(a)      The Commitment shall terminate on the Maturity Date and any Loans then outstanding (together with any accrued and unpaid interest thereon) shall be due and payable on such date.

                (b)      The Borrower shall have the right, upon prior written notice of at least five (5) Business Days to the Lender, to terminate or, from time to time, to reduce the Commitment, provided that (i) any such reduction of the Commitment shall be accompanied by the prepayment of the Note, together with accrued interest thereon to the date of such prepayment, to the extent, if any, that the aggregate unpaid principal amount thereof then outstanding exceeds the Commitment as then reduced and (ii) any such termination of the Commitment shall be accompanied by prepayment in full of the unpaid principal amount of the Note, together with accrued interest thereon to the date of such. Any such partial reduction of the Commitment shall be in an aggregate principal amount of $500,000 or any whole multiple of $100,000 in excess thereof and shall reduce permanently the Commitment then in effect hereunder.

                (a)      If the Lender determines that compliance with any law or regulation enacted or introduced after the date hereof or any guideline or request of any central bank or other governmental authority adopted or made after the date hereof (whether or not having the force of law) affects or would affect the amount of capital required or expected to be maintained by the Lender or any corporation controlling the Lender and that the amount of such capital is increased by or based upon the existence of the Lender’s commitment to lend hereunder and other commitments of this type, or the Loans, then, the Borrower shall, within thirty (30) days after delivery by the Lender to the Borrower of a certificate as to such required compliance, pay to the Lender the amount required to compensate the Lender therefor (a certificate of the Lender as to such amount to be conclusive and binding on the Borrower in the absence of manifest error).

                (b)      The Lender shall notify the Borrower of any event occurring after the date hereof entitling the Lender to any compensation under paragraph (a) above as promptly as practicable, but in any event within thirty (30) days after the Lender obtains actual knowledge thereof; provided that if the Lender fails to give such notice within thirty (30) days after it obtains actual knowledge of such an event, the Lender shall, with respect to compensation payable pursuant to this Section in respect of any costs resulting from such event, only be entitled to payment under this Section for costs incurred from and after the date thirty (30) days prior to the date that the Lender does give such notice.

                (a)      the Note for the account of the Lender duly executed by the Borrower in the principal amount of the Commitment;

                (b)      the Security Agreement duly executed by Borrower;

                (c)      the AAI Guaranty duly executed by Guarantor;

                (d)      the NCM Guaranty duly executed by NCM;

                (e)      the AAI Pledge Agreement duly executed by AAI;

                (f)      the NCM Pledge Agreement duly executed by NCM;

                (g)      the stock certificates representing all of the authorized, issued and outstanding capital stock of FLICA, NFL and the Borrower, as applicable (with undated stock powers signed in blank);

                (h)      the Receivables Purchase Agreement duly executed and delivered by the Borrower and NCM;

                (i)      the Financing Statements;

                (j)      confirmations of pledge executed by AAI, NCM, FLICA, NFL and Borrower;

                (k)      an intercreditor subordination agreement among the Lender, CSFB and AAI and its Subsidiaries (the “Intercreditor Subordination Agreement”), substantially in the form attached as Exhibit I hereto;

                (l)      a certificate of the Secretary or Assistant Secretary of the Borrower, dated the Closing Date, attesting on behalf of the Borrower to all corporate action taken by the Borrower, including resolutions of its Board of Directors authorizing the execution, delivery and performance of this Agreement, the Security Agreement, the Note, the Receivables Purchase Agreements and each other document to be delivered by the Borrower pursuant to this Agreement, and attesting to the names and true signatures of the officers of the Borrower authorized to sign this Agreement, the Security Agreement, the Receivables Purchase Agreement, the Note, and the other documents to be delivered by the Borrower under this Agreement and to the completeness and correctness of the attached Articles of Incorporation and Bylaws of the Borrower;

                (m)      a certificate of the Secretary or Assistant Secretary of AAI, dated the Closing Date, attesting on behalf of AAI to all corporate action taken by AAI, including resolutions of its Board of Directors authorizing the execution, delivery and performance of the AAI Guaranty and the AAI Pledge Agreement and each other document to be delivered by AAI hereunder, and attesting to the names and true signatures of the officers of AAI authorized to sign the AAI Guaranty, the AAI Pledge Agreement and the other documents to be delivered by AAI hereunder and to the completeness and correctness of the attached Articles of Incorporation and Bylaws of AAI;

                (n)      a certificate of the Secretary or Assistant Secretary of each Eligible MGA, dated the Closing Date, attesting on behalf of such Eligible MGA to all corporate action taken by such Eligible MGA, including resolutions of its Board of Directors authorizing the execution, delivery and performance of the Receivables Purchase Agreement and each other document to be delivered by the Eligible MGA hereunder, and attesting to the names and true signatures of the officers of the Eligible MGA authorized to sign the Receivables Purchase Agreement and the other documents to be delivered by the Eligible MGA hereunder and to the completeness and correctness of the attached Articles of Incorporation and Bylaws of such MGA;

                (o)      a certificate of good standing for the Borrower as of a recent date by the Secretary of State of its jurisdiction of incorporation and each state where the Borrower, by the nature of its business, is required to qualify to do business, except where the failure to be so qualified could not reasonably be expected to have a Materially Adverse Effect;

                (p)      a certificate of good standing for AAI as of a recent date by the Secretary of State of its jurisdiction of incorporation and each state where AAI, by the nature of its business, is required to qualify to do business, except where the failure to be so qualified could not reasonably be expected to have a Materially Adverse Effect;

                (q)      a certificate of good standing for each Eligible MGA as of a recent date by the Secretary of State of each jurisdiction of incorporation and each state where each Eligible MGA, by the nature of its business, is required to qualify to do business, except where the failure to be so qualified could not reasonably be expected to have a Materially Adverse Effect;

                (r)      a certificate of authority from each Insurance Commissioner certifying that each of FLICA and NFL are duly licensed and in good standing with the applicable Insurance Commissioner, except where any such failure could not reasonably be expect to have a Materially Adverse Effect;

                (s)      a favorable opinion of general counsel to the Obligors and the Insurance Affiliate dated the Closing Date, in substantially the form set forth in Exhibit K hereto;

                (t)      a Master General Agent Contract for each Master General Agent, attached to a certificate of a Senior Officer of the Eligible MGA party thereto certifying that such Master General Agent Contract is a true, correct and complete copy, including all amendments and supplements thereto, and is in full force and effect on the Closing Date;

                (u)      all corporate and legal proceedings and all instruments and agreements in connection with the transactions contemplated by this Agreement, the Security Agreement, the AAI Pledge Agreement, the AAI Guaranty, the NCM Guaranty, the NCM Pledge Agreement, the Receivables Purchase Agreement and the other Loan Documents shall be reasonably satisfactory in form and substance to the Lender and the Lender shall have received any and all other information and documents with respect to each Obligor and the Insurance Affiliate, which it may reasonably request;

                (v)      searches of the Uniform Commercial Code, tax lien, real property and other records as Lender may require;

                (w)      a Compliance Certificate, dated the Closing Date, confirming compliance with the covenants set forth in Sections 6.1, 6.4, 6.8, 6.9, 6,10, and 6.12;

                (x)      a copy of the executed agreement between CSFB and AAI waiving any default under any agreement between CSFB and AAI resulting from the execution, delivery and performance of the Loan Documents; and

                (y)      the Waiver of Jury Trial and Notice of Final Agreement executed by all parties thereto.

                (a)      the representations and warranties contained in each Loan Document shall be true and correct in all material respects on and as of the date of such Loan (both before and after giving effect to the making of and application of proceeds of such Loan) as though made on and as of such date (or, if such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

                (b)      to the extent that Agent Receivables are being purchased from an Eligible MGA with the proceeds of such Loan, the representations and warranties of such Eligible MGA contained in the Receivables Purchase Agreement are true and correct in all material respects on and as of the date of such Loan as though made on and as of such date (or, if such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date);

                (c)      each Obligor has complied in all material respects with all conditions contained in the Loan Documents to which it is a party or it or its property is subject, and such Obligor has performed in all material respects all agreements contained in the Loan Documents to which it is a party or it or its property is subject that are required to be performed by such Obligor;

                (d)      there does not exist any Default or Event of Default;

                (e)      since the date of the last Loan under this Agreement (or if no Loan has occurred, since September 30, 2003), there has occurred no event that could reasonably be expected to have a Materially Adverse Effect; and

                (f)      the Lender shall have received a duly executed Notice of Borrowing in the form of Exhibit F and a duly executed Borrowing Base Certificate in the form of Exhibit M.

                (a)      The Borrower has heretofore furnished to the Lender (i) its audited consolidated balance sheet and statements of income, stockholders’ equity and cash flows as of and for the fiscal year ended December 31, 2002, with the unqualified opinion thereon of Ernst & Young LLP and (ii) its unaudited consolidated balance sheet and statements of income, stockholders’ equity and cash flows as of and for the quarterly period ended September 30, 2003. Such financial statements present fairly and accurately the consolidated financial position and consolidated results of operations and cash flows of the Borrower as of such date and for such period in accordance with GAAP.

                (b)      AAI has heretofore furnished to the Lender (i) the audited consolidated balance sheet and statements of income, stockholders’ equity and cash flows for AAI as of and for the fiscal year ended December 31, 2002, with the unqualified opinion thereon of Ernst & Young LLP and (ii) the unaudited consolidated balance sheet and statements of income, stockholders’ equity and cash flows for AAI as of and for the quarterly period ended September 30, 2003. Such financial statements present fairly and accurately the consolidated financial position and consolidated results of operations and cash flows of AAI as of such date and for such period in accordance with GAAP.

                (c)      AAI has heretofore furnished to the Lender (i) the audited consolidated balance sheet and statements of income, stockholders’ equity and cash flows of each of FLICA and NFL as of and for the fiscal year ended December 31, 2002, with the unqualified opinion thereon of Ernst & Young LLP and (ii) the unaudited consolidated balance sheet and statements of income, stockholders’ equity and cash flows of each of FLICA and NFL, respectively, as of and for the quarterly period ended September 30, 2003. Such financial statements present fairly and accurately the consolidated financial position and consolidated results of operations and cash flows of each of FLICA and NFL as of such date and for such period in accordance with SAP.

                (a)      Attached as Schedule 4.16(a) is a complete and correct list of all documents and agreements effective as of the Closing Date related to all capital stock and other equity interest (including rights to acquire capital stock and other equity interest) of AAI;

                (b)      Attached as Exhibit L1 is a complete and correct copy of each document and agreement described on Schedule 4.16(a);

                (c)      No document or agreement described on Schedule 4.16(a) has been amended or restated, unless the amendment or restatement is attached as Exhibit L1;

                (d)      Attached as Schedule 4.16(b) is a complete and correct list of all documents and agreements effective as of the Closing Date related to all Debt of AAI;

                (e)      Attached as Exhibit L2 is a complete and correct copy of each document and agreement described on Schedule 4.16(b);

                (f)      No document or agreement described on Schedule 4.16(b) has been amended or restated, unless the amendment or restatement is attached as Exhibit L2; and

                (g)      No default or event of default exists with respect to an document or agreement described on Schedule 4.16(a) or 4.16(b) or attached as Exhibit L1 or L2.

                (a)      Annual GAAP Statements of Borrower and AAI. Within 105 days following the end of the Borrower’s and AAI’s respective fiscal years, copies of the audited financial statements of the Borrower and AAI, respectively, including the balance sheet of the Borrower and AAI, respectively, as at the close of such fiscal year; the statement of operations and statements of stockholders’ equity and cash flows, in each case of the Borrower and AAI, respectively, for such fiscal year, in each case setting forth in comparative form the figures for the preceding fiscal year and prepared in accordance with GAAP, all in reasonable detail and accompanied by an opinion of Ernst & Young LLP or other firm of independent public accountants selected by the Borrower and AAI, respectively, and reasonably acceptable to the Lender, to the effect that the financial statements have been prepared in accordance with GAAP (except for changes in application in which such accountants concur) and present fairly in all material respects in accordance with GAAP the financial condition of the Borrower and AAI, respectively, as of the end of such fiscal year and the results of its operations for the fiscal year then ended and that the examination of such independent public accountants in connection with such financial statements has been made in accordance with generally accepted auditing standards and, accordingly, included such tests of the accounting records and such other auditing procedures as were considered necessary under the circumstances.

                (b)      Annual SAP Statements of Insurance Affiliates. Within ninety days following the end of each Insurance Affiliate’s fiscal year, copies of the audited financial statements of such Insurance Affiliate, including the balance sheet of such Insurance Affiliate as at the close of such fiscal year, the statement of operations and statement of shareholders’ equity and cash flows, in each case of such Insurance Affiliate for such fiscal year, in each case setting forth in comparative form the figures for the preceding fiscal year and prepared in accordance with SAP, all in reasonable detail and accompanied by an opinion of Ernst & Young or other firm of independent public accountants, selected by such Insurance Affiliate and reasonably acceptable to the Lender, to the effect that the financial statements have been prepared in accordance with SAP (except for changes in application in which such accountants can occur) and present fairly in all material respects in accordance with SAP, the financial condition of such Insurance Affiliate as of the end of such fiscal year and the result of its operations for the fiscal year then ended, and that the examination of such independent public accountants in connection with such financial statements have been made in accordance with generally accepted auditing standards, and, accordingly, including such tests as to the accounting records and such other auditing procedures as were considered necessary under the circumstances.

                (c)      Quarterly GAAP Statements of Borrower, AAI and NCM. As soon as available, and in any event within fifty days after the end of each quarterly fiscal period of the Borrower, AAI and NCM, respectively, copies of the unaudited balance sheet of the Borrower, AAI and NCM at the end of such fiscal quarter, and the unaudited statement of operations and statements of stockholders’ equity and cash flows of the Borrower, AAI and NCM, respectively, for such fiscal quarter and the portion of such fiscal year ended with such fiscal quarter, in each case setting forth in comparative form the figures for the preceding fiscal year and prepared in accordance with GAAP all in reasonable detail and certified by a Senior Officer of such company as presenting fairly in accordance with GAAP the financial condition of the Borrower, AAI and NCM, respectively, as of the end of such period and the results of operations for such period, subject only to normal year-end accruals and audit adjustments and the absence of footnotes.

                (d)      Actuarial Opinion of Insurance Affiliates. With respect to each Insurance Affiliate, as soon as available and in any event within (i) seventy-five days after the close of each fiscal year of such Insurance Affiliate, a copy of the “Statement of Actuarial Opinion”, and (ii) seventy-five days after the close of each fiscal year of such Insurance Affiliate, a copy of the “Management Discussion and Analysis” for such Insurance Affiliate, each prepared in accordance with SAP for such fiscal year and as filed with the applicable Insurance Regulator in compliance with the requirements thereof (or a report containing equivalent information for such Insurance Affiliate if such Insurance Affiliate is not so required to file the foregoing with the applicable Insurance Regulator).

                (e)      Convention Statements. With respect to each Insurance Affiliate, within fifteen days after the first to occur of (i) the required filing date (as established by law or the applicable Insurance Commissioner), and (ii) the date on which actually filed, annual financial statements prepared in the form of convention blanks prescribed by NAIC, as filed with each Insurance Commissioner.

                (f)      Quarterly Regulatory Statements. As soon as available, and in any event within sixty days after the end of each quarterly fiscal period of each life insurance company owned by AAI, the quarterly financial statements for such insurance company in the form of the quarterly financial statements prescribed by NAIC.

                (g)      Management Letters. Promptly upon receipt thereof, copies of any reports or management letters relating to the internal financial controls and procedures delivered to any Obligor or Insurance Affiliate by any independent certified public accountant in connection with examination of the financial statements of such Obligor or Insurance Affiliate.

                (h)      Notice of Litigation. Promptly after the commencement thereof, notice of any action, suit and proceeding before any court or governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, against any Obligor or Insurance Affiliate, (A) which, if determined adversely to such Obligor or Insurance Affiliate, could reasonably be expected to have a Materially Adverse Effect, or (B) commenced by any creditor or lessor under any written credit or lease agreement with respect to borrowed money or material lease which asserts a default thereunder on the part of such Obligor or Insurance Affiliate.

                (i)      Notices of Default. As soon as practicable and in any event within ten days after the occurrence of each Default or Event of Default, a written notice setting forth the details of such Default or Event of Default and the action which is proposed to be taken by the Borrower or other Obligor with respect thereto.

                (j)      Other Filings. Promptly upon the filing thereof and at any time upon the reasonable request of the Lender, permit the Lender the opportunity to review copies of all reports, including annual reports, and notices which any Obligor or Insurance Affiliate files with or receives from the Pension Benefit Guaranty Corporation or the U.S. Department of Labor under ERISA; and as soon as practicable and in any event within fifteen days after such Obligor or Insurance Affiliate knows or has reason to know that any Reportable Event or prohibited transaction has occurred with respect to any employee benefit plan or that the Pension Benefit Guaranty Corporation or such Obligor or Insurance Affiliate has instituted or will institute proceedings under Title IV of ERISA to terminate any employee benefit plan, such Obligor or Insurance Affiliate will deliver to the Lender a certificate of a Senior Officer of such Obligor or Insurance Affiliate setting forth details as to such Reportable Event or prohibited transaction or employee benefit plan termination and the action such Obligor proposes to take with respect thereto.

                (k)      Borrowing Base Certificate. Within twenty days following the end of each month, a Borrowing Base Certificate dated as of the end of such month.

                (l)      Tax Shelter Regulations. If the Borrower determines to treat the Loans as a “reportable transaction” (within the meaning of Treasury Regulation Section 1.6011-4), Borrower will promptly notify the Lender thereof. If the Borrower so notifies the Lender, the Borrower acknowledges that the Lender may treat the Loans as part of a transaction that is subject to Treasury Regulation Section 301.6112-1, and the Lender will maintain the lists and other records required by such Treasury Regulation.

                (m)      Additional Information. Such additional information as the Lender may reasonably request concerning each Obligor and Insurance Affiliate and for that purpose all pertinent books, documents and vouchers relating to its business, affairs and Properties, including investments as shall from time to time be designated by the Lender.

                (a)      Officer’s Certificate. Simultaneously with each delivery of financial statements and information pursuant to Sections 5.8(a), (b), (c) and (d), the Borrower, AAI and NCM shall deliver to the Lender:

            (i)        a certificate of the Chief Financial Officer of the respective Person which will certify on behalf of such Person that such officer has reviewed the Agreement and the other Loan Documents and the condition and transactions of such Person for the period covered by such financial statements, and state that to the best of his or her knowledge such Person has observed or performed in all material respects all of its covenants and other agreements, and satisfied every condition, contained in this Agreement and the other Loan Documents to which it is a party or is subject, and that no Default or Event of Default has occurred and is continuing or, if a Default or Event of Default has occurred and is continuing, a statement as to the nature thereof and the action which is proposed to be taken with respect thereto, and

            (ii)        a Compliance Certificate for the period covered by the financial statements then being delivered; provided, none of Borrower, AAI or NCM are required to deliver a Compliance Certificate with the financial information required by Section 5.8(d).

                (b)      Accountant’s Certificate. Simultaneously with each delivery of financial statements pursuant to Sections 5.8(a) and (b), the Borrower will deliver to the Lender a certificate of the independent certified public accountants who certify such statements, stating whether, in the course of their audit of the financial statements, they obtained any knowledge of a condition or event which constitutes a Default or Event of Default and the nature thereof.

                (a)      Liens for taxes or assessments or other government charges or levies if not yet due and payable or if due and payable, if they are being contested in good faith by appropriate proceedings and for which appropriate reserves are maintained;

                (b)      Liens imposed by law, such as mechanic’s, materialmen’s, landlord’s, warehousemen’s and carrier’s Liens, and other similar Liens, securing obligations incurred in the ordinary course of business which are not past due for more than forty-five (45) days, or which are being contested in good faith by appropriate proceedings and for which appropriate reserves have been established;

                (c)      Liens or deposits under workers’ compensation, unemployment insurance, social security or similar legislation (other than ERISA);

                (d)      judgment and other similar Liens arising in connection with court proceedings; provided that the execution or other enforcement of such Liens is effectively stayed and the claims secured thereby are being actively contested in good faith and by appropriate proceedings;

                (e)      easements, rights-of-way, restrictions and other similar encumbrances which, in the aggregate, do not materially interfere with the occupation, use and enjoyment by the Borrower of its Property or assets encumbered thereby in the normal course of its business or materially impair the value of the Property subject thereto; and

                (f)      Liens created pursuant to the Loan Documents.

                (a)      the Borrower shall fail to pay any principal amount when due, whether at stated maturity, by acceleration, by notice of prepayment or otherwise, or Borrower shall fail to pay any premium or interest, or any fees or other amounts payable hereunder, within five days after the date due;

                (b)      any Obligor shall fail to perform or observe any term, covenant, or agreement on its part to be performed or observed in Article VI or Sections 5.1, 5.7, 5.8, 5.9, or 5.13;

                (c)      the representations and warranties made by any Obligor in any Loan Document, or which is contained in any certificate, document, financial or other written statement furnished at any time under or in connection with any Loan Document shall prove to have been incorrect in any material respect on or as of the date made;

                (d)      the representations and warranties made by CSFB in the Intercreditor Subordination Agreement, or which is contained in any certificate, document, financial or other written statement furnished by CSFB at any time under or in connection therewith shall prove to have been incorrect in any material respect on or as of the date made;

                (e)      any Obligor shall fail to perform or observe any term, covenant, or agreement on its part to be performed or observed in any Loan Document (other than any failure to perform or observe as described in Sections 7.1(a) or (b)) and such failure shall continue unremedied for thirty (30) days;

                (f)      CSFB shall fail to perform or observe any term, covenant, or agreement on its part to be performed or observed by CSFB in the Intercreditor Subordination Agreement or any other agreement related thereto;

                (g)      any default by any Eligible MGA under the Receivables Purchase Agreement that has, or could reasonably be expected to have, a Materially Adverse Effect;

                (h)      any material provision of the Receivables Purchase Agreement shall at any time for any reason have ceased to be valid and binding on any Eligible MGA or shall be declared to be null and void by any court or other Person having jurisdiction;

                (i)      any default by any Agent under any Agent Contract that has, or could reasonably be expected to have, a Materially Adverse Effect;

                (j)      any material provision of any Agent Contract shall at any time for any reason have ceased to be valid and binding on the Agent party thereto or any Agent Contract shall be declared to be null and void by any court or other Person having jurisdiction or the Agent party thereto shall deny that it has any or further liability or obligation under the Agent Contract, if the occurrence of such event has, or could reasonably be expected to have a Materially Adverse Effect;

                (k)      if any Obligor or any Insurance Affiliate shall (i) fail to pay any indebtedness, including but not limited to indebtedness for borrowed money (other than the payment Obligations described in (a) above), of such Person, as the case may be, or any interest or premium thereon, when due (whether by scheduled maturity, required prepayment, acceleration, demand or otherwise and after giving effect to any grace period provided); or (ii) fail to perform or observe any term, covenant or condition on its part to be performed or observed under any agreement or instrument relating to any such indebtedness, when required to be performed or observed and such failure continues after any applicable notice and grace period, if the effect of such failure to perform or observe is to accelerate, or to permit the acceleration of the maturity of such indebtedness, or (iii) any such indebtedness shall be declared to be due and payable, or required to be prepaid (other than by a regularly scheduled required prepayment), prior to the stated maturity thereof; provided, however, that it shall not be a Default or Event of Default under this Section 7.1(k) unless the aggregate principal amount of indebtedness described in clauses (i) through (iii) above shall exceed $100,000;

                (l)      any Obligor or any Insurance Affiliate (i) shall generally not, or be unable to, or shall admit in writing its inability to, pay its debts as such debts become due; or (ii) shall make an assignment for the benefit of creditors or petition or apply to any tribunal for the appointment of a custodian, receiver or trustee for it or a substantial part of its assets; or (iii) shall commence any proceeding under any bankruptcy, reorganization, arrangement, readjustment of debt, dissolution or liquidation law or statute of any jurisdiction, whether now or hereafter in effect; or (iv) shall have had any such petition or application filed or any such proceeding shall have been commenced against it in which an adjudication or appointment is made or order for relief is entered; or (v) shall be the subject of any proceeding under which all or substantially all of its assets may be subject to seizure, forfeiture or divestiture (other than a proceeding in respect of a Lien permitted under this Agreement); or (vi) by any act or omission shall indicate its consent to, approval of or acquiescence in any such petition, application or proceeding or order for relief or the appointment of a custodian, receiver or trustee for all or any substantial part of its Property; or (vii) shall suffer any such custodianship, receivership or trusteeship to continue undischarged for a period of sixty consecutive days or more; or (viii) shall enter into any transaction with the intent to hinder, delay or defraud any creditor;

                (m)      AAI or any holder of capital stock or other equity interest of AAI elects to convert any of such capital stock or other equity interest into debt of AAI or any distribution representing a return of capital is declared or made with respect to any capital stock or other equity interest of AAI;

                (n)      (i) any Insurance Commissioner shall apply for an order pursuant to any section of the applicable insurance code, directing the rehabilitation, conservation or liquidation of any Insurance Affiliate, and any such application shall not be dismissed or otherwise terminated during a period of thirty consecutive days, or a court of competent jurisdiction shall enter an order granting the relief sought; or (ii) any Insurance Commissioner shall file a complaint or petition pursuant any applicable insurance code seeking the dissolution of any Insurance Affiliate, and such complaint or petition is not dismissed or otherwise terminated for a period of thirty consecutive days, or a court of competent jurisdiction shall order the dissolution of any Insurance Affiliate;

                (o)      one or more judgments, decrees or orders for the payment of money in excess of $100,000 in the aggregate shall have been rendered against any Obligor or any Insurance Affiliate (excluding judgments which are covered by insurance other than self-insurance) and such judgments, decrees or orders shall continue unsatisfied and in effect for a period of sixty consecutive days without being vacated, discharged, satisfied or stayed or bonded pending appeal;

                (p)      any material provision of any Loan Document shall at any time for any reason have ceased to be valid and binding on any party thereto (other than the Lender) or shall be declared to be null and void by any court or other Person having jurisdiction;

                (q)      the validity or enforceability of any Loan Document shall be contested by any party thereto (other than the Lender) or any party thereto (other than the Lender), shall deny it has any further liability or obligation thereunder;

                (r)      FLICA or NFL shall issue additional capital stock to any Person;

                (s)      Any Insurance Affiliate makes any Investment in any Person, except Permitted Investments;

                (t)      Risk-Based Capital for either of FLICA or NFL is less than 225% at any time;

                (u)      a Change in Control shall have occurred;

                (v)      any person holding the office of president, chief financial officer or chief operating officer of Borrower or AAI exercising the authority assigned to such office on the Closing Date shall at any time after the Closing Date either not hold such office or exercise the authority assigned to such office on the Closing Date and a replacement (reasonably acceptable to the Lender in its discretion) for such person is not exercising the authority assigned to such person or office within 120 days after such person ceased to hold such office or exercise such authority; or

                (w)      if any opinion with respect to the financial statements of the Borrower, AAI or any Insurance Affiliate (including any opinion delivered in connection with any financial statement described in Section 5.8(a) and (b)) of the independent public accounts is not unqualified or contains any going concern “emphasis” or similar emphasis.

                (a)      Unless otherwise agreed in writing, the Borrower shall promptly reimburse the Lender for all reasonable costs, expenses and charges (including without limitation reasonable fees and charges of its attorneys and auditors) actually incurred by the Lender in connection with the preparation and negotiation of the Loan Documents. Such reimbursement obligation will not exceed $60,000 without the Borrower’s consent. The Borrower shall promptly reimburse the Lender for all reasonable costs, expenses and charges (including without limitation, reasonable fees and charges of external legal counsel for the Lender) actually incurred by the Lender in connection with the performance, modification and amendment of the Loan Documents. The Borrower shall promptly reimburse all reasonable costs and expenses (including reasonable counsel fees and expenses), if any, incurred by the Lender in connection with the enforcement, including without limitation the enforcement of judgments (whether through negotiations, legal proceedings or otherwise) of the Loan Documents. Until paid, the amount of any cost, expense or charge shall constitute, together with all accrued interest thereon, part of the Obligations.

                (b)      THE BORROWER SHALL INDEMNIFY THE LENDER AGAINST ANY AND ALL LOSSES, COSTS OR EXPENSES WHICH THE LENDER MAY AT ANY TIME OR FROM TIME TO TIME SUSTAIN OR INCUR AS A CONSEQUENCE OF (i) ANY FAILURE BY THE BORROWER TO PAY, PUNCTUALLY ON THE DUE DATE THEREOF, ANY AMOUNT PAYABLE BY THE BORROWER TO THE LENDER HEREUNDER OR (ii) THE ACCELERATION, IN ACCORDANCE WITH THE TERMS OF THIS AGREEMENT, OF THE TIME OF PAYMENT OF ANY OF THE OBLIGATIONS. SUCH LOSSES, COSTS OR EXPENSES MAY INCLUDE, WITHOUT LIMITATION, (i) ANY COMMERCIALLY REASONABLE COSTS INCURRED BY THE LENDER IN CARRYING FUNDS TO COVER ANY OVERDUE PRINCIPAL, OVERDUE INTEREST, OR ANY OTHER OVERDUE SUMS PAYABLE BY THE BORROWER TO THE LENDER OR (ii) ANY LOSSES INCURRED OR SUSTAINED BY THE LENDER IN LIQUIDATING OR REEMPLOYING FUNDS ACQUIRED BY THE LENDER FROM THIRD PARTIES, EXCEPT TO THE EXTENT CAUSED BY THE LENDER’S GROSS NEGLIGENCE OR WILLFUL MISCONDUCT.

                (c)      THE BORROWER SHALL INDEMNIFY THE LENDER AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND AFFILIATES FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, COSTS OR EXPENSES INCURRED BY ANY OF THEM ARISING OUT OF OR BY REASON OF ANY INVESTIGATION OR LITIGATION OR OTHER PROCEEDINGS (INCLUDING ANY THREATENED INVESTIGATION OR LITIGATION OR OTHER PROCEEDINGS) RELATING TO ANY TRANSACTION CONTEMPLATED BY THE LOAN DOCUMENTS, ANY ACTIONS OR OMISSIONS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES OR AGENTS IN CONNECTION WITH THE LOAN DOCUMENTS, OR ANY ACTUAL OR PROPOSED USE BY THE BORROWER OF THE LOAN PROCEEDS, INCLUDING WITHOUT LIMITATION, THE REASONABLE FEES AND DISBURSEMENTS OF COUNSEL INCURRED IN CONNECTION WITH ANY SUCH INVESTIGATION OR LITIGATION OR OTHER PROCEEDINGS (BUT EXCLUDING ANY SUCH LOSSES, LIABILITIES, CLAIMS, DAMAGES OR EXPENSES INCURRED BY REASON OF THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON TO BE INDEMNIFIED).

                (d)      THE BORROWER SHALL INDEMNIFY THE LENDER AND ITS DIRECTORS, OFFICERS, EMPLOYEES, AGENTS AND AFFILIATES FROM, AND HOLD EACH OF THEM HARMLESS AGAINST, ANY AND ALL LOSSES, LIABILITIES, CLAIMS, DAMAGES, COSTS OR EXPENSES (INCLUDING WITHOUT LIMITATION, REASONABLE FEES AND DISBURSEMENTS OF COUNSEL, ENGINEERS OR SIMILAR PROFESSIONALS) WHICH MAY BE INCURRED BY OR ASSERTED AGAINST THE LENDER OR ANY SUCH PARTY IN CONNECTION WITH OR ARISING OUT OF OR RELATING TO (i) THE LENDER’S COMPLIANCE WITH ANY ENVIRONMENTAL LAW WITH RESPECT TO THE PROPERTIES OR OPERATIONS OF THE BORROWER OR ANY OF ITS SUBSIDIARIES, (ii) ANY NATURAL RESOURCE DAMAGES, GOVERNMENTAL FINES OR PENALTIES OR OTHER AMOUNTS MANDATED BY ANY GOVERNMENTAL AUTHORITY, COURT ORDER, DEMAND OR DECREE IN CONNECTION WITH THE DISPOSAL BY THE BORROWER OR ANY OF ITS SUBSIDIARIES EITHER ON-SITE OR OFF-SITE (INCLUDING LEAKAGE OR SEEPAGE FROM ANY SUCH SITE INCLUDING THIRD PARTY TREATMENT FACILITIES) OF POLLUTANTS, CONTAMINANTS OR HAZARDOUS WASTES AND (iii) ANY PERSONAL INJURY OR PROPERTY DAMAGE TO THIRD PARTIES RESULTING FROM SUCH POLLUTANTS, CONTAMINANTS OR HAZARDOUS WASTES.

                (a)      EACH OBLIGOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF ANY TEXAS STATE OR UNITED STATES FEDERAL COURT SITTING IN BEXAR COUNTY, TEXAS OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE SECURITY AGREEMENT, ANY PLEDGE AGREEMENT, THE GUARANTY, THE RECEIVABLES PURCHASE AGREEMENT OR THE NOTE, AND EACH OBLIGOR HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN SUCH TEXAS STATE OR FEDERAL COURT. EACH OBLIGOR IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES OF SUCH PROCESS TO SUCH OBLIGOR AT ITS ADDRESS SPECIFIED IN SECTION 8.7. EACH OBLIGOR AGREES THAT A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER PROVIDED BY LAW. EACH OBLIGOR FURTHER WAIVES ANY OBJECTION TO VENUE IN SUCH STATE AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE ON THE BASIS OF FORUM NON CONVENIENS. EACH OBLIGOR FURTHER AGREES THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST THE LENDER SHALL BE BROUGHT ONLY IN TEXAS STATE OR UNITED STATES FEDERAL COURTS SITTING IN BEXAR COUNTY, TEXAS.

                (b)      EACH OBLIGOR AND THE LENDER HEREBY KNOWINGLY VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE, TO THE MAXIMUM EXTENT NOT PROHIBITED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO ANY OF THE LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A MATERIAL INDUCEMENT TO THE LENDER ENTERING INTO THIS AGREEMENT AND MAKING THE LOANS HEREUNDER.

                (c)      EACH OBLIGOR ACKNOWLEDGES THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS AGREEMENT AND THAT IT IRREVOCABLY WAIVES TRIAL BY JURY IN ANY COURT AND IN ANY SUIT, ACTION OR PROCEEDING OR ANY MATTER ARISING IN CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTIONS CONTEMPLATED BY THE LOAN DOCUMENTS AND THE ENFORCEMENT OF ANY OF THE LENDER’S RIGHTS AND REMEDIES.

                (d)      Nothing in this Section shall affect the right of the Lender to serve legal process in any other manner permitted by law or affect the right of the Lender to bring any action or proceeding against any Obligor or its Property in the courts of any other jurisdictions.

            (a)        “Lender” means THE FROST NATIONAL BANK, a national banking association, whose address for notice purposes is the following:

            (b)        “Borrower” means Ascent Funding, Inc., a Delaware corporation.

            (c)        “Guarantor” means Ascent Assurance, Inc., a Delaware corporation, whose address for notice purposes is the following:

            (d)        “Guaranteed Indebtedness” means (i) all Obligations now or hereafter existing of Borrower and each other Obligor under the Credit Agreement, (ii) all obligations of Borrower and each other Obligor under each other Loan Document, (iii) all other indebtedness, obligations and liabilities of Borrower and each other Obligor to Lender of any kind or character, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several (excluding only indebtedness originally payable to or in favor of a Person other than Lender and subsequently acquired by Lender), and all indebtedness, obligations and liabilities of Borrower and each other Obligor to Lender now existing or hereafter arising by note, draft, acceptance, guaranty, endorsement, letter of credit, assignment, purchase, overdraft, discount, indemnity agreement or otherwise, (iv) all accrued but unpaid interest (including all interest that would accrue but for the existence of a proceeding under any Debtor Relief Laws) on any of the indebtedness described in this definition of “Guaranteed Indebtedness”, (v) all costs and expenses incurred by Lender in connection with the collection and administration of all or any part of the indebtedness and obligations described in this definition of “Guaranteed Indebtedness” or the protection or preservation of, or realization upon, the Collateral securing all or any part of such indebtedness and obligations, including without limitation all reasonable attorneys’ fees, and (vi) all renewals, extensions, modifications and rearrangements of the indebtedness and obligations described in this definition of “Guaranteed Indebtedness.”

            (e)        “Credit Agreement” means the Credit Agreement dated as of December 31, 2003, among Borrower, each other Obligor, and Lender, together with all amendments and restatements thereto.

            (f)        “Loan Documents” means the Credit Agreement, each note executed pursuant to the Credit Agreement, each document securing or guaranteeing performance of the obligations of Borrower and each other Obligor under the Credit Agreement, each other document, instrument, financing statement, public notice and the like executed in connection with Liens in favor of Lender or collateral, and all other documents and instruments executed and delivered to Lender by any Obligor or any other Person in connection with the Credit Agreement, and each other document evidencing, securing, guaranteeing, governing and/or pertaining to all or any part of the indebtedness and obligations described in clause (iii) of “Guaranteed Indebtedness.”

            (a)        This is an absolute, continuing and unconditional guaranty of payment and not of collection and if at any time or from time to time there is no outstanding Guaranteed Indebtedness, the obligations of Guarantor with respect to any and all Guaranteed Indebtedness incurred thereafter shall not be affected. This Guaranty and the Guarantor’s obligations hereunder are irrevocable. All of the Guaranteed Indebtedness shall be conclusively presumed to have been made or acquired in acceptance hereof. Guarantor shall be liable, jointly and severally, with Borrower and any other guarantor of all or any part of the Guaranteed Indebtedness.

            (b)        Lender may, at its sole discretion and without impairing its rights hereunder, (i) apply any payments on the Guaranteed Indebtedness that Lender receives from Borrower or any other source other than Guarantor to that portion of the Guaranteed Indebtedness, if any, not guaranteed hereunder, and (ii) apply any proceeds it receives as a result of the foreclosure or other realization on any collateral for the Guaranteed Indebtedness to that portion, if any, of the Guaranteed Indebtedness not guaranteed hereunder or to any other indebtedness secured by such collateral.

            (c)        Guarantor agrees that its obligations hereunder shall not be released, diminished, impaired, reduced or affected by the existence of any other guaranty or the payment by any other guarantor of all or any part of the Guaranteed Indebtedness and Guarantor’s payment obligations hereunder shall continue (except as provided in Paragraph 23) until Lender has received payment in full of the Guaranteed Indebtedness and all obligations of Lender to extend credit to Borrower under the Loan Documents are terminated.

            (d)        Guarantor’s obligations hereunder shall not be released, diminished, impaired, reduced or affected by, nor shall any provision contained herein be deemed to be a limitation upon, the amount of credit which Lender may extend to Borrower, the number of transactions between Lender and Borrower, payments by Borrower to Lender or Lender’s allocation of payments by Borrower.

            (e)        Without further authorization from or notice to Guarantor, Lender may compromise, accelerate, or otherwise alter the time or manner for the payment of the Guaranteed Indebtedness, increase or reduce the rate of interest thereon, or release or add any one or more guarantors or endorsers, or allow substitution of or withdrawal of collateral or other security and release collateral and other security or subordinate the same; provided that, the Commitment will not be increased to greater than $3,000,000 without the prior written consent of Guarantor.

            (a)        This Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor, and the Board of Directors of Guarantor has determined that this Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor; and

            (b)        Guarantor is familiar with, and has independently reviewed the books and records regarding, the financial condition of Borrower and is familiar with the value of any and all collateral intended to be security for the payment of all or any part of the Guaranteed Indebtedness; provided, however, Guarantor is not relying on such financial condition or collateral as an inducement to enter into this Guaranty; and

            (c)        Guarantor has adequate means to obtain from Borrower on a continuing basis information concerning the financial condition of Borrower and Guarantor is not relying on Lender to provide such information to Guarantor either now or in the future; and

            (d)        Guarantor has the corporate power and authority to execute, deliver and perform this Guaranty and any other agreements executed by Guarantor contemporaneously herewith, and the execution, delivery and performance of this Guaranty and any other agreements executed by Guarantor contemporaneously herewith do not and will not violate (i) any material agreement or instrument to which Guarantor is a party and with respect to which Guarantor has not obtained a waiver or consent of each such violation, (ii) any material law, rule, regulation or order of any governmental authority to which Guarantor is subject, or (iii) its articles or certificate of incorporation or bylaws; and

            (e)        Neither Lender nor any other party has made any representation, warranty or statement to Guarantor in order to induce Guarantor to execute this Guaranty; and

            (f)        The financial statements regarding Guarantor heretofore and hereafter delivered to Lender pursuant to the Credit Agreement fairly present in all material respects the consolidated financial position of Guarantor and its consolidated Subsidiaries as of the dates thereof, and no material adverse change has occurred in the financial condition of Guarantor reflected in the financial statements regarding Guarantor heretofore delivered to Lender since the date of the last statement thereof; and

            (g)        As of the date hereof, and after giving effect to this Guaranty and the obligations evidenced hereby, Guarantor is and will be Solvent; and

            (h)        Guarantor has not entered into this Guaranty or any of the other Loan Documents to which it is a party or its property is subject with the intent to hinder, delay or defraud any creditor.

            (a)        Guarantor shall not, so long as its obligations under this Guaranty continue, transfer or pledge any (i) material portion of its assets for less than full and adequate consideration (as reasonably determined by Guarantor’s Board of Directors), or (ii) of its assets subject or intended to be subject to a Lien in favor of Lender or its affiliates; and

            (b)        Guarantor shall comply with all terms and provisions of the Loan Documents to which it is a party; and

            (c)        Guarantor shall promptly inform Lender of (i) any litigation or governmental investigation against Guarantor or affecting any security for all or any part of the Guaranteed Indebtedness or this Guaranty which could reasonably be expected to have a material adverse effect upon the financial condition of Guarantor or upon such security or could reasonably be expected to cause a default under any of the Loan Documents, (ii) any claim or controversy which might become the subject of such litigation or governmental investigation, and (iii) any material adverse change in the financial condition of Guarantor.

            (a)        Guarantor waives (i) promptness, diligence and notice of acceptance of this Guaranty and notice of the incurring of any obligation (subject to the proviso of Section 3(e)), indebtedness or liability to which this Guaranty applies or may apply and waives presentment for payment, notice of nonpayment, protest, demand, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonor, diligence in enforcement and indulgences of every kind, and (ii) the taking of any other action by Lender, including without limitation giving any notice of default or any other notice to, or making any demand on, Borrower, any other guarantor of all or any part of the Guaranteed Indebtedness, any other Obligor or any other party.

            (b)        Guarantor waives any rights Guarantor has under, or any requirements imposed by, Chapter 34 of the Texas Business and Commerce Code, as in effect on the date of this Guaranty or as it may be amended from time to time.

            (c)        Lender may at any time (subject to the other Loan Documents), without the consent of or notice to Guarantor, without incurring responsibility to Guarantor and without impairing, releasing, reducing or affecting the obligations of Guarantor hereunder: (i) change the manner, place or terms of payment of all or any part of the Guaranteed Indebtedness, or renew, extend, modify, rearrange or alter all or any part of the Guaranteed Indebtedness; (ii) change the interest rate accruing on any of the Guaranteed Indebtedness (including, without limitation, any periodic change in such interest rate that occurs because such Guaranteed Indebtedness accrues interest at a variable rate which may fluctuate from time to time); (iii) sell, exchange, release, surrender, subordinate, realize upon or otherwise deal with in any manner and in any order any collateral for all or any part of the Guaranteed Indebtedness or this Guaranty or setoff against all or any part of the Guaranteed Indebtedness; (iv) neglect, delay, omit, fail or refuse to take or prosecute any action for the collection of all or any part of the Guaranteed Indebtedness or this Guaranty or to take or prosecute any action in connection with any of the Loan Documents; (v) exercise or refrain from exercising any rights against Borrower, any other Obligor or others, or otherwise act or refrain from acting; (vi) settle or compromise all or any part of the Guaranteed Indebtedness and subordinate the payment of all or any part of the Guaranteed Indebtedness to the payment of any obligations, indebtedness or liabilities which may be due or become due to Lender or others; (vii) apply any deposit balance, fund, payment, collections through process of law or otherwise or other collateral of Borrower to the satisfaction and liquidation of the indebtedness or obligations of Borrower and each other Obligor to Lender not guaranteed under this Guaranty; and (viii) apply any sums paid to Lender by Guarantor, Borrower, any other Obligor or others to the Guaranteed Indebtedness in such order and manner as Lender, in its sole discretion, may determine.

            (d)        Should Lender seek to enforce the obligations of Guarantor hereunder by action in any court or otherwise, Guarantor waives any requirement, substantive or procedural, that (i) Lender first enforce any rights or remedies against Borrower, any other Obligor or any other Person liable to Lender for all or any part of the Guaranteed Indebtedness, including without limitation that a judgment first be rendered against Borrower, any other Obligor or any other Person, or that Borrower, any other Obligor or any other Person should be joined in such cause, or (ii) Lender first enforce rights against any collateral which shall ever have been given to secure all or any part of the Guaranteed Indebtedness or this Guaranty. Such waiver shall be without prejudice to Lender’s right, at its option, to proceed against Borrower, any other Obligor or any other Person, whether by separate action or by joinder.

            (e)        IN ADDITION TO ANY OTHER WAIVERS, AGREEMENTS AND COVENANTS OF GUARANTOR SET FORTH HEREIN, GUARANTOR HEREBY FURTHER WAIVES AND RELEASES ALL CLAIMS, CAUSES OF ACTION, DEFENSES AND OFFSETS FOR ANY ACT OR OMISSION OF LENDER, ITS DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES OR AGENTS IN CONNECTION WITH LENDER’S ADMINISTRATION OF THE GUARANTEED INDEBTEDNESS, EXCEPT FOR LENDER’S WILLFUL MISCONDUCT AND GROSS NEGLIGENCE.

            (a)        Guarantor agrees that its obligations hereunder shall not be released, diminished, impaired, reduced or affected by the occurrence of any one or more of the following events: (i) the death, disability or lack of corporate power of Borrower, Guarantor, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness, (ii) any receivership, insolvency, bankruptcy or other proceedings affecting Borrower, Guarantor, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness, or any of their respective property; (iii) the partial or total release or discharge of Borrower, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness, or any other Person from the performance of any obligation contained in any instrument or agreement evidencing, governing or securing all or any part of the Guaranteed Indebtedness, whether occurring by reason of law or otherwise (other than as a result of payment in full in cash of the Guaranteed Indebtedness after termination of all obligations of Lender to extend credit to Borrower); (iv) the taking or accepting of any collateral for all or any part of the Guaranteed Indebtedness or this Guaranty; (v) the taking or accepting of any other guaranty for all or any part of the Guaranteed Indebtedness; (vi) any failure by Lender to acquire, perfect or continue any lien or security interest on collateral securing all or any part of the Guaranteed Indebtedness or this Guaranty; (vii) the impairment of any collateral securing all or any part of the Guaranteed Indebtedness or this Guaranty; (viii) subject to the other Loan Documents, any failure by Lender to sell any collateral securing all or any part of the Guaranteed Indebtedness or this Guaranty in a commercially reasonable manner or as otherwise required by law; (ix) any invalidity or unenforceability of or defect or deficiency in any of the Loan Documents; or (x) any other circumstance which might otherwise constitute a defense available to, or discharge of, Borrower, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness.

            (b)        This Guaranty shall be reinstated if at any time any payment of all or any part of the Guaranteed Indebtedness is rescinded or must otherwise be returned by Lender upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor, or any other Obligor or other guarantor of all or any part of the Guaranteed Indebtedness, or otherwise, all as though such payment had not been made.

            (c)        None of the following shall affect Guarantor’s liability hereunder: (i) the unenforceability of all or any part of the Guaranteed Indebtedness against Borrower by reason of the fact that the Guaranteed Indebtedness exceeds the amount permitted by law; (ii) the act of creating all or any part of the Guaranteed Indebtedness is ultra ▇▇▇▇▇; or (iii) the officers or partners creating all or any part of the Guaranteed Indebtedness acted in excess of their authority. Guarantor hereby acknowledges that withdrawal from, or termination of, any ownership interest in Borrower now or hereafter owned or held, directly or indirectly, by Guarantor shall not alter, affect or in any way limit the obligations of Guarantor hereunder.

            (a)        “Lender” means THE FROST NATIONAL BANK, a national banking association, whose address for notice purposes is the following:

            (b)        “Borrower” means Ascent Funding, Inc., a Delaware corporation.

            (c)        “Guarantor” means NationalCare® Marketing, Inc., a Delaware corporation, whose address for notice purposes is the following:

            (d)        “Guaranteed Indebtedness” means (i) all Obligations now or hereafter existing of Borrower and each other Obligor under the Credit Agreement, (ii) all obligations of Borrower and each other Obligor under each other Loan Document, (iii) all other indebtedness, obligations and liabilities of Borrower and each other Obligor to Lender of any kind or character, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several (excluding only indebtedness originally payable to or in favor of a Person other than Lender and subsequently acquired by Lender), and all indebtedness, obligations and liabilities of Borrower and each other Obligor to Lender now existing or hereafter arising by note, draft, acceptance, guaranty, endorsement, letter of credit, assignment, purchase, overdraft, discount, indemnity agreement or otherwise, (iv) all accrued but unpaid interest (including all interest that would accrue but for the existence of a proceeding under any Debtor Relief Laws) on any of the indebtedness described in this definition of “Guaranteed Indebtedness”, (v) all costs and expenses incurred by Lender in connection with the collection and administration of all or any part of the indebtedness and obligations described in this definition of “Guaranteed Indebtedness” or the protection or preservation of, or realization upon, the Collateral securing all or any part of such indebtedness and obligations, including without limitation all reasonable attorneys’ fees, and (vi) all renewals, extensions, modifications and rearrangements of the indebtedness and obligations described in this definition of “Guaranteed Indebtedness.”

            (e)        “Credit Agreement” means the Credit Agreement dated as of December 31, 2003, among Borrower, each other Obligor, and Lender, together with all amendments and restatements thereto.

            (f)        “Loan Documents” means the Credit Agreement, each note executed pursuant to the Credit Agreement, each document securing or guaranteeing performance of the obligations of Borrower and each other Obligor under the Credit Agreement, each other document, instrument, financing statement, public notice and the like executed in connection with Liens in favor of Lender or collateral, and all other documents and instruments executed and delivered to Lender by any Obligor or any other Person in connection with the Credit Agreement, and each other document evidencing, securing, guaranteeing, governing and/or pertaining to all or any part of the indebtedness and obligations described in clause (iii) of “Guaranteed Indebtedness.”

            (a)        This is an absolute, continuing and unconditional guaranty of payment and not of collection and if at any time or from time to time there is no outstanding Guaranteed Indebtedness, the obligations of Guarantor with respect to any and all Guaranteed Indebtedness incurred thereafter shall not be affected. This Guaranty and the Guarantor’s obligations hereunder are irrevocable. All of the Guaranteed Indebtedness shall be conclusively presumed to have been made or acquired in acceptance hereof. Guarantor shall be liable, jointly and severally, with Borrower and any other guarantor of all or any part of the Guaranteed Indebtedness.

            (b)        Lender may, at its sole discretion and without impairing its rights hereunder, (i) apply any payments on the Guaranteed Indebtedness that Lender receives from Borrower or any other source other than Guarantor to that portion of the Guaranteed Indebtedness, if any, not guaranteed hereunder, and (ii) apply any proceeds it receives as a result of the foreclosure or other realization on any collateral for the Guaranteed Indebtedness to that portion, if any, of the Guaranteed Indebtedness not guaranteed hereunder or to any other indebtedness secured by such collateral.

            (c)        Guarantor agrees that its obligations hereunder shall not be released, diminished, impaired, reduced or affected by the existence of any other guaranty or the payment by any other guarantor of all or any part of the Guaranteed Indebtedness and Guarantor’s payment obligations hereunder shall continue (except as provided in Paragraph 23) until Lender has received payment in full of the Guaranteed Indebtedness and all obligations of Lender to extend credit to Borrower under the Loan Documents are terminated.

            (d)        Guarantor’s obligations hereunder shall not be released, diminished, impaired, reduced or affected by, nor shall any provision contained herein be deemed to be a limitation upon, the amount of credit which Lender may extend to Borrower, the number of transactions between Lender and Borrower, payments by Borrower to Lender or Lender’s allocation of payments by Borrower.

            (e)        Without further authorization from or notice to Guarantor, Lender may compromise, accelerate, or otherwise alter the time or manner for the payment of the Guaranteed Indebtedness, increase or reduce the rate of interest thereon, or release or add any one or more guarantors or endorsers, or allow substitution of or withdrawal of collateral or other security and release collateral and other security or subordinate the same; provided that, the Commitment will not be increased to greater than $3,000,000 without the prior written consent of Guarantor.

            (a)        This Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor, and the Board of Directors of Guarantor has determined that this Guaranty may reasonably be expected to benefit, directly or indirectly, Guarantor; and

            (b)        Guarantor is familiar with, and has independently reviewed the books and records regarding, the financial condition of Borrower and is familiar with the value of any and all collateral intended to be security for the payment of all or any part of the Guaranteed Indebtedness; provided, however, Guarantor is not relying on such financial condition or collateral as an inducement to enter into this Guaranty; and

            (c)        Guarantor has adequate means to obtain from Borrower on a continuing basis information concerning the financial condition of Borrower and Guarantor is not relying on Lender to provide such information to Guarantor either now or in the future; and

            (d)        Guarantor has the corporate power and authority to execute, deliver and perform this Guaranty and any other agreements executed by Guarantor contemporaneously herewith, and the execution, delivery and performance of this Guaranty and any other agreements executed by Guarantor contemporaneously herewith do not and will not violate (i) any material agreement or instrument to which Guarantor is a party and with respect to which Guarantor has not obtained a waiver or consent of each such violation, (ii) any material law, rule, regulation or order of any governmental authority to which Guarantor is subject, or (iii) its articles or certificate of incorporation or bylaws; and

            (e)        Neither Lender nor any other party has made any representation, warranty or statement to Guarantor in order to induce Guarantor to execute this Guaranty; and

            (f)        The financial statements regarding Guarantor heretofore and hereafter delivered to Lender pursuant to the Credit Agreement fairly present in all material respects the consolidated financial position of Guarantor and its consolidated Subsidiaries as of the dates thereof, and no material adverse change has occurred in the financial condition of Guarantor reflected in the financial statements regarding Guarantor heretofore delivered to Lender since the date of the last statement thereof; and

            (g)        As of the date hereof, and after giving effect to this Guaranty and the obligations evidenced hereby, Guarantor is and will be Solvent; and

            (h)        Guarantor has not entered into this Guaranty or any of the other Loan Documents to which it is a party or its property is subject with the intent to hinder, delay or defraud any creditor.

            (a)        Guarantor shall not, so long as its obligations under this Guaranty continue, transfer or pledge any (i) material portion of its assets for less than full and adequate consideration (as reasonably determined by Guarantor’s Board of Directors), or (ii) of its assets subject or intended to be subject to a Lien in favor of Lender or its affiliates; and

            (b)        Guarantor shall c omply with all terms and provisions of the Loan Documents to which it is a party; and

            (c)        Guarantor shall promptly inform Lender of (i) any litigation or governmental investigation against Guarantor or affecting any security for all or any part of the Guaranteed Indebtedness or this Guaranty which could reasonably be expected to have a material adverse effect upon the financial condition of Guarantor or upon such security or could reasonably be expected to cause a default under any of the Loan Documents, (ii) any claim or controversy which might become the subject of such litigation or governmental investigation, and (iii) any material adverse change in the financial condition of Guarantor.

            (a)        Guarantor waives (i) promptness, diligence and notice of acceptance of this Guaranty and notice of the incurring of any obligation (subject to the proviso of Section 3(e)), indebtedness or liability to which this Guaranty applies or may apply and waives presentment for payment, notice of nonpayment, protest, demand, notice of protest, notice of intent to accelerate, notice of acceleration, notice of dishonor, diligence in enforcement and indulgences of every kind, and (ii) the taking of any other action by Lender, including without limitation giving any notice of default or any other notice to, or making any demand on, Borrower, any other guarantor of all or any part of the Guaranteed Indebtedness, any other Obligor or any other party.

            (b)        Guarantor waives any rights Guarantor has under, or any requirements imposed by, Chapter 34 of the Texas Business and Commerce Code, as in effect on the date of this Guaranty or as it may be amended from time to time.

            (c)        Lender may at any time (subject to the other Loan Documents), without the consent of or notice to Guarantor, without incurring responsibility to Guarantor and without impairing, releasing, reducing or affecting the obligations of Guarantor hereunder: (i) change the manner, place or terms of payment of all or any part of the Guaranteed Indebtedness, or renew, extend, modify, rearrange or alter all or any part of the Guaranteed Indebtedness; (ii) change the interest rate accruing on any of the Guaranteed Indebtedness (including, without limitation, any periodic change in such interest rate that occurs because such Guaranteed Indebtedness accrues interest at a variable rate which may fluctuate from time to time); (iii) sell, exchange, release, surrender, subordinate, realize upon or otherwise deal with in any manner and in any order any collateral for all or any part of the Guaranteed Indebtedness or this Guaranty or setoff against all or any part of the Guaranteed Indebtedness; (iv) neglect, delay, omit, fail or refuse to take or prosecute any action for the collection of all or any part of the Guaranteed Indebtedness or this Guaranty or to take or prosecute any action in connection with any of the Loan Documents; (v) exercise or refrain from exercising any rights against Borrower, any other Obligor or others, or otherwise act or refrain from acting; (vi) settle or compromise all or any part of the Guaranteed Indebtedness and subordinate the payment of all or any part of the Guaranteed Indebtedness to the payment of any obligations, indebtedness or liabilities which may be due or become due to Lender or others; (vii) apply any deposit balance, fund, payment, collections through process of law or otherwise or other collateral of Borrower to the satisfaction and liquidation of the indebtedness or obligations of Borrower and each other Obligor to Lender not guaranteed under this Guaranty; and (viii) apply any sums paid to Lender by Guarantor, Borrower, any other Obligor or others to the Guaranteed Indebtedness in such order and manner as Lender, in its sole discretion, may determine.

            (d)        Should Lender seek to enforce the obligations of Guarantor hereunder by action in any court or otherwise, Guarantor waives any requirement, substantive or procedural, that (i) Lender first enforce any rights or remedies against Borrower, any other Obligor or any other Person liable to Lender for all or any part of the Guaranteed Indebtedness, including without limitation that a judgment first be rendered against Borrower, any other Obligor or any other Person, or that Borrower, any other Obligor or any other Person should be joined in such cause, or (ii) Lender first enforce rights against any collateral which shall ever have been given to secure all or any part of the Guaranteed Indebtedness or this Guaranty. Such waiver shall be without prejudice to Lender’s right, at its option, to proceed against Borrower, any other Obligor or any other Person, whether by separate action or by joinder.

            (e)        IN ADDITION TO ANY OTHER WAIVERS, AGREEMENTS AND COVENANTS OF GUARANTOR SET FORTH HEREIN, GUARANTOR HEREBY FURTHER WAIVES AND RELEASES ALL CLAIMS, CAUSES OF ACTION, DEFENSES AND OFFSETS FOR ANY ACT OR OMISSION OF LENDER, ITS DIRECTORS, OFFICERS, EMPLOYEES, REPRESENTATIVES OR AGENTS IN CONNECTION WITH LENDER’S ADMINISTRATION OF THE GUARANTEED INDEBTEDNESS, EXCEPT FOR LENDER’S WILLFUL MISCONDUCT AND GROSS NEGLIGENCE.

            (a)        Guarantor agrees that its obligations hereunder shall not be released, diminished, impaired, reduced or affected by the occurrence of any one or more of the following events: (i) the death, disability or lack of corporate power of Borrower, Guarantor, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness, (ii) any receivership, insolvency, bankruptcy or other proceedings affecting Borrower, Guarantor, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness, or any of their respective property; (iii) the partial or total release or discharge of Borrower, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness, or any other Person from the performance of any obligation contained in any instrument or agreement evidencing, governing or securing all or any part of the Guaranteed Indebtedness, whether occurring by reason of law or otherwise (other than as a result of payment in full in cash of the Guaranteed Indebtedness after termination of all obligations of Lender to extend credit to Borrower); (iv) the taking or accepting of any collateral for all or any part of the Guaranteed Indebtedness or this Guaranty; (v) the taking or accepting of any other guaranty for all or any part of the Guaranteed Indebtedness; (vi) any failure by Lender to acquire, perfect or continue any lien or security interest on collateral securing all or any part of the Guaranteed Indebtedness or this Guaranty; (vii) the impairment of any collateral securing all or any part of the Guaranteed Indebtedness or this Guaranty; (viii) subject to the other Loan Documents, any failure by Lender to sell any collateral securing all or any part of the Guaranteed Indebtedness or this Guaranty in a commercially reasonable manner or as otherwise required by law; (ix) any invalidity or unenforceability of or defect or deficiency in any of the Loan Documents; or (x) any other circumstance which might otherwise constitute a defense available to, or discharge of, Borrower, any other Obligor or any other guarantor of all or any part of the Guaranteed Indebtedness.

            (b)        This Guaranty shall be reinstated if at any time any payment of all or any part of the Guaranteed Indebtedness is rescinded or must otherwise be returned by Lender upon the insolvency, bankruptcy or reorganization of Borrower, Guarantor, or any other Obligor or other guarantor of all or any part of the Guaranteed Indebtedness, or otherwise, all as though such payment had not been made.

            (c)        None of the following shall affect Guarantor’s liability hereunder: (i) the unenforceability of all or any part of the Guaranteed Indebtedness against Borrower by reason of the fact that the Guaranteed Indebtedness exceeds the amount permitted by law; (ii) the act of creating all or any part of the Guaranteed Indebtedness is ultra ▇▇▇▇▇; or (iii) the officers or partners creating all or any part of the Guaranteed Indebtedness acted in excess of their authority. Guarantor hereby acknowledges that withdrawal from, or termination of, any ownership interest in Borrower now or hereafter owned or held, directly or indirectly, by Guarantor shall not alter, affect or in any way limit the obligations of Guarantor hereunder.

            (a)      “Code” means the Texas Business and Commerce Code as in effect in the State of Texas on the date of this Agreement or as it may hereafter be amended from time to time.

            (b)      “Collateral” means (i) all personal property of Debtor specifically described on Schedule A attached hereto and made a part hereof, (ii) all certificates, instruments and/or other documents evidencing the foregoing and following, (iii) all renewals, replacements and substitutions of all of the foregoing and following, (iv) all Additional Property (as hereinafter defined), and (v) all PRODUCTS and PROCEEDS of all of the foregoing. The designation of proceeds does not authorize Debtor to sell, transfer or otherwise convey any of the foregoing property. The delivery at any time by Debtor to Secured Party of any property as a pledge to secure payment or performance of any indebtedness or obligation whatsoever shall also constitute a pledge of such property as Collateral hereunder.

            (c)      “Credit Agreement” means the Credit Agreement dated as of December 31, 2003, among Borrower, each other Obligor and Secured Party, together with all amendments and restatements thereto.

            (d)      “Indebtedness” means (i) all indebtedness, obligations and liabilities of Debtor and each other Obligor to Secured Party of any kind or character, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several (excluding only indebtedness originally payable to or in favor of a Person other than Secured Party and subsequently acquired by Secured Party), including without limitation all indebtedness, obligations and liabilities of Debtor and each other Obligor to Secured Party now existing or hereafter arising by note, draft, acceptance, guaranty, endorsement, letter of credit, assignment, purchase, overdraft, discount, indemnity agreement or otherwise, (ii) all obligations now or hereafter existing of Debtor and each other Obligor under the Credit Agreement and each other Loan Document (including, but not limited to, the Obligations), (iii) all accrued but unpaid interest (including all interest that would accrue but for the existence of a proceeding under any Debtor Relief Laws) on any of the indebtedness described in this definition of “Indebtedness,” (iv) all obligations of Debtor and each other Obligor to Secured Party under any documents evidencing, securing, governing and/or pertaining to all or any part of the indebtedness described in this definition of “Indebtedness,” (v) all costs and expenses incurred by Secured Party in connection with the collection and administration of all or any part of the indebtedness and obligations described in this definition of “Indebtedness” or the protection or preservation of, or realization upon, the collateral securing all or any part of such indebtedness and obligations, including without limitation all reasonable attorneys’ fees, and (vi) all renewals, extensions, modifications and rearrangements of the indebtedness and obligations described in this definition of “Indebtedness.”

            (a)      Authority. The execution, delivery and performance of this Agreement and all of the other Loan Documents by Debtor have been duly authorized by all necessary corporate action of Debtor.

            (b)      Accuracy of Information. All information contained herein with respect to the Collateral is true and correct in all material respects. The exact legal name and federal taxpayer identification number of Debtor are correctly shown in the first paragraph hereof.

            (c)      Enforceability. This Agreement and the other Loan Documents constitute legal, valid and binding obligations of Debtor, enforceable in accordance with their respective terms, except as limited as to enforcement of remedies by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights and except to the extent specific remedies may generally be limited by equitable principles.

            (d)      Ownership and Liens. Debtor has good and marketable title to the Collateral free and clear of all Liens or adverse claims, except for the security interest created by this Agreement. No dispute, right of setoff, counterclaim or defense exists with respect to all or any part of the Collateral. Debtor has not executed any other security agreement currently affecting the Collateral and no financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording office except as may have been executed or filed in favor of Secured Party.

            (e)      No Conflicts or Consents. Neither the ownership, the intended use of the Collateral by Debtor, the grant of the security interest by Debtor to Secured Party herein nor the exercise by Secured Party of its rights or remedies hereunder, will (i) conflict with any provision of (A) any material domestic or foreign law, statute, rule or regulation (B) the articles or certificate of incorporation or bylaws of Debtor, or (C) any agreement, judgment, license, order or permit applicable to or binding upon Debtor or otherwise affecting the Collateral, or (ii) result in or require the creation of any Lien upon any assets or properties of Debtor or of any Person except as may be expressly contemplated in the Loan Documents. Except as expressly contemplated in the Loan Documents, no consent, approval, authorization or order of, and no notice to or filing with, any court, governmental authority or other Person is required in connection with the grant by Debtor of the security interest herein or the exercise by Secured Party of its rights and remedies hereunder.

            (f)      Security Interest. Debtor has and will have at all times full right, power and authority to grant a security interest in the Collateral to Secured Party in the manner provided herein, free and clear of any Lien or other charge or encumbrance. This Agreement creates a legal, valid and binding security interest in favor of Secured Party in the Collateral. Upon the filing of a financing statement describing the Collateral with the Uniform Commercial Code central filing officer of the jurisdiction of Debtor’s location and delivery to Secured Party of all certificates evidencing Collateral, the security interest granted by this Agreement shall be perfected and prior to all other Liens therein.

            (g)      Location/Identity. Debtor’s principal place of business and chief executive office (as those terms are used in the Code), as the case may be is located at the address set forth on the first page hereof. Except as specified elsewhere herein, all Collateral and records concerning the Collateral shall be kept at such address. Debtor is not organized in more than one jurisdiction. Debtor’s organizational structure, state of organization, and organizational number issued by the appropriate authority of the State of Delaware (the “Organizational Information”) are as set forth on the first page hereof. Except as specified herein, the Organizational Information shall not change.

            (h)      Solvency of Debtor. Debtor is not entering into this Agreement or any other Loan Document to which Debtor is a party or its property is subject with the intent of hindering, delaying or defrauding any creditor.

            (i)      Securities. Any certificates evidencing securities or other equity interests pledged as Collateral are valid and genuine and have not been altered. All securities or other equity interests pledged as Collateral have been duly authorized and validly issued, are fully paid and non-assessable, and were not issued in violation of the preemptive rights of any party or of any agreement by which Debtor or the issuer thereof is bound. No restrictions or conditions exist with respect to the transfer or voting of any securities or other equity interests pledged as Collateral. No issuer of such securities or other equity interests has any outstanding stock rights, rights to subscribe, options, warrants or convertible securities or other equity interests outstanding or any other rights outstanding entitling any party to have issued to such party capital stock or other security interests of such issuer. Schedule A contains a complete and correct description of each certificate or other instrument included in or evidencing Collateral. Schedule B is a complete and correct list of the exact name of the issuer of all Collateral described on Schedule A, its jurisdiction of organization, its federal taxpayer identification number, and the authorized, issued and outstanding capital stock of such issuer. As of the date hereof, Debtor’s interest in such issuer is as stated on Schedule A.

            (j)      Benefit. This Agreement may reasonably be expected to benefit, directly or indirectly, Debtor and the Board of Directors of Debtor has determined that this Agreement may reasonably be expected to benefit, directly or indirectly, Debtor.

            (a)      Ownership and Liens. Debtor will maintain good and marketable title to all Collateral free and clear of all Liens or adverse claims, except for the security interest created by this Agreement and the security interests and other encumbrances expressly permitted by the other Loan Documents. Debtor will not permit any dispute, right of setoff, counterclaim or defense to exist with respect to all or any part of the Collateral. Debtor will cause any financing statement or other security instrument with respect to the Collateral to be terminated, except as may exist or as may have been filed in favor of Secured Party. Debtor hereby irrevocably appoints Secured Party as Debtor’s attorney-in-fact, such power of attorney being coupled with an interest, with full authority in the place and stead of Debtor and in the name of Debtor or otherwise, for the purpose of terminating any financing statements currently filed with respect to the Collateral. Debtor will defend at its expense Secured Party’s right, title and security interest in and to the Collateral against the claims of any third party.

            (b)      Inspection of Books and Records. Debtor will keep adequate records concerning the Collateral and will, subject to the terms of the Credit Agreement, permit Secured Party and all representatives and agents appointed by Secured Party to inspect any of the Collateral and the books and records of or relating to the Collateral at any time during normal business hours, to make and take away photocopies, photographs and printouts thereof and to write down and record any such information (If no Event of Default exists, Debtor shall not be required to reimburse Secured Party for the related photocopy, photograph and printout costs and expenses).

            (c)      Adverse Claim. Debtor covenants and agrees to promptly notify Secured Party of any claim, action or proceeding affecting title to the Collateral, or any part thereof, or the security interest created hereunder and, at Debtor’s expense, defend Secured Party’s security interest in the Collateral against the claims of any third party. Debtor also covenants and agrees to promptly deliver to Secured Party a copy of all written notices received by Debtor with respect to the Collateral, including without limitation, notices received from the issuer of any securities or other equity interests pledged hereunder as Collateral.

            (d)      Further Assurances. Debtor will contemporaneously with the execution hereof and from time to time thereafter at its expense promptly execute and deliver all further instruments and documents and take all further action necessary or appropriate or that Secured Party may request in order (i) to perfect and protect the security interest created or purported to be created hereby and the first priority of such security interest, (ii) to enable Secured Party to exercise and enforce its rights and remedies hereunder in respect of the Collateral, and (iii) to otherwise effect the purposes of this Agreement, including without limitation: (A) executing (if requested) and filing any financing or continuation statements, or any amendments thereto; (B) obtaining written confirmation from the issuer of any securities or other equity interests pledged as Collateral of the pledge of such securities or other equity interests, in form and substance satisfactory to Secured Party; (C) cooperating with Secured Party in registering the pledge of any securities or other equity interests pledged as Collateral with the issuer of such securities or other equity interests; (D) delivering notice of Secured Party’s security interest in any securities or other equity interests pledged as Collateral to any financial intermediary, clearing corporation or other party required by Secured Party, in form and substance satisfactory to Secured Party; and (E) obtaining written confirmation of the pledge of any securities or other equity interests constituting Collateral from any financial intermediary, clearing corporation or other party required by Secured Party, in form and substance satisfactory to Secured Party. If all or any part of the Collateral is securities issued by an agency or department of the United States, Debtor covenants and agrees, at Secured Party’s request, to cooperate in registering such securities in Secured Party’s name or with Secured Party’s account maintained with a Federal Reserve Bank.

            (e)      Control Agreements. Debtor will cooperate with Secured Party in obtaining a control agreement in form and substance satisfactory to Secured Party with respect to Collateral for which such agreement is required for perfection of a security interest pursuant to the Code (as determined by Secured Party in its sole discretion)

            (a)      Transfer or Encumbrance. Debtor will not (i) sell, assign (by operation of law or otherwise) or transfer Debtor’s rights in any of the Collateral (other than Excluded Property), (ii) ▇▇▇▇▇ ▇ ▇▇▇▇ in or execute, authorize, file or record any financing statement or other security instrument with respect to the Collateral to any party other than Secured Party, or (iii) deliver actual or constructive possession of any certificate, instrument or document evidencing and/or representing any of the Collateral to any party other than Secured Party.

            (b)      Impairment of Security Interest. Debtor will not take or fail to take any action which would in any manner impair the value or enforceability of Secured Party’s security interest in any Collateral.

            (c)      Dilution of Ownership. As to any securities or other equity interests pledged as Collateral, Debtor will not consent to or approve of the issuance of (i) any additional shares of any class of securities or other equity interests of such issuer (unless immediately upon issuance additional securities or other equity interests are pledged and delivered to Secured Party pursuant to the terms hereof to the extent necessary to give Secured Party a security interest after such issuance in at least the same percentage of such issuer’s outstanding securities or other equity interests as Secured Party had before such issuance), (ii) any instrument convertible voluntarily by the holder thereof or automatically upon the occurrence or non-occurrence of any event or condition into, or exchangeable for, any such securities or other equity interests, or (iii) any warrants, options, contracts or other commitments entitling any third party to purchase or otherwise acquire any such securities or other equity interests.

            (d)      Restrictions on Securities. Debtor will not enter into any agreement creating, or otherwise permit to exist, any restriction or condition upon the transfer, voting or control of any securities or other equity interests pledged as Collateral, except as consented to in writing by Secured Party.

            (a)      Power of Attorney. Debtor hereby irrevocably appoints Secured Party as Debtor’s attorney-in-fact, such power of attorney being coupled with an interest, exercisable if an Event of Default exists, with full authority in the place and stead of Debtor and in the name of Debtor or otherwise, to take any action and to execute any instrument which Secured Party may from time to time in Secured Party’s discretion deem necessary or appropriate to accomplish the purposes of this Agreement, including without limitation, the following action: (i) transfer any securities or other equity interests, instruments, documents or certificates pledged as Collateral in the name of Secured Party or its nominee; (ii) use any interest, premium or principal payments, conversion or redemption proceeds or other cash proceeds received in connection with any Collateral to reduce any of the Indebtedness; (iii) exchange any of the securities or other equity interests pledged as Collateral for any other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof, and, in connection therewith, to deposit and deliver any and all of such securities or other equity interests with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as Secured Party may deem necessary or appropriate; (iv) exercise or comply with any conversion, exchange, redemption, subscription or any other right, privilege or option pertaining to any securities or other equity interests pledged as Collateral; provided, however, except as provided herein, Secured Party shall not have a duty to exercise or comply with any such right, privilege or option (whether conversion, redemption or otherwise) and shall not be responsible for any delay or failure to do so; and (v) file any claims or take any action or institute any proceedings which Secured Party may deem necessary or appropriate for the collection and/or preservation of the Collateral or otherwise to enforce the rights of Secured Party with respect to the Collateral. THE PROXY AND POWER OF ATTORNEY HEREIN GRANTED, AND EACH STOCK POWER AND SIMILAR POWER NOW OR HEREAFTER GRANTED (INCLUDING ANY EVIDENCED BY A SEPARATE WRITING), ARE COUPLED WITH AN INTEREST AND ARE IRREVOCABLE PRIOR TO PAYMENT IN FULL OF THE INDEBTEDNESS.

            (b)      Performance by Secured Party. If Debtor fails to perform any agreement or obligation provided herein, Secured Party may itself perform, or cause performance of, such agreement or obligation, and the expenses of Secured Party incurred in connection therewith shall be a part of the Indebtedness, secured by the Collateral and payable by Debtor on demand.

            (a)      Default in Payment. The failure, refusal or neglect of Debtor or any other Obligor to make any payment of principal or interest on the Indebtedness, or any portion thereof, as the same shall become due and payable after giving effect to any applicable grace period; or

            (b)      Non-Performance of Covenants. Subject to any applicable grace period, the failure of Debtor or any other Obligor to timely and properly observe, keep or perform any covenant, agreement, warranty or condition required herein or in any of the other Loan Documents; or

            (c)      Default Under other Loan Documents. The occurrence of an Event of Default (as defined in the Credit Agreement) under any of the other Loan Documents; or

            (d)      False Representation. Any representation contained herein or in any of the other Loan Documents made by Debtor or any other Obligor is not true and correct in any material respect; or

            (e)      Execution on Collateral. If Debtor fails to have discharged within a period of sixty (60) days any attachment, sequestration or similar writ levied upon any property (other than the Collateral) of Debtor, or the Collateral or any portion thereof is taken on execution or other process of law in any action against Debtor or any attachment, sequestration or similar writ is levied upon any Collateral; or

            (f)      Abandonment. Debtor abandons the Collateral or any portion thereof; or

            (g)      Action by Other Lienholder. The holder of any Lien on the Collateral (without hereby implying the consent of Secured Party to the existence or creation of any such Lien on the Collateral) or any other asset of Debtor having a value of $100,000 or greater declares a default thereunder or institutes foreclosure or other proceedings for the enforcement of its remedies thereunder; or

            (h)      Liquidation and Related Events. The liquidation, dissolution, merger or consolidation of Debtor or any other Obligor not otherwise permitted by the Credit Agreement; or

            (i)      Bankruptcy of Issuer. (i) The issuer of any securities or other equity interest constituting Collateral files a petition for relief under any Applicable Bankruptcy Law, (ii) an involuntary petition for relief is filed against any such issuer under any Applicable Bankruptcy Law and such involuntary petition is not dismissed within thirty (30) days after the filing thereof, (iii) an order for relief naming any such issuer is entered under any Applicable Bankruptcy Law (iv) any court or governmental authority shall issue any order of conservation, supervision or any other order of like effect relating to any such issuer, or (v) any Insurance Commissioner intervenes or takes any formal steps towards intervening in the management of the business or operations of any issuer or any such issuer facilitates or takes any affirmative action with the intention of facilitating such intervention, or

            (j)      Search Report. If Secured Party shall have elected to file any financing statement with respect to the Collateral, Secured Party shall receive at any time following the execution of this Agreement a search report indicating that Secured Party’s security interest is not prior to all other Liens, security interests or other interests reflected in the report and Secured Party does not receive within twenty days after the date of notice to Debtor of such Lien, a file stamped termination statement of each financing statement related to such Lien, the written release of such Lien in form and substance satisfactory to Secured Party, and a search report indicating the filing of each such termination statement.

            (a)      Remedies. Secured Party may from time to time at its discretion, without limitation and without notice except as expressly provided in any of the Loan Documents:

           (i)        exercise in respect of the Collateral all the rights and remedies of a secured party under the Code (whether or not the Code applies to the affected Collateral);

           (ii)       reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, the security interest granted hereunder by any available judicial procedure;

           (iii)      sell or otherwise dispose of, at its office, on the premises of Debtor or elsewhere, the Collateral, as a unit or in parcels, by public or private proceedings, and by way of one or more contracts (it being agreed that the sale or other disposition of any part of the Collateral shall not exhaust Secured Party’s power of sale, but sales or other dispositions may be made from time to time until all of the Collateral has been sold or disposed of or until the Indebtedness has been paid and performed in full), and at any such sale or other disposition it shall not be necessary to exhibit any of the Collateral;

           (iv)       buy the Collateral, or any portion thereof, at any public sale;

           (v)        buy the Collateral, or any portion thereof, at any private sale if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations;

           (vi)       apply for the appointment of a receiver for the Collateral, and Debtor hereby consents to any such appointment; and

           (vii)      at its option, retain the Collateral in satisfaction of the Indebtedness whenever the circumstances are such that Secured Party is entitled to do so under the Code or otherwise, to the full extent permitted by the Code, Secured Party shall be permitted to elect whether such retention shall be in full or partial satisfaction of the Indebtedness.

            (b)      Private Sale of Securities; Further Approvals.

           (i)        Debtor recognizes that Secured Party may be unable to effect a public sale of all or any part of the securities or other equity interests pledged as Collateral because of restrictions in applicable federal and state securities laws, insurance laws and contractual restrictions and that Secured Party may, therefore, determine to make one or more private sales of any such securities or other equity interests to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities or other equity interests for their own account, for investment and not with a view to the distribution or resale thereof. Debtor acknowledges that each any such private sale may be at prices and other terms less favorable than what might have been obtained at a public sale and, notwithstanding the foregoing, agrees that each such private sale shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall have no obligation to delay the sale of any such securities or other equity interests for the period of time necessary to permit the issuer to register such securities or other equity interests for public sale under any federal or state securities laws. Debtor further acknowledges and agrees that any offer to sell such securities or other equity interests which has been made privately in the manner described above to not less than five (5) bona fide offerees shall be deemed to involve a “public sale” for the purposes of Chapter 9 of the Code, notwithstanding that such sale may not constitute a “public offering” under any federal or state securities laws and that Secured Party may, in such event, bid for the purchase of such securities or other equity interests.

           (ii)       In connection with the exercise by Secured Party of its rights hereunder that effects the disposition of or use of any Collateral, it may be necessary to obtain the prior consent or approval of governmental authorities (including any Insurance Commissioner) and other Persons to a transfer or assignment of Collateral, including, without limitation, any governmental authorities (including any Insurance Commissioner) regulating insurance companies and their Affiliates.

           (iii)      Debtor agrees, if an Event of Default exists, to execute, deliver, and file, and hereby appoints Secured Party as its attorney-in-fact, to execute, deliver, and file on Debtor’s behalf and in Debtor’s name, all applications, certificates, filings, instruments, and other documents (including without limitation any application for an assignment or transfer of control or ownership) that may be necessary or appropriate, in Secured Party’s opinion, and to obtain such consents, waivers, or approvals under applicable laws and agreements prior to an Event of Default. Debtor further agrees to use its best efforts to obtain the foregoing consents, waivers, and approvals, including receipt of consents, waivers, and approvals under applicable laws and agreements prior to an Event of Default. Debtor acknowledges that there is no adequate remedy at Law for failure by it to comply with the provisions of this Section and that such failure would not be adequately compensable in damages, and therefore agrees that this Section may be specifically enforced.

            (c)      Application of Proceeds. If any Event of Default exists, Secured Party may at its discretion apply or use any cash held by Secured Party as Collateral, and any cash proceeds received by Secured Party in respect of any sale or other disposition of, collection from, or other realization upon, all or any part of the Collateral as follows in such order and manner as Secured Party may elect:

           (i)        to the repayment or reimbursement of the reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by Secured Party in connection with (A) the administration of the Loan Documents, (B) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Collateral, and (C) the exercise or enforcement of any of the rights and remedies of Secured Party hereunder;

           (ii)       to the payment or other satisfaction of any liens and other encumbrances upon the Collateral;

           (iii)      to the satisfaction of the Indebtedness;

           (iv)       by holding such cash and proceeds as Collateral prior to application to the Indebtedness if required to hold such cash or proceeds by applicable law or any court or governmental authority;

           (v)        to the payment of any other amounts required by applicable law (including without limitation, Section 9.615(a)(3) of the Code or any other applicable statutory provision); and

           (vi)       by delivery to Debtor or any other party lawfully entitled to receive such cash or proceeds whether by direction of a court of competent jurisdiction or otherwise.

            (d)      Deficiency. In the event that the proceeds of any sale of, collection from, or other realization upon, all or any part of the Collateral by Secured Party are insufficient to pay all amounts to which Secured Party is legally entitled, Debtor and each other Obligor who guaranteed or is otherwise obligated to pay all or any portion of the Indebtedness shall be liable for the deficiency, together with interest thereon as provided in the Loan Documents, to the full extent not prohibited by law.

            (e)      Non-Judicial Remedies. In granting to Secured Party the power to enforce its rights hereunder without prior judicial process or judicial hearing, Debtor expressly waives, renounces and knowingly relinquishes any legal right which might otherwise require Secured Party to enforce its rights by judicial process. Debtor recognizes and concedes that non-judicial remedies are consistent with the usage of trade, are responsive to commercial necessity and are the result of a bargain at arm’s length. Nothing herein is intended to prevent Secured Party or Debtor from resorting to judicial process at either party’s option.

            (f)      Other Recourse. Debtor waives any right to require Secured Party to proceed against any third party, exhaust any Collateral or other security for the Indebtedness, or to have any third party joined with Debtor in any suit arising out of the Indebtedness or any of the Loan Documents, or pursue any other remedy available to Secured Party. Debtor further waives any and all notice of acceptance of this Agreement and of the creation, modification, rearrangement, renewal or extension of the Indebtedness. Debtor further waives any defense arising by reason of any disability or other defense of any third party or by reason of the cessation from any cause whatsoever of the liability of any third party. Until all of the Indebtedness shall have been paid in full, Debtor shall have no right of subrogation and Debtor waives the right to enforce any remedy which Secured Party has or may hereafter have against any third party, and waives any benefit of and any right to participate in any other security whatsoever now or hereafter held by Secured Party. Debtor authorizes Secured Party, and without notice or demand and without any reservation of rights against Debtor and without affecting Debtor’s liability hereunder or on the Indebtedness, to (i) take or hold any other property of any type from any third party as security for the Indebtedness, and exchange, enforce, waive and release any or all of such other property, (ii) apply such other property and direct the order or manner of sale thereof as Secured Party may in its discretion determine, (iii) renew, extend, accelerate, modify, compromise, settle or release any of the Indebtedness or other security for the Indebtedness, (iv) waive, enforce or modify any of the provisions of any of the Loan Documents executed by any third party, and (v) release or substitute any third party. Notwithstanding anything in this Agreement to the contrary, the obligations of Debtor under this Agreement shall be limited to a maximum aggregate amount equal to the largest amount that would not render Debtor’s obligations hereunder subject to avoidance as a fraudulent transfer or fraudulent conveyance under Section 548 of Title 11 of the United States Code or any applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of Debtor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws and after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement or contribution of Debtor pursuant to applicable law, or any agreement providing for rights of subrogation, reimbursement or contribution in favor of Debtor, or for an equitable allocation among Debtor, Borrower, any other Obligor, and any other Person of obligations arising under guaranties by such Persons.

            (g)      Voting Rights. If an Event of Default exists, Debtor will not exercise any voting rights with respect to securities or other equity interests pledged as Collateral. Debtor hereby irrevocably appoints Secured Party as Debtor’s attorney-in-fact (such power of attorney being coupled with an interest) and proxy to exercise any voting rights with respect to Debtor’s securities or other equity interests pledged as Collateral upon the occurrence of an Event of Default.

            (h)      Dividend Rights and Interest Payments. If an Event of Default exists:

           (i)        all rights of Debtor to receive and retain the dividends and interest payments which it would otherwise be authorized to receive and retain pursuant to Section 3 shall automatically cease, and all such rights shall thereupon become vested with Secured Party which shall thereafter have the sole right to receive, hold and apply as Collateral such dividends and interest payments; and

           (ii)       all dividend and interest payments which are received by Debtor contrary to the provisions of clause (i) of this Subsection shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of Debtor, and shall be forthwith paid over to Secured Party in the exact form received (properly endorsed or assigned if requested by Secured Party), to be held by Secured Party as Collateral.

            (a)      Entire Agreement. This Agreement contains the entire agreement of Secured Party and Debtor with respect to the Collateral. If the parties hereto are parties to any prior agreement, either written or oral, relating to the Collateral, the terms of this Agreement shall amend and supersede the terms of such prior agreements as to transactions on or after the effective date of this Agreement, but all security agreements, financing statements, guaranties, other contracts and notices for the benefit of Secured Party shall continue in full force and effect to secure the Indebtedness unless Secured Party specifically releases its rights thereunder by separate release.

            (b)      Amendment. No modification, consent or amendment of any provision of this Agreement or any of the other Loan Documents shall be valid or effective unless the same is in writing and authenticated by the party against whom it is sought to be enforced, except to the extent of amendments specifically permitted by the Code without authentication by the Debtor or any other Obligor.

            (c)      Actions by Secured Party. The Lien of Secured Party hereunder shall not be impaired by (i) any renewal, extension, increase or modification with respect to the Indebtedness, (ii) any surrender, compromise, release, renewal, extension, exchange or substitution which Secured Party may grant with respect to the Collateral, or (iii) any release or indulgence granted to any endorser, guarantor or surety of the Indebtedness. The taking of additional security by Secured Party shall not release or impair the Lien of Secured Party hereunder or affect the obligations of Debtor hereunder.

            (d)      Waiver by Secured Party. Secured Party may waive any Event of Default without waiving any other prior or subsequent Event of Default. Secured Party may remedy any default without waiving the Event of Default remedied. Neither the failure by Secured Party to exercise, nor the delay by Secured Party in exercising, any right or remedy upon any Event of Default shall be construed as a waiver of such Event of Default or as a waiver of the right to exercise any such right or remedy at a later date. No single or partial exercise by Secured Party of any right or remedy hereunder shall exhaust the same or shall preclude any other or further exercise thereof, and every such right or remedy hereunder may be exercised at any time. No waiver of any provision hereof or consent to any departure by Debtor therefrom shall be effective unless the same shall be in writing and signed by Secured Party and then such waiver or consent shall be effective only in the specific instances, for the purpose for which given and to the extent therein specified. No notice to or demand on Debtor in any case shall of itself entitle Debtor to any other or further notice or demand in similar or other circumstances.

            (e)      Costs and Expenses. Debtor will upon demand pay to Secured Party the amount of any and all costs and expenses (including without limitation, attorneys’ fees and expenses), which Secured Party may incur in connection with (i) the transactions which give rise to the Loan Documents (subject to Section 8.3(a) of the Credit Agreement), (ii) the preparation of this Agreement (subject to Section 8.3(a) of the Credit Agreement) and the perfection and preservation of the security interests granted under the Loan Documents, (iii) the administration of the Loan Documents, (iv) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Collateral, (v) the exercise or enforcement of any of the rights of Secured Party under the Loan Documents, or (vi) the failure by Debtor to perform or observe any of the provisions hereof.

            (f)      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.

            (g)      Venue. This Agreement has been entered into in the county in Texas where Secured Party’s address for notice purposes is located, and it shall be performable for all purposes in such county. Courts within the State of Texas shall have jurisdiction over any and all disputes arising under or pertaining to this Agreement and venue for any such disputes shall be in the county or judicial district where this Agreement has been executed and delivered.

            (h)      Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision held to be illegal, invalid or unenforceable.

            (i)      No Obligation. Nothing contained herein shall be construed as an obligation on the part of Secured Party to extend or continue to extend credit to Debtor or any other Obligor.

            (j)      Notices. All notices, requests, demands or other communications required or permitted to be given pursuant to this Agreement shall be in writing and given by (i) personal delivery, (ii) expedited delivery service with proof of delivery, or (iii) United States mail, postage prepaid, registered or certified mail, return receipt requested, sent to the intended addressee at the address set forth on the first page hereof or to such different address as the addressee shall have designated by written notice sent pursuant to the terms hereof and shall be deemed to have been received either, in the case of personal delivery, at the time of personal delivery, in the case of expedited delivery service, as of the date of first attempted delivery at the address and in the manner provided herein, or in the case of mail, upon deposit in a depository receptacle under the care and custody of the United States Postal Service. Either party shall have the right to change its address for notice hereunder to any other location within the continental United States by notice to the other party of such new address at least thirty (30) days prior to the effective date of such new address.

            (k)      Binding Effect and Assignment. This Agreement (i) creates a continuing security interest in the Collateral, (ii) shall be binding on Debtor and the heirs, executors, administrators, personal representatives, successors and assigns of Debtor, and (iii) shall inure to the benefit of Secured Party and its successors and assigns. Without limiting the generality of the foregoing, Secured Party may pledge, assign or otherwise transfer the Indebtedness and its rights under this Agreement and any of the other Loan Documents to any other party. Debtor’s rights and obligations hereunder may not be assigned or otherwise transferred without the prior written consent of Secured Party.

            (l)      Termination. It is contemplated by the parties hereto that from time to time there may be no outstanding Indebtedness, but notwithstanding such occurrences, this Agreement shall remain valid and shall be in full force and effect as to subsequent outstanding Indebtedness. Upon (i) the indefeasible satisfaction in full of the Indebtedness, (ii) the termination or expiration of any commitment of Secured Party to extend credit to any Obligor, (iii) written request for the termination hereof delivered by Debtor to Secured Party, and (iv) written release delivered by Secured Party to Debtor, this Agreement and the security interests created hereby shall terminate. Upon termination of this Agreement and Debtor’s written request, Secured Party will, at Debtor’s sole cost and expense, return to Debtor such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and execute and deliver to Debtor such documents as Debtor shall reasonably request to evidence such termination.

            (m)      Cumulative Rights. All rights and remedies of Secured Party hereunder are cumulative of each other and of every other right or remedy which Secured Party may otherwise have at law or in equity or under any of the other Loan Documents, and the exercise of one or more of such rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of any other rights or remedies. Further, except as specifically noted as a waiver herein, no provision of this Agreement is intended by the parties to this Agreement to waive any rights, benefits or protection afforded to Secured Party under the Code.

            (n)      Gender and Number. Within this Agreement, words of any gender shall be held and construed to include the other gender, and words in the singular number shall be held and construed to include the plural and words in the plural number shall be held and construed to include the singular, unless in each instance the context requires otherwise.

            (o)      Descriptive Headings. The headings in this Agreement are for convenience only and shall in no way enlarge, limit or define the scope or meaning of the various and several provisions hereof.

            (a)      “Code” means the Texas Business and Commerce Code as in effect in the State of Texas on the date of this Agreement or as it may hereafter be amended from time to time.

            (b)      “Collateral” means (i) all personal property of Debtor specifically described on Schedule A attached hereto and made a part hereof, (ii) all certificates, instruments and/or other documents evidencing the foregoing and following, (iii) all renewals, replacements and substitutions of all of the foregoing and following, (iv) all Additional Property (as hereinafter defined), and (v) all PRODUCTS and PROCEEDS of all of the foregoing. The designation of proceeds does not authorize Debtor to sell, transfer or otherwise convey any of the foregoing property. The delivery at any time by Debtor to Secured Party of any property as a pledge to secure payment or performance of any indebtedness or obligation whatsoever shall also constitute a pledge of such property as Collateral hereunder.

            (c)      “Credit Agreement” means the Credit Agreement dated as of December 31, 2003, among Borrower, each other Obligor and Secured Party, together with all amendments and restatements thereto.

            (d)      “Indebtedness” means (i) all indebtedness, obligations and liabilities of Debtor and each other Obligor to Secured Party of any kind or character, now existing or hereafter arising, whether direct, indirect, related, unrelated, fixed, contingent, liquidated, unliquidated, joint, several or joint and several (excluding only indebtedness originally payable to or in favor of a Person other than Secured Party and subsequently acquired by Secured Party), including without limitation all indebtedness, obligations and liabilities of Debtor and each other Obligor to Secured Party now existing or hereafter arising by note, draft, acceptance, guaranty, endorsement, letter of credit, assignment, purchase, overdraft, discount, indemnity agreement or otherwise, (ii) all obligations now or hereafter existing of Debtor and each other Obligor under the Credit Agreement and each other Loan Document (including, but not limited to, the Obligations), (iii) all accrued but unpaid interest (including all interest that would accrue but for the existence of a proceeding under any Debtor Relief Laws) on any of the indebtedness described in this definition of “Indebtedness,” (iv) all obligations of Debtor and each other Obligor to Secured Party under any documents evidencing, securing, governing and/or pertaining to all or any part of the indebtedness described in this definition of “Indebtedness,” (v) all costs and expenses incurred by Secured Party in connection with the collection and administration of all or any part of the indebtedness and obligations described in this definition of “Indebtedness” or the protection or preservation of, or realization upon, the collateral securing all or any part of such indebtedness and obligations, including without limitation all reasonable attorneys’ fees, and (vi) all renewals, extensions, modifications and rearrangements of the indebtedness and obligations described in this definition of “Indebtedness.”

            (a)      Authority. The execution, delivery and performance of this Agreement and all of the other Loan Documents by Debtor have been duly authorized by all necessary corporate action of Debtor.

            (b)      Accuracy of Information. All information contained herein with respect to the Collateral is true and correct in all material respects. The exact legal name and federal taxpayer identification number of Debtor are correctly shown in the first paragraph hereof.

            (c)      Enforceability. This Agreement and the other Loan Documents constitute legal, valid and binding obligations of Debtor, enforceable in accordance with their respective terms, except as limited as to enforcement of remedies by bankruptcy, insolvency or similar laws of general application relating to the enforcement of creditors’ rights and except to the extent specific remedies may generally be limited by equitable principles.

            (d)      Ownership and Liens. Debtor has good and marketable title to the Collateral free and clear of all Liens or adverse claims, except for the security interest created by this Agreement. No dispute, right of setoff, counterclaim or defense exists with respect to all or any part of the Collateral. Debtor has not executed any other security agreement currently affecting the Collateral and no financing statement or other instrument similar in effect covering all or any part of the Collateral is on file in any recording office except as may have been executed or filed in favor of Secured Party.

            (e)      No Conflicts or Consents. Neither the ownership, the intended use of the Collateral by Debtor, the grant of the security interest by Debtor to Secured Party herein nor the exercise by Secured Party of its rights or remedies hereunder, will (i) conflict with any provision of (A) any material domestic or foreign law, statute, rule or regulation (B) the articles or certificate of incorporation or bylaws of Debtor, or (C) any agreement, judgment, license, order or permit applicable to or binding upon Debtor or otherwise affecting the Collateral, or (ii) result in or require the creation of any Lien upon any assets or properties of Debtor or of any Person except as may be expressly contemplated in the Loan Documents. Except (i) as expressly contemplated in the Loan Documents, and (ii) for any consent of the Insurance Commissioner of the state of domicile of NFL and FLICA to any realization upon the capital stock of NFL and FLICA, no consent, approval, authorization or order of, and no notice to or filing with, any court, governmental authority or other Person is required in connection with the grant by Debtor of the security interest herein or the exercise by Secured Party of its rights and remedies hereunder.

            (f)      Security Interest. Debtor has and will have at all times full right, power and authority to grant a security interest in the Collateral to Secured Party in the manner provided herein, free and clear of any Lien or other charge or encumbrance. This Agreement creates a legal, valid and binding security interest in favor of Secured Party in the Collateral. Upon the filing of a financing statement describing the Collateral with the Uniform Commercial Code central filing officer of the jurisdiction of Debtor’s location and delivery to Secured Party of all certificates evidencing Collateral, the security interest granted by this Agreement shall be perfected and prior to all other Liens therein.

            (g)      Location/Identity. Debtor’s principal place of business and chief executive office (as those terms are used in the Code), as the case may be is located at the address set forth on the first page hereof. Except as specified elsewhere herein, all Collateral and records concerning the Collateral shall be kept at such address. Debtor is not organized in more than one jurisdiction. Debtor’s organizational structure, state of organization, and organizational number issued by the appropriate authority of the State of Delaware (the “Organizational Information”) are as set forth on the first page hereof. Except as specified herein, the Organizational Information shall not change.

            (h)      Solvency of Debtor. Debtor is not entering into this Agreement or any other Loan Document to which Debtor is a party or its property is subject with the intent of hindering, delaying or defrauding any creditor.

            (i)      Securities. Any certificates evidencing securities or other equity interests pledged as Collateral are valid and genuine and have not been altered. All securities or other equity interests pledged as Collateral have been duly authorized and validly issued, are fully paid and non-assessable, and were not issued in violation of the preemptive rights of any party or of any agreement by which Debtor or the issuer thereof is bound. No restrictions or conditions exist with respect to the transfer or voting of any securities or other equity interests pledged as Collateral. No issuer of such securities or other equity interests has any outstanding stock rights, rights to subscribe, options, warrants or convertible securities or other equity interests outstanding or any other rights outstanding entitling any party to have issued to such party capital stock or other security interests of such issuer. Schedule A contains a complete and correct description of each certificate or other instrument included in or evidencing Collateral. Schedule B is a complete and correct list of the exact name of the issuer of all Collateral described on Schedule A, its jurisdiction of organization, its federal taxpayer identification number, and the authorized, issued and outstanding capital stock of such issuer. As of the date hereof, Debtor’s interest in such issuer is as stated on Schedule A.

            (j)      Benefit. This Agreement may reasonably be expected to benefit, directly or indirectly, Debtor and the Board of Directors of Debtor has determined that this Agreement may reasonably be expected to benefit, directly or indirectly, Debtor.

            (a)      Ownership and Liens. Debtor will maintain good and marketable title to all Collateral free and clear of all Liens or adverse claims, except for the security interest created by this Agreement and the security interests and other encumbrances expressly permitted by the other Loan Documents. Debtor will not permit any dispute, right of setoff, counterclaim or defense to exist with respect to all or any part of the Collateral. Debtor will cause any financing statement or other security instrument with respect to the Collateral to be terminated, except as may exist or as may have been filed in favor of Secured Party. Debtor hereby irrevocably appoints Secured Party as Debtor’s attorney-in-fact, such power of attorney being coupled with an interest, with full authority in the place and stead of Debtor and in the name of Debtor or otherwise, for the purpose of terminating any financing statements currently filed with respect to the Collateral. Debtor will defend at its expense Secured Party’s right, title and security interest in and to the Collateral against the claims of any third party.

            (b)      Inspection of Books and Records. Debtor will keep adequate records concerning the Collateral and will, subject to the terms of the Credit Agreement, permit Secured Party and all representatives and agents appointed by Secured Party to inspect any of the Collateral and the books and records of or relating to the Collateral at any time during normal business hours, to make and take away photocopies, photographs and printouts thereof and to write down and record any such information (If no Event of Default exists, Debtor shall not be required to reimburse Secured Party for the related photocopy, photograph and printout costs and expenses).

            (c)      Adverse Claim. Debtor covenants and agrees to promptly notify Secured Party of any claim, action or proceeding affecting title to the Collateral, or any part thereof, or the security interest created hereunder and, at Debtor’s expense, defend Secured Party’s security interest in the Collateral against the claims of any third party. Debtor also covenants and agrees to promptly deliver to Secured Party a copy of all written notices received by Debtor with respect to the Collateral, including without limitation, notices received from the issuer of any securities or other equity interests pledged hereunder as Collateral.

            (d)      Further Assurances. Debtor will contemporaneously with the execution hereof and from time to time thereafter at its expense promptly execute and deliver all further instruments and documents and take all further action necessary or appropriate or that Secured Party may request in order (i) to perfect and protect the security interest created or purported to be created hereby and the first priority of such security interest, (ii) to enable Secured Party to exercise and enforce its rights and remedies hereunder in respect of the Collateral, and (iii) to otherwise effect the purposes of this Agreement, including without limitation: (A) executing (if requested) and filing any financing or continuation statements, or any amendments thereto; (B) obtaining written confirmation from the issuer of any securities or other equity interests pledged as Collateral of the pledge of such securities or other equity interests, in form and substance satisfactory to Secured Party; (C) cooperating with Secured Party in registering the pledge of any securities or other equity interests pledged as Collateral with the issuer of such securities or other equity interests; (D) delivering notice of Secured Party’s security interest in any securities or other equity interests pledged as Collateral to any financial intermediary, clearing corporation or other party required by Secured Party, in form and substance satisfactory to Secured Party; and (E) obtaining written confirmation of the pledge of any securities or other equity interests constituting Collateral from any financial intermediary, clearing corporation or other party required by Secured Party, in form and substance satisfactory to Secured Party. If all or any part of the Collateral is securities issued by an agency or department of the United States, Debtor covenants and agrees, at Secured Party’s request, to cooperate in registering such securities in Secured Party’s name or with Secured Party’s account maintained with a Federal Reserve Bank.

            (e)      Control Agreements. Debtor will cooperate with Secured Party in obtaining a control agreement in form and substance satisfactory to Secured Party with respect to Collateral for which such agreement is required for perfection of a security interest pursuant to the Code (as determined by Secured Party in its sole discretion)

            (a)      Transfer or Encumbrance. Debtor will not (i) sell, assign (by operation of law or otherwise) or transfer Debtor’s rights in any of the Collateral (other than Excluded Property), (ii) ▇▇▇▇▇ ▇ ▇▇▇▇ in or execute, authorize, file or record any financing statement or other security instrument with respect to the Collateral to any party other than Secured Party, or (iii) deliver actual or constructive possession of any certificate, instrument or document evidencing and/or representing any of the Collateral to any party other than Secured Party.

            (b)      Impairment of Security Interest. Debtor will not take or fail to take any action which would in any manner impair the value or enforceability of Secured Party’s security interest in any Collateral.

            (c)      Dilution of Ownership. As to any securities or other equity interests pledged as Collateral, Debtor will not consent to or approve of the issuance of (i) any additional shares of any class of securities or other equity interests of such issuer (unless immediately upon issuance additional securities or other equity interests are pledged and delivered to Secured Party pursuant to the terms hereof to the extent necessary to give Secured Party a security interest after such issuance in at least the same percentage of such issuer’s outstanding securities or other equity interests as Secured Party had before such issuance), (ii) any instrument convertible voluntarily by the holder thereof or automatically upon the occurrence or non-occurrence of any event or condition into, or exchangeable for, any such securities or other equity interests, or (iii) any warrants, options, contracts or other commitments entitling any third party to purchase or otherwise acquire any such securities or other equity interests.

            (d)      Restrictions on Securities. Debtor will not enter into any agreement creating, or otherwise permit to exist, any restriction or condition upon the transfer, voting or control of any securities or other equity interests pledged as Collateral, except as consented to in writing by Secured Party.

            (a)      Power of Attorney. Debtor hereby irrevocably appoints Secured Party as Debtor’s attorney-in-fact, such power of attorney being coupled with an interest, exercisable if an Event of Default exists, with full authority in the place and stead of Debtor and in the name of Debtor or otherwise, to take any action and to execute any instrument which Secured Party may from time to time in Secured Party’s discretion deem necessary or appropriate to accomplish the purposes of this Agreement, including without limitation, the following action: (i) transfer any securities or other equity interests, instruments, documents or certificates pledged as Collateral in the name of Secured Party or its nominee; (ii) use any interest, premium or principal payments, conversion or redemption proceeds or other cash proceeds received in connection with any Collateral to reduce any of the Indebtedness; (iii) exchange any of the securities or other equity interests pledged as Collateral for any other property upon any merger, consolidation, reorganization, recapitalization or other readjustment of the issuer thereof, and, in connection therewith, to deposit and deliver any and all of such securities or other equity interests with any committee, depository, transfer agent, registrar or other designated agent upon such terms and conditions as Secured Party may deem necessary or appropriate; (iv) exercise or comply with any conversion, exchange, redemption, subscription or any other right, privilege or option pertaining to any securities or other equity interests pledged as Collateral; provided, however, except as provided herein, Secured Party shall not have a duty to exercise or comply with any such right, privilege or option (whether conversion, redemption or otherwise) and shall not be responsible for any delay or failure to do so; and (v) file any claims or take any action or institute any proceedings which Secured Party may deem necessary or appropriate for the collection and/or preservation of the Collateral or otherwise to enforce the rights of Secured Party with respect to the Collateral. THE PROXY AND POWER OF ATTORNEY HEREIN GRANTED, AND EACH STOCK POWER AND SIMILAR POWER NOW OR HEREAFTER GRANTED (INCLUDING ANY EVIDENCED BY A SEPARATE WRITING), ARE COUPLED WITH AN INTEREST AND ARE IRREVOCABLE PRIOR TO PAYMENT IN FULL OF THE INDEBTEDNESS.

            (b)      Performance by Secured Party. If Debtor fails to perform any agreement or obligation provided herein, Secured Party may itself perform, or cause performance of, such agreement or obligation, and the expenses of Secured Party incurred in connection therewith shall be a part of the Indebtedness, secured by the Collateral and payable by Debtor on demand.

            (a)      Default in Payment. The failure, refusal or neglect of Debtor or any other Obligor to make any payment of principal or interest on the Indebtedness, or any portion thereof, as the same shall become due and payable after giving effect to any applicable grace period; or

            (b)      Non-Performance of Covenants. Subject to any applicable grace period, the failure of Debtor or any other Obligor to timely and properly observe, keep or perform any covenant, agreement, warranty or condition required herein or in any of the other Loan Documents; or

            (c)      Default Under other Loan Documents. The occurrence of an Event of Default (as defined in the Credit Agreement) under any of the other Loan Documents; or

            (d)      False Representation. Any representation contained herein or in any of the other Loan Documents made by Debtor or any other Obligor is not true and correct in any material respect; or

            (e)      Execution on Collateral. If Debtor fails to have discharged within a period of sixty (60) days any attachment, sequestration or similar writ levied upon any property (other than the Collateral) of Debtor, or the Collateral or any portion thereof is taken on execution or other process of law in any action against Debtor or any attachment, sequestration or similar writ is levied upon any Collateral; or

            (f)      Abandonment. Debtor abandons the Collateral or any portion thereof; or

            (g)      Action by Other Lienholder. The holder of any Lien on the Collateral (without hereby implying the consent of Secured Party to the existence or creation of any such Lien on the Collateral) or any other asset of Debtor having a value of $100,000 or greater declares a default thereunder or institutes foreclosure or other proceedings for the enforcement of its remedies thereunder; or

            (h)      Liquidation and Related Events. The liquidation, dissolution, merger or consolidation of Debtor or any other Obligor not otherwise permitted by the Credit Agreement; or

            (i)      Bankruptcy of Issuer. (i) The issuer of any securities or other equity interest constituting Collateral files a petition for relief under any Applicable Bankruptcy Law, (ii) an involuntary petition for relief is filed against any such issuer under any Applicable Bankruptcy Law and such involuntary petition is not dismissed within thirty (30) days after the filing thereof, (iii) an order for relief naming any such issuer is entered under any Applicable Bankruptcy Law (iv) any court or governmental authority shall issue any order of conservation, supervision or any other order of like effect relating to any such issuer, or (v) any Insurance Commissioner intervenes or takes any formal steps towards intervening in the management of the business or operations of any issuer or any such issuer facilitates or takes any affirmative action with the intention of facilitating such intervention, or

            (j)      Search Report. If Secured Party shall have elected to file any financing statement with respect to the Collateral, Secured Party shall receive at any time following the execution of this Agreement a search report indicating that Secured Party’s security interest is not prior to all other Liens, security interests or other interests reflected in the report and Secured Party does not receive within twenty days after the date of notice to Debtor of such Lien, a file stamped termination statement of each financing statement related to such Lien, the written release of such Lien in form and substance satisfactory to Secured Party, and a search report indicating the filing of each such termination statement.

            (a)      Remedies. Secured Party may from time to time at its discretion, without limitation and without notice except as expressly provided in any of the Loan Documents:

           (i)        exercise in respect of the Collateral all the rights and remedies of a secured party under the Code (whether or not the Code applies to the affected Collateral);

           (ii)       reduce its claim to judgment or foreclose or otherwise enforce, in whole or in part, the security interest granted hereunder by any available judicial procedure;

           (iii)      sell or otherwise dispose of, at its office, on the premises of Debtor or elsewhere, the Collateral, as a unit or in parcels, by public or private proceedings, and by way of one or more contracts (it being agreed that the sale or other disposition of any part of the Collateral shall not exhaust Secured Party’s power of sale, but sales or other dispositions may be made from time to time until all of the Collateral has been sold or disposed of or until the Indebtedness has been paid and performed in full), and at any such sale or other disposition it shall not be necessary to exhibit any of the Collateral;

           (iv)       buy the Collateral, or any portion thereof, at any public sale;

           (v)        buy the Collateral, or any portion thereof, at any private sale if the Collateral is of a type customarily sold in a recognized market or is of a type which is the subject of widely distributed standard price quotations;

           (vi)       apply for the appointment of a receiver for the Collateral, and Debtor hereby consents to any such appointment; and

           (vii)      at its option, retain the Collateral in satisfaction of the Indebtedness whenever the circumstances are such that Secured Party is entitled to do so under the Code or otherwise, to the full extent permitted by the Code, Secured Party shall be permitted to elect whether such retention shall be in full or partial satisfaction of the Indebtedness.

            (b)      Private Sale of Securities; Further Approvals.

           (i)        Debtor recognizes that Secured Party may be unable to effect a public sale of all or any part of the securities or other equity interests pledged as Collateral because of restrictions in applicable federal and state securities laws, insurance laws and contractual restrictions and that Secured Party may, therefore, determine to make one or more private sales of any such securities or other equity interests to a restricted group of purchasers who will be obligated to agree, among other things, to acquire such securities or other equity interests for their own account, for investment and not with a view to the distribution or resale thereof. Debtor acknowledges that each any such private sale may be at prices and other terms less favorable than what might have been obtained at a public sale and, notwithstanding the foregoing, agrees that each such private sale shall be deemed to have been made in a commercially reasonable manner and that Secured Party shall have no obligation to delay the sale of any such securities or other equity interests for the period of time necessary to permit the issuer to register such securities or other equity interests for public sale under any federal or state securities laws. Debtor further acknowledges and agrees that any offer to sell such securities or other equity interests which has been made privately in the manner described above to not less than five (5) bona fide offerees shall be deemed to involve a “public sale” for the purposes of Chapter 9 of the Code, notwithstanding that such sale may not constitute a “public offering” under any federal or state securities laws and that Secured Party may, in such event, bid for the purchase of such securities or other equity interests.

           (ii)       In connection with the exercise by Secured Party of its rights hereunder that effects the disposition of or use of any Collateral, it may be necessary to obtain the prior consent or approval of governmental authorities (including any Insurance Commissioner) and other Persons to a transfer or assignment of Collateral, including, without limitation, any governmental authorities (including any Insurance Commissioner) regulating insurance companies and their Affiliates.

           (iii)      Debtor agrees, if an Event of Default exists, to execute, deliver, and file, and hereby appoints Secured Party as its attorney-in-fact, to execute, deliver, and file on Debtor’s behalf and in Debtor’s name, all applications, certificates, filings, instruments, and other documents (including without limitation any application for an assignment or transfer of control or ownership) that may be necessary or appropriate, in Secured Party’s opinion, and to obtain such consents, waivers, or approvals under applicable laws and agreements prior to an Event of Default. Debtor further agrees to use its best efforts to obtain the foregoing consents, waivers, and approvals, including receipt of consents, waivers, and approvals under applicable laws and agreements prior to an Event of Default. Debtor acknowledges that there is no adequate remedy at Law for failure by it to comply with the provisions of this Section and that such failure would not be adequately compensable in damages, and therefore agrees that this Section may be specifically enforced.

            (c)      Application of Proceeds. If any Event of Default exists, Secured Party may at its discretion apply or use any cash held by Secured Party as Collateral, and any cash proceeds received by Secured Party in respect of any sale or other disposition of, collection from, or other realization upon, all or any part of the Collateral as follows in such order and manner as Secured Party may elect:

           (i)        to the repayment or reimbursement of the reasonable costs and expenses (including, without limitation, reasonable attorneys’ fees and expenses) incurred by Secured Party in connection with (A) the administration of the Loan Documents, (B) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Collateral, and (C) the exercise or enforcement of any of the rights and remedies of Secured Party hereunder;

           (ii)       to the payment or other satisfaction of any liens and other encumbrances upon the Collateral;

           (iii)      to the satisfaction of the Indebtedness;

           (iv)      by holding such cash and proceeds as Collateral prior to application to the Indebtedness if required to hold such cash or proceeds by applicable law or any court or governmental authority;

           (v)       to the payment of any other amounts required by applicable law (including without limitation, Section 9.615(a)(3) of the Code or any other applicable statutory provision); and

           (vi)      by delivery to Debtor or any other party lawfully entitled to receive such cash or proceeds whether by direction of a court of competent jurisdiction or otherwise.

            (d)      Deficiency. In the event that the proceeds of any sale of, collection from, or other realization upon, all or any part of the Collateral by Secured Party are insufficient to pay all amounts to which Secured Party is legally entitled, Debtor and each other Obligor who guaranteed or is otherwise obligated to pay all or any portion of the Indebtedness shall be liable for the deficiency, together with interest thereon as provided in the Loan Documents, to the full extent not prohibited by law.

            (e)      Non-Judicial Remedies. In granting to Secured Party the power to enforce its rights hereunder without prior judicial process or judicial hearing, Debtor expressly waives, renounces and knowingly relinquishes any legal right which might otherwise require Secured Party to enforce its rights by judicial process. Debtor recognizes and concedes that non-judicial remedies are consistent with the usage of trade, are responsive to commercial necessity and are the result of a bargain at arm’s length. Nothing herein is intended to prevent Secured Party or Debtor from resorting to judicial process at either party’s option.

            (f)      Other Recourse. Debtor waives any right to require Secured Party to proceed against any third party, exhaust any Collateral or other security for the Indebtedness, or to have any third party joined with Debtor in any suit arising out of the Indebtedness or any of the Loan Documents, or pursue any other remedy available to Secured Party. Debtor further waives any and all notice of acceptance of this Agreement and of the creation, modification, rearrangement, renewal or extension of the Indebtedness. Debtor further waives any defense arising by reason of any disability or other defense of any third party or by reason of the cessation from any cause whatsoever of the liability of any third party. Until all of the Indebtedness shall have been paid in full, Debtor shall have no right of subrogation and Debtor waives the right to enforce any remedy which Secured Party has or may hereafter have against any third party, and waives any benefit of and any right to participate in any other security whatsoever now or hereafter held by Secured Party. Debtor authorizes Secured Party, and without notice or demand and without any reservation of rights against Debtor and without affecting Debtor’s liability hereunder or on the Indebtedness, to (i) take or hold any other property of any type from any third party as security for the Indebtedness, and exchange, enforce, waive and release any or all of such other property, (ii) apply such other property and direct the order or manner of sale thereof as Secured Party may in its discretion determine, (iii) renew, extend, accelerate, modify, compromise, settle or release any of the Indebtedness or other security for the Indebtedness, (iv) waive, enforce or modify any of the provisions of any of the Loan Documents executed by any third party, and (v) release or substitute any third party. Notwithstanding anything in this Agreement to the contrary, the obligations of Debtor under this Agreement shall be limited to a maximum aggregate amount equal to the largest amount that would not render Debtor’s obligations hereunder subject to avoidance as a fraudulent transfer or fraudulent conveyance under Section 548 of Title 11 of the United States Code or any applicable provisions of comparable state law (collectively, the “Fraudulent Transfer Laws”), in each case after giving effect to all other liabilities of Debtor, contingent or otherwise, that are relevant under the Fraudulent Transfer Laws and after giving effect as assets to the value (as determined under the applicable provisions of the Fraudulent Transfer Laws) of any rights to subrogation, reimbursement or contribution of Debtor pursuant to (i) applicable law, or (ii) any agreement providing for rights of subrogation, reimbursement or contribution in favor of Debtor, or for an equitable allocation among Debtor, Borrower, any other Obligor, and any other Person of obligations arising under guaranties by such Persons.

            (g)      Voting Rights. If an Event of Default exists, Debtor will not exercise any voting rights with respect to securities or other equity interests pledged as Collateral. Debtor hereby irrevocably appoints Secured Party as Debtor’s attorney-in-fact (such power of attorney being coupled with an interest) and proxy to exercise any voting rights with respect to Debtor’s securities or other equity interests pledged as Collateral upon the occurrence of an Event of Default.

            (h)      Dividend Rights and Interest Payments. If an Event of Default exists:

           (i)        all rights of Debtor to receive and retain the dividends and interest payments which it would otherwise be authorized to receive and retain pursuant to Section 3 shall automatically cease, and all such rights shall thereupon become vested with Secured Party which shall thereafter have the sole right to receive, hold and apply as Collateral such dividends and interest payments; and

           (ii)       all dividend and interest payments which are received by Debtor contrary to the provisions of clause (i) of this Subsection shall be received in trust for the benefit of Secured Party, shall be segregated from other funds of Debtor, and shall be forthwith paid over to Secured Party in the exact form received (properly endorsed or assigned if requested by Secured Party), to be held by Secured Party as Collateral.

            (a)      Entire Agreement. This Agreement contains the entire agreement of Secured Party and Debtor with respect to the Collateral. If the parties hereto are parties to any prior agreement, either written or oral, relating to the Collateral, the terms of this Agreement shall amend and supersede the terms of such prior agreements as to transactions on or after the effective date of this Agreement, but all security agreements, financing statements, guaranties, other contracts and notices for the benefit of Secured Party shall continue in full force and effect to secure the Indebtedness unless Secured Party specifically releases its rights thereunder by separate release.

            (b)      Amendment. No modification, consent or amendment of any provision of this Agreement or any of the other Loan Documents shall be valid or effective unless the same is in writing and authenticated by the party against whom it is sought to be enforced, except to the extent of amendments specifically permitted by the Code without authentication by the Debtor or any other Obligor.

            (c)      Actions by Secured Party. The Lien of Secured Party hereunder shall not be impaired by (i) any renewal, extension, increase or modification with respect to the Indebtedness, (ii) any surrender, compromise, release, renewal, extension, exchange or substitution which Secured Party may grant with respect to the Collateral, or (iii) any release or indulgence granted to any endorser, guarantor or surety of the Indebtedness. The taking of additional security by Secured Party shall not release or impair the Lien of Secured Party hereunder or affect the obligations of Debtor hereunder.

            (d)      Waiver by Secured Party. Secured Party may waive any Event of Default without waiving any other prior or subsequent Event of Default. Secured Party may remedy any default without waiving the Event of Default remedied. Neither the failure by Secured Party to exercise, nor the delay by Secured Party in exercising, any right or remedy upon any Event of Default shall be construed as a waiver of such Event of Default or as a waiver of the right to exercise any such right or remedy at a later date. No single or partial exercise by Secured Party of any right or remedy hereunder shall exhaust the same or shall preclude any other or further exercise thereof, and every such right or remedy hereunder may be exercised at any time. No waiver of any provision hereof or consent to any departure by Debtor therefrom shall be effective unless the same shall be in writing and signed by Secured Party and then such waiver or consent shall be effective only in the specific instances, for the purpose for which given and to the extent therein specified. No notice to or demand on Debtor in any case shall of itself entitle Debtor to any other or further notice or demand in similar or other circumstances.

            (e)      Costs and Expenses. Debtor will upon demand pay to Secured Party the amount of any and all costs and expenses (including without limitation, attorneys’ fees and expenses), which Secured Party may incur in connection with (i) the transactions which give rise to the Loan Documents (subject to Section 8.3(a) of the Credit Agreement), (ii) the preparation of this Agreement (subject to Section 8.3(a) of the Credit Agreement) and the perfection and preservation of the security interests granted under the Loan Documents, (iii) the administration of the Loan Documents, (iv) the custody, preservation, use or operation of, or the sale of, collection from, or other realization upon, the Collateral, (v) the exercise or enforcement of any of the rights of Secured Party under the Loan Documents, or (vi) the failure by Debtor to perform or observe any of the provisions hereof.

            (f)      GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND APPLICABLE FEDERAL LAWS, EXCEPT TO THE EXTENT PERFECTION AND THE EFFECT OF PERFECTION OR NON-PERFECTION OF THE SECURITY INTEREST GRANTED HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL, ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF TEXAS.

            (g)      Venue. This Agreement has been entered into in the county in Texas where Secured Party’s address for notice purposes is located, and it shall be performable for all purposes in such county. Courts within the State of Texas shall have jurisdiction over any and all disputes arising under or pertaining to this Agreement and venue for any such disputes shall be in the county or judicial district where this Agreement has been executed and delivered.

            (h)      Severability. If any provision of this Agreement is held by a court of competent jurisdiction to be illegal, invalid or unenforceable under present or future laws, such provision shall be fully severable, shall not impair or invalidate the remainder of this Agreement and the effect thereof shall be confined to the provision held to be illegal, invalid or unenforceable.

            (i)      No Obligation. Nothing contained herein shall be construed as an obligation on the part of Secured Party to extend or continue to extend credit to Debtor or any other Obligor.

            (j)      Notices. All notices, requests, demands or other communications required or permitted to be given pursuant to this Agreement shall be in writing and given by (i) personal delivery, (ii) expedited delivery service with proof of delivery, or (iii) United States mail, postage prepaid, registered or certified mail, return receipt requested, sent to the intended addressee at the address set forth on the first page hereof or to such different address as the addressee shall have designated by written notice sent pursuant to the terms hereof and shall be deemed to have been received either, in the case of personal delivery, at the time of personal delivery, in the case of expedited delivery service, as of the date of first attempted delivery at the address and in the manner provided herein, or in the case of mail, upon deposit in a depository receptacle under the care and custody of the United States Postal Service. Either party shall have the right to change its address for notice hereunder to any other location within the continental United States by notice to the other party of such new address at least thirty (30) days prior to the effective date of such new address.

            (k)      Binding Effect and Assignment. This Agreement (i) creates a continuing security interest in the Collateral, (ii) shall be binding on Debtor and the heirs, executors, administrators, personal representatives, successors and assigns of Debtor, and (iii) shall inure to the benefit of Secured Party and its successors and assigns. Without limiting the generality of the foregoing, Secured Party may pledge, assign or otherwise transfer the Indebtedness and its rights under this Agreement and any of the other Loan Documents to any other party. Debtor’s rights and obligations hereunder may not be assigned or otherwise transferred without the prior written consent of Secured Party.

            (l)      Termination. It is contemplated by the parties hereto that from time to time there may be no outstanding Indebtedness, but notwithstanding such occurrences, this Agreement shall remain valid and shall be in full force and effect as to subsequent outstanding Indebtedness. Upon (i) the indefeasible satisfaction in full of the Indebtedness, (ii) the termination or expiration of any commitment of Secured Party to extend credit to any Obligor, (iii) written request for the termination hereof delivered by Debtor to Secured Party, and (iv) written release delivered by Secured Party to Debtor, this Agreement and the security interests created hereby shall terminate. Upon termination of this Agreement and Debtor’s written request, Secured Party will, at Debtor’s sole cost and expense, return to Debtor such of the Collateral as shall not have been sold or otherwise disposed of or applied pursuant to the terms hereof and execute and deliver to Debtor such documents as Debtor shall reasonably request to evidence such termination.

            (m)      Cumulative Rights. All rights and remedies of Secured Party hereunder are cumulative of each other and of every other right or remedy which Secured Party may otherwise have at law or in equity or under any of the other Loan Documents, and the exercise of one or more of such rights or remedies shall not prejudice or impair the concurrent or subsequent exercise of any other rights or remedies. Further, except as specifically noted as a waiver herein, no provision of this Agreement is intended by the parties to this Agreement to waive any rights, benefits or protection afforded to Secured Party under the Code.

            (n)      Gender and Number. Within this Agreement, words of any gender shall be held and construed to include the other gender, and words in the singular number shall be held and construed to include the plural and words in the plural number shall be held and construed to include the singular, unless in each instance the context requires otherwise.

            (o)      Descriptive Headings. The headings in this Agreement are for convenience only and shall in no way enlarge, limit or define the scope or meaning of the various and several provisions hereof.