March 16, 2004

Exhibit 10.40

March 16, 2004

Xxxxxxx X. X’Xxxxx
Executive Vice President,
General Counsel & Secretary
Ascent Assurance, Inc.
000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxxx, Xxxxx 00000

Re: Extension of the "Xxxxxxx X. X'Xxxxx Employment Agreement" with Ascent Management, Inc. and Ascent Assurance, Inc. dated as of December 18, 2002 ("Employment Agreement")

Dear Xx. X’Xxxxx:

The purpose of this letter is to confirm in writing and memorialize the agreement reached, as of March 15, 2004, between you, defined as the “Executive” in the above referenced Employment Agreement, and each of Ascent Management, Inc. (“AMI”) and Ascent Assurance, Inc. (“AAI”) to extend such Employment Agreement through March 15, 2005. More specifically, the “Expiration Date” in Section 3 of the Employment Agreement is March 15, 2004. Therefore, the Employment Agreement, unless extended by mutual agreement of the parties, would have expired at 12:00 a.m. March 16, 2004.

In consideration of the mutual promises contained herein, the “Executive” and each of AMI and AAI hereby amend such Employment Agreement, as of March 15, 2004, by deleting “March 15, 2004” as the “Expiration Date” in Section 3 thereof, and substituting in its place, “March 15, 2005” as such “Expiration Date.” Except as expressly stated herein, the Employment Agreement is not otherwise modified or amended by the parties, such that all other definitions, conditions, and terms contained therein shall remain, and all present and future rights, duties and obligations of the parties thereunder shall continue throughout both the “Executive’s” “Term of Employment” and as otherwise provided in such Employment Agreement.

As evidence of the acceptance by AMI and AAI of the terms of this letter agreement amending the Employment Agreement by extending it through March 15, 2005, an authorized officer of each, has affixed his signature hereto. As evidence of your acceptance of such amendment to the Employment Agreement, please execute this letter agreement in the space provided herein below.

Yours very truly,

/s/ Xxxxxxx X. Xxxxxxxx

Xxxxxxx X. Xxxxxxxx

Agreed as to form and substance:

Ascent Management, Inc.

/s/ Xxxxxxx X. Xxxxxxxx                                                                     
By: Xxxxxxx X. Xxxxxxxx, Chief Executive Officer and President

Ascent Assurance, Inc.

/s/ Xxxxxxx X. Xxxxxxxx                                                                      
By: Xxxxxxx X. Xxxxxxxx, Chief Executive Officer and President

/s/ Xxxxxxx X.X’Xxxxx     
Xxxxxxx X. X’Xxxxx