BY AND AMONG

EXHIBIT 02
(part 1)
(Conformed copy)

ASSET TRANSFER AND ACQUISITION AGREEMENT

BY AND AMONG

CIGNA CORPORATION,

CONNECTICUT GENERAL CORPORATION,
CONNECTICUT GENERAL LIFE INSURANCE COMPANY,

CIGNA LIFE INSURANCE COMPANY,

LINCOLN NATIONAL CORPORATION,

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY,

AND

LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

Dated as of July 27, 1997
2

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS .................................................................... 2
1.01. Definitions .................................................................... 2
Adjusted Statutory Reserves and other Statutory Liabilities............. 2
Administrative Services Agreements...................................... 2
Affiliate............................................................... 2
Allocable Amount........................................................ 2
Ancillary Agreements.................................................... 2
Annual Rate............................................................. 3
Antitrust Division...................................................... 3
Applicable Law.......................................................... 3
Asserted Liability...................................................... 3
Assignable Licensed Principally Used Software........................... 3
Assigned and Assumed Contracts.......................................... 3
Assumed Liabilities..................................................... 3
Band 1 Employee......................................................... 3
Band 2 Employee......................................................... 3
Benefit Plans........................................................... 3
Benefits Affected Employee.............................................. 3
Benefits Effective Date................................................. 3
Xxxx of Sale............................................................ 3
Books and Records....................................................... 4
Brokers................................................................. 4
Brokers and Agents...................................................... 4
Business................................................................ 4
Business Day............................................................ 4
CA...................................................................... 4
Ceding Commissions...................................................... 4
CF...................................................................... 4
CFA Closing............................................................. 4
CIGNA................................................................... 4
CIGNA Non-Compete....................................................... 4
Claims Notice........................................................... 4
CLIC.................................................................... 4
CLIC Separate Account Administration Agreement.......................... 5
Closing................................................................. 5
Closing Balance Sheet................................................... 5
Closing Date............................................................ 4
COBRA................................................................... 4
Code.................................................................... 5
COLI Business........................................................... 5

Commission.............................................................. 5
Connecticut SAP......................................................... 5
Contract Employees...................................................... 5
Effective Date.......................................................... 5
Elections............................................................... 6
Environmental Laws...................................................... 6
ERISA................................................................... 6
Estimated Statutory Carrying Value...................................... 6
Externally Managed Funds................................................ 6
Final Balance Sheet..................................................... 6
403(b) Contract......................................................... 6
FTC..................................................................... 6
GAAP.................................................................... 6
General Account Liabilities............................................. 6
General Account Other Insurance Assets.................................. 6
General Account Reserves................................................ 6
General Assignment and Assumption Agreement............................. 7
Hazardous Materials..................................................... 7
HIPAA................................................................... 7
HSR Act................................................................. 7
Income Tax Regulations.................................................. 7
Indemnified Party....................................................... 7
Indemnifying Party...................................................... 7
Indemnity Reinsurance Agreements........................................ 7
Indiana SAP............................................................. 7
Initial Portfolio....................................................... 7
Insurance Contracts..................................................... 7
Interim CIGNA Financial Statements...................................... 7
Interim LLANY Financial Statements...................................... 8
Interim Purchaser Financial Statements.................................. 8
Internally Managed Funds................................................ 8
Investment Assets....................................................... 8
IRS..................................................................... 8
July 18 Letter.......................................................... 8
Knowledge............................................................... 8
Lender.................................................................. 8
License Agreement....................................................... 8
Licensed Generally Used Software........................................ 9
Licensed Principally Used Software...................................... 9
LLANY................................................................... 9
LLANY Administrative Services Agreement................................. 9
LLANY Indemnity Reinsurance Agreement................................... 9
LNC..................................................................... 9
"Loss" and "Losses"..................................................... 9
"Material" or "material adverse effect on the Business"................. 9

Mortgage Loans.......................................................... 10
NAIC.................................................................... 10
NASD.................................................................... 10
New York Contract Closing Date Investment Assets........................ 10
New York Contracts...................................................... 10
New York SAP............................................................ 10
1940 Act................................................................ 10
90-Day Treasury Rate.................................................... 10
Non-New York Contract Closing Date Investment Assets.................... 10
Non-New York Contracts.................................................. 10
Office Lease Agreement.................................................. 10
Office Sub-Lease Agreements............................................. 10
Opinion................................................................. 11
Other Statutory Assets.................................................. 11
Owned Generally Used Software........................................... 11
Owned Principally Used Software......................................... 11
Parent.................................................................. 11
Parent Subsidiaries..................................................... 11
Pension Plans........................................................... 11
Permits................................................................. 11
Person.................................................................. 11
Post-Closing Contracts.................................................. 11
premiums................................................................ 11
Pro Forma Financial Statements.......................................... 11
Proposed Balance Sheet.................................................. 11
Purchase Price.......................................................... 11
Purchaser............................................................... 12
Purchaser Administrative Services Agreement............................. 12
Purchaser Financial Statements.......................................... 12
Purchaser Indemnitees................................................... 12
Purchaser Indemnity Reinsurance Agreement............................... 12
Purchaser Key People.................................................... 12
Purchaser's Defined Benefit Plan........................................ 12
Purchaser's 401(k) Plans................................................ 12
Purchaser's Money Purchase Plan......................................... 12
Purchaser's Retiree Welfare Plans....................................... 12
Qualified Contract...................................................... 12
Qualified Plans......................................................... 12
Real Estate Assets...................................................... 12
Retained Liabilities.................................................... 12
Securities Act.......................................................... 12
Section 10.04 Purchaser Obligation...................................... 14
Section 10.04 Seller Obligation......................................... 14
Seller.................................................................. 14
Seller Financial Statements............................................. 14

Seller Indemnitees...................................................... 14
Seller Key People....................................................... 14
Seller Parties.......................................................... 15
Seller Separate Accounts................................................ 15
Seller's Deferred Compensation Plan..................................... 15
Seller's Defined Benefit Plan........................................... 15
Seller's 401(k) Plan.................................................... 15
Seller's Money Purchase Plan............................................ 15
Separate Account Liabilities............................................ 15
Settlement Agreements................................................... 15
Severance Costs......................................................... 15
"Statutory Carrying Value............................................... 15
Stock Purchase Agreement................................................ 15
Subsidiary.............................................................. 15
Subsidiary Stock........................................................ 15
Suitable Employment..................................................... 16
Taxes................................................................... 16
Taxing Authority........................................................ 16
Third Party Accountant.................................................. 16
Third Party Claimant.................................................... 16
Transferred Assets...................................................... 16
Transferred Contracts................................................... 17
Transition Services Agreement........................................... 17
25% Premium Threshold................................................... 17
WARN Act................................................................ 17
Welfare Plans........................................................... 17

ARTICLE II TRANSFER AND ACQUISITION OF ASSETS............................................... 17
2.01. Cash Consideration.............................................................. 17
2.02. Acquisition of Transferred Assets and Assumption of Assumed
Liabilities............................................................... 18
2.03. Place and Date of Closing; Balance Sheets; Closing Date Transfer
of Investment Assets and Cash.l........................................... 20
2.04. Post-Closing Adjustments........................................................ 20
2.05. Closing Items................................................................... 22

ARTICLE III REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER............................. 23
3.01. Organization, Standing and Authority of CIGNA, Parent, Seller and
CLIC............................................................................ 23
3.02. Authorization................................................................... 24
3.03. Actions and Proceedings......................................................... 24
3.04. No Conflict or Violation........................................................ 24
3.05. Governmental Consents and Approvals............................................. 25
3.06. Computer Software and Intellectual Property..................................... 25
3.07. Brokerage and Financial Advisers................................................ 26
3.08. Compliance with Laws............................................................ 26
3.09. Permits, Licenses and Franchises................................................ 26

3.10. Insurance Contracts............................................................. 27
3.11. Regulatory Filings.............................................................. 29
3.12. Brokers and Agents.............................................................. 29
3.13. Reinsurance..................................................................... 29
3.14. Conduct of Business............................................................. 29
3.15. Absence of Certain Changes...................................................... 30
3.16. Other Sale Arrangements......................................................... 30
3.17. Seller Separate Accounts and Underlying Funds................................... 30
3.18. Assigned and Assumed Contracts.................................................. 31
3.19. Employees....................................................................... 31
3.20. Employee Benefit Plans; ERISA................................................... 32
3.21. Labor Relations and Employment.................................................. 34
3.22. Transferred Assets.............................................................. 35
3.23. Contracts....................................................................... 36
3.24. GAAP Financial Statements....................................................... 37
3.25. Statutory Statements............................................................ 37
3.26. Tax Matters..................................................................... 38
3.27. Transition Services Agreement.................................................... 38
3.28. Pro Forma Financial Statements.................................................. 39
3.29. Cash Flow Testing............................................................... 39

ARTICLE IV REPRESENTATIONS AND WARRANTIES OF LNC, PURCHASER
AND LLANY......................................................................... 39
4.01. Organization and Standing.................................................. 39
4.02. Authorization.............................................................. 40
4.03. Actions and Proceedings.................................................... 40
4.04. No Conflict or Violation................................................... 40
4.05. Governmental Consents and Approvals........................................ 41
4.06. Brokerage and Financial Advisers........................................... 41
4.07. Compliance with Laws....................................................... 41
4.08. Permits, Licenses and Franchises........................................... 41
4.09. SAP Financial Statements................................................... 42
4.10. Statutory Statements....................................................... 42
4.11. Absence of Certain Changes................................................. 43
4.12. Qualified Institutional Buyer.............................................. 43
4.13. Sufficient Funds........................................................... 43

ARTICLE V COVENANTS......................................................................... 43
5.01. Conduct of Business........................................................ 43
5.02. Certain Transactions....................................................... 45
5.03. Investigations, Pre-Closing Access......................................... 45
5.04. Post-Closing Access........................................................ 46
5.05. HSR Act Filings............................................................ 47
5.06. Consents and Reasonable Efforts............................................ 47
5.07. Representations and Warranties............................................. 48

5.08. Further Assurances................................................. 49
5.09. Expenses........................................................... 49
5.10. Indemnity Reinsurance Agreements................................... 49
5.11. Administrative Services Agreements................................. 50
5.12. CLIC Separate Account Administration Agreement..................... 50
5.13. Transition Services Agreement...................................... 50
5.14. General Assignment and Assumption Agreement........................ 50
5.15. Xxxx of Sale....................................................... 50
5.16. Reinsurance Credit for New York Contracts.......................... 51
5.17. Stock Purchase Agreement........................................... 51
5.18. License Agreement.................................................. 51
5.19. Assumption Reinsurance Agreements.................................. 51
5.20. Certain Events..................................................... 51
5.21. Reinsurance Treaties............................................... 53
5.22. Termination of Certain Agreements.................................. 53
5.23. Employees; Severance Payments...................................... 54
5.24. Employee Benefits.................................................. 57
5.25. Allocation of Purchase Price and Assumed Liabilities............... 62
5.26. Other Agreements................................................... 63
5.27. Bank Accounts and Lockboxes........................................ 63
5.28. Computer Software.................................................. 63
5.29. Section 338(h)(10) Election........................................ 64
5.30. Confidentiality.................................................... 64
5.31. Certain Seller Approval Rights..................................... 65
5.32. Provision of Certain Services...................................... 65
5.33. Certain Product Tax Matters........................................ 66
5.34. Transition to Purchaser Policy Forms............................... 66
5.35. Systems............................................................ 67
5.36. Updated Financial Information...................................... 67
5.37 Performance of Covenants........................................... 68
5.38 Separate Account Revenues.......................................... 68

ARTICLE VI CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASER
AND LLANY TO CLOSE.............................................................. 68
6.01. Representations and Warranties..................................... 68
6.02. Other Agreements................................................... 68
6.03. Governmental and Regulatory Consents and Approvals................. 68
6.04. Possession of Assets; Instruments of Conveyance.................... 69
6.05. Injunction......................................................... 69

ARTICLE VII CONDITIONS PRECEDENT TO THE OBLIGATION OF
SELLER TO CLOSE................................................................. 69
7.01. Representations and Warranties..................................... 69
7.02. Other Agreements................................................... 69
7.03. Governmental and Regulatory Consents and Approvals................. 69

7.04. Purchase Price........................................................................... 70
7.05. Injunction............................................................................... 70

ARTICLE VIII FURTHER AGREEMENTS...................................................................... 70
8.01. CIGNA's Non-Compete...................................................................... 70

ARTICLE IX SURVIVAL OF REPRESENTATIONS AND WARRANTIES................................................ 71
9.01. Survival of Representations and Warranties............................................... 71

ARTICLE X INDEMNIFICATION............................................................................ 71
10.01. Obligation to Indemnify................................................................. 71
10.02. Claims Notice........................................................................... 72
10.03. Right to Contest Claims of Third Parties................................................ 73
10.04. Certain Liabilities..................................................................... 76
10.05. Indemnification Payments................................................................ 77
10.06. Exclusivity............................................................................. 77

ARTICLE XI TERMINATION PRIOR TO CLOSING.............................................................. 78
11.01. Termination of Agreement................................................................ 78
11.02. Survival................................................................................ 78

ARTICLE XII
MISCELLANEOUS................................................................................... 78
12.01. Publicity............................................................................... 78
12.02. Confidentiality......................................................................... 78
12.03. Notices................................................................................. 79
12.04. Entire Agreement........................................................................ 82
12.05. Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies.............. 82
12.06. Governing Law........................................................................... 82
12.07. Binding Effect; Assignment.............................................................. 82
12.08. Interpretation.......................................................................... 82
12.09. No Third Party Beneficiaries............................................................ 83
12.10. Counterparts............................................................................ 83
12.11. Other Agreements, Exhibits and Schedules................................................ 83
12.12. Headings................................................................................ 83
12.13. Dollar References....................................................................... 83

ASSET TRANSFER AND ACQUISITION AGREEMENT

This ASSET TRANSFER AND ACQUISITION AGREEMENT (this
"AGREEMENT"), dated as of July 27, 1997, is entered into by and among CIGNA
Corporation, a Delaware corporation ("CIGNA") ,Connecticut General
Corporation, a Connecticut corporation and a wholly owned indirect subsidiary
of CIGNA ("PARENT"), Connecticut General Life Insurance Company, a stock life
insurance company organized under the laws of the State of Connecticut and a
wholly owned subsidiary of Parent ("SELLER"), CIGNA Life Insurance Company, a
stock life insurance company organized under the laws of the State of
Connecticut and an indirect wholly owned subsidiary of CIGNA ("CLIC"), Lincoln
National Corporation, an Indiana corporation ("LNC"), The Lincoln National Life
Insurance Company, a stock life insurance company organized under the laws of
the State of Indiana and a wholly owned subsidiary of LNC ("PURCHASER"), and
Lincoln Life & Annuity Company of New York, a stock life insurance company
organized under the laws of the State of New York and a wholly owned subsidiary
of Purchaser ("LLANY").

RECITALS:

A. THE ACQUISITION. Upon the terms and subject to the
conditions of this Agreement, Seller wishes to sell, and Purchaser wishes to
acquire, certain of the life insurance, disability income insurance and
annuity business of Seller, and certain other assets of Parent and Seller, as
described below. Concurrently herewith, CIGNA, Parent and Purchaser are
entering into the Stock Purchase Agreement (as defined below) relating to the
purchase by Purchaser of the stock of the Parent Subsidiaries (as defined
below).

B. THE DOCUMENTS. Upon the terms and subject to the
conditions of this Agreement, at the Closing (as defined below) the parties
hereto will execute and deliver the following agreements and instruments dated
as of the Closing Date (as defined below) or a date prior thereto: (i) Seller
and Purchaser and Seller and LLANY will enter into the Purchaser Indemnity
Reinsurance Agreement and the LLANY Indemnity Reinsurance Agreement (each as
defined below), respectively, providing for, upon the terms and conditions and
for the consideration set forth therein, the indemnity reinsurance as of the
Effective Date (as defined below) by Purchaser and LLANY of the general account
liabilities of Seller under the Insurance Contracts (as defined below) and
under any policies or contracts issued by Seller following the Effective Date
that would have constituted Insurance Contracts if issued by Seller prior to
the Effective Date; (ii) Seller and Purchaser and Seller and LLANY will enter
into the Purchaser Administrative Services Agreement (as defined below) and the
LLANY Administrative Services Agreement (as defined below), respectively,
providing for the servicing by Purchaser and LLANY of the reinsured books of
business in the name of the Seller and for the servicing of the Seller Separate
Accounts (as defined below) business attributable to Seller; (iii) CLIC and
Purchaser will enter into the CLIC Separate Account Administration Agreement
(as defined below) providing for the servicing by Purchaser of the Seller
Separate Account business attributable to CLIC; (iv) Seller and Purchaser will
enter into the Transition Services Agreement (as defined below), providing for
the provision by Seller of any services to the Business (as defined below)
currently provided by Seller or any Affiliate (as defined below) of Seller and
requested by Purchaser as

necessary to enable Purchaser to operate the Business and for the provision by
Purchaser to Seller of certain services, for a period not to exceed 18 months
after the Closing Date; (v) Seller and Purchaser will enter into the General
Assignment and Assumption Agreement to provide for the assignment by Seller of
certain assets and the assumption by Purchaser of certain non-insurance
obligations relating to the Business; (vi) Seller will execute and deliver to
Purchaser and LLANY all necessary instruments of transfer, including but not
limited to the Xxxx of Sale (as defined below); and (vii) Seller, Purchaser,
and LLANY will enter into the License Agreement (as defined below).

NOW, THEREFORE, in consideration of the mutual promises and
covenants set forth herein, and in reliance upon the representations,
warranties, conditions and covenants contained herein, and intending to be
legally bound hereby, the parties hereto do hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. DEFINITIONS. The following terms shall have the
respective meanings set forth below throughout this Agreement:

"ADJUSTED STATUTORY RESERVES AND OTHER STATUTORY LIABILITIES"
at any time means statutory reserves and other statutory liabilities of the
Business appropriately includable in line items 1 through 25, except line 24.1,
of the Liabilities, Surplus and Other Funds page of the NAIC Annual Statement
Blank (1996 format), but excluding from such statutory reserves and other
statutory liabilities the statutory liabilities included within Retained
Liabilities.

"ADMINISTRATIVE SERVICES AGREEMENTS" means the Purchaser
Administrative Services Agreement and the LLANY Administrative Services
Agreement.

"AFFILIATE" means, with respect to any Person, at the time in
question, any other Person controlling, controlled by or under common control
with such Person.

"ALLOCABLE AMOUNT" shall have the meaning set forth in Section
5.25(a) hereof.

"ANCILLARY AGREEMENTS" means the Indemnity Reinsurance
Agreements, the Administrative Services Agreements, the CLIC Separate Account
Administration Agreement, the General Assignment and Assumption Agreement, the
Xxxx of Sale, the Transition Services Agreement, the Stock Purchase Agreement,
the License Agreement, the Office Lease Agreement and the Office Sub-Lease
Agreements.

"ANNUAL RATE" means the value of r in the expression
(1 + r)n/365 - 1, where "n" is equal to the number of days for which interest
is to be computed and the result of the

expression is the interest factor for computing the applicable interest
amounts.

"ANTITRUST DIVISION" shall have the meaning set forth in
Section 5.05 hereof.

"APPLICABLE LAW" means any domestic or foreign federal, state
or local statute, law, ordinance, rule, administrative interpretation,
regulation, order, writ, injunction, directive, judgment, decree, policy,
guideline or other requirement (including without limitation those of the
Commission, NASD, NAIC and any state) applicable to the parties hereto, or any
of their respective Affiliates, properties, assets, officers, directors,
employees or agents, as the case may be.

"ASSERTED LIABILITY" shall have the meaning set forth in
Section 10.03(a) hereof.

"ASSIGNABLE LICENSED PRINCIPALLY USED SOFTWARE" means the
Licensed Principally Used Software as to which (i) no consent to the assignment
thereof to Purchaser is required or (ii) consent to the assignment thereof has
been obtained on or prior to the Closing Date.

"ASSIGNED AND ASSUMED CONTRACTS" means all contracts and other
agreements material to the operation of the Business, including but not limited
to those identified on Schedule 1.01(B), but excluding (i) Insurance Contracts,
(ii) reinsurance treaties and agreements, and (iii) those listed on Schedule
1.01(A).

"ASSUMED LIABILITIES" shall have the meaning set forth in the
General Assignment and Assumption Agreement.

"BAND 1 EMPLOYEE" shall have the meaning set forth in Section
5.23(a) hereof.

"BAND 2 EMPLOYEE" shall have the meaning set forth in Section
5.23(c) hereof.

"BENEFIT PLANS" shall have the meaning set forth in Section
3.20(a) hereof.

"BENEFITS AFFECTED EMPLOYEE" shall have the meaning set forth
in Section 5.24(a) hereof.

"BENEFITS EFFECTIVE DATE" shall have the meaning set forth in
Section 5.24(a) hereof.

"XXXX OF SALE" means the Xxxx of Sale which is substantially in
the form of Exhibit E hereto.

"BOOKS AND RECORDS" means the originals or copies of all
customer lists, policy information, Insurance Contract forms and rating plans,
disclosure and other documents and filings required under applicable securities
laws, claim records, sales records, underwriting records, financial records,
tax records and compliance records in the possession or control of Seller and
relating principally to the operation of the Business, including, without
limitation, any database, magnetic or optical media (to the extent not subject
to licensing restrictions) and any other form of recorded, computer generated
or stored information or process, but excluding any such records that are
subject to the attorney-client privilege.

"BROKERS" shall have the meaning set forth in Section 3.12
hereof.

"BROKERS AND AGENTS" shall have the meaning set forth in
Section 3.12 hereof.

"BUSINESS" means the business of issuing, selling and
administering individual life insurance (other than the COLI Business),
disability income insurance and annuity contracts, the other business
activities related thereto and the respective businesses currently conducted by
the Parent Subsidiaries, in each case as currently conducted by Seller's
Individual Insurance Division and the Parent Subsidiaries or, where so
specified herein, as conducted by Purchaser and LLANY following the Closing.

"BUSINESS DAY" means any day other than a Saturday, Sunday, a
day on which banking institutions in any of the States of Connecticut, Indiana
or New York are permitted or obligated by law to be closed or a day on which
the New York Stock Exchange is closed for trading.

"CA" means CIGNA Associates, Inc., a Connecticut corporation.

"CEDING COMMISSIONS" shall mean the aggregate of the ceding
commissions provided for under the Indemnity Reinsurance Agreements.

"CFA" means CIGNA Financial Advisors, Inc., a Connecticut
corporation.

"CFA CLOSING" shall have the meaning set forth in Section
2.03(a) hereof.

"CIGNA" shall have the meaning set forth in the first paragraph
of this Agreement.

"CIGNA NON-COMPETE" means the non-competition agreement
contained in Article VIII hereof.

"CLAIMS NOTICE" shall have the meaning set forth in Section
10.02 hereof.

"CLIC" shall have the meaning set forth in the first paragraph of this
Agreement.

"CLIC SEPARATE ACCOUNT ADMINISTRATION AGREEMENT" means the CLIC
Separate Account Administration Agreement to be entered into between CLIC and
Purchaser as contemplated by Section 5.12 hereof.

"CLOSING" means the closing of the transactions contemplated by this
Agreement, subject to the provision contained in Section 2.03(a) hereof.

"CLOSING BALANCE SHEET" shall have the meaning set forth in Section
2.03(b) hereof.

"CLOSING DATE" means (i) if the last of the conditions to Closing set
forth in this Agreement is satisfied or waived in writing prior to the 15th day
of a given month, then the Closing shall be the first day of the month
following the month in which the last of the conditions was so satisfied or
waived in writing, or (ii) if such satisfaction or waiver in writing occurs or
is granted after the 15th day of any given month, then the Closing shall be the
first day of the second month following the month in which the last of the
closing conditions is so satisfied or waived; provided, however, that if such
date is not a Business Day, the Closing Date shall be the immediately
succeeding Business Day; and provided further, that the Closing may occur on
such other date as the parties may agree to in writing.

"COBRA" shall have the meaning set forth in Section 3.20(j) hereof.

"CODE" means the Internal Revenue Code of 1986, as amended. Any
citation to a provision of the Code includes a citation to any successor
provision.

"COLI BUSINESS" means the business of issuing, selling and
administering insurance contracts that are issued on an individual basis on the
lives of employees of employers, without individual underwriting, whereby the
employer is the owner and beneficiary of the contract or the employer
contributes to the payment of premiums, which may include policies of the type
identified on Schedule 1.01(C) hereto; provided, however, that COLI Business
excludes any key person contracts.

"COMMISSION" means the United States Securities and Exchange
Commission.

"CONNECTICUT SAP" means the statutory accounting principles and
practices prescribed or permitted by the Insurance Department of the State of
Connecticut as applied on a basis consistent with those utilized in the
preparation of 1996 Annual Statements.

"CONTRACT EMPLOYEES" shall have the meaning set forth in Section
5.23(b) hereof.

"EFFECTIVE DATE" means the Closing Date if such date is the first day
of a month and, if not, then the first day of the month in which the Closing
Date falls.

"ELECTIONS" shall have the meaning set forth in Section 5.29 hereof.

"ENVIRONMENTAL LAWS" shall have the meaning set forth in Section
3.22(b) hereof. "ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and all final and temporary regulations and interpretive
Bulletins and other rulings of general applicability thereunder.

"ESTIMATED STATUTORY CARRYING VALUE" shall mean, as to any Investment
Asset or Other Statutory Asset, the carrying value thereof on Seller's books
for statutory statement blank purposes in accordance with Connecticut SAP,
estimated in good faith as of the date of the Closing Balance Sheet by Seller.

"EXTERNALLY MANAGED FUNDS" shall have the meaning set forth in Section
3.17 hereof.

"FINAL BALANCE SHEET" shall have the meaning set forth in Section
2.03(d) hereof.

"403(B) CONTRACT" means an Insurance Contract which is intended to
qualify for tax treatment under section 403(b) of the Code.

"FTC" shall have the meaning set forth in Section 5.05 hereof.

"GAAP" means United States generally accepted accounting principles as
in effect from time to time.

"GENERAL ACCOUNT LIABILITIES" means all general account insurance
liabilities and obligations arising under the Insurance Contracts, including,
without limitation the General Account Reserves and amounts included in lines
12, 12a, 19 and 25 of the Liabilities, Surplus and Other Funds page of the NAIC
Annual Statement Blank (1996 format) excluding, however, (i) the Seller
Separate Account Liabilities and (ii) any general account liabilities which
relate to (A) amounts transferred from the Seller Separate Accounts to the
general account of Seller pending distribution to holders of the Insurance
Contracts and (B) amounts held in the general account of Seller pending
transfer to the Seller Separate Accounts.

"GENERAL ACCOUNT OTHER INSURANCE ASSETS" means all general account
other admitted insurance assets of Seller arising under the Insurance Contracts
determined pursuant to Connecticut SAP as such amounts would have been included
in lines 12.1, 12.2, 12.3, 15, 16 and 17 of the Assets page of the NAIC Annual
Statement Blank (1996 format).

"GENERAL ACCOUNT RESERVES" means the general account statutory

reserves of Seller (without regard to the transactions contemplated by the
Indemnity Reinsurance Agreements) with respect to the Coinsured Contracts
determined pursuant to Connecticut SAP, as such reserves would have been
included in lines 1, 2, 3, 4.1, 4.2, 5, 6, 7.1, 7.2, 7.3, 8, 9, 10.1, 10.2,
10.3, 11.1, 11.2, 11.3 and 11.4 of the Liabilities, Surplus and Other Funds
page of the NAIC Annual Statement Blank (1996 format), excluding however, any
general account statutory reserve adjustments in relation to Seller Separate
Account Liabilities.

"GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT" means the General
Assignment and Assumption Agreement between Seller and Purchaser which is
substantially in the form of Exhibit D hereto.

"HAZARDOUS MATERIALS" shall have the meaning set forth in Section
3.22(b) hereof.

"HIPAA" shall have the meaning set forth in Section 3.20(j) hereof.

"HSR ACT" means the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.

"INCOME TAX REGULATIONS" means the temporary or final regulations
issued under the Code. Any citation to a provision of the Income Tax
Regulations includes a reference to any successor regulatory provision.

"INDEMNIFIED PARTY" shall have the meaning set forth in Section 10.02
hereof.

"INDEMNIFYING PARTY" shall have the meaning set forth in Section 10.02
hereof.

"INDEMNITY REINSURANCE AGREEMENTS" means the Purchaser Indemnity
Reinsurance Agreement and the LLANY Indemnity Reinsurance Agreement.

"INDIANA SAP" means the statutory accounting principles and practices
prescribed or permitted by the Indiana Insurance Department.

"INITIAL PORTFOLIO" means the portfolio of investment assets listed on
Schedule 1.01(D) hereto, excluding assets, if any, which constitute real estate
assets owned by Seller or in which Seller has any equity interest.

"INSURANCE CONTRACTS" means all individual life insurance, disability
income insurance and annuity contracts issued and administered by Seller
through its Individual Insurance Division (in accordance with, and as
determined by reference to, Seller's historical practices) and in force on the
date hereof, including but not limited to all such policies and contracts
issued on the forms identified on Schedule 1.01(E) hereto but excluding the
COLI Business, and any additional individual life insurance (other than life
insurance issued as part of the COLI Business), disability income insurance and
annuity contracts issued and administered by

Seller through its Individual Insurance Division (in accordance with, and as
determined by reference to, Seller's historical practices) after the date
hereof and prior to the Closing Date, to the extent that such contracts are in
effect as of the Effective Date, (including all supplements, endorsements,
riders and ancillary agreements in connection therewith).

"INTERIM CIGNA FINANCIAL STATEMENTS" shall have the meaning set forth
in Section 3.24 hereof.

"INTERIM LLANY FINANCIAL STATEMENTS" shall have the meaning set forth
in Section 4.09(b) hereof.

"INTERIM PURCHASER FINANCIAL STATEMENTS" shall have the meaning set
forth in Section 4.09(a) hereof.

"INTERNALLY MANAGED FUNDS" shall have the meaning set forth in Section
3.17 hereof.

"INVESTMENT ASSETS" means assets included in the Initial Portfolio,
with such additions thereto and deletions therefrom as may result from ordinary
course management of Seller's investment portfolio, consistent in all material
respects with Seller's past investment practices, prior to the Closing Date.

"IRS" means the United States Internal Revenue Service.

"JULY 18 LETTER" shall have the meaning set forth in Section 3.19(a)
hereof.

"KNOWLEDGE" shall be interpreted for the purposes of this Agreement as
follows: (i) a matter will be deemed to be within the "knowledge of the Seller
Key People" if (A) such matter is as of the date of the execution of this
Agreement actually known to any of the Seller Key People, or (B) in light of
the positions held by the Seller Key People, but taking into account that the
due diligence undertaken by the Seller Key People prior to the execution of
this Agreement was limited to reviewing materials accessible to the Seller Key
People without informing other individuals of the transactions contemplated by
this Agreement, the matter would reasonably be expected to be known by the
Seller Key People; and (ii) a matter will be deemed to be within the "knowledge
of Purchaser" if it is actually known to any of the Purchaser Key People as of
the date of the execution of this Agreement after reasonable inquiry.

"LENDER" shall have the meaning set forth in Section 3.22(b) hereof.

"LICENSE AGREEMENT" means the license agreement to be entered into on
or prior to the Closing Date among CIGNA, Seller, Purchaser and LLANY, pursuant
to which (i) CIGNA and Seller will grant to Purchaser and/or LLANY, as
applicable, the right to use CIGNA's and Seller's logos, trademarks, copyrights
and service marks that are currently used in the Business (x) for the period of
time set forth in the Administrative Services Agreements (as

defined herein) in connection with the administration of the Business (as
defined herein) pursuant to such agreements, (y) subject to Section 5.34
hereof, for a period of 24 months following the Closing Date, in connection
with writing business that is being processed at the time of Closing and in
writing new business to be added to Purchaser's and LLANY's books following
Closing during the transition to Purchaser's or LLANY's policy forms (as
contemplated by Section 5.34); and (z) for a period of six months following the
Closing Date, for related purposes (e.g., signage); and (ii) Purchaser and
LLANY, as applicable, will grant, from and after the Closing Date, to Seller a
non-exclusive perpetual license to use and copy the Owned Principally Used
Software, which license will be assignable in connection with any sale of any
business of Seller or its Affiliates that utilizes such software. Under the
License Agreement the licensee shall have the right to make modifications to
the licensed software, provided such modification does not adversely affect the
use of such software by the licensor.

"LICENSED GENERALLY USED SOFTWARE" shall have the meaning set forth in
Section 3.06(a) hereof.

"LICENSED PRINCIPALLY USED SOFTWARE" shall have the meaning set forth
in Section 3.06(a) hereof.

"LLANY" shall have the meaning set forth in the first paragraph of this
Agreement.

"LLANY ADMINISTRATIVE SERVICES AGREEMENT" means the Administrative
Services Agreement to be entered into between Seller and LLANY as contemplated
by Section 5.11 hereof.

"LLANY INDEMNITY REINSURANCE AGREEMENT" means the Indemnity Reinsurance
Agreement to be entered into between Seller and LLANY as contemplated by
Section 5.10 hereof, which agreement will set forth (i) the terms and
conditions upon which certain general account liabilities of Seller will be
reinsured by LLANY and (ii) the consideration to be paid therefor.

"LNC" shall have the meaning set forth in the first paragraph of this
Agreement.

"LOSS" and "LOSSES" shall have the meanings set forth in Section
10.01(a) hereof.

"MATERIAL" or "MATERIAL ADVERSE EFFECT ON THE BUSINESS" shall have the
following meaning: A matter will be deemed to be "material" or to have a
"material adverse effect on the Business" in connection with any provision of
this Agreement if such matter would be considered significant by a reasonable
acquiror of the Business in the context of the particular provision in which
the word "material" or the phrase "material adverse effect on the Business"
appears; i.e., a matter need not have a material adverse effect on the Business
in its entirety in order to be deemed "material" or to have a "material adverse
effect on the Business" in the context of a particular provision.

"MORTGAGE LOANS" shall have the meaning set forth in Section
3.22(b) hereof.

"NAIC" means the National Association of Insurance
Commissioners.

"NASD" shall mean the National Association of Securities
Dealers, Inc., including without limitation its Subsidiary NASD Regulation, Inc.

"NEW YORK CONTRACT CLOSING DATE INVESTMENT ASSETS"
shall have the meaning set forth in Section 2.03(b) hereof.

"NEW YORK CONTRACTS" means the life insurance, disability
income insurance and annuity contracts included within the definition of
Insurance Contracts that were delivered or issued for delivery in New York
(including all supplements, endorsements, riders and ancillary agreements in
connection therewith).

"NEW YORK SAP" means the statutory accounting principles and
practices prescribed or permitted by the New York Insurance Department.

"1940 ACT" means the Investment Company Act of 1940, as
amended, and all rules and regulations thereunder.

"90-DAY TREASURY RATE" means the annual yield rate, on the
date to which such 90-Day Treasury Rate relates, of actively traded U.S.
Treasury securities having a remaining duration to maturity of three months, as
such rate is published under "Treasury Constant Maturities" in Federal Reserve
Statistical Release H.15(519).

"NON-NEW YORK CONTRACT CLOSING DATE INVESTMENT ASSETS" shall
have the meaning set forth in Section 2.03(b) hereof.

"NON-NEW YORK CONTRACTS" means the life insurance, disability
income insurance and annuity contracts included within the definition of
Insurance Contracts, other than New York Contracts (including all supplements,
endorsements, riders and ancillary agreements in connection therewith).

"OFFICE LEASE AGREEMENT" shall have the meaning set forth in
the Transition Services Agreement.

"OFFICE SUB-LEASE AGREEMENTS" shall have the meaning set forth
in the Transition Services Agreement.

"OPINION" shall have the meaning set forth in Section 3.29 of
this Agreement.

"OTHER STATUTORY ASSETS" means admitted assets of Seller that are
included in the Transferred Assets (other than cash, Investment Assets, loans
under the Insurance Contracts, and admitted assets that are included in
Schedule 1.01(H)).

"OWNED GENERALLY USED SOFTWARE" shall have the meaning set forth in
Section 3.06(a) hereof.

"OWNED PRINCIPALLY USED SOFTWARE" shall have the meaning set forth in
Section 3.06(a) hereof.

"PARENT" shall have the meaning set forth in the first paragraph of
this Agreement.

"PARENT SUBSIDIARIES" means CFA and CA.

"PENSION PLANS" shall have the meaning set forth in Section 3.20(a)
hereof.

"PERMITS" means all licenses, permits, orders, approvals,
registrations, authorizations, qualifications and filings with and under all
federal, state, local or foreign laws or governmental or regulatory bodies.

"PERSON" means any individual, corporation, partnership, firm, joint
venture, association, joint-stock company, trust, unincorporated organization,
governmental, judicial or regulatory body, business unit (including, but not
limited to, the Business), division or other entity.

"POST-CLOSING CONTRACTS" means all Insurance Contracts included within
the meaning of such term as set forth in the Indemnity Reinsurance Agreements.

"PREMIUMS" means premiums and annuity considerations, deposits and
similar receipts with respect to the Insurance Contracts.

"PRO FORMA FINANCIAL STATEMENTS" shall mean the pro forma financial
statements of the Business as set forth in Schedule 1.01 (F) hereto.

"PROPOSED BALANCE SHEET" shall have the meaning set forth in Section
2.03(d) hereof.

"PURCHASE PRICE" means $1,414,000,000.

"PURCHASER" shall have the meaning set forth in the first paragraph of
this Agreement.

"PURCHASER ADMINISTRATIVE SERVICES AGREEMENT" means the

Administrative Services Agreement between Seller and Purchaser, which is
substantially in the form of Exhibit B hereto.

"PURCHASER FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 4.09(b) hereof.

"PURCHASER INDEMNITEES" shall have the meaning set forth in Section
10.01(a) hereof.

"PURCHASER INDEMNITY REINSURANCE AGREEMENT" means the Indemnity
Reinsurance Agreement between Seller and Purchaser, substantially in the form
of Exhibit A hereto, which sets forth (i) the terms and conditions upon which
certain general account liabilities of Seller will be reinsured by Purchaser,
and (ii) the consideration to be paid therefor.

"PURCHASER KEY PEOPLE" means the individuals set forth in Schedule
1.01(I) hereto.

"PURCHASER'S DEFINED BENEFIT PLAN" shall have the meaning set forth in
Section 5.24(f) hereof.

"PURCHASER'S 401(K) PLANS" shall have the meaning set forth in Section
5.24(d) hereof.

"PURCHASER'S MONEY PURCHASE PLAN" shall have the meaning set forth in
Section 5.24(e) hereof.

"PURCHASER'S RETIREE WELFARE PLANS" shall have the meaning set forth in
Section 5.24(c) hereof.

"QUALIFIED CONTRACT" means an Insurance Contract issued in connection
with a plan intended to qualify for tax treatment under section 401(a), 403(a),
403(b), 408 or 457 of the Code.

"QUALIFIED PLANS" shall have the meaning set forth in Section 3.20(b)
hereof.

"REAL ESTATE ASSETS" shall have the meaning set forth in Section
3.22(b) hereof.

"RETAINED LIABILITIES" means (except as has been previously agreed by
Seller and Purchaser):

(i) all liabilities of the Business (other than the General Account
Liabilities and obligations under contracts and agreements) that
have, as of the Closing Date, either (without duplication)

(x) been accrued by Seller on Seller's books
prepared in accordance with Connecticut SAP (to the extent
of the amount of such accrual) or

(y) been asserted by a third party claimant in a
writing received by Seller or any of its Affiliates prior to
the Closing Date;

(ii) any Section 10.04 Seller Obligation;

(iii) any liability or loss incurred or suffered as a result of any
claim by any present or former employee, agent or (solely with
respect to clause (z)(B) below) broker of Seller or any of its
Affiliates who performed or performs services in the Business,
including, without limitation, the Benefits Affected Employees,
that

(x) relates to the employment, agency or (solely
with respect to clause (z)(B) below) brokerage
relationship of such present or former employee, agent or
broker with the Seller or any of its Affiliates,

(y) arose out of actions, events or omissions
that occurred (or, in the case of omissions, failed to
occur) prior to the Closing Date, but did not arise out of
any such actions, events or omissions that would not have
occurred if not for Purchaser's presence at Seller's
facilities and Purchaser's pre-Closing integration and
systems modification work and Purchaser's other involvement
in the Business during the pre-Closing period, and

(z) arises either

(A) in the case of any such present or former employee
or agent, under federal, state or local statute
(including, without limitation, Title VII of the
Civil Rights Act of 1964, the Civil Rights Act of
1991, the Age Discrimination in Employment Act of
1990, the Equal Pay Act, the Americans with
Disabilities Act of 1990, ERISA and all other
statutes regulating the terms and conditions of
employment), regulation or ordinance, under the
common law or in equity (including any claims for
wrongful discharge or otherwise), or

(B) in the case of any such present or former
employee, agent or broker, under any policy,
agreement, understanding or promise, written or
oral, formal or informal, between the Seller and
the individual;

(iv) General Account Liabilities (subject to the obligations of
Purchaser and LLANY under the Indemnity Reinsurance Agreements);

(v) pension and other post-employment liabilities for retired employees;

(vi) liabilities for Taxes of Seller other than premium Taxes payable
with respect to premiums paid after the Effective Date with
respect to policies and contracts reinsured under the Indemnity
Reinsurance Agreements;

(vii) obligations under contracts of Seller not assigned to Purchaser
or LLANY;

(viii) liabilities specifically excluded in this Agreement from those
being assumed by Purchaser or LLANY;

(ix) any liability secured by a security interest in any asset not
transferred to Purchaser or LLANY;

(x) liabilities for amounts payable prior to the Effective Date for
returns or refunds of premiums under the Insurance Contracts;

(xi) liabilities for commission payments or other fees or compensation
payable with respect to the Insurance Contracts to or for the
benefit of brokers and service providers, in each case payable
prior to the Effective Date;

(xii) liabilities for guaranty fund assessments and similar charges
imposed with respect to the Insurance Contracts based on
premiums paid prior to the Effective Date; and

(xiii) liability for reinsurance in unauthorized companies.

"SECURITIES ACT" means the Securities Act of 1933, as amended, and all
rules and regulations thereunder.

"SECTION 10.04 PURCHASER OBLIGATION" shall have the meaning set forth
in Section 10.04(d) hereof.

"SECTION 10.04 SELLER OBLIGATION" shall have the meaning set forth in
Section 10.04(d) hereto.

"SELLER" shall have the meaning set forth in the first paragraph of
this Agreement.

"SELLER FINANCIAL STATEMENTS" shall have the meaning set forth in
Section 3.24 hereof.

"SELLER INDEMNITEES" shall have the meaning set forth in Section
10.01(b) hereof.

"SELLER KEY PEOPLE" means the individuals set forth
in Schedule 1.01(J) hereto.

"SELLER PARTIES" means CIGNA, Parent, Seller and CLIC.

"SELLER SEPARATE ACCOUNTS" means the separate
accounts of Seller's Individual Insurance Division and the separate accounts
of CLIC, in each case identified on Schedule 1.01(G) hereto.

"SELLER'S DEFERRED COMPENSATION PLAN" shall have the
meaning set forth in Section 5.24(g) hereof.

"SELLER'S DEFINED BENEFIT PLAN" shall have the
meaning set forth in Section 5.24(f) hereof.

"SELLER'S 401(K) PLAN" shall have the meaning set
forth in Section 5.24(d) hereof.

"SELLER'S MONEY PURCHASE PLAN" shall have the
meaning set forth in Section 5.24(e) hereof.

"SEPARATE ACCOUNT LIABILITIES" means those
liabilities that are reflected in the Seller Separate Accounts.

"SETTLEMENT AGREEMENTS" shall have the meaning set
forth in Section 10.04(c) hereof.

"SEVERANCE COSTS" shall have the meaning set forth
in Section 3.19(c) hereof.

"STATUTORY CARRYING VALUE" shall mean, as to any
Investment Asset or Other Statutory Asset, the carrying value thereof on
Seller's books for statutory statement blank purposes, determined in
accordance with Connecticut SAP.

"STOCK PURCHASE AGREEMENT" means the Stock
Purchase Agreement among CIGNA, Parent and Purchaser being executed
concurrently herewith.

"SUBSIDIARY" means, with respect to any Person on a
given date (i) any other Person of which a majority of the voting power of the
equity securities or equity interests is owned directly or indirectly
by such Person and (ii) any other Person the accounts of which, by virtue of an
ownership interest in it by such Person would be consolidated, in accordance
with GAAP, with those of such Person in its financial statements as of the
applicable date.

"SUBSIDIARY STOCK" means all of the issued and
outstanding shares of

common stock of CFA, par value $25.00 per share, and CA, par value $1.00 per
share, all of which issued and outstanding shares are owned by Parent.

"SUITABLE EMPLOYMENT" shall have the meaning set
forth in Section 5.23(c) hereof.

"TAXES" (or "TAX" as the context may require) means
(i) any tax, however denominated, imposed by any federal, state, local,
municipal, territorial, provincial or foreign government or any agency
or political subdivision of any such government (a "TAXING AUTHORITY"),
including without limitation any tax imposed under Subtitle A of the Code and
any net income, alternative or add-on minimum tax, gross income, gross
receipts, sales, use, gains, goods and services, production, documentary,
recording, social security, unemployment, disability, workers' compensation,
estimated, ad valorem, value added, transfer, franchise, profits, license,
withholding on amounts paid to or by Seller or its Affiliates, payroll,
employment, excise, severance, stamp, capital stock, occupation, personal or
real property, environmental or windfall profit tax, premium, custom, duty or
other tax, governmental fee or other like assessment or charge of any kind
whatsoever, together with any interest, penalty, addition to tax or additional
amount imposed by any Taxing Authority relating thereto, (ii) liability of
Parent or its Affiliates for the payment of any amounts of the type described
in (i) as a result of being a member of an affiliated, consolidated, combined
or unitary group with any other corporation at any time on or prior to the
Closing Date, and (iii) liability of Parent or its Affiliates for the payment
of any amounts as a result of being a party to any Tax Sharing Agreement or
with respect to the payment of any amounts of the type described in (i) or (ii)
as a result of any express or implied obligation to indemnify any other Person.

"TAXING AUTHORITY" has the meaning set forth in the
definition of "Taxes."

"THIRD PARTY ACCOUNTANT" shall have the meaning set
forth in Section 2.03(d) hereof.

"THIRD PARTY CLAIMANT" shall have the meaning set
forth in Section 10.03(a) hereof.

"TRANSFERRED ASSETS" means: (i) cash and/or
Investment Assets (identified in accordance with Section 2.03(b)) with
Statutory Carrying Value as of the Closing Date equal to the sum as of the
Closing Date of (A) Adjusted Statutory Reserves and Other Statutory Liabilities
plus (B) the statutory surplus with respect to the participating Insurance
Contracts minus (C) the amount of outstanding loans under the Insurance
Contracts and minus (D) the Statutory Carrying Value of Other Statutory Assets;
(ii) all of Seller's rights and interests under the Insurance Contracts to
receive principal and interest paid on policy or contract loans on or after the
Closing Date; (iii) Other Statutory Assets, (iv) the Books and Records; (v) the
Assignable Licensed Principally Used Software; (vi) the Owned Principally Used
Software; (vii) the Transferred Contracts; (viii) all of the issued and
outstanding capital stock of the Parent

Subsidiaries; and (ix) all other assets (including, without limitation,
Seller's relationships with its agents with respect to the Business, the
assembled workforce, going concern, goodwill, and other similar intangible
assets relating to the Business and non-admitted assets such as agents'
balances and cash advanced to or in the hands of officers or agents) and
contracts of Seller that are used exclusively in, or are otherwise material
(individually or in the aggregate) to, the Business, but excluding those assets
(A) specifically identified on Schedule 1.01 (H) hereto, (B) described on
Schedule 2.01 to the Transition Services Agreement as being made available by
Seller, (C) the Insurance Contracts, the Seller Separate Accounts, and the
policies and contracts funded by the Seller Separate Accounts; (D) reinsurance
treaties and agreements, and (E) cash and Investment Assets other than the cash
and Investment Assets specified in clause (i) above; and (F) that cannot be
transferred to Purchaser or LLANY, as the case may be, because of Seller's
inability to obtain the consent of a third party required for such transfer to
be effective.

"TRANSFERRED CONTRACTS" means the Assigned and
Assumed Contracts, and all other contracts, assigned pursuant to the General
Assignment and Assumption Agreement.

"TRANSITION SERVICES AGREEMENT" means the Transition
Services Agreement between Seller and Purchaser which is substantially in the
form of Exhibit C hereto.

"25% PREMIUM THRESHOLD" shall have the meaning set
forth in Section 5.34(c) hereof.

"WARN ACT" means the Worker Adjustment and
Retraining and Notification Act.

"WELFARE PLANS" shall have the meaning set forth in
Section 3.20(a) hereof.

ARTICLE II

TRANSFER AND ACQUISITION OF ASSETS

SECTION 2.01. CASH CONSIDERATION. Upon the terms
and subject to the conditions of this Agreement, Purchaser and LLANY shall pay
to CIGNA, Parent and Seller on the Closing Date an aggregate amount equal to
the Purchase Price by wire transfer of immediately available funds in U.S.
Dollars to the bank account(s) designated to Purchaser in writing by Seller at
least two Business Days prior to the Closing Date, with the exact amount of
each payment to be determined according to the allocation provided for in
Section 5.25 hereof. Such payment obligation shall not be affected in any
manner by the delay between the Closing Date and, if applicable, the date of
the CFA Closing, as provided for in Section 2.03 hereof.

SECTION 2.02. ACQUISITION OF TRANSFERRED ASSETS AND
ASSUMPTION OF ASSUMED LIABILITIES. (a) Upon the terms and subject to the
conditions of this Agreement and the payment of the Purchase Price, on the
Closing Date, Seller shall sell, assign and transfer to

Purchaser and LLANY, as applicable, all of Seller's right, title and interest
in the Transferred Assets; provided, however, that the amount of cash and
Investment Assets to be transferred shall be determined in accordance with the
provisions of Section 2.03 and adjusted as required by Section 2.04 hereof. All
sales, assignments and transfers of the Transferred Assets other than the
Subsidiary Stock, cash and Investment Assets shall be effected by the Xxxx of
Sale and the General Assignment and Assumption Agreement. The sale, assignment
and transfer of the Subsidiary Stock shall be effected pursuant to the Stock
Purchase Agreement. Investment Assets shall be transferred by such instruments
of transfer or book entry transfer, as appropriate, as are reasonably
acceptable to Seller, Purchaser and LLANY. Notwithstanding anything in this
Agreement to the contrary, but subject to the provisions of Section 5.04
hereof, Seller shall be entitled to keep and maintain copies of all Books and
Records from and after the Closing, and to have access to the originals of the
Books and Records in accordance with the terms hereof.

(b) Upon the terms and subject to the conditions
of this Agreement, on the Closing Date, Purchaser and LLANY shall reinsure
their respective General Account Liabilities pursuant to the Indemnity
Reinsurance Agreements, as appropriate, and Purchaser and LLANY shall each
assume, pursuant to the General Assignment and Assumption Agreement, all
Assumed Liabilities other than the Retained Liabilities. The liabilities to be
assumed by Purchaser or LLANY, as the case may be, will include, without
limitation, the Transferred Contracts and the Assignable Licensed Principally
Used Software to be assumed by it.

(c) The liabilities assumed by Purchaser
hereunder and under the Ancillary Agreements and the Purchase Price shall be
allocated among the Transferred Assets and the CIGNA Non-Compete as provided in
Section 5.25 hereof.

SECTION 2.03. PLACE AND DATE OF CLOSING; BALANCE
SHEETS; CLOSING DATE TRANSFERS OF INVESTMENT ASSETS AND CASH. (a) The Closing
shall take place at the offices of Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP, 0000
Xxxxxxxxxxxx Xxxxxx, X.X., Xxxxxxxxxx, X.X., at 10:00 a.m. Eastern Time on the
Closing Date or such other time or place as the parties may mutually agree
upon; provided, however, that if the Closing occurs prior to January 1, 1998,
the closing of the sale by Parent to Purchaser of all the issued and
outstanding common stock of CFA pursuant to the terms of the Stock Purchase
Agreement will occur at 10:00 a.m. Eastern Time on January 1, 1998, at such
location as the parties may mutually agree (the "CFA CLOSING"). In the latter
event, the closing of the sale of the stock of CFA shall be treated as a Stock
Purchase Closing for purposes of the Stock Purchase Agreement.

(b) On the Closing Date, Seller will deliver to
Purchaser a balance sheet of the Business in the same format as the statutory
balance sheet as of December 31, 1996, included in the Pro Forma Financial
Statements (the "CLOSING BALANCE SHEET") and a certification of the chief
financial officer of Seller that all items on the Closing Balance Sheet were
estimated in good faith by Seller as of the end of the month next preceding the
month in which the Closing Date falls and were based upon the books and records
of Seller consistent with the methodologies utilized in preparing the Pro Forma
Financial Statements. The Closing Balance Sheet shall reflect (i) the Adjusted
Statutory Reserves and Other Statutory Liabilities, (ii) the Separate Account
Liabilities with respect to the New York Contracts, (iii) the Separate Account

27
Liabilities with respect to the Non-New York Contracts, (iv) the General Account
Reserves and the General Account Liabilities with respect to the New York
Contracts, (v) the General Account Reserves and the General Account Liabilities
with respect to the Non-New York Contracts, (vi) assets held in the Seller
Separate Accounts equal to the Separate Account Liabilities with respect to the
New York Contracts, (vii) assets held in the Seller Separate Accounts equal to
the Separate Account Liabilities with respect to the Non-New York Contracts,
(viii) loans under the New York Contracts, (ix) loans under the Non-New York
Contracts, (x) the amount of the statutory surplus with respect to the
participating New York Contracts, (xi) the amount of the statutory surplus with
respect to the participating Non-New York Contracts, (xii) the General Account
Other Insurance Assets with respect to the New York Contracts, (xiii) the
General Account Other Insurance Assets with respect to the Non-New York
Contracts, (xiv) the Other Statutory Assets with respect to the New York
Contracts, (xv) the Other Statutory Assets with respect to the Non-New York
Contracts, (xvi) Investment Assets (and cash to the extent needed because of
Investment Assets not being capable of being divided to produce the exact amount
contemplated by this item (xvi), it being the intent of the parties, however,
that the Investment Assets will be chosen so as to keep the amount of such cash
to the minimum) with an Estimated Statutory Carrying Value equal to (A) General
Account Liabilities plus (B) the statutory surplus with respect to the
participating Insurance Contracts minus (C) the amount of outstanding loans
under the Insurance Contracts and minus (D) the General Account Other Insurance
Assets, and (xvii) a positive or negative amount in respect of cash reflecting
the amount of cash to be paid on the Closing Date by Seller or Purchaser,
respectively, pursuant to Section 2.03(c) hereof. The Investment Assets shown
on the Closing Balance Sheet in accordance with clause (xvi) of the preceding
sentence shall be divided into (x) Investment Assets for the New York Contracts
(the "NEW YORK CONTRACT CLOSING DATE INVESTMENT ASSETS" and (y) Investments
Assets for the Non-New York Contracts (the "NON-NEW YORK CONTRACT CLOSING DATE
INVESTMENT ASSETS"). The Investment Assets to be reflected on the Closing
Balance Sheet and transferred to Purchaser and LLANY shall be jointly identified
by Purchaser and Seller prior to Closing from among the Investment Assets, with
such substitutions as may be agreed upon by both parties. Purchaser and Seller
shall act reasonably and in good faith in all aspects of the selection of the
assets to be transferred, with the goal of selecting a portfolio of assets
having risk and return characteristics substantially identical to those of the
Investment Assets, and of minimizing (i) the amount of cash to be transferred,
and (ii) the number of Mortgage Loans so transferred that are cross-defaulted or
cross-collateralized with any loan to be retained by Seller or owned by any
Affiliate of Seller.

(c) On the Closing Date, Seller will transfer (i) to LLANY the New
York Contract Closing Date Investment Assets and (ii) to Purchaser the Non-New
York Contract Closing Date Investment Assets. Also on the Closing Date, (iii)
if (x) the sum of Adjusted Statutory Reserves and Other Statutory Liabilities
and the statutory surplus with respect to the participating Insurance Contracts
exceeds (y) the sum of the amount of the outstanding loans under the Insurance
Contracts, the Estimated Carrying Value of the Other Statutory Assets, the
Estimated Carrying Value of the New York Closing Date Investment Assets and the
Estimated Carrying Value of the Non-New York Closing Date Investment Assets, all
as shown on the Closing Balance Sheet, Seller will pay to Purchaser cash in an
amount equal to such excess; and (iv) if the sum referred to in subclause (y) of
clause (iii) above exceeds the sum referred to in subclause (x) of clause (iii)
above, Purchaser will pay to Seller cash in an amount equal to such excess.

(d) Seller shall, on or before the date that is 60 days after
the Closing

28
Date, prepare a proposed balance sheet of the Business as of the close of
business on the last day of the month preceding the month in which the Closing
Date falls (the "PROPOSED BALANCE SHEET"), in the same format as the Closing
Balance Sheet (except that the Proposed Balance Sheet shall specify the
Statutory Carrying Value, rather than the Estimated Statutory Carrying Value, of
the cash and Investment Assets and Other Statutory Assets reflected on the
Closing Balance Sheet), and a certification of the chief financial officer of
Seller that the data contained in the Proposed Balance Sheet was obtained from
the books and records of Seller and such data was computed in accordance with
Connecticut SAP applied consistently with the application thereof in the
preparation of the Pro Forma Financial Statements. Promptly after its
preparation, Seller shall deliver copies of the Proposed Balance Sheet to
Purchaser. Purchaser shall have the right to review such balance sheet and
comment thereon for a period of 45 days after receipt thereof. Seller agrees
that Purchaser and its accountants may have access to the accounting records of
Seller relating to its preparation of the Proposed Balance Sheet for the purpose
of conducting its review. Any changes in the Proposed Balance Sheet that are
agreed to by Purchaser and Seller within 45 days of the aforementioned delivery
of such balance sheet by Seller shall be incorporated into a final balance sheet
of the Business as of the close of business on the last day of the month
preceding the month in which the Closing Date falls (the "FINAL BALANCE SHEET").
In the event that Purchaser and Seller are unable to agree on the manner in
which any item or items should be treated in the preparation of the Final
Balance Sheet within such 45-day period, separate written reports of such item
or items shall be made in concise form and shall be referred to KPMG Peat
Marwick (the "THIRD PARTY ACCOUNTANT"). The Third Party Accountant shall
determine within 14 days the manner in which such item or items shall be treated
on the Final Balance Sheet; provided, however, that the dollar amount of each
item in dispute shall be determined within the range of dollar amounts proposed
by Seller and Purchaser, respectively. The determinations by the Third Party
Accountant as to the items in dispute shall be in writing and shall be binding
and conclusive on the parties and shall be so reflected in the Final Balance
Sheet. The fees, costs and expenses of retaining the Third Party Accountant
shall be shared equally by the parties. Such determination shall be binding and
conclusive on the parties. Following the resolution of all disputed items (or,
if there is no dispute, promptly after the parties reach agreement on the Final
Balance Sheet), Seller shall prepare the Final Balance Sheet and shall deliver
copies of such balance sheet and such calculation to Purchaser.

SECTION 2.04. POST-CLOSING ADJUSTMENTS. (a) In the event the
Statutory Carrying Value of the New York Closing Date Investment Assets is less
than the amount of (i) General Account Liabilities relating to the New York
Contracts plus (ii) the statutory surplus with respect to the participating New
York Insurance Contracts, minus (iii) the amount of outstanding loans under the
New York Contracts and minus (iv) the General Account Other Insurance Assets
with respect to the New York Contracts, all as reflected on the Final Balance
Sheet, Seller shall transfer to LLANY additional cash equal to the amount of
such difference, together with interest thereon from and including the Closing
Date to but not including the date of such transfer computed at an Annual Rate
equal to the 90-day Treasury Rate in effect on the Closing Date.

(b) In the event the Statutory Carrying Value of the Non-New
York Closing Date Investment Assets is less than the amount of (i) General
Account Liabilities relating to the Non-New York Contracts plus (ii) the
statutory surplus with respect to the participating

Non-New York Insurance Contracts minus (iii) the amount of outstanding loans
under the Non-New York Contracts and minus (iv) the General Account Other
Insurance Assets with respect to the Non-New York Contracts, all as reflected
on the Final Balance Sheet, Seller shall transfer to Purchaser additional cash
equal to the amount of such difference, together with interest thereon from and
including the Closing Date to but not including the date of such transfer
computed at an Annual Rate equal to the 90-day Treasury Rate in effect on the
Closing Date.

(c) In the event the Statutory Carrying Value of
the New York Closing Date Investment Assets is more than the amount of (i)
General Account Liabilities relating to the New York Contracts plus (ii) the
statutory surplus with respect to the participating New York Insurance
Contracts minus (iii) the amount of outstanding loans under the New York
Contracts and minus (iv) the General Account Other Insurance Assets with
respect to the New York Contracts, all as reflected on the Final Balance Sheet,
LLANY shall transfer to Seller additional cash equal to the amount of such
difference, together with interest thereon from and including the Closing Date
to but not including the date of such transfer computed at an Annual Rate equal
to the 90-day Treasury Rate in effect on the Closing Date.

(d) In the event the Statutory Carrying Value of
the Non-New York Closing Date Investment Assets is more than the amount of (i)
General Account Liabilities relating to the Non-New York Contracts plus (ii)
the statutory surplus with respect to the participating Non-New York Insurance
Contracts minus (iii) the amount of outstanding loans under the Non-New York
Contracts and minus (iv) the General Account Other Insurance Assets with
respect to the Non-New York Contracts, all as reflected on the Final Balance
Sheet, Purchaser shall transfer to Seller additional cash equal to the amount
of such difference, together with interest thereon from and including the
Closing Date to but not including the date of such transfer computed at an
Annual Rate equal to the 90-day Treasury Rate in effect on the Closing Date.

(e) If (x) the sum of Adjusted Statutory Reserves
and Other Statutory Liabilities and the statutory surplus with respect to the
participating Insurance Contracts exceeds (y) the sum of the amount of the
outstanding loans under the Insurance Contracts, the Statutory Carrying Value
of the Other Statutory Assets, the Statutory Carrying Value of the New York
Contract Closing Date Investment Assets, the Statutory Carrying Value of the
Non-New York Contract Closing Date Investment Assets, and the cash, if any,
paid to Purchaser pursuant to Section 2.03(c)(iii) or minus the cash, if any,
paid by Purchaser to Seller pursuant to Section 2.03(c)(iv), all (except for
such cash) as shown on the Final Balance Sheet, Seller will pay to Purchaser
cash in an amount equal to such excess, together with interest thereon from and
including the Closing Date to but not including the date of such transfer,
computed at an Annual Rate equal to the 90-day Treasury Rate in effect on the
Closing Date.

(f) If the sum referred to in clause (y) of
Section 2.04(e) exceeds the sum referred to in clause (x) of Section 2.04(e),
Purchaser will pay to Seller cash in an amount equal to such excess.

(g) Amounts required to be transferred from Purchaser and LLANY to

Seller or from Seller to Purchaser and LLANY pursuant to this Section shall be
netted against one another so that only a single net transfer shall be
required. Any transfer of cash required under this Section 2.04 shall be made
within ten Business Days of the date of the delivery of the Final Balance Sheet
to Purchaser.

SECTION 2.05. CLOSING ITEMS. (a) At the Closing,
Seller shall execute (where appropriate) and deliver to Purchaser and LLANY, as
applicable, the following:

(i) the Indemnity Reinsurance Agreements;
(ii) the Administrative Services Agreements;
(iii) the Transition Services Agreement;
(iv) the General Assignment and Assumption Agreement;
(v) the Xxxx of Sale;
(vi) the License Agreement;
(vii) the Office Lease Agreement;
(viii) the Office Sub-Lease Agreements;
(ix) evidence of compliance with the requirements of the HSR Act;
(x) evidence of receipt of the Permits described on Exhibit F hereto from the Insurance
Departments of the States of Connecticut, Colorado, New York and Wisconsin; and
(xi) evidence of compliance with any state pre-acquisition notification acts from which no
exemption is available.

Seller shall also (i) transfer to the Purchaser and
LLANY cash and Investment Assets in accordance with Sections 2.02(a) and
2.03(c) hereof, (ii) transfer the other Transferred Assets (other than the
Subsidiary Stock) to Purchaser or LLANY, as applicable, in accordance with
Section 2.02 hereof, and (iii) deliver to Purchaser a true and correct list of
all life insurance, disability income insurance and annuity contracts included
in the Insurance Contracts that are in effect as of the Closing Date. In
addition, at the Closing Parent shall transfer the Subsidiary Stock pursuant to
the terms of the Stock Purchase Agreement or, in the event that the Closing
Date is prior to January 1, 1998, Parent will deliver to Purchaser at the
Closing all of the issued and outstanding common stock of CA and, at the CFA
Closing, all of the issued and outstanding common stock of CFA.

(b) At the Closing, CLIC shall execute and
deliver to Purchaser the CLIC Separate Account Administration Agreement.

(c) At the Closing, Purchaser and LLANY, as
applicable, shall execute (where appropriate) and deliver to Seller the
following:

(i) the Indemnity Reinsurance
Agreements;
(ii) the Administrative Services
Agreements;
(iii) the Transition Services Agreement;
(iv) the General Assignment and
Assumption Agreement;

(v) the License Agreement;
(vi) the Office Lease Agreement;
(vii) the Office Sub-Lease Agreements;
(viii) evidence of compliance with the requirements of
the HSR Act;
(ix) evidence of receipt of the Permits described on
Exhibit F hereto from the Insurance Departments of
the States of Indiana and New York; and
(x) evidence of compliance with any state
pre-acquisition notification requirements from
which no exemption is available.

Purchaser and LLANY shall also transfer to (i) CIGNA, Parent and
Seller in accordance with Section 2.01 an aggregate amount of cash equal to the
Purchase Price and (ii) to Seller, any cash required to be paid by Purchaser
pursuant to Section 2.03 hereof.
(d) At the Closing, Purchaser shall execute and deliver to CLIC
the CLIC Separate Account Administration Agreement.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT AND SELLER

CIGNA, Parent, Seller and CLIC hereby represent and warrant to
Purchaser as follows (it being understood that CLIC hereby makes only those
representations and warranties that specifically relate to it):

SECTION 3.01. ORGANIZATION, STANDING AND AUTHORITY OF CIGNA,
PARENT, SELLER AND CLIC. CIGNA is duly organized, validly existing and in good
standing under the laws of Delaware and has all requisite power and authority
to carry on its operations as they are now being conducted, except where the
failure to have such authority would not, individually or in the aggregate,
have a material adverse effect on the Business. Each of Parent, Seller and
CLIC is duly organized, validly existing and in good standing under the laws of
Connecticut and has all requisite power and authority to carry on the
operations of the Business as they are now being conducted, except where the
failure to have such authority would not, individually or in the aggregate,
have a material adverse effect on the Business. Each of CIGNA, Parent, Seller
and CLIC is duly qualified to do business as a foreign corporation and is in
good standing in each jurisdiction where such qualification is necessary,
except for those jurisdictions where failure to be so qualified would not,
individually or in the aggregate, have a material adverse effect on the
Business.

SECTION 3.02. AUTHORIZATION. Each of CIGNA, Parent, Seller and
CLIC has all requisite power and authority to execute and deliver, and to
perform its respective obligations under, this Agreement and under each of the
Ancillary Agreements to be executed by it. The execution and delivery by
CIGNA, Parent, Seller and CLIC of this Agreement and the Ancillary Agreements
to be executed by them, and the performance by CIGNA, Parent, Seller and CLIC
of

32
their respective obligations under such agreements, have been or, with respect
to Parent, Seller, and CLIC, will promptly after the execution of this Agreement
be, duly authorized by all necessary corporate action on the part of CIGNA,
Parent, Seller and CLIC. This Agreement has been duly executed and delivered by
CIGNA and, subject to such due authorization as to them occurring, by CIGNA,
Parent, Seller and CLIC, and on the Closing Date the Ancillary Agreements
executed by CIGNA, Parent, Seller and/or CLIC will be duly executed and
delivered by CIGNA, Parent, Seller and/or CLIC, as appropriate; and, subject to
the due execution and delivery by the other parties to such agreements, this
Agreement, subject in the case of Parent, Seller and CLIC to such due
authorization is, and the Ancillary Agreements executed by CIGNA, Parent, Seller
and/or CLIC will, upon due execution and delivery, be valid and binding
obligations of CIGNA, Parent, Seller and/or CLIC, as the case may be,
enforceable against CIGNA, Parent, Seller and/or CLIC in accordance with their
respective terms. Notwithstanding the foregoing, the obligation of Parent,
Seller and/or CLIC to execute any Ancillary Agreement shall be subject to the
terms and conditions of this Agreement.

SECTION 3.03. ACTIONS AND PROCEEDINGS. Except as disclosed on
Schedule 3.03 hereto, there are no outstanding orders, decrees or judgments by
or with any court, governmental agency, regulatory body or arbitration tribunal
before which CIGNA, Parent, Seller or CLIC was a party that, individually or in
the aggregate, have a material adverse effect on the Business. Except as
disclosed on Schedule 3.03 hereto, there are no actions, suits, arbitrations or
legal, administrative or other proceedings pending or, to the knowledge of the
Seller Key People, threatened against CIGNA, Parent, Seller or CLIC, at law or
in equity, or before or by any governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, or before any arbitrator
of any kind which, if adversely determined, would, individually or in the
aggregate, have a material adverse effect on the Business.

SECTION 3.04. NO CONFLICT OR VIOLATION. Except as disclosed on
Schedule 3.04 hereto, the execution, delivery and performance by CIGNA, Parent,
Seller and CLIC of this Agreement and the Ancillary Agreements to which any of
them may become a party and the consummation of the transactions contemplated
hereby and thereby in accordance with the respective terms and conditions hereof
and thereof will not (a) violate any provision of the charter, bylaws or other
organizational document of CIGNA, Parent, Seller or CLIC, (b) violate, conflict
with or result in the breach of any of the terms of, result in any modification
of the effect of, otherwise give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time or both, constitute) a
default under, any contract relating to or arising in connection with the
Business to which CIGNA, Parent, Seller or CLIC is a party or by or to which
CIGNA, Parent, Seller or CLIC or any of their respective assets or properties
may be bound or subject, except for such violations, conflicts, breaches or
modifications that would not, individually or in the aggregate, have a material
adverse effect on the Business and violations with respect to any contract as to
which Seller is able to make arrangements pursuant to Section 5.32 hereof, (c)
violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory body against, or binding upon, or any
agreement with, or condition imposed by, any governmental or regulatory body,
foreign or domestic, binding upon CIGNA, Parent, Seller or CLIC in connection
with the Business, except for such violations that would not, individually or in
the aggregate, have a material adverse effect on the Business, (d) subject to

obtaining the Permits referred to in Section 3.05 hereof, violate any statute,
law or regulation of any jurisdiction, except for such violations that would
not, individually or in the aggregate, have a material adverse effect on the
Business or (e) result in a breach or violation of any of the terms or
conditions of, constitute a default under, or otherwise cause an impairment or
revocation of, any Permit related to the Business, except for such breaches,
violations, defaults, impairments or revocations that would not, individually
or in the aggregate, have a material adverse effect on the Business.

SECTION 3.05. GOVERNMENTAL CONSENTS AND APPROVALS. Except as
required under the HSR Act and except for required Permits of and filings with
applicable insurance or securities regulatory authorities, the execution,
delivery and performance by CIGNA, Parent, Seller and CLIC of this Agreement
and the Ancillary Agreements to which any of them is a party and the
consummation of the transactions contemplated hereby and thereby in accordance
with the respective terms hereof and thereof do not require any of CIGNA,
Parent, Seller or CLIC to obtain any consent, approval or action of, make any
filing with, or give any notice to, any governmental or regulatory body, except
for such consents, approvals, actions, filings or notices the failure of which
to obtain, make or give, as the case may be, would not, individually or in the
aggregate, have a material adverse effect on the Business.

SECTION 3.06. COMPUTER SOFTWARE AND INTELLECTUAL PROPERTY. (a)
Seller has set forth on Schedule 3.06(A) hereto a true and complete listing, to
the knowledge of the Seller Key People, of all computer software programs used
principally in the conduct of the Business. Schedule 3.06(A) hereto also sets
forth whether each such computer software program is (i) owned by Seller (the
"OWNED PRINCIPALLY USED SOFTWARE") or (ii) licensed by Seller from a third
party (the "LICENSED PRINCIPALLY USED SOFTWARE"). Seller has set forth on
Schedule 3.06(B) hereto a true and complete listing, to the knowledge of the
Seller Key People, of all computer software programs used generally in the
conduct of the Seller's businesses as well as in the conduct of the Business.
Schedule 3.06(B) hereto also sets forth whether each such computer software
program is (i) owned by Seller (the "OWNED GENERALLY USED SOFTWARE") or (ii)
licensed by Seller from a third party (the "LICENSED GENERALLY USED SOFTWARE").
Seller has, and on the Closing Date Purchaser or LLANY, as applicable, will
have the right to use all Owned Principally Used Software, free and clear of
any royalty or other similar payment obligations, claims of infringement or
alleged infringement or other lien, charge, claim or other encumbrance of any
kind other than the License Agreement, except for any such claims, liens,
charges or encumbrances that would not, individually or in the aggregate, have
a material adverse effect on the Business. Seller has, and immediately prior
to the Closing will have, the right to use the Licensed Principally Used
Software, free and clear of claims of infringement or alleged infringement or
other lien, charge, claim or other encumbrance of any kind, except for any such
claims, liens, charges or encumbrances that would not, individually or in the
aggregate, have a material adverse effect on the Business. Seller is not in
conflict with or violation or infringement of, nor, to the knowledge of the
Seller Key People, has Seller received any notice of any such conflict with, or
violation or infringement of, any asserted rights of any other Person with
respect to any Owned Principally Used Software or Licensed Principally Used
Software, except for any such conflicts, violations or infringements that would
not, individually or in the aggregate, have a material adverse effect on the
Business.

(b) To the knowledge of the Seller Key People, (i) the logos,
trademarks, service marks and copyrights that are used in the Business are the
property of CIGNA or Seller, and (ii) CIGNA or Seller has the right to grant to
Purchaser and/or LLANY a limited license to use the logos, trademarks, service
marks and copyrights referred to above in this Section 3.06.

SECTION 3.07. BROKERAGE AND FINANCIAL ADVISERS. No broker, finder or
financial adviser has acted directly or indirectly as such for, or is entitled
to any compensation from, Seller or its Affiliates in connection with this
Agreement or the transactions contemplated hereby, except Xxxxxxx, Xxxxx & Co.,
whose fees for services rendered in connection therewith will be paid by
Seller.

SECTION 3.08. COMPLIANCE WITH LAWS. Except with respect to those
violations, if any, which would not, individually or in the aggregate, have a
material adverse effect on the Business (i) none of Seller, CLIC nor the Seller
Separate Accounts nor any Internally Managed Fund (as defined below) is in
violation of any federal, state, local or foreign law, ordinance or regulation
or any other requirement of any governmental or regulatory body, court or
arbitrator applicable to the Business nor, to the knowledge of the Seller Key
People, has Seller or CLIC received any written notice that any such violation
is being alleged and (ii) without limiting the generality of the foregoing, in
connection with Seller's or CLIC's most recently completed or any ongoing
triennial examination, neither Seller nor CLIC has, to the knowledge of the
Seller Key People, received any notice, nor, to the knowledge of the Seller Key
People, is Seller or CLIC aware of the intention to send any notice, from any
state regulatory authority alleging any violation of any such law, ordinance or
regulation or directing Seller or CLIC to take any remedial action with respect
to such law, ordinance or regulation, in either case relating to the Business.

SECTION 3.09. PERMITS, LICENSES AND FRANCHISES. Schedule 3.09 hereto
lists (i) all jurisdictions in which Seller and CLIC are licensed to issue the
Insurance Contracts and (ii) the lines of business in connection with the
Business which Seller and CLIC are authorized to transact in each such
jurisdiction. Seller and CLIC have been duly authorized by the relevant state
insurance regulatory authorities to issue the Insurance Contracts that it is
currently writing, and was duly authorized to issue the Insurance Contracts
that it is not currently writing at the time such Insurance Contracts were
issued, in the respective states in which it conducts the Business, except for
authorizations the failure of which to have would not, individually or in the
aggregate, have a material adverse effect on the Business. Except as set forth
on Schedule 3.09, Seller and CLIC have all other Permits necessary to conduct
the Business in the manner and in the areas in which the Business is presently
being conducted and all such Permits are valid and in full force and effect,
except where the failure to have such a Permit would not, individually or in
the aggregate, have a material adverse effect on the Business.

SECTION 3.10. INSURANCE CONTRACTS. (a) The forms of Insurance
Contracts available for issuance, and the states in which such forms are
authorized for issuance, on the date hereof are listed on Schedule 1.01(E)
hereto and are specifically identified on such Schedule as "LIFE INSURANCE
CONTRACTS," "ANNUITY CONTRACTS," and "DISABILITY INCOME INSURANCE CONTRACTS."
All Insurance Contracts as now in force are in all respects, to the extent
required

under applicable law, on forms approved by applicable insurance regulatory
authorities or which have been filed and not objected to by such authorities
within the period provided for objection, and such forms comply in all material
respects with the insurance statutes, regulations and rules applicable thereto,
except where the failure to have such approval or non-objection or the failure
to so comply would not, individually or in the aggregate, have a material
adverse effect on the Business. To the knowledge of the Seller Key People, at
the xxxx Xxxxxx or CLIC paid commissions to any broker or agent within the past
36 months in connection with the sale of Insurance Contracts, each such broker
or agent was duly licensed as an insurance broker (for the type of business
sold by such broker) or agent in the particular jurisdiction in which such
broker or agent sold such business for Seller or CLIC, and no such broker or
agent violated (or with or without notice or lapse of time or both would have
violated) any federal, state, local or foreign law, ordinance or regulation or
any other requirement of any governmental or regulatory body, court or
arbitrator applicable to the Business, except where the failure to be so
licensed or any such violation would not, individually or in the aggregate,
have a material adverse effect on the Business. Neither the manner in which
Seller or CLIC compensates any Person involved in the sale or servicing of
Insurance Contracts that is not registered as a broker-dealer or insurance
agent, as applicable, nor, to the knowledge of the Seller Key People, the
conduct of any such Person, renders such Person a broker-dealer or insurance
agent under any applicable federal or state law, and the manner in which Seller
or CLIC compensates each Person involved in the sale or servicing of Insurance
Contracts is in compliance with all applicable federal or state laws except
where such manner of compensation or conduct having such affect or the failure
to be so in compliance would not, individually or in the aggregate, have a
material adverse affect on the Business.

(b) Both Seller and CLIC have implemented procedures and programs
which are reasonably designed to provide assurance that its respective agents
and employees are in material compliance with all Applicable Law, including
without limitation, advertising, licensing and sales practices laws,
regulations, directives, bulletins and opinions of governmental authorities,
except for non-compliances that, individually or in the aggregate, have not had
and would not have a material adverse effect on the Business. Seller and CLIC
have previously provided Purchaser with a true, complete and correct copy of
its compliance program and procedures referred to in the preceding sentence, to
the extent they relate to Seller's Individual Insurance Division and, except as
previously disclosed in this Agreement or any Schedule to this Agreement, the
Seller Key People have no knowledge of any noncompliance therewith, except for
noncompliance which, individually or in the aggregate, have not had and would
not have a material adverse effect on the Business.

(c) Seller and CLIC have at all times since January 1, 1987,
maintained records which in all material respects accurately reflect
transactions in reasonable detail, and accounting controls, policies and
procedures sufficient to ensure in all material respects that such transactions
are recorded in a manner which permits the preparation of financial statements
in accordance with GAAP and applicable statutory accounting requirements.

(d) Except as set forth on Schedule 3.10(A) hereto, to the
knowledge of the Seller Key People:
36

(i) to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, (A) the
terms of each Qualified Contract and the administration and operation thereof
and of any plan or arrangement funded in whole or in part through any such
Qualified Contract comply, and at all relevant times have complied, in all
material respects with the applicable provisions of the Code and ERISA and (to
the extent such plan is intended by the Contract holder to limit fiduciary
responsibility in accordance with section (404)(c) of ERISA) comply, and at all
relevant times have complied, in all material respects with all applicable
requirements for limiting fiduciary responsibility under section 404(c) of
ERISA; (B) contributions or payments to each such Qualified Contract which are
intended to be nontaxable are not taxable; and (C) plan or contract loans made
under such Qualified Contracts were neither prohibited transactions nor taxable
when made or at any time thereafter, except with respect to taxable defaults in
repayment of such contracts loans;

(ii) neither Seller nor any of its Affiliates is legally
responsible, by operation of law, written agreement or otherwise, for
calculating, deducting, accounting for, recording, making, or reporting plan or
contract loans under section 72(p) of the Code or minimum required
distributions under sections 401(a), 408 and 457 of the Code; testing,
determining or otherwise ensuring compliance under Sections 401(a), 408 and 457
of the Code or otherwise administering or providing administrative services of
any nature to any plan or arrangement funded in whole or in part through any
such Qualified Contract; and

(iii) none of the Qualified Contracts is a 403(b) Contract.

SECTION 3.11. REGULATORY FILINGS. Except as listed on Schedule 3.11
hereto, Seller and CLIC have filed all reports, statements, documents,
registrations, filings or submissions (including without limitation any sales
material) required to be filed by Seller, CLIC, the Seller Separate Accounts
and the Internally Managed Funds (as defined below) with any governmental or
regulatory body to the extent they relate to the Business, except where the
failure to make such filings would not, individually or in the aggregate, have
a material adverse effect on the Business. Except as listed on Schedule 3.11
hereto, all such registrations, filings and submissions were in compliance in
all material respects with applicable law when filed or as amended or
supplemented, and, to the knowledge of the Seller Key People, no material
deficiencies have been asserted by any such governmental or regulatory body
with respect to such registrations, filings or submissions that have not been
satisfied.

SECTION 3.12. BROKERS AND AGENTS. Schedule 3.12(A) hereto lists all
selling entities with respect to Insurance Contracts whose producers can sell
insurance only through the selling entity, and lists commissions paid by Seller
or CLIC through each such selling entity during 1996 and the first two quarters
of 1997. Schedule 3.12(B) hereto lists certain Persons who have acted as
brokers or general agents with respect to Insurance Contracts which are in
force (such brokers, collectively with all other brokers or general agents with
respect to the Insurance Contracts which are in force, being referred to herein
as "BROKERS") and lists the amount of commissions paid by Seller or CLIC to
each Broker identified thereon during 1996 and in the first two quarters of
1997. Schedule 3.12(C) hereto lists all other Persons constituting Seller's
37

"CAREER AGENCY FORCE" (the Brokers and the Persons listed on Schedule 3.12(C)
being referred to collectively herein as "BROKERS AND AGENTS"). Schedule
3.12(D) hereto sets forth (i) the standard forms of agreements between Seller
(or CLIC) and brokers and Seller (or CLIC) and agents, respectively, which
relate to the Business, and (ii) a list of those Brokers and Agents as to which
such agreements are in effect. Except as disclosed on Schedule 3.19(B), there
are no other written agreements between Seller (or CLIC) and any Brokers and
Agents providing for the compensation or indemnification of such Brokers and
Agents in connection with the Business or the provision of financing (whether
in the form of contract loans or otherwise) to such Brokers and Agents. The
contracts and other agreements relating to the Business between Seller (or
CLIC) and the Brokers and Agents are valid, binding and in full force and
effect in accordance with their respective terms as against Seller or CLIC, as
the case may be, and, to the knowledge of the Seller Key People, the other
parties thereto. Neither Seller nor CLIC nor, to the knowledge of the Seller
Key People, any Broker or Agent is in default in any material respect with
respect to any such contract or such other agreement.

SECTION 3.13. REINSURANCE. Except as set forth on Schedule 3.13
hereto, and to the knowledge of the Seller Key People, (a) there are no
agreements, written or oral, pursuant to which Seller or CLIC cedes or
retrocedes risks assumed under the Insurance Contracts and (b) there are no
Insurance Contracts which are agreements of assumed reinsurance.

SECTION 3.14. CONDUCT OF BUSINESS. Except as expressly contemplated
or required by this Agreement, or as set forth in Schedule 3.14 hereto, since
December 31, 1996, Seller and CLIC have generally conducted the Business only
in the ordinary course consistent with their past practices and there has not
been any material change in the underwriting, pricing, actuarial, reserving,
investment, sales, marketing or agency practices or policies of the Business.

SECTION 3.15. ABSENCE OF CERTAIN CHANGES. Since December 31, 1996,
there has been no change in mortality or lapse experience, or any damage,
destruction, loss or other event or condition of any character (whether or not
in the ordinary course of business), other than those occurring as a result of
general economic or financial conditions or other developments which are not
unique to the Business but also affect other Persons who participate or are
engaged in lines of business similar to the Business, that, individually or in
the aggregate, is likely to have a material adverse effect on the Business.

SECTION 3.16. OTHER SALE ARRANGEMENTS. Neither Seller nor Parent is
obligated or liable, contingently or otherwise, for or with respect to
negotiations, letters of intent or commitments for the sale of all or any part
of the Business (except in the ordinary course of business) or any of the stock
or substantially all of the assets of the Parent Subsidiaries to any Persons
other than Purchaser and LLANY.

SECTION 3.17. SELLER SEPARATE ACCOUNTS AND UNDERLYING FUNDS. Each of
the Seller Separate Accounts and the funds supporting the Seller Separate
Accounts that are managed by an Affiliate of Seller or CLIC (the "INTERNALLY
MANAGED FUNDS") is duly and validly established and maintained in all material
respects under the laws of the State of Connecticut and the assets of the
Seller Separate Accounts and the Internally Managed Funds are not chargeable
38

with liabilities arising out of any other business that Seller or CLIC may
conduct; each of the Seller Separate Accounts and the Internally Managed Funds
is duly registered as an investment company under the 1940 Act (or exempt from
such registration); each of the Seller Separate Accounts and the Internally
Managed Funds is and has been operated in compliance with the 1940 Act in all
material respects, and Seller or CLIC, as appropriate, has filed all reports
and amendments of its registration statement required to be filed, and has been
granted all exemptive relief necessary for the operations of the Seller
Separate Accounts and the Internally Managed Funds. Each Internally Managed
Fund is duly incorporated and in good standing under the laws of the state of
its incorporation or is a validly existing business trust under the laws of the
jurisdiction in which it was formed and is qualified as a foreign corporation
or business trust in each jurisdiction in which such qualification is
necessary, except for those jurisdictions where failure to be so qualified
would not, individually or in the aggregate, have a material adverse affect on
the Business. The Insurance Contracts under which the Seller Separate Account
assets are held are duly and validly issued and were sold pursuant to an
effective registration statement under the Securities Act and any applicable
state securities laws and each such registration statement is currently in
effect to the extent necessary to allow Seller to receive contributions under
such contracts. Seller or CLIC, as appropriate, has filed each prospectus and
statement of additional information, as amended or supplemented, under which
the Seller Separate Accounts and Internally Managed Funds assets are held that
are required to be filed, and each such prospectus and statement of additional
information, as of its respective mailing date or date of use, complied in all
material respects with applicable securities laws. All participation
agreements relating to funds supporting the Seller Separate Accounts that are
not managed by an Affiliate of Seller or CLIC (the "EXTERNALLY MANAGED FUNDS")
are in full force and effect and, to the knowledge of the Seller Key People, no
notice has been given from any Externally Managed Fund that it intends to
terminate any such participation agreement.

SECTION 3.18. ASSIGNED AND ASSUMED CONTRACTS. Each of the Assigned
and Assumed Contracts is valid, binding and in full force and effect according
to its terms as against Seller and, to the knowledge of the Seller Key People,
the other party or parties thereto; and either (a) is freely assignable to
Purchaser or LLANY, as applicable, pursuant to this Agreement and the General
Assignment and Assumption Agreement without notice to or consent of any Person,
other than as specified on Exhibit F hereto, or (b) if any required consent to
an assignment thereof to Purchaser (other than those specified in Exhibit F) is
not able to be obtained by Seller using commercially reasonable best efforts,
Seller will be able to make arrangements with respect thereto pursuant to
Section 5.32 hereof. Neither Seller nor, to the knowledge of the Seller Key
People, any other party to any such contract is in default with respect to any
such contract or such other agreement, except for any such default that would
not, individually or in the aggregate, have a material adverse effect on the
Business.

SECTION 3.19. EMPLOYEES. (a) Except for individuals identified in a
letter to Xxxxx Xxxxx from Xxx Xxxxx which was delivered by facsimile on July
18, 1997, at 5:08 p.m., (the "JULY 18 LETTER"), Schedule 3.19(A) hereto lists
to the knowledge of the Seller Key People (i) each Person employed by or who is
an agent of Seller or any of its Affiliates immediately prior to the execution
of this Agreement who customarily works for the Business, (ii) the position and
the payroll employer of each such Person or the entity with which each such
Person has an agency
39

contract as of the date hereof, (iii) the salary or other base remuneration of
each such Person as of the date hereof, and (iv) for each such Person, other
than an agent, who customarily devotes less than 35 hours per week to the
Business, the hours per week customarily worked by such Person. To the
knowledge of the Seller Key People, as of the date hereof, there is no Person
who is employed by or is an agent of CA. Promptly after the date hereof,
Seller will prepare and deliver to Purchaser an updated Schedule 3.19(A) which
will not be qualified by reference to the knowledge of the Seller Key People.
Thereafter, all references in this Agreement to Schedule 3.19(A) will be
references to such revised Schedule.

(b) Schedule 3.19(B) hereto lists and describes, to the knowledge
of the Seller Key People, any "PAY TO STAY" or similar arrangement applicable
to any employee listed on Schedule 3.19(A) hereto as of the date of this
Agreement.

(c) Schedule 3.19(C) hereto contains a complete description of
each category of severance and related benefits ("SEVERANCE COSTS") that Seller
proposes to pay or provide to or on behalf of any Band 1 Employee, as further
described in Section 5.23(h) hereof, including severance benefits, early
vesting of restricted stock awards, and to the extent applicable under Seller's
policies and practices in effect on the date hereof, outplacement services.

(d) Schedule 3.19(D) hereto contains a complete list of the
restricted stock awards and/or options for CIGNA's common stock that have been
granted to any employee or agent listed on Schedule 3.19(A) hereto, and, for
all stock options, such list discloses both the vested and the unvested options
as of the date hereof.

SECTION 3.20. EMPLOYEE BENEFIT PLANS; ERISA. (a) Schedule 3.20(A)
hereto contains a list and brief description of (i) all "EMPLOYEE PENSION
BENEFIT PLANS," as defined in section 3(2) of ERISA, established, maintained,
or contributed to by Seller or any of its Affiliates for the benefit of any
employees or agents listed on Schedule 3.19(A) or Schedule 3.12(C) (sometimes
referred to herein as the "PENSION PLANS"); (ii) all "EMPLOYEE WELFARE BENEFIT
PLANS," as defined in section 3(1) of ERISA, established, maintained, or
contributed to by Seller or any of its Affiliates for the benefit of any
employees or agents listed on Schedule 3.19(A) or Schedule 3.12(C) (sometimes
referred to herein as the "WELFARE PLANS"); and (iii) to the knowledge of the
Seller Key People, all other benefit plans, programs, and arrangements
established, maintained, or contributed to by Seller or any of its Affiliates
for the benefit of any employees or agents listed on Schedule 3.19(A) or
Schedule 3.12(C), without regard to the coverage of any such plan, program, or
arrangement by ERISA or any provision of the Code (which plans are collectively
referred to herein as the "BENEFIT PLANS.") Each Benefit Plan is in material
compliance with all Applicable Law including ERISA and the Code.

(b) Schedule 3.20(B) identifies each Benefit Plan that is or is
intended to be a "QUALIFIED PLAN" within the meaning of section 401(a) of the
Code ("QUALIFIED PLANS"). Except as set forth in Schedule 3.20(B), the
Internal Revenue Service has issued a favorable determination letter with
respect to each Qualified Plan, both as to the original plan and all
restatements or material amendments, that has not been revoked, and, to the
knowledge of Seller Key People, there are no existing circumstances nor any
events that have occurred that are likely
40

to adversely affect the qualified status of any Qualified Plan or the related
trust. None of the Qualified Plans has, to the knowledge of Seller Key People,
been subject to any assertion by any governmental authority that it is not
qualified and, to the knowledge of the Seller Key People, each has been
operated so that it has always been so qualified.

(c) Except as set forth in Schedule 3.20(C), no Pension Plan
established or maintained by Seller or any of its Affiliates, and no Pension
Plan to which Seller or any of its Affiliates is obligated to make
contributions, had, as of January 1, 1997, an "UNFUNDED BENEFIT LIABILITY," as
defined in section 4001(a)(18) of ERISA. All contributions required to be made
to any Benefit Plan by applicable law or regulation or by any plan document or
other contractual undertaking, and all premiums due or payable with respect to
insurance policies funding any Benefit Plan, for any period through the date
hereof have been timely made or paid in full or, to the extent not required to
be made or paid on or before the date hereof, have been fully reflected on the
relevant financial statements described in Section 3.24 hereof. All amounts
required to be paid under or with respect to any Benefit Plan have been paid in
full on a timely basis; except for any failures that individually or in the
aggregate would not have a material adverse effect on the Business. No excise
or penalty taxes are assessable as a result of any nondeductible or other
contributions made or not made to a Benefit Plan. All contributions to a
Benefit Plan have been deductible under the Code.

(d) Schedule 3.20(D) to the knowledge of the Seller Key People,
fully and accurately discloses any funding liability under the Deferred
Compensation Plan of CIGNA Corporation and Seller's Top Earner's Plan. Promptly
after the date hereof, Seller will prepare and deliver to Purchaser an updated
Schedule 3.20(D) which will not be qualified by reference to the knowledge of
the Seller Key People. Thereafter, all references in this Agreement to
Schedule 3.20(D) will be references to such revised Schedule.

(e) No Pension Plan established or maintained by Seller or any of
its Affiliates, and no Pension Plan to which Seller or any of its Affiliates is
obligated to make contributions, has an "ACCUMULATED FUNDING DEFICIENCY," as
defined in section 302 of ERISA and section 412 of the Code, whether or not
waived.

(f) No Pension Plan established or maintained by Seller or any of its
Affiliates or to which Seller or any of its Affiliates is obligated to make
contributions, and no trust created under any such Pension Plan, has been
terminated or experienced a "REPORTABLE EVENT," as defined in section 4043 of
ERISA, during the five-year period ending on the date of execution of this
Agreement.

(g) No Pension Plan to which Seller or any of its Affiliates is
obligated to make contributions is a "MULTIEMPLOYER PLAN," as defined in
section 4001(a)(3) of ERISA, or a single-employer plan under multiple
controlled groups, within the meaning of sections 4063-64 of ERISA.

(h) To the knowledge of the Seller Key People, none of Seller, any of
its Affiliates, any officer of Seller or of any of its Affiliates, any Benefit
Plan (including the Pension Plans) that
41

is subject to ERISA, any trust created under any such Benefit Plan, or any
trustee or administrator of any such Benefit Plan has engaged in a "PROHIBITED
TRANSACTION," as defined in section 406 of ERISA or section 4975 of the Code,
or in any other breach of fiduciary responsibility with respect to a Benefit
Plan that could subject Seller, any of its Affiliates, or any officer of Seller
or of any of its Affiliates to any tax or penalty pursuant to section 4975 of
the Code or to any liability under section 502(i) or 502(l) of ERISA.

(i) Except as provided in this Agreement or as set forth in
Schedule 3.20(I), to the knowledge of Seller Key People, neither the execution
and delivery of this Agreement nor the consummation of the transactions
contemplated hereby will (either alone or in conjunction with any other event)
(i) result in, cause the accelerated vesting or delivery of, or increase the
amount or value of, any payment or benefit to any employee, director, officer
or former employee of Seller or any of its Affiliates, (ii) result in or cause
the payment of an amount constituting an "EXCESS PARACHUTE PAYMENT" (as such
term is defined in section 280G(b)(1) of the Code), or (iii) result in a
violation of fiduciary duties imposed by section 404 of ERISA, the prohibited
transaction rules of section 406 of ERISA or section 4975 of the Code, or other
applicable law.

(j) To the knowledge of the Seller Key People and except to the
extent set forth in Schedule 3.20(J) hereto, each Welfare Plan that is a "GROUP
HEALTH PLAN," as defined in section 5000(b)(1) of the Code, complies, and at
all times has complied, in all material respects with the applicable
requirements of section 4980B of the Code ("COBRA") and sections 9801 through
9806 of the Code ("HIPAA").

(k) To the knowledge of the Seller Key People, none of Seller, any
of its Affiliates, any officer of Seller or of any of its Affiliates, any
Benefit Plan (including Pension Plan) that is subject to ERISA, any trust
created under any such Benefit Plan, or any trustee or administrator of any
such Benefit Plan could subject Seller, any of its Affiliates, or any officer
of Seller or of any of its Affiliates to any tax or penalty pursuant to section
512, 4976 or 7501 of the Code.

(l) Except as set forth in Schedule 3.20(L), to the knowledge of
Seller Key People, summary plan descriptions and all other returns, reports,
documents, statements and communications which are required to have been filed,
published or disseminated under ERISA or other applicable law and the rules and
regulations promulgated by the Department of Labor, the Pension Benefit
Guaranty Corporation, the Treasury Department, the Equal Employment Opportunity
Commission, the Commission or any other Governmental Authority with respect to
the Benefit Plans have been so filed, published or disseminated.

(m) To the knowledge of the Seller Key People, and with the exception
of claims for benefits, including associated appeals and disputes of denied
claims, arising in the ordinary course of administration of the Benefit Plans,
no material claims, assessments, investigations, or proceedings in arbitration
or litigation relating to or arising under any Benefit Plan are pending or
threatened against Seller, any of its Affiliates, any Benefit Plan, or any
trust or other funding arrangement created under or established as part of any
Benefit Plan, or against any trustee, fiduciary, custodian, administrator, or
any other Person holding or controlling assets of any Benefit Plan, and Seller
has no basis to anticipate that any such claim or claims exist.
42

SECTION 3.21. LABOR RELATIONS AND EMPLOYMENT. Except to the extent
set forth in Schedule 3.21 hereto, (i) to the knowledge of the Seller Key
People, there is no labor strike, dispute, slowdown, stoppage or lockout
pending or, to the knowledge of the Seller Key People, threatened against or
affecting Seller or CLIC in connection with the Business, and, since January 1,
1992, there has not been any such action; (ii) to the knowledge of the Seller
Key People, there are no union claims to represent the employees of Seller or
CLIC and there are no current union organizing activities among such employees;
(iii) neither Seller nor CLIC is a party to or bound by any collective
bargaining or similar agreement with any labor organization applicable to
Seller's or CLIC's employees in connection with the Business; and (iv) there
are no material written personnel policies, rules or procedures applicable to
Seller's employees in connection with the Business, other than those set forth
in Schedule 3.21, true and correct copies of which have heretofore been
delivered to Purchaser.

SECTION 3.22. TRANSFERRED ASSETS. (a) Seller has good and marketable
title to all assets included within the Transferred Assets (other than cash,
the Assignable Licensed Principally Used Software and the Transferred
Contracts), free of any lien, encumbrance, restriction, claim, charge, or
defect of title, except for any liens, encumbrances, restrictions, claims,
charges or defaults of title (i) whose effect on the value of the relevant
Transferred Asset will be collectively reflected in the current value thereof
on the Final Balance Sheet, (ii) identified on Schedule 3.22 hereto, or (iii)
with respect to assets other than cash or Investment Assets, that, individually
or in the aggregate, would not have a material adverse effect on the Business.

(b) (i) Schedules B and D of the statutory statements of Seller for
the year ended December 31, 1996 contain true and (to the extent required by
the form) complete disclosures of all "MORTGAGE LOANS" (Schedule B Assets), and
"Credit Tenant Loans and Industrial Revenue Bonds with Publicly Traded
Borrowers" (Schedule D Assets) owned by Seller as of December 31, 1996 ( the
items set forth in (i) and (ii) hereinafter collectively referred to as "REAL
ESTATE ASSETS"). All information concerning the Real Estate Assets in the
statutory statements of Seller for the year ended December 31, 1996 is true and
(to the extent required by the form) complete in all respects in the opinion of
Seller; and reserves taken in respect of impairment to value of the Mortgage
Loans are in the opinion of Seller adequate to fairly represent such
impairment.

(ii) All Real Estate Assets comply with all regulations of the
applicable authorities of the domiciliary jurisdiction of Seller owning such
assets to qualify as "ADMITTED ASSETS" pursuant to the laws and regulations of
such domicile.

(iii) To the knowledge of the Seller Key People, the real property
underlying each item that constitutes the Real Estate Assets and all activities
upon, or use or occupancy of, such property are in compliance with all
applicable laws, including Environmental Laws (as defined below). For each
commercial mortgage loan originated since 1987, Seller or an Affiliate of
Seller has obtained an environmental report covering the environmental
condition of the asset. As used in this Agreement, the term "ENVIRONMENTAL
LAWS" shall mean all state, federal and local laws and all rules and
regulations promulgated thereunder governing or in any way relating to the
generation, handling, manufacturing, treatment, storage, use, transportation,
spillage, leakage,
43

dumping, release, discharge or disposal of any contaminant, pollutant or
hazardous or toxic substance, material or waste, or other environmentally
regulated material including, but not limited to, those substances, materials
and wastes listed in the United States Department of Transportation Table (49
C.F.R. 172.101) or by the Environmental Protection Agency as a hazardous
substance, material or waste or which is or becomes regulated under any
applicable local, state or federal law and all rules and regulations
promulgated thereunder, including, without limitation, any of the following
materials, wastes or substances: (A) petroleum and petroleum products, (B)
asbestos in any form, (C) polychlorinated biphenyls, (D) urea formaldehyde, (E)
atmospheric radon at levels over four (4) picocuries per cubic liter, (F) those
designated as a "HAZARDOUS SUBSTANCE" pursuant to Section 311 of the Clean
Water Act, 33 U.S.C. Section 1251 et seq. (33 U.S.C. Section 1321) or listed
pursuant to Section 307 of the Clean Water Act (33 U.S.C. Section 1317), (G)
those defined as a "HAZARDOUS SUBSTANCE" pursuant to Section 1004 of the
Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq. (42
U.S.C. Section 6903), or (H) those defined as a "HAZARDOUS SUBSTANCE" pursuant
to Section 101 of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. Section 9601 et seq. (42 U.S.C. Section 9601)
(collectively, "HAZARDOUS MATERIALS"). Seller has not participated in the
management of any of the partnership properties or of the borrowers under the
Mortgage Loans or has not participated in the management or operation of the
real property encumbered by any of the Mortgage Loans or any of the
improvements located on said real property. As used in this Section 3.22(d)
"PARTICIPATED IN THE MANAGEMENT" shall have the meaning ascribed to such phrase
in the Asset Conservation, Lender Liability and Deposit Insurance Protection
Act of 1996 and "OPERATION" shall have the meaning ascribed in 42 U.S.C.
Section 6901 et seq.

(iv) Seller or an Affiliate of Seller is the sole named insured on a
policy of title insurance with respect to each of the Real Estate Assets for
which it is the sole lender, and each of said title insurance policies insures
Seller or such Affiliate as the holder of a first priority mortgage in regard
to Mortgage Loans. On mortgages shared with other lenders, Seller or an
Affiliate of Seller is a named insured or has an interest in a title insurance
policy insuring Seller or an Affiliate of Seller as a participant in the first
priority mortgage.

(v) Seller or an Affiliate of Seller, owning each Mortgage Loan asset
(hereinafter sometimes referred to as "LENDER"), has possession of the original
promissory note or notes creating such Mortgage Loan debt and all other
documents creating, evidencing or modifying the Mortgage Loan or its terms and
conditions. The lien associated with each Mortgage Loan constitutes a first
priority lien against the property purported to be encumbered, subject to
certain exceptions.

SECTION 3.23. CONTRACTS. (a) Schedule 3.23(A) lists and briefly
describes to the knowledge of the Seller Key People each and every written
contract, agreement, lease, license, commitment or arrangement (including the
parties to and the date and subject matter of) and, to the knowledge of the
Seller Key People, each and every oral contract, agreement, commitment or
arrangement, to which Seller or CLIC is a party or which is binding upon Seller
or CLIC that is material to the Business except for (i) those specifically
disclosed in any other Schedule to this Agreement and (ii) the Insurance
Contracts.
44

(b) Each of the contracts listed on Schedule 3.23(A) is in full
force and effect and constitutes a legal, valid and binding obligation of
Seller or CLIC, as the case may be, and to the knowledge of the Seller Key
People, of each other Person that is a party thereto. Except as set forth on
Schedule 3.23(B), neither Seller nor CLIC nor, to the knowledge of the Seller
Key People, any other party to such contract is in violation, breach or default
of any such contract or, with or without notice or lapse of time or both, would
be in violation, breach or default of any such contract, except for such
violations, breaches or defaults that would not, individually or in the
aggregate, have a material adverse effect on the Business. Except as set forth
on Schedule 3.23(B), to the knowledge of the Seller Key People, no such
contract contains any provision providing that any party thereto other than
Seller or CLIC, as the case may be, may terminate such contract by reason of
the execution of this Agreement or the Ancillary Agreements or the transactions
contemplated thereby.

(c) Notwithstanding the generality of the foregoing, Schedule
3.23(C) hereto lists and briefly describes to the knowledge of the Seller Key
People each and every written contract, agreement, commitment or arrangement,
and each and every oral contract, agreement, commitment or arrangement, to
which Seller or CLIC is a party or which is binding upon Seller or CLIC that
restrict the right of Seller or CLIC to change the crediting rates and other
non-guaranteed elements under the Insurance Contracts, other than pursuant to
the terms of the Insurance Contracts.

SECTION 3.24. GAAP FINANCIAL STATEMENTS. On or prior to the date
hereof, Seller has delivered to Purchaser true, correct and complete copies of
(a) the audited consolidated balance sheet of Seller and its Subsidiaries as of
December 31, 1996, prepared in accordance with GAAP, together with the notes
thereon and the related report of Price Waterhouse LLP, the independent
certified public accountant of Seller, and (b) the audited consolidated
statements of income, stockholders' equity and cash flows of Seller and its
Subsidiaries for the year ended December 31, 1996, prepared in accordance with
GAAP, together with the notes thereon and the related report of Price
Waterhouse LLP, (collectively, the "SELLER FINANCIAL STATEMENTS"). Seller has
delivered to Purchaser a true, correct and complete copy of the consolidated
balance sheet, and the related consolidated statements of income, stockholders'
equity and cash flows of CIGNA and its Subsidiaries for the quarter ended March
31, 1997, prepared in accordance with GAAP, subject to normal recurring
year-end adjustments (the "INTERIM CIGNA FINANCIAL STATEMENTS"). The Seller
Financial Statements and the Interim CIGNA Financial Statements are based on
the books and records of Seller and its Subsidiaries or CIGNA and its
Subsidiaries, as appropriate, and the Seller Financial Statements and the
Interim CIGNA Financial Statements have been prepared in accordance with GAAP
(subject, in the case of the Interim CIGNA Financial Statements, to normal
recurring year-end adjustments) consistently applied, and fairly present in all
material respects the consolidated financial position and results of operations
of Seller or CIGNA, as appropriate, and their respective Subsidiaries as of the
date and for the period indicated therein.

SECTION 3.25. STATUTORY STATEMENTS. Seller has previously delivered
Purchaser true, complete and correct copies of the Annual Statements of Seller
as filed with the Connecticut Insurance Department for the years ended December
31, 1996 and 1995, together with all exhibits
45

and schedules thereto and the actuarial opinions applicable to the Business for
such years and supporting actuarial memoranda for the year ended December 31,
1996 only. Seller has previously disclosed to Purchaser a true, complete and
correct copy of the Quarterly Statement of Seller as filed with the Connecticut
Insurance Department for the quarter ended March 31, 1997, together with all
exhibits and schedules thereto.

SECTION 3.26. TAX MATTERS. Except as described on Schedule 3.26:
(a) The assets of the Seller Separate Accounts are and have been
adequately diversified at all times within the meaning of section 817(h) of the
Code.

(b) Each Insurance Contract identified as an "ANNUITY CONTRACT"
for purposes of this Agreement complies with the requirements of Section 72 of
the Code.

(c) Each Insurance Contract identified as a "LIFE INSURANCE
CONTRACT" for purposes of this Agreement that was issued after December 31,
1984 complies with the requirements of Section 7702 of the Code.

(d) Each Insurance Contract identified as a "LIFE INSURANCE
CONTRACT" for purposes of this Agreement that was issued before January 1, 1985
(i) complies with the requirements of Section 7702 of the Code to the extent
applicable to such Insurance Contract or (ii) to the extent Section 7702 of the
Code is inapplicable to such Insurance Contact and such Insurance Contract is a
flexible premium contract within the meaning of Section 101(f) of the Code,
complies with the requirements of such Section 101(f).

(e) To the knowledge of the Seller Key People, there are no "hold
harmless," tax sharing, indemnification, or similar arrangements regarding the
Tax qualification or treatment of any Insurance Contracts.

(f) Seller is or is treated for all federal income Tax purposes as the
owner of the assets underlying each variable Insurance Contract issued, entered
into, or sold by Seller.

(g) The policyholders of any Insurance Contracts that constitute
"modified endowment contracts" under Section 7702A of the Code have been fully
notified of the status and federal tax consequences of such Insurance
Contracts.

(h) Seller has complied in all material respects with all applicable
reporting, withholding and disclosure requirements under the Code, ERISA and
other applicable law, including but not limited to those regarding
distributions, with respect to the Insurance Contracts and has reported the
distributions under such contracts in accordance with Sections 72, 7702 and
7702A of the Code in all material respects.

SECTION 3.27. TRANSITION SERVICES AGREEMENT. Except as set forth in
the Transition Services Agreement, the amounts to be paid by Purchaser to
Seller pursuant to the terms of the Transition Services Agreement have been (or
will be) computed in accordance with the internal charge-back methodologies
historically used by Seller.
46

SECTION 3.28. PRO FORMA FINANCIAL STATEMENTS. The data contained in
the Pro Forma Financial Statements was obtained from the books and records of
Seller and is the same data that was included with respect to the Business in
the GAAP and statutory financial statements of Seller and in Seller's work
papers upon which such GAAP and SAP financial statements were based. Such data
was computed in accordance with, as applicable, GAAP and Connecticut SAP.
Except as disclosed on Schedule 3.28 hereto, or reserved against in the Pro
Forma Financial Statements, to the knowledge of the Seller Key People, as of
the date thereof there were no material debts, liabilities or obligations of
the Business, whether accrued, absolute or contingent and whether due or to
become due.

SECTION 3.29. CASH FLOW TESTING. The 1996 Actuarial Opinion and
Memorandum with respect to Individual Insurance Products for Seller contained
in Schedule 3.29 hereto (the "OPINION") is a true, correct and complete copy of
an extract from the 1996 Actuarial Memorandum for Seller as filed with the
Connecticut Department of Insurance. To the knowledge of the Seller Key People
the cash flow testing results set forth in the Opinion, and the supporting data
for the Opinion contained in Schedule 3.29 hereto, (i) reflected only insurance
policies and annuity contracts issued by the Seller that would have constituted
Insurance Contracts if in effect on the date hereof and (ii) were, for the
purpose of forming the Opinion, determined in accordance with standards of
practice promulgated by the Actuarial Standards Board consistently applied
throughout the periods covered and met the requirements of Connecticut SAP. At
the request of Purchaser, Seller prepared and previously provided additional
cash flow calculations. To the knowledge of Seller Key People, the
calculations were prepared with reasonable care reflecting the methodology, and
were subject to adjustments (e.g., consideration of certain non-reinsured
business) and qualifications, discussed with Purchaser's advisor.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF LNC, PURCHASER AND LLANY

LNC, Purchaser and LLANY hereby represent and warrant to
Parent and Seller as follows:

SECTION 4.01. ORGANIZATION AND STANDING. Each of LNC and Purchaser is
a corporation duly organized and validly existing under the laws of the State
of Indiana and has all requisite power and authority to own, lease and operate
its assets, properties and business and to carry on the operations of its
business as they are now being conducted, except where such authority is not
material to such operations. LLANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of New York and has
all requisite power and authority to own, lease and operate its assets,
properties and business and to carry on the operations of its business as they
are now being conducted, except where such authority is not material to such
operations.

SECTION 4.02. AUTHORIZATION. Each of LNC, Purchaser and LLANY has all
47

requisite power and authority to execute, deliver and perform its obligations
under this Agreement and under each of the Ancillary Agreements to be executed
by it. The execution and delivery by LNC, Purchaser and LLANY of this
Agreement and the execution and delivery of the Ancillary Agreements to be
executed by Purchaser and LLANY, and the performance by each of them of their
obligations under such agreements, have been duly authorized. This Agreement
has been duly executed and delivered by LNC, Purchaser and LLANY, and on the
Closing Date the Ancillary Agreements executed by Purchaser and LLANY,
respectively, will be duly executed and delivered by Purchaser and LLANY; and,
subject to the due execution and delivery by the other parties to such
agreements, this Agreement is, and the Ancillary Agreements executed by
Purchaser and LLANY will, upon due execution and delivery, be valid and binding
obligations of LNC, Purchaser and LLANY, respectively, enforceable against LNC,
Purchaser or LLANY, as appropriate, in accordance with their respective terms.
Notwithstanding the foregoing, the obligation of Purchaser and LLANY to execute
any Ancillary Agreement shall be subject to the terms and conditions of this
Agreement.

SECTION 4.03. ACTIONS AND PROCEEDINGS. Except as disclosed
on Schedule 4.03 hereto, there are no outstanding orders, decrees or judgments
by or with any court, governmental agency, regulatory body or arbitration
tribunal before which Purchaser or LLANY was a party that, individually or in
the aggregate, have a material adverse effect on the operations of Purchaser or
LLANY. Except as disclosed on Schedule 4.03 hereto, there are no actions,
suits, arbitrations or legal, administrative or other proceedings pending or,
to the knowledge of the Purchaser Key People, threatened against Purchaser or
LLANY, at law or in equity, or before or by any governmental department,
commission, board, bureau, agency or instrumentality, domestic or foreign, or
before any arbitrator of any kind which, if adversely determined, would,
individually or in the aggregate, have a material adverse effect on the
operations of Purchaser or LLANY.

SECTION 4.04. NO CONFLICT OR VIOLATION. Except as disclosed
on Schedule 4.04 hereto, the execution, delivery and performance by LNC,
Purchaser and LLANY of this Agreement and the execution, delivery and
performance by each of Purchaser and LLANY of the Ancillary Agreements to which
it is a party and the consummation of the transactions contemplated hereby and
thereby in accordance with the respective terms and conditions hereof and
thereof will not (a) violate any provision of the charter, bylaws or other
organizational document of LNC, Purchaser or LLANY, (b) violate, conflict with
or result in the breach of any of the terms of, result in any modification of
the effect of, otherwise give any other contracting party the right to
terminate, or constitute (or with notice or lapse of time or both, constitute)
a default under, any contract to which LNC, Purchaser or LLANY is a party or by
or to which either of them or any of their respective assets or properties may
be bound or subject, except for such violations, conflicts, breaches or
modifications that would not, individually or in the aggregate, have a material
adverse effect on Purchaser or LLANY, (c) violate any order, judgment,
injunction, award or decree of any court, arbitrator or governmental or
regulatory body against, or binding upon, or any agreement with, or condition
imposed by, any governmental or regulatory body, foreign or domestic, binding
upon LNC, Purchaser or LLANY, except for such violations that would not,
individually or in the aggregate, have a material adverse effect on Purchaser
or LLANY, (d) violate any statute, law or regulation of any jurisdiction except
for such violations that would not, individually or in the aggregate, have a
material adverse effect on LNC,
48

Purchaser or LLANY, or (e) result in a breach or violation of any of the terms
or conditions of, constitute a default under, or otherwise cause an impairment
of, any Permit related to LNC's, Purchaser's or LLANY's business or necessary
to conduct the Business, except for any violation, conflict, breach or default
that would individually or in the aggregate, have a material adverse effect on
the operations of LNC, Purchaser or LLANY.

SECTION 4.05. GOVERNMENTAL CONSENTS AND APPROVALS. Except as required
under the HSR Act or as set forth on Schedule 4.05 hereto and except for
required Permits of applicable insurance regulatory authorities, the execution,
delivery and performance by LNC, Purchaser and LLANY of this Agreement, and the
execution, delivery and performance by each of Purchaser and LLANY of the
Ancillary Agreements to which either of them is a party, and the consummation
of the transactions contemplated hereby and thereby in accordance with the
respective terms hereof and thereof, do not require any of LNC, Purchaser or
LLANY to obtain any consent, approval or action of, make any governmental
filing with or give any notice to, any Person, except for such consents,
approvals, actions, filings or notices the failure of which to obtain, make or
give, as the case may be, would not individually or in the aggregate have a
material adverse effect on the operations of LNC, Purchaser or LLANY.

SECTION 4.06. BROKERAGE AND FINANCIAL ADVISERS. No broker, finder or
financial adviser has acted directly or indirectly as such for, or is entitled
to any compensation from, Purchaser or LLANY in connection with this Agreement
or the transactions contemplated hereby, except Xxxxxxx Xxxxx & Co., whose fees
for services rendered in connection therewith will be paid by Purchaser.

SECTION 4.07. COMPLIANCE WITH LAWS. Except with respect to those
violations, if any, that will be cured by Purchaser prior to, or by the act of,
Closing or which individually or in the aggregate would not have a material
adverse effect on the operation of Purchaser or LLANY, neither Purchaser nor
LLANY is in violation of any federal, state, local or foreign law, ordinance or
regulation or any other requirement of any governmental or regulatory body,
court or arbitrator nor has Purchaser or LLANY received any written notice that
any such violation is being alleged.

SECTION 4.08. PERMITS, LICENSES AND FRANCHISES. Purchaser and LLANY
have been duly authorized by the relevant state insurance regulatory
authorities to transact each of the lines of insurance business in each of the
jurisdictions as set forth with respect to each such company on Schedule 4.08
hereto. Except as listed on Schedule 4.08 hereto, Purchaser and LLANY have all
Permits necessary to conduct the Business in the manner and in the areas in
which the Business is presently being conducted, and all such Permits are valid
and in full force and effect, except where the failure to have such a Permit
would not, individually or in the aggregate, have a material effect on the
operations of Purchaser or LLANY. Except as listed on Schedule 4.08 hereto,
neither Purchaser nor LLANY has engaged in any activity which would cause
revocation or suspension of any such Permit and no action or proceeding looking
to or contemplating the revocation or suspension of any such Permit is pending
or threatened.

SECTION 4.09. SAP FINANCIAL STATEMENTS. (a) On or prior to the date
hereof,

Purchaser has delivered to Seller true, correct and complete copies of (a) the
audited consolidated balance sheet of Purchaser and its Subsidiaries as of
December 31, 1996, prepared in accordance with Indiana SAP, together with the
notes thereon and the related report of Ernst & Young, the independent
certified public accountant of Purchaser, and (b) the audited consolidated
statements of income, stockholders' equity and cash flows of Purchaser and its
Subsidiaries for the year ended December 31, 1996, prepared in accordance with
Indiana SAP, together with the notes thereon and the related report of Ernst &
Young, (collectively, the "PURCHASER FINANCIAL STATEMENTS"). Purchaser has
delivered to Seller a true, correct and complete copy of the consolidated
balance sheet, and the related consolidated statements of income, stockholders'
equity and cash flows of Purchaser and its Subsidiaries for the quarter ended
March 31, 1997, prepared in accordance with Indiana SAP subject to year-end
adjustments (the "INTERIM PURCHASER FINANCIAL STATEMENTS"). The Purchaser
Financial Statements and the Interim Purchaser Financial Statements are based
on the books and records of Purchaser and its Subsidiaries, and the Purchaser
Financial Statements have been prepared in accordance with Indiana SAP
consistently applied, audited by Ernst & Young and fairly present in all
material respects the consolidated financial position and results of operations
of Purchaser and its Subsidiaries as of the date and for the period indicated
therein.

(b) On or prior to the date hereof, LLANY has delivered to Seller
true, correct and complete copies of (a) the audited consolidated balance sheet
of LLANY as of December 31, 1996, prepared in accordance with New York SAP,
together with the notes thereon and the related report of Ernst & Young, the
independent certified public accountant of LLANY, and (b) the audited
consolidated statements of income, stockholders' equity and cash flows of LLANY
for the year ended December 31, 1996, prepared in accordance with New York SAP,
together with the notes thereon and the related report of Ernst & Young,
(collectively, the "PURCHASER FINANCIAL STATEMENTS"). LLANY has delivered to
Seller a true, correct and complete copy of the consolidated balance sheet, and
the related consolidated statements of income, stockholders' equity and cash
flows of LLANY for the quarters March 31, 1997, prepared in accordance with
New York SAP subject to year-end adjustments (the "INTERIM LLANY FINANCIAL
STATEMENTS"). The LLANY Financial Statements and the Interim LLANY Financial
Statements are based on the books and records of LLANY, and the LLANY Financial
Statements have been prepared in accordance with New York SAP consistently
applied, audited by Ernst & Young and fairly present in all material respects
the consolidated financial position and results of operations of LLANY as of
the date and for the period indicated therein.

SECTION 4.10. STATUTORY STATEMENTS. (a) Purchaser has furnished to
Seller true, complete and correct copies of the Annual Statements of Purchaser
as filed with the Indiana Insurance Department for the years ended December 31,
1996, 1995 and 1994, together with all exhibits and schedules thereto and
applicable actuarial opinions. Purchaser has furnished to Seller a true,
complete and correct copy of the Quarterly Statement of Purchaser as filed with
the Indiana Insurance Department for the quarter ended March 31, 1997, together
with all exhibits and schedules thereto.

(b) LLANY has furnished to Seller true, complete and correct
copies of the Annual Statements of LLANY as filed with the New York Insurance
Department for the year ended
50

December 31, 1996, together with all exhibits and schedules thereto and
applicable actuarial opinions. LLANY has furnished to Seller a true, complete
and correct copy of the Quarterly Statements of LLANY as filed with the New
York Insurance Department for the quarter ended March 31, 1997, together with
all exhibits and schedules thereto.

SECTION 4.11. ABSENCE OF CERTAIN CHANGES. Except as listed on
Schedule 4.11 hereto or except as expressly contemplated or required by this
Agreement, since December 31, 1996, there has not been (i) any change in the
business, operations, condition (financial or otherwise), results of
operations, properties, prospects or assets of Purchaser or (ii) in the ability
of Purchaser to consummate the transactions contemplated hereby or in any
Ancillary Agreement, in either case that has had or is likely to have a
material adverse effect on the operation of Purchaser or LLANY.

SECTION 4.12. QUALIFIED INSTITUTIONAL BUYER. Purchaser and LLANY are
each "QUALIFIED INSTITUTIONAL BUYERS" within the meaning of Rule 144A
promulgated under the Securities Act. Purchaser and LLANY hereby acknowledge
that Seller may be relying, with respect to the transfer of Investment Assets
on the exemption from the registration provisions of the Securities Act
provided by Rule 144A.

SECTION 4.13. SUFFICIENT FUNDS. Either Purchaser or Purchaser Parent
has or will have at Closing sufficient funds available (through existing credit
arrangements or otherwise) to pay the Purchase Price and to pay all fees and
expenses related to the transactions contemplated.

ARTICLE V

COVENANTS

SECTION 5.01. CONDUCT OF BUSINESS. (a) Prior to the Closing (and, as
to the matters specified in Section 5.01(b)(ix), prior to the CFA Closing, if
applicable), Seller and CLIC shall, and Parent shall cause the Parent
Subsidiaries to, (i) in all material respects operate the Business as presently
operated and only in the ordinary course and consistent with past practice
(including but not limited to past underwriting standards and investment
management of the Transferred Assets) except as set forth in Schedule 5.01(A)
hereto, (ii) use commercially reasonable best efforts to preserve the value of
the Business, and (iii) use commercially reasonable best efforts to preserve
their relationships with and the goodwill of their agents, brokers, customers,
suppliers, employees and other Persons having business dealings with Seller,
CLIC and the Parent Subsidiaries in connection with the Business.

(b) Without limiting the generality of Section 5.01(a), and except
as otherwise expressly provided in this Agreement, Seller and CLIC will not,
and Parent will cause each of the Parent Subsidiaries not to, without the prior
written consent of Purchaser:

(i) enter into any contract that would constitute an Assigned
and Assumed Contract, other than in the ordinary course of business
consistent with past practice;
51

(ii) acquire or dispose of any asset that would constitute
a Transferred Asset if owned by Seller at Closing, other than
acquisitions or dispositions in the ordinary course of the Business;

(iii) except as set forth in Schedule 5.01(B) hereto, enter
into, adopt or (except as may be required by law or the terms
of any such arrangement) terminate any bonus, profit sharing,
compensation, severance, termination, stock option, stock appreciation
right, restricted stock, performance unit, stock equivalent, stock
purchase agreement, pension, retirement, deferred compensation,
employment, severance or other employee benefit agreement, trust, plan,
fund or other arrangement for the benefit or welfare of any individual
identified on Schedule 3.19(A), amend any such arrangement as it
relates to such individuals or (except, as to non-executive level
individuals, for changes in base compensation and bonuses, and changes
in benefits in accordance with plans or arrangements in effect as of
the date hereof, in the ordinary course of business consistent with
past practice) change in any manner the compensation or other benefits
payable to any such individual;

(iv) change any of the accounting principles, practices,
methods or policies (including but not limited to any reserving
methods, practices or policies) employed with respect to the Business,
except as may be required as a result of a change in law, GAAP, SAP or
guidelines issued by the Commission or its accounting staff;

(v) change the method of determining the GAAP reserves with
respect to the Business for any guaranty fund assessment, second injury
fund assessment, special insurance assessment or similar assessment or
tax;

(vi) pay, discharge or satisfy any material claims,
liabilities or obligations associated with the Business (absolute,
asserted or unasserted, contingent or otherwise) other than
the payment, discharge or satisfaction in the ordinary course of the
Business consistent with past practice or in accordance with their
terms of liabilities reflected or reserved against in the Pro Forma
Financial Statements or incurred in the ordinary course of business
consistent with past practice;

(vii) enter into any reinsurance contract, other than in
the ordinary course of business consistent with past practice;

(viii) take or cause to be taken any action that would
result in Seller's investment portfolio or Seller Separate Accounts to
be managed other than in the ordinary course consistent with past
practice in all material respects; or

(ix) as to each of the Parent Subsidiaries, declare or pay
any dividend or make any other distribution with respect to its capital
stock; or

(x) agree in writing or otherwise to take any of the actions
described above in
52

this Section 5.01(b).

(c) Prior to Closing, Seller shall notify Purchaser as
promptly as practicable of any event or transaction having a material adverse
effect on the Business.

SECTION 5.02. CERTAIN TRANSACTIONS. From the date of this Agreement
through the Closing, neither Seller nor any of its officers, employees,
representatives or agents will, directly or indirectly, solicit, encourage or
initiate any negotiations or discussions with, or provide any information to,
or otherwise cooperate in any other manner with, any Person or group (other
than Purchaser, LLANY and their respective Affiliates and their respective
representatives) concerning any direct or indirect sale or other disposition of
the Business or the stock or substantially all of the assets of any Parent
Subsidiary.

SECTION 5.03. INVESTIGATIONS; PRE-CLOSING ACCESS. (a) Prior
to the Closing Date, Purchaser shall be entitled, through its employees and
representatives, to make such investigation of the assets, liabilities,
business and operations of the Business, and such examination of the Books and
Records, as Purchaser may reasonably request. Any investigation, examination
or interview by Purchaser of Seller's employees and agents and employees of the
Parent Subsidiaries or access pursuant to any of the provisions of this Section
5.03(a) shall be conducted or occur at reasonable times upon reasonable prior
notice; and each of the parties hereto and its employees and representatives,
including, without limitation, counsel, investment bankers, and independent
public accountants, shall cooperate with the other's employees and
representatives, as the case may be, in connection with such review and
examination.

(b) In addition, prior to the Closing Date, Seller shall provide
Purchaser with full and complete access to every aspect of the Business,
subject only to any applicable legal limitations. Without limiting the
generality of the foregoing, Seller shall (i) provide Purchaser with access to
individuals reasonably specified by Purchaser to plan the transition of the
Business and the employees and agents of Seller to Purchaser and LLANY, (ii)
designate certain individuals (subject to Purchaser's reasonable approval) to
serve as members of a Seller/Purchaser transition team and cause such
individuals to devote reasonable time to transition matters, (iii) devote
reasonable resources to transition matters (such resources to include, without
limitation, office accommodations and related facilities for a substantial and
continuing presence of Purchaser's transition team members on Seller's
premises), (iv) cooperate with Purchaser in connection with Purchaser's filing
of policy and contract forms to enable Purchaser to issue policies and
contracts substantially similar to those included in the Business, (v) consult
with Purchaser regarding Seller's development work pertaining to systems,
products, distribution and customer and producer services, and (vi) cooperate
with Purchaser in its development work pertaining to systems, products,
distribution and customer and producer services in order to enable
implementation of the transition plan at the earliest feasible date. In
conjunction with the foregoing, Seller hereby acknowledges that the transition
plan is critical to the success of the transactions contemplated by this
Agreement.

(c) Prior to the Closing Date, Seller shall be entitled, through
its employees and representatives, to make such investigation of the assets,
liabilities, business and operations of
53

Purchaser and LLANY as Seller may reasonably request. Any such investigation
or examination shall be conducted at reasonable times upon reasonable prior
notice; and each of the parties hereto and its employees and representatives,
including, without limitation, counsel, investment bankers, and independent
public accountants, shall cooperate with the other's employees and
representatives, as the case may be, in connection with such review and
examination.

(d) Notwithstanding any other provisions of this Section 5.03,
Purchaser and Seller shall cooperate in implementing the provisions of this
Section 5.03 so as not to prevent or interfere with Seller's compliance with
Section 5.01 hereof.

SECTION 5.04. POST-CLOSING ACCESS. (a) Following the Closing Date,
Seller shall (i) allow Purchaser and/or LLANY, upon reasonable prior notice and
during regular business hours, through their employees and representatives, the
right, at Purchaser's or LLANY's expense, to examine and make copies of any
books and records retained by Seller, to the extent they relate to the
Business, for any reasonable business purpose, including, without limitation,
the preparation or examination of Purchaser's Tax returns, regulatory filings
and financial statements and the conduct of any litigation or regulatory
dispute resolution, whether pending or threatened, concerning the conduct of
the Business prior to the Closing Date and (ii) maintain such books and records
for Purchaser's and/or LLANY's examination and copying. Access to such books
and records shall be at Purchaser's or LLANY's expense and may not unreasonably
interfere with Seller's or any successor company's business operations.

(b) Following the Closing Date, Purchaser and LLANY shall (i)
allow Seller, upon reasonable prior notice and during regular business hours,
through its employees and representatives, the right, at Seller's expense, to
examine and make copies of the Books and Records transferred to Purchaser and
LLANY, respectively, at the Closing for any reasonable business purpose,
including, without limitation, the preparation or examination of Tax returns,
regulatory filings and financial statements and the conduct of any litigation
or the conduct of any regulatory, contractholder, participant or other dispute
resolution whether pending or threatened, and (ii) maintain such Books and
Records for Seller's examination and copying. Access to such Books and Records
shall be at Seller's expense and may not unreasonably interfere with
Purchaser's or LLANY's or any successor company's business operations.

SECTION 5.05. HSR ACT FILINGS. Seller and Purchaser shall, as
promptly as practicable, file, or cause to be filed, Notification and Report
Forms to be filed under the HSR Act with the Federal Trade Commission (the
"FTC") and the Antitrust Division of the United States Department of Justice
(the "ANTITRUST DIVISION") in connection with the transactions contemplated by
this Agreement, the Ancillary Agreements and the other agreements contemplated
hereby and thereby, and will use their respective reasonable efforts to respond
as promptly as practicable to all inquiries received from the FTC or the
Antitrust Division for additional information or documentation and to cause the
waiting periods under the HSR Act to terminate or expire at the earliest
possible date. Seller and Purchaser will each furnish to the other such
necessary information and reasonable assistance as the other may request in
connection with its preparation of necessary filings or submissions to any
governmental or regulatory agency, including, without limitation, any filings
necessary under the provisions of the HSR Act.
54

SECTION 5.06. CONSENTS AND REASONABLE EFFORTS. (a) Seller, CLIC,
Purchaser and LLANY shall cooperate and use commercially reasonable best
efforts to obtain all consents, approvals and agreements of, and to give and
make all notices and filings with, any governmental authorities and regulatory
agencies, necessary to authorize, approve or permit the consummation of the
transactions contemplated by this Agreement, the Ancillary Agreements and the
other agreements contemplated hereby and thereby, including, without
limitation, the Permits described in Sections 6.03 and 7.03. Seller shall use
commercially reasonable best efforts to obtain, and Purchaser and LLANY will
cooperate with Seller in obtaining, all other approvals and consents to the
transactions contemplated by this Agreement and the Ancillary Agreements,
including the matters set forth on Schedule 3.04 hereto and the consents of
third parties under contracts to be assigned. In the event third party
consents under contracts to be assigned cannot be obtained, Seller agrees to
use commercially reasonable best efforts, in cooperation with Purchaser, to
obtain comparable benefits for Purchaser for the period provided for in Section
5.32 hereof. Purchaser will use commercially reasonable best efforts to obtain
all approvals and consents to the transactions contemplated by this Agreement
and the Ancillary Agreements as set forth on Schedule 4.04 hereto.

(b) Seller, CLIC and Purchaser shall cooperate and use commercially
reasonable best efforts to obtain approval by the managing trustees or their
equivalent of the Seller Separate Accounts regarding the substitution of a
mutual fund managed by Purchaser or an Affiliate of Purchaser for any and all
Internally Managed Funds that support the Seller Separate Accounts, to obtain
approval from the Commission in connection therewith to enter into a
participation agreement to effect such substitution (which participation
agreement shall be reasonably satisfactory to Purchaser and Seller in all
material respects), and to obtain all other consents, approvals and agreements
of, and to give and make all notices and filings with, any other governmental
authorities and regulatory agencies, necessary to authorize, approve or permit
the consummation of the substitution referred to herein. Seller, CLIC and
Purchaser, as the case may be, shall use commercially reasonable best efforts
to obtain, and each such party will cooperate with the other parties in
obtaining, all other approvals and consents to the substitution described in
the immediately preceding foregoing sentence.

(c) To the extent that the sale of all the issued and outstanding
common stock of CFA to Purchaser pursuant to the Stock Purchase Agreement
results in an "ASSIGNMENT" (as that term in defined in the 0000 Xxx) of the
principal underwriting agreement currently in effect between the Seller
Separate Accounts and CFA, Seller, CLIC and Purchaser shall cooperate and use
commercially reasonable best efforts to obtain approval by the managing
trustees or their equivalent of the Seller Separate Accounts of new principal
underwriting agreements between the Seller Separate Accounts and CFA (in
substantially the same form as currently in effect), and to obtain all other
consents, approvals and agreements of, and to give and make all notices and
filings with, any other governmental authorities and regulatory agencies,
necessary to authorize, approve or permit the new principal underwriting
agreements. Seller, CLIC and Purchaser, as the case may be, shall use
commercially reasonable best efforts to obtain, and each such party will
cooperate with the other parties in obtaining, all other approvals and consents
to the approval of new principal underwriting agreements described in the
immediately preceding foregoing
55

sentence.

SECTION 5.07. REPRESENTATIONS AND WARRANTIES. From the date hereof
through the Closing Date, (a) Seller and CLIC shall use commercially reasonable
best efforts to conduct its affairs in such a manner so that, except as
otherwise contemplated or permitted by this Agreement, the representations and
warranties contained in Article III shall continue to be true, complete and
correct in all material respects on and as of the Closing Date as if made on
and as of the Closing Date, except for representations and warranties that are
expressly stated to be made as of an earlier date (b) Purchaser and LLANY shall
use commercially reasonable best efforts to conduct their affairs in such a
manner so that, except as otherwise contemplated or permitted by this
Agreement, the representations and warranties as to Purchaser and LLANY
contained in Article IV shall continue to be true and correct in all material
respects on and as of the Closing Date as if made on and as of the Closing
Date, (c) Seller shall notify Purchaser and LLANY promptly of any event,
condition or circumstance known to Seller occurring from the date hereof
through the Closing Date that would constitute a violation or breach of this
Agreement by Seller and (d) Purchaser shall notify Seller promptly of any
event, condition or circumstance known to Purchaser occurring from the date
hereof through the Closing Date that would constitute a violation or breach of
this Agreement by Purchaser or LLANY. Not later than August 31, 1997, Seller
shall provide to Purchaser and LLANY updates of the schedules to this
Agreement, which for the purposes of this provision shall be prepared without
regard to any qualification as to the knowledge of the Seller Key People in the
representation and warranty to which the relevant schedule relates. The update
to Schedule 3.06(A) provided pursuant to the preceding sentence shall also
identify which items of Licensed Principally Used Software have remaining terms
of less than 42 months from the date hereof, and shall describe the renewal
provisions, if any, relating to such license agreements. No update pursuant to
the preceding two sentences (other than the update to Schedules 3.19(A) and
3.20(D) provided for in Sections 3.19(a) and 3.20(d), respectively) shall (i)
have any effect on the rights of any of the parties hereto, or (ii) constitute
a representation or warranty by any of the Seller Parties, it being understood
that the representations, warranties, covenants, and agreements of any of the
Seller Parties that refer to any such schedules shall be deemed to continue to
refer to such original schedules.

SECTION 5.08. FURTHER ASSURANCES. (a) Upon the terms and subject to
the conditions herein provided, on and prior to the Closing Date each of
Seller, CLIC, Purchaser and LLANY shall use all commercially reasonable best
efforts to take, or cause to be taken, all action or do, or cause to be done,
all things or execute any documents necessary, proper or advisable under
applicable laws and regulations to consummate and make effective the
transactions contemplated by this Agreement, the Ancillary Agreements and the
other agreements contemplated hereby and thereby.

(b) On and after the Closing Date, Seller or CLIC (as reasonably
requested from time to time by Purchaser) and Purchaser and LLANY (as
reasonably requested from time to time by Seller or CLIC) shall take all
reasonably appropriate action and execute any additional documents, instruments
or conveyances of any kind (not containing additional representations and
warranties) which may be reasonably necessary to carry out any of the
provisions hereof, including, without limitation, putting each of Purchaser and
LLANY in full possession and
56

operating control of the Transferred Assets and the Business and causing
Purchaser to have full unencumbered ownership of the Subsidiary Stock, and
giving effect to the assumption of liabilities by Purchaser and LLANY as
contemplated hereby and thereby.

SECTION 5.09. EXPENSES. Except as otherwise specifically provided in
this Agreement, the parties to this Agreement shall bear their respective
expenses incurred in connection with the preparation, execution and performance
of this Agreement and the transactions contemplated hereby, including, without
limitation, all fees and expenses of agents, representatives, counsel,
investment bankers, actuaries and accountants; provided, however, that (a)
Purchaser shall pay the cost of the filing fees in connection with all filings
by any of the parties hereto with the FTC and the Antitrust Division under the
HSR Act with respect to the transactions contemplated hereby and (b) Purchaser
shall bear the cost of obtaining required insurance regulatory approvals,
consents and orders for the implementation of the Indemnity Reinsurance
Agreements and from the States of Indiana and New York, and (c) Seller shall
bear the cost of obtaining required approvals, consents and orders for the
implementation of the Indemnity Reinsurance Agreements from the State of
Connecticut.

SECTION 5.10. INDEMNITY REINSURANCE AGREEMENTS. At the Closing,
Seller and Purchaser shall execute and deliver to each other the Purchaser
Indemnity Reinsurance Agreement in substantially the form of Exhibit A hereto,
and Seller and LLANY shall execute and deliver to each other the LLANY
Indemnity Reinsurance Agreement, the terms of which the parties will negotiate
prior to Closing. Promptly following the date hereof, Seller and LLANY shall
negotiate in good faith the terms of the LLANY Indemnity Reinsurance Agreement,
which agreement shall be identical in all material respects to the Purchaser
Indemnity Reinsurance Agreement, except for such modifications, if any, as may
be deemed necessary by the parties in order for the agreement to receive
approval of the New York Insurance Department. Each of the Indemnity
Reinsurance Agreements shall be effective as of the Effective Date.

SECTION 5.11. ADMINISTRATIVE SERVICES AGREEMENTS. At the Closing,
Seller and Purchaser shall execute and deliver to each other the Purchaser
Administrative Services Agreement in substantially the form of Exhibit B
hereto, and Seller and LLANY shall execute and deliver to each other the LLANY
Administrative Services Agreement, the terms of which the parties shall
negotiate prior to Closing. Promptly following the date hereof, Seller and
LLANY shall negotiate in good faith the terms of the LLANY Administrative
Services Agreement, which agreement shall be identical in all material respects
to the Purchaser Administrative Services Agreement, except for such
modifications, if any, as may be deemed necessary by the parties in order for
the agreement to receive approval of the New York Insurance Department. Each
of the Administrative Services Agreements shall be effective as of the Closing
Date.

SECTION 5.12. CLIC SEPARATE ACCOUNT ADMINISTRATION AGREEMENT. At the
Closing, CLIC and Purchaser shall execute and deliver to each other the CLIC
Separate Account Administration Agreement, which shall be negotiated prior to
Closing. Promptly following the date hereof, CLIC and Purchaser shall
negotiate in good faith the terms of the CLIC Separate Account Administration
Agreement, which agreement shall be identical in all material respects to the
Purchaser Administrative Services Agreement, except for such modifications as
may be
57

appropriate to reflect the separate account nature of CLIC's business.

SECTION 5.13. TRANSITION SERVICES AGREEMENT. At the Closing, Seller
and Purchaser shall execute and deliver to each other the Transition Services
Agreement, which shall be effective as of the Closing Date, in substantially
the form of Exhibit C hereto. Not later than 30 days prior to the Closing
Date, Purchaser shall provide a written notice to Seller identifying the type
and level of services Purchaser will require pursuant to the Transition
Services Agreement in those areas serviced by Band 1 Employees for the period
from the Effective Date through the end of the second calendar month
thereafter.

SECTION 5.14. GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT. At the
Closing, Seller and Purchaser shall execute and deliver to each other the
General Assignment and Assumption Agreement, which shall be effective as of the
Closing Date, in substantially the form of Exhibit D hereto.

SECTION 5.15. XXXX OF SALE. At the Closing, Seller shall execute and
deliver to Purchaser and LLANY the Xxxx of Sale, which shall be effective as of
the Closing Date, in substantially the form of Exhibit E hereto.

SECTION 5.16. REINSURANCE CREDIT FOR NEW YORK CONTACTS. Purchaser and
LLANY hereby agree to use their commercially reasonable best efforts to cause
LLANY to become an accredited reinsurer in the State of Connecticut as promptly
as practicable after the date of execution of this Agreement and/or both before
and after the Closing to take any other actions as may be necessary in order
for Seller to receive full statutory reinsurance credit with respect to the New
York Contracts under the terms of the LLANY Indemnity Reinsurance Agreement.

SECTION 5.17. STOCK PURCHASE AGREEMENT. At the Closing, Parent will
deliver to Purchaser the Subsidiary Stock pursuant to the terms of the Stock
Purchase Agreement, which transfer of stock shall be effective as of the
Closing Date, as set forth in the Stock Purchase Agreement, and subject to the
proviso set forth in Section 2.03(a) hereof.

SECTION 5.18. LICENSE AGREEMENT. At the Closing, CIGNA, Seller,
Purchaser and LLANY will execute and deliver to each other the License
Agreement, the terms of which the parties shall negotiate prior to Closing.
CIGNA, Seller, Purchaser and LLANY hereby covenant to negotiate in good faith
from the date hereof until Closing regarding the terms of the License
Agreement, which shall be consistent with those described in the definition of
License Agreement.

SECTION 5.19. ASSUMPTION REINSURANCE AGREEMENTS. At Purchaser's
option at any time following the Closing, Seller and/or CLIC, as the case may
be, will enter into and cooperate with Purchaser in obtaining regulatory
approvals for assumption reinsurance agreements pursuant to which Purchaser
will assumption reinsure all separate account liabilities of the Business.
Such agreements shall contain such terms and conditions as are customarily
included in assumption reinsurance agreements pertaining to insurance contracts
funded by separate accounts.
58

SECTION 5.20. CERTAIN EVENTS. (a) In the event that there is a
change of control of LNC or Purchaser, or LNC ceases to maintain an investment
grade credit rating on its senior debt, then Purchaser and LLANY shall
immediately notify Seller thereof describing the circumstances in reasonable
detail and shall, at the written request of Seller:

(i) place assets (consisting of cash and admitted investment
assets) in a grantor trust of Purchaser (within the meaning
of Sections 671-678 of the Code), pursuant to a trust
agreement and with a trustee, each reasonably satisfactory
to Seller, sufficient to satisfy the remaining General
Account Liabilities under the Indemnity Reinsurance Agreements;

(ii) provide a clean, unconditional, annually renewable letter
of credit from a bank, and having terms, reasonably
satisfactory to Seller in an amount sufficient to satisfy
the remaining General Account Liabilities under the
Indemnity Reinsurance Agreements; or

(iii) enter into an assumption reinsurance agreement with Seller
having terms reasonably satisfactory to Seller and obtain
all regulatory approvals and policyholder and contractholder
consents necessary to assume, and assume, the policies and
contracts reinsured under the Indemnity Reinsurance Agreements.

(b) In the event that Purchaser ceases to maintain a claims paying
rating issued by A.M. Best of at least B++, or by Xxxxx'x Investors Services,
Inc. of at least Baa3, or by Standard & Poor's Corporation of at least BBB-,
then Purchaser shall immediately notify Seller thereof describing the
circumstances in reasonable detail and shall, at the written request of Seller,
take one of the actions specified in clauses (i), (ii) and (iii) of Section
5.20(a); provided, that any such action taken shall relate only to the
obligations, policies and contracts under the Purchaser Indemnity Reinsurance
Agreement.

(c) In the event that there is a change of control of LLANY, or in the
event that LLANY ceases to maintain a claims paying rating issued by A.M. Best
of at least B++, or by Xxxxx'x Investors Services, Inc. of at least Baa3, or by
Standard & Poor's Corporation of at least BBB-, then LLANY shall immediately
notify Seller thereof describing the circumstances in reasonable detail and
shall, at the written request of Seller, take one of the actions specified in
clauses (i), (ii) and (iii) of Section 5.20(a); provided, that any such action
taken shall relate only to the obligations, policies and contracts under the
LLANY Indemnity Reinsurance Agreement. Alternatively, under the circumstances
described in this Section 5.20(c), but only if there has not been a change of
control of Purchaser and none of the events relating to Purchaser referred to
in Section 5.20(b) has occurred, Purchaser may, pursuant to the Purchaser
Indemnity Reinsurance Agreement, coinsure 100% of the General Account
Liabilities under the policies and contracts reinsured under the LLANY
Indemnity Reinsurance Agreement.

(d) If Purchaser and LLANY do not take one of the actions specified in
clauses (i),
59

(ii) and (iii) of Section 5.20(a) under the circumstances described therein
within 60 days after the date of Seller's written request provided under
Section 5.20(a), Seller will have the option to (i) terminate the relevant
reinsurance agreement, (ii) recapture the relevant remaining adjusted statutory
reserves and other statutory liabilities, and (iii) require Purchaser and LLANY
to transfer to Seller cash and/or admitted invested assets at market value
sufficient to satisfy such reserves and liabilities.

(e) If Purchaser does not take one of the actions specified in clauses
(i), (ii) and (iii) of Section 5.20(a) under the circumstances described in
Section 5.20(b) within the 60 days after the date of Seller's written request
provided under Section 5.20(b), Seller will have the option to (i) terminate
the Purchaser Indemnity Reinsurance Agreement, (ii) recapture the relevant
remaining adjusted statutory reserves and other statutory liabilities, and
(iii) require Purchaser to transfer to Seller cash and/or admitted invested
assets at market value sufficient to satisfy such reserves and liabilities.

(f) If LLANY does not take one of the actions specified in clauses (i),
(ii) and (iii) of Section 5.20(a) under the circumstances described in Section
5.20(c), or if Purchaser does not take the action specified in the last
sentence of Section 5.20(c) within 60 days after the date of Seller's written
request provided under Section 5.20(c), Seller will have the option to (i)
terminate the LLANY Indemnity Reinsurance Agreement, (ii) recapture the
relevant remaining adjusted statutory reserves and other statutory liabilities,
and (iii) require LLANY to transfer to Seller cash and/or admitted invested
assets at market value sufficient to satisfy such reserves and liabilities.

(g) Any dispute regarding the appropriate amount of cash and/or
invested assets at market value to be transferred pursuant to Sections 5.20(d),
(e) or (f) shall be resolved by a nationally-known firm of independent
actuaries reasonably selected by Seller; provided, that in no event shall the
market value of such cash and/or invested assets at the time of any transfer
pursuant to Section 5.20(d), (e) or (f) hereof be less than 100% of the amount
of the relevant reserves and liabilities.

(h) For the purposes of this Section 5.20, a "CHANGE OF CONTROL" shall
be deemed to have occurred with respect to LNC, Purchaser or LLANY if (i) a
Person that is not now an Affiliate of LNC acquires, directly or indirectly, a
majority of the outstanding capital stock of LNC, Purchaser, or LLANY, as the
case may be, or (ii) a Person that is not now an Affiliate of LNC nominates one
or more directors to the board of directors of LNC, Purchaser or LLANY, such
director or directors are elected and, as a result of such election, a majority
of such board of directors consists of directors so nominated by non-Affiliates
LNC.

SECTION 5.21. REINSURANCE TREATIES. Prior to Closing, Seller agrees
to use its commercially reasonable best efforts, at its own expense, to assign
all of its rights and obligations under the reinsurance treaties listed on
Schedule 5.21 hereto, and to obtain any endorsements from the reinsurers
thereunder to the extent necessary to ensure that Purchaser and LLANY are
entitled to enforce such treaties against the reinsurers in their own names,
with respect to the Insurance Contracts and the Post-Closing Contracts. If
Purchaser is unable to obtain such endorsements notwithstanding such efforts,
Seller shall place Purchaser and LLANY in the same
60

net economic position as if such endorsements had been obtained (which actions
may consist of Seller continuing to use commercially reasonable best efforts to
enforce its rights under such treaties and ensuring that all benefits
thereunder received, directly or indirectly, by Seller flow to Purchaser and
LLANY).

SECTION 5.22. TERMINATION OF CERTAIN AGREEMENTS. At or prior to
Closing, Seller shall deliver to Purchaser documentation evidencing the
termination of any agreements between Seller or any Affiliate of Seller and the
Parent Subsidiaries, other than those, if any, that provide for Seller or an
Affiliate of Seller to provide services or assets to the Parent Subsidiaries
that are material to the conduct of the Business by Purchaser and LLANY
following the Closing which are not described in Schedule 2.01 to the
Transition Services Agreement. Any such termination shall include settlement
of all outstanding balances between the relevant companies and the
documentation shall be reasonably satisfactory to Purchaser.

SECTION 5.23. EMPLOYEES; SEVERANCE PAYMENTS. (a) Purchaser shall
provide to Seller, at least 30 days prior to the Closing Date, the names of
those individuals listed on Schedule 3.19(A) hereto who will not be offered
employment under a contract or at will or an agency contract by Purchaser (such
individuals, along with any replacement employees for any such individuals
whose employment terminates prior to the Closing Date and any other individuals
listed on Schedule 3.19(A) hereto who are identified prior to the Closing Date
in writing to Seller by Purchaser as lacking the work authorization and
identification required by the Immigration Reform and Control Act of 1986,
being referred to herein as the "BAND 1 EMPLOYEES"). The identity of the Band
1 Employees shall be determined by Purchaser in its sole discretion consistent
with any Applicable Law. Purchaser shall indicate in writing, at the time it
delivers such list to Seller, which of the Band 1 Employees Purchaser believes
should be retained by Seller until the Closing Date, and Seller shall use all
commercially reasonable efforts to retain such individuals, through the Closing
Date, in the positions which such individuals hold as of the date hereof.

(b) Purchaser shall provide Seller, prior to the Closing Date, the
names of those individuals listed on Schedule 3.19(A) hereto with respect to
whom Purchaser will offer employment contracts or agency agreements or
contracts, such agreements or contracts to be effective as of the later of the
Closing Date or January 1, 1998. Each such individual who accepts such offer
and enters into such an employment contract or agency contract shall
hereinafter be referred to as a "CONTRACT EMPLOYEE." From and after the
commencement of the employment or an agency contract of a Contract Employee by
Purchaser, Purchaser shall bear full responsibility for any severance payments
payable in connection with the termination of the employment of any Contract
Employee in accordance with the terms of such Contract Employee's contract, and
Seller shall have no obligations with respect thereto. Notwithstanding any
exclusive agency agreements with its career agency force, Seller expressly
agrees that it shall permit its career agents to enter into agency agreements
with Purchaser as contemplated herein.

(c) Prior to the Closing Date, Purchaser shall offer Suitable
Employment (including, where applicable, as an agent) to all Band 2 Employees,
to be effective as of the later of the Closing Date or January 1, 1998. "BAND
2 EMPLOYEES" shall mean (i) individuals listed on Schedule 3.19(A) hereto who
are neither Band 1 Employees nor Contract Employees and (ii)
61

individuals hired by Seller in accordance with Section 5.23(d) as replacement
employees for any such individuals whose employment terminates prior to the
later of the Closing Date or January 1, 1998. "SUITABLE EMPLOYMENT" shall mean
a position that is substantially similar to the individual's position, and at
an individual's geographic location of employment, as of the date hereof (or,
as to a replacement employee, the position held by the respective Band 2
Employee whom he has replaced), with a salary (or other remuneration, in the
case of agents) at least at the level set forth on Schedule 3.19(A).
Notwithstanding any other provision of this Section 5.23, an individual listed
on Schedule 3.19(A) who receives and rejects an offer of other than Suitable
Employment shall be a Band 1 Employee. Notwithstanding the foregoing or any
other provision of this Section 5.23, nothing in this Agreement shall be deemed
to require Purchaser to retain any particular Band 2 Employee for any period of
time following the later of the Closing Date or January 1, 1998, or to entitle
any such Band 2 Employee to any status other than that of an at will employee
of Purchaser.

(d) In the event that any Band 2 Employee's employment terminates
prior to the later of the Closing Date or January 1, 1998, Seller, acting in
consultation with Purchaser, shall use commercially reasonable efforts to
replace such Band 2 Employee, including retention of individuals through
contract, leasing arrangement, or otherwise, in order to maintain appropriate
staffing levels with respect to the Business. Unless otherwise agreed to by
Seller and Purchaser, any individual hired by Seller in accordance with this
Section 5.23 (other than a Contract Employee) shall be deemed a Band 2 Employee
for the purpose of this Agreement. A Band 1 Employee may become a Band 2
Employee under this Section 5.23(d).

(e) Purchaser shall reimburse Seller for any stay bonuses that are
provided prior to Closing at Purchaser's request to Band 1, Band 2 or Contract
Employees.

(f) In the event that the Closing Date occurs before December 31,
1997, then from the Closing Date through December 31, 1997, the Contract
Employees and Band 2 Employees shall remain employees (or, where applicable
agents) of Seller and its Affiliates. During the period from the Closing Date
through December 31, 1997, Purchaser shall contract with Seller to provide
those services to support the Business that immediately prior to Closing were
provided by Contract Employees and Band 2 Employees, and as further set forth
in the Transition Services Agreement. Purchaser may also contract with Seller
to provide some or all of those services to support the Business that
immediately prior to Closing were provided by Band 1 Employees; such services
to be provided for the period and on the terms and conditions agreed to by
Purchaser and Seller as further set forth in the Transition Services Agreement.
No later than 30 days prior to the Closing Date, Purchaser shall provide a
written notice to Seller identifying the type and level of services Purchaser
will require in those areas serviced by Band 1 Employees for the period from
the Closing Date through the end of the second calendar month thereafter. In
accordance with the terms of the Transition Services Agreement, Seller shall
determine the manner in which it shall provide the services described above in
this Section 5.23(f) to Purchaser and the employees or agents who shall provide
such services. Purchaser shall also contract with Seller to provide those
services to support the Business that on July 27, 1997, were provided by those
employees identified in the July 18 Letter as are specified in the Transition
Services Agreement; such services to be provided for the period and on the
terms and conditions agreed to
62

by Purchaser and Seller, as set forth in the Transition Services Agreement. The
Transition Services Agreement shall specify the basis on and manner in which
Purchaser shall compensate Seller for all such services described in this
Section 5.23(f) and provided in accordance with the Transition Services
Agreement.

(g) Except as otherwise specifically provided for in Section
5.23(f), neither Seller nor any of its Affiliates shall, without the prior
approval of Purchaser:

(i) prior to the Closing Date, offer post-closing employment to
any Seller employee listed on Schedule 3.19(A) hereto or transfer any such
employee to any subsidiary or division of Seller unrelated to the operation of
the Business;

(ii) for a period of two years following the Closing Date, offer
employment to any Seller employee listed on Schedule 3.19(A) hereto to whom
Purchaser offers Suitable Employment, as defined in Section 5.23(c), regardless
of whether the employee accepts Purchaser's offer;

(iii) prior to the Closing Date, offer a contract to any Seller
career agent listed on Schedule 3.19(A) hereto or to any Seller Broker listed
on Schedule 3.12(B) hereto;

(iv) for a period of five years after the Closing Date, offer
employment or a contract to any Seller career agent listed on Schedule 3.19(A)
hereto who is offered a contract by Purchaser; and

(v) for a period of three years after the Closing Date, offer
employment or a contract to any Seller Broker listed on Schedule 3.12(B) hereto
who is offered a contract by Purchaser with respect to sales of any product
included in the Business.

Neither Purchaser nor any of its Affiliates shall, without the prior approval
of Seller, prior to the Closing Date or for a period of two years thereafter,
offer post-closing employment to any employee of Seller or its Affiliates not
listed on Schedule 3.19(A) hereto (i) who is one of the Seller Key People, (ii)
who Purchaser comes into contact with during the negotiation of, preparation
for or Closing of the transaction that is the subject of this Agreement, or
(iii) whose place of employment is in space that is cohabited by any Contract
Employee or Band 2 Employee or in facilities maintained by Seller or its
Affiliates in the Hartford, Connecticut metropolitan area; provided, however
that this paragraph shall not prohibit Purchaser or its Affiliates from
employing any such individual who responds to any solicitation directed to the
general public such as a newspaper or magazine advertisement.

(h) Purchaser shall reimburse Seller for any Severance Costs (as
defined in Schedule 3.19(C) hereto) incurred with respect to any Band 1
Employee who is terminated by Seller on or after the date Purchaser delivers
the list of Band 1 Employees to Seller, but not later than 90 days following
the Closing Date; provided, however that to the extent that Purchaser requests
Seller to provide the services of any Band 1 Employee following the Closing
Date, the applicable 90-day period for any Band 1 Employee who provides such
services to Purchaser shall begin on the last
63

day that such Band 1 Employee provides services to Purchaser. Purchaser will
not reimburse Seller for any Severance Costs incurred with respect to any
employee or agent who rejects an offer of an employment contract or agency
contract that would otherwise constitute Suitable Employment or an offer of
Suitable Employment from Purchaser.

SECTION 5.24. EMPLOYEE BENEFITS. (a) Subject to the further
provisions of this Section 5.24, Purchaser agrees to provide benefits under the
employee benefit plans, programs, and arrangements of Purchaser and its
Affiliates (not to include incentive compensation plans), without regard to the
coverage of any such plan, program, or arrangement by ERISA or any provision of
the Code, to each Band 2 Employee and Contract Employee who accepts employment
(under a contract or at will) or an agency contract with Purchaser ("BENEFITS
AFFECTED EMPLOYEE"), effective as of the commencement of such employment or
agency contract (the "BENEFITS EFFECTIVE DATE"), on the same terms and
conditions as such benefits are provided to similarly situated employees or
agents of Purchaser. Purchaser and its Affiliates shall waive or cause to be
waived, except to the extent that such waiver is precluded by applicable law,
any waiting period, probationary period, pre-existing condition exclusion,
evidence of insurability requirement, or similar condition with respect to
initial participation under any plan, program, or arrangement established,
maintained, or contributed to by Purchaser or any of its Affiliates to provide
health, life insurance, or disability benefits with respect to each Benefits
Affected Employee who has satisfied the comparable eligibility, insurability or
other requirements being waived under Seller's comparable plans prior to the
Benefits Effective Date.

(b) Subject to the other provisions of this Section 5.24, and
except as provided in Section 5.23, Seller, and not Purchaser, shall be
responsible and shall retain any and all liability for (i) all compensation,
benefits, and perquisites of any kind due any Benefits Affected Employee on
account of employment by Seller before the Benefits Effective Date, or the
termination of employment by Seller, including, but not limited to, medical or
dental benefits either reported but not paid or incurred but not reported
before the Benefits Effective Date and continuation of health care coverage
pursuant to COBRA; and (ii) all notices, payments, fines, taxes or assessments
due to any governmental authority pursuant to any applicable foreign, federal,
state or local law, common law, statute, rule or regulation with respect to the
employment, discharge or layoff of employees of the Business by Seller for any
period before the Benefits Effective Date, including, but not limited to, the
WARN Act and any applicable state severance pay law and any rules or
regulations that have been issued in connection with any of the foregoing.

Subject to the other provisions of this Section 5.24, and except as
provided in Section 5.23, Purchaser, and not Seller, shall be responsible and
shall assume any and all liability for (i) all compensation, benefits, and
perquisites of any kind due any Benefits Affected Employee on account of
employment by Purchaser on and after the Benefits Effective Date, or the
termination of employment by Purchaser, including, but not limited to,
continuation of health care coverage pursuant to COBRA; (ii) all notices,
payments, fines, taxes or assessments due to any governmental authority
pursuant to any applicable foreign, federal, state or local law, common law,
statute, rule or regulation with respect to the employment, discharge or layoff
of Benefits Affected Employees by Purchaser for any period on and after the
Benefits Effective Date, including, but not limited to, the WARN Act and any
applicable state severance pay law and any
64

rules or regulations that have been issued in connection with any of the
foregoing.

Notwithstanding any other provision of this Agreement, and except as
provided in Sections 5.23(h) and 10.01(b)(v) hereof, Seller, and not Purchaser,
shall be responsible and shall retain any and all liability for (i) all
compensation, benefits, and perquisites of any kind due any Band 1 Employee on
account of the termination of employment of such individual by Seller; (ii)
all notices, payments, fines, taxes or assessments due to any governmental
authority pursuant to any applicable foreign, federal, state or local law,
common law, statute, rule or regulation with respect to the discharge or layoff
of employees of the Business by Seller for any period, including, but not
limited to, the WARN Act and any applicable state severance pay law and any
rules or regulations that have been issued in connection with any of the
foregoing; and (iii) any claim by any present or former employee or agent of
Seller or any of its Affiliates who performed or performs services in the
Business, (including, without limitation, any Band 1 Employee), but who does
not become a Contract Employee or a Band 2 Employee, that (x) relates to the
termination of employment, discharge or layoff of such present or former
employee or agent, or the failure of such employee or agent to become a
Contract Employee or a Band 2 Employee, (y) arises either (A) under federal,
state or local statute (including, without limitation, Title VII of the Civil
Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in
Employment Act of 1990, the Equal Pay Act, the Americans with Disabilities Act
of 1990, ERISA and all other statutes regulating the terms and conditions of
employment), regulation or ordinance, under the common law or in equity
(including any claims for wrongful discharge or otherwise), or (B) under any
policy, agreement, understanding or promise, written or oral, formal or
informal, between the Seller or any of its Affiliates and the individual, and
(z) arose out of actions, events or omissions that occurred (or, in the case of
omissions, failed to occur) either prior or subsequent to the Closing Date, but
not out of any violation by Purchaser or any of its Affiliates, or any agent of
Purchaser or any of its Affiliates, of Applicable Law (including without
limitation the statutes referred to in clause (y) above).

(i) Each Benefits Affected Employee shall be permitted to elect to
receive benefits under the Lincoln National Corporation Employees' Health Care
Expense Account Plan or the LNL Agents' Health Care Expense Account Plan, as
applicable (pursuant to the Lincoln National Corporation Customized Security
Plan), as of the Benefits Effective Date.

(ii) Each Benefits Affected Employee shall be permitted to
elect to receive benefits under the Lincoln National Corporation Employees'
Dependent Care Expense Account Plan (pursuant to the Lincoln National
Corporation Customized Security Plan) as of the Benefits Effective Date.

(iii) Each Benefits Affected Employee who retires on or
after the Benefits Effective Date shall be eligible to participate in the
Lincoln National Corporation Group Health and Dental Plan for Retirees (Retiree
Employee Coverage) and Group Life Plans ("PURCHASER'S RETIREE WELFARE PLANS")
on the same terms and conditions as such benefits are provided to similarly
situated employees of Purchaser. The service of each such Benefits Affected
Employee with Seller
65

and its Affiliates prior to the Benefits Effective Date shall be credited for
purposes of eligibility and the level of benefits under Purchaser's Retiree
Welfare Plans to the same extent as if such service had been performed for
Purchaser or any of its Affiliates.

(d) Each Benefits Affected Employee who is eligible to participate
in Seller's Savings and Investment Plus Plan ("SELLER'S 401(K) PLAN")
immediately before the Benefits Effective Date shall be eligible to participate
in the Lincoln National Corporation Employees' Savings and Profit Sharing Plan
or the LNL Agents' Savings and Profit Sharing Plan, as applicable
("PURCHASER'S 401(K) PLANS"), as of the Benefits Effective Date. The service
of each such Benefits Affected Employee with Seller and its Affiliates prior to
the Benefits Effective Date shall be credited for purposes of eligibility and
vesting under Purchaser's 401(k) Plans to the same extent as if such service
had been performed for Purchaser or any of its Affiliates. Seller shall retain
all liabilities and obligations with respect to benefits accrued by Benefits
Affected Employees under the Seller's 401(k) Plan. On the Benefits Effective
Date, or as soon as practicable thereafter, Seller and Purchaser shall take
such actions as may be necessary if any, to permit each Benefits Affected
Employee who participates in Seller's 401(k) Plan to effect a direct rollover
(within the meaning of section 401(a)(31) of the Code) of his account balance
into the Purchaser's 401(k) Plan for which he is eligible. Seller and
Purchaser shall work together in order to facilitate and effect any such direct
rollover; provided, however, that nothing contained herein shall obligate
Purchaser's 401(k) Plans to accept a direct rollover in a form other than cash
or to accept a rollover contribution that could jeopardize the
tax-qualification of Purchaser's 401(k) Plans, and nothing contained herein
shall obligate Seller's 401(k) Plan to make a distribution that could
jeopardize the tax-qualification of Seller's 401(k) Plan.

(e) Each Benefits Affected Employee who is an agent and who is
eligible to participate in the Connecticut General Life Field Retirement Plan
(as amended and restated effective January 1, 1996) ("SELLER'S MONEY PURCHASE
PLAN") immediately before the Benefits Effective Date shall be eligible to
participate in the Lincoln National Corporation Agents' Money Purchase Plan
("PURCHASER'S MONEY PURCHASE PLAN") in accordance with the applicable
provisions of such plan as amended from time to time. The service of each such
Benefits Affected Employee with Seller and its Affiliates prior to the Benefits
Effective Date shall be credited for purposes of eligibility and vesting under
Purchaser's Money Purchase Plan to the same extent as if such service had been
performed for Purchaser or any of its Affiliates. Seller shall retain all
liabilities and obligations with respect to benefits accrued by Benefits
Affected Employees under the Seller's Money Purchase Plan. On the Benefits
Effective Date, or as soon as practicable thereafter, Seller and Purchaser
shall take such actions as may be necessary if any, to permit each Benefits
Affected Employee who participates in Seller's Money Purchase Plan to effect a
direct rollover (within the meaning of section 401(a)(31) of the Code) of his
account balance into the Purchaser's Money Purchase Plan. Seller and Purchaser
shall work together in order to facilitate and effect any such direct rollover;
provided, however, that nothing contained herein shall obligate Purchaser's
Money Purchase Plan to accept a direct rollover in a form other than cash or to
accept a rollover contribution that could jeopardize the tax-qualification of
Purchaser's Money Purchase Plan, and nothing contained herein shall obligate
Seller's Money Purchase Plan to make a distribution that would jeopardize the
tax-qualification of Seller's Money Purchase Plan.
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(f) Each Benefits Affected Employee other than an agent shall be
eligible to participate in the Lincoln National Corporation Employees'
Retirement Plan ("PURCHASER'S DEFINED BENEFIT PLAN") in accordance with the
applicable provisions of such plan as amended from time to time. Each such
Benefits Affected Employee shall be credited for all purposes under Purchaser's
Defined Benefit Plan with the service of such Benefits Affected Employee with
Seller and its Affiliates up to the Benefits Effective Date to the same extent
as if such service had been performed for Purchaser or any of its Affiliates.
Seller shall retain all liabilities and obligations with respect to benefits
accrued by Benefits Affected Employees under the CIGNA Pension Plan ("SELLER'S
DEFINED BENEFIT PLAN").

As soon as practicable after the Benefits Effective Date, Seller shall
provide to Purchaser the Benefits Information Schedule which shall set forth,
with respect to each Benefits Affected Employee who becomes a participant in
Purchaser's Defined Benefit Plan on the Benefits Effective Date, the employee's
name; date of birth; date of hire; vesting service as of the Benefits Effective
Date; credited service as of the Benefits Effective Date; sex; compensation for
calendar years 1987 through 1996; estimated compensation for 1997; number of
hours worked by the Benefits Affected Employee for Seller during 1997; and
shall specify the amount of each such Benefits Affected Employee's normal
retirement benefit (age 65 accrued benefit) under Seller's Defined Benefit Plan
commencing at age 65 and payable in the form of a single life annuity, and such
Benefits Affected Employee's credited service under Seller's plans, all
determined as of the Benefits Effective Date, as well as the early retirement
reduction factors applicable under Seller's Defined Benefit Plan at each
possible combination of age and service.

Purchaser shall be permitted to reduce (but not below zero) the
aggregate of the accrued benefits under Purchaser's Defined Benefit Plan of
each Benefits Affected Employee who commences participation thereunder by the
amount of such Benefits Affected Employee's benefits payable under the Seller's
Defined Benefit Plan.

No later than the date that is 24 months after the Closing Date, and
for purposes only of calculating pension benefits under Purchaser's Defined
Benefit Plan, Seller shall provide to Purchaser a schedule containing the
actual data in place of the estimated data set forth on the Benefits
Information Schedule.

(g) Purchaser shall assume all obligations and liabilities for
each Benefits Affected Employee under the Deferred Compensation Plan of CIGNA
Corporation (the "SELLER'S DEFERRED COMPENSATION PLAN"), which amounts shall be
credited to each such Benefits Affected Employee under the Lincoln National
Corporation Executive Deferred Compensation Plan for Employees or the LNL
Deferred Compensation Plan for Agents, as applicable. Purchaser may, prior to
the Closing Date, elect whether to assume Seller's Top Earner's Plan, including
all obligations and liabilities under Seller's Top Earner's Plan for each
Benefits Affected Employee, and any assets of Seller's Top Earner's Plan or
that are held by Seller or any of its Affiliates in connection with Seller's
Top Earner's Plan.

(h) Unvested options of CIGNA's common stock held by Benefits
Affected Employees, as identified on Schedule 3.19(D) for such individuals,
shall vest on the Closing Date, and such individuals shall have a reasonable
period of time, but in no event less than 90 days, after Closing
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Date to exercise such options. Furthermore, at Purchaser's election, which
shall be made no later than 30 days prior to the Closing Date, either:

(i) Seller shall, as of the later of the Closing Date or
December 31, 1997, make a cash payment to each Benefits Affected Employee who
holds any restricted stock of CIGNA, as identified on Schedule 3.19(D) for such
individuals, in an amount equal to the then-fair market value of such
restricted stock; in which case, the restricted stock of CIGNA held by each
such Benefits Affected Employee shall be deemed to be forfeited on the date of
payment; or

(ii) LNC shall, on the Benefits Effective Date, grant
restricted common stock of LNC to each Benefits Affected Employee who as of the
later of the Closing Date or December 31, 1997 held any restricted stock of
CIGNA, as identified on Schedule 3.19(D) for such individuals. The value of
the restricted stock grant from LNC to each such individual shall equal, as of
the date of grant, the then-fair market value of the restricted stock of CIGNA
the individual on the later of the Closing Date or December 31, 1997, and the
stock granted to each individual by LNC shall be subject to the same vesting
restrictions as is the restricted stock of CIGNA that the individual holds on
the later of the Closing Date or December 31, 1997 and shall otherwise be
subject to the applicable terms and conditions of the LNC 1997 Incentive
Compensation Plan. The restricted stock of CIGNA held by each such Benefits
Affected Employee shall be forfeited on the individual's last day of employment
with Seller or any of its Affiliates on or prior to the Benefits Effective
Date. In consideration therefor, as of each date that vesting restrictions on
LNC's stock granted to any individual pursuant to this Section 5.24(h)(ii)
lapse, Seller shall make a cash payment to Purchaser in an amount equal, as of
the later of the Closing Date or December 31, 1997, to the then-fair market
value of restricted stock of CIGNA that was forfeited by such individual
pursuant to this Section 5.24(h)(ii), or, in the event it is a lower amount,
the value of the LNC stock on the date the restrictions lapse.

(i) Seller shall retain all liabilities and obligations with
respect to any Benefits Affected Employee under any Benefit Plan, other than
Seller's Deferred Compensation Plan and, if Purchaser makes the election under
Section 5.24(g), Seller's Top Earner's Plan.

(j) Purchaser shall provide vacation and sick pay benefits to all
Benefits Affected Employees on the same terms and conditions as such benefits
are provided to similarly situated employees or agents of Purchaser; provided
that each such Benefits Affected Employee shall be credited with the service of
such Benefits Affected Employee with Seller and its Affiliates up to the
Benefits Effective Date to the same extent as if such service had been
performed for Purchaser for purposes of determining the number of vacation
and/or sick days such Benefits Affected Employee shall be entitled to
prospectively. No later than the day before the Benefits Effective Date,
Seller shall pay to each Benefits Affected Employee the value of his accrued
vacation and personal days.

(k) On and after the Closing Date, each of Seller and Purchaser
shall timely amend their respective employee benefit plans, programs, and
arrangements, and shall undertake all actions necessary or desirable to
implement such amendments, to the extent that such amendments and other actions
are reasonably necessary to carry out any of the terms and provisions of this
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Section 5.24.

(l) Any Benefits Affected Employee who, on the day before the
Benefits Effective Date, is on a leave of absence and is eligible for benefits
under CIGNA's Short-Term or Long-Term Disability Benefits Plans shall, if such
individual remains disabled on the Benefits Effective Date, remain employed by
Seller on a leave of absence. If, within six months after the Benefits
Effective Date, such individual ceases to be disabled, Purchaser shall make a
good faith effort to place such individual in a position with Purchaser or any
of its Affiliates that constitutes Suitable Employment.

SECTION 5.25. ALLOCATION OF PURCHASE PRICE AND ASSUMED LIABILITIES.
(a) CIGNA, Parent, Seller, CLIC and Purchaser agree to allocate the Purchase
Price, the liabilities assumed by Purchaser hereunder and under the Ancillary
Agreements, and all other capitalizable costs incurred in connection with the
transactions described herein (collectively, the "ALLOCABLE AMOUNT") among the
Transferred Assets and the CIGNA Non-Compete in accordance with this Section
5.25 for all purposes, including Tax and financial accounting purposes.

(b) An amount equal to the Ceding Commissions shall be
allocated to the value of the insurance-in-force with respect to the Insurance
Contracts reinsured under the Indemnity Reinsurance Agreements.

(c) The remainder of the Allocable Amount shall be
allocated among the Transferred Assets (other than such insurance-in-force) and
the CIGNA Non-Compete in proportion to the fair market value of such assets,
using the residual method of accounting. For purposes of the Code, the amount
of the liabilities assumed by Purchaser that are included in the Allocable
Amount for this purpose shall be equal to Seller's tax basis in such
liabilities.

(d) For purposes of section 1060 of the Code, Seller and
Purchaser shall (i) make the allocation described in Section 5.25(c) hereof in
the manner described in Income Tax Regulations Section 1.1060-1T, taking into
account the allocation described in Section 5.25(b) hereof, and (ii) file asset
acquisition statements on Form 8594 (or any replacement or successor form)
reflecting such allocation at the time, in the manner, and under the procedures
described in such provision of the Income Tax Regulations.

(e) As soon as practicable after the Closing Date,
Purchaser shall prepare a schedule reflecting the allocation of the remainder
of the Allocable Amount under Section 5.25(c) hereof in the manner described in
Income Tax Regulations Section 1.1060-1T and shall submit it to Seller. If,
within 30 days of Seller's receipt of such schedule, Seller shall not have
objected in writing to the determination of the Allocable Amount or to such
allocation, the allocation shall be used by Seller and Purchaser for purposes
of Form 8594 (and any replacement or successor form) and all other federal
income Tax purposes. If, within 15 days of any objection in writing to the
determination of the Allocable Amount or to such allocation, Seller and
Purchaser shall not have agreed in writing to the allocation under Section
5.25(c) hereof, any disputed aspects of the determination of the Allocable
Amount or to such allocation shall be resolved by the Third Party Accountant
within 30 days of the submission of the dispute to the Third Party Accountant
by Seller or Purchaser. The decision of the Third Party Accountant shall be
final, and the costs,
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expenses, and fees of the Third Party Accountant shall be borne equally by
Seller and Purchaser.

(f) Seller and Purchaser shall not take any position
before any Taxing Authority or otherwise (including in any Tax return)
inconsistent with this Section 5.25 unless and to the extent required to do so
pursuant to a determination (as defined in Section 1313(a) of the Code or any
similar provision of state, local or foreign law).

SECTION 5.26. OTHER AGREEMENTS. Seller and Purchaser shall,
following the date hereof, work in good faith and in accordance with the
financial terms set forth herein to prepare the License Agreement in accordance
with the terms and conditions specified in the definition of the License
Agreement.

SECTION 5.27. BANK ACCOUNTS AND LOCKBOXES. Pursuant to the
General Assignment and Assumption Agreements, Seller shall transfer to
Purchaser or LLANY, as appropriate, the bank accounts and lock-boxes of Seller
used solely in the operation of the Business. Seller shall execute such
additional agreements and instruments as may be required by a particular bank
to effectuate the transfer to Purchaser or LLANY, as appropriate, of such bank
accounts and lock-boxes.

SECTION 5.28. COMPUTER SOFTWARE. With respect to Licensed
Principally Used Software, Seller and Purchaser shall work together
cooperatively to determine the most economical method of obtaining from the
licensors of the Licensed Principally Used Software the right for Seller to
process data for Purchaser or LLANY, as applicable, related to the Business or
for Purchaser to operate the Licensed Principally Used Software. Seller shall
be responsible for all costs and expenses associated with obtaining such right
from the licensors of the Licensed Principally Used Software, or with obtaining
substitute software or reimbursing Purchaser for the cost of obtaining
substitute software, (i) for a period equal, as to any item of Licensed
Principally Owned Software, to the lesser of (x) three years after the Closing
and (y) the remaining life of the applicable license and (ii) insofar as such
right relates to a volume of usage consistent with that of the Business as
conducted by Seller prior to the Closing. Purchaser shall be entitled to
participate fully in any negotiation with any such licensors, but shall bear
its own costs in connection with such participation. In the event that the
remaining term of a license agreement relating to an item of Licensed
Principally Used Software expires during the three year period referred to
above, then (i) if such agreement is not renewable by Seller, then Seller shall
have no further obligation under this Section 5.28 with respect to such item of
Licensed Principally Used Software; or (ii) if such agreement is renewable by
Seller, then Seller shall so notify Purchaser and Purchaser shall be entitled
to require Seller to renew such agreement for a period ending not later than
the end of the three-year period commencing on the Closing Date; provided, that
Purchaser shall be required to make all payments with respect to the renewal
period. With respect to the Licensed Principally Used Software, Purchaser shall
assume responsibility for complying with the terms and conditions of the
licenses governing such software, including responsibility for the payment of
the costs and expenses, or its pro rata share of the costs and expenses, as
applicable, of all ongoing contractual responsibilities, including without
limitation licensing, upgrade and maintenance fees. With respect to the
Licensed Principally Used Software, Purchaser and LLANY agree to (i) keep
confidential the terms of any license agreements relating to such software, to
the extent the terms
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of such license agreements require confidentiality and Seller communicates such
requirements to Purchaser in writing and (ii) abide by the terms of any license
agreements relating to such software, to the extent such terms have been
communicated to Purchaser in writing.

SECTION 5.29. SECTION 338(H)(10) ELECTION. CIGNA and
Purchaser shall jointly make timely and irrevocable elections under Section
338(h)(10) of the Code and, if permissible, similar elections under any
applicable state, local or foreign income tax laws for each of the Parent
Subsidiaries (the "ELECTIONS") on the terms and in the manner set forth in the
Stock Purchase Agreement.

SECTION 5.30. CONFIDENTIALITY. Each party hereto (with
Purchaser and LLANY considered to be one party for purposes of this Section
5.30) will hold, and will use its best efforts to cause its Affiliates, and
their respective representatives to hold, in strict confidence from any Person
(other than any such Affiliate or representative), unless (i) compelled to
disclose by judicial or administrative process (including without limitation in
connection with obtaining the necessary approvals of this Agreement and the
transactions contemplated hereby of governmental or regulatory authorities) or
by other requirements of law or (ii) disclosed in an action or proceeding
brought by a party hereto in pursuit of its rights or in the exercise of its
remedies hereunder, all documents and information concerning the other party or
any of its Affiliates furnished to it by the other party or such other party's
representatives in connection with this Agreement or the transactions
contemplated hereby, except to the extent that such documents or information
can be shown to have been (a) previously known by the party receiving such
documents or information, (b) in the public domain (either prior to or after
the furnishing of such documents or information hereunder) through no fault of
such receiving party or (c) later acquired by the receiving party from another
source if the receiving party is not aware that such source is under an
obligation to another party hereto to keep such documents and information
confidential; provided that following the Closing the foregoing restrictions
will not apply to Purchaser's use of documents and information concerning the
Business furnished by Seller hereunder. In the event the transactions
contemplated hereby are not consummated, upon the request of the other party,
each party hereto will, and will cause its Affiliates and their respective
representatives to, promptly redeliver or cause to be redelivered all copies of
confidential documents and information furnished by the other party in
connection with this Agreement or the transactions contemplated hereby and
destroy or cause to be destroyed all notes, memoranda, summaries, analyses,
compilations and other writings related thereto or based thereon prepared by
the party furnished such documents and information or its representatives.

SECTION 5.31. CERTAIN SELLER APPROVAL RIGHTS. Unless and
until Purchaser assumes the obligations referred to in Section 10.04(a), (i)
Seller shall have the right to review in advance any proposed change in any
non-guaranteed element of any policy or contract reinsured under the Indemnity
Reinsurance Agreements other than those subject to the Settlement Agreements
and any material changes in fundamental portfolio investment policy with
respect to the assets funding such policies and contracts, and Purchaser or
LLANY, as the case may be, will not make any such change without the prior
approval of Seller (which approval shall not unreasonably be withheld), and
(ii) Purchaser and LLANY shall provide to Seller following the end of each
calendar year a certificate of an executive officer of Purchaser or LLANY, as
the case may be, regarding
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compliance with the terms of such policies and contracts. Seller shall
cooperate in good faith with Purchaser to develop, prior to Closing, guidelines
within which any changes described in clause (i) of the preceding sentence
would not require Seller's review or approval.

SECTION 5.32. PROVISION OF CERTAIN SERVICES. For a period of three
years after closing Seller agrees to provide, cause a third party to provide,
or reimburse Purchaser or LLANY for the reasonable cost of obtaining, in each
case at a cost to Purchaser not in excess of the amount currently being paid by
Seller or charged back to the Business by Seller (subject to escalation on the
basis provided for in the contract pursuant to which Seller obtains such
service or the use of such asset from a third party) services or assets
substantially comparable to any service or asset material to the operation of
the Business that Seller is unable to deliver to Purchaser or LLANY (other than
any such service or asset identified in Schedule 1.01(H) hereto or described in
Schedule 2.01 to the Transition Services Agreement and other than Insurance
Contracts, reinsurance treaties and agreements and Licensed Principally Used
Software). In the event that the remaining term of a contract pursuant to
which Seller obtains a particular service or asset expires during the
three-year period covered by this Section 5.32, then: (i) if such contract is
not renewable by Seller, then Seller shall have no further obligation under
this Section 5.32 with respect to such service or asset; or (ii) if such
contract is renewable by Seller, then Seller shall so notify Purchaser or
LLANY, as the case may be, and Purchaser or LLANY shall be entitled to require
Seller to renew such contract for a period ending not later than the end of the
three-year term covered by this Section 5.32; provided, that Purchaser or
LLANY, as the case may be, shall be required to make all payments with respect
to the renewal period.

SECTION 5.33. CERTAIN PRODUCT TAX MATTERS. (a) Seller shall, after the
Closing, at Purchaser's written request given prior to the last day of the 20th
month following the month in which the Closing Date falls, use commercially
reasonable best efforts to obtain such relief as Purchaser shall reasonably
require (including obtaining a waiver from, or entering into a settlement or
closing agreement with, the IRS or any affected policyholder) with respect to
any non-compliance by Seller prior to the Closing with any product tax
requirement or limitation contained in Sections 72, 101(f), 817(h), 7702 and
7702A of the Code regarding any Insurance Contract. Seller shall permit
Purchaser to participate in and, to the extent Seller is not materially
adversely affected by such actions, control any discussions, negotiations, or
settlements with the IRS and any affected policyholders pursuant to this
Section 5.33.

(b) Any such request by Purchaser shall be treated as a Claims Notice
under Article X hereof. Prior to the time that the $30 million deductible
provided for in Section 10.01(c)(i) hereof or, where applicable, the $10
million deductible provided for in Section 10.01(c)(ii) hereof, has been
exhausted, Purchaser shall bear the costs and expenses of such relief and
shall, promptly upon Seller's request therefor, reimburse Seller for any costs
or expenses incurred by Seller (other than Seller's internal costs or expenses)
in complying with this Section 5.33. To the extent that the relevant
deductible provided for in Section 10.01(c) hereof has been exhausted, (i)
Purchaser shall not reimburse Seller for its costs and expenses incurred in
complying with this Section 5.33 and (ii) any costs or expenses incurred by
Purchaser hereunder, including Purchaser's costs and expenses (other than
Purchaser's internal costs and expenses) and
72

any payments of Taxes or payments to affected policyholders, shall be treated
as payments for which Purchaser is entitled to indemnification under this
Agreement. Any costs or expenses incurred by Purchaser hereunder, including
reimbursement payments to Seller, Purchaser's costs and expenses (other than
Purchaser's internal costs and expenses), and other payments by Purchaser,
shall be applied against the relevant deductible in Section 10.01(c) hereof.

SECTION 5.34. TRANSITION TO PURCHASER POLICY FORMS. (a) Commencing on
the Closing Date and for a period of one year thereafter, as requested in
writing by Purchaser or LLANY, as the case may be, Seller shall issue
contracts that will constitute Post-Closing Contracts (as defined in the
Indemnity Reinsurance Agreements) of the type that would be included in the
Business if in effect on the Closing Date; provided, that Seller shall not be
required to issue contracts pursuant to this Section 5.34 in any state if (i)
Purchaser has completed the modification of systems used principally in the
conduct of the Business to permit such systems to input, process and output
information in a multi-company environment and (ii) Purchaser or LLANY, as the
case may be, has obtained insurance department approval of its own forms
corresponding to the Insurance Contracts in such state. Purchaser shall use
its commercially reasonable best efforts to complete the systems modifications
and to obtain the policy forms approvals referred to in the previous sentence
as soon as is reasonably practicable after the date hereof.

(b) Commencing on the first anniversary of the Closing Date and for a
period of one year thereafter, as requested by Seller or LLANY, as the case may
be, and subject to Section 5.34 (c), Seller shall continue to issue contracts
that will constitute Post-Closing Contracts (as defined in the Indemnity
Reinsurance Agreements) of the type that would be included in the Business if
in effect on the Closing Date in those states in which Purchaser or LLANY, as
the case may be, has not obtained the policy forms approval referred to in
Section 5.34(a) notwithstanding its commercially reasonable best efforts to do
so.

(c) In the event that the aggregate amount of direct written premium
by Seller at the request of Purchaser and LLANY pursuant to Section 5.34(b)
exceeds an amount equal to 25% of the direct written premium with respect to
the Business as conducted by Purchaser and LLANY during the one-year period
described in Section 5.34(a) (the "25% PREMIUM THRESHOLD"), then:

(i) Seller shall provide a written notice to Purchaser noting
that the 25% Premium Threshold has been reached; and

(ii) Purchaser or LLANY, as appropriate, shall thereafter pay
to Seller on an annual basis an amount equal to the cost of
capital to Seller associated with retaining risk-based capital to
support the amount by which direct written premium under contracts
issued by Seller pursuant to Section 5.34(b) exceed the 25% Premium
Threshold.

SECTION 5.35. SYSTEMS. During the period prior to the Closing, Seller
shall work in good faith to assist Purchaser in development activities designed
to ensure that all systems used principally in the conduct of the Business are
capable of inputting, processing and outputting
73

information in a multi-company environment as soon as reasonably practicable
following the Closing. Seller acknowledges the criticality of developing such
capabilities in order to permit Purchaser and LLANY to commence issuing
policies and contracts substantially identical to the Insurance Contracts, and
thus maintaining the value of the Business, following the Closing. Purchaser
acknowledges that the development of such capabilities will require resources
that may exceed those reasonably available to Seller during the pre-Closing
period. In view of the foregoing acknowledgments: (i) Seller agrees to make
available to Purchaser internal facilities, personnel and other resources for
the development of multi-company systems capabilities to the extent that doing
so will not significantly detract from the accomplishment of other systems
priorities, taking into account Seller's obligations under Sections 5.01, 5.03,
and 5.07 of this Agreement; and (ii) Purchaser agrees to bear the cost of
retaining outside consultants and procuring other resources necessary to
accomplish the multi-company systems development work in a timely manner.

SECTION 5.36. UPDATED FINANCIAL INFORMATION. As soon as is reasonably
practicable following the end of any fiscal quarter or fiscal year of Seller,
Seller shall deliver to Purchaser pro forma financial information with respect
to such quarter or year and with respect to the period from the end of the
previous fiscal year to the end of such quarter or year, as applicable, in each
case using the same methodology as was used in preparing the Pro Forma
Financial Statements, it being understood that the quarterly financial
information to be provided shall consist solely of a pro forma income
statement.

SECTION 5.37. PERFORMANCE OF COVENANTS. CIGNA shall cause Parent,
Seller and CLIC to comply with their respective covenants and agreements under
this Agreement. LNC shall cause Purchaser and LLANY to comply with their
respective covenants and agreements under this Agreement.

SECTION 5.38. SEPARATE ACCOUNT REVENUES. Commencing with the month
during which the Closing occurs, Seller and CLIC shall pay to Purchaser on a
monthly basis an amount equal to 100% of the revenues from contract fees,
separate account fees or charges, and any other fees, charges or expenses
(including those derived from expense factors in the calculation of unit
value), with respect to interests in the Seller Separate Accounts.

ARTICLE VI

CONDITIONS PRECEDENT TO THE OBLIGATION
OF PURCHASER AND LLANY TO CLOSE

The obligations of Purchaser and LLANY under this Agreement are subject
to the satisfaction on or prior to the Closing of the following conditions, any
one or more of which may be waived by it to the extent permitted by law:

SECTION 6.01. REPRESENTATIONS AND WARRANTIES. (a) The
representations and warranties of Parent and Seller contained in Section 3.02
and in Section 3.04(a), (c), (d) and (e) of this Agreement shall be true and
correct in all respects as of the Closing Date.
74

SECTION 6.02. OTHER AGREEMENTS. The Ancillary Agreements and each of
the other agreements and instruments contemplated hereby and thereby to which
Seller or Parent is a party shall have been duly executed and delivered by
Seller or Parent, as applicable, on the Closing Date and each of such
agreements, documents and instruments shall be in full force and effect with
respect to Seller or Parent on the Closing Date, as applicable.

SECTION 6.03. GOVERNMENTAL AND REGULATORY CONSENTS AND APPROVALS. (a)
All Permits and authorizations required by Seller, Purchaser or LLANY from
governmental and regulatory bodies listed on Exhibit F hereto shall have been
obtained and shall be in full force and effect and without conditions or
limitations which would have a material adverse effect on the Business as
operated by Purchaser after the Closing Date and are unacceptable to Purchaser
in the exercise of its reasonable business judgment, and Purchaser shall have
been furnished with appropriate evidence, reasonably satisfactory to it and its
counsel, of the granting of such Permits.

(b) The waiting period prescribed by the HSR Act shall have expired
or early termination thereof shall have been granted.

SECTION 6.04. POSSESSION OF ASSETS; INSTRUMENTS OF CONVEYANCE. On the
Closing Date, Seller shall have delivered to Purchaser or LLANY, as applicable,
possession of the Transferred Assets to be transferred on the Closing Date and
shall have transferred to Purchaser or LLANY, as applicable, all of the right,
title and interest of Seller in and to such assets as provided in this
Agreement and the Ancillary Agreements.

SECTION 6.05. INJUNCTION. There shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a
court of competent jurisdiction, directing that the transactions provided for
herein not be consummated as herein provided.

ARTICLE VII

CONDITIONS PRECEDENT TO THE OBLIGATION
OF SELLER TO CLOSE

The obligations of Seller under this Agreement are subject to the
satisfaction on or prior to the Closing of the following conditions, any one or
more of which may be waived by it to the extent permitted by law:

SECTION 7.01. REPRESENTATIONS AND WARRANTIES. (a) The representations
and warranties of Purchaser and LLANY contained in Section 4.02 and in Section
4.04(a), (c), (d) and (e) this Agreement shall be true and correct in all
respects on and as of the Closing Date.

SECTION 7.02. OTHER AGREEMENTS. The Ancillary Agreements and each of
the other agreements and instruments contemplated hereby and thereby to which
Purchaser or LLANY is a party shall have been duly executed and delivered by
Purchaser or LLANY, as applicable, on the
75

Closing Date and each of such agreements and instruments shall be in full force
and effect with respect to Purchaser or LLANY on the Closing Date, as
applicable.

SECTION 7.03. GOVERNMENTAL AND REGULATORY CONSENTS AND APPROVALS. (a)
All Permits required by Seller, Purchaser or LLANY from governmental and
regulatory bodies listed on Exhibit F hereto shall have been obtained and shall
be in full force and effect and without conditions or limitations which would
have a material adverse effect on the business of Seller and are unacceptable
to Seller in the exercise of its reasonable business judgment, and Seller shall
have been furnished with appropriate evidence, reasonably satisfactory to it
and its counsel, of the granting of such Permits.

(b) The waiting period prescribed by the HSR Act shall have expired
or early termination thereof shall have been granted.

SECTION 7.04. PURCHASE PRICE. Purchaser and LLANY shall have paid to
Parent and Seller an amount in cash equal to the Purchase Price as provided in
Section 2.01 of this Agreement.

SECTION 7.05. INJUNCTION. There shall be no effective injunction,
writ, preliminary restraining order or any order of any nature issued by a
court of competent jurisdiction, directing that the transactions provided for
herein not be consummated as herein provided.

ARTICLE VIII

FURTHER AGREEMENTS

SECTION 8.01. CIGNA'S NON-COMPETE. (a) For a period of thirty-six
calendar months following the Closing, neither CIGNA nor any of its
Subsidiaries shall issue or sell individual life or disability income or
annuity policies that are to be distributed through career agents in the United
States.

(b) For a period of twelve calendar months following the Closing,
issue individual life or disability income or annuity policies that are to be
distributed through any other means in the United States other than any
existing such arrangements of Seller that do not constitute part of the
Business, such as (x) corporate owned life insurance, (y) individual policies
issued in connection with the conversion by certificate holders of their rights
under group policies and (z) immediate and deferred annuities sold through
CIGNA Financial Services to participants of Seller-administered defined benefit
and defined contribution plans.

(c) CIGNA, Purchaser and LLANY acknowledge that any damage caused to
Purchaser and LLANY by reason of the breach by CIGNA, any of its Subsidiaries
or any of their respective successors in interest of this Section 8.01 could
not be adequately compensated for in monetary damages alone; therefore, each
party agrees that, in addition to any other remedies, at law or otherwise,
Purchaser and LLANY shall be entitled to specific performance of this Section
8.01 or an injunction to be issued by a court of competent jurisdiction
restraining and enjoining
76

any violation of this Section 8.01.

(d) It is the intent and desire of the parties to this Agreement
that the provisions of this Section 8.01 shall be enforced to the fullest
extent permissible under applicable law. Accordingly, if any particular
portion of this Section 8.01 shall be adjudicated to be invalid or
unenforceable, this Section 8.01 shall be amended to delete therefrom the
portion thus adjudicated to be invalid and unenforceable under such law.

ARTICLE IX

SURVIVAL OF REPRESENTATIONS AND WARRANTIES

SECTION 9.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the parties hereto contained in this
Agreement and the Ancillary Agreements shall survive the execution and delivery
hereof; provided, however, that, except as set forth in the following sentence,
the representations and warranties of the parties hereto herein and in the
Stock Purchase Agreement shall terminate and expire on the last day of the
twentieth calendar month following the month in which the Closing Date falls,
except for matters as to which a Claims Notice shall have been given pursuant
to Section 10.02 or 10.03 by a party hereto prior to the applicable expiration
date, which representations shall continue with respect to such matters until
such matters have been finally decided, settled or adjudicated. Notwithstanding
anything in this Agreement to the contrary, the provisions of Article V of the
Stock Purchase Agreement shall survive until 30 days after the expiration of
the full period of all statutes of limitations (giving effect to any waiver,
mitigation or extension thereof) applicable to the matters described herein.

ARTICLE X

INDEMNIFICATION

SECTION 10.01. OBLIGATION TO INDEMNIFY. (a) Subject to the
limitations set forth in this Article X, CIGNA and Seller agree to indemnify,
defend and hold harmless Purchaser and LLANY (and their respective directors,
officers, employees, Affiliates, successors and permitted assigns
(collectively, the "PURCHASER INDEMNITEES")) from and against all Losses (as
hereinafter defined), based upon: (i) any breach of or inaccuracy in the
representations and warranties contained in Article III hereof, (other than
Section 3.22(b)) Article III and Article V of the Stock Purchase Agreement, or
in any certificate delivered by Seller to Purchaser pursuant to this Agreement
on or after the date of execution of this Agreement that were breaches as of
the date of this Agreement or the Stock Purchase Agreement and do not result in
a Section 10.04 Purchaser Obligation; (ii) any breach, nonfulfillment or
default in the performance of any of the covenants and agreements of Seller
contained in this Agreement or in any Ancillary Agreement; (iii) any Section
10.04 Seller Obligations; or (iv) Retained Liabilities. Any breach of the
representations and warranties contained in Section 3.22(b) hereof shall be
governed by
77

Section 10.01(e) below.

As used in this Article X, "Loss" and/or "Losses" shall mean actions,
claims, losses, liabilities, damages, deficiencies, costs, expenses (including
attorneys' fees), interest, taxes and penalties.

(b) Subject to the limitations set forth in this Article X, LNC and
Purchaser agree to indemnify, defend and hold harmless Seller (and its
directors, officers, employees, Affiliates, successors and permitted assigns
(collectively, the "SELLER INDEMNITEES")) from and against all Losses, based
upon: (i) any breach of or inaccuracy in the representations and warranties of
Purchaser contained in Article IV hereof or Article IV of the Stock Purchase
Agreement or in any certificate delivered by Purchaser or LLANY to Seller
pursuant to this Agreement, on or after the date of execution of this
Agreement; (ii) any breach, nonfulfillment or default in the performance of any
of the covenants and agreements of Purchaser contained in this Agreement or in
the Ancillary Agreements; (iii) all Assumed Liabilities; (iv) any Section 10.04
Purchaser Obligations or (v) the violation by Purchaser or any of its
Affiliates, or any agent of Purchaser or any of its Affiliates, of Applicable
Law (including without limitation the statutes referred to in the third
paragraph of Section 5.24(b) hereof) in connection with (y) the failure of any
Band 1 Employee to become a Contract Employee or a Band 2 Employee, or (z) any
decision on the part of Purchaser or any of its Affiliates, or any agent of
Purchaser or any of its Affiliates, not to offer employment to any Band 1
Employee (or the discharge, layoff or termination of employment of any Band 1
Employee directly resulting from an action described in Clause (y) or (z)).

(c) The aggregate amount for which CIGNA and Seller shall be liable
under Section 10.01(a) shall be $700 million. The aggregate amount for which
LNC and Purchaser shall be liable under Section 10.01(b) shall be $700 million.
Except as set forth in the following sentence, CIGNA and Seller shall be
required to indemnify the Purchaser Indemnitees pursuant to Section 10.01(a)(i)
and (ii) only to the extent that the sum of Losses incurred by the Purchaser
Indemnitees in connection with such clauses exceeds $30 million in the
aggregate, and then only for the amount of such excess. Notwithstanding the
foregoing (i) no Loss resulting from a breach by Seller of any covenant or
agreement referred to in Section 10.01(a)(ii) resulting from the absence of a
good faith effort by Seller to comply with such covenant or agreement shall be
subject to or applied against the $30 million "deductible" provided for in the
preceding sentence; (ii) CIGNA and Seller shall be required to indemnify the
Purchaser Indemnitees for any breach of Section 3.26(g) to the extent the
Losses incurred by reason of such breach exceed $10 million in the aggregate,
and then only for the amount of such excess; (iii) Losses, if any, incurred by
reason of a breach of Section 3.26(g) shall be applied against the $30 million
"deductible" provided for in the preceding sentence except to the extent that
they exceed $10 million and are indemnified by CIGNA or Seller; and (iv) Losses
which constitute obligations of any of the Parent Subsidiaries for any Taxes
which are indemnifiable under Article V of the Stock Purchase Agreement shall
be subject to and applied against the $30 million "deductible" provided for in
the preceding sentence, except to the extent described in Section 5.06(e)(2) of
the Stock Purchase Agreement. LNC and Purchaser shall be required to indemnify
the Seller Indemnitees pursuant to Section 10.01(b)(i) and (ii) only to the
extent that the sum of Losses incurred by the Seller Indemnitees in connection
with such clauses exceeds $30 million in the aggregate, and then only for the
amount of such excess; provided, that no Loss resulting from a breach by
Purchaser or LLANY of any covenant
78

or agreement referred to in Section 10.01(b)(ii) resulting from the absence of
a good faith effort by Purchaser or LLANY, as the case may be, to comply with
such covenant or agreement shall be subject to or applied against the $30
million deductible provided for in this sentence. For the avoidance of doubt,
the $30 million deductible referred to in this Section 10.01(c) shall not apply
to any claim for indemnification under any provision of this Section 10.01
other than Sections 10.01(a)(i) and (ii) and 10.01 (b)(i) and (ii). For
purposes of this Section 10.01(c), a breach of an agreement in a covenant to
make a payment of money (including a payment in satisfaction of a judgment
against the obligor based upon the failure to pay under such covenant), except
where the obligation to make such payment, or the required amount of such
payment, is disputed in good faith by the obligor, shall be deemed to result
from the absence of a good faith effort to perform such covenant.

(d) Matters governed by Section 5.06 of the Stock Purchase Agreement
shall be subject to the provisions of this Article X to the extent, but only to
the extent, specifically so provided therein.

(e) In the event that the representations set forth in Section 3.22(b)
were not accurate as of the date hereof as to any real estate asset described
in such Section, and if Purchaser or LLANY incurs a Loss as a result of such
inaccuracy within the period specified in Section 9.01 of this Agreement,
Purchaser or LLANY, as the case may be, may provide a Claims Notice to Seller
identifying such inaccuracy and such Loss. Not later than thirty (30) days
after the date of such Claims Notice, Seller shall either (i) purchase such
asset from Purchaser or LLANY, as the case may be, for a cash amount equal to
the Statutory Carrying Value of such asset as of the Closing Date minus the
amount of any principal payments received by Purchaser or LLANY with respect to
such asset since the Closing Date, or (ii) deliver to Purchaser or LLANY, as
the case may be, a combination of cash and other assets having risk and return
characteristics substantially identical to those of the asset in question and
having an aggregate Statutory Carrying Value as of the Closing Date minus the
amount of any principal payments received by Purchaser or LLANY with respect to
such asset since the Closing Date.

SECTION 10.02. CLAIMS NOTICE. In the event that either Purchaser,
LLANY or Seller wishes to assert a claim for indemnification hereunder, such
party seeking indemnification (the "INDEMNIFIED PARTY") shall deliver written
notice (a "CLAIMS NOTICE") to the other party (the "INDEMNIFYING PARTY") no
later than ten (10) Business Days after such claim becomes known to the
Indemnified Party, specifying the facts constituting the basis for, and the
amount (if known) of the claim asserted. Failure to deliver a Claims Notice
with respect to a claim (other than a claim based on an Asserted Liability) in
a timely manner as specified in the preceding sentence shall not be deemed a
waiver of the Indemnified Party's right to indemnification hereunder for Losses
in connection with such claim, but the amount of reimbursement to which the
Indemnified Party is entitled shall be reduced by the amount, if any, by which
the Indemnified Party's Losses would have been less had such Claims Notice been
timely delivered; provided, that the failure to deliver a Claims Notice with
respect to an Asserted Liability within twenty (20) Business Days of the
Indemnified Party's receipt of written notice of such Asserted Liability shall
be deemed to be a waiver of the Indemnified Party's right to indemnification
hereunder for Losses in connection with such Asserted Liability.
79

SECTION 10.03. RIGHT TO CONTEST CLAIMS OF THIRD PARTIES. (a) If an
Indemnified Party asserts, or may in the future seek to assert, a claim for
indemnification hereunder because of a claim or demand made, or an action,
proceeding or investigation instituted, by any Person not a party to this
Agreement (a "THIRD PARTY CLAIMANT") that may result in a Loss with respect to
which the Indemnified Party would be entitled to indemnification pursuant to
this Article X without regard to the dollar limitations set forth in Section
10.01 (an "ASSERTED LIABILITY"), the Indemnified Party shall deliver to the
Indemnifying Party a Claims Notice with respect thereto, which Claims Notice
shall, in accordance with the provisions of Section 10.02 hereof, be delivered
as promptly as practicable and in any event no later than ten (10) Business
Days after such Asserted Liability is actually known to the Indemnified Party.
Failure to deliver a Claims Notice with respect to a claim in a timely manner
as specified in the preceding sentence shall not be deemed a waiver of the
Indemnified Party's right to indemnification hereunder for Losses in connection
with such claim, but the amount of reimbursement to which the Indemnified Party
is entitled shall be reduced by the amount, if any, by which the Indemnified
Party's Losses would have been less had such Claims Notice been timely
delivered; provided, that the failure to deliver a Claims Notice with respect
to an Asserted Liability within twenty (20) Business Days of the Indemnified
Party's receipt of written notice of such Asserted Liability shall be deemed to
be a waiver of the Indemnified Party's right to indemnification hereunder for
Losses in connection with such Asserted Liability.

(b)(i) The Indemnifying Party shall have the right, upon written
notice to the Indemnified Party, to investigate, contest, defend or settle any
Asserted Liability that may result in a Loss with respect to which the
Indemnified Party is entitled to indemnification pursuant to this Article X;
provided, that the Indemnified Party may, at its option and at its own expense,
participate in the investigation, contesting, defense or settlement of any such
Asserted Liability through representatives and counsel of its own choosing;
and, provided further, that the Indemnifying Party shall not settle any
Asserted Liability unless (i) such settlement is on exclusively monetary terms
or (ii) the Indemnified Party shall have consented to the terms of such
settlement, which consent shall not unreasonably be withheld. If requested by
the Indemnifying Party, the Indemnified Party will, at the sole cost and
expense of the Indemnifying Party, cooperate with the Indemnifying Party and
its counsel in contesting any Asserted Liability or, if appropriate and related
to the Asserted Liability in question, in making any counterclaim against the
Third Party Claimant, or any cross-complaint against any Person (other than the
Indemnified Party or its Affiliates). The failure of the Indemnifying Party to
provide the above-mentioned written notice to the Indemnified Party within ten
(10) Business Days after receipt of a Claims Notice with respect to an Asserted
Liability shall be deemed an election not to defend the same. Unless and until
the Indemnifying Party elects to defend the Asserted Liability, the Indemnified
Party shall have the right, at its option and at the Indemnifying Party's
expense to the extent that the applicable $30 million deductible under Section
10.01(c) hereof has been exhausted, to do so in such manner as it deems
appropriate; provided, however, that the Indemnified Party shall not settle or
compromise any Asserted Liability for which it seeks indemnification hereunder
without the prior written consent of the Indemnifying Party (which shall not be
unreasonably withheld) during the ten (10) Business Day period referred to
above after the receipt of a Claims Notice, or thereafter in a manner that
would cause any applicable $30 million deductible under Section
80

10.01(c) hereof to be exhausted.

(ii) Notwithstanding Section 10.03(b)(i), the Indemnified Party shall
have the right to investigate, contest, defend or settle any Asserted Liability
falling under Section 10.01(a)(i) or (b)(i), as the case may be, other than any
such Asserted Liability that the Indemnified Party asserts or may thereafter
assert is not subject to the applicable $30 million deductible under Section
10.01(c) because of the proviso to the first or the second sentence of Section
10.01(c), as the case may be, so long as the Losses that could reasonably be
expected to result from such Asserted Liability, together with all Losses under
any other Asserted Liability falling under such Sections over which the
Indemnified Party has retained control pursuant to this Section 10.03(b)(ii),
would not exceed the $30 million "deductible" provided for in Section
10.01(a)(i) and (b)(i). In the event that an Indemnified Party retains control
over any Asserted Liability pursuant to this Section 10.03(b)(ii):

(A) The Indemnifying Party shall have the right to participate
in (but not control) the defense of such Asserted Liability;

(B) The Indemnified Party shall not settle or compromise such
Asserted Liability without the prior written consent of the
Indemnifying Party (which shall not be unreasonably withheld); and

(C) The Indemnified Party shall not be entitled to any
indemnification for any amounts by which the actual Losses resulting
from such Asserted Claims exceeds, in the aggregate, the $30 million
deductible provided for in Section 10.01(a)(i) and (b)(i).

(c) The Indemnifying Party shall be entitled to participate in
(but not to control) the defense of any Asserted Liability which it has
elected, or is deemed to have elected, not to defend, or as to which it does
not have the right to defend under Section 10.03(b), with its own counsel and
at its own expense.

(d) Except as provided in the first sentence of Section 10.03(b),
the Indemnifying Party shall bear all costs of defending any Asserted Liability
and shall indemnify and hold the Indemnified Party harmless against and from
all costs, fees and expenses incurred in connection with defending such
Asserted Liability.

(e) Purchaser, LLANY and Seller shall make mutually available to
each other (or to CIGNA, as applicable) all relevant information in their
possession relating to any Asserted Liability (except to the extent that such
action would result in a loss of attorney-client privilege) and shall cooperate
with each other in the defense thereof.

SECTION 10.04. CERTAIN LIABILITIES. (a) Except as specifically
provided in this Section 10.04, Seller shall retain any and all liability for
compensatory, consequential, exemplary, punitive or similar damages which
results from (i) any claim brought by any owner or beneficiary of any of the
Insurance Contracts or (ii) any action brought by any insurance regulatory body
for
81

(x) any alleged or actual act, error or omission by Seller or any of its
Affiliates prior to the Closing Date, whether intentional or otherwise, or (y)
any reckless conduct or bad faith by Seller or any of its Affiliates, in
connection with the handling of any claim under any of the Insurance Contracts
or in connection with the issuance, delivery, cancellation or administration of
any of the Insurance Contracts (other than obligations to pay benefits or other
amounts or to take any other actions specifically provided for under such
Insurance Contracts as originally issued and subsequently amended or
supplemented other than pursuant to the Settlement Agreements). Purchaser
shall cooperate with Seller in Seller's efforts to address and resolve
liabilities for all obligations referred to in Section 10.04(a), including
resolutions which required commission reversal and/or producer discipline.

(b) Seller shall retain liability for all obligations referred to
in Section 10.04(a) indefinitely with respect to Insurance Contracts issued on
any policy or contract form unless and until such time (if ever) as Purchaser
notifies Seller that it elects to assume such liability with respect to such
Insurance Contracts. Any such notice shall be in writing and shall be effective
as of the date specified therein.

(c) Seller and certain of its Affiliates have entered into the
settlement agreements identified on Schedule 10.04 hereto relating to class
actions involving certain of the Insurance Contracts (the "SETTLEMENT
AGREEMENTS"). The following shall apply with respect to liabilities arising
out of the sale or administration of the Insurance Contracts (other than
obligations to pay benefits or other amounts or to take any other actions
specifically provided for under such Insurance Contracts as originally issued
and subsequently amended or supplemented other than pursuant to the Settlement
Agreements) that are subject to the Settlement Agreements:

(i) Seller shall retain any liability caused by Seller's
failure to comply with any Settlement Agreement
(except to the extent that such failure resulted from
the failure of Purchaser or LLANY to comply with the
relevant Administrative Services Agreement) and for
any attorneys' or arbitrators' fees or any other
costs incurred under the Settlement Agreement prior
to Closing;

(ii) Seller shall retain responsibility for and shall
control the defense of claims brought under
alternative dispute resolution procedures provided
for under the Settlement Agreements, for any payments
required to be made to the relevant holders of
Insurance Contracts or their attorneys under such
procedures, and the economic cost of any reformation
of the relevant insurance contract resulting from
such procedures (including any administrative and
systems costs incurred to implement any such
reformation);

(iii) Seller shall retain liability to the extent provided
in Section 10.04(a) for any claims by holders of the
relevant Insurance Contracts who have opted out of
the class covered by the Settlement Agreement; and
82

(iv) Notwithstanding anything in this Agreement to the
contrary, Purchaser shall assume any other liability
with respect to any Insurance Contract covered by any
Settlement Agreement, including without limitation
(A) any contract reformation specifically provided
for in such Settlement Agreement (other than any
reformation arising out of the alternative dispute
resolution procedures referred to in (ii) above) and
(B) any liability arising out of the failure by
Purchaser or LLANY to comply with any Settlement
Agreement or the terms of any Insurance Contract
covered by the Settlement Agreement.

(d) Any liability retained by Seller pursuant to Section 10.04(a)
or Section 10.04(c)(i), (ii) or (iii) shall be referred to herein as a "SECTION
10.04 SELLER OBLIGATION". Any liability assumed by Purchaser pursuant to
Section 10.04(b) or Section 10.04(c)(iv) shall be referred to herein as a
"SECTION 10.04 PURCHASER OBLIGATION".

SECTION 10.05. INDEMNIFICATION PAYMENTS. Any payment hereunder shall
be made by wire transfer of immediately available funds to such account or
accounts as the Indemnified Party shall designate to the Indemnifying Party in
writing.

SECTION 10.06. EXCLUSIVITY. Except as provided in Section 5.06 of the
Stock Purchase Agreement, after the Closing, to the extent permitted by
applicable law, the indemnities provided for in Section 10.01 shall be the
exclusive remedies of Purchaser and Seller and their respective officers,
directors, employees, agents and Affiliates for any breach of or inaccuracy in
any representation or warranty (including in any certificate delivered by a
party pursuant to this Agreement) or any breach, nonfulfillment or default in
the performance of any of the covenants or agreements contained in this
Agreement or the Stock Purchase Agreement (but not any such covenants or
agreements to the extent they are by their terms to be performed after the
Closing Date), and the parties shall not be entitled to a rescission of this
Agreement or to any further indemnification rights or claims of any nature
whatsoever in respect thereof, all of which the parties hereto hereby waive.

ARTICLE XI

TERMINATION PRIOR TO CLOSING

SECTION 11.01. TERMINATION OF AGREEMENT. This Agreement may be
terminated at any time prior to the Closing:

(a) by Seller or Purchaser in writing, if there shall be any
order, writ, injunction or decree of any court or governmental or regulatory
agency binding on Purchaser and/or Seller, which prohibits or restrains
Purchaser and/or Seller from consummating the transactions contemplated hereby;
provided, that Purchaser and/or Seller, as the case may be, shall have used its
commercially reasonable best efforts to have any such order, writ, injunction
or decree lifted and the same shall not have been lifted by April 30, 1998;

(b) by either of Seller or Purchaser in writing, if the Closing
has not occurred on or
83

prior to the first anniversary of the date of this Agreement unless the absence
of such occurrence shall be due to the failure of the party seeking to
terminate this Agreement to materially perform each of its obligations under
this Agreement required to be performed by it on or prior to the Closing Date;
and

SECTION 11.02. SURVIVAL. If this Agreement is terminated and the
transactions contemplated hereby are not consummated as described above, this
Agreement shall become null and void and of no further force and effect, except
for (a) the provisions of this Agreement relating to the obligations of the
parties hereto to keep confidential and not to use certain information and data
obtained from the other parties hereto and (b) the provisions of Sections 5.09,
12.01, 12.08(b) and this Section 11.02.

ARTICLE XII

MISCELLANEOUS

SECTION 12.01. PUBLICITY. Except as may otherwise be required by law,
no release or announcement concerning this Agreement or the transactions
contemplated hereby shall be made without advance consultation by Seller and
Purchaser with respect thereto. The parties hereto shall cooperate with each
other in making any release or announcement.

SECTION 12.02. CONFIDENTIALITY. The parties agree that, other than
as agreed or as required to implement the transactions contemplated
hereby, the parties will keep confidential the terms and conditions of this
Agreement and the Ancillary Agreements, including, without limitation, the
Schedules hereto and thereto, except as otherwise required by law (including,
without limitation, pursuant to any federal or state securities laws or the
rules of any stock exchange or self-regulatory organization or pursuant to any
legal, regulatory or legislative proceedings).

SECTION 12.03. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally (by
courier or otherwise), telegraphed, telexed, sent by facsimile transmission or
sent by certified or registered mail, postage prepaid and return receipt
requested, or by express mail. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission
or, if mailed, three days after the date of deposit in the United States mails,
as follows:

(i) if to LNC:

Lincoln National Corporation
000 Xxxx Xxxxx Xxxxxx
Xxxx Xxxxx, XX 00000
84

Attention: Xxxx X. Xxxxxx, Esq.
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000

(ii) if to Purchaser:

The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000

(iii) If to LLANY:

Xxxxxx X. Xxxxxxxx
President
Lincoln Life & Annuity Company of New York
000 Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxx, Xxx Xxxx 00000
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000

(iv) If to Seller:
85

Connecticut General Life Insurance Company
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Millbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: G. Xxxxxxx Xxxxxxxxxx
Telecopier No.: 000-000-0000

(v) If to Parent:

Connecticut General Corporation
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Millbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: G. Xxxxxxx Xxxxxxxxxx
Telecopier No.: 000-000-0000

(vi) If to CIGNA:

CIGNA Corporation
One Liberty Place - OLP- 1550
Attention: Corporate Secretary, Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000
86

With a concurrent copy to:

Millbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: G. Xxxxxxx Xxxxxxxxxx
Telecopier No.: 000-000-0000

(vii) If to CLIC:

CIGNA Life Insurance Company
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Secretary, Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Millbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: G. Xxxxxxx Xxxxxxxxxx
Telecopier No.: 000-000-0000

Any party may, by notice given in accordance with this Section 12.03 to the
other parties, designate another address or person for receipt of notices
hereunder provided that notice of such a change shall be effective upon
receipt.

SECTION 12.04. ENTIRE AGREEMENT. This Agreement (including the Ancillary
Agreements, the other agreements contemplated hereby and thereby, the Exhibits
and the Schedules hereto) contains the entire agreement among the parties with
respect to the subject matter hereof and supersedes all prior agreements,
written or oral, with respect thereto.

SECTION 12.05. WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by each of the parties or, in the case of a waiver, by the
party waiving compliance. No delay on the part of any party on exercising any
right, power or privilege hereunder shall operate as a waiver thereof, or shall
any waiver on the part of any party of any right, power or privilege, or any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege. The rights and remedies herein provided are cumulative and are not
exclusive of any rights or remedies that any party may otherwise have at law or
in equity.
87

SECTION 12.06. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

SECTION 12.07. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors,
permitted assigns and legal representatives. Neither this Agreement, nor any
right hereunder, may be assigned by any party (in whole or in part) without the
prior written consent of the other party hereto.

SECTION 12.08. INTERPRETATION. (a) Notwithstanding anything in this
Agreement to the contrary, no term or condition of this Agreement shall be
construed to supersede, restrict or otherwise limit any term or condition set
forth in the Indemnity Reinsurance Agreements.

(b) The parties acknowledge and agree that, except as specifically provided
herein, they may pursue judicial remedies at law or equity in the event of a
dispute with respect to the interpretation or construction of this Agreement.
In the event that an alternative dispute resolution procedure is provided for
in any of the Ancillary Agreements or any other agreement contemplated hereby
or thereby, and there is a dispute with respect to the construction or
interpretation of such Ancillary Agreement, the dispute resolution procedure
provided for in such Ancillary Agreement shall be the procedure that shall
apply with respect to the resolution of such dispute.

(c) For purposes of this Agreement, the words "hereof," "herein," "hereby"
and other words of similar import refer to this Agreement as a whole unless
otherwise indicated. Whenever the singular is used herein, the same shall
include the plural, and whenever the plural is used herein, the same shall
include the singular, where appropriate.

SECTION 12.09. NO THIRD PARTY BENEFICIARIES. Except as set forth in Article
X, nothing in this Agreement is intended or shall be construed to give any
Person (including, but not limited to, the employees of Seller), other than the
parties hereto, their successors and permitted assigns, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.

SECTION 12.10. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.

SECTION 12.11. OTHER AGREEMENTS, EXHIBITS AND SCHEDULES. The Exhibits and
the Schedules are a part of this Agreement as if fully set forth herein. All
references herein to Articles, Sections, subsections, paragraphs,
subparagraphs, clauses, Exhibits and Schedules shall be deemed references to
such parts of this Agreement, unless the context shall otherwise require.
88

SECTION 12.12. HEADINGS. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.

SECTION 12.13. DOLLAR REFERENCES. All dollar references in this Agreement
are to the currency of the United States.
89

IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.

CIGNA CORPORATION

BY:
--------------------------------------
NAME:
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TITLE:
--------------------------------------

CONNECTICUT GENERAL CORPORATION

BY:
--------------------------------------
NAME:
--------------------------------------
TITLE:
--------------------------------------

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

BY:
--------------------------------------
NAME:
--------------------------------------
TITLE:
--------------------------------------

CIGNA LIFE INSURANCE COMPANY

BY:
--------------------------------------
NAME:
--------------------------------------
TITLE:
--------------------------------------
LINCOLN NATIONAL CORPORATION
90

BY:
--------------------------------------
NAME:
--------------------------------------
TITLE:
--------------------------------------

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

BY:
--------------------------------------
NAME:
--------------------------------------
TITLE:
--------------------------------------

LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

BY:
--------------------------------------
NAME:
--------------------------------------
TITLE:
--------------------------------------
91

EXHIBITS

Exhibit A - Form of Purchaser Indemnity Reinsurance Agreement
Exhibit B - Form of Purchaser Administrative Services Agreement
Exhibit C - Form of Transition Services Agreement
Exhibit D - Form of General Assignment and Assumption Agreement
Exhibit E - Form of Xxxx of Sale
Exhibit F - State Regulatory Approvals

92
EXHIBIT A
93

INDEMNITY REINSURANCE AGREEMENT

BY AND BETWEEN

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

AND

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Dated as of __________, 1997

TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II BUSINESS REINSURED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE III TERMINATION AND RECAPTURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.01. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.02. Recapture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

ARTICLE IV TERRITORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE V ADMINISTRATION; CHANGES; CREDITING RATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.01. Administration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.02. Contract Changes or Reserve Assumption Changes . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 5.03. Non-Guaranteed Elements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE VI TRANSFER OF ASSETS; CONTRACT LOANS; CEDING COMMISSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.01. Asset Transfer. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.02. Contract Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.03. Ceding Commission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE VII INSOLVENCY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE VIII OFFSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE IX RIGHTS WITH RESPECT TO GENERAL ACCOUNT LIABILITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE X ERRORS AND OMISSIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10

ARTICLE XI DUTY OF COOPERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 11.01. Cooperation Generally . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 11.02. Product Tax Cooperation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE XII DEFERRED ACQUISITION COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 12.01. Section 848 Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Section 12.02. DAC Adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE XIII ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE XIV MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 14.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 14.02. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 14.03. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 14.04. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 14.05. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 14.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 14.07. Credit for Ceded Reinsurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15

INDEMNITY REINSURANCE AGREEMENT

This INDEMNITY REINSURANCE AGREEMENT (this "Agreement"), dated
as of ___________, 1997, is made by and between Connecticut General Life
Insurance Company, a Connecticut domiciled stock life insurance company
("Cedent"), and The Lincoln National Life Insurance Company, an Indiana
domiciled stock life insurance company ("Reinsurer") and a wholly owned
subsidiary of Lincoln National Corporation, an Indiana corporation.

WHEREAS, Cedent has agreed to cede and transfer to Reinsurer
the Coinsured Contracts (as defined below) for the consideration specified
herein and Reinsurer has agreed to reinsure the rights, obligations and
liabilities of Cedent under the Coinsured Contracts; and

WHEREAS, Cedent and Reinsurer are entering into this Agreement
whereby Reinsurer will reinsure the General Account Liabilities (as defined
below) of Cedent under the Coinsured Contracts on the terms and conditions set
forth herein; and

WHEREAS, Cedent desires that Reinsurer perform all
administrative functions on behalf of Cedent after the date hereof with respect
to the Coinsured Contracts and the Seller Separate Accounts (as defined below)
and the contracts supported by the Seller Separate Accounts, and Reinsurer has
agreed to provide such services pursuant to the terms of the Administrative
Services Agreement (as defined below);

NOW THEREFORE, in consideration of the mutual covenants and
promises contained herein and upon the terms and conditions set forth herein,
the parties hereto agree as follows:

ARTICLE I
DEFINITIONS

The following terms shall have the respective meanings set
forth below throughout the Agreement:

"ACQUISITION AGREEMENT" means the Asset Transfer and
Acquisition Agreement entered into by and among CIGNA Corporation, Connecticut
General Corporation, CIGNA Life Insurance Company, Lincoln National
Corporation, Cedent, Reinsurer and LLANY (as defined herein) dated as of July
27, 1997.

"ADMINISTRATIVE SERVICES AGREEMENT" means the Administrative
Services Agreement entered into by and between Reinsurer and Cedent dated as of
the date hereof.

"AFFILIATE" means, with respect to any Person, at the time in
question, any other Person controlling, controlled by or under common control
with such Person.

"AGREEMENT" means this Indemnity Reinsurance Agreement.
97

"ANNUAL RATE" means the value of r in the expression
(l + r)n/365-1, where "n" is equal to the number of days for which interest is
to be computed and the result of the expression is the interest factor for
computing the applicable interest amounts.

"CASH EQUIVALENTS" means, as of any particular date, money
market funds, marketable obligations issued or guaranteed by the United States
Government, certificates of deposit, bankers' acceptances and other similar
liquid investments, in each case, with a maturity date of not more than 90 days
from the date on which any such instrument is transferred pursuant to the terms
of this Agreement, the market value of which on the date of transfer will be
counted as equivalent to cash for purposes of satisfying the aggregate amount
of cash and Cash Equivalents required to be transferred as described in Article
III hereof.

"CEDENT" shall have the meaning set forth in the introductory
paragraph hereof.

"CEDING COMMISSION" means $________.

"CODE" means the Internal Revenue Code of 1986, as amended.
Any citation to a section of the Code includes a citation to any successor
statutory provision.

"COINSURED CONTRACTS" means (i) the In-Force Contracts, and
(ii) the Post-Closing Contracts.

"COLI BUSINESS" shall have the meaning as set forth in the
Acquisition Agreement.

"CONNECTICUT SAP" means the statutory accounting principles
and practices prescribed or permitted by the Insurance Department of the State
of Connecticut as applied on a basis consistent with those utilized in the
preparation of 1996 Annual Statements.

"CONTRACTHOLDER" shall mean the holder of any Coinsured
Contract.

"DAC ADJUSTMENT" shall have the meaning set forth in Section
12.02(a) hereof.

"EFFECTIVE DATE" shall have the meaning set forth in Article
II hereof.

"EXTRA CONTRACTUAL OBLIGATIONS" means all liabilities for
compensatory, consequential, exemplary, punitive or similar damages which
relate to or arise in connection with any alleged or actual act, error or
omission by Cedent or any of its Affiliates prior to the Effective Date hereof,
whether intentional or otherwise, or from any reckless conduct or bad faith by
Cedent or any of its Affiliates prior to the Effective Date hereof, or in
connection with any such alleged or actual act, error or omission on and after
the Effective Date hereof by the Reinsurer acting on behalf of Cedent or any of
its Affiliates pursuant to the Administrative Services Agreement or otherwise,
in each case whether in connection with the handling of any claim under any of
the Coinsured Contracts or in connection with the issuance, delivery,
cancellation or administration of any of the Coinsured Contracts; provided,
that no Section 10.04 Seller Obligation, as such term is defined in

the Acquisition Agreement, shall be deemed to be an Extra Contractual
Obligation.

"FINAL RECAPTURE STATEMENT" shall have the meaning set forth
in Section 3.02(d) hereof.

"GENERAL ACCOUNT OTHER INSURANCE ASSETS" means all general
account other admitted insurance assets of Cedent arising under the Coinsured
Contracts determined pursuant to Connecticut SAP as such amounts would have
been included in lines 12.1, 12.2, 12.3, 15, 16 and 17 of the Assets page of
the NAIC Annual Statement Blank (1996 format).

"GENERAL ACCOUNT LIABILITIES" means all general account
insurance liabilities and obligations arising under the Coinsured Contracts,
including, without limitation the General Account Reserves and amounts included
in lines 12, 12a, 19, and 25 of the Liabilities, Surplus and Other Funds page
of the NAIC Annual statement Blank (1996 format) and any Extra Contractual
Obligations excluding, however, (i) the Seller Separate Account Liabilities,
and (ii) any general account liabilities which relate to (A) amounts
transferred from the Seller Separate Accounts to the general account of Cedent
pending distribution to holders of the Coinsured Contracts and (B) amounts held
in the general account of Cedent pending transfer to the Seller Separate
Accounts.

"GENERAL ACCOUNT RESERVES" means the general account statutory
reserves of Cedent (without regard to this Agreement) with respect to the
Coinsured Contracts determined pursuant to Connecticut SAP, as such reserves
would have been included in lines 1, 2, 3, 4.1, 4.2, 5, 6, 7.1, 7.2, 7.3, 8, 9,
10.1, 10.2, 10.3, 11.1, 11.2, 11.3 and 11.4 of the Liabilities, Surplus and
Other Funds page of the NAIC Annual Statement Blank (1996 format), excluding
however, any general account statutory reserve adjustments in relation to
Seller Separate Account Liabilities.

"IN-FORCE CONTRACTS" means all individual life insurance
(other than contracts included in the COLI Business), health insurance and
annuity contracts delivered or issued for delivery in jurisdictions other than
New York by Cedent's Individual Insurance Division on the forms described on
Schedule 1.01 hereto and in effect on the Effective Date (including all
supplements, endorsements, riders and ancillary agreements in connection
therewith).

"INCOME TAX REGULATIONS" means the temporary and final
regulations issued under the Code. Any citation to a section of the Income Tax
Regulations includes a citation to any successor regulatory provision.

"LINCOLN NATIONAL" shall have the meaning set forth in the
introductory paragraph hereof.

"LLANY" means Lincoln Life & Annuity Company of New York, a
New York domiciled stock life insurance company and an Affiliate of Reinsurer.

"NAIC" means the National Association of Insurance
Commissioners.

"90-DAY TREASURY RATE" means the annual yield rate, on the
date to which 90-Day Treasury Rate relates, of actively traded U.S. Treasury
securities having a remaining duration to maturity of three months, as such
rate is published under "Treasury Constant Maturities" in

Federal Reserve Statistical Release H.15(519).

"PERSON" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, governmental, judicial or regulatory body, business unit,
division or other entity.

"POST-CLOSING CONTRACTS" means all individual life insurance
(other than contracts included within the COLI Business), health insurance and
annuity contracts of the types which are described on Schedule 1.02 hereto
(including all supplements, endorsement, riders and ancillary agreements in
connection therewith) that are delivered or issued for delivery by Cedent's
Individual Insurance Division prior to the second anniversary of the Effective
Date at the written request of Reinsurer in jurisdictions other than New York
in accordance with Section 5.34 of the Acquisition Agreement..

"POST-RECAPTURE EXTRA CONTRACTUAL OBLIGATIONS" means Extra
Contractual Obligations which relate to or arise in connection with any alleged
or actual act, error or omission by Reinsurer or any of its Affiliates
(including by the Reinsurer acting on behalf of Cedent or any of its Affiliates
pursuant to the Administrative Services Agreement or otherwise) on or before
the Recapture Date, whether intentional or otherwise, or from any reckless
conduct or bad faith by Reinsurer or any of its Affiliates (including by the
Reinsurer acting on behalf of Cedent or any of its Affiliates pursuant to the
Administrative Services Agreement or otherwise), in connection with the
handling of any claim under any of the Coinsured Contracts or in connection
with the issuance, delivery, cancellation or administration of any of the
Coinsured Contracts.

"PRELIMINARY RECAPTURE STATEMENT" shall have the meaning set
forth in Section 3.02(b) hereof.

"PROPOSED RECAPTURE STATEMENT" shall have the meaning set
forth in Section 3.02(d) hereof.

"RECAPTURE DATE" shall have the meaning set forth in Section
3.02(a) hereof.

"REINSURER" shall have the meaning set forth in the
introductory paragraph hereof.

"SELLER SEPARATE ACCOUNTS" means the separate accounts of
Cedent described on Schedule 1.03 hereto.

"SELLER SEPARATE ACCOUNT LIABILITIES" means those insurance
liabilities that are reflected in the Seller Separate Accounts and that relate
to the Coinsured Contracts.

"THIRD PARTY ACTUARY" shall have the meaning set forth in
Section 3.02(d) hereof.

"TRIGGER DATE" means the last day of any of the time periods
specified in Sections 5.20(d) or (e), as the case may be, of the Acquisition
Agreement in the event that the Reinsurer is required to take any of the
actions specified in Sections 5.20(a)(i) and (ii) thereof during such

100

time period and fails to take any such actions.

"UMPIRE" shall have the meaning set forth in Article XIII.

ARTICLE II
BUSINESS REINSURED

Upon the terms and subject to the conditions and other
provisions of this Agreement and any required governmental and regulatory
consents and approvals, effective as of 12:01 a.m., Eastern Time, on
__________, 1997 (the "Effective Date"), Cedent hereby cedes to Reinsurer and
Reinsurer hereby accepts and indemnity reinsures, on a coinsurance basis, 100%
of the General Account Liabilities outstanding as of the Effective Date or
arising thereafter, net of reinsurance recoveries received by Cedent under
reinsurance cessions with respect to the Coinsured Contracts.

ARTICLE III
TERMINATION AND RECAPTURE

SECTION 3.01. TERMINATION. The reinsurance provided under
this Agreement shall terminate as to each Coinsured Contract on any date as of
which such Coinsured Contract is recaptured as provided below in this Article
III, but shall otherwise continue indefinitely as to all Coinsured Contracts.

SECTION 3.02. RECAPTURE. (a) If Reinsurer fails to take one
of the actions specified in clauses (i), (ii) and (iii) of Section 5.20(a) of
the Acquisition Agreement under the circumstances described therein on or prior
to the Trigger Date, then Cedent shall have the right, upon 10 days' written
notice to Purchaser, to recapture the Coinsured Contracts that have not
expired, effective as of the first day of the month following the Trigger Date
(the "Recapture Date"). In the event that the Coinsured Contracts that have
not expired are recaptured pursuant to this Article III, a net accounting and
settlement with respect to the General Account Liabilities relating to
Coinsured Contracts that have not expired shall be undertaken by the parties
hereto pursuant to the provisions set forth below in this Section 3.02.

(b) On the Recapture Date, Reinsurer will deliver to Cedent
a statement of the General Account Other Insurance Assets, General Account
Liabilities, the amount of the participating surplus with respect to the
Coinsured Contracts and the amount of any contract loans under the Coinsured
Contracts that have not expired, each as of the end of the second month
preceding the month in which the Recapture Date falls (the "Preliminary
Recapture Statement"), together with a certification of the chief financial
officer of Reinsurer that (i) the Preliminary Recapture Statement was prepared
in accordance with Connecticut SAP, and (ii) the General Account Reserves set
forth therein (A) were determined in accordance with generally accepted
actuarial standards consistently applied, (B) were fairly stated in accordance
with sound actuarial principles, (C) were based on actuarial assumptions that
were appropriate for Cedent's obligations under the related Coinsured
Contracts, and (D) met the requirements of Connecticut SAP.

101

(c) On the Recapture Date, Reinsurer shall transfer to Cedent
(i) invested assets, cash and Cash Equivalents having an aggregate value
sufficient to satisfy the obligations represented by the General Account
Liabilities plus the amount of the participating surplus with respect to the
Coinsured Contracts less the amount of any contract loans under the Coinsured
Contracts that have not expired and less the amount of General Account Other
Insurance Assets and (ii) the General Account Other Insurance Assets, each as
determined by Reinsurer and set forth on the Preliminary Recapture Statement.
Cash shall be transferred by Reinsurer to Cedent by wire transfer of
immediately available funds in U.S. Dollars. Invested assets and Cash
Equivalents shall be transferred by such instruments of transfer as are
reasonably acceptable to Cedent. Invested assets transferred pursuant to this
Section 3.02(c) shall be valued at their market value as of the Recapture Date.
As specified in Section 6.02 hereof, Cedent shall, from and after the Recapture
Date, be entitled to receive and retain all contract loan repayments under the
Coinsured Contracts that have not expired. Recapture shall be deemed to occur
upon the receipt by Cedent of such invested assets, cash and Cash Equivalents
and such General Account Other Insurance Assets, free of all liens or other
encumbrances.

(d) Reinsurer shall, on or before the date that is 30 days
after the Recapture Date, prepare a statement of the General Account Other
Insurance Assets, General Account Liabilities, the amount of the participating
surplus with respect to the Coinsured Contracts and the amount of any contract
loans under the Coinsured Contracts that have not expired, each as of the close
of business on the last day of the month preceding the month in which the
Recapture Date falls (the "Proposed Recapture Statement"), together with a
certification of the chief financial officer of Reinsurer to the same effect
with respect to the Proposed Recapture Statement as of the date thereof as the
certification provided by such officer with respect to the Preliminary
Recapture Statement as of the date thereof pursuant to Section 3.02(b).
Promptly after its preparation, Reinsurer shall deliver copies of the Proposed
Recapture Statement to Cedent. Cedent shall have the right to review the
Proposed Recapture Statement and comment thereon for a period of 45 days after
receipt thereof. Reinsurer agrees that Cedent and its accountants may have
access to the accounting records of Reinsurer relating to its preparation of
the Proposed Recapture Statement for the purpose of conducting its review. Any
changes in the Proposed Recapture Statement that are agreed to by Reinsurer and
Cedent within 45 days of the aforementioned delivery of such statement by
Reinsurer shall be incorporated into a final recapture statement as of the
close of business on the last day of the month preceding the month in which the
Recapture Date falls (the "Final Recapture Statement"). In the event that
Reinsurer and Cedent are unable to agree within such 45-day period on the
manner in which any item or items should be treated in the preparation of the
Final Recapture Statement, or upon (i) the amount of invested assets, cash and
Cash Equivalents that is sufficient to satisfy the obligations represented by
the General Account Liabilities plus the amount of participating surplus with
respect to the Coinsured Contracts less the amount of any contract loans under
the Coinsured Contracts that have not expired and less the amount of General
Account Other Insurance Assets or (ii) the amount of the General Account Other
Insurance Assets, separate written reports of such item or items shall be made
in concise form and shall be referred to a nationally-known firm of independent
actuaries selected by Cedent and approved by the Reinsurer, which approval
shall not unreasonably be withheld (the "Third Party Actuary"). The Third
Party Actuary shall determine within 14 days the manner in which

102

such item or items shall be treated on the Final Recapture Statement; provided,
however, that the dollar amount of each item in dispute shall be determined
between the range of dollar amounts proposed by Cedent and Reinsurer,
respectively; further provided, however, that in no event shall the amount of
invested assets, cash and Cash Equivalents that is deemed to be sufficient to
satisfy the obligations represented by the General Account Liabilities less the
amount of any contract loans under the Coinsured Contracts that have not
expired be less than the amount of the General Account Liabilities less the
amount of any such contract loans. The determinations by the Third Party
Actuary as to the items in dispute shall be in writing and shall be binding and
conclusive on the parties and shall be so reflected in the Final Recapture
Statement. The fees, costs and expenses of retaining the Third Party Actuary
shall be shared equally between the parties. Such determination shall be
binding and conclusive on the parties. Following the resolution of all
disputed items, Reinsurer shall prepare the Final Recapture Statement and shall
deliver copies of such statement to Cedent.

(e) In the event the aggregate amount of invested assets,
cash and Cash Equivalents and General Account Other Insurance Assets reflected
on the Preliminary Recapture Statement and transferred to the Cedent on the
Recapture Date is less than an amount equal to the General Account Liabilities
plus the amount of participating surplus with respect to the Coinsured
Contracts less the amount of any contract loans under the Coinsured Contracts
that have not expired less the amount of General Account Other Insurance
Assets, each as reflected on the Final Recapture Statement, Reinsurer shall
transfer to Cedent additional cash or Cash Equivalents equal to the amount of
such difference, together with interest thereon from and including the
Recapture Date to but not including the date of such transfer computed at an
Annual Rate equal to the 90-Day Treasury Rate in effect as of the Recapture
Date. In the event the aggregate amount of invested assets, cash and Cash
Equivalents, and General Account Other Insurance Assets reflected on the
Preliminary Recapture Statement and transferred to Cedent on the Recapture Date
is more than an amount equal to the General Account Liabilities plus the amount
of participating surplus with respect to the Coinsured Contracts less the
amount of any contract loans under the Coinsured Contracts that have not
expired less the amount of General Account Other Insurance Assets, each as
reflected on the Final Recapture Statement, Cedent shall transfer to Reinsurer
cash or Cash Equivalents in the amount of such difference, together with
interest thereon computed at an Annual Rate as specified above from and
including the Recapture Date to but not including the date of such transfer.

(f) If at any time after the Recapture Date Cedent or any of
its Affiliates is required to make any payment in respect of any Post Recapture
Extra Contractual Obligations, Reinsurer will, promptly upon Cedent's demand
therefor, pay the amount thereof to Cedent.

ARTICLE IV
TERRITORY

This Agreement shall apply to Coinsured Contracts covering
lives and risks wherever resident or situated.

ARTICLE V
ADMINISTRATION; CHANGES; CREDITING RATES

SECTION 5.01. ADMINISTRATION. Pursuant to the Administrative
Services Agreement, Cedent has appointed Reinsurer to perform all
administrative services with respect to the Coinsured Contracts and the Seller
Separate Accounts and the contracts supported by the Seller Separate Accounts
and Reinsurer has agreed to perform such services on behalf of Cedent,
including, but not limited to, the collection of premiums and other

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amounts due from Contractholders, the direct payment of all General Account
Liabilities, the direct disbursement of all contract loans and the
administration of claims.

SECTION 5.02. CONTRACT CHANGES OR RESERVE ASSUMPTION CHANGES.
Cedent, on its own initiative, shall not change (a) the terms and conditions of
any Coinsured Contracts or (b) the assumptions and methods used by Cedent to
establish the General Account Reserves. Reinsurer shall share proportionately,
on a 100% coinsurance basis, in any changes in the terms or conditions of any
Coinsured Contracts or changes in the assumptions and methods used to establish
the General Account Reserves, whether effected by Reinsurer acting pursuant to
the Administrative Services Agreement or by reason of the requirements of any
regulatory authority having jurisdiction over Cedent or otherwise required by
law, provided that prior to effectuating any such change Cedent shall promptly
notify Reinsurer of such proposed change and afford Reinsurer the opportunity,
to the extent practical under applicable law, to object to such change under
applicable administrative procedures (both formal and informal).

SECTION 5.03. NON-GUARANTEED ELEMENTS. Except as provided in
Section 5.31 of the Acquisition Agreement, Cedent shall set all non-guaranteed
elements of the Coinsured Contracts from and after the Effective Date as
directed by Reinsurer after consultation with Cedent.

ARTICLE VI
TRANSFER OF ASSETS; CONTRACT LOANS; CEDING COMMISSION

SECTION 6.01. ASSET TRANSFER. As consideration for the
indemnity reinsurance of the General Account Liabilities by Reinsurer hereunder
in the manner provided in the Acquisition Agreement, Cedent hereby agrees to
transfer to Reinsurer (i) investment assets having a statutory statement
carrying value on the books of Cedent equal to (a) the General Account
Liabilities as of the close of business on the last day of the month preceding
the month in which the Effective Date falls plus (b) the amount of the
participating surplus with respect to the Coinsured Contracts less (c) the
amount of any contract loans under the Coinsured Contracts as of such date and
(d) the amount of the General Account Other Insurance Assets and (ii) the
General Account Other Insurance Assets, all computed as of the close of
business on the last day of the month preceding the month in which the
Effective Date falls.

SECTION 6.02. CONTRACT LOANS. (a) As further consideration
for the indemnity reinsurance of the General Account Liabilities hereunder,
Reinsurer shall, subject to the provisions of this Section 6.02, be entitled to
all contract loan repayments (including both principal and interest) under the
Coinsured Contracts, payable in accordance with Article V hereof.

(b) Cedent shall, from and after the Recapture Date, have the
right to retain all contract loan repayments under the Coinsured Contracts, and
to direct Reinsurer to pay to Cedent all such contract loan repayment amounts
collected by Reinsurer pursuant to the Administrative Services Agreement.

SECTION 6.03. CEDING COMMISSION. As consideration for the
reinsurance ceded by Cedent to Reinsurer of the Coinsured Contracts and the
acquisition by Reinsurer of rights in

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respect of such Coinsured Contracts, Reinsurer shall pay Cedent the Ceding
Commission as of the Effective Date by including such amount in the Purchase
Price (as defined in the Acquisition Agreement) payable by Reinsurer on the
Closing Date under the Acquisition Agreement. Reinsurer shall provide Cedent
its allocation of the Ceding Commission among the life insurance and
non-cancelable disability insurance, other health insurance, and annuity
contracts included in the Coinsured Contracts.

ARTICLE VII
INSOLVENCY

Reinsurer hereby agrees that, as to all reinsurance made,
ceded, renewed or otherwise becoming effective hereunder, the reinsurance shall
be payable by Reinsurer on the basis of the liability of Cedent under the
Coinsured Contracts reinsured on an indemnity basis, without diminution because
of the insolvency, liquidation or rehabilitation of Cedent or the appointment
of a conservator, receiver, liquidator or statutory successor of Cedent,
directly to Cedent or to its conservator, liquidator, receiver or other
statutory successor. It is agreed that any conservator, receiver, liquidator
or statutory successor of Cedent shall give prompt written notice to Reinsurer
of the pendency or submission of a claim under any such Coinsured Contracts.
During the pendency of such claim, Reinsurer may investigate such claim and
interpose, at its own expense, in the proceeding where such claim is to be
adjudicated, any defense available to Cedent or its conservator, receiver,
liquidator or statutory successor. The expense thus incurred by Reinsurer is
chargeable against Cedent as a part of the expense of insolvency, liquidation
or rehabilitation to the extent of a proportionate share of the benefit which
accrues to Cedent solely as a result of the defense undertaken by Reinsurer.

ARTICLE VIII
OFFSETS

Any debts or credits between Cedent and Reinsurer arising
under this Agreement are deemed mutual debts or credits, as the case may be,
and shall be netted or set off, as the case may be, and only the balance shall
be allowed or paid hereunder.

ARTICLE IX
RIGHTS WITH RESPECT TO GENERAL ACCOUNT LIABILITIES

Reinsurer's reinsurance of the General Account Liabilities is
intended for the sole benefit of the parties to this Agreement and shall not
create any right on the part of any other party, including, without limit, any
Contractholder, insured, claimant or beneficiary, against Reinsurer or any
legal relation between any Contractholders, insureds, claimants or
beneficiaries and Reinsurer.

105

ARTICLE X
ERRORS AND OMISSIONS

Inadvertent delays, errors or omissions made by either Cedent
or Reinsurer in connection with this Agreement or any transaction hereunder
shall not relieve the other party from any liability which would have attached
to such party had such delay, error or omission not occurred, provided that the
party causing such delay, error or omission rectifies the same as soon as
possible after its discovery thereof. If, as a result of any such delay, error
or omission, there is a delay in the transfer of funds to be transferred
pursuant hereto, the party responsible for such delay, error or omission shall
pay, to the party to whom such funds are to be transferred, interest on the
amount of funds to be transferred from the date of such delay, error or
omission to and including the date of such transfer of funds at a rate equal to
the 90-Day Treasury Rate.

ARTICLE XI
DUTY OF COOPERATION

SECTION 11.01. COOPERATION GENERALLY. Each party hereto
shall cooperate fully with the other in all reasonable respects in order to
accomplish the objectives of this Agreement. The duty of cooperation shall
apply, but not be limited, to regulatory matters and to litigation matters
involving third parties.

SECTION 11.02. PRODUCT TAX COOPERATION. Cedent shall, at
Reinsurer's written request and sole cost and expense, cooperate fully with
Reinsurer in obtaining such relief as Reinsurer shall reasonably require
(including obtaining a waiver from, or entering into a settlement or closing
agreement with, the Internal Revenue Service or an affected policyholder) with
respect to any non-compliance by Cedent or Reinsurer with any product tax
requirement or limitation contained in the Code (including without limitation
sections 72, 101, 817, 7702 and 7702A of the Code) regarding any Coinsured
Contract; provided, however, that this Section 11.02 shall apply only if
Reinsurer's written request is not given prior to the last day of the twentieth
calendar month following the month in which the Closing Date falls. Cedent
shall permit Reinsurer to participate in any discussions, negotiations or
settlements with the Internal Revenue Service or any affected policyholder
pursuant to this Section 11.02 and, to the extent Cedent is not adversely
affected by such actions, to control such discussions, negotiations or
settlements.

ARTICLE XII
DEFERRED ACQUISITION COSTS

SECTION 12.01. SECTION 848 ELECTION. (a) Each of Cedent and
Reinsurer acknowledges that it is subject to taxation under Subchapter L of the
Code and hereby makes the election contemplated by Section 1.848-2(g)(8) of the
Income Tax Regulations with respect to this Agreement. Each of Cedent and
Reinsurer (i) agrees that such election is effective for the taxable year of
each party that includes the Effective Date and for all subsequent years during
which this Agreement remains in effect and (ii) warrants that it will take no
action to revoke the

106

election.

(b) Pursuant to Section 1.848-2(g)(8) of the Income Tax
Regulations, each of Cedent and Reinsurer hereby agrees (i) to attach a
schedule to its federal income tax return for its first taxable year ending on
or after the Effective Date that identifies this Agreement as a reinsurance
agreement for which the joint election under Section 1.848-2(g)(8) has been
made, (ii) that the party with net positive consideration, as defined in
Section 848 of the Code and the Income Tax Regulations thereunder, for this
Agreement for each taxable year will capitalize its specified policy
acquisition expenses with respect to this Agreement without regard to the
general deductions limitation of Section 848(c)(1) of the Code, and (iii) to
exchange information pertaining to the amount of net consideration, as defined
in Section 848 of the Code and the Income Tax Regulations thereunder, under
this Agreement each year to ensure consistency. Reinsurer shall prepare and
execute duplicate copies of the schedule described in the preceding sentence as
soon as possible after the Effective Date and submit them to Cedent for
execution. Cedent shall execute the copies and return one of them to Reinsurer
within 30 days of Cedent's receipt of such copies.

SECTION 12.02. DAC ADJUSTMENT. (a) For purposes
of this Agreement, the term "DAC Adjustment" is calculated as follows: First,
for each taxable year with respect to each category of Coinsured Contracts,
"the gross amount incurred by the reinsurer with respect to this Agreement" (as
defined in section 1.848-2(f)(2)(i)(A) of the Income Tax Regulations) for such
category (but not including any DAC Adjustment incurred in such year) is
multiplied by the applicable percentage set forth in section 848 (c)(1) of the
Code for such category. The sum, if any, from the preceding sentence is then
reduced by the amortization allowed Cedent under section 848(a)(2) of the Code
for such category, but only with regard to amounts capitalized per this
Agreement under section 1.848-2(f)(2)(i)(A). The result for a category,
whether positive or negative, is then multiplied by the quotient of: tr/(1-(tr
x (1+Y))), where tr = the maximum applicable marginal corporate federal income
tax rate (as defined in section 11(b)(1)(D) of the Code) for the taxable year,
and Y = the applicable percentage set forth in section 848(c)(1) for such
category of Coinsured Contracts. The aggregate amount of such calculations for
all categories of Coinsured Contracts for a taxable year (whether positive or
negative) is the DAC Adjustment for the year.

(b) Within 60 days of the end of Cedent's taxable year, Cedent shall
calculate the DAC Adjustment for the year and submit such calculations to
Reinsurer for review. If, within 30 days of Reinsurer's receipt of such
calculations, Reinsurer shall not have objected in writing to such
calculations, the calculations shall become final. If, within 15 days of any
objection in writing to such calculations, Cedent and Reinsurer shall not have
agreed in writing to such calculations (in which case the calculations shall
become final), any disputed aspects of the calculations shall be resolved by
the Third Party Accountant (as defined in the Acquisition Agreement) within 30
days of the submission of the dispute to the Third Party Accountant by Cedent
or Reinsurer. The decision of the Third Party Accountant shall be final (and
the resulting calculations shall be final), and the costs, expenses, and fees
of the Third Party Accountant shall be borne equally by Cedent and Reinsurer.

107

(c) If the amount of the DAC Adjustment for any taxable year of
Cedent is positive, Reinsurer shall pay such amount to Cedent within 15 days of
the date on which the calculations of the DAC Adjustment become final. If the
amount of the DAC adjustment for any taxable year of Cedent negative, Cedent
shall pay such amount to Reinsurer within 15 days of the date on which the
calculations of the DAC Adjustment become final.

(d) Notwithstanding any other provision of this Section 12.02, the
term "gross amount incurred by the reinsurer with respect to this Agreement"
shall not include (i) all or any part of the Ceding Commission or (ii) the
consequences of any recapture of the Coinsured Contracts pursuant to Section
3.02 hereof.

(e) In the event that section 848 of the Code or the Income Tax
Regulations thereunder are amended after the date hereof and any change is made
to the amortization period under Section 848(a)(2), the capitalization
percentages in Section 848(c)(1), or the definition of the term "gross amount
incurred by the reinsurer with respect to the reinsurance agreement" in Section
1.848-2(f)(2)(i)(A) of the Income Tax Regulations, Cedent and Reinsurer shall
cooperate in good faith to modify the definition of the term "DAC Adjustment"
to reflect such change, consistent with the principles and assumptions
originally used in defining that term in this Agreement.

ARTICLE XIII
ARBITRATION

Any dispute arising out of or relating to the interpretation,
performance or breach of this Agreement, including the formation or validity
hereof, shall be submitted for decision to a panel of three arbitrators.
Notice requesting arbitration must be in writing and sent certified or
registered mail, return receipt requested.

One arbitrator shall be chosen by each party and the two
arbitrators shall, before instituting the hearing, choose an impartial third
arbitrator (the "Umpire") who shall preside at the hearing. If either party
fails to appoint its arbitrator within 30 days after being requested to do so
by the other party, the latter, after 10 days notice by certified or registered
mail of its intention to do so, may appoint the second arbitrator.

If the two arbitrators are unable to agree upon the selection
of the Umpire within 30 days of their appointment, then each arbitrator shall
submit to the other a list of three Umpire candidates. Each arbitrator shall
strike the names of two candidates from the other arbitrator's list, and the
Umpire shall be selected from the two remaining candidates by a lot drawing
procedure determined by the two arbitrators.

Unless the parties otherwise agree all arbitrators shall be
disinterested active or former officers of insurance or reinsurance companies.

Within 30 days after notice of appointment of all arbitrators,
the panel shall meet and determine a schedule for the conduct of the
arbitration, including hearings. The panel shall be

108

relieved of all judicial formality and shall not be bound by the strict rules
of procedure and evidence. The panel shall determine where the arbitration
shall take place. To the extent and only to the extent that the provisions of
this Agreement are ambiguous or unclear, the panel shall make its decision
considering the custom and practice of the applicable insurance and reinsurance
business. Insofar as the arbitration panel looks to substantive law, the law
of New York shall govern. The decision of any two arbitrators when rendered in
writing shall be final and binding. The panel is empowered to grant interim
relief as it may deem appropriate.

The panel shall render its decision, which shall be in writing
and state the reasons therefor, within 60 days following the termination of
hearings. Judgment upon the award may be entered in any court having
jurisdiction thereof. Each party shall bear the expense of its own arbitrator
and shall jointly and equally bear with the other party the cost of the Umpire.
The remaining costs of the arbitration shall be allocated by the panel. The
panel may, at its discretion, award such further costs and expenses as it
considers appropriate, including but not limited to interest (determined at the
Panel's discretion) and attorneys' fees, to the extent permitted by law.

ARTICLE XIV
MISCELLANEOUS PROVISIONS

SECTION 14.01. NOTICES. Any notice required or permitted
hereunder shall be in writing and shall be delivered personally (by courier or
otherwise), telegraphed, telexed, sent by facsimile transmission or sent by
certified or registered mail, postage prepaid and return receipt requested, or
by express mail. Any such notice shall be deemed given when so delivered
personally, telegraphed, telexed or sent by facsimile transmission or, if
mailed, three days after the date of deposit in the United States mails, as
follows:

(1) If to Reinsurer to:

The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000

(2) If to Cedent to:

109

Connecticut General Life Insurance Company
[ADDRESS]
Attention:
Telecopier No.:

With a concurrent copy to:

Millbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: G. Xxxxxxx Xxxxxxxxxx
Telecopier No.: 000-000-0000

Any party may, by notice given in accordance with this
Agreement to the other party, designate another address or person for receipt
of notices hereunder.

SECTION 14.02. AMENDMENT. This Agreement may not be
modified, changed, discharged or terminated, except by an instrument in writing
signed by an authorized officer of each of the parties hereto.

SECTION 14.03. COUNTERPARTS. This Agreement may be executed
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by
all, of the parties hereto.

SECTION 14.04. NO THIRD PARTY BENEFICIARIES. Nothing in this
Agreement is intended or shall be construed to give any Person, other than the
parties hereto, their successors and permitted assigns, any legal or equitable
right, remedy or claim under or in respect of this Agreement or any provision
contained herein.

SECTION 14.05. ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, permitted assigns and legal representatives. Neither this
Agreement, nor any right hereunder, may be assigned by either party (in whole
or in part) without the prior written consent of the other party hereto.

SECTION 14.06. GOVERNING LAW. SUBJECT TO ARTICLE XV HEREOF,
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS
OF LAWS THEREOF.

SECTION 14.07. CREDIT FOR CEDED REINSURANCE. Reinsurer shall
take at its own expense all actions, and maintain all licenses, permits and
authorizations, as are necessary in order for Cedent to receive credit for
reinsurance ceded hereunder as reported in Cedent's financial

110

statements.

111

IN WITNESS WHEREOF, Cedent and Reinsurer have executed this
Agreement as of the date first above written.

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

BY:

NAME:

TITLE:

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

BY:

NAME:

TITLE:

112

SCHEDULE 1.01

IN-FORCE CONTRACTS

113

SCHEDULE 1.02

POST-CLOSING CONTRACTS

114

SCHEDULE 1.03

SELLER SEPARATE ACCOUNTS
115

EXHIBIT B

116

ADMINISTRATIVE SERVICES AGREEMENT

BY AND BETWEEN

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

AND

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Dated as of _________, 1997

117

TABLE OF CONTENTS

ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II APPOINTMENT; STANDARDS; NOTIFICATION OF CONTRACTHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.01. Appointment and Acceptance of Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2.02. Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 2.03. Notification of Contractholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE III ADMINISTRATIVE SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.01. Administrative Services in General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Section 3.02. Collection Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.03. Processing of Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Section 3.04. Payment of Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Section 3.05. Denied Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

ARTICLE IV BOOKS AND RECORDS; REPORTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.01. Maintenance of Books and Records . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.02. Transaction Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Section 4.03. Final Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

ARTICLE V INABILITY TO PERFORM SERVICES; ERRORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.01. Inability to Perform Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 5.02. Errors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE VI REGULATORY MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 6.01. Responsibilities of Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE VII INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.01. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.02. Notice of Asserted Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.03. Right to Contest Claims of Third Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 7.04. Indemnification Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE VIII DURATION; TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.01. Duration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Section 8.02. Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

ARTICLE IX ARBITRATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE X INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 10.01. Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 10.02. Fidelity Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

118

ARTICLE XI MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 11.01. Headings, Schedules and Exhibits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 11.02. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 11.03. Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 11.04. Execution in Counterpart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 11.05. Limited Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.06. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.07. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.08. Subcontracting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.09. Change in Status . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.10. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.11. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 11.12. Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

SCHEDULE 1.01 Seller Separate Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

SCHEDULE 2.01 Administrative Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

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ADMINISTRATIVE SERVICES AGREEMENT

This ADMINISTRATIVE SERVICES AGREEMENT (this "Agreement"),
dated as of ________, 1997, is made by and between Connecticut General Life
Insurance Company, a Connecticut domiciled stock life insurance company
("Seller"), and The Lincoln National Life Insurance Company, a stock life
insurance company incorporated in Indiana and a wholly owned subsidiary of
Lincoln National Corporation ("Purchaser").

WHEREAS, pursuant to an Indemnity Reinsurance Agreement
between Seller and Purchaser that is being executed concurrently with this
Agreement (the "Indemnity Reinsurance Agreement"), Purchaser has agreed to
indemnify Seller for 100% of the General Account Liabilities, as defined in the
Indemnity Reinsurance Agreement (such General Account Liabilities being
referred to herein as the "General Account Liabilities"); and

WHEREAS, Seller wishes to appoint Purchaser to provide all
administrative services with respect to the Coinsured Contracts and the Seller
Separate Accounts (as defined below), and Purchaser desires to provide such
administrative services in consideration for Seller entering into the
Acquisition Agreement (as defined below) and the Indemnity Reinsurance
Agreement;

NOW THEREFORE, in consideration of the mutual covenants and
promises contained herein and upon the terms and conditions set forth herein,
the parties to this Agreement agree as follows:

ARTICLE IV

DEFINITIONS

The following terms shall have the respective meaning set
forth below throughout the Agreement:

"ADMINISTRATIVE SERVICES" shall have the meaning set forth in
Section 2.01 hereof.

"ASSERTED LIABILITY" shall have the meaning set forth in
Section 7.03 hereof.

"ACQUISITION AGREEMENT" means the Asset Transfer and
Acquisition Agreement entered into by and among CIGNA Corporation, Connecticut
General Corporation, Seller, CIGNA Life Insurance Company, Lincoln National
Corporation, Purchaser and LLANY dated as of July 27, 1997.

"BUSINESS" shall have the same meaning as set forth in the
Acquisition Agreement.

"BUSINESS DAY" means any day on which the unit value of the
Seller Separate Accounts is required to be calculated.
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"COINSURED CONTRACTS" shall have the meaning set forth in the
Indemnity Reinsurance Agreement.

"CONTRACTHOLDER" means the holder of any Covered Contract.

"COVERED CONTRACTS" means the Coinsured Contracts and the
policies and contracts funded by the Seller Separate Account.

"COMMISSION" means the Securities and Exchange Commission.

"EFFECTIVE DATE" means the Effective Date as defined in the
Indemnity Reinsurance Agreement.

"EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended.

"GENERAL ACCOUNT LIABILITIES" shall have the meaning set forth
in the first recital hereof.

"INDEMNIFIED PARTY" shall have the meaning set forth in
Section 7.02 hereof.

"INDEMNIFYING PARTY" shall have the meaning set forth in
Section 7.02 hereof.

"INDEMNITY REINSURANCE AGREEMENT" shall have the meaning set
forth in the first recital hereof.

"INTERMEDIARY" means an individual or entity designated by a
Contractholder as its broker of record or as the individual or entity that will
act on such Contractholder's behalf, in some or all respects, in connection
with such Contractholder's Coinsured Contract.

"LICENSE AGREEMENT" shall have the meaning set forth in the
Acquisition Agreement.

"LLANY" means Lincoln Life & Annuity Company of New York, a
New York domiciled stock life insurance company and an affiliate of Purchaser.

"LLANY AGREEMENT" shall have the meaning set forth in the
third recital hereof.

"NAIC" means the National Association of Insurance
Commissioners.

"NASD" means the National Association of Securities Dealers,
Inc.

"OUTWARD REINSURANCE" means reinsurance cessions by Seller with
respect to the Coinsured Contracts, other than pursuant to the Indemnity
Reinsurance Agreement.

"PERSON" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, governmental, judicial or regulatory
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body, business unit, division or other entity.

"PURCHASER" shall have the meaning set forth in the
introductory paragraph hereof.

"PURCHASER LOSSES" shall have the meaning set forth in Section
7.01 hereof.

"SELLER" shall have the meaning set forth in the introductory
paragraph hereof.

"SELLER LOSSES" shall have the meaning set forth in Section
7.01 hereof.

"SELLER SEPARATE ACCOUNTS" means the separate accounts of
Seller described on Schedule 1.01 hereto.

"SERVICE PROVIDER" means an individual or entity, other than
an Intermediary, that provides services to holders of Coinsured Contracts.

"THIRD PARTY CLAIMANT" shall have the meaning set forth in
Section 7.03 hereof.

"TRANSITION SERVICES AGREEMENT" shall have the meaning set
forth in the Acquisition Agreement.

"UMPIRE" shall have the meaning set forth in Article IX.

ARTICLE V

APPOINTMENT; STANDARDS;
NOTIFICATION OF CONTRACTHOLDERS

SECTION 2.01. APPOINTMENT AND ACCEPTANCE OF APPOINTMENT.
Seller hereby appoints Purchaser to provide, with respect to the Covered
Contracts, the administrative services specified herein and in Schedule 2.01
hereto (collectively, the "Administrative Services") for the period specified
in Section 8.01 of this Agreement, and Purchaser hereby accepts such
appointment and agrees to perform such services.

SECTION 2.02. STANDARDS. Purchaser acknowledges that the
performance of the Administrative Services in an accurate and timely manner is
of paramount importance to Seller. Purchaser agrees to perform the
Administrative Services with the skill, diligence and expertise commonly
expected from experienced and qualified personnel performing such duties and in
conformance with industry standards and applicable law.

Notwithstanding the foregoing obligations, in recognition of
the fact that Purchaser is taking over the administrative procedures used prior
to the Effective Date by Seller, Purchaser shall not be obligated by this
Agreement or any schedule hereto to perform during the first 18 months after
the Effective Date the services required by this Agreement in a manner
different from

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the manner in which such services are being provided by Seller immediately
prior to the Effective Date; provided, however, that after the Effective Date,
Purchaser shall make any changes required by changes in law (or the
interpretation thereof) subsequent to the Effective Date and any changes
required by changes in industry standards.

SECTION 2.03. NOTIFICATION OF CONTRACTHOLDERS. Purchaser
agrees to send to (i) holders of the Covered Contracts, (ii) Intermediaries,
and (iii) Service Providers, a written notice prepared by Seller and reasonably
acceptable to Purchaser to the effect that Purchaser has been appointed by
Seller to provide Administrative Services. Purchaser shall send such notice
promptly after receipt thereof, but in no event more than 30 Business Days
thereafter, by first class U.S. mail.

ARTICLE III

ADMINISTRATIVE SERVICES

SECTION 3.01. ADMINISTRATIVE SERVICES IN GENERAL. Purchaser
agrees to perform all administrative services required to be performed with
respect to the Covered Contracts and the Seller Separate Accounts, and is
authorized to do so in the name or on behalf of Seller where appropriate,
including, without limitation those specifically provided for in Sections 3.02
through 3.05 and elsewhere in this Agreement, but subject to Section 3.06 and
the next following paragraph.

The intention of the parties is that Purchaser will perform
all such administrative services in such a way as to minimize the involvement
of Seller and its Affiliates therein, subject to (a) Section 3.06 and (b) any
requirements of law or governmental authorities having jurisdiction that
require that specific actions, other than those provided for in Section 3.06,
be taken by Seller without Purchaser acting on its behalf ("Legally Required
Seller Actions"). Purchaser will give Seller timely notice of any Legally
Required Seller Actions and, to the maximum extent practicable, prepare in a
timely manner the forms of any documentation required for Seller to comply
therewith.

Without limiting the generality of the foregoing, Purchaser
shall have the right to cause Seller to effect the termination of any
participation agreements and/or to enter into new participation agreements
relating to underlying funding media for the Seller Separate Accounts.

SECTION 3.02. COLLECTION SERVICES. Purchaser agrees to
perform the following services with respect to amounts due from holders of the
Covered Contracts:

(a) Collect premiums, deposits and other remittances from
Contractholders (including payments of principal or interest on contract loans)
and from any collection facility, including Intermediaries and other persons or
institutions that receive remittances with respect to the Covered Contracts,
and process the remittances in a manner reasonably acceptable to Seller.

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(b) Collect amounts payable in respect of Outward Reinsurance.

(c) Maintain records pertaining to the collection and
processing of premiums, deposits or other remittances and amounts payable in
respect of Outward Reinsurance in the format utilized by Seller on the
Effective Date or as otherwise agreed by the parties.

(d) Promptly invest in the Seller Separate Accounts deposits
collected which relate to the separate account portions of Covered Contracts
(including transfers from fixed options under the Covered Contracts), and
forward funds and required information to the underlying investment management
companies in accordance with any applicable agreements, laws and regulations.

SECTION 3.03. PROCESSING OF DISBURSEMENTS. Purchaser agrees
to perform the following services with respect to disbursements made in respect
of the Covered Contracts for payment of death benefits, annuity benefits,
withdrawals, surrenders, transfers, policy loans, returns of deposits, and any
other disbursement and payments due to reinsurers or otherwise in respect of
Outward Reinsurance:

(a) Receive and process requests for disbursements.

(b) Process policy lapses, expiries and/or non-forfeiture
options with respect to the Covered Contracts.

(c) Evaluate requests for disbursements and either pay any
such request for disbursement, in accordance with Section 3.04 hereof, or
propose to deny any such request for disbursement in full or in part, in
accordance with Section 3.05 hereof, (i) within 10 Business Days after receipt
of all documentation required to process any such disbursement, with respect to
any request for a disbursement relating to the general account portion of a
Coinsured Contract and (ii) within the time period specified in the applicable
contract, with respect to any request for a disbursement relating to the
separate account under a Covered Contract, or, in the case of either clause (i)
or clause (ii) above, within any shorter time provided by applicable statute,
rule or regulation. In the event that Purchaser is unable to make a
determination as to whether any such request for disbursement should be paid or
denied within the specified period, it shall notify Seller immediately in
writing and shall state in such notice the reasons for such delay.

SECTION 3.04. PAYMENT OF DISBURSEMENTS. Purchaser agrees to
pay all disbursements (subject, where appropriate, to reimbursement from the
relevant Seller Separate Account). Purchaser will do so directly so as to
avoid, to the maximum extent practicable, Seller being required to make any
payments in connection with the Covered Contracts or the Administrative
Services, except as specifically provided otherwise in Section 3.06.

SECTION 3.05. DENIED DISBURSEMENTS. (a) Purchaser agrees to
promptly notify Seller if it proposes to deny any disbursement request. The
notice required under this Section 3.05 will contain the basis for Purchaser's
decision to deny such disbursement request. Purchaser may not deny a
disbursement request if Seller reasonably objects to such denial in writing
within 10 Business Days of Seller's receipt of the notice required under this
Section 3.05 (or within such

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shorter period as may be required to permit the relevant disbursement to be
made within the time period required by any applicable law or regulation). In
the event that Purchaser notifies Seller of a proposed denial on the Business
Day that the disbursement would be required to be made and Seller objects to
such proposed denial, then the disbursement shall be made as soon as
practicable thereafter, and Seller acknowledges that such disbursement may be
made later than the date otherwise required by this Agreement.

(b) Purchaser agrees to immediately notify Seller of any
litigation that has been instituted or threatened, or of any complaint which
any person has filed or has threatened to file with any state insurance
department or other regulatory agency, with respect to any denied disbursement
request or any disbursement request-handling procedure in connection with a
Covered Contract, regardless of whether the disbursement request was paid or
denied, or with respect to any other matter relating to a Covered Contract.
Such notice shall contain a report summarizing the nature of the litigation or
complaint, the alleged actions or omissions giving rise to the litigation or
complaint and copies of any files that Seller may require to respond to the
litigation or complaint.

(c) Purchaser shall pay the expenses of any litigation or
regulatory proceeding with respect to the Covered Contracts (subject to any
indemnification rights of Purchaser under this Agreement or any other agreement
between Purchaser and Seller).

SECTION 3.06. CERTAIN ACTIONS BY SELLER.

Notwithstanding the provisions of Section 3.01:

(a) Seller will prepare and, subject to Purchaser's compliance
with this section, timely file any filings required to be made with any
governmental authorities, including filings with insurance regulators and
guaranty associations and filings and premium tax returns with taxing
authorities that relate to Seller generally and not just to the Covered
Contracts and the Seller Separate Accounts and will make any payments required
in connection with such filings and premium tax returns and any assessment by
guaranty associations. To the extent reasonably possible, Purchaser will be
responsible for complying with all applicable reporting, withholding and
disclosure requirements under the Internal Revenue Code of 1986 with respect to
the Covered Contracts and Seller Separate Accounts, and Seller will cooperate
with Purchaser to the extent necessary to allow Purchaser to fulfill its
responsibilities. Purchaser will, in a timely fashion in light of the dates
such filings and payments by Seller are required, provide to Seller all
information with respect to the Covered Contracts and the Seller Separate
Accounts that may be required for Seller to prepare such filings and tax
returns and will pay to Seller (without reduction for Premium Tax Credits, as
defined below) the amounts that are required to be paid by Seller in connection
with such filings and premium tax returns in respect of premiums, deposits or
other consideration paid to Seller after the Effective Date on the Covered
Contracts and the Seller Separate Accounts. Without limiting the generality of
the foregoing, Purchaser will reimburse Seller for premium taxes due on the
Covered Contracts and the Seller Separate Accounts in sufficient time to allow
Seller to file such returns.

As described below, Purchaser will pay to Seller an amount equal to the
portion of any

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guaranty fund assessments or other premium based assessments paid by Seller
after the Effective Date that are based on premiums, deposits and other
consideration paid after the Effective Date on the Covered Contracts and Seller
Separate Accounts ("Post Closing Assessments"). Seller will pay to or provide
Purchaser with the benefit of any Post Closing Assessments which have been
applied to reduce Seller's premium tax liability ("Premium Tax Credits"),
regardless of the source of such liability. Seller will provide to Purchaser
by March 15 of each year a statement of the amount of Post Closing Assessments
less Premium Tax Credits for the prior calendar year ("Guaranty Fund
Adjustment"). By March 30 of each year Purchaser will pay to Seller the
Guaranty Fund Adjustment, if a positive amount, and Seller will pay or credit
to Purchaser the Guaranty Fund Adjustment, if a negative amount.

(b) In the event that Seller retains a portion of any
investment asset transferred to Purchaser pursuant to Section 6.01 of the
Indemnity Reinsurance Agreement and Section 2.03(c) of the Acquisition
Agreement, (i) Seller will continue to provide, or cause to be provided,
investment management with respect to such asset if Seller's retained interest
is equal to or greater than 50% of the combined interest of Seller and
Purchaser in such asset and (ii) Purchaser will provide, or cause to be
provided, investment management services with respect to such asset if Seller's
interest is less than 50% of the combined interest of Seller and Purchaser in
such asset. The party providing such investment management services shall do
so in the same manner as such party provides such services with respect to its
own portion of the relevant asset, but shall make no other warranty, or have
any other responsibility, to the other party with respect to such investment
management services.

SECTION 3.07. COMPENSATION AND REIMBURSEMENT FOR SELLER.
Purchaser will, promptly upon Seller's request therefor:

(a) compensate Seller for any administrative services it
may from time to time, notwithstanding the intention of the parties expressed
in Section 3.01, be required to perform with respect to the Covered Contracts
and the Seller Separate Accounts, including without limitation accounting,
legal, tax and regulatory filing services, Legally Required Seller Actions and,
to the extent they relate to Covered Contracts and Seller Separate Accounts,
actions and services referred to in Section 3.06; and

(b) reimburse Seller for any other costs it may
reasonably incur with respect to the Covered Contracts and the Seller Separate
Accounts as a result of the reinsurance arrangement contemplated by the
Indemnity Reinsurance Agreement.

The compensation and reimbursement referred to in this Section 3.07 shall be
based on Seller's fully-allocated costs, including a proportionate share of
corporate overhead, as detailed in invoices to Purchaser.

ARTICLE IV

BOOKS AND RECORDS; REPORTS

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SECTION 4.01. MAINTENANCE OF BOOKS AND RECORDS. (a) For the
duration of this Agreement, Purchaser shall maintain, at a location to be
agreed upon by Purchaser and Seller, books and records of all transactions
pertaining to the Covered Contracts, including, but not limited to, any
disbursement requests submitted in respect of the Covered Contracts and any
documents relating thereto, any communications relating to any Covered
Contract, any communication with any regulatory authority, complaint logs and
all data used by Purchaser in the performance of services required under this
Agreement. These books and records shall be maintained (i) in accordance with
any and all applicable statutes, rules and regulations and (ii) in a format no
less accessible than the format in which such books and records are maintained
on the date hereof. All such books and records pertaining to a Covered
Contract shall be made available to Seller, its auditors or other designees,
and regulatory agencies, during normal business hours and at any other time on
reasonable notice, for review, inspection, examination and reproduction. Upon
termination of this Agreement, all books and records pertaining to Covered
Contracts which have not expired shall be delivered promptly to Seller or such
other person or entity as Seller shall designate in writing.

(b) Purchaser shall back up all of its computer files used in
the performance of services under this Agreement on a daily basis and shall
maintain back-up files in an off-site location.

(c) Purchaser shall maintain facilities and procedures
reasonably acceptable to Seller for safekeeping all records used in the
performance of services under this Agreement.

SECTION 4.02. TRANSACTION REPORT. Within five Business Days
of the end of each calendar month during the term of this Agreement, Purchaser
shall provide Seller with a summary report and accounting of all transactions,
including receipts, payments, policy loans, surrenders and other matters, that
have occurred during that month, in a form acceptable to Seller. Purchaser
shall provide a final accounting to Seller within 15 Business Days following
the end of the month during which the termination of this Agreement occurs.

SECTION 4.03. FINAL BALANCE SHEET. Purchaser shall assist
Seller, as reasonably requested by Seller, in the preparation of the Proposed
Balance Sheet and the Final Balance Sheet, as such terms are defined in the
Acquisition Agreement.

ARTICLE V

INABILITY TO PERFORM SERVICES; ERRORS

SECTION 5.01. INABILITY TO PERFORM SERVICES. In the event
that Purchaser shall be unable to perform services as required by this
Agreement for any reason for a period that can reasonably be expected to exceed
three Business Days, Purchaser shall cooperate with Seller in obtaining an
alternative means of providing such services. Purchaser will be responsible
for all costs incurred in either restoring services or obtaining an alternative
source of services, except to the extent such inability by Purchaser to perform
the services required by this Agreement is the result of, or is

127

caused by, the failure of Seller to perform its obligations under the
Transition Services Agreement.

SECTION 5.02. ERRORS. Purchaser shall, at its own expense,
correct any errors in Administrative Services caused by it within a reasonable
time after receiving notice thereof from Seller or otherwise, except to the
extent such inability by Purchaser to perform the services required by this
Agreement is the result of, or is caused by, the failure of Seller or any of
its Affiliates as the case may be, to perform its obligations as set forth
under the Transition Services Agreement. This obligation includes, without
limitation, reimbursement to the Seller Separate Accounts and the management
investment companies underlying that account for any dilution or other adverse
effect due to transactions made effective as of an earlier date, commonly
referred to as "breakage."

ARTICLE VI

REGULATORY MATTERS

SECTION 6.01. RESPONSIBILITIES OF PURCHASER. Purchaser, on
behalf of Seller, shall, subject to the second paragraph of Section 3.01 and
Section 3.06(a) be responsible for all state insurance department and federal
and state securities law filings (including, but not limited to, filings of
riders and amendments), the maintenance of all required licenses and permits,
compliance with all regulatory requirements and the taking of all required
actions with respect to government authorities.

ARTICLE VII

INDEMNIFICATION

SECTION 7.01. INDEMNIFICATION. (a) Purchaser agrees to
indemnify and hold harmless Seller and any of its directors, officers,
employees, agents or affiliates from any and all losses, costs, claims,
demands, compensatory, extra contractual and/or punitive damages, fines and
penalties (collectively, "Seller Losses") arising out of or caused by: (i)
fraud, theft or embezzlement by officers, employees or agents of Purchaser
during the term of this Agreement; (ii) the failure, either intentional or
unintentional, of Purchaser to properly perform the services or take the
actions required by this Agreement, including, without limitation, the failure
to properly process, evaluate and pay disbursement requests in accordance with
the terms of this Agreement; (iii) any other act of negligence or willful
misconduct committed by officers, agents or employees of Purchaser during the
term of this Agreement; (iv) any failure of Purchaser to comply with applicable
laws, rules and regulations during the term of this Agreement other than,
during the first 18 months after the Effective Date, Seller Losses arising out
of or caused by actions or inactions of Purchaser consistent with the manner in
which such services are being provided by Seller immediately prior to the
Effective Date, except if changes are required pursuant to Section 2.02 hereof;
or (v) the failure of any Person described in clause (ii) of Section 11.08 to
properly

128

perform the services that Purchaser is to provide hereunder.

(b) Seller agrees to indemnify and hold harmless Purchaser
and any of its directors, officers, employees, agents or affiliates from any
and all losses, costs, claims, demands, compensatory, extra contractual and/or
punitive damages, fines and penalties (collectively, "Purchaser Losses")
arising out of or caused by: (i) fraud, theft or embezzlement by officers,
employees or agents of Seller during the term of this Agreement; (ii) the
failure, either intentional or unintentional, of Purchaser to properly perform
the services or take the actions required by this Agreement, including, without
limitation, the failure to properly process, evaluate and pay disbursement
requests in accordance with the terms of this Agreement; (iii) any other act of
negligence or willful misconduct committed by officers, agents or employees of
Seller during the term of this Agreement; (iv) any failure of Seller to comply
with applicable laws, rules and regulations during the term of this Agreement
other than (x) any failure caused by the action or inaction of Purchaser,
including when acting in the name or on behalf of Seller, whether or not in
compliance with the terms of this Agreement, or (y) any such failure of Seller
to comply which such action or inaction referred to in clause (x) above
constitutes.

SECTION 7.02. NOTICE OF ASSERTED LIABILITY. In the event
that either party hereto asserts a claim for indemnification hereunder, such
party seeking indemnification (the "Indemnified Party") shall give written
notice to the other party (the "Indemnifying Party") specifying the facts
constituting the basis for, and the amount (if known) of, the claim asserted.

SECTION 7.03. RIGHT TO CONTEST CLAIMS OF THIRD PARTIES. (a)
If an Indemnified Party asserts, or may in the future seek to assert, a claim
for indemnification hereunder because of a claim or demand made, or an action,
proceeding or investigation instituted, by any Person not a party to this
Agreement (a "Third Party Claimant") that may result in a Purchaser Loss with
respect to which Purchaser is entitled to indemnification pursuant to Section
7.01(a) hereof or a Seller Loss with respect to which Seller is entitled to
indemnification pursuant to Section 7.01(b) hereof (an "Asserted Liability"),
the Indemnified Party shall so notify the Indemnifying Party as promptly as
practicable, but in no event later than 10 Business Days after such Asserted
Liability is actually known to the Indemnified Party. Failure to deliver
notice with respect to an Asserted Liability in a timely manner shall not be
deemed a waiver of the Indemnified Party's right to indemnification for Losses
in connection with such Asserted Liability but the amount of reimbursement to
which the Indemnified Party is entitled shall be reduced by the amount, if any,
by which the Indemnified Party's losses would have been less had such notice
been timely delivered.

(b) The Indemnifying Party shall have the right, upon written
notice to the Indemnified Party, to investigate, contest, defend or settle the
Asserted Liability; provided, that the Indemnified Party may, at its option and
at its own expense, participate in the investigation, contesting, defense or
settlement of any such Asserted Liability through representatives and counsel
of its own choosing. The failure of the Indemnifying Party to respond in
writing to proper notice of an Asserted Liability within 10 days after receipt
thereof shall be deemed an election not to defend the same. Unless and until
the Indemnifying Party elects to defend the Asserted Liability, the Indemnified
Party shall have the right, at its option and at the Indemnifying

129

Party's expense, to do so in such manner as it deems appropriate, including,
but not limited to, settling such Asserted Liability (after giving notice of
the settlement to the Indemnifying Party) on such terms as the Indemnified
Party deems appropriate.

(c) Except as provided in the immediately preceding sentence,
the Indemnified Party shall not settle or compromise any Asserted Liability for
which it seeks indemnification hereunder without the prior written consent of
the Indemnifying Party (which shall not be unreasonably withheld) during the 10
day period specified above.

(d) The Indemnifying Party shall be entitled to participate
in (but not to control) the defense of any Asserted Liability which it has
elected, or is deemed to have elected, not to defend, or which it does not have
the right to defend under paragraph (b) of this Section 7.03, with its own
counsel and at its own expense.

(e) Except as provided in the first sentence of paragraph (b)
of this Section 7.03, the Indemnifying Party shall bear all costs of defending
any Asserted Liability and shall indemnify and hold the Indemnified Party
harmless against and from all costs, fees and expenses incurred in connection
with defending such Asserted Liability.

(f) Purchaser and Seller shall make mutually available to
each other all relevant information in their possession relating to any
Asserted Liability (except to the extent that such action would result in a
loss of attorney-client privilege) and shall cooperate with each other in the
defense thereof.

SECTION 7.04. INDEMNIFICATION PAYMENTS. Any payment
hereunder shall be made by wire transfer of immediately available funds to such
account or accounts as the Indemnified Party shall designate to the
Indemnifying Party in writing.

ARTICLE VIII

DURATION; TERMINATION

SECTION 8.01. DURATION. This Agreement shall commence on the
date of its execution and continue until such time as none of the Covered
Contracts remains in force and no further Administrative Services in respect of
the Covered Contracts are required, or until it is terminated under Section
8.02. Purchaser shall cooperate fully in the transfer of services and the
books and records maintained by Purchaser pursuant to Section 4.01 hereof (or,
where appropriate, copies thereof) to Seller or Seller's designee, so that
Seller or its designee will be able to perform the services required under this
Agreement without interruption following termination of this Agreement.

SECTION 8.02. TERMINATION. (a) This Agreement is subject to
immediate termination at the option of Seller, upon written notice to
Purchaser, on the occurrence of any of the following events:

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(i) A voluntary or involuntary proceeding is
commenced in any state by or against Purchaser for the purpose of conserving,
rehabilitating or liquidating Purchaser, or Purchaser shall lose its authority
to perform services hereunder;

(ii) There is a material breach by Purchaser of any
term or condition of this Agreement, that is not cured by Purchaser within 90
days of receipt of written notice from Seller of such breach or act;

(iii) Any liability policy or bond required pursuant
to Article X of this Agreement is canceled, terminated or substantially
revised; or

(iv) Purchaser is unable to perform the services
required under Articles III, IV and V of this Agreement for a period of 90
consecutive days for any reason.

(b) This Agreement will terminate automatically in the event
that Seller exercises recapture under the Indemnity Reinsurance Agreement
pursuant to Section 3.02 thereof.

(c) This Agreement may be terminated at any time upon the
mutual written consent of the parties hereto, which writing shall state the
effective date of termination.

(d) In the event that this Agreement is terminated under any
of the provisions of this Section 8.02 other than Section 8.02(b), Purchaser
shall select a third-party administrator to perform the services required by
this Agreement. Seller shall have the right to approve any such administrator
selected by Purchaser, but such approval will not unreasonably be withheld. If
Purchaser fails to select an administrator pursuant to this Section 8.02(d),
Seller shall select such an administrator. In either case, Purchaser shall pay
all fees and charges imposed by the selected administrator and shall continue
to be entitled to the compensation provided for in Article XI hereof, which
shall survive the termination of this Agreement in all circumstances other than
a termination pursuant to Section 8.02(b).

ARTICLE IX

ARBITRATION

Any dispute arising out of or relating to the interpretation,
performance or breach of this Agreement, including the formation or validity
thereof, shall be submitted for decision to a panel of three arbitrators.
Notice requesting arbitration must be in writing and sent certified or
registered mail, return receipt requested.

131

do so, may appoint the second arbitrator.

Unless the parties otherwise agree all arbitrators shall be
disinterested active or former officers of insurance or reinsurance companies.

Within 30 days after notice of appointment of all arbitrators,
the panel shall meet and determine a schedule for the conduct of the
arbitration, including hearings. The panel shall be relieved of all judicial
formality and shall not be bound by the strict rules of procedure and evidence.
The panel shall determine where the arbitration shall take place. To the
extent and only to the extent that the provisions of this Agreement are
ambiguous or unclear, the panel shall make its decision considering the custom
and practice of the applicable insurance and reinsurance business. Insofar as
the arbitration panel looks to substantive law, the law of New York shall
govern. The decision of any two arbitrators when rendered in writing shall be
final and binding. The panel is empowered to grant interim relief as it may
deem appropriate.

ARTICLE X

INSURANCE

SECTION 10.01. LIABILITY INSURANCE. Purchaser shall maintain
errors and omissions liability coverages in commercially prudent amounts, to
cover any loss arising as a result of any real or alleged negligence, errors or
omissions on the part of Purchaser's officers, agents or employees in any
aspect of the performance of services under this Agreement.

SECTION 10.02. FIDELITY BOND. Purchaser shall maintain
fidelity bond coverage in commercially prudent amounts to cover any loss due to
the misdeeds of Purchaser's officers, employees or agents.

ARTICLE XI

132

MISCELLANEOUS

SECTION 11.01. HEADINGS, SCHEDULES AND EXHIBITS. Headings
used herein are not a part of this Agreement and shall not affect the terms
hereof. The attached Schedules and Exhibits are a part of this Agreement.

SECTION 11.02. NOTICES. Any notice required or permitted
hereunder shall be in writing and shall be delivered personally (by courier or
otherwise), telegraphed, telexed, sent by facsimile transmission or sent by
certified, registered or express mail, postage prepaid. Any such notice shall
be deemed given when so delivered personally, telegraphed, telexed or sent by
facsimile transmission or, if mailed, three days after the date of deposit in
the United States mails, as follows:

(a) If to Purchaser to:

The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000

(b) If to Seller to:

With a concurrent copy to:

Any party may, by notice given in accordance with this
Agreement to the other parties, designate another address or person for receipt
of notices hereunder.

SECTION 11.03. AMENDMENTS. This Agreement cannot be
modified, changed, discharged or terminated, except by an instrument in writing
signed by an authorized officer of each of the parties hereto.

SECTION 11.04. EXECUTION IN COUNTERPART. This Agreement may
be executed by the

133

parties hereto in separate counterparts, each of which when so executed and
delivered shall be an original, but all such counterparts shall together
constitute one and the same instrument. Each counterpart may consist of a
number of copies hereof each signed by less than all, but together signed by
all of the parties hereto.

SECTION 11.05. LIMITED AUTHORITY. Seller and Purchaser are
not partners or joint venturers, and no employee or agent of either party shall
be considered an employee or agent of the other. Purchaser's authority shall
be limited to that which is expressly stated in this Agreement.

SECTION 11.06. ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors, permitted assigns and legal representatives. Neither this
Agreement, nor any right hereunder, may be assigned by either party (in whole
or in part) without the prior written consent of the other party hereto, which
consent shall not be unreasonably withheld provided, however, that Purchaser
may not assign this Agreement or such rights so long as it is the reinsurer
under the Indemnity Reinsurance Agreement.

SECTION 11.07. NO THIRD PARTY BENEFICIARIES. Except as
otherwise specifically provided for herein, nothing in this Agreement is
intended or shall be construed to give any person, other than the parties
hereto, their successors and permitted assigns, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein.

SECTION 11.08. SUBCONTRACTING. Purchaser may not subcontract
for the performance of any services that Purchaser is to provide hereunder,
except as permitted in writing by Seller, which consent shall not be
unreasonably withheld. Notwithstanding the foregoing sentence, Purchaser shall
be permitted to subcontract for the performance of any of such services with
(i) any Person that is performing such services as a subcontractor for Seller
as of the date hereof, without obtaining the consent of Seller so long as
Purchaser notifies Seller of such subcontract on or prior to the effective date
thereof or (ii) any Person that is performing such services as a subcontractor
for Purchaser with respect to all or substantially all of Purchaser's insurance
business that is similar to the insurance business to be administered
hereunder.

SECTION 11.09. CHANGE IN STATUS. Purchaser shall notify
Seller immediately of any "change of control" filing, the adoption of any plan
to liquidate, merge or dissolve Purchaser, or of any proceeding or lawsuit
which effects Purchaser's ability to perform this Agreement, including, but not
limited to, insolvency or rehabilitation proceedings.

SECTION 11.10. SURVIVAL. The provisions of Articles VII and
IX hereof shall survive the termination of this Agreement.

SECTION 11.11. FURTHER ASSURANCES. Each of the parties
hereto shall execute such documents and other papers and perform such further
acts as may be reasonably required to carry out the provisions of this
Agreement. Without limiting the generality of the foregoing, Seller shall (a)
execute all documents necessary to grant Purchaser the disbursement payment
authority

134

contemplated by Section 3.03 of this Agreement, (b) subject to Section 3.01,
make any Seller regulatory filings or broker appointments that Purchaser is
required to make on behalf of Seller hereunder and (c) grant any licenses to
Purchaser with respect to any logos, trademarks, service marks or copyrights
necessary for Purchaser to comply with the terms of this Agreement.

SECTION 11.12. GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK,
WITHOUT GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

135

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

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

BY:
------------------------------------------------
NAME:
-----------------------------------------------
TITLE:
----------------------------------------------

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

BY:
------------------------------------------------
NAME:
-----------------------------------------------
TITLE:
----------------------------------------------

136

SCHEDULE 1.01

SELLER SEPARATE ACCOUNTS

137

SCHEDULE 2.01

ADMINISTRATIVE SERVICES

o Disbursements, including but not limited to payment of benefits, claim
investigation, adjustment, resisting and defense of claims, policy
loans, premium refunds, withdrawals, and surrenders

o Statistical information

o Billing and premium collection

o Policy lapses, expiries, and nonforfeitures

o Reinstatements

o Legally required accounting and actuarial information in order to meet
statutory, tax and GAAP requirements

o Preparation and filing of insurance forms and amendments, including
rate authorization filings, if applicable

o Underwriting and new business administration

o Commission processing

o Electronic data processing services

o Licensing of agents

o Preparation and filing of any tax information returns as may be
required under federal and state laws

o Completion of any annual, quarterly or monthly statement exhibits

o Direct response to any insurance department or other regulatory
inquiries with copies to Seller as are necessary to enable Seller to
meet its compliance responsibilities

o Any DAC computations (whether or not related to Settlement Agreements)

o Preparation of all reports required to be filed under federal and
state securities laws, including but not limited to the annual and
semiannual reports to contractholders, confirmation of all contract
customer transactions, proxy material, including all mailings to
contractholders, annual reports on Form N-SAR, registration of units
under Rule 24f-2 of

138

the Investment Company Act of 1940, applications and prospectuses.

o Reinsurance Administration

o Broker Dealer administrative activities (e.g. trading)

o Licensing and appointment of agents

o Contracting with and oversight of outside investment managers

o Compliance with IRC, SEC and other regulators with respect to the
registered products

139

EXHIBIT C

140

TRANSITION SERVICES AGREEMENT

BY AND BETWEEN

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

AND

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Dated as of [__________]

141
TABLE OF CONTENTS

Page

ARTICLE I DEFINITIONS ................................................... 2

ARTICLE II APPOINTMENT; STANDARDS ....................................... 4

ARTICLE III EFFECTIVE DATE; TERM; TERMINATION AS TO PARTICULAR
SERVICES ............................................................ 4

ARTICLE IV SERVICES ..................................................... 4

ARTICLE V INABILITY TO PERFORM SERVICES; ERRORS ......................... 8

ARTICLE VI PRICING ...................................................... 8

ARTICLE VII INDEMNIFICATION ............................................. 8

ARTICLE VIII ARBITRATION ............................................... 11

ARTICLE IX INSURANCE .................................................... 12

ARTICLE X MISCELLANEOUS ................................................. 12

SCHEDULE 2.01

Menu of Services ................................................ 16

SCHEDULE 4.01 Services Selected ......................................... 17

SCHEDULE 4.02(a) Hartford Office Space .................................. 18

SCHEDULE 4.02(b) Field Office Space ..................................... 19

SCHEDULE 4.03(b) Employees ............................................... 20

142

TRANSITION SERVICES AGREEMENT

This TRANSITION SERVICES AGREEMENT (this "Agreement"), dated as of
[_______], is made by and between Connecticut General Life Insurance Company, a
stock life insurance company incorporated in Connecticut ("Seller"), and The
Lincoln National Life Insurance Company, a stock life insurance company
incorporated in Indiana ("Purchaser").

WHEREAS, pursuant to the Indemnity Reinsurance Agreements (as defined
below), Purchaser and Lincoln Life & Annuity Company of New York, a stock life
insurance company incorporated in New York ("LLANY"), are coinsuring certain
individual life insurance, health insurance and annuity contracts issued by
Seller; and

WHEREAS, pursuant to the Purchaser Administrative Services Agreement
(as defined herein), the parties are providing for Purchaser to render certain
administrative services to Seller with respect to the Non-New York Contracts
(as defined herein) and the policies and contracts funded by the Seller
Separate Accounts (as defined herein); and

WHEREAS, pursuant to the LLANY Administrative Services Agreement (as
defined herein), LLANY and Seller are providing for LLANY to render certain
administrative services to Seller with respect to the New York Contracts (as
defined herein); and

WHEREAS, pursuant to the Intercompany Administrative Services
Agreement (as defined herein), Purchaser and LLANY are providing for Purchaser
to render certain administrative services to LLANY with respect to the New York
Contracts; and

WHEREAS, the parties desire to effectuate the Purchaser Administrative
Services Agreement, the LLANY Administrative Services Agreement and provisions
of the Intercompany Administrative Services Agreement pertinent to LLANY's
obligations under the LLANY Administrative Services Agreement and to
cooperatively provide for an orderly transition in the performance of
administrative services from Seller to Purchaser and from Seller to LLANY as of
the Effective Date (as defined herein) without interruption of the operations
of the Business (as defined herein);

NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, and upon the terms and conditions set forth herein,
the parties hereto agree as follows:
143

ARTICLE I

DEFINITIONS

The following terms shall have the respective meaning set forth below
throughout this Agreement:

"ACQUISITION AGREEMENT" means the Asset Transfer and Acquisition
Agreement, dated as of July 27, 1997, by and among CIGNA Corporation,
Connecticut General Corporation, Seller, CIGNA Life Insurance Company, Lincoln
National Corporation, Purchaser and LLANY.

"AFFILIATE" means, with respect to any Person, at the time in
question, any other Person controlling, controlled by or under common control
with such Person.

"BUSINESS" means the business of issuing, selling and administering
individual life insurance (other than the COLI Business), health insurance and
annuity contracts as currently conducted by Seller's Individual Insurance
Division or, where so specified herein, as conducted by Purchaser and LLANY
following the Closing, the other business activities related thereto as
currently conducted by Seller's Individual Insurance Division, and the
respective businesses currently conducted by the Seller Subsidiaries.

"BUSINESS DAY" shall have the meaning set forth in the Purchaser
Administrative Services Agreement.

"COLI BUSINESS" shall have the meaning set forth in the Acquisition
Agreement.

"EFFECTIVE DATE" means the Effective Date as defined in the
Indemnity Reinsurance Agreements.

"INDEMNITY REINSURANCE AGREEMENTS" means the Purchaser Indemnity
Reinsurance Agreement and the LLANY Indemnity Reinsurance Agreement.

"INTERCOMPANY ADMINISTRATIVE SERVICES AGREEMENT" means the
Administrative Services Agreement, dated as of the date hereof, entered into by
and between Purchaser and LLANY, providing for Purchaser to render certain
administrative services to LLANY with respect to the New York Contracts on and
after the Effective Date.

"LLANY" shall have the meaning set forth in the first paragraph
of this Agreement.

"LLANY INDEMNITY REINSURANCE AGREEMENT" means the Indemnity
Reinsurance Agreement, dated as of the date hereof, by and between LLANY and
Seller.

"LLANY ADMINISTRATIVE SERVICES AGREEMENT" means the
Administrative Services Agreement, dated as of the date hereof, entered into by
and between LLANY and Seller, providing for LLANY to render certain
administrative services to Seller with respect to the New
144

York Contracts on and after the Effective Date.

"NEW YORK CONTRACTS" means the Coinsured Contracts, as such term
is defined in the LLANY Indemnity Reinsurance Agreement.

"NON-NEW YORK CONTRACTS" means the Coinsured Contracts, as such
term is defined in the Purchaser Indemnity Reinsurance Agreement.

"OFFICE LEASE AGREEMENT" shall have the meaning set forth in
Section 4.02(a).

"OFFICE SUBLEASE AGREEMENTS" shall have the meaning set forth in
Section 4.02(b).

"PERSON" means any individual, corporation, partnership, firm,
joint venture, association, joint-stock company, trust, unincorporated
organization, governmental, judicial or regulatory body, business unit,
division or other entity.

"PURCHASER" shall have the meaning set forth in the first
paragraph of this Agreement.

"PURCHASER ADMINISTRATIVE SERVICES AGREEMENT" means the
Administrative Services Agreement, dated as of the date hereof, by and between
Purchaser and Seller, providing for Purchaser to render certain administrative
services to Seller with respect to the Covered Contracts (as defined in the
Purchaser Indemnity Reinsurance Agreement) on and after the Effective Date.

"PURCHASER INDEMNITY REINSURANCE AGREEMENT" means the Indemnity
Reinsurance Agreement, dated as of the date hereof, by and between Purchaser
and Seller.

"SELLER" shall have the meaning set forth in the first paragraph
of this Agreement.

"SELLER SEPARATE ACCOUNTS" shall have the meaning set forth in
the Acquisition Agreement.

"SELLER SUBSIDIARIES" means CIGNA Financial Advisors, Inc., and
CIGNA Associates, Inc.

"UMPIRE" shall have the meaning set forth in Article VIII.
145

ARTICLE II

APPOINTMENT; STANDARDS

SECTION 2.01. APPOINTMENT AND ACCEPTANCE OF APPOINTMENT. Seller has
heretofore advised Purchaser of the services and assets that Seller (other than
the Business) or an Affiliate of Seller (other than the Seller Subsidiaries)
provides or otherwise makes available to the Business and of the internal
charge back methodologies historically used by Seller or such Affiliates, as
the case may be, in charging the Business for such services and assets
("Seller's Charge-Back Methodologies"). A listing of such services and assets,
as so advised to Purchaser, is contained in Schedule 2.01 hereto. Purchaser
has determined to avail itself, from amongst the services and assets listed on
Schedule 2.01, of only those services and assets listed on Schedule 4.01
hereto. Accordingly, Purchaser hereby appoints Seller to provide the
transition services specified in Article IV hereof and in Schedule 4.01 hereto
(collectively, the "Transition Services") for the period specified in Article
III of this Agreement, and Seller hereby accepts such appointment.

SECTION 2.02. STANDARDS. Seller acknowledges that the Transition
Services are of paramount importance to Purchaser. Seller agrees to provide
the Transition Services at a level of service substantially identical to that
being provided to the Business as of July 27, 1997.

ARTICLE III

EFFECTIVE DATE; TERM; TERMINATION AS TO PARTICULAR SERVICES

SECTION 3.01. EFFECTIVE DATE; TERM. This Agreement shall be
effective as of the Effective Date. It shall have a term of 18 calendar months
and shall terminate on the last day of the eighteenth such calendar month
following the Effective Date.

SECTION 3.02. TERMINATION AS TO PARTICULAR SERVICES. Purchaser may
terminate this Agreement with respect to any specific service specified in
Article IV hereof or in Schedule 4.01 hereto by delivery of notice to Seller
not later than 60 days prior to the effective date of such termination as
specified in such notice. No such termination shall in any way affect Seller's
obligation to provide any other service hereunder. Certain specific services
shall be provided for a shorter period than the term of this Agreement, as
provided herein.

ARTICLE IV

SERVICES

SECTION 4.01. CERTAIN SPECIFIED SERVICES. Seller shall provide to
Purchaser the services specified in Schedule 4.01 hereto. As compensation for
the provision of such services by Seller, Purchaser shall pay to Seller a fee
determined in accordance with the internal charge-back
146

methodology historically used by Seller with respect to such services
(excluding any extraordinary third-party charges incurred by Seller in order to
enable Seller to provide such Services to an unaffiliated third party (i.e.,
Purchaser) as contemplated by this Agreement). In addition to the foregoing,
Purchaser shall pay, or shall reimburse Seller for, any taxes imposed by any
state with respect to the fees paid by Purchaser under this Agreement.

SECTION 4.02 LEASE AND SUB-LEASES OF OFFICE SPACE. (a) On the
Effective Date, Seller and Purchaser shall enter into an agreement (the "Office
Lease Agreement") with respect to the office space in Seller's headquarters
facility in Bloomfield, Connecticut, described on Schedule 4.02(a) hereto.
The Office Lease Agreement shall provide for monthly rental payments based on
Seller's Charge-Back Methodologies and shall terminate on the first anniversary
of the Effective Date.

(b) On the Effective Date, Seller and Purchaser shall enter into one
or more agreements (the "Office Sublease Agreements") with respect to the field
office space described on Schedule 4.02(b) hereto. The Office Sublease
Agreements shall provide for monthly rental payments in an amount determined in
accordance with Seller's Charge-Back Methodologies and shall otherwise have
terms that are substantially similar to those contained in the lease whereby
Seller leases the shared office space from a third party (the "Prime Lease"),
and shall terminate on the last day of the eighteenth month following the
Effective Date or, if earlier, the end of the term of the Prime Lease;
provided, that Seller shall exercise any renewal option under any Prime Lease
at Purchaser's direction.

SECTION 4.03. OTHER SERVICES. In addition to the services
specified in Schedule 4.01 hereto, Seller shall provide to Purchaser the
services described below.

(a) In the event that the Effective Date occurs before December 31,
1997, then, from the Effective Date through December 31, 1997, Seller shall
provide to Purchaser those services to support the Business that immediately
prior to the Effective Date were provided by Contract Employees and Band 2
Employees (as defined in the Acquisition Agreement). The services may include
(without limitation) the following: (i) underwriting; (ii) billing and/or
premium servicing; (iii) pricing; (iv) product development; (v) client and
producer services, (vi) training; (vii) claims management and distribution;
(viii) broker/dealer activities; (ix) support services for brokers,
wholesalers, marketing, customer support; and (x) hardware and software systems
and maintenance.

(b) Seller shall provide to Purchaser those services that (i)
immediately prior to the Effective Date were provided by Band 1 Employees (as
defined in the Acquisition Agreement) or (ii) on July 27, 1997, were provided
by those employees identified in Schedule 4.03(b) hereto. The services may
include (without limitation) the following: (i) human resources; (ii) finance;
(iii) accounting; and (iv) marketing.

With respect to such services, on the Effective Date, Purchaser shall
provide a written notice to Seller identifying the type and level of services
Purchaser will require for the period from the Effective Date through the end
of the second calendar month thereafter. By the fifth business

147

day of each calendar month beginning after the period covered by the initial
notice described in the preceding sentence, Purchaser shall provide a written
notice to Seller identifying the type and level of services Purchaser will
require during the next following calendar month.

(c) Seller shall determine the manner in which it shall provide
the services described in this Section 4.03 to Purchaser and, subject to the
restrictions regarding individuals listed in Schedule 4.03(b), the employees or
agents who shall provide such services. Notwithstanding the above, such
services shall be provided at a quality level generally consistent with the
past practices of Seller and the level at which the Business was being operated
on July 27, 1997, and the individuals providing such services shall possess
such qualifications as are reasonably required to operate the Business at such
quality level. In the event that Purchaser requires services of the type that
an individual listed in Schedule 4.03(b) performed as of July 27, 1997, such
individual shall be assigned to provide such services under this Section 4.03.
Notwithstanding the preceding sentence, Seller may substitute another
individual for any individual listed in Schedule 4.03(b) to provide services
previously provided by such individual; provided that any such individual who
is substituted has the qualifications reasonably required to perform such
services and further provided that a substitution may occur only if Seller and
Purchaser mutually agree thereto (and Purchaser shall not unreasonably withhold
its agreement to any substitution proposed by Seller). Seller shall establish
a transition services team with oversight responsibility for the personnel
responsible for providing such transition services and a transition services
leader reasonably acceptable to Purchaser who shall have primary responsibility
for supervising all transition services described in this Section 4.03.

(d) In no event shall the personnel whose services are provided to
Purchaser in accordance with this Agreement be considered employees or agents
of Purchaser. Seller shall be solely liable for the payment of salary, bonus,
employer's share of all applicable withholding taxes, other reasonable out of
pocket expenses normally incidental to the services (including, without
limitation, travel and entertainment expenses) and benefits received by such
personnel consistent with the historical practices of Seller and its Affiliates
(collectively, the "Compensation and Benefits").

Purchaser's sole obligation to Seller with respect to such personnel
for services under this Section 4.03 shall be as described in this Section
4.03(d). Purchaser shall reimburse Seller for the amount of Compensation and
Benefits paid to or provided on behalf of such personnel for the amount or
period of time such personnel actually devote to providing such transition
services to the Business; provided, however, that Purchaser shall have no
obligation to reimburse Seller for the amount of any severance that may be
payable by reason of the termination of any employee listed in Schedule
4.03(b), regardless of whether Purchaser has notified Seller that it no longer
requires services in the area in which such individual was employed by Seller.
The aggregate Compensation and Benefits costs for any individual employee
listed in Schedule 4.03(b) for any month may not be increased by more than ten
percent over the cost for any prior month during the period of this Agreement
without the prior written approval of Purchaser. Other than increases in
salary or base remuneration in the ordinary course of business and any changes
in benefits disclosed in Schedule 5.01(B) to the Acquisition Agreement or as
described in the preceding sentence, there may be no increases in the
Compensation and Benefits of any employees
148

providing services under this Section 4.03 without the prior written approval
of Purchaser. In the event that the Compensation and Benefits paid to or
provided on behalf of any such personnel during the period of this Agreement
include amounts attributable to an entire year or any portion of a year greater
than the period of time during which such personnel were providing transition
services under this Section 4.03, then the portion of such Compensation and
Benefits that Purchaser shall reimburse to Seller shall be determined by
allocation of such Compensation and Benefits in accordance with the ratio that
the amount or period of time during such year or portion of the year during
which the individuals provided services under this Agreement and the salary or
other remuneration earned by such individuals during such period bears to the
total amount or period of time such individuals were employed by Seller for
such year or portion of a year and the salary or other remuneration earned by
such individuals during such period of employment.

To the extent not otherwise provided for herein, Purchaser shall reimburse
Seller for Purchaser's reasonably allocable share of overhead costs, other than
corporate level tax, attributable to Seller personnel who perform transition
services for Purchaser. Seller shall remain responsible for all overhead costs
of all Seller personnel who do not perform transition services for Purchaser
and for Seller's reasonably allocable share of the overhead costs attributable
to Seller personnel who both perform transition services for Purchaser and
perform services for Seller.

(e) With respect to the services described in this Section 4.03,
Purchaser shall make payments of the amounts owed to Seller under this
Agreement (as determined under Section 4.03(d)) as follows: (i) on or before
the tenth day of the month (other than the first month during which transition
services are provided), Seller shall provide to Purchaser a written itemization
of the actual Compensation and Benefits costs incurred by Seller for such
transition services provided during the prior month (the "Prior Month's
Costs"); and (ii) on or before the twentieth day of such month, Purchaser shall
pay to Seller an amount equal to the Prior Month's Costs. In the event,
however, that the total Prior Month's Costs cannot be determined by Seller by
the tenth day of any month, then, on such date, Seller shall provide a written
itemization to the Purchaser to the extent the Prior Month's Costs can be
determined and shall indicate on the itemization the extent to which the Prior
Month's Costs cannot be determined (the "Undetermined Costs"). As soon as
practicable thereafter as Seller is able to determine any previously
Undetermined Costs, Seller shall provide a written itemization thereof to
Purchaser, and Purchaser shall have a period of ten days to pay such costs. In
Seller's discretion, Seller may provide a single itemization for all
Undetermined Costs for any month, aggregate any Undetermined Costs with the
Prior Month's Costs for any subsequent month, or provide separate itemizations
as any previously Undetermined Costs are determined; provided however, that
Seller shall not provide a separate itemization for any previously Undetermined
Costs aggregating less than $10,000, unless such costs are the final costs for
services under this Section 4.03 to be itemized.

SECTION 4.04. CERTAIN SERVICES PROVIDED BY PURCHASER. In addition to
the services to be provided to Purchaser by Seller identified as such in
Schedule 2.01, during the term of this Agreement Purchaser shall provide to
Seller the services identified on Schedule 2.01 for the fees
149

identified thereon.

ARTICLE V

INABILITY TO PERFORM SERVICES; ERRORS

SECTION 5.01. INABILITY TO PERFORM SERVICES. In the event that
Seller shall be unable to perform services as required by this Agreement for
any reason for a period that can reasonably be expected to exceed three
Business Days, Seller shall cooperate with Purchaser in obtaining an
alternative means of providing such services. Seller will be responsible for
all costs incurred in either restoring services or obtaining an alternative
source of services.

SECTION 5.02. ERRORS. Seller shall, at its own expense, correct any
errors in Transition Services caused by it within a reasonable time after
receiving notice thereof from Purchaser or otherwise.

ARTICLE VI

PRICING

SECTION 6.01. PRICING. Seller will price all services specified on
Schedule 4.01 in accordance with the Seller's Charge-Back Methodologies.

ARTICLE VII

INDEMNIFICATION

SECTION 7.01. INDEMNIFICATION. (a) Seller agrees to indemnify and
hold harmless Purchaser and any of its directors, officers, employees, agents
or affiliates from any and all losses, costs, claims, demands, compensatory,
extra contractual and/or punitive damages, fines and penalties (collectively,
"Purchaser Losses") arising out of or caused by:

(i) fraud, theft or embezzlement by officers, employees or agents of
Seller during the term of this Agreement;

(ii) the failure, either intentional or unintentional, of Seller to
properly perform the services required by this Agreement, including, without
limitation, the failure to properly process, evaluate and pay disbursement
requests in accordance with the terms of this Agreement;

(iii) the breach of any representation or warranty of Seller;

(iv) any failure of Seller to comply with applicable laws, rules and
regulations during
150

the term of this Agreement;

(v) the failure of any subcontractor retained by Seller in accordance
with Section 10.08 to perform the services that Seller is to provide hereunder;
or

(vi) any liability or loss incurred or suffered as a result of any
claim by any individual providing services under Section 4.03(b) hereof that
arose during the term of this Agreement out of any violation by Seller or any
of its Affiliates of (A) any law regulating the terms and conditions of
employment, including any statute, regulation or ordinance, under the common
law or in equity (including for wrongful discharge or otherwise) or (B) any
agreement, including any policy, understanding or promise, written or oral,
formal or informal, between the Seller or its Affiliates and the individual.

(b) Purchaser agrees to indemnify and hold harmless Seller and any of
its directors, officers, employees, agents or affiliates from any and all
losses, costs, claims, demands, compensatory, extra contractual and/or punitive
damages, fines and penalties (collectively, "Seller Losses") arising out of or
caused by:

(i) fraud, theft or embezzlement by officers, employees or agents of
Purchaser during the term of this Agreement;

(ii) any failure of Purchaser to comply with applicable laws, rules
and regulations during the term of this Agreement, other than any failure
caused by the action or inaction of Seller not in compliance with the terms of
this Agreement; or

(iii) any liability or loss incurred or suffered as a result of any
claim by any individual providing services under Section 4.03(a) hereof that
(A) relates to the employment or agency relationship of such individual with
the Seller or any of its Affiliates or the termination of such relationship,
(B) arose out of actions, events or omissions that occurred (or, in the case of
omissions, failed to occur) during the term of this Agreement, and (C) arose
either (1) under any law regulating the terms and conditions of employment,
including any statute, regulation or ordinance, under the common law or in
equity (including any claims for wrongful discharge or otherwise), or (2) under
any agreement, including any policy, understanding or promise, written or oral,
formal or informal, between the Seller or its Affiliates and the individual,
but (D) did not arise out of any violation by Seller or its Affiliates of any
law referred to in Clause (C)(1) above or any agreement referred to in Clause
(C)(2) above.

SECTION 7.02. NOTICE OF ASSERTED LIABILITY. In the event that either
party hereto asserts a claim for indemnification hereunder, such party seeking
indemnification (the "Indemnified Party") shall give written notice to the
other party (the "Indemnifying Party") specifying the facts constituting the
basis for, and the amount (if known) of, the claim asserted.

party to this Agreement (a "Third Party Claimant") that may result in a
Purchaser Loss with respect to which Purchaser is entitled to indemnification
pursuant to Section 7.01(a) hereof or a Seller Loss with respect to which
Seller is entitled to indemnification pursuant to Section 7.01(b) hereof (an
"Asserted Liability"), the Indemnified Party shall so notify the Indemnifying
Party, as promptly as practicable but in no event later than 10 Business Days
after such Asserted Liability is actually known to the Indemnified Party.
Failure to deliver notice with respect to an Asserted Liability in a timely
manner shall not be deemed a waiver of the Indemnified Party's right to
indemnification for Losses in connection with such Asserted Liability but the
amount of reimbursement to which the Indemnified Party is entitled shall be
reduced by the amount, if any, by which the Indemnified Party's losses would
have been less had such notice been timely delivered.

(b) The Indemnifying Party shall have the right, upon written notice
to the Indemnified Party, to investigate, contest, defend or settle the
Asserted Liability; provided, that the Indemnified Party may, at its option and
at its own expense, participate in the investigation, contesting, defense or
settlement of any such Asserted Liability through representatives and counsel
of its own choosing. The failure of the Indemnifying Party to respond in
writing to proper notice of an Asserted Liability within 10 days after receipt
thereof shall be deemed an election not to defend the same. Unless and until
the Indemnifying Party elects to defend the Asserted Liability, the Indemnified
Party shall have the right, at its option and at the Indemnifying Party's
expense, to do so in such manner as it deems appropriate, including, but not
limited to, settling such Asserted Liability (after giving notice of the
settlement to the Indemnifying Party) on such terms as the Indemnified Party
deems appropriate.

(c) Except as provided in the immediately preceding sentence, the
Indemnified Party shall not settle or compromise any Asserted Liability for
which it seeks indemnification hereunder without the prior written consent of
the Indemnifying Party (which shall not be unreasonably withheld) during the 10
day period specified above.

(d) The Indemnifying Party shall be entitled to participate in (but
not to control) the defense of any Asserted Liability which it has elected, or
is deemed to have elected, not to defend, or which it does not have the right
to defend under paragraph (b) of this Section 7.03, with its own counsel and at
its own expense.

(e) Except as provided in the first sentence of paragraph (b) of this
Section 7.03, the Indemnifying Party shall bear all costs of defending any
Asserted Liability and shall indemnify and hold the Indemnified Party harmless
against and from all costs, fees and expenses incurred in connection with
defending such Asserted Liability.

(f) Purchaser and Seller shall make mutually available to each other
all relevant information in their possession relating to any Asserted Liability
(except to the extent that such action would result in a loss of
attorney-client privilege) and shall cooperate with each other in the defense
thereof.

SECTION 7.04. INDEMNIFICATION PAYMENTS. Any payment hereunder shall
be made by
152

wire transfer of immediately available funds to such account or accounts as the
Indemnified Party shall designate to the Indemnifying Party in writing.

ARTICLE VIII

ARBITRATION

One arbitrator shall be chosen by each party and the two arbitrators
shall, before instituting the hearing, choose an impartial third arbitrator
(the "Umpire") who shall preside at the hearing. If either party fails to
appoint its arbitrator within 30 days after being requested to do so by the
other party, the latter, after 10 days notice by certified or registered mail
of its intention to do so, may appoint the second arbitrator.

If the two arbitrators are unable to agree upon the selection of the
Umpire within 30 days of their appointment, then each arbitrator shall submit
to the other a list of three Umpire candidates. Each arbitrator shall strike
the names of two candidates from the other arbitrator's list, and the Umpire
shall be selected from the two remaining candidates by a lot drawing procedure
determined by the two arbitrators.

Unless the parties otherwise agree all arbitrators shall be
disinterested active or former officers of insurance or reinsurance companies.

Within 30 days after notice of appointment of all arbitrators, the
panel shall meet and determine a schedule for the conduct of the arbitration,
including hearings. The panel shall be relieved of all judicial formality and
shall not be bound by the strict rules of procedure and evidence. The panel
shall determine where the arbitration shall take place. To the extent and only
to the extent that the provisions of this Agreement are ambiguous or unclear,
the panel shall make its decision considering the custom and practice of the
applicable insurance and reinsurance business. Insofar as the arbitration
panel looks to substantive law, the law of New York shall govern. The decision
of any two arbitrators when rendered in writing shall be final and binding.
The panel is empowered to grant interim relief as it may deem appropriate.

The panel shall render its decision, which shall be in writing and
state the reasons therefor, within 60 days following the termination of
hearings. Judgment upon the award may be entered in any court having
jurisdiction thereof. Each party shall bear the expense of its own arbitrator
and shall jointly and equally bear with the other party the cost of the Umpire.
The remaining costs of the arbitration shall be allocated by the panel. The
panel may, at its discretion, award such further costs and expenses as it
considers appropriate, including but not limited to interest (determined at the
Panel's discretion) and attorneys' fees, to the extent permitted by law.
153

ARTICLE IX

INSURANCE

SECTION 9.01. LIABILITY INSURANCE. Seller shall maintain errors and
omissions liability coverages in commercially prudent amounts, to cover any
loss arising as a result of any real or alleged negligence, errors or omissions
on the part of Seller's officers, agents or employees in any aspect of the
performance of services under this Agreement.

SECTION 9.02. FIDELITY BOND. Seller shall maintain fidelity bond
coverage in commercially prudent amounts to cover any loss due to the misdeeds
of Seller's officers, employees or agents.
ARTICLE X

MISCELLANEOUS

SECTION 10.01. HEADINGS, SCHEDULES AND EXHIBITS. Headings used
herein are not a part of this Agreement and shall not affect the terms hereof.
The attached Schedules are a part of this Agreement.

SECTION 10.02. NOTICES. Any notice required or permitted hereunder
shall be in writing and shall be delivered personally (by courier or
otherwise), telegraphed, telexed, sent by facsimile transmission or sent by
certified, registered or express mail, postage prepaid. Any such notice shall
be deemed given when so delivered personally, telegraphed, telexed or sent by
facsimile transmission or, if mailed, three days after the date of deposit in
the United States mails, as follows:

(a) If to Purchaser to:

The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Xxxxxxxxxx, Xxxxxx & Xxxxxxx, LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000

154

(b) If to Seller to:

With a concurrent copy to:

Any party may, by notice given in accordance with this Agreement to
the other parties, designate another address or person for receipt of notices
hereunder.

SECTION 10.03. AMENDMENTS. This Agreement cannot be modified,
changed, discharged or terminated, except by an instrument in writing signed by
an authorized officer of each of the parties hereto.

SECTION 10.04. EXECUTION IN COUNTERPART. This Agreement may be
executed by the parties hereto in separate counterparts, each of which when so
executed and delivered shall be an original, but all such counterparts shall
together constitute one and the same instrument. Each counterpart may consist
of a number of copies hereof each signed by less than all, but together signed
by all of the parties hereto.

SECTION 10.05. LIMITED AUTHORITY. Seller and Purchaser are not
partners or joint venturers, and no employee or agent of either party shall be
considered an employee or agent of the other. Purchaser's authority shall be
limited to that which is expressly stated in this Agreement.

SECTION 10.06. ASSIGNMENT. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors,
permitted assigns and legal representatives. Neither this Agreement, nor any
right hereunder, may be assigned by either party (in whole or in part) without
the prior written consent of the other party hereto, which consent shall not be
unreasonably withheld.

SECTION 10.07. NO THIRD PARTY BENEFICIARIES. Except as otherwise
specifically provided for herein, nothing in this Agreement is intended or
shall be construed to give any person, other than the parties hereto, their
successors and permitted assigns, any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provision contained herein.

SECTION 10.08. SUBCONTRACTING. Seller may not subcontract for the
performance of any services that Seller is to provide hereunder, except as
permitted in writing by Purchaser, which consent shall not be unreasonably
withheld. Notwithstanding the foregoing sentence, Seller shall be permitted to
subcontract for the performance of any of such services with any Person that is
performing such services as a subcontractor for Seller as of the date hereof,
without obtaining the consent of Purchaser so long as Seller notifies Purchaser
of such subcontract on or prior to the effective date thereof.

SECTION 10.09. CHANGE IN STATUS. Seller shall notify Purchaser
immediately of any
155

"change of control" filing, the adoption of any plan to liquidate, merge or
dissolve Seller, or of any proceeding or lawsuit which effects Seller's ability
to perform this Agreement, including, but not limited to, insolvency or
rehabilitation proceedings.

SECTION 10.10. SURVIVAL. The provisions of Article VII and Article X
hereof shall survive the termination of this Agreement.

SECTION 10.11. FURTHER ASSURANCES. Each of the parties hereto shall
execute such documents and other papers and perform such further acts as may be
reasonably required to carry out the provisions of this Agreement.

SECTION 10.12. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT
GIVING EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
156

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

CONNECTICUT GENERAL LIFE INSURANCE
COMPANY

BY:

NAME:

TITLE:

THE LINCOLN NATIONAL LIFE INSURANCE
COMPANY

BY:

NAME:

TITLE:
157

SCHEDULE 2.01

MENU OF SERVICES
158

SCHEDULE 4.01

SERVICES SELECTED
159

SCHEDULE 4.02(A)

HARTFORD OFFICE SPACE
160

SCHEDULE 4.02(B)

FIELD OFFICE SPACE
161

SCHEDULE 4.03(B)

EMPLOYEES

Xxxxx Xxxxx - Chief Accounting Officer

Xxxxx Xxxxx - Actuarial Program - Financial Reporting

Xxxxxxx Xxxxxxxx - Actuarial Program - Financial Reporting

Xxxxxxx Xxxxxxxxx - Actuarial Program - Financial Reporting

Xxxxxx Xxx - Actuarial Program - Financial Reporting

Xxxx Xxxxxxxxx - Actuarial Program - Financial Reporting

Xxxxxxx Xxxxxxx - Actuarial Program - Financial Reporting

Xxxxxxxx Dolphin - Actuarial Program - Financial Reporting

Xxxxx Xxxxx - Actuarial Program - Financial Reporting

Xxx Xxx - Actuarial Program - Financial Reporting

Xxxxxxx Xxxxxxxxxxx - Actuarial Program

Xxxxxx Xxxx - Financial Program

Xxxxx Xxxxx - Financial Program

Xxxxx Xxxxxxxxxx - Financial Program

Xxxx Xxxxxxxx - Financial Program

Xxx Xxxxxxxx - Financial Program

Xxxxxxxx X'Xxxx - Financial Program
162

EXHIBIT D
163

================================================================================

GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT

BY AND BETWEEN

CONNECTICUT GENERAL LIFE INSURANCE COMPANY,

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

AND

LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

Dated as of __________, 1997

================================================================================
164

GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT

This GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Agreement"),
dated as of ____________, 1997, is entered into by and between Connecticut
General Life Insurance Company, a Connecticut domiciled stock life insurance
company ("Seller"), and The Lincoln National Life Insurance Company, an Indiana
domiciled stock life insurance company and a wholly owned subsidiary of Lincoln
National Corporation, an Indiana corporation ("Purchaser"), and Lincoln Life &
Annuity Company of New York, a New York domiciled stock life insurance company
and a wholly owned subsidiary of Purchaser.

W I T N E S S E T H

WHEREAS, CIGNA Corporation, Connecticut General Corporation, Seller,
CIGNA Life Insurance Company, Lincoln National Corporation, Purchaser and LLANY
are parties to an Asset Transfer and Acquisition Agreement dated as of July 27,
1997 (the "Acquisition Agreement"), pursuant to which Seller will sell, and
Purchaser and LLANY will purchase, certain portions of Seller's individual
life, health and annuity business upon the terms and subject to the conditions
set forth in the Acquisition Agreement; and

WHEREAS, concurrently with the execution of this Agreement (but subject
to Section 2.04 of the Acquisition Agreement), Seller and Purchaser and Seller
and LLANY are executing and delivering other instruments of assignment,
conveyance, transfer and assumption to vest in Purchaser or LLANY, as
applicable, all of Seller's right, title and interest in and to the Transferred
Assets other than those being sold, assigned, transferred and assumed hereby;

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

SECTION 1. DEFINITIONS. Capitalized terms used herein and not defined
herein have the respective meanings assigned to them in the Acquisition
Agreement.

SECTION 2. SALE OF CONTRACTS, ACCOUNTS AND CONTRACT LOANS. Seller
hereby sells, assigns, transfers and delivers to Purchaser or LLANY, as of the
date hereof, (i) all of Seller's right, title and interest in and to the
Assigned and Assumed Contracts described on Schedule A hereto, (ii) all other
contracts and agreements between Seller and a Person that is not an Affiliate
of Seller relating primarily to the Business (other than (x) the Insurance
Contracts, (y) the Seller Separate Accounts and the policies and contracts
funded thereby, and (z) the Acquisition Agreement and contracts and agreements
executed pursuant thereto), except those of the Assigned and Assumed Contracts
and such other contracts and agreements that cannot be assigned to Purchaser or
LLANY, as the case may be, because of Seller's inability to obtain the consent
of a third party required for such assignment to be effective, and (iii) the
lockboxes and

165

bank accounts listed on Schedule C hereto. The other contracts and
agreements referred to in clause (ii) of the preceding sentence include, but
are not limited to, those identified on Schedule B hereto. The Assigned and
Assumed Contracts and such other contracts and agreements, except for those
that cannot be assigned as aforesaid are referred to herein as the "Transferred
Contracts." In addition, Seller hereby sells, assigns, transfers and delivers
(i) to Purchaser, all loans to the holders of Non-New York Contracts, and (ii)
to LLANY, all loans to the holders of New York Contracts. The assets described
in this Section 2 are referred to collectively herein as the "Assets," and are
transferred hereby as they exist as of the date hereof, subject to the terms
and conditions set forth herein.

SECTION 3. ASSUMPTION OF LIABILITIES. Purchaser or LLANY, as the case
may be, hereby assumes and agrees to pay, perform and discharge in full, and
release and discharge Seller and its Affiliates, successors and assigns,
completely, unconditionally, and forever from, all liabilities and obligations
arising under the Transferred Contracts. Purchaser or LLANY, as the case may
be, hereby assumes and agrees to pay, perform and discharge in full, and
release and discharge Seller and its Affiliates, successors and assigns,
completely, unconditionally and forever from, all other liabilities and
obligations of, or arising under, the Business to the extent that such
liabilities or obligations are or become payable, or are otherwise required to
be performed, on or after the Effective Date (whether now known or unknown and
whether accrued, absolute, contingent or otherwise) provided, however, any
liabilities or obligations of the Business, or any category thereof, that
require allocation as between the Business and the Seller (other than the
Business), only the portion thereof reasonably allocable to the Business
consistent with Seller's historical allocation practices will be assumed by
Purchaser or LLANY, as the case may be, pursuant hereto. The obligations and
liabilities referred to in the preceding sentence (the "Assumed Liabilities")
include without limitation those listed on Schedule D, but exclude the Retained
Liabilities.

SECTION 4. ADDITIONAL ACTIONS. Seller shall promptly give all notices
that are, under the Transferred Contracts or applicable law, required in
connection with the assignment of the Assets. Each of Seller, Purchaser and
LLANY shall promptly execute, deliver, record or file any and all releases,
affidavits, waivers, notices or other documents which any other party hereto
may reasonably request in order to implement the sale, assignment, transfer and
assumption of the Assets.

SECTION 5. REPRESENTATIONS AND WARRANTIES. Seller makes no
representation or warranty hereunder with respect to the Assets, and neither
Purchaser nor LLANY makes any representation or warranty with respect to the
assumption of the liabilities and obligations arising under the Assets, other
than those set forth in the Acquisition Agreement.

SECTION 6. NO THIRD PARTY BENEFICIARIES. This Agreement is for the
sole and exclusive benefit of Seller, Purchaser and LLANY and their respective
successors and permitted assigns and nothing herein is intended or shall be
construed to confer upon any Person other than Seller, Purchaser and LLANY and
their respective successors and permitted assigns any rights, remedies or
claims under, or by reason of, this Agreement or any term, covenant or
condition hereof.
166

SECTION 7. AMENDMENT. This Agreement may only be amended or modified
by a written instrument executed by both of the parties hereto.

SECTION 8. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.
167

IN WITNESS WHEREOF, each of the undersigned has caused this Agreement
to be duly executed on its behalf as of the date first above written.

CONNECTICUT GENERAL LIFE INSURANCE CORPORATION

BY: ______________________________

NAME: ______________________________

TITLE: ______________________________

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

BY: ______________________________

NAME: ______________________________

TITLE: ______________________________

LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

BY: ______________________________

NAME: ______________________________

TITLE: ______________________________
168

SCHEDULE A

ASSIGNED AND ASSUMED CONTRACTS

[Including Rights under Non-Shared Field Office Leases]
169

SCHEDULE B

CERTAIN OTHER ASSIGNED CONTRACTS
170

SCHEDULE C

LOCKBOXES AND BANK ACCOUNTS
171

SCHEDULE D

CERTAIN ASSUMED LIABILITIES

[Including Obligations Under Non-Shared Field Office Leases]
172

EXHIBIT E
173

XXXX OF SALE

BY AND AMONG

CONNECTICUT GENERAL LIFE INSURANCE COMPANY

IN FAVOR OF

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

AND

LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

Dated as of ________, 1997
174

XXXX OF SALE

THIS XXXX OF SALE (this "Xxxx of Sale") is dated as of ______, 1997,
by Connecticut General Life Insurance Company, a Connecticut domiciled stock
life insurance company ("Seller"), in favor of The Lincoln National Life
Insurance Company, an Indiana domiciled stock life insurance company
("Purchaser") and a wholly owned subsidiary of Lincoln National Corporation,
and Lincoln Life & Annuity Company of New York, a stock life insurance company
incorporated in New York and a wholly owned subsidiary of Purchaser ("LLANY").

W I T N E S S E T H:

WHEREAS, concurrently with the execution and delivery of this Xxxx of
Sale (but subject to Section 2.04 of the Acquisition Agreement), Seller,
Purchaser and LLANY are executing and delivering other instruments of
assignment, conveyance, transfer and assumption to vest in Purchaser or LLANY,
as applicable, all of Seller's right, title and interest in and to the
Transferred Assets other than those being sold, assigned, and transferred
hereby;

SECTION 1. DEFINITIONS. Capitalized terms used herein and not
defined herein have the respective meanings assigned to them in the Acquisition
Agreement.

SECTION 2. SALE OF ASSETS TO PURCHASER. Seller does hereby sell,
assign, transfer and deliver to Purchaser and its successors and assigns
forever all of Seller's right, title and interest in and to (i) the Books and
Records relating to those Insurance Contracts to be reinsured by Purchaser
pursuant to the Purchaser Indemnity Reinsurance Agreement and all other Books
and Records other than those referred to in Section 3 hereof; (ii) the software
listed on Schedule A hereto, (iii) to the extent owned by Seller, the support
software incorporated as part of the software listed on Schedule A hereto and
required to operate the software listed on Schedule A hereto (for example,
applicable JCL datasets and similar support utilities), and (iv) all other
assets that are used exclusively in, or are otherwise material (individually or
in the aggregate) to, the Business, including but not limited to those
identified on Schedule B hereto, in each case as the
175

same exist as of the date hereof, subject to the terms and conditions hereof,
but excluding those assets referred to in clauses (A) through (F) of the
definition of "Transferred Assets" in the Acquisition Agreement. The assets
described in this Section 2 are referred to herein as the "Purchaser Assets."

TO HAVE AND TO HOLD such Purchaser Assets unto Purchaser and its
successors and assigns forever.

SECTION 3. SALE OF ASSETS TO LLANY. Seller does hereby sell, assign,
transfer and deliver to LLANY and its successors and assigns forever all of
Seller's right, title and interest in and to the Books and Records relating to
the Insurance Contracts to be reinsured by LLANY pursuant to the LLANY
Indemnity Reinsurance Agreement (the "LLANY Assets"), as the same exist as of
the date hereof, subject to the terms and conditions hereof.

TO HAVE AND TO HOLD the LLANY Assets unto LLANY and its successors and
assigns forever.

SECTION 4. ADDITIONAL ACTIONS. Seller shall promptly execute,
deliver, record or file any and all other releases, affidavits, waivers or
other documents, and take any and all additional actions, which Purchaser or
LLANY may reasonably request in order to implement the provisions of this Xxxx
of Sale.

SECTION 5. REPRESENTATIONS AND WARRANTIES. Seller makes no
representation or warranty hereunder with respect to the Purchaser Assets or
the LLANY Assets other than those set forth in the Acquisition Agreement. This
Xxxx of Sale is not intended to create any obligation of Seller other than the
obligations contemplated in the Acquisition Agreement.

SECTION 6. NO THIRD PARTY BENEFICIARIES. This Xxxx of Sale is for
the sole and exclusive benefit of Purchaser, LLANY, Seller and their respective
successors and assigns and nothing herein is intended or shall be construed to
confer upon any Person other than Purchaser, LLANY, Seller or their respective
successors and assigns any right, remedy or claim under or by reason of this
Xxxx of Sale or any term, covenant or condition hereof.

SECTION 6. AMENDMENT. This Xxxx of Sale may only be amended or
modified by a written instrument executed by both of the parties hereto. This
Xxxx of Sale shall inure to the benefit of and be binding upon Purchaser,
LLANY, Seller and their respective successors and assigns.

SECTION 7. GOVERNING LAW. THIS XXXX OF SALE SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

IN WITNESS WHEREOF, the undersigned have caused this Xxxx of Sale to
be duly executed on its behalf as of the date first written above.

176

CONNECTICUT GENERAL LIFE INSURANCE CORPORATION

BY: ______________________________

NAME: ______________________________

TITLE: ______________________________

Accepted and Agreed as of the
date first written above:

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

BY: ______________________________

NAME: ______________________________

TITLE: ______________________________

LINCOLN LIFE & ANNUITY COMPANY OF NEW YORK

BY: ______________________________

NAME: ______________________________

TITLE: _____________________________

177

SCHEDULE A

Software
178

SCHEDULE B

Certain Assets
179

EXHIBIT F
180

Exhibit F

- Approval of the Connecticut Department of Insurance for the implementation
of this Agreement and each of the Ancillary Agreements for which
regulatory approval is required.

- Approval of the New York Insurance Department for the implementation of
this Agreement, each of the Ancillary Agreements and any other matters
contemplated by this Agreement for which approval of the New York
Insurance Department is required.

- Approval of the Indiana Insurance Department for the implementation of
this Agreement and each of the Ancillary Agreements for which regulatory
approval is required.

- Approval of the Wisconsin Insurance Department for the implementation of
this Agreement and each of the Ancillary Agreements for which regulatory
approval is required.

- Approval of the Colorado Insurance Department for the implementation of
this Agreement and each of the Ancillary Agreements for which regulatory
approval is required.
181

Exhibit 02
(part two)

(Conformed copy)

STOCK PURCHASE AGREEMENT
BETWEEN
CIGNA CORPORATION,
CONNECTICUT GENERAL CORPORATION
AND

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

Dated as of July 27, 1997

182

TABLE OF CONTENTS

Page
ARTICLE I
DEFINITIONS

1.01. Definitions .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Acquisition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
AGUB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
CFA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Election . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Federal Tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
NASD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1933 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1934 Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Parent Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Parent Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Post-Closing Tax Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Pre-Closing Tax Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Purchaser Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
SEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Securities Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Stock Purchase Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Tax Sharing Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

ARTICLE II
PURCHASE AND SALE
2.01. Purchase and Sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.02. Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE III
REPRESENTATIONS AND WARRANTIES OF PARENT
3.01. Organization, Standing and Authority of the Companies; Capitalization . . . . . . . . . . . . . . . . . . . . 4
3.02. Actions and Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.03. No Conflict or Violation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.04. Compliance with Applicable Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.05. Sale of Insurance Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.06. Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.07. Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

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PAGE

ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF PURCHASER
4.01. Accredited Investor; Investment Intent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

ARTICLE V
TAX MATTERS
5.01. Tax Representations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.02. Transfer Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.03. Termination of Existing Tax Sharing Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.04. Tax Sharing and Proration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.05. Cooperation on Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.06. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.07. Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.08. Elections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.09. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE VI
COVENANTS
6.01. Consents and Reasonable Efforts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.02. Further Assurances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE VII
CONDITIONS PRECEDENT TO THE OBLIGATIONOF THE PARTIES TO CLOSE
7.01. Closing of the Acquisition Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE VIII
SURVIVAL; INDEMNIFICATION
8.01. Survival of Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
8.02. Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE IX
TERMINATION PRIOR TO CLOSING
9.01. Termination of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

ARTICLE X
MISCELLANEOUS
10.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
10.02. Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies . . . . . . . . . . . . . . . . . 16
10.03. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.04. Binding Effect; Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.05. Interpretation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.06. No Third Party Beneficiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
10.07. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.08. Other Agreements, Exhibits and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.09. Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
10.10. Dollar References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

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STOCK PURCHASE AGREEMENT

This STOCK PURCHASE AGREEMENT (this "Agreement") dated as of July 27, 1997, is
entered into by and among CIGNA Corporation, a Delaware corporation ("CIGNA"),
Connecticut General Corporation, a Connecticut corporation and wholly owned
indirect subsidiary of CIGNA ("Parent"), and The Lincoln National Life
Insurance Company, a stock life insurance company organized under the laws of
the State of Indiana ("Purchaser").

RECITALS:

WHEREAS, CIGNA, Parent, Connecticut General Life Insurance Company, a stock
life insurance company organized under the laws of the State of Connecticut and
a wholly owned subsidiary of Parent ("Seller"), CIGNA Life Insurance Company, a
stock life insurance company organized under the laws of the State of
Connecticut and an indirect wholly owned indirect subsidiary of CIGNA ("CLIC"),
Lincoln National Corporation, an Indiana corporation ("LNC"), Purchaser, and
Lincoln Life & Annuity Company of New York, a stock life insurance company
organized under the laws of the State of New York and a wholly owned subsidiary
of Purchaser "LLANY"), have entered into that certain Asset Transfer and
Acquisition Agreement by and among CIGNA, Parent, Seller, CLIC, LNC, Purchaser
and LLANY, dated as of July 27, 1997 (the "Acquisition Agreement"), pursuant to
which certain portions of Seller's individual life, disability income and
annuity business will be reinsured by Purchaser; and

WHEREAS, Parent is the record and beneficial owner of the Shares (as defined
herein) and desires to sell the Shares to Purchaser, and Purchaser desires to
purchase the Shares from Parent, upon the terms and subject to the conditions
hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, and in reliance upon the representations, warranties, conditions
and covenants contained herein, and intending to be legally bound hereby, the
parties hereto do hereby agree as follows:

ARTICLE I

DEFINITIONS

SECTION 1.01. DEFINITIONS. Except as set forth below, capitalized terms
used herein shall have the meanings ascribed to them in the Acquisition
Agreement. The following terms, as used herein, have the following meanings:

"ACQUISITION AGREEMENT" shall have the meaning set forth in the forepart of
this Agreement.

"AGUB" shall have the meaning set forth in Section 5.08(c) hereof.

"APPLICABLE LAW" means any domestic or foreign federal, state or local
statute, law, ordinance, rule, administrative interpretation, regulation,
order, writ, injunction, directive,

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judgment, decree, policy, guideline or other requirement (including without
limitation those of the SEC, Internal Revenue Service, NASD, NAIC and any
state) applicable to the Companies, or any of their respective Affiliates,
properties, assets, officers, directors, employees or agents, as the case may
be.

"CA" means CIGNA Associates, Inc., a Connecticut corporation and a wholly
owned subsidiary of Parent.

"CFA" means CIGNA Financial Advisors, Inc., a Connecticut corporation and a
wholly owned subsidiary of Parent.

"COMPANIES" means CFA and CA.

"ELECTION" means an election under Section 338(h)(10) of the Code (and any
corresponding provision of foreign, state or local law) with respect to the
purchase and sale of the Shares hereunder.

"EMPLOYEES" means the employees and retired or former employees of the
Companies.

"FEDERAL TAX" means any Tax imposed under Subtitle A of the Code.

"MADSP" shall have the meaning set forth in Section 5.08(c) hereof.

"NASD" means the National Association of Securities Dealers, Inc., including
without limitation its subsidiary, NASD Regulation, Inc.

"1933 ACT" means the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereunder.

"1934 ACT" means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.

"PARENT GROUP" means, with respect to Federal Taxes, the affiliated group of
corporations (as defined in Section 1504(a) of the Code) of which Parent and
the Companies are members and, with respect to other Taxes, the consolidated,
affiliated, combined or unitary group of which Parent and the Companies are
members.

"PARENT LOSS" shall have the meaning set forth in Section 5.06(b).

"POST-CLOSING TAX PERIOD" means any Tax period commencing after the close of
business on the Closing Date, including any portion of a Tax period treated as
a Tax period pursuant to Section 5.04(b) hereof.

"PRE-CLOSING TAX PERIOD" means any Tax period ending on or before the Closing

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Date, including any portion of a Tax period treated as a Tax period pursuant to
Section 5.04(b) hereof.

"PURCHASER LOSS" shall have the meaning set forth in Section 5.06(a).

"RETURN" means any return, report, filing, information statement, schedule or
other document with respect to Taxes relating to or including either of the
Companies, and any amended Return.

"SEC" means the Securities and Exchange Commission.

"SECURITIES LAWS" means the 1933 Act, the 1934 Act, the Investment Company
Act, the Investment Advisers Act and state laws regulating the offer or sale of
securities, investment advisers, brokers, dealers and transfer agents.

"SHARES" means all of the issued and outstanding shares of the capital stock
of CFA, $25.00 par value per share, and CA, $1.00 par value per share.

"STOCK PURCHASE CLOSING" shall have the meaning set forth in Section 2.02.

"TAXES" (or "TAX" as the context may require) means (i) any tax, however
denominated, imposed by any federal, state, local, municipal, territorial,
provincial or foreign government or any agency or political subdivision of any
such government (a "Taxing Authority"), including without limitation any tax
imposed under Subtitle A of the Code and any net income, alternative or add-on
minimum tax, gross income, gross receipts, sales, use, gains, goods and
services, production, documentary, recording, social security, unemployment,
disability, workers' compensation, estimated, ad valorem, value added,
transfer, franchise, profits, license, withholding, payroll, employment,
excise, severance, stamp, capital stock, occupation, personal or real property,
environmental or windfall profit tax, premium, custom, duty or other tax,
governmental fee or other like assessment or charge of any kind whatsoever,
together with any interest, penalty, addition to tax or additional amount
imposed by any Taxing Authority relating thereto, (ii) liability of Parent or
its Affiliates for the payment of any amounts of the type described in (i) as a
result of being a member of an affiliated, consolidated, combined or unitary
group with any other corporation at any time on or prior to the Closing Date,
and (iii) liability of Parent or its Affiliates for the payment of any amounts
as a result of being a party to any Tax Sharing Agreement or with respect to
the payment of any amounts of the type described in (i) or (ii) as a result of
any express or implied obligation to indemnify any other Person.

"TAX SHARING AGREEMENT" means the tax sharing agreement referred to in
Schedule 5.01 hereof and any other Tax sharing, allocation, indemnification, or
splitting arrangement or agreement (whether or not written) to which either of
the Companies is or was subject for any Pre-Closing Tax Period.

ARTICLE II

187

PURCHASE AND SALE

SECTION 2.01. PURCHASE AND SALE. Upon the terms and conditions set forth
herein, Parent agrees to sell to Purchaser and Purchaser agrees to purchase
from Parent, the Shares at the Stock Purchase Closing (as defined below) for
the purchase price allocated to the Shares under the Acquisition Agreement.

SECTION 2.02. CLOSING. The closing of the purchase and sale of the Shares
hereunder (the "Stock Purchase Closing") shall take place at the time and
location of the Closing contemplated by the Acquisition Agreement. In the
event that the closings of the purchase and sale of the Shares of both
Companies do not occur at the same time, each such closing shall constitute a
Stock Purchase Closing for this purpose. Upon payment of the Purchase Price
under the Acquisition Agreement, Parent shall deliver to Purchaser at the
Closing certificates for the Shares duly endorsed or accompanied by stock
powers duly executed in blank, with any required transfer stamps affixed
thereto.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF PARENT

CIGNA and Parent hereby represents and warrants to Purchaser as follows:

SECTION 3.01. ORGANIZATION, STANDING AND AUTHORITY OF THE COMPANIES;
CAPITALIZATION. (a) Each of the Companies is duly organized, validly existing
and in good standing under the laws of Connecticut and has all requisite power
and authority to carry on the operations of its business as it is now being
conducted, except where the failure to have such authority would not,
individually or in the aggregate, have a material adverse effect on the
Business. Each of the Companies is duly qualified to do business as a foreign
corporation and is in good standing in each jurisdiction where such
qualification is necessary, except for those jurisdictions where failure to be
so qualified would not, individually or in the aggregate, have a material
adverse effect on the Business.

(b) CFA has 10,000 shares of common stock authorized for issuance, 8,000 of
which are issued and outstanding. CA has 10,000 shares of common stock
authorized for issuance, 1,000 of which are issued and outstanding. All of the
outstanding capital stock of, or other voting securities or ownership interests
in, each of the Companies is owned by Parent, free and clear of any lien and
free of any other limitation or restriction (including any restriction on the
right to vote, sell or otherwise dispose of such capital stock or other voting
securities or ownership interests). All such capital stock has been duly
authorized and validly issued and is fully paid and nonassessable. There are
no outstanding (i) securities of either of the Companies convertible into or
exchangeable for shares of capital stock or other voting securities or
ownership interests in any of the Companies or (ii) options or other rights to
acquire from Parent or either of the Companies, or other obligation of either
of the Companies to issue, any capital stock or other voting securities or
ownership interests in, or any securities convertible into or exchangeable for
any capital stock or other voting securities or ownership interests in, either
of

188

the Companies (the items in clauses (i) and (ii) being referred to collectively
as the "Subsidiary Securities"). There are no outstanding obligations of Parent
or the Companies to repurchase, redeem or otherwise acquire any outstanding
Subsidiary Securities. Except as disclosed in Schedule 3.01(b) hereto, neither
of the Companies has any Subsidiaries.

SECTION 3.02. ACTIONS AND PROCEEDINGS. Except as disclosed on Schedule 3.02
hereto, there are no outstanding orders, decrees or judgments by or with any
court, governmental agency, regulatory body or arbitration tribunal before
which either of the Companies was a party that, individually or in the
aggregate, have a material adverse effect on the Business. Except as disclosed
on Schedule 3.02 hereto, there are no actions, suits, arbitrations or legal,
administrative or other proceedings pending or, to the knowledge of the Seller
Key People, threatened against the Companies, at law or in equity, or before or
by any governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, or before any arbitrator of any kind
which, if adversely determined, would, individually or in the aggregate, have a
material adverse effect on the Business.

SECTION 3.03. NO CONFLICT OR VIOLATION. Except as disclosed on Schedule
3.03 hereto, the execution, delivery and performance by CIGNA and Parent of
this Agreement and the consummation of the transactions contemplated hereby in
accordance with the terms and conditions hereof will not (a) violate any
provision of the charter, bylaws or other organizational document of the
Companies, (b) violate, conflict with or result in the breach of any of the
terms of, result in any modification of the effect of, otherwise give any other
contracting party the right to terminate, or constitute (or with notice or
lapse of time or both, constitute) a default under, any contract relating to or
arising in connection with the Business to which either of the Companies is a
party or by or to which either of the Companies or any of their respective
assets or properties may be bound or subject, except for such violations,
conflicts, breaches or modifications that would not, individually or in the
aggregate, have a material adverse effect on the Business (c) violate any
order, judgment, injunction, award or decree of any court, arbitrator or
governmental or regulatory body against, or binding upon, or any agreement
with, or condition imposed by, any governmental or regulatory body, foreign or
domestic, binding upon either of the Companies in connection with the Business,
except for such violations that would not, individually or in the aggregate,
have a material adverse effect on the Business (d) violate any statute, law or
regulation of any jurisdiction, except for such violations that would not,
individually or in the aggregate, have a material adverse effect on the
Business or (e) result in a breach or violation of any of the terms or
conditions of, constitute a default under, or otherwise cause an impairment or
revocation of, any Permit related to the Business, except for such breaches,
violations, defaults, impairments or revocations that would not, individually
or in the aggregate, have a material adverse effect on the Business.

SECTION 3.04. COMPLIANCE WITH APPLICABLE LAWS. (a) Except with respect to
those violations, if any, which would not, individually or in the aggregate,
have a material adverse effect on the Business, neither of the Companies is in
violation of any federal, state, local or foreign law, ordinance or regulation
or any other requirement of any governmental or regulatory body, court or
arbitrator applicable to the Business nor, to the knowledge of the Seller Key
People, has either of the Companies received any written notice that any such
violation is being

189

alleged.

(b) CFA is and has been duly registered as a broker dealer under applicable
federal and state statutes. Schedule 3.04(B) lists the jurisdictions in which
CFA is required to be registered as a broker-dealer. Each such registration is
in full force and effect, except where the failure to be so registered would
not have a material adverse effect on the operation of the Business. Other
than the jurisdictions set forth in Schedule 3.04(B), CFA is not required to be
registered as a broker-dealer in any other jurisdiction. CFA is a member in
good standing and has all licenses and authorizations in self regulatory or
trade organizations (including without limitation the NASD) or registered
clearing agencies, required to permit the operation of its business as
presently conducted, except where the failure to be in good standing, or to
have all licenses or authorizations, would not have a material adverse effect
on the operation of the Business. Except as set forth on Schedule 3.04(B), CFA
has all other Permits necessary to conduct the Business in the manner and in
the areas in which the Business is presently being conducted and all such
Permits are valid and in full force and effect, except where the failure to
have such a Permit would not, individually or in the aggregate, have a material
adverse effect on the Business.

(c) CA is and has been duly registered as a general insurance agency under
the insurance laws of the state of Connecticut. Schedule 3.04(C) lists the
jurisdictions in which CA is required to be registered as an insurance agency.
Each such registration is in full force and effect, except where the failure to
be so registered would not have a material adverse effect on the operation of
the Business. Other than the jurisdictions set forth in Schedule 3.04(C), CA
is not required to be registered as an insurance agency in any other
jurisdiction. Except as set forth on Schedule 3.04(C), CA has all other
Permits necessary to conduct the Business in the manner and in the areas in
which the Business is presently being conducted and all such Permits are valid
and in full force and effect, except where the failure to have such a Permit
would not, individually or in the aggregate, have a material adverse effect on
the Business.

SECTION 3.05. SALE OF INSURANCE CONTRACTS. (a) The Companies have
implemented procedures and programs which are reasonably designed to provide
assurance that its respective agents and employees are in material compliance
with all Applicable Law, including without limitation, advertising, licensing
and sales practices laws, regulations, directives, bulletins and opinions of
Governmental Authorities, except for non- compliances that, individually or in
the aggregate, have not had and would not have a material adverse effect on the
Business. Each of the Companies has previously provided Purchaser with a true,
complete and correct copy of its compliance program and procedures, to the
extent they relate to Seller's Individual Insurance Division and, except as
previously disclosed in this Agreement or any Schedule to this Agreement, the
Seller Key People have no knowledge of any noncompliance therewith, except for
noncompliance which, individually or in the aggregate, have not had and would
not have a material adverse effect on the Business.

(b) The Companies have at all times maintained records which accurately
reflect transactions in reasonable detail, and accounting controls, policies
and procedures sufficient to ensure that such transactions are recorded in a
manner which permits the preparation

190

of financial statements in accordance with GAAP and applicable statutory
accounting requirements.

SECTION 3.06. REGULATORY FILINGS. Except as listed on Schedule 3.06 hereto,
the Companies have filed all reports, statements, documents, registrations,
filings or submissions (including without limitation any sales material)
required to be filed by the Companies with any governmental or regulatory body
to the extent they relate to the Business, except where the failure to make
such filings would not, individually or in the aggregate, have a material
adverse effect on the Business. Except as listed on Schedule 3.06 hereto, all
such registrations, filings and submissions were in compliance in all material
respects with applicable law when filed or as amended or supplemented, and, to
the knowledge of the Seller Key People, no material deficiencies have been
asserted by any such governmental or regulatory body with respect to such
registrations, filings or submissions that have not been satisfied.

SECTION 3.07. CONTRACTS. (a) Schedule 3.07(A) lists and briefly describes
to the knowledge of the Seller Key People (including the parties to and the
date and subject matter of) each and every written contract, agreement, lease,
license, commitment or arrangement and, to the knowledge of the Seller Key
People, each and every oral contract, agreement, commitment or arrangement, to
which either of the Companies is a party or which is binding upon either of the
Companies and is material to the Business except for those specifically
disclosed in any other Schedule to this Agreement.

(b) Each of the contracts listed on Schedule 3.07(A) is in full force and
effect and constitutes a legal, valid and binding obligation of the Companies,
and to the knowledge of the Seller Key People, of each other Person that is a
party thereto. Except as set forth on Schedule 3.07(A), neither the Companies
nor, to the knowledge of the Seller Key People, any other party to such
contract is in violation, breach or default of any such contract or, with or
without notice or lapse of time or both, would be in violation, breach or
default of any such contract, except for such violations, breaches or defaults
that would not, individually or in the aggregate, have a material adverse
effect on the Business. Except as set forth on Schedule 3.07(A), to the
knowledge of the Seller Key People, no such contract contains any provision
providing that any party thereto other than the Companies may terminate such
contract by reason of the execution of this Agreement or the transactions
contemplated thereby.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF PURCHASER

Purchaser hereby represents and warrants to Parent as follows:

SECTION 4.01. ACCREDITED INVESTOR; INVESTMENT INTENT. Purchaser is an
accredited investor within the meaning of Rule 501(a) promulgated under the
Securities Act of 1933, as amended. Purchaser is and will be acquiring the
Shares for investment for its own account and not with a view to resale or
distribution thereof. Purchaser will not offer, sell, transfer, assign, pledge
or hypothecate any portion of the Shares in the absence of registration

191

under, or pursuant to an applicable exemption from, federal and applicable
state securities laws.

ARTICLE V

TAX MATTERS

SECTION 5.01. TAX REPRESENTATIONS. Parent represents and warrants to
Purchaser as of the date hereof and as of the Closing Date that, except as set
forth on Schedule 5.01, (i) all Returns required to be filed with any Taxing
Authority on or before the Closing Date with respect to any Pre-Closing Tax
Period by, or with respect to, the Companies have been timely filed or will be
timely filed on or before the Closing Date, and all such Returns were (or will
be when filed) true, complete and correct in all material respects; (ii) all
other Returns required to be filed with respect to the Companies (excluding
separate Returns required to be filed by the Companies) with respect to any
Pre-Closing Tax Period will be timely filed when due (taking into account any
extension of a required filing date), and all such Returns will be true,
complete and correct in all material respects; (iii) the Companies have timely
paid all Taxes shown on any Return; (iv) on or before the Closing Date, Parent
will pay or make adequate provision for all Taxes payable by, or with respect
to, the Companies for any Pre-Closing Tax Period for which no Return has yet
been filed; (v) the charges, accruals and reserves for Taxes with respect to
the Companies reflected on the balance sheets of the Companies as of the
Closing Date will be adequate in all material respects to cover the Tax
liabilities accruing through the date thereof; (vi) there is no action, suit,
proceeding, investigation, audit or claim now pending against or with respect
to the Companies in respect of any Tax; (vii) there are no material liens on
any of the assets of the Companies that arose in connection with any Taxes
(other than liens for Taxes not yet due and payable); (viii) the Companies have
withheld and paid in all material respects all Taxes required to be withheld
and paid and have materially complied with all information and backup
withholding requirements; (ix) Parent has delivered or will deliver prior to
the Stock Purchase Closing to Purchaser true, complete and correct copies of
(A) all tax audit reports, statements of deficiencies, closing and similar
documents or agreements received by, or with respect to, the Companies, and (B)
all foreign, federal, state and municipal income, gross receipts, sales,
premium, use and franchise Returns for, or including, the Companies for all
periods for which the applicable statute of limitations has not expired,
provided, however, that in the case of federal and Connecticut state income Tax
Returns, Parent shall only deliver separate or pro-forma Returns for the
immediately preceding three taxable years; (x) no waiver or extension of any
statute of limitations on assessments is in effect with respect to Taxes or
Returns for which the Companies may be liable; (xi) none of the Companies (A)
has been a member of an affiliated group filing a consolidated Federal Tax
Return (other than a group of which CIGNA or Parent was the common parent), (B)
has any liabilities for the Taxes of any Person (other than as a member of the
Parent Group) under Section 1504(a) of the Code or the regulations thereunder
(or any similar provision of state, local, or foreign law), as a transferee or
successor, by contract or otherwise or (C) has been a party to any Tax Sharing
Agreement under which it may be liable for Taxes other than the Tax Sharing
Agreements referenced in Schedule 5.01; and (xii) CIGNA is entitled, and has
the legal right, to join with Purchaser in making an Election.

SECTION 5.02. TRANSFER TAXES. All transfer, documentary, sales, use, stamp,
registration and other such Taxes and fees (including any penalties and
interest) incurred in

192

connection with the sale and purchase of the Shares (including any New York
State Transfer Tax, New York City Transfer Tax and any similar Tax imposed by
other states or subdivisions) shall be borne and paid by Parent, and Parent
will, at its own expense, prepare and file all necessary Returns and other
documentation with respect to all such Taxes and fees, and, if required by
Applicable Law, Purchaser will, and will cause its Affiliates to, join in the
execution and filing of any such Returns and other documentation.

SECTION 5.03. TERMINATION OF EXISTING TAX SHARING AGREEMENTS. Any Tax
Sharing Agreements shall be terminated as of the Closing Date with respect to
the Companies. After such date the Companies shall have no further rights or
liabilities under any Tax Sharing Agreement.

SECTION 5.04. TAX SHARING AND PRORATION. (a) Immediately preceding the
Stock Purchase Closing, the Companies shall pay Parent (i) an amount equal to
the Taxes of the Companies with respect to all Pre-Closing Tax Periods for
which no Return has yet been filed and (ii) the portion of any Tax reserve
relating to the Tax liabilities under the New York Returns referenced in
Schedule 5.01(vi) hereof (and any similar New York Returns for subsequent
years). The amount of such payment in respect of such Taxes shall be
calculated pursuant to the current Tax Sharing Agreements and Income Tax
Regulations Section 1.1502-76, or in accordance with principles comparable
thereto, based on Parent's good faith estimates, as of the Closing Date, of the
income of the Companies and the amount of Taxable income allocable to any
Pre-Closing Tax Period, reduced by the amount of any payments on account of
such Taxes previously paid by the Companies to Parent, its Affiliates or the
relevant Taxing Authority. Prior to such payment, Purchaser shall be given
sufficient time and information to review such estimates and, if it is not
reasonably satisfied regarding the accuracy and correctness of such estimates,
shall be entitled to object to such payment. In that event, if the parties are
unable to agree about the correct payment amount, the issue shall be resolved
by the Third Party Accountant, the decision of which shall be final and the
expenses of which shall be borne equally by Purchaser and Parent.

(b) Any Taxes for a Tax period beginning on or before the Closing Date and
ending after the Closing Date with respect to the Companies shall be
apportioned between Parent and Purchaser, in the case of real and personal
property Taxes, based on the actual number of days in such period prior to (but
including) the Closing Date and following the Closing Date and, in the case of
other Taxes, on the actual activities and operations of the Companies during
such pre-Closing and post-Closing periods. For purposes of the provisions of
this Article V, each portion of such a Tax period shall be deemed to be a
separate Tax period (whether or not it is in fact a separate Tax period).

SECTION 5.05. COOPERATION ON TAX MATTERS. (a) Purchaser and Parent agree to
furnish or cause to be furnished to each other, upon request, as promptly as
practicable, (i) such information (including access to books and records) and
assistance relating to the Companies as are reasonably necessary for the filing
of any Return, for the preparation for any audit, and for the prosecution or
defense of any claim, suit or proceeding relating to any proposed adjustment
and (ii) notices of extensions and notices of proposed Tax adjustments relating
to any period for which either party may be liable to the other hereunder.
Purchaser and Parent agree to retain or

193

cause to be retained all books and records pertinent to the Companies until the
applicable period for assessment under Applicable Law (giving effect to any and
all extensions or waivers) has expired, and to abide by or cause the abidance
with all record retention agreements entered into with any Taxing Authority.
Each of Purchaser and Parent agrees to give the other party reasonable notice
prior to transferring, discarding or destroying any such books and records
relating to Tax matters and, if the other party so requests, the party in
possession of such books and records shall allow the other party to take
possession of such books and records. Purchaser and Parent shall cooperate
with each other in the preparation and filing of any Returns relating to the
Companies and in the conduct of any audit or administrative or judicial
proceedings involving the Companies for any Tax purposes, and each shall
execute and deliver such powers of attorney and other documents as are
reasonably necessary to carry out the intent of this subsection.

(b) Purchaser and Parent further agree, upon request, to provide the other
party with all information that either party may be required to report pursuant
to Section 6043 of the Code and all Income Tax Regulations promulgated
thereunder.

SECTION 5.06. INDEMNIFICATION. (a) Subject to Section 5.06(e) hereof,
Parent hereby indemnifies Purchaser against and agrees to hold it and the
Companies harmless from any (i) Taxes of the Companies, (ii) Taxes allocated to
Parent pursuant to Section 5.04(b) hereof, (iii) Taxes with respect to any
other members of the Parent Group for which the Companies may have liability
under Section 1.1502 -6(a) of the Income Tax Regulations (or similar provisions
of state, local or foreign law), and (iv) liabilities, costs, expenses
(including, without limitation, reasonable expenses of investigation and
attorneys' fees and expenses), arising out of or incident to the imposition,
assessment or assertion of any Taxes, including those incurred in the contest
in good faith in appropriate proceedings relating to the imposition, assessment
or assertion of any Tax, in each case in (i) - (iv) with respect to any
Pre-Closing Tax Period, and in each case incurred or suffered by Purchaser, any
of its Affiliates or, effective upon the Stock Purchase Closing, the Companies
(the sum of such amounts being referred to as a "Purchaser Loss"). In no
event, however, shall Parent be liable for such Taxes to the extent
attributable to transactions occurring after the Stock Purchase Closing on the
Closing Date.

(b) Purchaser hereby indemnifies Parent against and agrees to hold it
harmless from any (i) Taxes of the Companies, (ii) Taxes allocated to Purchaser
pursuant to Section 5.04(b) hereof, and (iii) liabilities, costs, expenses
(including, without limitation, reasonable expenses of investigation and
attorneys' fees and expenses), arising out of or incident to the imposition,
assessment or assertion of any Taxes, including those incurred in the contest
in good faith in appropriate proceedings relating to the imposition, assessment
or assertion of any Tax, in each case in (i) - (iii) with respect to any
Post-Closing Tax Period, and in each case incurred or suffered by Parent or its
Affiliates (the sum of such amounts being referred to as a "Parent Loss").

(c) Any payment by Parent pursuant to this Section 5.06 shall be made not
later than 30 days after receipt by Parent of written notice from Purchaser
stating that any Purchaser Loss has been paid by Purchaser, any of its
Affiliates or, effective upon the Stock Purchase Closing, the Companies, the
amount thereof and of the indemnity payment requested. Any payment by Purchaser
pursuant to this Section 5.06 shall be made not later than 30 days after

194

receipt by Purchaser of written notice from Parent stating that any Parent Loss
has been paid by Parent or any of its Affiliates, the amount thereof and of the
indemnity payment requested.

(d) If any claim or demand for Taxes for which Parent is or may be liable
hereunder is asserted in writing against Purchaser, any of its Affiliates or,
effective upon the Stock Purchase Closing, the Companies, Purchaser shall
notify Parent of such claim or demand within 30 days of receipt thereof, or
such earlier time that would allow Parent to timely respond to such claim or
demand, and shall give Parent such information with respect thereto as Parent
may reasonably request. Parent may discharge, at any time, its indemnification
obligation under this Section 5.06 by paying to Purchaser the amount of the
Purchaser Loss, calculated on the date of such payment. Parent may, at its own
expense, participate in and, upon notice to Purchaser, assume the defense of
any such claim, suit, action, litigation or proceeding (including any Tax
audit). If Parent assumes such defense, (i) Purchaser shall have the right
(but not the duty) to participate in the defense thereof and to employ counsel,
at its own expense, separate from the counsel employed by Parent and (ii)
Parent shall not enter into any settlement without the written consent of
Purchaser if such settlement would increase the Tax liability of Purchaser, any
of its Affiliates or, effective upon the Stock Purchase Closing, the Companies,
for any Post-Closing Taxable Period. Whether or not Parent chooses to defend
or prosecute any claim, all of the parties hereto shall cooperate in the
defense or prosecution thereof. At Purchaser's sole option, it shall be
entitled to waive its rights of indemnification hereunder and to direct Parent
to take such action with respect to a claim or demand for Taxes for which
Parent is or may be liable hereunder as Purchaser shall reasonably elect, and
Parent shall comply with such direction, provided that Parent shall not be
materially adversely affected by such action for any period. The provisions of
this Section 5.06(d) shall be applied, mutatis mutandis, to claims or demands
for Taxes for which Purchaser is or may be liable under Section 5.06(b) hereof.

(e) (1) Subject to Section 5.06(e)(2) hereof, the obligation of Parent to
indemnify Purchaser under this Article V shall be subject to the terms of, and
the maximum aggregate amount and the deductible provided in, Section 10.01(c)
of the Acquisition Agreement (treating Parent and Seller as the same Person for
such purpose). In no event, however, shall the other provisions of Article X of
the Acquisition Agreement apply to such obligation. The obligation of
Purchaser to indemnify Parent under this Article V shall not be subject to any
deductible or to the other provisions of Section 10.01(c) of the Acquisition
Agreement.

(2) Notwithstanding Article X of the Acquisition Agreement or Section
5.06(e)(1) hereof, Parent's obligation to indemnify Purchaser for Taxes
attributable or incurred with respect to a Pre-Closing Tax Period shall not be
subject to any deductible or limitation to the extent such Taxes (A) are
asserted against the Companies as a result of (i) a liability described in
Section 5.06(a)(iii) hereof, (ii) the provisions of any Tax Sharing Agreement,
(iii) the breach of the representations contained in Section 5.01(xi) hereof,
(iv) the failure of Parent to pay, to the extent required by Applicable Law,
any Taxes attributable to the making of the Elections or (v) any Tax liability
related to the reserve payment referenced in Section 5.04(a)(ii) hereof, or (B)
are indemnifiable by Parent under Section 5.06(a)(ii) hereof.

SECTION 5.07. RETURNS. (a) Parent shall prepare and file or shall cause to be

195

prepared and filed the following Returns with respect to the Companies: (1) all
income Tax Returns for any Pre-Closing Tax Period (including, without
limitation, any deemed sale Returns resulting from the filing of the Elections)
and (2) all Returns with respect to other Taxes required to be filed (taking
into account extensions) on or prior to the Closing Date. Subject to Section
5.06(b) hereof, Parent shall pay or cause to be paid to the appropriate Taxing
Authority all Taxes shown to be due on such Returns.

(b) Purchaser shall prepare and file or shall cause to be prepared and filed
all Returns other than those described in Section 5.07(a) hereof with respect
to the Companies. Subject to Section 5.06 (a) hereof, Purchaser shall pay or
cause to be paid to the appropriate Taxing Authority all Taxes shown to be due
on such Returns.

SECTION 5.08. ELECTIONS.

(a) CIGNA and Purchaser shall jointly make timely and irrevocable Elections.
CIGNA, Parent, each of the Companies and Purchaser shall report the
transactions contemplated herein consistent with the Elections and shall take
no Tax position contrary thereto unless and to the extent required to do so
pursuant to a determination (as defined in Section 1313(a) of the Code or any
similar state, local or foreign tax provision). Parent shall pay any Taxes
attributable to the making of the Elections to the extent required by
Applicable Law and shall indemnify Purchaser and the Companies against any
failure to pay such Taxes.

(b) To the extent possible, CIGNA, each of the Companies and Purchaser shall
execute at the Stock Purchase Closing any and all forms necessary to effectuate
the Elections (including, without limitation, Internal Revenue Service Form
8023-A and any similar forms under applicable state, local and foreign income
tax laws (the "Section 338 Forms")). In the event, however, any Section 338
Forms are not executed at the Stock Purchase Closing, CIGNA, each of the
Companies and Purchaser shall prepare and complete each such Section 338 Form
no later than 30 days prior to the date such Section 338 Form is required to be
filed. CIGNA, each of the Companies and Purchaser shall each cause the Section
338 Forms to be duly executed by an authorized person for CIGNA, each of the
Companies and Purchaser in each case, and shall duly and timely file the
Section 338 Forms in accordance with applicable tax laws and the terms of this
Agreement.

(c) CIGNA and Purchaser agree to use their best efforts to enter into an
agreement (the "Allocation Agreement") as soon as practicable after the Closing
Date to address the computation of the Modified Aggregate Deemed Sale Price (as
defined under applicable Income Tax Regulations) ("MADSP") and the Adjusted
Grossed-Up Basis (as defined under applicable Income Tax Regulations) ("AGUB")
of the assets of each of the Companies. Purchaser shall initially prepare a
statement setting forth a proposed computation and allocation of MADSP and AGUB
(the "Computation") and submit it to CIGNA no later than one hundred twenty
days after the Closing Date. If, within 30 days of CIGNA's receipt of the
Computation, CIGNA shall not have objected in writing to such Computation, the
Computation shall become the Allocation Agreement. If, within 15 days of any
objection in writing to such Computation, CIGNA and Purchaser shall not have
agreed in writing to an Allocation Agreement, any disputed

196

aspects of the Allocation Agreement shall be resolved by the Third Party
Accountant within 30 days of the submission of the dispute to the Third Party
Accountant by CIGNA or Purchaser. The decision of the Third Party Accountant
shall be final, and the costs, expenses and fees of the Third Party Accountant
shall be borne equally by Purchaser and CIGNA. Purchaser and CIGNA shall not
take a Tax position (including in any Return) inconsistent with the Allocation
Agreement unless and to the extent required to do so pursuant to a
determination (as defined in Section 1313(a) of the Code or any similar
provision of state, local or foreign law).

SECTION 5.09. SURVIVAL. Notwithstanding anything in this Agreement or the
Acquisition Agreement to the contrary, the provisions of this Article V shall
survive until 30 days after the expiration of the full period of all statutes
of limitations (giving effect to any waiver, mitigation or extension thereof)
applicable to the matters described herein.

ARTICLE VI

COVENANTS

SECTION 6.01. CONSENTS AND REASONABLE EFFORTS. Parent shall use
commercially reasonable best efforts to obtain all approvals and consents to
the transactions contemplated by this Agreement, including the consents of
third parties under contracts to be assigned. Purchaser will use commercially
reasonable best efforts to obtain all approvals and consents to the
transactions contemplated by this Agreement.

SECTION 6.02. FURTHER ASSURANCES. (a) Upon the terms and subject to the
conditions herein provided, each of Parent and Purchaser shall use all
commercially reasonable best efforts to take, or cause to be taken, all action
or do, or cause to be done, all things or execute any documents necessary,
proper or advisable under applicable laws and regulations to consummate and
make effective the transactions contemplated by this Agreement.

(b) On and after the Closing Date, Parent and Purchaser shall take all
reasonably appropriate action and execute any additional documents, instruments
or conveyances of any kind (not containing additional representations and
warranties) which may be reasonably necessary to carry out any of the
provisions hereof, including, without limitation, causing Purchaser to have
full unencumbered ownership of the Shares.

ARTICLE VII

CONDITIONS PRECEDENT TO THE OBLIGATION
OF THE PARTIES TO CLOSE

SECTION 7.01. CLOSING OF THE ACQUISITION AGREEMENT. The Stock Purchase
Closing shall occur only if the Closing under the Acquisition Agreement occurs
and will be deemed to occur contemporaneously therewith.

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ARTICLE VIII

SURVIVAL; INDEMNIFICATION

SECTION 8.01. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as
provided in Section 5.09 hereof, all representations and warranties of Parent
and Purchaser contained in this Agreement shall survive the execution and
delivery hereof for the same period and upon the same conditions as the
representations and warranties in the Acquisition Agreement.

SECTION 8.02. INDEMNIFICATION. Subject to Section 5.06 hereof, any breach
of a representation, warranty, covenant or agreement contained herein shall be
treated the same as if such breach constituted a breach of a representation,
warranty, covenant or agreement contained in the Acquisition Agreement, subject
to Article X thereof.

ARTICLE IX

TERMINATION PRIOR TO CLOSING

SECTION 9.01. TERMINATION OF AGREEMENT. This Agreement will automatically
terminate at any time prior to the Closing in the event that the Acquisition
Agreement is terminated pursuant to Article XI thereof.

ARTICLE X

MISCELLANEOUS

SECTION 10.01. NOTICES. Any notice or other communication required or
permitted hereunder shall be in writing and shall be delivered personally (by
courier or otherwise), telegraphed, telexed, sent by facsimile transmission or
sent by certified or registered mail, postage prepaid and return receipt
requested, or by express mail. Any such notice shall be deemed given when so
delivered personally, telegraphed, telexed or sent by facsimile transmission
or, if mailed, three days after the date of deposit in the United States mails,
as follows:

(i) if to Purchaser:

The Lincoln National Life Insurance Company
0000 Xxxxx Xxxxxxx Xxxxxx
X.X. Xxx 0000
Xxxx Xxxxx, Xxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

198

Xxxxxxxxxx, Xxxxxx & Xxxxxxx LLP
0000 Xxxxxxxxxxxx Xxxxxx, X.X.
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000

(ii) If to Parent:

Connecticut General Corporation
000 Xxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Corporate Secretary: Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Millbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: G. Xxxxxxx Xxxxxxxxxx
Telecopier No.: 000-000-0000

(iii) If to CIGNA:

CIGNA Corporation
One Liberty Place - OLP- 1550
Attention: Corporate Secretary: Xxxxx X. Xxxx
Telecopier No.: (000) 000-0000

With a concurrent copy to:

Millbank, Tweed, Xxxxxx & XxXxxx
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: G. Xxxxxxx Xxxxxxxxxx
Telecopier No.: 000-000-0000

Any party may, by notice given in accordance with this Section 10.03 to the
other parties, designate another address or person for receipt of notices
hereunder provided that notice of such a change shall be effective upon
receipt.

SECTION 10.02. WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES. This Agreement may be amended, superseded, canceled,
renewed or extended, and the terms hereof may be waived, only by a written
instrument signed by each of the

199

parties or, in the case of a waiver, by the party waiving compliance. No delay
on the part of any party on exercising any right, power or privilege hereunder
shall operate as a waiver thereof, or shall any waiver on the part of any party
of any right, power or privilege, or any single or partial exercise of any such
right, power or privilege, preclude any further exercise thereof or the
exercise of any other such right, power or privilege. The rights and remedies
herein provided are cumulative and are not exclusive of any rights or remedies
that any party may otherwise have at law or in equity.

SECTION 10.03. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING
EFFECT TO THE PRINCIPLES OF CONFLICTS OF LAWS THEREOF.

SECTION 10.04. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding
upon and inure to the benefit of the parties and their respective successors,
permitted assigns and legal representatives. Neither this Agreement, nor any
right hereunder, may be assigned by any party (in whole or in part) without the
prior written consent of the other party hereto.

SECTION 10.05. INTERPRETATION. (a) Except as expressly provided in Article
V of this Agreement, no term or condition of this Agreement shall be construed
to supersede, restrict or otherwise limit any term or condition set forth in
the Acquisition Agreement or any of the other Ancillary Agreements.

SECTION 10.06. NO THIRD PARTY BENEFICIARIES. Nothing in this Agreement is
intended or shall be construed to give any Person, other than the parties
hereto, their successors and permitted assigns, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision
contained herein.

SECTION 10.07. COUNTERPARTS. This Agreement may be executed by the parties
hereto in separate counterparts, each of which when so executed and delivered
shall be an original, but all such counterparts shall together constitute one
and the same instrument. Each counterpart may consist of a number of copies
hereof each signed by less than all, but together signed by all, of the parties
hereto.

SECTION 10.08. OTHER AGREEMENTS, EXHIBITS AND SCHEDULES. The Exhibits and
the Schedules are a part of this Agreement as if fully set forth herein. All
references herein to

200

Articles, Sections, subsections, paragraphs, subparagraphs, clauses, Exhibits
and Schedules shall be deemed references to such parts of this Agreement,
unless the context shall otherwise require.

SECTION 10.09. HEADINGS. The headings in this Agreement are for reference
only, and shall not affect the interpretation of this Agreement.

SECTION 10.10. DOLLAR REFERENCES. All dollar references in this Agreement
are to the currency of the United States.

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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

CIGNA CORPORATION

BY:

NAME:

TITLE:

CONNECTICUT GENERAL CORPORATION

BY:

NAME:

TITLE:

THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

BY:

NAME:

TITLE:

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