assets, assignment
     for the benefit of creditors,  composition  with  creditors,  readjustment,
     liquidation  or  arrangement  of the  Borrower or any other  Grantor or any
     similar proceedings or actions, or by any defense the Borrower or any other
     Grantor may have by reason of the order, decree or decision of any court or
     administrative  body resulting from any such proceeding or action.  Without
     limiting the generality of the  foregoing,  the Grantor's  liability  shall
     extend to all amounts and  obligations  that constitute the Obligations and
     would be owed by the Borrower, but for the fact that they are unenforceable
     or not allowable due to the existence of any such proceeding or action.

(b)  This  Agreement  shall  create  a  continuing   security  interest  in  the
     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 the  termination of the  Commitments and the payment and
     performance  in full of the Secured  Obligations,  the Lien created by this
     Agreement shall  terminate.  Upon any such  termination,  the Secured Party
     shall, at such Grantor's  expense,  execute and deliver to any Grantor such
     documents,  and take such other  acts,  as such  Grantor  shall  reasonably
     request to evidence, or give effect to, such termination.

Section 19. Limitation on Grantor Liability.

     Each Grantor and (by their  acceptance  of the benefits of this  Agreement)
the  Administrative  Agent and each of the Lenders hereby (i) confirm that it is
the  intention of such Grantor and the  Beneficiaries  that this  Agreement  not
constitute a fraudulent  transfer or conveyance  for purposes of the  Bankruptcy
Code, the Uniform Fraudulent  Conveyance Act or Uniform Fraudulent Transfer Act,
as in  effect  in any  jurisdiction,  or any  similar  Law (any  such  event,  a
"Fraudulent  Transfer");   and  (ii)  to  effectuate  the  foregoing  intention,
irrevocably  agree that such  Grantor's  liability  hereunder  in respect of the
Obligations shall be limited to such amount as will not, after giving effect (to
the extent relevant under applicable Law) to (A) such maximum  liability and all
other liabilities of such Grantor (contingent or otherwise),  and (B) all rights
to contribution,  indemnification,  set-off or  reimbursement,  whether from the
Borrower or any other Person,  and whether arising by contract,  by operation of
law or otherwise by reason of such Grantor's execution,  delivery or performance
of  this  Agreement,   result  in  such  Grantor's  obligations  constituting  a
Fraudulent Transfer.

Section 20. Certain Waivers.

(a)  Each Grantor consents to any extension or waiver of any Secured Obligation.
     The Secured  Party shall have no duty with respect to the  preservation  or
     protection of the Collateral or any income thereof or the  preservation  or
     protection of any rights  against other parties with respect  thereto.  The
     Secured  Party may  exercise any rights it may have  hereunder  against any
     Grantor or the Collateral, after having given notice to any such Grantor 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 Collateral or
     the Guaranty of each Grantor or by the  guarantee,  endorsement,  assets or
     property of any other  Person,  then the Secured Party shall have the right
     in its sole  discretion  to  determine  which  rights,  security,  Liens or
     remedies  the  Secured  Party  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
     Secured Party's rights hereunder.

(b)  Each Grantor hereby  unconditionally  waives: (i) promptness and diligence;
     (ii)  notice  of or  proof  of  reliance  by the  Beneficiaries  upon  this
     Agreement,  including the Guaranty of such  Grantor,  or acceptance of this
     Agreement  and  such  Guaranty;  (iii)  notice  of  the  incurrence  of any
     Obligation  by the  Borrower or the  renewal,  extension  or accrual of any
     Obligation  or of any  circumstances  affecting  the  Borrower's  financial
     condition or ability to perform the Obligations; (iv) notice of any actions
     taken by the  Beneficiaries  or the  Borrower or any other Person under any
     Loan Document or any other agreement or instrument  relating  thereto;  (v)
     all other notices, demands and protests, and all other formalities of every
     kind in  connection  with  the  enforcement  of the  Obligations  or of the
     obligations of such Grantor or any other Grantor hereunder, the omission of
     or delay in which,  but for the  provisions  of this Section  20(b),  might
     constitute grounds for relieving such Grantor of its obligations hereunder;
     (vi) any requirement that the  Beneficiaries  protect,  secure,  perfect or
     insure any Lien or any property  subject  thereto,  or exhaust any right or
     take any action against the Borrower or any other Person or any collateral;
     and (vii) each other circumstance, other than payment of the Obligations in
     full,  that might  otherwise  result in a discharge or  exoneration  of, or
     constitute a defense to, such Grantor's obligations hereunder.

Section 21. 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  PROVIDED FOR HEREUNDER,  IN RESPECT OF
ANY PARTICULAR  COLLATERAL IS GOVERNED BY THE LAWS OF A JURISDICTION  OTHER THAN
THE STATE OF NEW YORK.

Section 22. Voting Rights.

     During  the term of this  Agreement,  and so long as no Default or Event of
Default has occurred and is continuing, NCM shall be entitled to exercise all of
its voting and other  consensual  rights  pertaining to the Pledged Stock or any
part thereof;  provided that,  without the prior written  consent of the Secured
Party (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 NCM, NCM
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 NCM's  interest in any Company;  (v) to
permit any change in the directors of any Company;  (vi) to admit any additional
shareholder to any Company; (vii) to permit any additional shares of the Capital
Stock of any  Company  to be  issued;  (viii) to alter the terms of any  surplus
notes issued by any Company or waive any of their conditions, or (ix) to take or
approve  any action  that could  reasonably  expected  to  adversely  affect the
Secured Party's security hereunder. To this end, the Secured Party shall execute
and  deliver to NCM all proxies and other  instruments  that NCM may  reasonably
request.  Upon the  occurrence  and during the  continuation  of a Default or an
Event of Default,  all rights of NCM to exercise the voting and other consensual
rights that NCM would otherwise be entitled to exercise pursuant to this Section
22 shall cease, and all such rights shall thereupon become vested in the Secured
Party, who shall thereupon have the sole right to exercise such voting and other
consensual rights.

Section 23. Protection of Pledged Stock.

     NCM shall pay all taxes,  charges and assessments against the Pledged Stock
and do all acts  necessary and  appropriate to preserve and maintain the Pledged
Stock  free of any Liens  other  than  Permitted  Liens.  Without  limiting  the
generality  of the  foregoing,  NCM shall not grant a Lien on or in the  Pledged
Stock to any other Person without the prior written consent of the Secured Party
thereto.  Upon the failure of NCM to comply with any of the foregoing provisions
of this  Section  23, the  Secured  Party may make such  payments  and take such
actions on account  thereof  as the  Secured  Party,  in its  discretion,  deems
necessary or appropriate. NCM shall reimburse the Secured Party immediately upon
demand for any and all such  payments and related  costs so  incurred,  together
with interest thereon,  from the date incurred by NCM 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 24. Miscellaneous.

(a)  Each Grantor  shall make each payment under its Guaranty in lawful money of
     the United  States of America  and in  immediately  available  funds to the
     Lenders at the  Administrative  Agent's address  specified below or to such
     other address as the Administrative  Agent may designate for itself by like
     notice:

     Account for payments:  Citibank, N.A.
                            ABA #021000089
                            Account:  Credit Suisse First Boston-Distressed
                            Account #4080-4716
                            REF:  Ascent Term Loan

                            Attn: Adair Young, CSFB, 212-322-1365

(b)  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.

(c)  The failure of the Secured Party or any  Beneficiary to exercise,  or delay
     in exercising, any right, remedy, power or privilege hereunder or under any
     other Grantor Document or agreement or instrument  relating thereto,  shall
     not operate as a waiver thereof,  nor shall any single or partial  exercise
     by the Secured Party of any right,  remedy, power or privilege hereunder or
     under any other  Grantor  Document  or  agreement  or  instrument  relating
     thereto 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 Secured Party may have by virtue of any other  instrument or
     agreement heretofore,  contemporaneously  herewith or hereafter executed by
     any Grantor or any other  Person or by  applicable  Law or  otherwise.  All
     rights,  remedies,  powers and  privileges  of the  Secured  Party shall be
     cumulative and may be exercised singly or concurrently.

(d)  The  representations,  covenants  and  agreements  of each  Grantor  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.

(e)  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 any party  unless in writing and
     signed by a duly authorized representative thereof.

(f)  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.

(g)  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  Grantor  Document  or  other  agreement,  instrument  or
     document, shall include such Grantor 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,  Schedules and the like, unless otherwise stated,
     are  references  to  Sections  or  paragraphs  of, 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.

(h)  Each Grantor  acknowledges that it has sought to become,  and will continue
     to be familiar with the Credit  Agreement to the extent it deems  necessary
     in  connection  with its  execution  and  delivery  of this  Agreement  and
     performance of its obligations hereunder. The Secured Party and the Lenders
     will have no  obligation to inform the Grantors of amendments to the Credit
     Agreement,  the making or repayment of Loans thereunder or any other matter
     relating  thereto.  To the extent it deems  necessary,  each  Grantor  will
     verify all such matters through the Borrower.

Section 25. Waiver of Trial by Jury.

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

Section 26. Jurisdiction.

     Each of (i) each  Grantor  and (ii) the  Secured  Party  and  (iii)(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  Grantor
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.  Each Grantor  agrees that service on it 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 Grantor, at the address for such Grantor specified in Section 17 or at such
other  address  of such  Grantor  of which the  Secured  Party  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, each of the parties hereto has caused this Agreement to
be duly executed and delivered by its officer  thereunto  duly  authorized as of
the date first above written.

GRANTORS:                           FOUNDATION FINANCIAL SERVICES, INC.

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

                                    NATIONALCARE(R)MARKETING, INC.

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

                                    LIFESTYLES MARKETING  GROUP, INC.

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

                                    PRECISION DIALING SERVICES, INC.

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

                                    SENIOR BENEFITS, L.L.C.

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

                                    WESTBRIDGE PRINTING SERVICES, INC.

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

                        [Guaranty and Security Agreement]

<PAGE>

SECURED PARTY:             CREDIT SUISSE FIRST BOSTON

                                   MANAGEMENT CORPORATION

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

LENDERS:                   CREDIT SUISSE FIRST BOSTON

                                   MANAGEMENT CORPORATION

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

                        [Guaranty and Security Agreement]

<PAGE>

                                                                         ANNEX 1
                                          to the Guaranty and Security Agreement

                                  Pledged Stock

Company                 No. of Shares         Class of Stock    Certificate Nos.

LifeStyles Marketing       100                   Common                      15
Group, Inc.

Precision Dialing            1                   Common                       5
Services, Inc.

Restrictions on Transfer*

Pursuant to the Receivables  Financing  Agreements,  the consent of LaSalle Bank
National Association is required for the pledge of the Pledged Stock and Pledged
Membership  Interests hereunder by NCM and the related pledge hereunder by it of
interests in any other capital stock or similar  interests in any  Subsidiary of
the Borrower.

<PAGE>

                                                                      SCHEDULE I
                                          to the Guaranty and Security Agreement

     Grantor Places of Business and Organization and Locations of Collateral
     -----------------------------------------------------------------------

        A. Jurisdiction of Organization

1.  Foundation Financial Services, Inc. - Nevada

2.  LifeStyles Marketing Group, Inc. - Delaware

3.  NationalCare(R) Marketing, Inc. - Delaware

4.  Precision Dialing Services, Inc. - Delaware

5.  Senior Benefits, L.L.C. - Arizona

6.  Westbridge Printing Services, Inc. - Delaware

        B.(1) Chief Executive Office

1. Foundation Financial Services, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

2. LifeStyles Marketing Group, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

3. NationalCare(R)Marketing, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

4. Precision Dialing Services, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

5. Senior Benefits, L.L.C.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

6. Westbridge Printing Services, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

        (2) Chief Place of Business

     For each Grantor other than the following, the address set out in B(1). For
the following , the addresses indicated:

1. Precision Dialing Services, Inc.
   9550 Forest Lane, Suite 715
   Dallas, Texas 75243

2. Westbridge Printing Services, Inc.
   7333 Jack Newell Blvd. North
   Fort Worth, Texas 76118

        C. Locations of Inventory

1. Foundation Financial Services, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

2. LifeStyles Marketing Group, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

3. NationalCare(R)Marketing, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

4. Precision Dialing Services, Inc.
   9550 Forest Lane, Suite 715
   Dallas, Texas 75243

5. Senior Benefits, L.L.C.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

6. Westbridge Printing Services, Inc.
   7333 Jack Newell Blvd. North
   Fort Worth, Texas 76118

        D. Locations of Equipment

1. Foundation Financial Services, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

2. LifeStyles Marketing Group, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

3. NationalCare(R)Marketing, Inc.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

4. Precision Dialing Services, Inc.
   9550 Forest Lane, Suite 715
   Dallas, Texas 75243

5. Senior Benefits, L.L.C.
   110 W. 7th St., Suite 300
   Fort Worth, Texas 76102

6. Westbridge Printing Services, Inc.
   7333 Jack Newell Blvd. North
   Fort Worth, Texas 76118

        E. Other Places of Business

None.

        F. Taxpayer I.D. No.:

1. Foundation Financial Services, Inc. - 75-2193766

2. LifeStyles Marketing Group, Inc. - 75-2225187

3. NationalCare(R)Marketing, Inc. - 75-2192748

4. Precision Dialing Services, Inc. - 75-2225186

5. Senior Benefits, L.L.C. - 86-0739432

6. Westbridge Printing Services, Inc. - 75-2192750

<PAGE>

                                                                     SCHEDULE II
                                          to the Guaranty and Security Agreement

Part 1: Permitted Liens on Personal Property of Grantors*

Reference  is made to items 5 and 7 through  32 of  Schedule  3.23 of the Credit
Agreement.

For the avoidance of doubt, the Borrower and certain of its  Subsidiaries  have,
pursuant to the Receivables  Financing  Agreements and the Guaranty Agreement by
Ascent  Management  Inc.  referred  to in Item 4 of  Schedule  6.6 to the Credit
Agreement,  granted  security  interests  in  certain  assets  and  property  as
collateral for the  obligations of the Borrower and its  Subsidiaries to LaSalle
Bank National  Association,  all as described in such agreements.  Any assets or
property that are the subject of such security  interests and liens are excluded
as collateral under the Loan Documents.

Please see attached Lien Reports.

Part 2: Financing Statements relating to the Lien Created by this Agreement

                  Grantor                            Office of Filing

1. Foundation Financial Services, Inc.  Secretary of State of the State of Texas

2. LifeStyles Marketing Group, Inc.     Secretary of State of the State of Texas

3. NationalCare(R)Marketing, Inc.       Secretary of State of the State of Texas

4. Precision Dialing Services, Inc.     Secretary of State of the State of Texas

5. Senior Benefits, L.L.C.              Secretary of State of the State of Texas

6. Westbridge Printing Services, Inc.   Secretary of State of the State of Texas

<PAGE>

                                                                    SCHEDULE III
                                          to the Guaranty and Security Agreement

                                Required Consents

Reference is made to Section 3.4 of the Credit Agreement.

<PAGE>

                                                                     SCHEDULE IV
                                          to the Guaranty and Security Agreement

                                Excluded Property

Please see Lien Reports attached to Schedule II.PLEDGE AGREEMENT

                                     between

                             ASCENT ASSURANCE, INC.

                                   as Pledgor

                                       and

                CREDIT SUISSE FIRST BOSTON MANAGEMENT CORPORATION

                                   as Pledgee

                           Dated: As of April 17, 2001

<PAGE>
                                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

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