Document:

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                                                                    EXHIBIT 10.2

                            BORROWER PLEDGE AGREEMENT

                          dated as of December 16, 2002

                                     between

                          DELPHI FINANCIAL GROUP, INC.,

                                       and

                              BANK OF AMERICA, N.A.

                               as Collateral Agent

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                            BORROWER PLEDGE AGREEMENT

         THIS BORROWER PLEDGE AGREEMENT (this " Pledge Agreement"), dated as of
December 16, 2002, is made by and between DELPHI FINANCIAL GROUP, INC., a
Delaware corporation (herein, called the "Pledgor"), and Bank of America, N.A.
("Bank of America") as collateral agent for the Lenders (herein in such
capacity, together with any successors thereto in such capacity, called the
"Collateral Agent"). This Pledge Agreement is the Borrower Pledge Agreement
referred to in that certain Credit Agreement (as the same may from time to time
be amended or modified and in effect the "Credit Agreement"), dated as of
December 16, 2002, among the Pledgor, the Lenders who are or from time to time
become party thereto (the "Lenders"), the co-syndication agents for the Lenders
(in such capacity, the "Co-Agents") and Bank of America as Administrative Agent
and Collateral Agent for the Lenders.

                                    RECITALS

         WHEREAS, pursuant to the Credit Agreement, the Lenders have agreed to
make loans to the Borrower for the purposes described in the Credit Agreement;

         WHEREAS, the Pledgor is the owner of all of the stock listed on
Schedule 1 hereto, which consists of all of the outstanding capital stock of
each Subsidiary directly owned by the Pledgor;

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

                                    SECTION 1

                                   DEFINITIONS

         SECTION 1.1 Certain Defined Terms. As used in this Pledge Agreement,
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

         "Collateral" - see Section 2.

         "Collateral Agent" shall mean Bank of America.

         "Credit Agreement" - see Preamble.

         "Pledged Shares" - see Section 2.

         "Pledgor" - see Preamble.

         SECTION 1.2 Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement
(and in its preamble and recitals) have the meanings provided in the Credit
Agreement.

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                                    SECTION 2

                                     PLEDGE

         To secure the prompt and complete payment and performance of the
Liabilities, including, without limitation, the liabilities of the Pledgor
hereunder, the Pledgor hereby pledges, hypothecates, assigns, transfers, sets
over and delivers unto the Collateral Agent, for the benefit of the Lenders, and
hereby grants to the Collateral Agent, for the benefit of the Lenders, a
continuing security interest in the following (herein, collectively, called the
"Collateral"):

                  (a)      the shares of stock of the Subsidiaries listed on
         Schedule 1 hereto (herein called the "Pledged Shares") and the
         certificates representing or evidencing the Pledged Shares and all
         cash, securities, interest, dividends, rights 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 such Pledged
         Shares;

                  (b)      all additional shares of stock of the Subsidiaries
         from time to time acquired by the Pledgor in any manner including,
         without limitation, any uncertificated securities (which additional
         shares of stock and securities shall constitute a part of, and be,
         "Pledged Shares"), and, in the case of any and all uncertificated
         securities pledged hereunder, such uncertificated securities shall
         contain a notation of the security interest and the pledge granted to
         the Collateral Agent on the books and records of the Subsidiaries in
         the name of the Collateral Agent and, in the case of certificated
         securities, the certificates representing or evidencing such additional
         shares, and all cash, securities, interest, dividends, rights, notes,
         instruments and other property at any time and from time to time
         received, receivable or otherwise distributed in respect of or in
         exchange for any and all of such additional shares;

                  (c)      all other property hereafter delivered to the
         Collateral Agent by the Pledgor in substitution for or in addition to
         any of the foregoing, all certificates and instruments representing or
         evidencing such other property and in the case of uncertificated
         securities, all notations of the security interest hereafter delivered
         on the books and of the Subsidiaries in the name of the Collateral
         Agent, all cash, securities, interest, dividends, rights 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
         thereof; and

                  (d)      all proceeds, rents, issues, profits and returns of
         and from all of the foregoing;

TO HAVE AND TO HOLD the Collateral, together with all rights, titles, interests,
privileges and preferences appertaining or incidental thereto, unto the
Collateral Agent, its successors and assigns, forever, subject, however, to the
terms, covenants and conditions hereafter set forth.

         Subject to the terms of this Pledge Agreement, the Pledgor agrees to
deliver to the Collateral Agent promptly upon receipt and in the case of the
Pledged Shares in due form for transfer (i.e., endorsed in blank accompanied by
undated stock or bond powers executed in blank or registered on the books of the
Subsidiaries) and, subject to the provisions of Section 7 hereof, any Collateral
which may at any time or from time to time be in or come into possession or
control of the Pledgor; and prior to the delivery thereof to the Collateral
Agent, such Collateral

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shall be held by the Pledgor separate and apart from its other property and in
express trust for the Collateral Agent.

                                    SECTION 3

                         REPRESENTATIONS AND WARRANTIES

         SECTION 3.1 Pledged Shares. The Pledgor represents and warrants to the
Collateral Agent that:

                  (a)      The Pledged Shares are duly authorized, validly
         issued and are fully paid and non-assessable;

                  (b)      Except for liens, claims and rights of third parties
         arising solely through the acts of the Collateral Agent, the Collateral
         Agent has and (assuming the Collateral Agent maintains continuous
         possession of such Collateral) will continue to have at all times as
         security for the Liabilities a valid, first priority perfected security
         interest in the Collateral and the proceeds thereof free of all Liens,
         claims and rights of third parties whatsoever (other than Permitted
         Liens provided for in Section 8.01(b) of the Credit Agreement);

                  (c)      To the extent any Pledged Shares are evidenced by
         certificates, the Pledgor has delivered to the Collateral Agent for
         pledge under this Agreement on the date hereof, the certificates
         representing all the Pledged Shares which it owns;

                  (d)      The Pledged Shares represent all of the issued and
         outstanding capital stock of each Subsidiary owned by the Pledgor;

                  (e)      The Pledgor will, at all times, keep pledged to the
         Collateral Agent pursuant hereto all shares of each of the Subsidiaries
         owned by the Pledgor;

                  (f)      The Pledgor agrees to endorse and/or deliver to the
         Collateral Agent for pledge hereunder, promptly upon its obtaining
         thereof, any additional Collateral (other than cash dividends, interest
         and principal paid on such Collateral prior to the occurrence of a
         Default under Section 9.01(f) or (g) of the Credit Agreement or an
         Event of Default). As of the date of any such delivery of additional
         shares or certificates to the Collateral Agent, the Pledgor will
         represent and warrant that: (i) it owns such shares and certificates
         and the proceeds thereof free of all Liens, claims and rights of any
         other Person other than the Liens granted hereunder, (ii) it has good
         and marketable title to said shares and certificates and has the right
         to deliver, pledge, assign and transfer such shares or certificates to
         the Collateral Agent pursuant to this Pledge Agreement, (iii) the
         Collateral Agent has a valid, first priority perfected security
         interest in said shares and certificates and the proceeds thereof free
         of all Liens, claims and rights of third parties whatsoever (other than
         Permitted Liens provided for in Section 8.01(b) of the Credit
         Agreement) and (iv) it has pledged to the Collateral Agent, as the case
         may be, as at such date, all of the capital stock of each of the
         Subsidiaries owned by it;

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                  (g)      All documentary, stamp or other taxes or fees owing
         in connection with the issuance, transfer and/or pledge of the Pledged
         Shares have been paid and will hereafter be paid by the Pledgor as such
         become due and payable; and.

                  (h)      The information contained in Schedule 1 is true and
         accurate in all respects.

         SECTION 3.2 Collateral. The Pledgor further represents and warrants to
the Collateral Agent that it is the lawful owner of the Collateral existing on
the date hereof, free of all Liens, claims and rights of any other Person, other
than the Lien granted hereunder with full right to deliver, pledge, assign and
transfer such Collateral to the Collateral Agent as Collateral hereunder. The
pledge of the Collateral effected by this Pledge Agreement is effective to vest
in the Collateral Agent the rights of the Collateral Agent in the Collateral set
forth herein.

         SECTION 3.3 Organization, etc. The Pledgor additionally represents and
warrants to the Collateral Agent that:

                  (a)      It is a corporation duly organized, validly existing
         and in good standing under the laws of the State of Delaware;

                  (b)      The Subsidiaries are corporations duly organized,
         validly existing and in good standing under the laws of their state of
         incorporation;

                  (c)      The Pledgor and the Subsidiaries are duly qualified
         to transact business and are in good standing as foreign corporations
         authorized to do business in each jurisdiction where the nature of each
         of their businesses makes such qualification necessary or failure to so
         qualify could have a Material Adverse Effect;

                  (d)      The Pledgor has the corporate power to execute,
         deliver and perform this Pledge Agreement and such execution, delivery
         and performance have been duly authorized by all necessary corporate
         action (including, without limitation, shareholder approval, if
         necessary), has received or made all necessary governmental consents or
         approvals, licenses, authorizations, validations, filings, recordings,
         registrations or exemptions (if any shall be required), and the
         execution, delivery and performance hereof do not and will not
         contravene or conflict with any provision of law or of the corporate
         charter or by-laws of the Pledgor or of any agreement or instrument
         binding upon Pledgor or any of its property or result in the creation
         or imposition of or the obligation to create or impose any Lien (other
         than the Lien of the Collateral Agent hereunder); and

                  (e)      This Pledge Agreement is the legal, valid and binding
         obligation of the Pledgor, enforceable against the Pledgor in
         accordance with its terms.

         SECTION 3.4 Effectiveness. Each representation and warranty made or to
be made herein by the Pledgor shall be deemed remade as of and at the date of
each Loan made from time to time under or in connection with the Credit
Agreement with the same effect as if made contemporaneously with the making of
each such Loan, and as of and at the date of delivery of any additional
Collateral to the Collateral Agent.

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                                    SECTION 4

                                    COVENANTS

         So long as any of the Liabilities remain outstanding and the
Commitments have not been terminated, the Pledgor will, unless the Collateral
Agent and the Required Lenders shall otherwise consent in writing:

                  (a)      At its sole expense, promptly deliver to the
         Collateral Agent from time to time upon request of the Collateral Agent
         such undated stock powers and other documents, satisfactory in form and
         substance to the Collateral Agent, with respect to the Collateral as
         the Collateral Agent may reasonably request, to preserve and protect,
         and to enable the Collateral Agent to enforce, its rights and remedies
         hereunder;

                  (b)      Promptly endorse and/or deliver to the Collateral
         Agent, for pledge hereunder, any additional Collateral (other than cash
         dividends, interest and principal paid on such Collateral which the
         Pledgor is entitled to receive and retain pursuant to Section 7.1(a));

                  (c)      Not make or consent to any amendment or other
         modification or waiver with respect to any of the Collateral, or enter
         into any agreement or permit to exist any restriction with respect to
         any of the Collateral other than pursuant hereto;

                  (d)      Not take or fail to take any action which would in
         any manner impair the enforceability of the Collateral Agent's Lien and
         security interest in any of the Collateral;

                  (e)      Own and continue to own all Collateral free and clear
         of all Liens, security interests, encumbrances, claims, interests or
         rights of any other Person whatsoever (except for the pledge hereunder
         and the Lien created hereby and Permitted Liens provided for in Section
         8.01(b) of the Credit Agreement), have good and marketable title to all
         of the Collateral and have the right to pledge such Collateral and such
         Collateral will constitute all of the capital stock of the Subsidiaries
         owned by the Pledgor; and

                  (f)      Promptly cause each of its Subsidiaries, upon the
         issuance of any uncertificated securities, to note the Lien of the
         Collateral Agent in its books and records in the name of the Collateral
         Agent.

                                    SECTION 5

                               CARE OF COLLATERAL

         The Collateral Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Collateral if it takes such action for
that purpose as the Pledgor requests in writing, but failure of the Collateral
Agent to comply with any such request shall not of itself be deemed a failure to
exercise reasonable care, and no failure of the Collateral Agent to preserve or
protect any rights with respect to the Collateral against prior or other.
parties, or to do any act with respect to preservation of the Collateral not so
requested by the Pledgor, shall be deemed a failure to exercise reasonable care
in the custody or preservation of the Collateral.

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                                    SECTION 6

               CERTAIN RIGHTS REGARDING COLLATERAL AND LIABILITIES

         SECTION 6.1 Permitted Action. Subject to Section 6.3 and Section 7
hereof, the Collateral Agent may, from time to time after the occurrence of any
Default with respect to Section 9.01(f) or (g) of the Credit Agreement or an
Event of Default, in its sole discretion and without notice to the Pledgor:

                  (a)      transfer all or any part of the Collateral into the
         name of the Collateral Agent or its nominee, with or without disclosing
         that such Collateral is subject to the Lien and security interest
         hereunder;

                  (b)      notify the parties obligated on any of the Collateral
         to make payment to the Collateral Agent of any amounts due or to become
         due thereunder;

                  (c)      enforce collection of any of the Collateral by suit
         or otherwise;

                  (d)      surrender, release or exchange all or any part
         thereof, or compromise or extend or renew for any period (whether or
         not longer than the original period) any obligations of any nature of
         any party with respect thereto; and

                  (e)      take control of any proceeds of the Collateral.

         SECTION 6.2 Subject to the terms of the SIG Note Agreement and, with
respect to Sections 6.2(a) and 6.2(e), the SIG Pledge Agreement and the
Intercreditor Agreement, the Collateral Agent may, from time to time, in its
sole discretion and without notice to Pledgor, take any or all of the following
actions:

                  (a)      retain or obtain a Lien upon, or a security interest
         in, any property to secure payment and performance of any of the
         Liabilities or any obligation hereunder;

                  (b)      retain, obtain or release the primary or secondary
         obligation of any obligor or obligors, in addition to the Pledgor with
         respect to any of the Liabilities or any obligation hereunder;

                  (c)      create, extend or renew for any period (whether or
         not longer than the original period) or alter or exchange any of the
         Liabilities, or release or compromise any obligation of the Pledgor
         hereunder or any obligation of any nature of any other obligor with
         respect to any of the Liabilities or any obligation hereunder;

                  (d)      release or fail to perfect its Lien upon or security
         interest in, or impair, surrender, release or permit any substitution
         or exchange for, all or any part of any property securing any of the
         Liabilities or any obligation hereunder, or create, extend or renew for
         any period (whether or not longer than the original period) or release,
         compromise, alter or exchange any obligations of any nature of any
         obligor with respect to any such property; and

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                  (e)      upon the occurrence and during the continuance of a
         Default with respect to Section 9.01(f) or (g) of the Credit Agreement
         or an Event of Default, resort to the Collateral for payment of any of
         the Liabilities or any obligation hereunder, whether or not the
         Collateral Agent (i) shall have resorted to any other property securing
         any of the Liabilities or any obligation hereunder or (ii) shall have
         proceeded against any other obligor primarily or secondarily obligated
         with respect to any of the Liabilities or any obligation hereunder (all
         of the actions referred to in preceding clauses (i)and (ii) being
         hereby expressly waived by the Pledgor).

         SECTION 6.3 Voting Pledged Shares. The Collateral Agent shall have no
right to vote the Pledged Shares or other Collateral or give consents, waivers
or ratifications in respect thereof prior to the occurrence of a Default with
respect to Section 9.01(f) or (g) of the Credit Agreement or an Event of
Default. After the occurrence of a Default with respect to Section 9.01(f) or
(g) of the Credit Agreement or an Event of Default, the Pledgor shall have the
right to vote any and all of the Pledged Shares and other Collateral and give
consents, waivers and ratifications in respect thereof unless and until it
receives notice from the Collateral Agent that such right has been terminated.
The Pledgor agrees to deliver (properly endorsed when required) to the
Collateral Agent, after a Default with respect to Section 9.01(f) or (g) of the
Credit Agreement or an Event of Default shall have occurred, promptly upon
request of the Collateral Agent, such proxies and other documents as may be
necessary for the Collateral Agent to exercise the voting power with respect to
the Pledged Shares and other Collateral then or previously owned by the Pledgor.

                                    SECTION 7

                                 DIVIDENDS, ETC.

         SECTION 7.1 No Default. So long as no Default with respect to Section
9.01(f) or (g) of the Credit Agreement or Event of Default shall have occurred
and be continuing:

                  (a)      Subject to the provisions of the Credit Agreement,
         the Pledgor shall, notwithstanding anything contained herein to the
         contrary but subject to Section 7.2 hereof, be entitled to receive and
         retain or otherwise deal with any and all cash dividends, interest and
         principal on the Collateral which it is otherwise entitled to receive,
         but any and all securities and/or liquidating dividends, distributions
         in property, returns of capital or other distributions made on or in
         respect of the Collateral, whether resulting from a subdivision,
         combination, reclassification or conversion of the outstanding capital
         stock of any Subsidiary of Pledgor or other securities or received in
         exchange for the Collateral or any part thereof, or as a result of any
         merger, consolidation, acquisition or other exchange of assets to which
         any such Subsidiary may be a party or otherwise, and any and all cash
         and other property received in exchange for any Collateral shall be and
         become part of the Collateral pledged hereunder and, if received by the
         Pledgor, shall forthwith be delivered to the Collateral Agent or its
         designated nominee (accompanied, if appropriate, by proper instruments
         of assignment and/or undated stock or bond powers executed by the
         Pledgor in accordance with the Collateral Agent's instructions) to be
         held subject to the terms of this Pledge Agreement.

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                  (b)      If the Collateral or any part thereof shall have been
         registered in the name of the Collateral Agent or its sub-agent, the
         Collateral Agent shall execute and deliver (or cause to be executed and
         delivered) to the Pledgor all such dividend, interest and principal
         orders and other instruments as the Pledgor may request for the purpose
         of enabling the Pledgor to receive the dividends, interest, principal
         or other payments which it is authorized to receive and retain pursuant
         to clause (a) above.

         SECTION 7.2 Occurrence of Default. Upon the occurrence and during the
continuance of a Default with respect to Section 9.01(f) or (g) of the Credit
Agreement or an Event of Default, (a) all rights of the Pledgor pursuant to
Section 7.1 (a) hereof shall cease and the Collateral Agent shall have the sole
and exclusive right and authority to receive and retain the dividends (cash or
other), interest and principal which the Pledgor would otherwise be authorized
to retain and (b) all such dividends, interest and principal and all other
distributions and payments made on or in respect of the Collateral which may at
any time and from time to time be held by the Pledgor, shall, until delivery to
the Collateral Agent, be held by the Pledgor separate and apart from its other
property in trust for the Collateral Agent. Any and all money and other property
paid over to or received by the Collateral Agent pursuant to the provisions of
this Section 7.2 shall be retained by the Collateral Agent as additional
Collateral hereunder and be applied in accordance with the provisions hereof.

                                    SECTION 8

                                     DEFAULT

         SECTION 8.1 Occurrence of Default. Upon the occurrence and during the
continuance of a Default with respect to Section 9.01(f) or (g) of the Credit
Agreement or an Event of Default, and notwithstanding any provision contained
herein to the contrary, subject to the Applicable Insurance Code, the Collateral
Agent may exercise from time to time any rights and remedies available to it
under the Uniform Commercial Code as in effect from time to time in Illinois or
otherwise available to it, including, without limitation, sale, assignment, or
other disposal of the Collateral in exchange for cash or credit. If any
notification of intended disposition of any of the Collateral is required by
law, such notification, if mailed, shall be deemed reasonably and properly given
if mailed at least ten (10) days before such disposition, postage prepaid,
addressed to the Pledgor either at the address of the Pledgor shown below, or at
any other address of the Pledgor appearing on the records of the Collateral
Agent. Any proceeds of any disposition of Collateral shall be applied as
provided in Section 9 hereof. No rights and remedies of the Collateral Agent
expressed hereunder are intended to be exclusive of any other right or remedy,
but every such right or remedy shall be cumulative and shall be in addition to
all other rights and remedies herein conferred, or conferred upon the Collateral
Agent under any other agreement or instrument relating to any of the Liabilities
or security therefor or now or hereafter existing at law or in equity or by
statute. No delay on the part of the Collateral Agent in the exercise of any
right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Collateral Agent of any right or remedy shall preclude other or
further exercise thereof or the exercise of any other right or remedy. No action
of the Collateral Agent permitted hereunder shall impair or affect the rights of
the Collateral Agent in and to the Collateral.

         SECTION 8.2 Sale of Collateral.

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                  (a)      The Pledgor agrees that in any sale permitted
         hereunder of any of the Collateral the Collateral Agent is authorized
         to comply with any limitation or restriction in connection with such
         sale as counsel may advise the Collateral Agent is necessary in order
         to avoid any violation of applicable law (including, without
         limitation, the obtaining of any approval required by any Department,
         compliance with such procedures as may restrict the number of
         prospective bidders and purchasers, require that such prospective
         bidders and purchasers have certain qualifications, and restrict such
         prospective bidders and purchasers to persons who will represent and
         agree that they are purchasing for their own account for investment and
         not with a view to the distribution or resale of such Collateral), or
         in order to obtain any required approval of the sale or of the
         purchaser by any governmental regulatory authority or official, and the
         Pledgor further agrees that such compliance shall not result in such
         sale being considered or deemed not to have been made in a commercially
         reasonable manner, nor shall the Collateral Agent be liable nor
         accountable to the Pledgor for any discount allowed by the reason of
         the fact that such Collateral is sold in compliance with any such
         limitation or restriction.

                  (b)      Without limiting the rights of the Collateral Agent
         under any other provision of this Pledge Agreement, and in addition
         thereto, the Pledgor agrees that, to the maximum extent permitted by
         law, after a Default with respect to Section 9.01(f) or (g) of the
         Credit Agreement or an Event of Default shall have occurred and be
         continuing, upon written request from the Collateral Agent, the Pledgor
         shall cause any or each of its Subsidiaries whose capital stock is
         pledged hereunder to prepare, file and use its best efforts to cause to
         become effective promptly, a registration statement complying with the
         Securities Act of 1933, as amended, for the public sale of such of the
         Collateral as the Collateral Agent may elect, and to take comparable
         action to permit such sales under the securities laws of such
         jurisdictions as the Collateral Agent may designate and shall cause
         such Subsidiaries to enter into and perform their obligations under one
         or more underwriting agreements in connection therewith, containing
         customary representations, warranties, covenants and indemnities and
         contribution provisions if requested by the Collateral Agent. If such
         registration statement is filed, the Pledgor agrees to cause each such
         Subsidiary (i) to keep any such registration statement and related
         prospectus effective, current and in compliance with applicable federal
         and state securities laws so long as required to satisfy applicable
         prospectus delivery requirements and (ii) at the request of the
         Collateral Agent at any time after the effective date of any such
         registration statement, to use reasonable efforts to file
         post-effective amendments to such registration statement so that the
         Collateral Agent's sales of Pledged Shares or other Collateral will be
         covered by a current prospectus and can be made in compliance with all
         applicable federal and state securities laws. Nothing contained in this
         Section 8.2(b) shall be deemed to require the preparation, filing or
         effectiveness of more than one registration statement by any such
         Subsidiary.

                  (c)      Subject to the terms of the Collateral Agreement, the
         Pledgor further agrees, after a Default with respect to Section 9.01(f)
         or (g) of the Credit Agreement or an Event of Default shall have
         occurred and be continuing, and upon written request from the
         Collateral Agent, to (i) deliver and cause each of its Subsidiaries for
         which capital stock is being registered to deliver to the Collateral
         Agent such information as the Collateral Agent shall reasonably request
         for inclusion in any registration statement,

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         prospectus or offering memorandum or in any preliminary prospectus or
         preliminary offering memorandum or any amendment or supplement to any
         thereof or in any other writing prepared in connection with the offer,
         sale or resale of all or any portion of the Pledged Shares or other
         Collateral, which information shall not contain any untrue statement of
         a material fact or omit to state a material fact required to be stated
         or necessary to make such information not misleading, and (ii) do or
         cause to be done all such other acts and things as may be necessary to
         make such offer, sale or resale of all or any portion of the Pledged
         Shares or other Collateral valid and binding and in compliance with any
         and all applicable laws, regulations, orders, writs, injunctions,
         decrees or awards of any and all courts, arbitrators or governmental
         agencies or instrumentalities, domestic or foreign, having jurisdiction
         over any such offer, sale or resale.

                  (d)      Without limiting the foregoing paragraph, if the
         Collateral Agent decides to exercise its right under this Section 8 to
         sell all or any of the Pledged Shares or other Collateral, upon written
         request, the Pledgor shall furnish or cause to be furnished to the
         Collateral Agent all such information as the Collateral Agent may
         request in order to qualify such Pledged Shares or other Collateral as
         exempt securities, or the sale or resale of such Pledged Shares or
         other Collateral as exempt transactions, under federal and state
         securities laws. The Pledgor agrees to allow, and to cause each of its
         Subsidiaries to allow, the Collateral Agent and any underwriter access
         at reasonable times and places to the books, records and premises of
         such Subsidiary; the Pledgor further agrees to assist, and cause each
         of its Subsidiaries to assist, the Collateral Agent, any underwriter,
         any agent of any thereof, and any counsel, accountant or other expert
         for any thereof, in inspection, evaluation, and any other "due
         diligence" action of or with respect to any such books, records and
         premises; and the Pledgor further agrees to cause any independent
         public accountant for each such Subsidiary to furnish letters to the
         Collateral Agent and underwriters in customary form and covering
         matters of the type customarily covered by such letters of accountants
         for issuers to underwriters.

                  (e)      The Pledgor further agrees to indemnify and hold
         harmless the Administrative Agent, the Collateral Agent and the
         Lenders, and each of their respective officers, directors, employees
         and agents, successors, assigns and any Person in control of any
         thereof, from and against any loss, liability, claim, damage and
         expense, including, without limitation, counsel fees (in this paragraph
         collectively called the "Indemnified Liabilities"), under federal and
         state securities laws or otherwise insofar as such loss, liability,
         claim, damage or expense arises (i) out of or is based upon any untrue
         statement or alleged untrue statement of a material fact contained in
         any registration statement, prospectus or offering memorandum or in any
         preliminary prospectus or preliminary offering memorandum or any
         amendment or supplement to any thereof or in any other writing prepared
         in connection with the offer, sale or resale of all or any portion of
         the Pledged Shares or other Collateral unless such untrue statement or
         material fact was provided in writing by the Administrative Agent, the
         Collateral Agent or any underwriter specifically for inclusion therein,
         or (ii) out of or is based upon any omission or alleged omission to
         state therein a material fact required to be stated or necessary to
         make the statements therein not misleading, such indemnification to
         remain operative regardless of any investigation made by or on behalf
         of the Administrative Agent, the Collateral Agent or any successors
         thereof, or any Person in control of any thereof. In connection with a

                                       10

<PAGE>

         public sale or other distribution, the Pledgor will provide customary
         indemnification to any underwriters, their respective successors and
         assigns, their respective officers and directors and each Person who
         controls any such underwriter (within the meaning of the Securities Act
         of 1933, as amended). If and to the extent that the foregoing
         undertakings in this paragraph may be unenforceable for any reason, the
         Pledgor agrees to make the maximum contribution to the payment and
         satisfaction of each of the Indemnified Liabilities which is
         permissible under applicable law. The obligations of the Pledgor under
         this clause (e) shall survive any termination of this Pledge Agreement.

                                    SECTION 9

                             APPLICATION OF PROCEEDS

         The proceeds of sale of Collateral sold pursuant to the terms of
Section 8 hereof and/or, after a Default with respect to Section 9.01(f) or (g)
of the Credit Agreement or an Event of Default, the cash held as Collateral
hereunder, shall be applied by the Collateral Agent toward the payment of the
Liabilities and all reasonable costs and expenses of the Collateral Agent
(whether or not such costs and expenses are incurred by the Collateral Agent on
its own behalf or on behalf of the Lenders) and the Collateral Agent's counsel
incurred in connection with the administration and enforcement of this Pledge
Agreement, the Credit Agreement and the other Related Documents, in such order
of application as the Collateral Agent may from time to time elect.

                                   SECTION 10

               AUTHORITY OF THE COLLATERAL AGENT; INDEMNIFICATION

         The Collateral Agent shall have, and be entitled to exercise, all such
powers hereunder as are specifically delegated to the Collateral Agent by the
terms hereof, together with such powers as are incidental thereto. The
Collateral Agent may execute any of its duties hereunder by or through agents or
employees and shall be entitled to retain counsel and to act in reliance upon
the advice of such counsel concerning all matters pertaining to its duties
hereunder. Neither the Collateral Agent, nor any director, officer or employee
of the Collateral Agent shall be liable for any action taken or omitted to be
taken by it hereunder or in connection herewith, except for its own gross
negligence or willful misconduct. The Pledgor hereby agrees to reimburse the
Collateral Agent, on demand, for all reasonable costs and expenses incurred by
the Collateral Agent in connection with the administration and enforcement of
this Pledge Agreement (including, without limitation, reasonable costs and
expenses incurred by any agent employed by the Collateral Agent) and agrees to
indemnify (which indemnification shall survive any termination of this Pledge
Agreement) and hold harmless each Agent-Related Person (and any such agent
employed by the Collateral Agent) from and against any and all liability
incurred by such Agent-Related Person (or such agent employed by the Collateral
Agent) hereunder or in connection herewith, unless such liability shall be due
to gross negligence or willful misconduct on the part of such Agent-Related
Person, or such agent employed by the Collateral Agent, as the case may be.

                                       11

<PAGE>

                                   SECTION 11

                                   TERMINATION

         The Pledgor agrees that its pledge hereunder shall (notwithstanding,
without limitation, that at any time or from time to time all Liabilities may
have been paid in full) terminate only when all Liabilities (including, without
limitation, any extensions or renewals of any thereof) and all interest thereon
and all expenses (including, without limitation, reasonable attorneys' fees and
legal expenses) paid or incurred by the Administrative Agent, the Collateral
Agent or the holder or the holders of the Notes in endeavoring to enforce this
Pledge Agreement, the Credit Agreement and the other Related Documents to which
the Collateral Agent is a beneficiary shall have been finally paid in full and
all other obligations of the Pledgor hereunder and thereunder have been fully
performed, and all Commitments under the Credit Agreement have been terminated,
at which time the Collateral Agent shall reassign and redeliver (or cause to be
reassigned and redelivered) to the Pledgor, or to such Person or Persons as the
Pledgor shall designate, such of the Collateral (if any) as shall not have been
sold or otherwise applied by the Collateral Agent pursuant to the terms hereof
and shall still be held by it hereunder, together with appropriate instruments
of reassignment and release. Any such reassignment shall be without recourse
upon, or representation or warranty by, the Collateral Agent and at the sole
cost and expense of the Pledgor. Notwithstanding the foregoing, this Agreement
and the pledge hereunder shall immediately and permanently terminate under the
circumstances set forth in Section 4.02 of the Credit Agreement, upon which
termination the Collateral Agent shall effect the reassignment and redelivery of
the Collateral in accordance with the foregoing provisions of this Section 11.

                                   SECTION 12

                                  MISCELLANEOUS

         SECTION 12.1 Amendments. No amendment, modification, termination or
waiver of any provision of this Pledge Agreement, and no consent to any
departure by the Pledgor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Agent and the Required
Lenders, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

         SECTION 12.2 Captions. Section captions in this Pledge Agreement are
for convenience only, and shall not affect the construction of this Pledge
Agreement.

         SECTION 12.3 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex or telecopy
or similar writing) and shall be given to such party in accordance with the
notice provision in the Credit Agreement. Each such notice, request or other
communication shall be effective (a) if given by telex or telecopy, when such
telex is transmitted to the telex number as specified in the Credit Agreement
and the appropriate answer back is received, (b) if given by mail, three (3)
days after such communication is deposited in the mails with first class postage
prepaid, addressed as aforesaid, (c) if given by facsimile, when such telecopy
is transmitted to the telecopy number as specified

                                       12

<PAGE>

in the Credit Agreement and the appropriate confirmation is received, or (d) if
given by any other means, when delivered at the address specified in Section
11.02 of the Credit Agreement.

         SECTION 12.4 Waivers. The Pledgor hereby expressly waives: (a) notice
of the acceptance by the Collateral Agent of this Pledge Agreement, (b) notice
of the existence or creation or non-payment of all or any of the Liabilities,
(c) presentment, demand, notice of dishonor, protest, and all other notices
whatsoever, and (d) all diligence in collection or protection of or realization
upon the Liabilities or any thereof, any obligation hereunder, or any security
for or guaranty of any of the foregoing.

         SECTION 12.5 Further Assurances. The Pledgor agrees that, if at any
time all or any part of any payment theretofore applied by the Collateral Agent
to any of the Liabilities is or must be rescinded or returned by the Collateral
Agent for any reason whatsoever (including, without limitation, the insolvency,
bankruptcy or reorganization of any of the Borrower or its Subsidiaries), such
Liabilities shall, for the purposes of this Pledge Agreement, to the extent that
such payment is or must be rescinded or returned, be deemed to have continued in
existence, notwithstanding such application by the Collateral Agent, and the
pledge by the Pledgor hereunder shall continue to be effective or be reinstated,
as the case may be, as to such Liabilities, all as though such application by
the Collateral Agent had not been made.

         SECTION 12.6 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE PLEDGOR
(A) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY ILLINOIS STATE OR
FEDERAL COURT SITTING IN CHICAGO, ILLINOIS OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS PLEDGE AGREEMENT AND THE PLEDGOR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH ILLINOIS STATE OR FEDERAL COURT, AND (B) AGREES NOT TO
INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST THE ADMINISTRATIVE AGENT, THE
COLLATERAL AGENT OR THE DIRECTORS, OFFICERS, EMPLOYEES, ADMINISTRATIVE AGENT,
THE COLLATERAL AGENT OR PROPERTY OF THE COLLATERAL AGENT, ARISING OUT OF OR
RELATING TO THIS PLEDGE AGREEMENT, IN ANY COURT OTHER THAN AS HEREINABOVE
SPECIFIED IN THIS SECTION 12.6. THE PLEDGOR HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE TO
THE LAYING OF VENUE IN ANY ACTION OR PROCEEDING (WHETHER BROUGHT BY THE PLEDGOR,
ANY SUBSIDIARY, THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT, OR OTHERWISE) IN
ANY COURT HEREINABOVE SPECIFIED IN THIS SECTION 12.6 AS WELL AS ANY RIGHT IT MAY
NOW OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING, ONCE COMMENCED,
TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR OTHERWISE. THE
PLEDGOR 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.

         SECTION 12.7 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A

                                       13

<PAGE>

TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM CONCERNING ANY
RIGHTS UNDER THIS PLEDGE AGREEMENT OR UNDER ANY OTHER DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
THEREWITH, OR ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS PLEDGE AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDING OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY; THIS PROVISION
IS A MATERIAL INDUCEMENT FOR THE COLLATERAL AGENT ENTERING INTO THIS PLEDGE
AGREEMENT AND FOR THE ADMINISTRATIVE AGENT, THE COLLATERAL AGENT TO MAKE THE
LOANS PURSUANT TO THE CREDIT AGREEMENT.

         SECTION 12.8 Governing Law; Terms; Interpretation. This Pledge
Agreement shall be a contract made under and governed by the laws of the state
of Illinois, without regard to its conflicts of law principles. All obligations
of the Pledgor and rights of the Collateral Agent expressed herein or in the
other Related Documents shall be in addition to and not in limitation of those
provided by applicable law. Wherever possible, each provision of this Pledge
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Pledge Agreement shall be
prohibited by or invalid under such law, such provision shall be ineffective to
the extent of such prohibition or invalidity, without invalidating the remainder
of such provision or the remaining provisions of this Pledge Agreement.

         SECTION 12.9 Filing as a Financing Statement. At the option of the
Collateral Agent, this Pledge Agreement, or a carbon, photographic or other
reproduction of this Pledge Agreement or of any Uniform Commercial Code
financing statement covering the Collateral or any portion thereof, shall be
sufficient as a Uniform Commercial Code financing statement and may be filed as
such.

         SECTION 12.10 Binding Agreement; Assignment. This Pledge Agreement, and
the terms, covenants and conditions hereof, shall be binding upon and inure to
the benefit of the parties hereto, and their successors and assigns, except the
Pledgor shall not be permitted to assign this Pledge Agreement nor any interest
herein nor in the Collateral, nor any part thereof.

         SECTION 12.11 Conditions of Effectiveness. No action of the Collateral
Agent permitted hereunder shall in any way affect or impair the rights of the
Collateral Agent and the obligations of the Pledgor under this Pledge Agreement.
The Pledgor hereby acknowledges that there are no conditions to the
effectiveness of this Pledge Agreement which have not been satisfied
concurrently with or prior to Pledgor's execution and delivery of this Pledge
Agreement.

         SECTION 12.12 Liabilities. All obligations of the Pledgor and rights of
the Collateral Agent (and any other holder of Notes or Liabilities expressed in
this Pledge Agreement) shall be in addition to and not in limitation of those
provided in applicable law or in any other written instrument or agreement
relating to any of the Liabilities.

                                       14

<PAGE>

         SECTION 12.13 Counterparts. This Pledge Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute but one and the same Pledge
Agreement. The Pledgor hereby acknowledges receipt of a true, correct and
complete counterpart of this Pledge Agreement.

                                       15

<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first above written.

Address:                                  DELPHI FINANCIAL GROUP, INC.
c/o Delphi Capital Management, Inc.
153 E. 53rd Steet, 49th Floor
New York, New York 10022                  By: __________________________________
                                               Robert M. Smith, Jr.
                                          _________________________
                                               Executive Vice President
                                          _____________________________

<PAGE>

Address:                                  BANK OF AMERICA, N.A., as
231 South LaSalle Street                  Collateral Agent
Chicago, Illinois 60697

                                          By: __________________________________
                                          Name: ________________________________
                                          Title: _______________________________<PAGE>

                                                                    EXHIBIT 10.3

                          SIG HOLDINGS PLEDGE AGREEMENT

                          dated as of December 16, 2002

                                     between

                               SIG HOLDINGS, INC.

                                       and

                             BANK OF AMERICA, N.A.,
                              as Collateral Agent

<PAGE>

                          SIG HOLDINGS PLEDGE AGREEMENT

                  THIS SIG HOLDINGS PLEDGE AGREEMENT (this "Agreement"), dated
as of December 16, 2002, is made by and between SIG HOLDINGS, INC., a Delaware
corporation (herein, called the "Pledgor"), and Bank of America, N.A. ("Bank of
America"), as collateral agent for the Lenders (herein in such capacity,
together with any successors thereto in such capacity, called the "Collateral
Agent"). This is the SIG Holdings Pledge Agreement referred to in that certain
Credit Agreement (as the same may from time to time be amended or modified and
in effect the "Credit Agreement"), dated as of December 16, 2002, among Delphi
Financial Group, Inc. (the "Borrower"), the Lenders who are or from time to time
become party thereto (the "Lenders"), and Bank of America as Administrative
Agent for the Lenders.

                                    Recitals

                  WHEREAS, pursuant to the Credit Agreement, the Lenders have
agreed to make loans to the Borrower for the purposes described in the Credit
Agreement;

                  WHEREAS, the Pledgor is the owner of all of the stock listed
on Schedule 1 hereto, which consists of all of the outstanding capital stock of
Safety National;

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

                                    SECTION 1

                                   DEFINITIONS

         SECTION 1.1 Certain Defined Terms. As used in this Pledge Agreement,
the following terms shall have the following meanings (such meanings to be
equally applicable to both the singular and plural forms of the terms defined):

                  "Chase" shall mean JPMorganChase Bank (as successor to The
Chase Manhattan Bank), in its capacity as collateral agent under the SIG Pledge
Agreement.

                  "Collateral" - see Section 2.

                  "Collateral Agent" shall mean Bank of America.

                  "Credit Agreement" - see Preamble.

                  "Intercreditor Agreement" shall mean the Intercreditor
Agreement dated as of December 16, 2002 between Chase and the Collateral Agent
and acknowledged and accepted by Pledgor, as the same may be amended, modified,
supplemented, restated or renewed from time to time.

                  "Pledged Shares" - see Section 2.

<PAGE>

                  "Safety National" shall mean Safety National Casualty
Corporation, a Missouri insurance corporation, and any successor thereof.

                  "SIG Pledge Agreement" shall mean that certain Pledge
Agreement, dated as of May 20, 1994, between SIG Holdings and Chase, as amended
by the terms of the Intercreditor Agreement, as the same may be amended or
modified in accordance with the terms of the Credit Agreement.

         SECTION 1.2 Credit Agreement Definitions. Unless otherwise defined
herein or the context otherwise requires, terms used in this Pledge Agreement
(and in its preamble and recitals) have the meanings provided in the Credit
Agreement.

                                    SECTION 2

                                     PLEDGE

                  To secure the prompt and complete payment and performance of
the Liabilities, including, without limitation, the liabilities of the Pledgor
hereunder, and subject to the terms of the Intercreditor Agreement, the Pledgor
hereby pledges, hypothecates, assigns, transfers, sets over and delivers unto
the Collateral Agent, for the benefit of the Lenders, and hereby grants to the
Collateral Agent, for the benefit of the Lenders, a continuing security interest
in the following (herein, collectively, called the "Collateral"):

                  (a)      the shares of stock of Safety National listed on
                           Schedule 1 hereto (herein called the "Pledged
                           Shares") and the certificates representing or
                           evidencing the Pledged Shares and all cash,
                           securities, interest, dividends, rights 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 such Pledged Shares;

                  (b)      all additional shares of stock of Safety National
                           from time to time acquired by the Pledgor in any
                           manner including, without limitation, any
                           uncertificated securities (which additional shares of
                           stock and securities shall constitute a part of, and
                           be, "Pledged Shares"), and, in the case of any and
                           all uncertificated securities pledged hereunder, such
                           uncertificated securities shall contain a notation of
                           the security interest and the pledge granted to Chase
                           on the books and records of Safety National in the
                           name of Chase so long as the SIG Pledge Agreement is
                           in effect and in the name of the Collateral Agent at
                           all times thereafter and, in the case of certificated
                           securities, the certificates representing or
                           evidencing such additional shares, and all cash,
                           securities, interest, dividends, rights, notes,
                           instruments and other property at any time and from
                           time to time received, receivable or otherwise
                           distributed in respect of or in exchange for any and
                           all of such additional shares;

                  (c)      all other property hereafter delivered to Chase or
                           the Collateral Agent, as the case may be, by the
                           Pledgor in substitution for or in addition to any of

                                       2

<PAGE>

                           the foregoing, all certificates and instruments
                           representing or evidencing such other property and in
                           the case of uncertificated securities, all notations
                           of the security interest hereafter delivered on the
                           books and records of Safety National in the name of
                           Chase so long as the SIG Pledge Agreement is in
                           effect and the Collateral Agent at all times
                           thereafter, all cash, securities, interest,
                           dividends, rights 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 thereof; and

                  (d)      all proceeds, rents, issues, profits and returns of
                           and from all of the foregoing;

TO HAVE AND TO HOLD the Collateral, together with all rights, titles, interests,
privileges and preferences appertaining or incidental thereto, unto the
Collateral Agent, its successors and assigns, forever, subject, however, to the
terms, covenants and conditions hereafter set forth.

                  Subject to the terms of the SIG Pledge Agreement, the SIG Note
Agreement and the Intercreditor Agreement, the Pledgor agrees to deliver to the
Collateral Agent, promptly upon receipt and in the case of the Pledged Shares in
due form for transfer (i.e., endorsed in blank accompanied by undated stock or
bond powers executed in blank or registered on the books of Safety National)
and, subject to the provisions of Section 7 hereof, any Collateral which may at
any time or from time to time be in or come into possession or control of the
Pledgor; and prior to the delivery thereof to Chase or the Collateral Agent, as
the case may be, such Collateral shall be held by the Pledgor separate and apart
from its other property and in express trust for the Collateral Agent.

                                    SECTION 3

                         REPRESENTATIONS AND WARRANTIES

         SECTION 3.1 Pledged Shares. The Pledgor represents and warrants to the
Collateral Agent that:

                  (a)      The Pledged Shares are duly authorized, validly
                           issued and are fully paid and non-assessable;

                  (b)      Except for liens, claims and rights of third parties
                           arising solely through the acts of the Collateral
                           Agent, the interests of Chase, and the interests of
                           the holders of the SIG Notes pursuant to the SIG
                           Pledge Agreement, the Collateral Agent has and
                           (assuming Chase, as agent for the Collateral Agent
                           and the Lenders, or the Collateral Agent, as the case
                           may be, maintain continuous possession of such
                           Collateral) will continue to have at all times as
                           security for the Liabilities a valid, first priority
                           perfected security interest in the Collateral and the
                           proceeds thereof free of all Liens, claims and rights
                           of third parties whatsoever (other than Permitted
                           Liens provided for in Section 9.1 of the Credit
                           Agreement);

                                       3

<PAGE>

                  (c)      To the extent any Pledged Shares are evidenced by
                           certificates, the Pledgor has delivered to Chase, for
                           the benefit of the holders of the SIG Notes, or, if
                           the SIG Pledge Agreement is no longer in effect, the
                           Collateral Agent, for pledge under this Agreement on
                           the date hereof the certificates representing all the
                           Pledged Shares which it owns;

                  (d)      The Pledged Shares represent all of the issued and
                           outstanding capital stock of Safety National;

                  (e)      The Pledgor will, at all times, keep pledged to the
                           Collateral Agent pursuant hereto all shares of the
                           capital stock of Safety National;

                  (f)      Subject to the terms of the SIG Pledge Agreement and
                           the Intercreditor Agreement, the Pledgor agrees to
                           endorse and/or deliver to the Collateral Agent for
                           pledge hereunder, promptly upon its obtaining
                           thereof, any additional Collateral (other than cash
                           dividends and interest paid on such Collateral prior
                           to the occurrence of a Default under Section 9.01(f)
                           of the Credit Agreement or an Event of Default). As
                           of the date of any such delivery of additional shares
                           or certificates to Chase or the Collateral Agent, as
                           the case may be, the Pledgor will represent and
                           warrant that: (i) it owns such shares and
                           certificates and the proceeds thereof free of all
                           Liens, claims and rights of any other Person other
                           than the Liens granted hereunder and under the SIG
                           Pledge Agreement, (ii) it has good and marketable
                           title to said shares and certificates and has the
                           right to deliver, pledge, assign and transfer such
                           shares or certificates to Chase, the Collateral
                           Agent, as the case may be, pursuant to this Pledge
                           Agreement, (iii) subject to the Lien of Chase and the
                           holders of the SIG Notes pursuant to the SIG Pledge
                           Agreement, the Collateral Agent has a valid, first
                           priority perfected security interest in said shares
                           and certificates and the proceeds thereof free of all
                           Liens, claims and rights of third parties whatsoever
                           (other than Permitted Liens provided for in Section
                           8.01(a) and (b) of the Credit Agreement) and (iv) it
                           has pledged to Chase or the Collateral Agent, as the
                           case may be, as at such date, all of the capital
                           stock of Safety National;

                  (g)      All documentary, stamp or other taxes or fees owing
                           in connection with the issuance, transfer and/or
                           pledge of the Pledged Shares have been paid and will
                           hereafter be paid by the Pledgor as such become due
                           and payable; and

                  (h)      The information contained in Schedule 1 is true and
                           accurate in all respects.

         SECTION 3.2 Collateral. The Pledgor further represents and warrants to
the Collateral Agent that it is the lawful owner of the Collateral existing on
the date hereof, free of all Liens, claims and rights of any other Person, other
than the Lien granted hereunder and the Lien granted to Chase and the holders of
the SIG Notes pursuant to the SIG Pledge Agreement, with full right

                                       4

<PAGE>

to deliver, pledge, assign and transfer such Collateral to Chase or the
Collateral Agent, as the case may be, as Collateral hereunder. The pledge of the
Collateral effected by this Pledge Agreement is effective to vest in the
Collateral Agent the rights of the Collateral Agent in the Collateral set forth
herein.

         SECTION 3.3 Organization, etc. The Pledgor additionally represents and
warrants to the Collateral Agent that:

                  (a)      It is a corporation duly organized, validly existing
                           and in good standing under the laws of the State of
                           Delaware;

                  (b)      Safety National is a corporation duly organized,
                           validly existing and in good standing under the laws
                           of its state of incorporation;

                  (c)      The Pledgor and Safety National are duly qualified to
                           transact business and are in good standing as foreign
                           corporations authorized to do business in each
                           jurisdiction where the nature of each of their
                           businesses makes such qualification necessary or
                           failure to so qualify could have a Material Adverse
                           Effect;

                  (d)      The Pledgor has the corporate power to execute,
                           deliver and perform this Pledge Agreement and such
                           execution, delivery and performance have been duly
                           authorized by all necessary corporate action
                           (including, without limitation, shareholder approval,
                           if necessary), has received or made all necessary
                           governmental consents or approvals, licenses,
                           authorizations, validations, filings, recordings,
                           registrations or exemptions (if any shall be
                           required), and the execution, delivery and
                           performance hereof do not and will not contravene or
                           conflict with any provision of law or of the
                           corporate charter or by-laws of the Pledgor or of any
                           agreement or instrument binding upon Pledgor or any
                           of its property or result in the creation or
                           imposition of or the obligation to create or impose
                           any Lien (other than the Lien of the Collateral Agent
                           hereunder); and

                  (e)      This Pledge Agreement is the legal, valid and binding
                           obligation of the Pledgor, enforceable against the
                           Pledgor in accordance with its terms.

         SECTION 3.4 Effectiveness. Each representation and warranty made or to
be made herein by the Pledgor shall be deemed remade as of and at the date of
each Loan made from time to time under or in connection with the Credit
Agreement with the same effect as if made contemporaneously with the making of
each such Loan, and as of and at the date of delivery of any additional
Collateral to the Collateral Agent.

                                    SECTION 4

                                    COVENANTS

                  So long as any of the Liabilities remain outstanding and the
Commitments have not been terminated, subject to the terms of the Intercreditor
Agreement and the SIG Pledge

                                       5

<PAGE>

Agreement, the Pledgor will, unless the Collateral Agent and the Required
Lenders shall otherwise consent in writing:

                  (a)      At its sole expense, promptly deliver to Chase or the
                           Collateral Agent, as the case may be, from time to
                           time upon request of the Collateral Agent, such
                           undated stock powers and other documents,
                           satisfactory in form and substance to the Collateral
                           Agent, with respect to the Collateral as the
                           Collateral Agent may reasonably request, to preserve
                           and protect, and to enable the Collateral Agent to
                           enforce, its rights and remedies hereunder;

                  (b)      Promptly endorse and/or deliver to Chase or the
                           Collateral Agent, as the case may be, for pledge
                           hereunder, any additional Collateral (other than cash
                           dividends, interest and principal paid on such
                           Collateral which the Pledgor is entitled to receive
                           and retain pursuant to Section 7.1(a));

                  (c)      Not make or consent to any amendment or other
                           modification or waiver with respect to any of the
                           Collateral, or enter into any agreement or permit to
                           exist any restriction with respect to any of the
                           Collateral other than pursuant hereto, the SIG Pledge
                           Agreement or the SIG Note Agreement;

                  (d)      Except as required by the SIG Pledge Agreement, not
                           take or fail to take any action which would in any
                           manner impair the enforceability of the Collateral
                           Agent's Lien and security interest in any of the
                           Collateral;

                  (e)      Own and continue to own all Collateral free and clear
                           of all Liens, security interests, encumbrances,
                           claims, interests or rights of any other Person
                           whatsoever (except for the pledge hereunder and the
                           Lien created hereby, the Lien of the Collateral Agent
                           and the holders of the SIG Notes pursuant to the SIG
                           Pledge Agreement and Permitted Liens provided for in
                           Section 8.01(a) or (b) of the Credit Agreement), have
                           good and marketable title to all of the Collateral
                           and have the right to pledge such Collateral and such
                           Collateral will constitute all of the capital stock
                           and certificates of Safety National; and

                  (f)      Promptly cause Safety National, upon the issuance of
                           any uncertificated securities, to note the Lien of
                           the Collateral Agent in its books and records in the
                           name of Chase so long as the SIG Pledge Agreement is
                           in effect and in the name of the Collateral Agent at
                           all times thereafter.

                                    SECTION 5

                               CARE OF COLLATERAL

                  The Collateral Agent shall be deemed to have exercised
reasonable care in the custody and preservation of the Collateral if it takes
such action for that purpose as the Pledgor requests in writing, but failure of
the Collateral Agent to comply with any such request shall not of itself be
deemed a failure to exercise reasonable care, and no failure of the Collateral
Agent to preserve or protect any rights with respect to the Collateral against
prior or other parties, or to do

                                       6

<PAGE>

any act with respect to preservation of the Collateral not so requested by the
Pledgor, shall be deemed a failure to exercise reasonable care in the custody or
preservation of the Collateral.

                                    SECTION 6

               CERTAIN RIGHTS REGARDING COLLATERAL AND LIABILITIES

         SECTION 6.1 Permitted Action. Subject to Section 6.3 and Section 7
hereof and the terms of the SIG Pledge Agreement and the Intercreditor
Agreement, the Collateral Agent may, from time to time after the occurrence of
any Default with respect to Section 9.01(f) of the Credit Agreement or an Event
of Default, in its sole discretion and without notice to the Pledgor:

                  (a)      transfer all or any part of the Collateral into the
                           name of the Collateral Agent or its nominee, with or
                           without disclosing that such Collateral is subject to
                           the Lien and security interest hereunder;

                  (b)      notify the parties obligated on any of the Collateral
                           to make payment to the Collateral Agent of any
                           amounts due or to become due thereunder;

                  (c)      enforce collection of any of the Collateral by suit
                           or otherwise;

                  (d)      surrender, release or exchange all or any part
                           thereof, or compromise or extend or renew for any
                           period (whether or not longer than the original
                           period) any obligations of any nature of any party
                           with respect thereto; and

                  (e)      take control of any proceeds of the Collateral.

         SECTION 6.2 Subject to the terms of the SIG Note Agreement and, with
respect to Sections 6.2(a) and 6.2(e) , the SIG Pledge Agreement and the
Intercreditor Agreement, the Collateral Agent may, from time to time, in its
sole discretion and without notice to Pledgor, take any or all of the following
actions:

                  (a)      retain or obtain a Lien upon, or a security interest
                           in, any property to secure payment and performance of
                           any of the Liabilities or any obligation hereunder;

                  (b)      retain, obtain or release the primary or secondary
                           obligation of any obligor or obligors, in addition to
                           the Borrower or the Pledgor with respect to any of
                           the Liabilities or any obligation hereunder;

                  (c)      create, extend or renew for any period (whether or
                           not longer than the original period) or alter or
                           exchange any of the Liabilities, or release or
                           compromise any obligation of the Pledgor hereunder or
                           any obligation of any nature of any other obligor
                           with respect to any of the Liabilities or any
                           obligation hereunder;

                  (d)      release or fail to perfect its Lien upon or security
                           interest in, or impair, surrender, release or permit
                           any substitution or exchange for, all or any

                                       7

<PAGE>

                           part of any property securing any of the Liabilities
                           or any obligation hereunder, or create, extend or
                           renew for any period (whether or not longer than the
                           original period) or release, compromise, alter or
                           exchange any obligations of any nature of any obligor
                           with respect to any such property; and

                  (e)      upon the occurrence and during the continuance of a
                           Default with respect to Section 9.01(f) of the Credit
                           Agreement or an Event of Default, resort to the
                           Collateral for payment of any of the Liabilities or
                           any obligation hereunder, whether or not the
                           Collateral Agent (i) shall have resorted to any other
                           property securing any of the Liabilities or any
                           obligation hereunder or (ii) shall have proceeded
                           against any other obligor primarily or secondarily
                           obligated with respect to any of the Liabilities or
                           any obligation hereunder (all of the actions referred
                           to in preceding clauses (i) and (ii) being hereby
                           expressly waived by the Pledgor).

         SECTION 6.3 Voting Pledged Shares. The Collateral Agent shall have no
right to vote the Pledged Shares or other Collateral or give consents, waivers
or ratifications in respect thereof prior to the occurrence of a Default with
respect to Section 9.01(f) of the Credit Agreement or an Event of Default. After
the occurrence of a Default with respect to Section 9.01(f) of the Credit
Agreement or an Event of Default, subject to the terms of the SIG Pledge
Agreement and the Intercreditor Agreement, the Pledgor shall have the right to
vote any and all of the Pledged Shares and other Collateral and give consents,
waivers and ratifications in respect thereof unless and until it receives notice
from the Collateral Agent that such right has been terminated. Subject to the
terms of the SIG Pledge Agreement and the Intercreditor Agreement, the Pledgor
agrees to deliver (properly endorsed when required) to the Collateral Agent,
after a Default with respect to Section 9.01(f) of the Credit Agreement or an
Event of Default shall have occurred, promptly upon request of the Collateral
Agent, such proxies and other documents as may be necessary for the Collateral
Agent to exercise the voting power with respect to the Pledged Shares and other
Collateral then or previously owned by the Pledgor.

                                    SECTION 7

                                 DIVIDENDS, ETC.

         SECTION 7.1 No Default. So long as no Default with respect to Section
9.01(f) of the Credit Agreement or Event of Default shall have occurred and be
continuing:

                  (a)      Subject to the provisions of the Credit Agreement,
                           the SIG Pledge Agreement and the Intercreditor
                           Agreement, the Pledgor shall, notwithstanding
                           anything contained herein to the contrary but subject
                           to Section 7.2 hereof, be entitled to receive and
                           retain or otherwise deal with any and all cash
                           dividends, interest and principal on the Collateral
                           which it is otherwise entitled to receive, but any
                           and all securities and/or liquidating dividends,
                           distributions in property, returns of capital or
                           other distributions made on or in respect of the
                           Collateral, whether resulting from a subdivision,
                           combination, reclassification or conversion of the

                                       8

<PAGE>

                           outstanding capital stock of Safety National or other
                           securities or received in exchange for the Collateral
                           or any part thereof, or as a result of any merger,
                           consolidation, acquisition or other exchange of
                           assets to which Safety National may be a party or
                           otherwise, and any and all cash and other property
                           received in exchange for any Collateral shall be and
                           become part of the Collateral pledged hereunder and,
                           if received by the Pledgor, shall forthwith be
                           delivered to the Collateral Agent or its designated
                           nominee (accompanied, if appropriate, by proper
                           instruments of assignment and/or undated stock or
                           bond powers executed by the Pledgor in accordance
                           with the Collateral Agent's instructions) to be held
                           subject to the terms of this Pledge Agreement.

                  (b)      If the Collateral or any part thereof shall have been
                           registered in the name of the Collateral Agent or its
                           sub-agent, the Collateral Agent shall execute and
                           deliver (or cause to be executed and delivered) to
                           the Pledgor all such dividend, interest and principal
                           orders and other instruments as the Pledgor may
                           request for the purpose of enabling the Pledgor to
                           receive the dividends, interest, principal or other
                           payments which it is authorized to receive and retain
                           pursuant to clause (a) above.

         SECTION 7.2 Occurrence of Default. Upon the occurrence and during the
continuance of a Default with respect to Section 9.01(f) of the Credit Agreement
or an Event of Default, (a) all rights of the Pledgor pursuant to Section 7.1(a)
hereof shall cease and the Collateral Agent, subject to the terms of the SIG
Pledge Agreement and the Intercreditor Agreement, shall have the sole and
exclusive right and authority to receive and retain the dividends (cash or
other), interest and principal which the Pledgor would otherwise be authorized
to retain and (b) subject to the terms of the SIG Pledge Agreement and the
Intercreditor Agreement, all such dividends, interest and principal and all
other distributions and payments made on or in respect of the Collateral which
may at any time and from time to time be held by the Pledgor, shall, until
delivery to the Collateral Agent, be held by the Pledgor separate and apart from
its other property in trust for the Collateral Agent. Any and all money and
other property paid over to or received by the Collateral Agent pursuant to the
provisions of this Section 7.2 shall be retained by the Collateral Agent as
additional Collateral hereunder and be applied in accordance with the provisions
hereof.

                                    SECTION 8

                                     DEFAULT

         SECTION 8.1 Occurrence of Default. Upon the occurrence and during the
continuance of a Default with respect to Section 9.01(f) of the Credit Agreement
or an Event of Default, and notwithstanding any provision contained herein to
the contrary, subject to the requirements of the Applicable Insurance Code and
the terms of the Intercreditor Agreement, the Collateral Agent may exercise from
time to time any rights and remedies available to it under the Uniform
Commercial Code as in effect from time to time in Illinois or otherwise
available to it, including, without limitation, sale, assignment, or other
disposal of the Collateral in exchange for cash or credit. If any notification
of intended disposition of any of the Collateral is required by law, such

                                       9

<PAGE>

notification, if mailed, shall be deemed reasonably and properly given if mailed
at least ten (10) days before such disposition, postage prepaid, addressed to
the Pledgor either at the address of the Pledgor shown below, or at any other
address of the Pledgor appearing on the records of the Collateral Agent. Subject
to the terms of the Intercreditor Agreement, any proceeds of any disposition of
Collateral shall be applied as provided in Section 9 hereof. No rights and
remedies of the Collateral Agent expressed hereunder are intended to be
exclusive of any other right or remedy, but every such right or remedy shall be
cumulative and shall be in addition to all other rights and remedies herein
conferred, or conferred upon the Collateral Agent under any other agreement or
instrument relating to any of the Liabilities or security therefor or now or
hereafter existing at law or in equity or by statute. No delay on the part of
the Collateral Agent in the exercise of any right or remedy shall operate as a
waiver thereof, and no single or partial exercise by the Collateral Agent of any
right or remedy shall preclude other or further exercise thereof or the exercise
of any other right or remedy. No action of the Collateral Agent permitted
hereunder shall impair or affect the rights of the Collateral Agent in and to
the Collateral.

         SECTION 8.2 Sale of Collateral.

                  (a)      The Pledgor agrees that in any sale permitted
                           hereunder of any of the Collateral the Collateral
                           Agent is authorized to comply with any limitation or
                           restriction in connection with such sale as counsel
                           may advise the Collateral Agent is necessary in order
                           to avoid any violation of applicable law (including,
                           without limitation, obtaining any approval required
                           by any Department, compliance with such procedures as
                           may restrict the number of prospective bidders and
                           purchasers, require that such prospective bidders and
                           purchasers have certain qualifications, and restrict
                           such prospective bidders and purchasers to persons
                           who will represent and agree that they are purchasing
                           for their own account for investment and not with a
                           view to the distribution or resale of such
                           Collateral), or in order to obtain any required
                           approval of the sale or of the purchaser by any
                           governmental regulatory authority or official, and
                           the Pledgor further agrees that such compliance shall
                           not result in such sale being considered or deemed
                           not to have been made in a commercially reasonable
                           manner, nor shall the Collateral Agent be liable nor
                           accountable to the Pledgor for any discount allowed
                           by the reason of the fact that such Collateral is
                           sold in compliance with any such limitation or
                           restriction.

                  (b)      Subject to the terms of the SIG Pledge Agreement and
                           the Intercreditor Agreement and without limiting the
                           rights of the Collateral Agent under any other
                           provision of this Pledge Agreement, and in addition
                           thereto, the Pledgor agrees that, to the maximum
                           extent permitted by law, after a Default with respect
                           to Section 9.01(f) of the Credit Agreement or an
                           Event of Default shall have occurred and be
                           continuing, upon written request from the Collateral
                           Agent, the Pledgor shall cause Safety National to
                           prepare, file and use its best efforts to cause to
                           become effective promptly, a registration statement
                           complying with the Securities Act of 1933, as
                           amended, for the public sale of such of the
                           Collateral as the Collateral Agent may elect, and to
                           take comparable action to permit such

                                       10

<PAGE>

                           sales under the securities laws of such jurisdictions
                           as the Collateral Agent may designate and shall cause
                           Safety National to enter into and perform its
                           obligations under one or more underwriting agreements
                           in connection therewith, containing customary
                           representations, warranties, covenants and
                           indemnities and contribution provisions if requested
                           by the Collateral Agent. If such registration
                           statement is filed, the Pledgor agrees to cause
                           Safety National (i) to keep any such registration
                           statement and related prospectus effective, current
                           and in compliance with applicable federal and state
                           securities laws so long as required to satisfy
                           applicable prospectus delivery requirements and (ii)
                           at the request of the Collateral Agent at any time
                           after the effective date of any such registration
                           statement, to use reasonable efforts to file
                           post-effective amendments to such registration
                           statement so that the Collateral Agent's sales of
                           Pledged Shares or other Collateral will be covered by
                           a current prospectus and can be made in compliance
                           with all applicable federal and state securities
                           laws. Nothing contained in this Section 8.2(b) shall
                           be deemed to require the preparation, filing or
                           effectiveness of more than one registration statement
                           by Safety National.

                  (c)      Subject to the terms of the SIG Pledge Agreement and
                           the Intercreditor Agreement, the Pledgor further
                           agrees, after a Default with respect to Section
                           9.01(f) of the Credit Agreement or an Event of
                           Default shall have occurred and be continuing, and
                           upon written request from the Collateral Agent, to
                           (i) deliver and cause Safety National to deliver to
                           the Collateral Agent such information as the
                           Collateral Agent shall reasonably request for
                           inclusion in any registration statement, prospectus
                           or offering memorandum or in any preliminary
                           prospectus or preliminary offering memorandum or any
                           amendment or supplement to any thereof or in any
                           other writing prepared in connection with the offer,
                           sale or resale of all or any portion of the Pledged
                           Shares or other Collateral, which information shall
                           not contain any untrue statement of a material fact
                           or omit to state a material fact required to be
                           stated or necessary to make such information not
                           misleading, and (ii) do or cause to be done all such
                           other acts and things as may be necessary to make
                           such offer, sale or resale of all or any portion of
                           the Pledged Shares or other Collateral valid and
                           binding and in compliance with any and all applicable
                           laws, regulations, orders, writs, injunctions,
                           decrees or awards of any and all courts, arbitrators
                           or governmental agencies or instrumentalities,
                           domestic or foreign, having jurisdiction over any
                           such offer, sale or resale.

                  (d)      Without limiting the foregoing paragraph, if the
                           Collateral Agent decides to exercise its right under
                           this Section 8 to sell all or any of the Pledged
                           Shares or other Collateral, upon written request, the
                           Pledgor shall furnish or cause to be furnished to the
                           Collateral Agent all such information as the
                           Collateral Agent may request in order to qualify such
                           Pledged Shares or other Collateral as exempt
                           securities, or the sale or resale of such Pledged
                           Shares or other Collateral as exempt transactions,
                           under federal and state

                                       11

<PAGE>

                           securities laws. The Pledgor agrees to allow, and to
                           cause Safety National to allow, the Collateral Agent
                           and any underwriter access at reasonable times and
                           places to the books, records and premises of Safety
                           National; the Pledgor further agrees to assist, and
                           cause Safety National to assist, the Collateral
                           Agent, any underwriter, any agent of any thereof, and
                           any counsel, accountant or other expert for any
                           thereof, in inspection, evaluation, and any other
                           "due diligence" action of or with respect to any such
                           books, records and premises; and the Pledgor further
                           agrees to cause any independent public accountant for
                           Safety National to furnish a letter to the Collateral
                           Agent and underwriters in customary form and covering
                           matters of the type customarily covered by letters of
                           accountants for issuers to underwriters.

                  (e)      The Pledgor further agrees to indemnify and hold
                           harmless the Collateral Agent, the Administrative
                           Agent and the Lenders, and each of their respective
                           officers, directors, employees and agents,
                           successors, assigns and any Person in control of any
                           thereof, from and against any loss, liability, claim,
                           damage and expense, including, without limitation,
                           counsel fees (in this paragraph collectively called
                           the "Indemnified Liabilities"), under federal and
                           state securities laws or otherwise insofar as such
                           loss, liability, claim, damage or expense arises (i)
                           out of or is based upon any untrue statement or
                           alleged untrue statement of a material fact contained
                           in any registration statement, prospectus or offering
                           memorandum or in any preliminary prospectus or
                           preliminary offering memorandum or any amendment or
                           supplement to any thereof or in any other writing
                           prepared in connection with the offer, sale or resale
                           of all or any portion of the Pledged Shares or other
                           Collateral unless such untrue statement or material
                           fact was provided in writing by the Collateral Agent
                           or any underwriter specifically for inclusion
                           therein, or (ii) out of or is based upon any omission
                           or alleged omission to state therein a material fact
                           required to be stated or necessary to make the
                           statements therein not misleading, such
                           indemnification to remain operative regardless of any
                           investigation made by or on behalf of the Collateral
                           Agent or any successors thereof, or any Person in
                           control of any thereof. In connection with a public
                           sale or other distribution, the Pledgor will provide
                           customary indemnification to any underwriters, their
                           respective successors and assigns, their respective
                           officers and directors and each Person who controls
                           any such underwriter (within the meaning of the
                           Securities Act of 1933, as amended). If and to the
                           extent that the foregoing undertakings in this
                           paragraph may be unenforceable for any reason, the
                           Pledgor agrees to make the maximum contribution to
                           the payment and satisfaction of each of the
                           Indemnified Liabilities which is permissible under
                           applicable law. The obligations of the Pledgor under
                           this clause (e) shall survive any termination of this
                           Pledge Agreement.

                                       12

<PAGE>

                                    SECTION 9

                             APPLICATION OF PROCEEDS

                  Subject to the terms of the Intercreditor Agreement, the
proceeds of sale of Collateral sold pursuant to the terms of Section 8 hereof
and/or, after a Default with respect to Section 9.01(f) of the Credit Agreement
or an Event of Default, the cash held as Collateral hereunder, shall be applied
by the Collateral Agent toward the payment of the Liabilities and all reasonable
costs and expenses of the Collateral Agent (whether or not such costs and
expenses are incurred by the Collateral Agent on its own behalf or on behalf of
the Lenders) and the Collateral Agent's counsel incurred in connection with the
administration and enforcement of this Pledge Agreement, the Credit Agreement
and the other Related Documents, in such order of application as the Collateral
Agent may from time to time elect.

                                   SECTION 10

               AUTHORITY OF THE COLLATERAL AGENT; INDEMNIFICATION

                  The Collateral Agent shall have, and be entitled to exercise,
all such powers hereunder as are specifically delegated to the Collateral Agent
by the terms hereof, together with such powers as are incidental thereto. The
Collateral Agent may execute any of its duties hereunder by or through agents or
employees and shall be entitled to retain counsel and to act in reliance upon
the advice of such counsel concerning all matters pertaining to its duties
hereunder. Neither the Collateral Agent, nor any director, officer or employee
of the Collateral Agent shall be liable for any action taken or omitted to be
taken by it hereunder or in connection herewith, except for its own gross
negligence or willful misconduct. The Pledgor hereby agrees to reimburse the
Collateral Agent, on demand, for all reasonable costs and expenses incurred by
the Collateral Agent in connection with the administration and enforcement of
this Pledge Agreement (including, without limitation, reasonable costs and
expenses incurred by any agent employed by the Collateral Agent) and agrees to
indemnify (which indemnification shall survive any termination of this Pledge
Agreement) and hold harmless the Collateral Agent (and any such agent employed
by the Collateral Agent) from and against any and all liability incurred by the
Collateral Agent (or such agent employed by the Collateral Agent) hereunder or
in connection herewith, unless such liability shall be due to gross negligence
or willful misconduct on the part of the Collateral Agent, or such agent
employed by the Collateral Agent, as the case may be.

                                   SECTION 11

                                   TERMINATION

                  The Pledgor agrees that its pledge hereunder shall
(notwithstanding, without limitation, that at any time or from time to time all
Liabilities may have been paid in full) terminate only when all Liabilities
(including, without limitation, any extensions or renewals of any thereof) and
all interest thereon and all expenses (including, without limitation, reasonable
attorneys' fees and legal expenses) paid or incurred by the Collateral Agent or
the holder or the holders of the Notes in endeavoring to enforce this Pledge
Agreement, the Credit Agreement and the other Related Documents to which the
Collateral Agent is a beneficiary shall have been

                                       13

<PAGE>

finally paid in full and all other obligations of the Pledgor hereunder and
thereunder have been fully performed, and all Commitments under the Credit
Agreement have been terminated, at which time the Collateral Agent shall
reassign and redeliver (or cause to be reassigned and redelivered) to the
Pledgor, or to such Person or Persons as the Pledgor shall designate, such of
the Collateral (if any) as shall not have been sold or otherwise applied by the
Collateral Agent pursuant to the terms hereof and shall still be held by it
hereunder, together with appropriate instruments of reassignment and release.
Any such reassignment shall be without recourse upon, or representation or
warranty by, the Collateral Agent and at the sole cost and expense of the
Pledgor. Notwithstanding the foregoing, this Agreement and the pledge hereunder
shall immediately and permanently terminate under the circumstances set forth in
Section 4.02 of the Credit Agreement, upon which termination the Collateral
Agent shall effect the reassignment and redelivery of the Collateral in
accordance with the foregoing provisions of this Section 11.

                                   SECTION 12

                                  MISCELLANEOUS

         SECTION 12.1 Amendments. No amendment, modification, termination or
waiver of any provision of this Pledge Agreement, and no consent to any
departure by the Pledgor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Collateral Agent and the Required
Lenders, and then any such amendment, modification, waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.

         SECTION 12.2 Captions. Section captions in this Pledge Agreement are
for convenience only, and shall not affect the construction of this Pledge
Agreement.

         SECTION 12.3 Notices. All notices, requests and other communications to
any party hereunder shall be in writing (including bank wire, telex or telecopy
or similar writing) and shall be given to such party in accordance with the
notice provision in the Credit Agreement. Each such notice, request or other
communication shall be effective (a) if given by mail, three (3) days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, (b) if given by facsimile, when such telecopy is
transmitted to the telecopy number as specified in the Credit Agreement and the
appropriate confirmation is received, or (c) if given by any other means, when
delivered at the address specified in Section 11.02 of the Credit Agreement.

         SECTION 12.4 Waivers. The Pledgor hereby expressly waives: (a) notice
of the acceptance by the Collateral Agent of this Pledge Agreement, (b) notice
of the existence or creation or non-payment of all or any of the Liabilities,
(c) presentment, demand, notice of dishonor, protest, and all other notices
whatsoever, and (d) all diligence in collection or protection of or realization
upon the Liabilities or any thereof, any obligation hereunder, or any security
for or guaranty of any of the foregoing.

         SECTION 12.5 Further Assurances. The Pledgor agrees that, if at any
time all or any part of any payment theretofore applied by the Collateral Agent
to any of the Liabilities is or must be rescinded or returned by the Collateral
Agent for any reason whatsoever (including,

                                       14

<PAGE>

without limitation, the insolvency, bankruptcy or reorganization of any of the
Borrower or its Subsidiaries), such Liabilities shall, for the purposes of this
Pledge Agreement, to the extent that such payment is or must be rescinded or
returned, be deemed to have continued in existence, notwithstanding such
application by the Collateral Agent, and the pledge by the Pledgor hereunder
shall continue to be effective or be reinstated, as the case may be, as to such
Liabilities, all as though such application by the Collateral Agent had not been
made.

         SECTION 12.6 SUBMISSION TO JURISDICTION; WAIVER OF VENUE. THE PLEDGOR
(A) HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY ILLINOIS STATE OR
FEDERAL COURT SITTING IN CHICAGO, ILLINOIS OVER ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO THIS PLEDGE AGREEMENT AND THE PLEDGOR HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND
DETERMINED IN SUCH ILLINOIS STATE OR FEDERAL COURT, AND (B) AGREES NOT TO
INSTITUTE ANY LEGAL ACTION OR PROCEEDING AGAINST THE COLLATERAL AGENT OR THE
DIRECTORS, OFFICERS, EMPLOYEES, COLLATERAL AGENT OR PROPERTY OF THE COLLATERAL
AGENT, ARISING OUT OF OR RELATING TO THIS PLEDGE AGREEMENT, IN ANY COURT OTHER
THAN AS HEREINABOVE SPECIFIED IN THIS SECTION 12.6. THE PLEDGOR HEREBY
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE IN ANY ACTION OR PROCEEDING
(WHETHER BROUGHT BY THE PLEDGOR, ANY SUBSIDIARY, THE COLLATERAL AGENT, OR
OTHERWISE) IN ANY COURT HEREINABOVE SPECIFIED IN THIS SECTION 12.6 AS WELL AS
ANY RIGHT IT MAY NOW OR HEREAFTER HAVE TO REMOVE ANY SUCH ACTION OR PROCEEDING,
ONCE COMMENCED, TO ANOTHER COURT ON THE GROUNDS OF FORUM NON CONVENIENS OR
OTHERWISE. THE PLEDGOR 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.

         SECTION 12.7 WAIVER OF JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM OR COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS PLEDGE
AGREEMENT OR UNDER ANY OTHER DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH, OR ARISING FROM ANY
BANKING RELATIONSHIP EXISTING IN CONNECTION WITH THIS PLEDGE AGREEMENT, AND
AGREE THAT ANY SUCH ACTION, PROCEEDING OR COUNTERCLAIM SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY; THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
COLLATERAL AGENT ENTERING INTO THIS PLEDGE AGREEMENT AND FOR THE COLLATERAL
AGENT TO MAKE THE LOANS PURSUANT TO THE CREDIT AGREEMENT.

         SECTION 12.8 Governing Law; Terms; Interpretation. This Pledge
Agreement shall be a contract made under and governed by the laws of the state
of Illinois, without regard to its conflicts of law principles. All obligations
of the Pledgor and rights of the Collateral Agent

                                       15

<PAGE>

expressed herein or in the other Related Documents shall be in addition to and
not in limitation of those provided by applicable law. Wherever possible, each
provision of this Pledge Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Pledge
Agreement shall be prohibited by or invalid under such law, such provision shall
be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Pledge Agreement.

         SECTION 12.9 Filing as a Financing Statement. At the option of the
Collateral Agent, this Pledge Agreement, or a carbon, photographic or other
reproduction of this Pledge Agreement or of any Uniform Commercial Code
financing statement covering the Collateral or any portion thereof, shall be
sufficient as a Uniform Commercial Code financing statement and may be filed as
such.

         SECTION 12.10 Binding Agreement; Assignment. This Pledge Agreement, and
the terms, covenants and conditions hereof, shall be binding upon and inure to
the benefit of the parties hereto, and their successors and assigns, except the
Pledgor shall not be permitted to assign this Pledge Agreement nor any interest
herein nor in the Collateral, nor any part thereof.

         SECTION 12.11 Conditions of Effectiveness. No action of the Collateral
Agent permitted hereunder shall in any way affect or impair the rights of the
Collateral Agent and the obligations of the Pledgor under this Pledge Agreement.
The Pledgor hereby acknowledges that there are no conditions to the
effectiveness of this Pledge Agreement which have not been satisfied
concurrently with or prior to Pledgor's execution and delivery of this Pledge
Agreement.

         SECTION 12.12 Liabilities. All obligations of the Pledgor and rights of
the Collateral Agent (and any other holder of Notes or Liabilities expressed in
this Pledge Agreement) shall be in addition to and not in limitation of those
provided in applicable law or in any other written instrument or agreement
relating to any of the Liabilities.

         SECTION 12.13 Counterparts. This Pledge Agreement may be executed in
any number of counterparts, each of which shall be deemed an original, but all
such counterparts shall together constitute but one and the same Pledge
Agreement. The Pledgor hereby acknowledges receipt of a true, correct and
complete counterpart of this Pledge Agreement.

                                       16

<PAGE>

                  IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the date first above written.

Address:                                     SIG HOLDINGS, INC.
c/o Delphi Capital Management, Inc.
153 E. 53rd Street, 49th Floor
New York, New York 10022                     By: _______________________________
                                                 Robert M. Smith, Jr.
                                                 Vice President

Address:                                     BANK OF AMERICA, N.A., as
231 South LaSalle Street                     Collateral Agent
Chicago, IL 60697
                                             By: _______________________________
                                             Name: _____________________________
                                             Its: ______________________________

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