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                                 EXHIBIT 10.12   
                                         

                              AMENDED AND RESTATED
                    ASSET TRANSFER AND ACQUISITION AGREEMENT


                                 By and Between



                     UNUM LIFE INSURANCE COMPANY OF AMERICA


                                       and


                   THE LINCOLN NATIONAL LIFE INSURANCE COMPANY


                          Dated as of January 24, 1996





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                                TABLE OF CONTENTS

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ARTICLE I
          DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
     1.01. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .   4
               Accrued Liabilities . . . . . . . . . . . . . . . . . . . . .   4
               Administrative Services Agreement . . . . . . . . . . . . . .   4
               Affected Employees. . . . . . . . . . . . . . . . . . . . . .   4
               Affiliate . . . . . . . . . . . . . . . . . . . . . . . . . .   4
               Ancillary Agreements. . . . . . . . . . . . . . . . . . . . .   4
               Annual Rate . . . . . . . . . . . . . . . . . . . . . . . . .   4
               Antitrust Division. . . . . . . . . . . . . . . . . . . . . .   4
               Asserted Liability. . . . . . . . . . . . . . . . . . . . . .   4
               Assignable Licensed Principally Used Software . . . . . . . .   5
               Assigned and Assumed Contracts. . . . . . . . . . . . . . . .   5
               Assumption Reinsurance Agreements . . . . . . . . . . . . . .   5
               Band 1 Employees. . . . . . . . . . . . . . . . . . . . . . .   5
               Band 2 Employees. . . . . . . . . . . . . . . . . . . . . . .   5
               Baseline Balance Sheet. . . . . . . . . . . . . . . . . . . .   5
               Baseline Customer Asset Value . . . . . . . . . . . . . . . .   5
               Baseline Purchase Price . . . . . . . . . . . . . . . . . . .   5
               Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . .   5
               Benefits Affected Employee. . . . . . . . . . . . . . . . . .   5
               Benefits Information Schedule . . . . . . . . . . . . . . . .   5
               Bill of Sale. . . . . . . . . . . . . . . . . . . . . . . . .   5
               Books and Records . . . . . . . . . . . . . . . . . . . . . .   5
               Business. . . . . . . . . . . . . . . . . . . . . . . . . . .   6
               Business Day. . . . . . . . . . . . . . . . . . . . . . . . .   6
               Cash Equivalents. . . . . . . . . . . . . . . . . . . . . . .   6
               Claims Notice . . . . . . . . . . . . . . . . . . . . . . . .   6
               Closing . . . . . . . . . . . . . . . . . . . . . . . . . . .   6
               Closing Balance Sheet . . . . . . . . . . . . . . . . . . . .   7
               Closing Date. . . . . . . . . . . . . . . . . . . . . . . . .   7
               COBRA . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
               Code. . . . . . . . . . . . . . . . . . . . . . . . . . . . .   7
               Coinsurance and Assumption Agreement. . . . . . . . . . . . .   7
               Combined Business . . . . . . . . . . . . . . . . . . . . . .   7
               Commission. . . . . . . . . . . . . . . . . . . . . . . . . .   7
               Contract Employees. . . . . . . . . . . . . . . . . . . . . .   7
               Contractholder. . . . . . . . . . . . . . . . . . . . . . . .   7
               Contractholder Affiliate. . . . . . . . . . . . . . . . . . .   7


                                       -i-
<PAGE>

                                TABLE OF CONTENTS      (CONT'D)

                                                                            PAGE
                                                                            ----

               Core Insurance Contracts. . . . . . . . . . . . . . . . . . .   7
               Custodian . . . . . . . . . . . . . . . . . . . . . . . . . .   8
               Custodian Agreement . . . . . . . . . . . . . . . . . . . . .   8
               Customer Asset Value. . . . . . . . . . . . . . . . . . . . .   8
               Effective Date. . . . . . . . . . . . . . . . . . . . . . . .   9
               Employer Claim. . . . . . . . . . . . . . . . . . . . . . . .   9
               ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . .   9
               Executive Officer . . . . . . . . . . . . . . . . . . . . . .   9
               Extra Contractual Obligations . . . . . . . . . . . . . . . .   9
               FAS 87. . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
               FAS 106 . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
               Final Balance Sheet . . . . . . . . . . . . . . . . . . . . .  10
               Final Customer Asset Value. . . . . . . . . . . . . . . . . .  10
               Final Purchase Price. . . . . . . . . . . . . . . . . . . . .  10
               First UNUM. . . . . . . . . . . . . . . . . . . . . . . . . .  10
               401(a) Contract . . . . . . . . . . . . . . . . . . . . . . .  10
               403(b) Contract . . . . . . . . . . . . . . . . . . . . . . .  10
               403(b) Contractholder . . . . . . . . . . . . . . . . . . . .  10
               FTC . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  10
               GAAP. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
               General Account Reserves. . . . . . . . . . . . . . . . . . .  11
               General Assignment Agreements . . . . . . . . . . . . . . . .  11
               HSR Act . . . . . . . . . . . . . . . . . . . . . . . . . . .  11
               Indemnified Party . . . . . . . . . . . . . . . . . . . . . .  11
               Indemnifying Party. . . . . . . . . . . . . . . . . . . . . .  11
               Indemnity Reinsurance Agreements. . . . . . . . . . . . . . .  11
               Insurance Contracts . . . . . . . . . . . . . . . . . . . . .  11
               Insurance Liabilities . . . . . . . . . . . . . . . . . . . .  12
               Interim Purchaser Financial Statements. . . . . . . . . . . .  12
               IRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .  12
               knowledge . . . . . . . . . . . . . . . . . . . . . . . . . .  12
               License Agreements. . . . . . . . . . . . . . . . . . . . . .  12
               Licensed Generally Used Software. . . . . . . . . . . . . . .  13
               Licensed Principally Used Software. . . . . . . . . . . . . .  13
               Losses. . . . . . . . . . . . . . . . . . . . . . . . . . . .  13
               Maine SAP . . . . . . . . . . . . . . . . . . . . . . . . . .  13
               Maine Severance Pay Law . . . . . . . . . . . . . . . . . . .  13
               Material Adverse Effect . . . . . . . . . . . . . . . . . . .  14
               1940 Act. . . . . . . . . . . . . . . . . . . . . . . . . . .  14
               NAIC. . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14


                                      -ii-
<PAGE>

                                TABLE OF CONTENTS      (CONT'D)

                                                                            PAGE
                                                                            ----

               90-Day Treasury Rate. . . . . . . . . . . . . . . . . . . . .  14
               Newco . . . . . . . . . . . . . . . . . . . . . . . . . . . .  14
               Newco Assumption Reinsurance Agreement. . . . . . . . . . . .  14
               Newco Indemnity Reinsurance Agreement . . . . . . . . . . . .  14
               Newco Separate Accounts . . . . . . . . . . . . . . . . . . .  15
               Newco Trust Agreement . . . . . . . . . . . . . . . . . . . .  15
               Non-Compete Period. . . . . . . . . . . . . . . . . . . . . .  15
               Owned Generally Used Software . . . . . . . . . . . . . . . .  15
               Owned Principally Used Software . . . . . . . . . . . . . . .  15
               Participant . . . . . . . . . . . . . . . . . . . . . . . . .  15
               Pension Plans . . . . . . . . . . . . . . . . . . . . . . . .  15
               Permits . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
               Person. . . . . . . . . . . . . . . . . . . . . . . . . . . .  15
               Preliminary Purchase Price. . . . . . . . . . . . . . . . . .  16
               Pre-Paid Items and Receivables. . . . . . . . . . . . . . . .  16
               premiums. . . . . . . . . . . . . . . . . . . . . . . . . . .  16
               previously disclosed. . . . . . . . . . . . . . . . . . . . .  16
               Proposed Balance Sheet. . . . . . . . . . . . . . . . . . . .  16
               Purchase Price Percentage . . . . . . . . . . . . . . . . . .  16
               Purchaser . . . . . . . . . . . . . . . . . . . . . . . . . .  16
               Purchaser Assumption Reinsurance Agreement. . . . . . . . . .  16
               Purchaser Financial Statements. . . . . . . . . . . . . . . .  16
               Purchaser Indemnity Reinsurance Agreement . . . . . . . . . .  17
               Purchaser Separate Accounts . . . . . . . . . . . . . . . . .  17
               Purchaser Trust Agreement . . . . . . . . . . . . . . . . . .  17
               Purchaser's Defined Benefit Plan. . . . . . . . . . . . . . .  17
               Purchaser's 401(k) Plan . . . . . . . . . . . . . . . . . . .  17
               Purchaser's Plan. . . . . . . . . . . . . . . . . . . . . . .  17
               Purchaser's Retiree Welfare Plans . . . . . . . . . . . . . .  17
               Purchaser's SERPs . . . . . . . . . . . . . . . . . . . . . .  17
               related to" or "arising in connection with. . . . . . . . . .  17
               Retention Bonus . . . . . . . . . . . . . . . . . . . . . . .  17
               Securities Act. . . . . . . . . . . . . . . . . . . . . . . .  17
               Seller. . . . . . . . . . . . . . . . . . . . . . . . . . . .  17
               Seller Custodian Account. . . . . . . . . . . . . . . . . . .  18
               Seller Custodian Agreement. . . . . . . . . . . . . . . . . .  18
               Seller Custodian. . . . . . . . . . . . . . . . . . . . . . .  18
               Seller Separate Account . . . . . . . . . . . . . . . . . . .  18
               Seller's Defined Benefit Plan . . . . . . . . . . . . . . . .  18
               Seller's 401(k) Plan. . . . . . . . . . . . . . . . . . . . .  18


                                      -iii-
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                                TABLE OF CONTENTS      (CONT'D)

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                                                                            ----

               Seller's SERP . . . . . . . . . . . . . . . . . . . . . . . .  18
               Seller's Employee Welfare Plan. . . . . . . . . . . . . . . .  18
               Separate Account Liabilities. . . . . . . . . . . . . . . . .  18
               Settlement Notice . . . . . . . . . . . . . . . . . . . . . .  18
               Shared Cost Period. . . . . . . . . . . . . . . . . . . . . .  18
               Significant Brokers . . . . . . . . . . . . . . . . . . . . .  19
               Subsidiary. . . . . . . . . . . . . . . . . . . . . . . . . .  19
               Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . .  19
               Third Party Accountant. . . . . . . . . . . . . . . . . . . .  19
               Third Party Claimant. . . . . . . . . . . . . . . . . . . . .  19
               Transferred Assets. . . . . . . . . . . . . . . . . . . . . .  19
               Transferred Contract. . . . . . . . . . . . . . . . . . . . .  20
               Transition Services Agreement . . . . . . . . . . . . . . . .  20
               Trust Accounts. . . . . . . . . . . . . . . . . . . . . . . .  20
               Trust Agreements. . . . . . . . . . . . . . . . . . . . . . .  20
               Trustee . . . . . . . . . . . . . . . . . . . . . . . . . . .  20
               WARN Act. . . . . . . . . . . . . . . . . . . . . . . . . . .  20
               Welfare Plans . . . . . . . . . . . . . . . . . . . . . . . .  20

ARTICLE II
               TRANSFER AND ACQUISITION OF ASSETS. . . . . . . . . . . . . .  20
          2.01. Cash Consideration . . . . . . . . . . . . . . . . . . . . .  20
          2.02. Acquisition of Transferred Assets and
               Assumption of Assumed Liabilities . . . . . . . . . . . . . .  20
          2.03. Place and Date of Closing; Balance Sheets. . . . . . . . . .  22
          2.04. Post-Closing Adjustments . . . . . . . . . . . . . . . . . .  26
          2.05. Closing Items. . . . . . . . . . . . . . . . . . . . . . . .  28

ARTICLE III
               REPRESENTATIONS AND WARRANTIES OF SELLER. . . . . . . . . . .  30
          3.01. Organization, Standing and Authority of Seller . . . . . . .  30
          3.02. Authorization. . . . . . . . . . . . . . . . . . . . . . . .  30
          3.03. Actions and Proceedings. . . . . . . . . . . . . . . . . . .  31
          3.04. No Conflict or Violation . . . . . . . . . . . . . . . . . .  31
          3.05. Consents and Approvals . . . . . . . . . . . . . . . . . . .  32
          3.06. Computer Software. . . . . . . . . . . . . . . . . . . . . .  32
          3.07. Brokerage and Financial Advisers . . . . . . . . . . . . . .  35
          3.08. Compliance with Laws . . . . . . . . . . . . . . . . . . . .  35
          3.09. Permits, Licenses and Franchises . . . . . . . . . . . . . .  35
          3.10. Annuity Business . . . . . . . . . . . . . . . . . . . . . .  36


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                                TABLE OF CONTENTS      (CONT'D)

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          3.11. Regulatory Filings . . . . . . . . . . . . . . . . . . . . .  41
          3.12. Brokers. . . . . . . . . . . . . . . . . . . . . . . . . . .  42
          3.13. Reinsurance. . . . . . . . . . . . . . . . . . . . . . . . .  43
          3.14. Banking Arrangements . . . . . . . . . . . . . . . . . . . .  43
          3.15. Absence of Certain Changes or Events . . . . . . . . . . . .  43
          3.16. Other Sale Arrangement . . . . . . . . . . . . . . . . . . .  44
          3.17. Seller Separate Account. . . . . . . . . . . . . . . . . . .  44
          3.18. Assigned and Assumed Contracts . . . . . . . . . . . . . . .  45
          3.19. Employees. . . . . . . . . . . . . . . . . . . . . . . . . .  45
          3.20. Employee Benefit Plans; ERISA. . . . . . . . . . . . . . . .  46
          3.21. Labor Relations and Employment . . . . . . . . . . . . . . .  48
          3.22. Transferred Assets . . . . . . . . . . . . . . . . . . . . .  49
          3.23. Contracts. . . . . . . . . . . . . . . . . . . . . . . . . .  49
          3.24. Statutory Statements . . . . . . . . . . . . . . . . . . . .  50
          3.25. Tax Matters. . . . . . . . . . . . . . . . . . . . . . . . .  51
          3.26. Financial Statement Data . . . . . . . . . . . . . . . . . .  51
          3.27. Transition Services Agreement. . . . . . . . . . . . . . . .  52
          3.28. Crediting Rate . . . . . . . . . . . . . . . . . . . . . . .  52

ARTICLE IV
               REPRESENTATIONS AND WARRANTIES OF PURCHASER . . . . . . . . .  52
          4.01. Organization and Standing. . . . . . . . . . . . . . . . . .  52
          4.02. Authorization. . . . . . . . . . . . . . . . . . . . . . . .  53
          4.03. Actions and Proceedings. . . . . . . . . . . . . . . . . . .  53
          4.04. No Conflict or Violation . . . . . . . . . . . . . . . . . .  54
          4.05. Consents and Approvals . . . . . . . . . . . . . . . . . . .  55
          4.06. Brokerage and Financial Advisers . . . . . . . . . . . . . .  55
          4.07. Compliance with Laws . . . . . . . . . . . . . . . . . . . .  55
          4.08. Permits, Licenses and Franchises . . . . . . . . . . . . . .  56
          4.09. GAAP Financial Statements. . . . . . . . . . . . . . . . . .  56
          4.10. Statutory Statements . . . . . . . . . . . . . . . . . . . .  57
          4.11. Absence of Certain Changes or Events . . . . . . . . . . . .  58
          4.12. Relations with Investment Companies. . . . . . . . . . . . .  58


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                                TABLE OF CONTENTS      (CONT'D)

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ARTICLE V
               COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . .  59
          5.01. Conduct of Business. . . . . . . . . . . . . . . . . . . . .  59
          5.02. Certain Transactions . . . . . . . . . . . . . . . . . . . .  59
          5.03. Investigations . . . . . . . . . . . . . . . . . . . . . . .  60
          5.04. Continued Access . . . . . . . . . . . . . . . . . . . . . .  60
          5.05. HSR Act Filings. . . . . . . . . . . . . . . . . . . . . . .  61
          5.06. Consents and Reasonable Efforts. . . . . . . . . . . . . . .  62
          5.07. Representations and Warranties . . . . . . . . . . . . . . .  63
          5.08. Further Assurances . . . . . . . . . . . . . . . . . . . . .  64
          5.09. Expenses . . . . . . . . . . . . . . . . . . . . . . . . . .  64
          5.10. Assumption Reinsurance Agreements. . . . . . . . . . . . . .  65
          5.11. Indemnity Reinsurance Agreements . . . . . . . . . . . . . .  65
          5.12. Administrative Services Agreement. . . . . . . . . . . . . .  65
          5.13. Transition Services Agreement. . . . . . . . . . . . . . . .  66
          5.14. Bill of Sale . . . . . . . . . . . . . . . . . . . . . . . .  66
          5.15. Trust Agreements . . . . . . . . . . . . . . . . . . . . . .  66
          5.16(a). General Assignment Agreement. . . . . . . . . . . . . . .  66
          5.16(b). Custodian Agreement . . . . . . . . . . . . . . . . . . .  66
          5.17. Coinsurance and Assumption Agreement . . . . . . . . . . . .  66
          5.18. Products . . . . . . . . . . . . . . . . . . . . . . . . . .  67
          5.19. Employees; Severance Payments. . . . . . . . . . . . . . . .  68
          5.20. Employee Benefits. . . . . . . . . . . . . . . . . . . . . .  76
          5.21. Allocation of Final Purchase Price . . . . . . . . . . . . .  97
          5.22. Newco. . . . . . . . . . . . . . . . . . . . . . . . . . . .  98
          5.23. Broker/Dealer Transition . . . . . . . . . . . . . . . . . .  98
          5.24. Other Agreements . . . . . . . . . . . . . . . . . . . . . .  99
          5.25. Bank Accounts and Lockboxes. . . . . . . . . . . . . . . . .  99
          5.26. Computer Systems . . . . . . . . . . . . . . . . . . . . . . 100
          5.27. Computer Software. . . . . . . . . . . . . . . . . . . . . . 100
          5.28. Contract Administration. . . . . . . . . . . . . . . . . . . 101
          5.29. Credit for Reinsurance . . . . . . . . . . . . . . . . . . . 102
          5.30. Custodian Account. . . . . . . . . . . . . . . . . . . . . . 103

ARTICLE VI
          CONDITIONS PRECEDENT TO THE OBLIGATION
           OF PURCHASER TO CLOSE . . . . . . . . . . . . . . . . . . . . . . 104
          6.01. Representations and Covenants. . . . . . . . . . . . . . . . 104
          6.02. Other Agreements . . . . . . . . . . . . . . . . . . . . . . 105
          6.03. Governmental and Regulatory Consents and Approvals . . . . . 106


                                      -vi-
<PAGE>

                                TABLE OF CONTENTS      (CONT'D)

                                                                            PAGE
                                                                            ----

          6.04. Third Party Consents . . . . . . . . . . . . . . . . . . . . 106
          6.05. Participation Agreements . . . . . . . . . . . . . . . . . . 106
          6.06. Possession of Assets; Instruments of Conveyance. . . . . . . 106
          6.07. Opinion of Counsel to Seller . . . . . . . . . . . . . . . . 107
          6.08. Injunction . . . . . . . . . . . . . . . . . . . . . . . . . 107
          6.09. Customer Asset Value . . . . . . . . . . . . . . . . . . . . 107
          6.10. Crediting Rates. . . . . . . . . . . . . . . . . . . . . . . 107
          6.11. New York Subsidiary. . . . . . . . . . . . . . . . . . . . . 108
          6.12. Employment Contracts . . . . . . . . . . . . . . . . . . . . 108
          6.13. First UNUM Closing . . . . . . . . . . . . . . . . . . . . . 108

ARTICLE VII
          CONDITIONS PRECEDENT TO THE OBLIGATION
           OF SELLER TO CLOSE. . . . . . . . . . . . . . . . . . . . . . . . 108
          7.01. Representations and Covenants. . . . . . . . . . . . . . . . 108
          7.02. Other Agreements . . . . . . . . . . . . . . . . . . . . . . 110
          7.03. Governmental and Regulatory Consents and Approvals . . . . . 110
          7.04. Third Party Consents . . . . . . . . . . . . . . . . . . . . 111
          7.05. Purchase Price . . . . . . . . . . . . . . . . . . . . . . . 111
          7.06. Opinion of Counsel to Purchaser. . . . . . . . . . . . . . . 111
          7.07. Injunction . . . . . . . . . . . . . . . . . . . . . . . . . 112
          7.08. Ratings. . . . . . . . . . . . . . . . . . . . . . . . . . . 112
          7.09. New York Subsidiary. . . . . . . . . . . . . . . . . . . . . 112
          7.10. Principal Underwriter. . . . . . . . . . . . . . . . . . . . 112
          7.11. First UNUM Agreement Closing . . . . . . . . . . . . . . . . 113

ARTICLE VIII
          FURTHER AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . 113
          8.01. Seller's Non-Compete . . . . . . . . . . . . . . . . . . . . 113

ARTICLE IX
          SURVIVAL OF REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . 115
          9.01. Survival of Representations and Warranties . . . . . . . . . 115

ARTICLE X
          INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . 116
          10.01. Obligation to Indemnify . . . . . . . . . . . . . . . . . . 116
          10.02. Claims Notice . . . . . . . . . . . . . . . . . . . . . . . 119
          10.03. Right to Contest Claims of Third Parties. . . . . . . . . . 120


                                      -vii-
<PAGE>

                                TABLE OF CONTENTS      (CONT'D)

                                                                            PAGE
                                                                            ----

          10.04. Section 10.01(a)(ii) Indemnification. . . . . . . . . . . . 122
          10.05. Indemnification Payments. . . . . . . . . . . . . . . . . . 133

ARTICLE XI
          TERMINATION PRIOR TO CLOSING . . . . . . . . . . . . . . . . . . . 133
          11.01. Termination of Agreement. . . . . . . . . . . . . . . . . . 133
          11.02. Break-up Fee. . . . . . . . . . . . . . . . . . . . . . . . 135
          11.03. Survival. . . . . . . . . . . . . . . . . . . . . . . . . . 136

ARTICLE XII
          MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . 136
          12.01. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . 136
          12.02. Confidentiality . . . . . . . . . . . . . . . . . . . . . . 136
          12.03. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 137
          12.04. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . 138
          12.05. Waivers and Amendments; Non-Contractual
                 Remedies; Preservation of Remedies. . . . . . . . . . . . . 138
          12.06. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 139
          12.07. Binding Effect; Assignment. . . . . . . . . . . . . . . . . 139
          12.08. Interpretation. . . . . . . . . . . . . . . . . . . . . . . 139
          12.09. No Third Party Beneficiaries. . . . . . . . . . . . . . . . 140
          12.10. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . 140
          12.11. Other Agreements, Exhibits and Schedules. . . . . . . . . . 140
          12.12. Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 141
          12.13. Dollar References . . . . . . . . . . . . . . . . . . . . . 141
          12.14. Newco Signature Page. . . . . . . . . . . . . . . . . . . . 141


                                     -viii-
<PAGE>

                                    EXHIBITS


Exhibit A-1    -    Form of Purchaser Assumption Reinsurance Agreement

Exhibit A-2    -    Form of Newco Assumption Reinsurance Agreement

Exhibit B-1    -    Form of Purchaser Indemnity Reinsurance Agreement

Exhibit B-2    -    Form of Newco Indemnity Reinsurance Agreement

Exhibit C      -    Form of Administrative Services Agreement

Exhibit D      -    Form of Transition Services Agreement

Exhibit E      -    Form of Bill of Sale

Exhibit F-1    -    Form of Purchaser Trust Agreement

Exhibit F-2    -    Form of Newco Trust Agreement

Exhibit G      -    Form of General Assignment Agreement

Exhibit H      -    Form of Coinsurance and Assumption Agreement

Exhibit I      -    Form of Opinion of Seller's Counsel

Exhibit J      -    Form of Opinion of Purchaser's Counsel

Exhibit K      -    Form of Custodian Agreement

Exhibit L      -    Form of Newco Signature Page


                                      -ix-
<PAGE>

                                    SCHEDULES


Schedule 1.01(A)    -    Assigned and Assumed Contracts

Schedule 1.01(B)    -    Baseline Balance Sheet

Schedule 1.01(C)    -    Group Annuity Contracts Included in the Insurance
                           Contracts

Schedule 1.01(D)    -    Purchaser Separate Accounts

Schedule 1.01(E)    -    Seller Separate Account

Schedule 1.01(F)    -    Additional Transferred Assets

Schedule 3.03       -    Actions and Proceedings against Seller

Schedule 3.04       -    No Conflict or Violation by Seller

Schedule 3.05       -    Consents and Approvals of Seller

Schedule 3.06(A)    -    Computer Software Used Principally in
                           Conduct of Business

Schedule 3.06(B)    -    Computer Software Used Generally in Conduct of Business

Schedule 3.09       -    Permits, Licenses and Franchises of Seller

Schedule 3.10(A)    -    Intentions of Termination or Cancellation of Insurance
                           Contracts and Association Servicing

Schedule 3.10(B)    -    Audits in Connection with Section 403(b) Compliance

Schedule 3.10(D)    -    Insurance Contracts with Respect to ERISA

Schedule 3.11       -    Regulatory Filings

Schedule 3.12(A)    -    Brokers

Schedule 3.12(B)    -    Significant Brokers

Schedule 3.14       -    Banking Arrangements

Schedule 3.15       -    Surrenders and Withdrawals


                                       -x-
<PAGE>

Schedule 3.19(A)    -    Employees

Schedule 3.19(B)    -    "Pay-to-Stay" Arrangements

Schedule 3.20(A)    -    Employee Benefit Plans

Schedule 3.20(C)    -    Welfare Benefit Plans

Schedule 3.21       -    Labor Relations and Employment

Schedule 3.23(A)    -    Contracts

Schedule 3.23(C)    -    Indemnification Arrangements

Schedule 3.23(D)    -    Crediting Rates

Schedule 3.25       -    Insurance Contracts Not Pension Plan Contracts

Schedule 3.26       -    Financial Statement Data

Schedule 4.03       -    Actions and Proceedings against Purchaser

Schedule 4.04       -    No Conflict or Violation by Purchaser

Schedule 4.05       -    Consents and Approvals of Purchaser

Schedule 4.07       -    Compliance with Laws by Purchaser

Schedule 4.08       -    Permits, Licenses and Franchises of Purchaser

Schedule 4.11       -    Absence of Certain Changes or Events with Respect to
                           Purchaser

Schedule 5.19(B)    -    Contract Employees

Schedule 5.20       -    Purchaser's Plans

Schedule 5.23       -    Registered Representatives and Selling Agreement
                           Partners

Schedule 6.03       -    Governmental and Regulatory Consents and Approvals

Schedule 6.05       -    Investment Companies

Schedule 6.12       -    Employment Contracts


                                      -xi-
<PAGE>

                              AMENDED AND RESTATED
                    ASSET TRANSFER AND ACQUISITION AGREEMENT

          This AMENDED AND RESTATED ASSET TRANSFER AND ACQUISITION AGREEMENT
(this "Agreement"), dated as of January 24, 1996, is entered into by and between
UNUM Life Insurance Company of America, a stock life insurance company
incorporated in Maine ("Seller"), and The Lincoln National Life Insurance
Company, a stock life insurance company incorporated in Indiana ("Purchaser")
and amends and restates in its entirety the Asset Transfer and Acquisition
Agreement entered into by and between Seller and Purchaser on January 24, 1996.

                                    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 group annuity business of Seller as described below (the "Business").  Such
group annuity contracts issued in states other than New York will be assumed by
Purchaser.  Such group annuity contracts issued in New York will be assumed by a
wholly-owned New York domestic life insurance subsidiary of Purchaser ("Newco")
to be acquired or organized by Purchaser prior to the Closing Date (as defined
below).  Following the execution of this Agreement, Purchaser shall enter into
an agreement (the "First UNUM Agreement") substantially similar to this
Agreement (including substantially similar schedules and exhibits, where
appropriate) with First UNUM Life Insurance Company ("First UNUM") whereby
Purchaser will agree to cause Newco to acquire certain group annuity contracts
issued by First UNUM in New York.


<PAGE>

     B.   THE DOCUMENTS.  Upon the terms and subject to the conditions of this
Agreement, at the Closing (as defined below), the parties hereto and Newco will
execute and deliver the following agreements and instruments dated as of the
Closing Date or a date prior thereto:  (i) Seller and Purchaser and Seller and
Newco will enter into the Purchaser Assumption Reinsurance Agreement and the
Newco Assumption Reinsurance Agreement (each as defined below), respectively,
providing, among other things, for the assumption by Purchaser and Newco of the
Insurance Contracts (as defined below); (ii) Seller and Purchaser and Seller and
Newco will enter into the Purchaser Indemnity Reinsurance Agreement and the
Newco Indemnity Reinsurance Agreement (each as defined below), respectively,
providing, among other things, for the indemnity reinsurance as of the Effective
Date (as defined below) by Purchaser and Newco of the general account
liabilities of Seller under the Insurance Contracts, pending assumption of such
contracts by Purchaser and Newco on a novation basis; (iii) Seller and Purchaser
will enter into the Administrative Services Agreement (as defined below),
providing for the provision by Purchaser of certain administrative services on
behalf of Seller with respect to the Insurance Contracts and the Seller Separate
Account (as defined below) following the Closing Date; (iv) Seller and Purchaser
will enter into the Transition Services Agreement (as defined below), providing
for the provision by Seller of certain administrative services to Purchaser
during a transition period following the Closing Date; (v) Seller will execute
and deliver to Purchaser and Newco the Bill of Sale (as defined below); (vi)
Seller, Purchaser and the Trustee (as defined below) and Seller, Newco and the
Trustee, will enter into the Purchaser Trust Agreement and the Newco Trust
Agreement (each as defined below), respectively, providing for trust accounts
into which cash and Cash Equivalents (as defined below) will be


                                       -2-
<PAGE>

transferred on the Closing Date by or at the direction of Seller; (vii) Seller
and Purchaser and Seller and Newco, respectively, will enter into the General
Assignment Agreements (as defined below) pursuant to which Seller will assign
and Purchaser and Newco will assume the Assigned and Assumed Contracts (as
defined below) and the Assignable Licensed Principally Used Software (as defined
below); (viii) Seller and Purchaser will enter into the Coinsurance and
Assumption Agreement (as defined below), providing, among other things, for
Purchaser to coinsure contracts of insurance relating to the Business that
Seller will issue for up to 18 months from the Closing Date; (ix) Seller and
Purchaser and Seller and Newco, respectively, will enter into the License
Agreements (as defined below) and (x) Newco and Custodian (as defined below)
will enter into the Custodian Agreement (as defined below) pursuant to which the
Custodian will hold certain assets of Newco as security for benefit of the New
York policyholders of Seller who are beneficiaries of the Seller Custodian
Account.

          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, Seller and Purchaser do hereby agree as follows:


                                       -3-
<PAGE>

                                    ARTICLE I

                                   DEFINITIONS


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

          "ACCRUED LIABILITIES" shall have the meaning set forth in Section
2.03(c) hereof.

          "ADMINISTRATIVE SERVICES AGREEMENT" means the Administrative Services
Agreement which is substantially in the form of Exhibit C hereto.

          "AFFECTED EMPLOYEES" means, collectively, Band 2 Employees and
Contract Employees.

          "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.

          "ANCILLARY AGREEMENTS" means the Assumption Reinsurance Agreements,
the Indemnity Reinsurance Agreements, the Administrative Services Agreement, the
Transition Services Agreement, the Bill of Sale, the General Assignment
Agreements, the Trust Agreements, the Coinsurance and Assumption Agreement, the
License Agreements and the Custodian Agreement.

          "ANNUAL RATE" means the value of r in the expression (1 + r) to the 
power of 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.

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


                                       -4-
<PAGE>

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

          "ASSIGNED AND ASSUMED CONTRACTS" means those contracts and other
agreements to which Seller is a party and which are listed on Schedule 1.01(A).

          "ASSUMPTION REINSURANCE AGREEMENTS" means the Purchaser Assumption
Reinsurance Agreement and the Newco Assumption Reinsurance Agreement.

          "BAND 1 EMPLOYEES" shall have the meaning set forth in Section
5.19(a).

          "BAND 2 EMPLOYEES" shall have the meaning set forth in Section
5.19(c).

          "BASELINE BALANCE SHEET" means the pro forma balance sheet of the
Business as at June 30, 1995 attached as Schedule 1.01(B).

          "BASELINE CUSTOMER ASSET VALUE" means $3,152,400,000, which is the
Customer Asset Value reflected on the Baseline Balance Sheet.

          "BASELINE PURCHASE PRICE" means $68,797,506.

          "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 5.20 hereof.

          "BENEFITS INFORMATION SCHEDULE" shall have the meaning set forth in
Section 5.20(d).

          "BILL OF SALE" means the Bill 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


                                       -5-
<PAGE>

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 exclusively 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.

          "BUSINESS" means the issuance and administration of the group annuity
contracts set forth on Schedule 1.01(C) hereto and any similar group annuity
contracts issued by Seller from the date hereof to the Closing Date, and the
other business activities of Seller related thereto.

          "BUSINESS DAY" means any day other than a Saturday, Sunday, a day on
which banking institutions in any of the States of Maine, 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.

          "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 as of such date will be counted as
equivalent to cash for purposes of satisfying the aggregate amount of cash and
Cash Equivalents required to be transferred hereunder on such date.

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

          "CLOSING" means the closing of the transactions contemplated by this
Agreement.


                                       -6-
<PAGE>

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

          "CLOSING DATE" means the first day of the month following the month in
which the last of the conditions set forth in this Agreement has been satisfied
or waived in writing, or such other date as the parties may agree to in writing;
PROVIDED, HOWEVER, if such date is not a Business Day, the Closing Date shall be
the immediately succeeding Business Day.

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

          "CODE" means the Internal Revenue Code of 1986, as amended, all final
and temporary Treasury Regulations promulgated thereunder and published rulings
thereunder.

          "COINSURANCE AND ASSUMPTION AGREEMENT" means the Coinsurance and
Assumption Agreement which is substantially in the form of Exhibit H hereto.

          "COMBINED BUSINESS" means the Business (as defined herein) and the
Business as defined in the First UNUM Agreement.

          "COMMISSION" means the Securities and Exchange Commission.

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

          "CONTRACTHOLDER" means the holder of a Transferred Contract (as
defined below).

          "CONTRACTHOLDER AFFILIATE" means an entity that is affiliated with a
Contractholder by reason of controlling, being controlled by or being under
common control with the Contractholder as contemplated under section 414(b),
(c), (m) or (o) of the Code or IRS Notice 89-23.

          "CORE INSURANCE CONTRACTS" means, collectively, those Insurance
Contracts issued by Seller and those Insurance Contracts (as defined in the
First UNUM Agreement) issued by First UNUM of the Contract Types that are listed
on Exhibits 4 and 5 of the UNUM Tax-


                                       -7-
<PAGE>

Sheltered Annuity Business Executive Summary dated October 1995 as prepared by
Morgan Stanley & Co. Incorporated.

          "CUSTODIAN" means the custodian named in the Custodian Agreement and
any successor appointed as such pursuant to the terms of the Custodian
Agreement.

          "CUSTODIAN AGREEMENT" means the Custodian Agreement between Newco and
the Custodian, which is substantially in the form of Exhibit K hereto.

          "CUSTOMER ASSET VALUE" means, at any time, an amount equal to the
aggregate reserves with respect to the Insurance Contracts in effect at such
time that would be shown on a balance sheet of Seller as at such time prepared
in accordance with GAAP applied in the same manner as applied in the preparation
of the Baseline Balance Sheet; PROVIDED, HOWEVER, that the portion of Customer
Asset Value attributable to assets held by Seller in the Seller Separate Account
pursuant to variable options under the Insurance Contracts shall be equal to the
result of (a) $241,900,000 plus (b) the amount of all participant contributions
(including transfers from fixed options) added to the Seller Separate Account,
from but not including June 30, 1995 to and including the date as of which
Customer Asset Value is calculated minus (c) the amount of all deductions from
the Seller Separate Account, from but not including June 30, 1995 to and
including the date as of which Customer Asset Value is calculated, for
withdrawals (including transfers to fixed options) and for mortality and expense
risk charges and annual administration charges, plus (d) imputed investment
return at the monthly rate of one percent (1%) applied monthly to the mean
balance of such portion of Customer Asset Value as it would have resulted from
time to time after June 30, 1995 according to the above calculation of (a) plus
(b) minus (c) plus (d) until and including the date as of which Customer Asset
Value is calculated; and


                                       -8-
<PAGE>

PROVIDED, FURTHER, that, in determining Customer Asset Value, there shall be
excluded from the calculation an amount equal to the aggregate reserves relating
to each Insurance Contract as to which Seller has received and processed in the
normal conduct of its business, consistent with practices in effect on June 30,
1995, a request from the holder of the Insurance Contract to pay to such holder
the amounts on deposit with Seller under such Insurance Contract.

          "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.

          "EMPLOYER CLAIM" shall have the meaning set forth in Section 10.04
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.

          "EXECUTIVE OFFICER" means the chairman of the board, chief executive
officer, president, any senior or executive vice president, secretary, treasurer
or chief financial officer or any other officer or employee having supervisory
responsibility for a principal business function.

          "EXTRA CONTRACTUAL OBLIGATIONS" means all liabilities for
consequential, exemplary, punitive or similar damages which relate to or arise
in connection with 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 from 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 (provided that no liability with respect to which
Purchaser or Newco shall be entitled to


                                       -9-
<PAGE>

indemnification under Section 10.01(a)(ii) hereof shall be deemed to be an Extra
Contractual Obligation).

          "FAS 87" shall have the meaning set forth in Section 5.20(f) hereof.

          "FAS 106" shall have the meaning set forth in Section 5.20(f) hereof.

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


          "FINAL CUSTOMER ASSET VALUE" shall have the meaning set forth in
Section 2.03(c) hereof.

          "FINAL PURCHASE PRICE" shall mean the product of the Final Customer
Asset Value multiplied by the Purchase Price Percentage.

          "FIRST UNUM" shall have the meaning set forth in the Recitals to this
Agreement.

          "FIRST UNUM AGREEMENT" shall have the meaning set forth in the
Recitals to this Agreement.

          "401(a) CONTRACT" means an Insurance Contract which is a group annuity
contract intended by Seller to fund an employee benefit plan qualified under
section 401(a) of the Code which is sponsored by a 403(b) Contractholder or a
Contractholder Affiliate and which is being transferred to Purchaser or Newco in
connection with the transfer of the 403(b) Contracts.

          "403(b) CONTRACT" means an Insurance Contract which is a group annuity
contract intended by Seller to satisfy the requirements of section 403(b) of the
Code and which is being transferred to Purchaser or Newco.

          "403(b) CONTRACTHOLDER" means a holder of a 403(b) Contract.

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


                                      -10-
<PAGE>

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

          "GENERAL ACCOUNT RESERVES" means the general account statutory
reserves of Seller with respect to the Insurance Contracts determined pursuant
to Maine SAP, as such reserves would have been included in line 10.2 or line
10.3 of the Liabilities, Surplus and Other Funds page of the NAIC Annual
Statement Blank (1994 format), including (for the avoidance of doubt) any
general account statutory reserve adjustments in relation to Separate Account
Liabilities.

          "GENERAL ASSIGNMENT AGREEMENTS" means the General Assignment
Agreements between Seller and Purchaser and between Seller and Newco,
respectively, each of which is substantially in the form of Exhibit G hereto.

          "HSR ACT" means the Hart-Scott-Rodino Antitrust Improvements Act of
1976, as amended, and the rules and regulations thereunder.

          "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 Newco Indemnity Reinsurance Agreement.

          "INSURANCE CONTRACTS" means the group annuity contracts that are
listed on Schedule 1.01(C) hereto and any additional group annuity contracts
issued by Seller in connection with the Business after the date hereof and prior
to the Closing Date, to the extent that such group annuity contracts are in
effect as of the Effective Date, and all certificates and participation
agreements in effect as of the Effective Date issued in accordance with the
terms


                                      -11-
<PAGE>

of such group annuity contracts (including all supplements, endorsements, riders
and ancillary agreements in connection therewith).

          "INSURANCE LIABILITIES" means all liabilities and obligations arising
under the Insurance Contracts (excluding any Extra Contractual Obligations),
including, without limitation:  (i) all liability for premium Taxes arising on
account of premiums paid or annuities purchased on or after the Effective Date,
(ii) all amounts payable on or after the Effective Date for returns or refunds
of premiums under the Insurance Contracts, (iii) all liability for commission
payments and other fees or compensation payable with respect to the Insurance
Contracts to or for the benefit of brokers and service providers, to the extent
that such amounts are or become payable on or after the Effective Date and (iv)
all guaranty fund assessments and similar charges imposed with respect to the
Insurance Contracts based on premiums paid on or after the Effective Date.

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

          "IRS" means the United States Internal Revenue Service.

          "IRS CLAIM" shall have the meaning set forth in Section 10.04(b)
hereof.

          "KNOWLEDGE" means to the best knowledge and belief after reasonable
inquiry of (i) any of the Executive Officers of Seller or Purchaser, as the case
may be, (ii) in the case of Seller, Sarah Wilkinson, Lawrence Kolkhorst, Susan
Peck, Vicki Gordan, Rosemary Moore, Lawrence Miller, Diane Garofalo, Peter
Adams, Michael Carter, Donna Wieland and George Young and (iii) in the case of
Purchaser, Ian Rolland and Chris Goeglein.

          "LICENSE AGREEMENTS" means the license agreements to be entered into
on or prior to the Closing Date between Seller and Purchaser and Seller and
Newco, respectively, pursuant


                                      -12-
<PAGE>

to which (i) Seller will grant, from and after the Closing Date, to Purchaser
and Newco a non-exclusive perpetual license to use, solely in connection with
the Combined Business, the Owned Generally Used Software, which license will be
assignable in connection with any sale of the Business (as defined herein or as
defined in the First UNUM Agreement) by Purchaser or Newco, as applicable, (ii)
Seller will grant to Purchaser or Newco, as applicable, the right to use
Seller's logos, trademarks, copyrights and other intellectual property solely in
connection with the administration of the Business pursuant to the
Administrative Services Agreement and (iii) Purchaser and Newco, as applicable,
will grant, from and after the Closing Date, to Seller and First UNUM a non-
exclusive perpetual license to use the Owned Principally Used Software, which
license will be assignable in connection with any sale of any business of Seller
or First UNUM that utilizes such software.  Under each of the License Agreements
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 hereof.

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

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

          "MAINE SAP" means the statutory accounting principles and practices
prescribed or permitted by the Bureau of Insurance of the State of Maine.

          "MAINE SEVERANCE PAY LAW" means 26 M.R.S.A. Section 625-B.


                                      -13-
<PAGE>

          "MATERIAL ADVERSE EFFECT" means, as to any Person, any change, effect,
event or occurrence that has, or is reasonably likely to have, individually or
in the aggregate, a material adverse impact on (i) the business, financial
position or results of operations of such Person or (ii) the ability of such
Person (or, in the case of the Business, the ability of Seller) to consummate
the transactions contemplated by this Agreement; provided that "Material Adverse
Effect" shall be deemed to exclude the impact of (i) changes in any statutes,
laws, rules and regulations of any governmental entity, or interpretations
thereof by any governmental entity, relating to or affecting the businesses
which such Person operates and (ii) changes in GAAP or regulatory accounting
principles generally applicable to insurance companies and their Affiliates.

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

          "NAIC" means the National Association of Insurance Commissioners.

          "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).

          "NEWCO" shall have the meaning set forth in the Recitals to this
Agreement.

          "NEWCO ASSUMPTION REINSURANCE AGREEMENT" means the Assumption
Reinsurance Agreement between Seller and Newco, which is substantially in the
form of Exhibit A-2 hereto.

          "NEWCO INDEMNITY REINSURANCE AGREEMENT" means the Indemnity
Reinsurance Agreement between Seller and Newco which is substantially in the
form of Exhibit B-2 hereto.


                                      -14-
<PAGE>

          "NEWCO SEPARATE ACCOUNTS" means one or more separate accounts to be
established by Newco prior to the Closing.

          "NEWCO TRUST AGREEMENT" means the Trust Agreement among Seller, Newco
and the Trustee, which is substantially in the form of Exhibit F-2 hereto.

          "NON-COMPETE PERIOD" shall have the meaning set forth in Section
8.01(a) hereof.

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

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

          "PARTICIPANT" means an individual, trust or estate that is an employee
or former employee (or beneficiary or alternate payee under a qualified domestic
relations order within the meaning of section 401(a)(13) of the Code or section
206(d)(3)(B) of ERISA) of a Contractholder and who (or which) has an interest in
a Transferred Contract.

          "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.


                                      -15-
<PAGE>

          "PRELIMINARY PURCHASE PRICE" shall mean the product of the Customer
Asset Value as of the date of the Closing Balance Sheet multiplied by the
Purchase Price Percentage.

          "PRE-PAID ITEMS AND RECEIVABLES" shall have the meaning set forth in
Section 2.03(c) hereof.

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

          "PREVIOUSLY DISCLOSED" means disclosed prior to the date hereof in a
writing or writings specifically identified as constituting previously disclosed
information for the purposes of this Agreement.

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

          "PURCHASE PRICE PERCENTAGE" means 2.1824%, which is the quotient,
expressed as a percentage, equal to the Baseline Purchase Price divided by the
Baseline Customer Asset Value.

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

          "PURCHASER ASSUMPTION REINSURANCE AGREEMENT" means the Assumption
Reinsurance Agreement between Seller and Purchaser, which is substantially in
the form of Exhibit A-1 hereto.

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


                                      -16-
<PAGE>

          "PURCHASER INDEMNITY REINSURANCE AGREEMENT" means the Indemnity
Reinsurance Agreement between Seller and Purchaser which is substantially in the
form of Exhibit B-1 hereto.

          "PURCHASER SEPARATE ACCOUNTS" means those separate accounts of
Purchaser listed on Schedule 1.01(D) hereto.

          "PURCHASER TRUST AGREEMENT" means the Trust Agreement among Seller,
Purchaser and the Trustee, which is substantially in the form of Exhibit F-1
hereto.

          "PURCHASER'S DEFINED BENEFIT PLAN" shall have the meaning set forth in
Section 5.20(d) hereof.

          "PURCHASER'S 401(k) PLAN" shall have the meaning set forth in
Section 5.20(d) hereof.

          "PURCHASER'S PLAN" shall have the meaning set forth in Section 5.20(a)
hereof.

          "PURCHASER'S RETIREE WELFARE PLANS" shall have the meaning set forth
in Section 5.20(c) hereof.

          "PURCHASER'S SERPs" shall have the meaning set forth in
Section 5.20(d) hereof.

          "RELATED TO" or "ARISING IN CONNECTION WITH" or similar words, as they
are used herein, shall be construed to have the broadest most inclusive meaning
that can be reasonably ascribed to them.

          "RETENTION BONUS" means the amount of $2,500.

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

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


                                      -17-
<PAGE>

          "SELLER CUSTODIAN ACCOUNT" means the custodian account established
under the Seller Custodian Agreement.

          "SELLER CUSTODIAN AGREEMENT" means the custodian agreement entered
into between Seller (as the successor to UNUM Life Insurance Company) and The
Bank of New York, approved by Superintendent of Insurance of the State of New
York on the 24th day of December, 1991.

          "SELLER CUSTODIAN" means the custodian named in the Seller Custodian
Agreement and any successor custodian appointed as such pursuant to the terms of
the Seller Custodian Agreement.

          "SELLER SEPARATE ACCOUNT" means the separate account of Seller listed
on Schedule 1.01(E) hereto.

          "SELLER'S DEFINED BENEFIT PLAN" shall have the meaning set forth in
Section 5.20 hereof.

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

          "SELLER'S SERP" shall have the meaning set forth in Section 5.20(d)
hereof.

          "SELLER'S EMPLOYEE WELFARE PLAN" shall have the meaning set forth in
Section 5.20(c) hereof.

          "SEPARATE ACCOUNT LIABILITIES" means those Insurance Liabilities that
are reflected in the Seller Separate Account.

          "SETTLEMENT NOTICE" shall have the meaning set forth in Section
10.04(a) hereof.

          "SHARED COST PERIOD" means the 12-month period commencing on the
Closing Date and ending on the day immediately preceding the first anniversary
of the Closing Date.


                                      -18-
<PAGE>

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

          "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.

          "TAXES" (or "TAX" as the context may require) means all federal,
state, county, local, foreign and other taxes, however denominated, of any kind
whatsoever (including, without limitation, income taxes, payroll and employee
withholding taxes, unemployment insurance, social security taxes (or other
similar taxes), estimated taxes, premium taxes, excise taxes, sales taxes, use
taxes, transfer taxes, gross receipts taxes, franchise taxes, ad valorem taxes,
severance taxes, capital property taxes, import duties and other governmental
charges and assessments), and includes interest, additions to tax and penalties
with respect thereto, whether disputed or not.

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

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

          "TRANSFERRED ASSETS" means (i) the cash and Cash Equivalents referred
to in Section 2.02(b) hereof, (ii) assets held in the Seller Separate Account
that relate to the Insurance Contracts and are equal to the Separate Account
Liabilities as to which assumption reinsurance is effected, (iii) except as
otherwise provided in the Indemnity Reinsurance Agreements, all of Seller's
rights and interests under the Insurance Contracts to receive principal and
interest paid on contract loans on or after the Closing Date, (iv) the Books and
Records, (v) the Assignable Licensed Principally Used Software, (vi) the Owned
Principally Used Software, (vii) the


                                      -19-
<PAGE>

Assigned and Assumed Contracts and (viii) those additional assets listed on
Schedule 1.01(F) hereto.

          "TRANSFERRED CONTRACT" means any of the 403(b) Contracts or 401(a)
Contracts.

          "TRANSITION SERVICES AGREEMENT" means the Transition Services
Agreement which is substantially in the form of Exhibit D hereto.

          "TRUST ACCOUNTS" means the trust accounts established pursuant to the
Trust Agreements.

          "TRUST AGREEMENTS" means the Purchaser Trust Agreement and the Newco
Trust Agreement.

          "TRUSTEE" means the trustee named in each Trust Agreement and any
successor trustee appointed as such pursuant to the terms of either Trust
Agreement.

          "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 Newco shall pay to Seller on the
Closing Date an aggregate amount equal to the Preliminary Purchase Price by wire
transfer of immediately available funds in U.S. Dollars to the bank account
designated to Purchaser in writing by Seller at least two Business Days prior to
the Closing Date.

          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


                                      -20-
<PAGE>

of the Preliminary Purchase Price, on the Closing Date, Seller shall sell,
assign and transfer to Purchaser and Newco, as applicable, all of Seller's
right, title and interest in the Transferred Assets; PROVIDED, HOWEVER, that, as
to the assets held in the Seller Separate Account, such transfers shall be made
to the Purchaser Separate Accounts and the Newco Separate Accounts,
respectively, and such assets shall be transferred, if at all, at the times
specified in the respective Assumption Reinsurance Agreements; and, PROVIDED
FURTHER, that the cash and Cash Equivalents shall be determined and transferred
in accordance with the provisions of Sections 2.02(b), 2.03 and 2.04 hereof;
and, PROVIDED FURTHER, that Seller shall assign and transfer to Purchaser and
Newco, as applicable, all of Seller's ownership rights, title and interest in
the contract loans under the Insurance Contracts, if at all, at the times
specified in the respective Assumption Reinsurance Agreements.  All sales,
assignments and transfers of the Transferred Assets shall be effected by the
Indemnity Reinsurance Agreements, the Assumption Reinsurance Agreements, the
Bill of Sale and the General Assignment Agreements.  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
and the Trust Agreements and the payment of the Preliminary Purchase Price, on
the Closing Date, Seller shall transfer (and cause the Seller Custodian to
transfer) to the Trust Accounts cash and Cash Equivalents in an aggregate amount
equal to (i) the General Account Reserves relating to the Insurance Contracts to
be assumed by Purchaser and Newco, respectively, less, in each case, (ii) the
amount of any related contract loans, each as reflected on the Closing Balance
Sheet.


                                      -21-
<PAGE>

Cash shall be transferred by Seller (and the Seller Custodian) to the Trust
Accounts by wire transfer of immediately available funds in U.S. Dollars.  Cash
Equivalents shall be transferred by such instruments of transfer as are
acceptable to the Trustee and reasonably acceptable to Purchaser.  All amounts
held in trust under the Trust Agreements shall be distributed as provided
therein, in the Indemnity Reinsurance Agreements and in the Assumption
Reinsurance Agreements.

          (c)  Upon the terms and subject to the conditions of this Agreement,
on the Closing Date, Purchaser and Newco shall assume their respective Insurance
Liabilities pursuant to the Indemnity Reinsurance Agreements and the Assumption
Reinsurance Agreements and Purchaser and Newco shall each assume, pursuant to
the General Assignment Agreements, the Assigned and Assumed Contracts listed on
Schedules 1.01(A) and the Assignable Licensed Principally Used Software to be
assumed by it.

          (d)  Any transfer or sales Tax or other governmentally imposed fees or
charges imposed upon the transfer, sale or recording of the Transferred Assets
shall be paid one-half by Seller and one-half by Purchaser.

          Section 2.03.  PLACE AND DATE OF CLOSING; BALANCE SHEETS.  (a)  The
Closing shall take place at the offices of LeBoeuf, Lamb, Greene & MacRae,
L.L.P., 125 West 55th Street, New York, New York, at 10:00 a.m. New York time on
the Closing Date or such other time or place as the parties may mutually agree
upon.

          (b)  On the Closing Date, Seller will deliver to Purchaser a balance
sheet of the Business as of the end of the second month preceding the month in
which the Closing Date falls (the "Closing Balance Sheet"), together with a
calculation in reasonable detail of Customer Asset


                                      -22-
<PAGE>

Value as of the date thereof with respect to the Insurance Contracts to be
assumed by Purchaser and Newco, respectively, and a certification of the chief
financial officer of Seller that (i) the Closing Balance Sheet was prepared from
and in accordance with the books and records of Seller and in accordance with
Maine SAP applied consistently with the application thereof in the preparation
of the statutory data included in Schedule 3.26 to the extent such data relates
to the Business, and (ii) the General Account Reserves and Separate Account
Liabilities 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 Seller's obligations under the related
Insurance Contracts, and (D) met the requirements of Maine SAP.  Such
certification shall also set forth Seller's calculation of Customer Asset Value
as of the date of the Closing Balance Sheet and shall certify that such
calculation was made in accordance with the definition of Customer Asset Value
set forth in Section 1.01 hereof.  The Closing Balance Sheet shall reflect (i)
the Separate Account Liabilities, (ii) the General Account Reserves, (iii)
assets held in the Seller Separate Account equal to the Separate Account
Liabilities, (iv) contract loans, and (v) cash and Cash Equivalents in an
aggregate amount equal to (A) the General Account Reserves less (B) contract
loans.

          (c)  Seller shall, on or before the date that is 30 days after the
Closing 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, together with a calculation in reasonable detail of
Customer Asset Value as of the date of the Proposed Balance Sheet and a
certification of the


                                      -23-
<PAGE>

chief financial officer of Seller to the same effect with respect to the
Proposed Balance Sheet and the Customer Asset Value as of the date thereof as
the certification provided by such officer with respect to the Closing Balance
Sheet and Customer Asset Value as of the date thereof pursuant to Section
2.03(b).  In addition to the information set forth on the Closing Balance Sheet,
the Proposed Balance Sheet shall set forth as to the Business (i) (A) all
accrued amounts payable as of the date of the Proposed Balance Sheet under the
Assigned and Assumed Contracts and any other similar liability of Seller arising
prior to such date that will be paid by Purchaser or Newco after such date,
including all amounts referred to under clause (iii) of the definition of
"Insurance Liabilities" herein but excluding any other liability under the
Insurance Contracts, net of any such amount payable to Seller as of such date,
and (B) all liabilities of Seller as reflected in Seller's suspense account with
respect to the Insurance Contracts as of the date of the Proposed Balance Sheet
that will be paid by Purchaser or Newco after such date, and (ii) (A) all pre-
paid expenses determined in accordance with Maine SAP covering periods after the
date of the Proposed Balance Sheet and any other similar item paid by Seller
which relates to periods after such date, (B) all accrued fees payable to Seller
under the Assigned and Assumed Contracts as of the date of the Proposed Balance
Sheet that will be paid to Purchaser after such date and (C) the amounts, if
any, due Seller that are reflected as debits in Seller's suspense account, if
any, with respect to the Insurance Contracts as of the date of the Proposed
Balance Sheet that will be received by Purchaser or Newco after such date.
Items described in clause (i) of the preceding sentence are referred to herein
as "Accrued Liabilities," and items referred to in clause (ii) thereof are
referred to herein as "Pre-Paid Items and Receivables."  Promptly after its
preparation, Seller shall deliver copies of the Proposed Balance Sheet and
calculation of


                                      -24-
<PAGE>

Customer Asset Value to Purchaser.  Purchaser shall have the right to review
such balance sheet and calculation of Customer Asset Value 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 and calculation of Customer Asset
Value for the purpose of conducting its review.  Any changes in the Proposed
Balance Sheet or calculation of Customer Asset Value 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") and a final
calculation of Customer Asset Value as of such date (the "Final Customer Asset
Value").  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 or calculation of Customer Asset Value 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 or calculation of
Customer Asset Value, as the case may be; PROVIDED, HOWEVER, that the dollar
amount of each item in dispute shall be determined between 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 and the calculation of Final Customer Asset Value.  The
fees, costs and expenses of retaining the Third Party Accountant


                                      -25-
<PAGE>

shall be allocated by the Third Party Accountant between the parties, in
accordance with the Third Party Accountant's judgment as to the relative merits
of the parties' proposals in respect of the disputed items.  Such determination
shall be binding and conclusive on the parties.  Following the resolution of all
disputed items, Seller shall prepare the Final Balance Sheet and calculation of
Final Customer Asset Value and shall deliver copies of such balance sheet and
such calculation to Purchaser.

          Section 2.04.  POST-CLOSING ADJUSTMENTS.  In the event the aggregate
amount of cash and Cash Equivalents reflected on the Closing Balance Sheet and
transferred to the Trust Accounts on the Closing Date is less than the amount of
General Account Reserves, less the amount of any contract loans, as reflected on
the Final Balance Sheet, Seller shall transfer (and/or cause the Seller
Custodian to transfer) to one or both of the Trust Accounts, as applicable,
additional cash or Cash Equivalents 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.  In the event the aggregate
amount of cash and Cash Equivalents reflected on the Closing Balance Sheet and
transferred to the Trust Accounts on the Closing Date is more than the amount of
General Account Reserves, less the amount of any contract loans, as reflected on
the Final Balance Sheet, Seller, Purchaser and/or Newco, as applicable, shall
direct the Trustee to transfer to Seller (and/or the Seller Custodian Account,
as applicable) 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 Closing Date to but not including the date of such
transfer.  In the event the aggregate amount of Accrued Liabilities reflected on
the Final Balance


                                      -26-
<PAGE>

Sheet exceeds the amount of Pre-Paid Items and Receivables reflected thereon,
Seller shall transfer to Purchaser and/or Newco, as applicable, cash in the
amount of such difference, together with interest thereon computed at an Annual
Rate as specified above from and including the Closing Date to but not including
the date of such transfer.  In the event the aggregate amount of Pre-Paid Items
and Receivables reflected on the Final Balance Sheet exceeds the amount of
Accrued Liabilities reflected thereon, Purchaser and/or Newco, as applicable,
shall transfer to Seller cash in the amount of such difference, together with
interest thereon computed at an Annual Rate as specified above from and
including the Closing Date to but not including the date of such transfer.  In
the event the Preliminary Purchase Price exceeds the Final Purchase Price,
Seller shall transfer to Purchaser and/or Newco, as applicable, cash in the
amount of such difference, together with interest thereon computed at an Annual
Rate as specified above from and including the Closing Date to but not including
the date of such transfer.  In the event the Final Purchase Price exceeds the
Preliminary Purchase Price, Purchaser and/or Newco, as applicable, shall
transfer to Seller cash in the amount of such difference, together with interest
thereon computed at an Annual Rate as specified above from and including the
Closing Date to but not including the date of such transfer.  Amounts required
to be transferred from Purchaser and Newco to Seller or from Seller to Purchaser
and Newco pursuant to this Section shall be netted against one another so that
only a single net transfer shall be required.  Any transfer of cash or Cash
Equivalents required under this Section 2.04 shall be made within ten Business
Days of the date of the delivery of the Final Balance Sheet and calculation of
Final Customer Asset Value to Purchaser.  The Final Purchase Price may be
further adjusted subsequent to the Closing Date in accordance with Section 5.20
hereof.


                                      -27-
<PAGE>

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

                 (i)     the Indemnity Reinsurance Agreements;
                (ii)     the Assumption Reinsurance Agreements;
               (iii)     the Administrative Services Agreement;
                (iv)     the Transition Services Agreement;
                 (v)     the Bill of Sale;
                (vi)     the Trust Agreements;
               (vii)     the General Assignment Agreements;
              (viii)     the Coinsurance and Assumption Agreement;
                (ix)     the License Agreements;
                 (x)     the opinion of counsel referred to in Section 6.07
                         hereof;
                (xi)     the certificate of Seller referred to in Section 6.01
                         hereof;
               (xii)     evidence of compliance with the requirements of the HSR
                         Act;
              (xiii)     evidence of receipt of the Permits described on
                         Schedule 6.03 hereto from the Insurance Departments of
                         the States of Maine and New York;
               (xiv)     evidence of receipt of additional approvals set forth
                         in Schedule 3.05 hereto, to the extent such approvals
                         are required for Closing;
                (xv)     an updated Schedule 3.15, as provided for in
                         Section 3.15 hereof;
               (xvi)     an addendum to Schedule 3.19(A), as provided for in
                         Section 3.19 hereof; and
              (xvii)     the schedule provided for in subsection (c)(ii)(A) of
                         Section 5.19 hereof.


                                      -28-
<PAGE>

          Seller shall also (i) transfer (and cause the Seller Custodian to
transfer) cash and Cash Equivalents to the Trustee, (ii) transfer certain
additional Transferred Assets to Purchaser or Newco, as applicable, in
accordance with Section 2.02 hereof and (iii) deliver to Purchaser a true and
correct list of all group annuity contracts included in the Insurance Contracts
that are in effect as of the Closing Date.

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

                 (i)     the Indemnity Reinsurance Agreements;
                (ii)     the Assumption Reinsurance Agreements;
               (iii)     the Administrative Services Agreement;
                (iv)     the Transition Services Agreement;
                 (v)     the Trust Agreements;
                (vi)     the General Assignment Agreements;
               (vii)     the Coinsurance and Assumption Agreement;
              (viii)     the License Agreements;
                (ix)     the Custodian Agreement;
                 (x)     the opinion of counsel referred to in Section 7.06
                         hereof;
                (xi)     the certificate of Purchaser referred to in Section
                         7.01 hereof;
               (xii)     evidence of compliance with the requirements of the HSR
                         Act;
              (xiii)     evidence of receipt of the Permits described on
                         Schedule 6.03 hereto from the Commission and from the
                         Insurance Departments of the States of Indiana and New
                         York;


                                      -29-
<PAGE>

               (xiv)     evidence of receipt of additional approvals set forth
                         on Schedule 4.05 hereto, to the extent such approvals
                         are required for Closing;
                (xv)     evidence of the ratings of Purchaser and Newco set
                         forth in Section 7.08 hereof;
               (xvi)     evidence of the licensing of Newco as set forth in
                         Section 7.09 hereof; and
              (xvii)     the principal underwriter agreements referred to in
                         Section 7.10 hereof, if required pursuant to Section
                         7.10 hereof.

          Purchaser and Newco shall also transfer an aggregate amount equal to
the Preliminary Purchase Price to Seller.


                                   ARTICLE III

                    REPRESENTATIONS AND WARRANTIES OF SELLER

          Seller hereby represents and warrants to Purchaser as follows:

          Section 3.01.  ORGANIZATION, STANDING AND AUTHORITY OF SELLER.  Seller
is duly organized, validly existing and in good standing under the laws of Maine
and has all requisite power and authority to carry on the operations of the
Business as they are now being conducted.

          Section 3.02.  AUTHORIZATION.  Seller has all 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 Seller of this Agreement and the Ancillary Agreements to be
executed by it, and the performance by Seller of its obligations under such
agreements, have been duly authorized.  This Agreement has been, and on the
Closing Date the Ancillary Agreements executed by Seller will be, duly executed
and delivered


                                      -30-
<PAGE>

by Seller; and, subject to the due execution and delivery by the other parties
to such agreements, this Agreement is, and the Ancillary Agreements executed by
Seller will, upon due execution and delivery, be valid and binding obligations
of Seller, enforceable against Seller in accordance with their respective terms.
Notwithstanding the foregoing, the obligation of Seller 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 Seller was a party that, individually or in the aggregate, have a
Material Adverse Effect on Seller and/or any of its material Affiliates or 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 Seller's knowledge, threatened against Seller,
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 Seller of this
Agreement and 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 Seller,
(b) violate, conflict with or result in the breach of any of the terms of,
result in any modification


                                      -31-
<PAGE>

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 or other agreement relating to or arising in
connection with the Business to which Seller is a party or by or to which it or
any of its assets or properties may be bound or subject, (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 Seller in connection with the Business, (d) violate any statute, law or
regulation of any jurisdiction or (e) result in the 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.

          Section 3.05.  CONSENTS AND APPROVALS.  Except as required under the
HSR Act or as set forth on Schedule 3.05 hereto and except for required Permits
of applicable insurance and securities regulatory authorities, the execution,
delivery and performance by Seller of this Agreement and 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 hereof
and thereof do not require Seller to obtain any consent, approval or action of,
make any filing with, or give any notice to, any Person.

          Section 3.06.  COMPUTER SOFTWARE.  Seller has set forth on Schedule
3.06(A) hereto a true and complete listing 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


                                      -32-
<PAGE>

Schedule 3.06(B) hereto a true and complete listing 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
Newco, as applicable, will have (w) the right to use, 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, all
Owned Principally Used Software, (x) pursuant to the applicable License
Agreement, the right to use, solely in connection with the conduct of the
Business, 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, all Owned Generally Used Software, (y) pursuant
to an assignment of Seller's rights to the Licensed Principally Used Software
or, if an assignment of Seller's rights to such software is not possible,
pursuant to one or more new license agreements to be entered into between
Purchaser or Newco, as applicable, and the licensors of such software, subject
to the terms and conditions of the assigned licenses or the new licenses to the
Licensed Principally Used Software, the right to use, free and clear of any
royalty or other similar payment obligations payable with respect to the Shared
Cost Period, claims of infringement or alleged infringement or other lien,
charge, claim or other encumbrance of any kind, other than maintenance fees, the
Licensed Principally Used Software, and (z) pursuant to one or more new license
agreements to be entered into between Purchaser or Newco, as applicable, and the
licensors of such software or pursuant to a sub-license granted by Seller to
Purchaser or Newco, as applicable, the right


                                      -33-
<PAGE>

to use during the Shared Cost Period, solely in connection with the conduct of
the Business, free and clear of any royalty or other similar payment
obligations, other than maintenance fees or Purchaser's or Newco's pro rata
share of maintenance fees, as applicable, claims of infringement or alleged
infringement or other lien, charge, claim or other encumbrance of any kind, all
Licensed Generally Used Software; and Seller is not in conflict with or
violation or infringement of, nor 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, Owned Generally Used
Software, Licensed Principally Used Software or Licensed Generally Used
Software.  Notwithstanding the foregoing, Seller will be deemed not to have made
the representation contained in (i) clause (y) of the preceding sentence with
respect to any Licensed Principally Used Software which Seller is unable to
assign to Purchaser or Newco, as the case may be, due to the refusal of the
licensor thereof to consent to the assignment thereof or as to which Purchaser
or Newco, as the case may be, fails to enter into a license agreement with the
licensor thereof, in either case as a result of (A) Purchaser's or Newco's, as
the case may be, failure to cooperate with Seller in obtaining from any such
licensor the right for Purchaser or Newco, as the case may be, to operate such
software or (B) Purchaser's or Newco's, as the case may be, default under any
agreement or other dispute with any such licensor, and (ii) clause (z) of the
preceding sentence with respect to any Licensed Generally Used Software as to
which Purchaser or Newco, as the case may be, fails to enter into a license
agreement with the licensor thereof as a result of (A) Purchaser's or Newco's,
as the case may be, failure to cooperate with Seller in obtaining from any such
licensor the right for Purchaser or Newco, as the case may


                                      -34-
<PAGE>

be, to operate such software or (B) Purchaser's or Newco's, as the case may be,
default under any agreement or other dispute with any such licensor.

          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 in connection with this Agreement or the
transactions contemplated hereby, except Morgan Stanley & Co., whose fees for
services rendered in connection with such transactions will be paid by Seller.

          Section 3.08.  COMPLIANCE WITH LAWS.  Except as previously disclosed
to Purchaser and except with respect to those violations, if any, that will be
cured by Seller prior to, or by the act of, Closing or which individually or in
the aggregate would not have a Material Adverse Effect on the Business (i)
neither Seller nor the Seller Separate Account 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 has Seller 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 pending triennial examination, Seller has not received
any notice, nor is 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 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 is licensed to issue the Insurance
Contracts and (ii) the lines of business in connection with the Business which
Seller is authorized to transact in each such


                                      -35-
<PAGE>

jurisdiction.  Seller has 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 as set forth on
Schedule 3.09, Seller 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 3.10.  ANNUITY BUSINESS.  (a)  The group annuity contracts
included in the Insurance Contracts in effect on the date hereof are listed on
Schedule 1.01(C) hereto.  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 Seller's
knowledge, at the time Seller paid commissions to any broker within the past 36
months in connection with the sale of Insurance Contracts, each such broker was
duly licensed as an insurance broker (for the type of business sold by such
broker) in the particular jurisdiction in which such broker sold such business
for Seller, and no such broker 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


                                      -36-
<PAGE>

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.  Except as previously
disclosed to Purchaser, (i) neither the manner in which Seller compensates any
association or broker involved in the sale or servicing of Insurance Contracts
that is not registered as a broker-dealer or insurance agent nor, to Seller's
knowledge, the conduct of any such association or broker, renders such
association or broker a broker-dealer or insurance agent under any applicable
federal or state law and (ii) the manner in which Seller compensates each
association or broker involved in the sale or servicing of Insurance Contracts
is in compliance with all applicable federal or state laws.  Except as set forth
on Schedule 3.10(A) hereto, (i) as of the date hereof, no holder of a group
annuity contract which constitutes an Insurance Contract has indicated in
writing to Seller an intention to cancel or terminate such Insurance Contract
and (ii) no association or similar Person involved in the servicing of an
Insurance Contract has indicated in writing to Seller an intention to cease such
services or to cancel or terminate its agreement or other arrangement with
Seller.

          (b)  Except as set forth on Schedule 3.10(B) hereto, to Seller's
knowledge, no entity that is a party to an Insurance Contract is undergoing, or
has undergone in the past 12 months, an audit by the Internal Revenue Service
with respect to its compliance with section 403(b) of the Code, and Seller is
not aware of any such proposed audit.

          (c)  Except as previously disclosed by Seller to Purchaser (which
disclosure shall not affect or limit in any way Purchaser's or Newco's rights to
indemnification under Article X hereof):


                                      -37-
<PAGE>

                 (i)     each 403(b) Contractholder was, at the time the 403(b)
Contract was issued, and, to Seller's knowledge and at all relevant times
thereafter has been, an entity described in section 403(b)(1)(A) of the Code;

                (ii)     to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, the terms of each
Transferred Contract and the administration and operation thereof and of any
plan funded in whole or in part through such Transferred Contract comply, and at
all relevant times have complied, in all material respects with the applicable
provisions of the Code and ERISA;

               (iii)     to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, the terms of each
Transferred Contract and the administration and operation thereof and of any
plan funded in whole or in part through such Transferred Contract ensure that
contributions or payments to such Transferred Contract which are intended to be
nontaxable are not taxable;

                (iv)     to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, the terms of all
contract loans made under a Transferred Contract, whether outstanding or
previously made, and the administration thereof by Seller, at all relevant times
have complied in all material respects with all applicable requirements of the
Code and ERISA, including but not limited to prohibited transaction rules and
the provisions of section 72(p) of the Code, such that such contract loans were
not taxable when made or at any time thereafter, except with respect to taxable
defaults in repayment of such contract loans;

                 (v)     to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, the terms of each
Transferred Contract and the


                                      -38-
<PAGE>

administration and operation thereof and of any plan funded in whole or in part
through any such contract, to the extent such plan is intended by the
Contractholder to limit fiduciary responsibility in accordance with section
404(c) of ERISA, comply in all material respects with all applicable
requirements for limiting fiduciary responsibility under section 404(c) of
ERISA;

                (vi)     Seller has previously disclosed to Purchaser a complete
list of 403(b) Contractholders (A) to whom Seller has provided reductions in
fees or increases in contract rates of return based on the volume of
contributions made to 403(b) Contracts and (B) whose Transferred Contracts
include (through riders or otherwise) provisions for individual retirement
accounts or annuities within the meaning of section 408 of the Code;

               (vii)     by the Closing Date Seller will have delivered to
Purchaser or Newco, as applicable, with respect to those files delivered to
Purchaser in computer imaged or electronic form, paper copies thereof including
but not limited to copies of all quarterly Participant statements (as provided
to the Participant);

              (viii)     to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, Seller has in
place and is operating a system for properly calculating, deducting, accounting
for, recording, and reporting to the IRS Participant contract loans under the
Transferred Contracts, and, if requested by Purchaser, Seller will cooperate in
a commercially reasonable time and manner with Purchaser to establish an
automated system to process the foregoing;

                (ix)     to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, Seller has in
place and is operating a system for prohibiting transactions involving any
Participant account under a Transferred Contract pending a


                                      -39-
<PAGE>

determination (A) in the case of a Transferred Contract subject to the
provisions of section 401(a)(13) of the Code or section 206(d)(3)(B) of ERISA,
of whether a domestic relations order is a qualified domestic relations order
within the meaning of section 414(p) of the Code or section 206(d)(3)(B) of
ERISA, and (B) in the case of a Transferred Contract the transfer and attachment
of which is subject to state law and not to section 401(a)(13) of the Code or
section 206(d)(3)(B) of ERISA, of whether under applicable state law any portion
of such Transferred Contract has been transferred or attached under applicable
state law;

               (x)  to the extent that by operation of law or written agreement
or otherwise Seller is legally responsible to provide any form of testing for
compliance with any of the requirements of section 403(b) of the Code, such
testing has been provided in a manner (including, but not limited to the
solicitation of adequate data with which to perform such testing) that assures,
to the extent that data requested by Seller has been provided accurately, that a
reliable determination of whether such requirements have been met is obtained;

                (xi)     to the extent that by operation of law or written
agreement or otherwise Seller is legally responsible therefor, all minimum
required distribution amounts calculated by Seller with respect to each
Transferred Contract fully comply with applicable requirements of sections
401(a)(9) and 403(b)(10) of the Code, and, to the extent that by operation of
law or written agreement or otherwise Seller is legally responsible therefor,
Seller has in place and is operating a system for properly calculating,
deducting, accounting for, recording, and reporting to the IRS such minimum
required distribution amounts; and


                                      -40-
<PAGE>

               (xii)     Seller maintains, on an electronic basis, accurate
historical records of contributions to the Transferred Contracts relevant for
calculating each Participant's exclusion allowance under Code section 403(b)(2).

          For purposes of this Section 3.10(c), any noncompliance that results
in an indemnifiable Loss (as defined in Article X) shall be a failure to comply
in all material respects.

          (d)  Schedule 3.10(D) hereto lists all Insurance Contracts that, to
Seller's knowledge, are part of or held pursuant to an employee benefit plan
within the meaning of section 3(3) of ERISA.

          Section 3.11.  REGULATORY FILINGS.  Seller has made available for
inspection by Purchaser all material registrations, filings, and submissions
made by Seller or by the Seller Separate Account with any governmental or
regulatory body and final reports of examinations with respect to Seller or the
Seller Separate Account issued by any such governmental or regulatory body to
the extent that such registrations, filings, submissions and reports relate to
the Business and (i) were made or issued on or subsequent to January 1, 1993, or
(ii) represent the most recent of such registrations, filings, submissions and
reports with respect to Insurance Contracts currently in effect but in a
category of Insurance Contracts not written by Seller after January 1, 1993.
Except as listed on Schedule 3.11 hereto, Seller has filed all reports,
statements, documents, registrations, filings or submissions (including without
limitation any sales material) required to be filed by Seller or the Seller
Separate Account with any governmental or regulatory body to the extent they
relate to the Business, and UNUM Sales Corporation has filed all sales material
required to be filed by it with any governmental or regulatory body to the
extent that they relate to the Business except, in each case, where the


                                      -41-
<PAGE>

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 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.  Schedule 3.12(A) hereto lists all Persons who
have acted as brokers (including broker-dealers) with respect to Insurance
Contracts which are in force and who were paid commissions by Seller within the
past 12 months.  Schedule 3.12(B) hereto lists all of the brokers who were paid
at least $100,000 in commissions by Seller with respect to the Business during
1994 or at least $75,000 in commissions by Seller with respect to the Business
during the first three calendar quarters of 1995 ("Significant Brokers") and
identifies any Significant Broker who has indicated in writing to Seller that
such broker will not sell or market on behalf of Purchaser group annuity
contracts of the type which constitute the Business after the consummation of
the transactions contemplated by this Agreement.  Schedule 3.12(B) hereto sets
forth (i) the standard forms of agreements between Seller and brokers which
relate to the Business, (ii) a list of those Significant Brokers as to which
such agreements are in effect and (iii) a list of those Significant Brokers who
have received commission payments from Seller which do not relate to the
Business and, except as set forth on Schedule 3.12(B) hereto, (iv) there are no
other written agreements between Seller and any Significant Brokers providing
for the compensation or indemnification of such brokers in connection with the
Business or the provision of financing (whether in the form of contract loans or
otherwise) to such brokers.


                                      -42-
<PAGE>

Each of such contracts and other agreements relating to the Business between
Seller and the Significant Brokers is valid, binding and in full force and
effect in accordance with its terms.  Neither Seller nor, to Seller's knowledge,
any Significant Broker is in default in any material respect with respect to any
such contract or such other agreement.

          Section 3.13.  REINSURANCE.  There are no agreements, written or oral,
pursuant to which Seller cedes or retrocedes risks assumed under the Insurance
Contracts.  There are no Insurance Contracts which are agreements of assumed
reinsurance.

          Section 3.14.  BANKING ARRANGEMENTS.  Schedule 3.14 hereto contains a
complete and accurate list and description of (a) all bank accounts used in
whole or part in connection with the Business and (b) all lock box arrangements
used in whole or in part in connection with the Business.

          Section 3.15.  ABSENCE OF CERTAIN CHANGES OR EVENTS.  Except as
previously disclosed to Purchaser or except as expressly contemplated or
required by this Agreement, since December 31, 1994, Seller has generally
conducted the Business only in the ordinary course and there has not been (a)
any material change in the underwriting, pricing, actuarial, reserving or
investment practices or policies of the Business or any material adverse change
in mortality or lapse experience, or (b) any transaction, commitment, dispute,
damage, destruction, loss or other event or condition of any character (whether
or not in the ordinary course of business), individually or in the aggregate
having, or which, insofar as reasonably can be foreseen, is likely to have, a
Material Adverse Effect on the Business, other than events or conditions
relating to the life insurance industry generally.  Schedule 3.15 sets forth the
aggregate dollar amount of all surrenders and withdrawals under Insurance
Contracts (or contracts that would constitute


                                      -43-
<PAGE>

Insurance Contracts if they were in effect on the Effective Date) from and after
June 30, 1995 to December 31, 1995.  On or prior to the Closing Date, Seller
shall deliver to Purchaser an updated Schedule 3.15, which shall set forth the
aggregate dollar amount of all surrenders and withdrawals under Insurance
Contracts (or contracts that would constitute Insurance Contracts if they were
in effect of the Effective Date) from and after December 31, 1995 to the date
which is the last day of the second month preceding the month in which the
Closing Date falls.

          Section 3.16.  OTHER SALE ARRANGEMENT.  Seller is not 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 to any
Persons other than Purchaser and Newco.

          Section 3.17.  SELLER SEPARATE ACCOUNT.  The Seller Separate Account
is duly and validly established and maintained under the laws of the State of
Maine and the assets of the Seller Separate Account are not chargeable with
liabilities arising out of any other business that Seller may conduct; the
Seller Separate Account is duly registered as an investment company under the
1940 Act; the Seller Separate Account is and has been operated in compliance
with the 1940 Act in all material respects, and Seller has filed all material
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 Account.  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 has filed each prospectus and statement of additional
information, as amended or supplemented, under which the Seller


                                      -44-
<PAGE>

Separate Account 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, contained no untrue statement of a material fact and did
not omit to state any material fact required to be stated therein or necessary
in order to make the statements therein not misleading.

          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 and is freely assignable to Purchaser or Newco, as applicable,
pursuant to this Agreement and the General Assignment Agreements without notice
to or consent of any Person, other than as specified on Schedule 3.05 hereto.
Neither Seller nor, to Seller's knowledge, any other party to any such contract
is in default in any material respect with respect to any such contract or such
other agreement.

          Section 3.19.  EMPLOYEES.  (a)  Schedule 3.19(A) hereto lists each
Person employed by Seller immediately prior to the execution of this Agreement
who customarily devotes more than 20 hours per week to the Business, and further
identifies any such Person who has notified Seller in writing as of the date of
this Agreement that such Person will not continue working in the Business after
the consummation of the transactions contemplated by this Agreement.  On the
Closing Date, Seller shall deliver to Purchaser an addendum to Schedule 3.19(A),
which will identify any Person listed on Schedule 3.19(A) who, as of the Closing
Date, is (i) receiving benefits under Seller's long-term disability plan, (ii)
receiving benefits under Seller's short-term disability plan or (iii) on an
approved leave of absence.  The employees listed on Schedule 3.19(A) currently
meet the standards set by Seller for continuing the employment of its employees
in their respective current positions.


                                      -45-
<PAGE>

          (b)  Schedule 3.19(B) hereto lists and describes 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.

          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 listed on Schedule 3.19(A) (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 listed on Schedule
3.19(A) (sometimes referred to herein as the "Welfare Plans"); and (iii) 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 listed on Schedule 3.19(A), without regard to the coverage of any such
plan, program, or arrangement by ERISA or any provision of the Code.  The plans
listed on Schedule 3.20(A) are collectively referred to herein as the "Benefit
Plans."

          (b)  (i)  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, 1995, an "unfunded
benefit liability," as defined in section 4001(a)(18) of ERISA;

               (ii)  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


                                      -46-
<PAGE>

contributions, has an "accumulated funding deficiency," as defined in section
302 of ERISA and section 412 of the Code, whether or not waived;

               (iii)  To the best of Seller's knowledge, 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 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;

               (iv)  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; and

               (v)  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.

          (c)  To the best of Seller's knowledge and except to the extent set
forth in Schedule 3.20(C) hereto, each Welfare Plan that is a "group health
plan," as defined in section 5000(b)(1)


                                      -47-
<PAGE>

of the Code, complies in all material respects with the applicable requirements
of section 4980B of the Code ("COBRA").

          (d)  To the best of Seller's knowledge, 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.

          Section 3.21.  LABOR RELATIONS AND EMPLOYMENT.  Except to the extent
set forth in Schedule 3.21 hereto, (i) there is no labor strike, dispute,
slowdown, stoppage or lockout actually pending or, to Seller's knowledge,
threatened against or affecting Seller in connection with the Business, and,
since January 1, 1990, there has not been any such action; (ii) to Seller's
knowledge, no union claims to represent the employees of Seller in connection
with the Business and there are no current union organizing activities among
such employees; (iii) Seller is not a party to or bound by any collective
bargaining or similar agreement with any labor organization applicable to
Seller'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.


                                      -48-
<PAGE>

          Section 3.22.  TRANSFERRED ASSETS.  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 Assigned and Assumed
Contracts), free of any lien, encumbrance, restriction, claim, charge, or defect
of title, and each of the Cash Equivalents that constitute Transferred Assets is
realizable in accordance with its terms.

          Section 3.23.  CONTRACTS.  (a)  Schedule 3.23(A) lists and briefly
describes (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 Seller, each and every oral contract, agreement,
commitment or arrangement, to which Seller is a party or which is binding upon
Seller that relate to the Business, except only for (i) those specifically
disclosed in any other Schedule to this Agreement, including but not limited to
the Insurance Contracts, (ii) those which do not relate in any significant
manner to the Business or (iii) having a value to or imposing an obligation upon
Seller not in excess of $10,000 in respect of any individual item or not in
excess of $200,000 in the aggregate for all items not listed and not otherwise
properly excluded.

          (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, and
to Seller's knowledge, of each other Person that is a party thereto.  Except as
set forth on Schedule 3.23(A), neither Seller nor, to Seller's knowledge, any
other party to such contract is in material violation, breach or default of any
such contract or, with or without notice or lapse of time or both, would be in
material violation, breach or default of any such contract.  Except as set forth
on Schedule 3.23(A), no such contract contains any provision providing that any
party thereto other than Seller may


                                      -49-
<PAGE>

terminate such contract by reason of the execution of this Agreement or the
Ancillary Agreements or the transactions contemplated thereby.

          (c)  Schedule 3.23(C) hereto lists and briefly describes each and
every written contract, agreement, commitment or arrangement, and each and every
oral contract, agreement, commitment or arrangement, to which Seller is a party
or which is binding upon Seller that relate to the Business, pursuant to which
Seller is or may become obligated to indemnify any Person in connection with the
Business.  Except as set forth on Schedule 3.23(C), no indemnification
obligations are currently payable by Seller under any such agreement or have
become payable by Seller under any such agreement since December 31, 1992.

          (d)  Notwithstanding the generality of the foregoing, Schedule 3.23(D)
hereto lists and briefly describes each and every written contract, agreement,
commitment or arrangement, and each and every oral contract, agreement,
commitment or arrangement, to which Seller is a party or which is binding upon
Seller that restrict the right of Seller to change the crediting rates under the
Insurance Contracts, other than pursuant to the terms of the Insurance
Contracts.

          Section 3.24.  STATUTORY STATEMENTS.  Seller has previously disclosed
to Purchaser true, complete and correct copies of the Annual Statements of
Seller as filed with the Maine Insurance Department for the years ended December
31, 1994, 1993 and 1992, together with all exhibits and schedules thereto
applicable to the Business and the actuarial opinions applicable to the Business
for such years and supporting actuarial memoranda for the year ended December
31, 1994 only.  Seller has previously disclosed to Purchaser a true, complete
and correct copy of the Quarterly Statements of Seller as filed with the Maine
Insurance Department for the


                                      -50-
<PAGE>

quarters ended September 30, 1995, June 30, 1995 and March 31, 1995, together
with all exhibits and schedules thereto.

          Section 3.25.  TAX MATTERS.  (a)  Each Insurance Contract, other than
those identified on Schedule 3.25 (which contracts were not intended at any time
to meet the requirements of Section 8.18(a) of the Code), is a "pension plan
contract" as defined in section 818(a) of the Code.

          (b)  The transfer of the Insurance Contracts from Seller to Purchaser
or Newco, as applicable, under this Agreement and the Ancillary Agreements will
not result in the imposition of any Taxes on the holders of the Insurance
Contracts or in the loss of any Tax benefits to which the holders are entitled
under the Insurance Contracts.

          (c)  To the extent required by law, the assets of the Seller Separate
Account are adequately diversified within the meaning of section 817(h) of the
Code.

          (d)  Except as previously disclosed to Purchaser, to the extent
required, each Insurance Contract complies with section 72 of the Code.

          (e)  The amount of the reserves maintained by Seller for federal
income tax purposes and properly computed as specified by the Code with respect
to the Insurance Liabilities is equal to the sum of the General Account Reserves
and the Separate Account Liabilities.

          Section 3.26.  FINANCIAL STATEMENT DATA.  Schedule 3.26 contains
certain GAAP and statutory financial statement data for the Business for the
years 1993 and 1994 and for the interim periods ended March 31, 1995, June 30,
1995, and September 30, 1995.  Such data was obtained from the books and records
of Seller and is the same data that was included with


                                      -51-
<PAGE>

respect to the Business in the internal and external GAAP and statutory
financial statements of Seller.  Such data was computed in accordance with, as
applicable, GAAP and Maine SAP.  From time to time prior to the Closing Date,
Seller shall deliver to Purchaser similar financial statement data for the one-
year period ending December 31, 1995 and for the three-month period most
recently ended, as such data is compiled in the normal course of Seller's
business.  Such additional financial data shall be based on the books and
records of Seller and will be computed in accordance with GAAP and Maine SAP, as
applicable.

          Section 3.27. TRANSITION SERVICES AGREEMENT.  Except as set forth in
Schedule 1 to the Transition Services Agreement, the amounts to be paid by
Purchaser to Seller pursuant to the terms of the Transition Services Agreement
are, or have been computed at, rates that are substantially consistent with
Seller's internal charge-back rates as of the date hereof.

          Section 3.28. CREDITING RATE.  The weighted aggregate general account
crediting rate in effect as of the date hereof with respect to the Core
Insurance Contracts does not exceed 6.06%.


                                   ARTICLE IV

                   REPRESENTATIONS AND WARRANTIES OF PURCHASER

          Purchaser hereby represents and warrants to Seller as follows:

          Section 4.01.  ORGANIZATION AND STANDING.  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.  On the Closing Date, Newco will be a corporation duly
organized, validly existing and in good standing under the laws of the


                                      -52-
<PAGE>

State of New York and will have 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 it is then being conducted.

          Section 4.02.  AUTHORIZATION.  Purchaser has and, on the Closing Date
Newco will have, all 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 Purchaser of
this Agreement and the execution and delivery of the Ancillary Agreements to be
executed by Purchaser and Newco, and the performance by each of them of their
obligations under such agreements, have been or will be duly authorized.  This
Agreement has been, and on the Closing Date the Ancillary Agreements executed by
Purchaser and Newco, respectively, will be duly executed and delivered by
Purchaser and Newco; 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 Newco will, upon due execution and delivery, be valid
and binding obligations of Purchaser and Newco, respectively, enforceable
against Purchaser and Newco in accordance with their respective terms.
Notwithstanding the foregoing, the obligation of Purchaser and Newco 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 any of its material Affiliates was a party and, on the
Closing Date, there will be no such orders, decrees or judgments as to Newco,
that, individually or in the aggregate, have a Material


                                      -53-
<PAGE>

Adverse Effect on Purchaser, Newco and/or any of their material Affiliates or
(after giving effect to the Closing) have a Material Adverse Effect on the
Business.  Except as disclosed on Schedule 4.03 hereto, there are no actions,
suits, arbitrations or legal, administrative or other proceedings pending or, to
Purchaser's knowledge, threatened against Purchaser or any of its material
Affiliates, 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 Purchaser
and/or any of its material Affiliates or (after giving effect to the Closing)
have a Material Adverse Effect on the Business and, on the Closing Date, there
will be no such actions, suits, arbitrations or other proceedings as to Newco.

          Section 4.04.  NO CONFLICT OR VIOLATION.  Except as disclosed on
Schedule 4.04 hereto, the execution, delivery and performance by Purchaser of
this Agreement and the execution, delivery and performance by each of Purchaser
and Newco 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
Purchaser or Newco, (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 or other
agreement to which Purchaser or Newco is a party or by or to which either of
them or any of their respective assets or properties may be bound or subject,
(c) violate any order, judgment, injunction, award or decree of any court,
arbitrator or governmental or regulatory


                                      -54-
<PAGE>

body against, or binding upon, or any agreement with, or condition imposed by,
any governmental or regulatory body, foreign or domestic, binding upon Purchaser
or Newco, (d) violate any statute, law or regulation of any jurisdiction which
violation would have a Material Adverse Effect on Purchaser, Newco and/or any of
their material Affiliates or (after giving effect to the Closing) have a
Material Adverse Effect on the Business, or (e) result in the breach of any of
the terms or conditions of, constitute a default under, or otherwise cause an
impairment of, any Permit related to Purchaser's or Newco's business or
necessary to conduct the Business.

          Section 4.05.  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 and securities regulatory authorities, the execution,
delivery and performance by Purchaser of this Agreement, and the execution,
delivery and performance by each of Purchaser and Newco 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 hereof
and thereof, do not require Purchaser or Newco to obtain any consent, approval
or action of, make any filing with or give any notice to, any Person.

          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 Newco in connection with this Agreement
or the transactions contemplated hereby.

           Section 4.07.  COMPLIANCE WITH LAWS.  Except as listed on Schedule
4.07 hereto, Purchaser is not 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


                                      -55-
<PAGE>

Purchaser received any written notice that any such violation is being alleged,
in each case except those that will be cured by Purchaser prior to, or by the
act of, Closing or (after giving effect to the Closing) which individually or in
the aggregate would not have a Material Adverse Effect on the Business.  On the
Closing Date, Newco will not be 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 or have received any
written notice that any such violation is being alleged, in each case except
those that will be cured by the act of Closing or (after giving effect to the
Closing) which individually or in the aggregate would not have a Material
Adverse Effect on the Business.

          Section 4.08.  PERMITS, LICENSES AND FRANCHISES.  Purchaser has 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 on Schedule 4.08 hereto.  Except as listed on Schedule 4.08 hereto,
Purchaser has 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 as listed on Schedule
4.08 hereto, Purchaser has not 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.  On the Closing Date, Newco will be so authorized in New York,
will have all such Permits and will not be engaged in any such activities.

          Section 4.09.  GAAP FINANCIAL STATEMENTS.  On or prior to the date
hereof, Purchaser has delivered to Seller true, correct and complete copies of
(a) the audited


                                      -56-
<PAGE>

consolidated balance sheet of Purchaser and its Subsidiaries as of December 31,
1994, prepared in accordance with GAAP, together with the notes thereon and the
related report of Ernst & Young, LLP, 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, 1994, prepared in accordance with GAAP, together with
the notes thereon and the related report of Ernst & Young, LLP (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 quarters ended September 30, 1995,
June 30, 1995 and March 31, 1995, prepared in accordance with GAAP (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 GAAP consistently applied, audited by Ernst & Young,
LLP 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.

          Section 4.10.  STATUTORY STATEMENTS.  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,
1994, 1993 and 1992, 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 Statements of Purchaser as filed with


                                      -57-
<PAGE>

the Indiana Insurance Department for the quarters ended September 30, 1995, June
30, 1995 and March 31, 1995, together with all exhibits and schedules thereto.

          Section 4.11.  ABSENCE OF CERTAIN CHANGES OR EVENTS.  Except as listed
on Schedule 4.11 hereto or except as expressly contemplated or required by this
Agreement, since December 31, 1994, 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 Purchaser and/or any of its material Affiliates or (after giving
effect to the Closing) have a Material Adverse Effect on the Business, in either
case other than events or conditions relating to the life insurance industry
generally.

          Section 4.12.  RELATIONS WITH INVESTMENT COMPANIES.  Purchaser does
not have, and has not previously had, any adverse relationship with any
investment company in which any Seller Separate Account assets are invested, or
with any investment adviser thereof, or any Affiliate of either of the
foregoing, which would reduce in any significant respect the likelihood of
Purchaser entering into a new participation agreement with such Person on
substantially the same terms as the currently existing agreement between such
Person and Seller.  Without limiting the generality of the foregoing, Purchaser
has a good relationship with FMR Corp. and its Subsidiaries.


                                      -58-
<PAGE>

                                    ARTICLE V

                                    COVENANTS

          Section 5.01.  CONDUCT OF BUSINESS.  (a)  Prior to the Closing, Seller
shall, unless it shall receive the prior written consent of Purchaser:

                 (i)     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 use commercially
          reasonable efforts to preserve its relationship with and the goodwill
          of its brokers, customers, suppliers, employees and other Persons
          having business dealings with Seller in connection with the Business;
          and

                (ii)     give notice to Purchaser as promptly as practicable of
          any Material Adverse Effect with respect to the Business.

          (b)  Prior to Closing, Seller shall notify Purchaser upon entering
into any group contract which, if in effect on the Effective Date, would
constitute an Insurance Contract.

          (c)  Prior to the Closing, Purchaser and Seller shall cooperate to
preserve the goodwill of the brokers, customers, employees and suppliers and
other Persons having business dealings with Seller in connection with the
Business.

          (d)  Prior to the Closing, Seller shall operate the Business in
accordance with industry standards in effect during such time.

          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


                                      -59-
<PAGE>

than Purchaser, Newco and their respective Affiliates) concerning any direct or
indirect sale or other disposition of the Business.

          Section 5.03.  INVESTIGATIONS.  (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, including, without limitation, for the purpose of
investigating the financial condition, service quality and operations of Seller.
Any investigation, examination or interview by Purchaser of Seller's employees
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.

          (b)  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 Purchaser and Newco 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.

          Section 5.04.  CONTINUED ACCESS.  (a)  Following the Closing Date,
Seller shall (i) allow Purchaser and/or Newco, upon reasonable prior notice and
during regular business hours, through their employees and representatives, the
right, at Purchaser's or Newco's


                                      -60-
<PAGE>

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 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 Newco's examination and copying.  Access to
such books and records shall be at Purchaser's or Newco's expense and may not
unreasonably interfere with Seller's or any successor company's business
operations.

          (b)  Following the Closing Date, Purchaser shall, and shall cause
Newco to, (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 Newco, 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 Newco'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


                                      -61-
<PAGE>

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.

          Section 5.06.  CONSENTS AND REASONABLE EFFORTS.  Seller and Purchaser
shall, and Purchaser shall cause Newco to, cooperate and use their 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 Section 6.03(a); PROVIDED, HOWEVER, that with respect to
the covenants of Purchaser contained in Section 5.22 hereof, Purchaser shall be
required to use only commercially reasonable efforts.  Seller shall use its best
efforts to obtain all approvals and consents to the transactions contemplated by
this Agreement and the Ancillary Agreements as set forth on Schedule 3.05
hereto.  Purchaser will use its best efforts to obtain all approvals and


                                      -62-
<PAGE>

consents to the transactions contemplated by this Agreement and the Ancillary
Agreements as set forth on Schedule 4.05 hereto.

          Section 5.07.  REPRESENTATIONS AND WARRANTIES.  From the date hereof
through the Closing Date, (a) Seller shall use its 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, (b) Purchaser
shall use its 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 as to Purchaser 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 use
commercially reasonable efforts to cause the representations and warranties
contained in Section 3.10(c) to be true and correct in all material respects on
and as of the Closing Date without regard to matters previously disclosed to
Purchaser; PROVIDED, HOWEVER, that Seller shall not be required to take any
action to cause the representations and warranties contained in Section 3.10(c)
to be true and correct (without regard to matters previously disclosed to
Purchaser) as of any particular date or period prior to the Closing Date, (d)
Seller shall notify Purchaser 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
(e) 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.


                                      -63-
<PAGE>

          Section 5.08.  FURTHER ASSURANCES.  (a)  Upon the terms and subject to
the conditions herein provided, each of Seller and Purchaser shall, and
Purchaser shall cause Newco to, use all commercially reasonable 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 and Purchaser shall take,
and Purchaser shall cause Newco to 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 Newco in full possession and operating
control of the Transferred Assets and the Business which each is assuming
pursuant to this Agreement and the Ancillary Agreements.

          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) Seller and Purchaser shall share equally the cost of the filing fees in
connection with the filings 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


                                      -64-
<PAGE>

insurance regulatory approvals and Commission approvals (other than any
approvals that relate solely to Seller), consents and orders for the
implementation of the Indemnity Reinsurance Agreements and the Assumption
Reinsurance Agreements from regulatory authorities (other than approvals from
the Insurance Departments of the States of Maine, New York and California, as to
which each party shall bear its own expenses) and the actual out-of-pocket costs
of providing policyholder notices and otherwise implementing the Assumption
Reinsurance Agreements in accordance with their respective terms.

          Section 5.10.  ASSUMPTION REINSURANCE AGREEMENTS.  At the Closing,
Seller and Purchaser shall execute and deliver to each other the Purchaser
Assumption Reinsurance Agreement in substantially the form of Exhibit A-1
hereto, and Seller and Newco shall execute and deliver to each other the Newco
Assumption Reinsurance Agreement in substantially the form of Exhibit A-2
hereto, each of which shall be effective as of the Effective Date.

          Section 5.11.  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 B-1 hereto,
and Seller and Newco shall execute and deliver to each other the Newco Indemnity
Reinsurance Agreement in substantially the form of Exhibit B-2 hereto, each of
which shall be effective as of the Effective Date.

          Section 5.12.  ADMINISTRATIVE SERVICES AGREEMENT.  At the Closing,
Seller and Purchaser shall execute and deliver to each other the Administrative
Services Agreement, which shall be effective as of the Closing Date, in
substantially the form of Exhibit C hereto.


                                      -65-

<PAGE>

          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 D hereto.

          Section 5.14.  BILL OF SALE.  At the Closing, Seller shall execute and
deliver to Purchaser and Newco the Bill of Sale, which shall be effective as of
the Closing Date, in substantially the form of Exhibit E hereto.

          Section 5.15.  TRUST AGREEMENTS.  At the Closing, Seller, Purchaser
and the Trustee shall execute and deliver to each other the Purchaser Trust
Agreement in substantially the form of Exhibit F-1 hereto, and Seller, Newco and
the Trustee shall execute and deliver to each other the Newco Trust Agreement in
substantially the form of Exhibit F-2 hereto,  each of which shall be effective
as of the Closing Date.

          Section 5.16(a).  GENERAL ASSIGNMENT AGREEMENTS.  At the Closing,
Seller and Purchaser shall execute and deliver to each other a General
Assignment Agreement and Seller and Newco shall execute and deliver to each
other a General Assignment Agreement, each of which shall be effective as of the
Closing Date, each in substantially the form of Exhibit G hereto.

          Section 5.16(b).  CUSTODIAN AGREEMENT.  At the Closing, Purchaser
shall cause Newco to execute and deliver and Seller and the Custodian shall
execute and deliver to each other a Custodian Agreement substantially in the
form of Exhibit K hereto.

          Section 5.17.  COINSURANCE AND ASSUMPTION AGREEMENT.  Seller agrees
that for a period of 18 months commencing with the Closing Date it will issue,
at the written request of Purchaser, group annuity contracts of the type that
would be included in the Business if in effect


                                      -66-
<PAGE>

on the Closing Date; PROVIDED, HOWEVER, that Seller shall be obligated to issue
such contracts in a particular state only until such time as Purchaser has
received form approval for a similar group annuity contract from the insurance
regulatory authorities of such state and, if required, has a registration
statement with respect to such contract that has been declared effective by the
Commission.  Upon the receipt of such approval and the receipt of any other
required regulatory approvals and such declaration of effectiveness, Purchaser
shall assume all contracts issued by Seller hereunder in such state.  Pending
such assumption, Purchaser shall 100% coinsure the general account liabilities
under such contracts and shall administer such contracts pursuant to the
Administrative Services Agreement.  At the Closing, Seller and Purchaser shall
execute and deliver to each other the Coinsurance and Assumption Agreement,
which shall be effective as of the Closing Date, in substantially the form of
Exhibit H hereto, to implement the reinsurance arrangements described in this
Section 5.17.  Promptly following the Closing, Purchaser will make all required
filings with governmental and regulatory bodies in order to apply for the
approvals and declarations referred to above and will diligently pursue the
issuance of such approvals and such declarations.

          Section 5.18.  PRODUCTS.  Purchaser agrees that, for a period of 18
months from the Closing Date, it will and will cause Newco to make available to
the brokers listed on Schedule 3.12(A) hereto group annuity products that are
the same as the products available to such brokers as of the date hereof from
Seller, either (i) with respect to Purchaser, through the Coinsurance and
Assumption Agreement or (ii) with respect to Purchaser or Newco, through group
annuity contracts to be issued by Purchaser or Newco, respectively, except as
such products may be modified (a) as required by applicable law or in accordance
with industry


                                      -67-
<PAGE>

standards, (b) to provide enhanced benefits to prospective holders of the
Insurance Contracts or (c) pursuant to a request from a prospective holder of an
Insurance Contract.

          Section 5.19.  EMPLOYEES; SEVERANCE PAYMENTS.  (a)  Purchaser shall
provide to Seller, within 60 days of the date hereof, a list of those
individuals listed on Schedule 3.19(A) hereto who will not be offered employment
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; PROVIDED, HOWEVER, that no retirement
consultant or account representative employees of Seller shall be selected by
Purchaser to be a Band 1 Employee.  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.  Seller shall bear full responsibility for either continuing the
employment of or providing severance payments to all Band 1 Employees in
accordance with its standard practices, and Purchaser shall have no obligations
with respect thereto.

          (b)  Schedule 5.19(B) hereto sets forth the names of those individuals
with respect to whom Purchaser has offered employment contracts, such contracts
to be effective as of the Closing Date.  Each such individual who accepts such
offer and enters into such an employment


                                      -68-
<PAGE>

contract shall hereinafter be referred to as a "Contract Employee."  From and
after the commencement of the employment 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.  Purchaser agrees to not, prior to the
Closing, offer employment contracts to any additional persons listed on Schedule
3.19(A), other than stay bonuses or similar arrangements.

          (c)  (i)  Purchaser shall offer employment as of the Closing Date to
all individuals listed on Schedule 3.19(A) hereto who are neither Band 1
Employees nor Contract Employees (such individuals, along with individuals hired
by Seller in accordance with Section 5.19(h) as replacement employees for any
such individuals whose employment terminates prior to the Closing Date, being
referred to herein as the "Band 2 Employees") at their respective geographic
locations of employment as of the date hereof in positions substantially similar
to the respective positions held by such Band 2 Employees as of the date hereof
(or, as to replacement employees, the positions held by the respective Band 2
Employees whom they have replaced), with salaries at least at the level set
forth on Schedule 3.19(A) (which shall be modified as soon as possible to
provide data related to compensation payable for 1996, which compensation shall
be determined consistent with Seller's salary policies with respect to its
businesses other than the Business); PROVIDED, HOWEVER, that with respect to
individuals listed on Schedule 3.19(A) hereto who are neither Band 1 Employees
nor Contract Employees but who are, as of the Closing Date, either (x) receiving
benefits under Seller's short-term disability plan or (y) absent from work in
connection with an approved leave of absence, Purchaser's offer of employment to
such


                                      -69-
<PAGE>

individuals shall be for employment commencing on the first Business Day
following the last day for which such short-term disability benefits are payable
or such approved leave of absence, as the case may be.  Notwithstanding the
foregoing or any other provision of this Section 5.19, and except as provided in
subsection (c)(ii)(A) and in the following sentence, nothing in this Agreement
shall be deemed to require Purchaser to retain any particular Band 2 Employee
for any period of time following the Closing Date or to entitle any such Band 2
Employee to any status other than that of an at will employee of Purchaser.
Purchaser shall employ the majority of such Band 2 Employees who are located in
the greater Portland home office for at least 12 months after the Closing Date
and all the employees who are located in field offices for at least six months
after the Closing Date.

               (ii) (A)  TERMINATION UPON JOB ELIMINATION.  In the event the
employment of any Band 2 Employee is terminated by Purchaser because of the
elimination of the employee's employment position prior to the date which is 20
months after the Closing Date, the provisions of this subsection (c)(ii)(A)
shall apply:

               Purchaser shall promptly notify Seller of such termination and
Seller shall provide such Band 2 Employee with the opportunity to have Seller
place such Band 2 Employee in Seller's then-current re-employment program for a
maximum period of eight weeks with the same priority consideration for available
openings such Band 2 Employee would enjoy were he or she still an employee of
Seller.  As used in this subsection (c)(ii)(A), job elimination shall include a
termination of employment due to an employee's refusal to accept a reassignment
to a new job site in excess of fifty (50) miles from the employee's job site
immediately preceding the termination.  In the event that the job of a Band 2
Employee who is absent from work on


                                      -70-
<PAGE>

account of extended temporary disability (greater than two weeks but less than
12 months) is eliminated and such Band 2 Employee thereafter returns to work
within 12 months of the commencement of such period of extended temporary
disability and within 18 months of the Closing Date, such Band 2 Employee will
be provided with a similar employment position to the one that was eliminated
or, in the absence of such position, treated as having been subjected to a job
elimination in accordance with the provisions of this subsection (c)(ii)(A);
provided that the employee's performance met job expectations immediately
preceding such absence.  To the extent that such Band 2 Employee who is
terminated in the circumstances described in this subsection (c)(ii)(A) is not
re-employed by Seller and such Band 2 Employee's employment is terminated under
circumstances in which such Band 2 Employee becomes eligible for severance
payments under the severance payment plan of Purchaser, Purchaser shall pay
severance and provide for continuation of benefit plan coverage to such Band 2
Employee determined as follows:  Purchaser shall pay severance to such Band 2
Employee in an amount equal to the salary-based severance payments to which such
Band 2 Employee would have been entitled were he or she an employee of Seller on
the date of termination of employment (taking into account all of such Band 2
Employee's service with both Seller and Purchaser through such date of
termination of employment with Purchaser) under Seller's severance payment plans
as in effect on the Closing Date had his or her employment terminated for job
elimination (applying Seller's plan's standard) as of such date of termination
of employment with Purchaser; PROVIDED, HOWEVER, that such payments shall be
payable only in the form of bi-weekly payments for up to 12 or 24 weeks,
whichever is applicable to such Band 2 Employee, and any payments due thereafter
paid in the form of a single lump sum.  On the Closing Date, Seller shall
provide


                                      -71-
<PAGE>

Purchaser with a schedule which sets forth each Band 2 Employee's service with
Seller, as the same is calculated by Seller for the purposes of determining
severance payments.  Purchaser shall provide for continuation of benefit plan
coverage to such Band 2 Employees following their termination of employment for
the period during which they receive bi-weekly severance payments for up to a
maximum period of, except as otherwise specified, 12 or 24 weeks, as applicable,
with respect to the following benefit plans:  (1) Purchaser's Defined Benefit
Plan (for recognition of up to 501 hours of service) and Purchaser's SERPs; (2)
the Lincoln National Corporation Employees' Group Life Insurance, Accidental
Death, Disability, Loss of Sight Insurance and Family Life Insurance Plan; (3)
the Lincoln National Corporation Group health, dental, vision and/or hearing
Plan for Employees in which such employees would have been entitled to
participate had they not been terminated; (4) the Lincoln National Corporation
Employees' Health Care Expense Account Plan (pursuant to the Lincoln National
Corporation Customized Security Plan) (except that if a re-enrollment occurs
during the period that severance is being paid, such terminated Band 2 Employee
may not re-enroll for coverage under Purchaser's Health Care Expense Account
Plan); and (5) the Lincoln National Corporation Employees' Dependent Care
Expense Account Plan (pursuant to the Lincoln National Corporation Customized
Security Plan).  In the case of a termination of employment of a Band 2 Employee
because of the elimination of the employment position of such Band 2 Employee,
Purchaser shall not effect such termination of employment prior to providing
eight weeks' advance notice to such Band 2 Employee and Seller of such
termination of employment.

                         (B)  TERMINATION OTHER THAN FOR CAUSE AND OTHER THAN
FOR JOB ELIMINATION.  In the event the employment of any Band 2 Employee is
terminated by Purchaser,


                                      -72-
<PAGE>

other than for cause and other than because of the elimination of such Band 2
Employee's employment position, for example, because of unsatisfactory
performance of employment duties, prior to the date which is 18 months after the
Closing Date, Purchaser shall have no obligation to provide advance notice to
Seller of such termination and Seller shall have no obligation to place such
Band 2 Employee in any re-employment program of Seller.  In the event that the
job of a Band 2 Employee who is absent from work on account of extended
temporary disability (greater than two weeks but less than 12 months) is
eliminated and such Band 2 Employee's job performance immediately preceding such
absence was unsatisfactory and such Band 2 Employee thereafter returns to work
within 12 months of the commencement of such period of extended temporary
disability and within 18 months of the Closing Date, such Band 2 Employee will
be provided with a similar employment position to the one that was eliminated
or, in the discretion of Purchaser, treated as having been terminated in
accordance with the provisions of this subsection (c)(ii)(B).  To the extent
such Band 2 Employee is not otherwise employed by Seller and such Band 2
Employee's employment was terminated under circumstances in which such Band 2
Employee becomes eligible for severance payments under the severance payment
plan of Purchaser, Purchaser shall pay severance to such Band 2 Employee
determined as follows:  Purchaser shall pay severance to such Band 2 Employee
who is terminated under the circumstances described in this subsection
(c)(ii)(B) a lump sum payment in an amount equal to the severance payments to
which such Band 2 Employee would have been entitled were he or she an employee
of Seller on the date of termination of employment (taking into account all of
such Band 2 Employee's service with both Seller and Purchaser through such date
of termination of employment with Purchaser) under Seller's salary-based
severance payment plan as in effect


                                      -73-
<PAGE>

on the Closing Date had his or her employment terminated for performance reasons
(applying Seller's plan's standard) as of such date.

                         (C)  TERMINATION FOR CAUSE.  In the event the
employment of any Band 2 Employee is terminated by Purchaser for cause at any
time, Purchaser shall not be obligated to provide any severance or benefit plan
coverage continuation to such Band 2 Employee and Purchaser shall have no
obligation to notify Seller of such termination and Seller shall have no
obligation to place such Band 2 Employee in any re-employment program of Seller.

                         (D)  REIMBURSEMENT OF PURCHASER.  Not later than 24
months after the Closing Date, Seller shall reimburse Purchaser in an amount
equal to one-half of the total severance payments paid or payable by Purchaser
in accordance with subsections (c)(ii)(A) and (B) above with respect to Band 2
Employees who were given notice of termination prior to the date which is 18
months after the Closing Date and whose termination date occurs (x) within 20
months of the Closing if in accordance with subsection (c)(ii)(A) and (y) within
18 months of Closing if in accordance with subsection (c)(ii)(B), in each case
only to the extent that such severance payments are attributable to years of
service with Seller and/or one of its Affiliates; PROVIDED, HOWEVER, that, to
the extent the sum of (1) the aggregate amount of the severance payment
obligations made by Purchaser to Band 2 Employees pursuant to this subsection
(c)(ii) that are attributable to years of service with Seller and/or one of its
Affiliates and (2) the aggregate amount of the severance payment obligations
made by Purchaser or Newco to Band 2 Employees (as defined in the First UNUM
Agreement) pursuant to the corresponding provision of the First UNUM Agreement
that are attributable to years of service with Seller and/or one of its
Affiliates exceeds $1 million, Seller shall reimburse Purchaser or Newco, as
appropriate,


                                      -74-
<PAGE>

in an amount equal to 100% of the amount of all severance payments due in excess
thereof to the Band 2 Employees.

               (iii)     Prior to the date which is 18 months from the Closing
Date, Seller shall not rehire any Band 2 Employees, except for Band 2 Employees
whose employment is first terminated, or who have been given notice of such
termination, by Purchaser.

               (iv) Purchaser shall pay a Retention Bonus on the date which is
12 months from the Closing Date to each Band 2 Employee who is an employee of
Purchaser on such date and, with respect to each Band 2 Employee whose
employment is terminated as a result of job elimination prior to such date,
Purchaser shall pay a Retention Bonus on the date of termination of employment
of each such employee.  No Retention Bonus shall be paid to any Band 2 Employee
whose employment with Purchaser terminates as a result of a resignation or
performance failure or for cause.  Seller shall reimburse Purchaser for any
Retention Bonus payments and any additional Tax liabilities of Purchaser
relating to such payments.

          (d)  Purchaser acknowledges that, up to and including the Closing
Date, all employees of Seller have an exclusive duty of loyalty to Seller and,
both prior to and subsequent to the Closing Date, a continuing non-disclosure
obligation as to information regarding Seller that does not relate specifically
to the Business.

          (e)  As of the Closing Date, Purchaser shall provide to the retirement
consultant and retirement account representative employees of Seller who become
Band 2 Employees employment at offices provided by Purchaser other than the
facilities of Seller, and shall pay all costs associated with the relocation of
such Band 2 Employees.


                                      -75-
<PAGE>

          (f)  Not later than the date which is 70 days after the date hereof,
Purchaser shall notify Seller as to the amount of space to be included in the
lease referred to in Section 1 of Schedule 1 to the Transition Services
Agreement, which amount of space shall not exceed 40,000 square feet of office
space, and the nature and extent of the related services to be provided under
the Transition Services Agreement.

          (g)  Not later than 30 days prior to the Closing Date, Seller shall
have moved, at Seller's expense, the operations of the Business to a physical
plant in a location and having a design consistent with Section 3 of the
Transition Services Agreement.

          (h)  In the event that any Band 2 Employee's employment terminates
prior to the Closing Date, Seller shall use commercially reasonable efforts,
acting in consultation with Purchaser, to replace such Band 2 Employee in order
to maintain current 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 5.19(h) shall be deemed a Band 2 Employee for the
purpose of this Agreement.

          (i)  Prior to the Closing, Seller will continue to monitor and
evaluate the work performance of the Band 2 Employees in the ordinary course of
its business operations.

          (j)  As soon as reasonably practicable after the date of this
Agreement, Seller and Purchaser shall finalize the design of a joint incentive
program related to the 1996 performance of the Business, and shall communicate
such program to employees of the Business.  The cost of such program shall be
borne equally by Seller and Purchaser.

          Section 5.20.  EMPLOYEE BENEFITS.  (a)  Subject to the further
provisions of this Section 5.20, and except as provided in Section 5.19,
Purchaser agrees to provide benefits under


                                      -76-
<PAGE>

the employee benefit plans, programs, and arrangements of Purchaser and its
Affiliates, 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 who
accepts employment with Purchaser ("Benefits Affected Employee") on the same
terms and conditions as such benefits are provided to similarly situated
employees of Purchaser.  Purchaser shall credit the service of each Benefits
Affected Employee with Seller and its Affiliates for purposes of eligibility,
participation, vesting, and accrual of or entitlement to benefits under all
plans, programs, and arrangements listed on Schedule 5.20 ("Purchaser's Plans")
to the same extent as if such service had been performed for Purchaser, in the
amount of such service stated in a schedule to be delivered by Seller to
Purchaser as soon as practicable after the Closing Date pursuant to subsection
(d)(ii)(B) (the "Benefits Information Schedule"), except to the extent that the
crediting of any such service might, in the opinion of counsel to Purchaser,
jeopardize the tax qualification of Purchaser's Plans or the tax-favored status
of Purchaser's Plans; and PROVIDED FURTHER that 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.

          (b)  Subject to the other provisions of this Section 5.20, and except
as provided in Section 5.19, Seller, and not Purchaser, shall be responsible and
shall assume any and all liability for (i) all compensation, benefits, and
perquisites of any kind due any Benefits Affected


                                      -77-
<PAGE>

Employee on account of employment by Seller before the Closing Date, or the
termination of employment by Seller, including, but not limited to, 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, including, but not limited to, the WARN Act and the
Maine 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 5.20, and except as
provided in Section 5.19, 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 Closing Date, or the termination of
employment by Purchaser, including, but not limited to, continuation of health
care coverage pursuant to COBRA; (ii) any decision by Purchaser or its
Affiliates to employ or not to employ any employee listed on Schedule 3.19(A);
and (iii) 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,
including, but not limited to, the WARN Act and the Maine Severance Pay Law and
any rules or regulations that have been issued in connection with any of the
foregoing.

          (c)  Notwithstanding subsection (a) to the contrary:


                                      -78-
<PAGE>

               (i)  Each Benefits Affected Employee shall be eligible to
participate in and receive coverage under medical and dental plans established
by Purchaser from and after the Closing Date until December 31, 1996, which
shall provide continuation of substantially the same medical and dental
coverages and level of benefits (including dependent and domestic partner
coverages and benefits) as such Benefits Affected Employee received under the
UNUM Employees Life, Dental and Medical Plan ("Seller's Employee Welfare Plan")
immediately prior to the Closing Date (including continuation of copayments,
deductibles, lifetime maximums and pre-existing condition exclusions as then in
effect); PROVIDED that a Benefits Affected Employee's participation and coverage
under such plans shall terminate in accordance with the terms thereof if such
Benefits Affected Employee terminates employment with Purchaser and all of its
Affiliates before December 31, 1996.  The rate of pre-tax salary reduction
contributions for such coverage during 1996 with respect to each Benefits
Affected Employee shall not exceed the rate of pre-tax salary reduction
contributions for coverage with respect to the Benefits Affected Employee under
Seller's Employee Welfare Plan immediately prior to the Closing Date, and the
balance of the costs of such coverage shall be paid entirely by Purchaser.  Each
Benefits Affected Employee who immediately prior to the Closing Date was
receiving a credit from Seller for having elected not to participate in the
medical or dental portion of Seller's Employee Welfare Plan shall continue to
receive such credit from Purchaser on and after the Closing Date through the end
of 1996, or the date of such Benefits Affected Employee's termination of
employment with Purchaser and all of its Affiliates, if earlier.  As of January
1, 1997, each Benefits Affected Employee who is employed by Purchaser or any of
its Affiliates on such date shall be eligible to commence participation in and
receive coverage under the Lincoln National


                                      -79-
<PAGE>

Corporation Group Health, Dental, Vision and Hearing Plan for Employees, in
accordance with Section 5.20(a), except that on and after the Closing Date
Purchaser and its Affiliates shall not be required to waive or cause to be
waived the exclusion of any pre-existing condition that may be excluded from
coverage under Seller's Employee Welfare Plan on such date, for so long as such
condition would be excluded from coverage under Seller's Employee Welfare Plan
if the Benefits Affected Employee continued to participate in and receive
coverage thereunder.

               (ii) Each Benefits Affected Employee shall be eligible to
commence participation in and receive coverage under the Lincoln National
Corporation Employees' Group Life Insurance, Accidental Death, Disability, Loss
of Sight Insurance and Family Life Insurance Plan as of the Closing Date;
PROVIDED that no such Benefits Affected Employee shall be eligible to receive
coverage under such plans with respect to any dependent prior to January 1,
1997.

               (iii)     Each Benefits Affected Employee shall be permitted to
elect to receive benefits under the Lincoln National Corporation Employees'
Health Care Expense Account Plan (pursuant to the Lincoln National Corporation
Customized Security Plan) as of the Closing Date; PROVIDED, HOWEVER, that each
such Benefits Affected Employee may only make an election with respect to
benefits under such plan that has the effect of continuing the election in
effect for such Benefits Affected Employee under the medical reimbursement
account portion of Seller's Employee Welfare Plan immediately prior to the
Closing Date.  Seller shall permit each Benefits Affected Employee who is a
"qualified beneficiary," as defined in section 4980B of the Code, to elect
continuation of coverage under the medical reimbursement account portion of
Seller's Employee Welfare Plan, without regard to any election made by such
Benefits Affected


                                      -80-
<PAGE>

Employee to receive benefits under Lincoln National Corporation Employees'
Health Care Expense Account Plan.

               (iv) 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 Closing Date; PROVIDED, HOWEVER, that each
such Benefits Affected Employee may only make an election with respect to
benefits under such plan that has the effect of continuing the election in
effect for such Benefits Affected Employee under the dependent care account
portion of Seller's Employee Welfare Plan immediately prior to the Closing Date.
Seller shall provide dependent care assistance benefits to each Benefits
Affected Employee who is participating in the dependent care account portion of
Seller's Employee Welfare Plan immediately before the Closing Date with respect
to qualifying expenses incurred on or before December 31, 1996.

               (v)  (A)  Each Benefits Affected Employee 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; PROVIDED, HOWEVER, that any such
Benefits Affected Employee who either (i) is customarily employed on a part-time
basis immediately before the Closing Date or (ii) has attained age 45 before the
Closing Date shall be required to have completed only 5 years of service in
addition to the otherwise applicable requirement that the employee shall have
attained the age of 55; and PROVIDED, FURTHER, that any such Benefits Affected
Employee who has both attained age 55 and completed 5 years of service as of the
Closing Date and who elects, as of the Closing Date, to


                                      -81-
<PAGE>

participate in the retiree medical, dental and life insurance benefits portion
of Seller's Employee Welfare Plan shall not be eligible to participate in
Purchaser's Retiree Welfare Plans.  Seller shall bear the cost of the
adjustments required under this subsection (c)(v)(A), as such cost is determined
under Section 5.20(f).

                    (B)  Seller shall take into account service with Purchaser
and its Affiliates for the purposes of determining eligibility for retiree
medical, dental, and life insurance benefits and the rate of retiree
contributions under Seller's Employee Welfare Plan of any Benefits Affected
Employee who is re-employed by Seller within 20 months after the Closing Date.
Purchaser shall bear the cost of the adjustments required under this subsection
(c)(v)(B), as such cost is determined under Section 5.20(f).

          (d)  (i)  Each Benefits Affected Employee who is eligible to
participate in the UNUM Employees Retirement Savings Plan and Trust ("Seller's
401(k) Plan") immediately before the Closing Date shall be eligible to
participate in the Lincoln National Corporation Employees' Savings and Profit
Sharing Plan ("Purchaser's 401(k) Plan") as of the Closing Date.  As set forth
in Section 5.20(a), the service of each such Benefits Affected Employee with
Seller and its Affiliates prior to the Closing Date shall be credited for all
purposes under Purchaser's 401(k) Plan to the same extent as if such service had
been performed for Purchaser or any of its Affiliates, in the amount of such
service stated in the Benefits Information Schedule; PROVIDED that all such
service performed at and after age 18 shall be so credited, and no such Benefits
Affected Employee shall be required to attain any age greater than 18 for
purposes of eligibility.  Any Benefits Affected Employee shall be permitted to
roll over outstanding plan loans that are not in default under Seller's 401(k)
Plan, and to maintain an account balance of $3,500 or less


                                      -82-
<PAGE>

under Seller's 401(k) Plan until the earlier of (1) the date on which such
Benefits Affected Employee terminates employment with Purchaser and all of its
Affiliates and is not thereupon re-employed by Seller or any of its affiliates
and (2) the date that is 20 months after the Closing Date, except to the extent
that the maintenance of such account balances might, in the opinion of counsel
to Seller, jeopardize the tax qualification of Seller's 401(k) Plan.

               (ii) (A)  Each Benefits Affected Employee who remains employed 
by Purchaser or its Affiliates on January 1, 1997 (or whose employment with 
Purchaser and all its Affiliates was involuntarily terminated by Purchaser or 
any of its Affiliates before such date), and is a participant in the UNUM 
Employees Pension Plan and Trust ("Seller's Defined Benefit Plan") and, where 
applicable, the UNUM Supplemental Retirement Benefit Plan ("Seller's SERP") 
immediately before the Closing Date shall continue to accrue benefits under 
such plans (as the same may be amended from time to time) until the earlier 
of (1) the date on which such Benefits Affected Employee terminates 
employment with the Purchaser and all of its Affiliates and (2) the date that 
is 20 months after the Closing Date.  The service of each Benefits Affected 
Employee by the Purchaser and its Affiliates during such period shall be 
credited under Seller's Defined Benefit Plan and Seller's SERP to the same 
extent as if such service had been performed for Seller or any of its 
Affiliates, and the compensation paid to each such Benefits Affected Employee 
by Purchaser and its Affiliates during such period shall be taken into 
account to the same extent as if such compensation had been paid by Seller or 
any of its Affiliates; PROVIDED, HOWEVER, that such service and compensation 
shall not be required to be taken into account to the extent that such action 
might, in the opinion of counsel to Seller, jeopardize the tax qualification 
of Seller's Defined Benefit Plan.  As soon as practicable after the earlier 
of (1) the


                                      -83-
<PAGE>

date on which a Benefits Affected Employee terminates employment with the 
Purchaser and all of its Affiliates and (2) the date that is 20 months after 
the Closing Date, Purchaser shall provide to Seller a record of such 
employee's actual service and compensation with respect to the 20-month 
period.  Purchaser shall bear the cost of the adjustments required under this 
subsection (d)(ii)(A), as such cost is determined under Section 5.20(f).

                    (B)  Each Benefits Affected Employee shall be eligible to
participate in the Lincoln National Corporation Employees' Retirement Plan
("Purchaser's Defined Benefit Plan") and, if applicable, the Lincoln National
Corporation Employees' Supplemental Pension Benefit Plan and the Lincoln
National Corporation Employees' Excess Compensation Pension Benefit Plan
("Purchaser's SERPs") in accordance with the applicable provisions of such plans
as amended from time to time.  Each Benefits Affected Employee described in the
preceding subsection (d)(ii)(A) whose employment with Purchaser and all of its
Affiliates has not been terminated on the date that is 20 months after the
Closing Date shall be credited for all purposes under Purchaser's Defined
Benefit Plan and, if eligible, Purchaser's SERPs, with the service of such
Benefits Affected Employee (1) with Seller and its Affiliates up to the Closing
Date to the same extent as if such service had been performed for Purchaser and
(2) with Purchaser during such 20-month period to the extent that such service
was not credited to such Benefits Affected Employee for periods prior to
commencement of participation in Purchaser's plans; PROVIDED that all such
service performed at and after age 18 shall be so credited, and no such Benefits
Affected Employee shall be required to attain any age greater than 18 for
purposes of eligibility to participate in Purchaser's Defined Benefit Plan and
Purchaser's SERPs.


                                      -84-
<PAGE>

     As soon as practicable after the Closing Date, Seller shall provide to
Purchaser the Benefits Information Schedule which shall set forth, with respect
to each Benefits Affected Employee, the employee's name; date of birth; date of
hire; vesting service as of the Closing Date; credited service as of the Closing
Date; sex; basic compensation for calendar years 1986 through 1995, determined
as the sum of base pay and field compensation; basic plus incentive compensation
for calendar years 1986 through 1995; estimated basic compensation for 1996,
determined as the sum of the annualized rate of base pay as of the Closing Date
and 1996 field incentives (determined as the average of actual 1994 and 1995
field incentives); estimated basic plus incentive compensation for 1996
(determined as the sum of estimated basic compensation for 1996 plus the actual
year to date incentive payments as of said date); projected 1997 basic
compensation (the projection for 1997 shall be based on the Benefits Affected
Employee's estimated basic compensation for 1996, increased by one year on the
basis of the Seller's graded rates); projected 1997 basic plus incentive
compensation (the projection for 1997 shall be based on the Benefits Affected
Employee's projected 1997 basic compensation plus the Benefits Affected
Employee's target incentive compensation for 1996); number of hours worked by
the Benefits Affected Employee for Seller during 1996; and shall specify the
amount of each such employee's normal retirement benefit (age 65 accrued
benefit) under Seller's Defined Benefit Plan and Seller's SERP commencing at age
65 and payable in the form of a single life annuity, and such employee's
credited service under Seller's plans, all determined as of the date that is 20
months after the Closing Date.  For purposes of determining such normal
retirement benefit under Seller's Defined Benefit Plan and Seller's SERP, Seller
shall assume that the Social


                                      -85-
<PAGE>

Security Taxable Wage Base shall increase by 4.25% for 1997 and by 3.5% per
annum from 1998 until the calendar year in which an employee attains age 65.

     Purchaser shall be permitted to reduce (but not below zero) the aggregate
of the accrued benefits under Purchaser's Defined Benefit Plan and Purchaser's
SERPs of each Benefits Affected Employee who commences participation thereunder
by the amount of such Benefits Affected Employee's benefits specified on the
schedule described below in this subsection (d)(ii)(B).  Seller shall bear the
cost (net of the offset described in the preceding sentence whether or not
imposed by Purchaser's Defined Benefit Plan and Purchaser's SERPs) of the
adjustments required under this subsection (d)(ii)(B), as such cost is
determined under Section 5.20(f).

     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 and Purchaser's SERPs, Seller shall provide to Purchaser a schedule
containing the actual data in place of the estimated data set forth on the
Benefits Information Schedule.

          (e)  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
Section 5.20.

          (f)  (i)  Seller and Purchaser agree to adjust the Final Purchase
Price as of the date that is 20 months after the Closing Date, for the purpose
of settling the obligations of Purchaser to Seller and of Seller to Purchaser
under subsections (c)(v) and (d)(ii) above.  These


                                      -86-
<PAGE>

obligations shall be determined as set forth in the following Tables 5.20(F)(1)
and 5.20(F)(2) and the notes thereto; PROVIDED, HOWEVER, that, to the extent any
service of a Benefits Affected Employee with Seller is not credited under one or
more of Purchaser's Plans because (pursuant to Section 5.20(a)), in the opinion
of counsel to Purchaser, such service credit might jeopardize the tax-qualified
or tax-favored status of such plan, such service shall not be taken into account
for purposes of the Final Purchase Price adjustment hereunder; and PROVIDED,
FURTHER, that, to the extent any service of a Benefits Affected Employee with
Purchaser is not credited under Seller's Defined Benefit Plan or Seller's
Employee Welfare Plan because (pursuant to Section 5.20(d)(ii)), in the opinion
of counsel to Seller, such service credit might jeopardize the tax-qualified
status of such plan, such service shall not be taken into account for purposes
of the Final Purchase Price adjustment hereunder.


                                      -87-
<PAGE>

<TABLE>
<CAPTION>

                                                          TABLE 5.20(F)(1)
                                                    PENSION BENEFIT OBLIGATIONS


BENEFITS AFFECTED EMPLOYEE WHO
TERMINATES EMPLOYMENT WITH
PURCHASER PRIOR TO THE DATE
THAT IS 20 MONTHS AFTER THE
CLOSING DATE AND:                                 SELLER PAYS TO  PURCHASER:                   PURCHASER PAYS TO SELLER:
------------------------------                    --------------------------                   -------------------------
<S>                                               <C>                                          <C>
Re-employed by Seller                             Nothing                                      Amount determined under Note 1

Vested but not re-employed by Seller              Nothing                                      Amount determined under Note 1

Not vested and not re-employed by                 Nothing                                      Nothing
Seller


<CAPTION>

BENEFITS AFFECTED EMPLOYEE WHO
REMAINS EMPLOYED BY
PURCHASER ON THE DATE THAT IS
20 MONTHS AFTER THE CLOSING
DATE AND:                                         SELLER PAYS TO PURCHASER:                    PURCHASER PAYS TO SELLER:
------------------------------                    -------------------------                    -------------------------
<S>                                               <C>                                          <C>
For costs for 20 months' service                  Nothing                                      Amount determined under Note 2
with Purchaser

For past service credit costs                     Amount determined under Note 3               Nothing
through the date that is 20 months
after the Closing Date
</TABLE>


          NOTE 1:  Purchaser shall be obligated to make a payment to Seller in
an amount to be determined as follows:  Purchaser shall calculate for each
Benefits Affected Employee the pro rata service cost, as described herein, for
accrued pension benefits under Seller's Defined Benefit Plan and Seller's SERP
for each Benefits Affected Employee (A) who was employed by Purchaser or any of
its Affiliates as of January 1, 1997, and whose employment with Purchaser and
all its Affiliates was terminated before the date that is 20 months after the
Closing Date or (B) whose employment with Purchaser and all its Affiliates was
involuntarily terminated by Purchaser or any of its Affiliates on or before
December 31, 1996, for the period from the


                                      -88-
<PAGE>

Closing Date to the date of the termination of the employee's employment with
the Purchaser and all its Affiliates.  In making this calculation, Purchaser
shall use the following assumptions:  (1) Demographic assumptions used by
Purchaser (as published in the January 1, 1995, actuarial valuation report for
Purchaser's Defined Benefit Plan); (2) Interest rate (discount rate):  7.5%;
(3) Salary Scale:  5%; (4) Social Security Wage Base Increase:  4.5%; (5) Census
data as set forth on the Benefits Information Schedule; (6) Provisions of
Purchaser's Defined Benefit Plan and Purchaser's SERPs as in effect on the
Closing Date; (7) Benefit starting date for vested terminated employees:  Age 64
1/2.

          Purchaser shall calculate the difference between the projected benefit
obligations (using the methodology established by Financial Accounting Standard
No. 87 issued by the Financial Accounting Standards Board ("FAS 87")) as of
January 1, 1998, and January 1, 1997 (adjusted for interest to January 1, 1998),
respectively, for each such employee, to determine the 12-month service costs.
Purchaser shall then determine the final service costs for each such employee by
prorating the 12-month service costs to reflect the number of years and months
(determined on the basis that 15 or more days equals one month) of employment
for each such employee from the Closing Date to the date of termination of the
employee's employment with the Purchaser and all its Affiliates.  (Example:  In
the case of an employee employed by Purchaser from a closing date of July 1,
1996, through September 30, 1997, the 12-month service cost would be multiplied
by 1.25 to reflect one year and three months of employment.)

          NOTE 2:  Purchaser shall be obligated to make a payment to Seller in
an amount to be determined as follows:  Seller shall calculate for each Benefits
Affected Employee the pro rata service cost, as described herein, for accrued
pension benefits under Seller's Defined Benefit


                                      -89-
<PAGE>

Plan and Seller's SERP as in effect on January 1, 1997, for each Benefits
Affected Employee who is employed by Purchaser on the date that is 20 months
after the Closing Date.  In making this calculation, Seller shall use the
following assumptions:  (1) Demographic assumptions used by Seller (as published
in the January 1, 1995, actuarial valuation report for Seller's Defined Benefit
Plan); (2) Interest rate (discount rate):  7.5%; (3) Average Salary Scale
(Seller's graded rates):  4.7%; (4) Social Security Wage Base Increase: 4.25%;
(5) Census data as set forth on the Benefits Information Schedule;
(6) Provisions of Seller's Defined Benefit Plan and Seller's SERP as in effect
on January 1, 1997; (7) Benefit starting date for vested terminated employees:
Age 55.

          Seller shall calculate the difference between the projected benefit
obligations (using the methodology established by FAS 87) as of January 1, 1998,
and January 1, 1997 (adjusted for interest to January 1, 1998), respectively,
for each such employee, to determine the 12-month service cost.  Purchaser shall
then determine the final service costs by multiplying the 12-month service cost
by 1.67.

          NOTE 3:  Seller shall be obligated to make a payment to Purchaser in
an amount to be determined as follows:  Purchaser shall calculate for each
Benefits Affected Employee "projected benefit obligations" (using methodology
established by FAS 87) for Purchaser's Defined Benefit Plan and Purchaser's
SERPs less the scheduled pension benefits under Seller's Defined Benefit Plan
and Seller's SERP, as set forth in the Benefits Information Schedule, as of the
date that is 20 months after the Closing Date, for each Benefits Affected
Employee who remains employed by Purchaser on the date that is 20 months after
the Closing Date.  In making this calculation, Purchaser shall use the following
assumptions:  (1) Demographic assumptions


                                      -90-
<PAGE>

used by Purchaser (as published in the January 1, 1995, actuarial valuation
report for Purchaser's Defined Benefit Plan); (2) Interest rate (discount rate):
7.5%; (3) Salary Scale:  5%; (4) Social Security Wage Base Increase:  4.5%;
(5) Census data as set forth on the Benefits Information Schedule;
(6) Provisions of Purchaser's Defined Benefit Plan and Purchaser's SERPs as in
effect on the date that is 20 months after the Closing Date; (7) Benefit
starting date for vested terminated employees:  Age 64 1/2.


                                      -91-
<PAGE>

<TABLE>
<CAPTION>

                                                          TABLE 5.20(F)(2)
                                                RETIREE WELFARE BENEFIT OBLIGATIONS


BENEFITS AFFECTED EMPLOYEE WHO TERMINATES
EMPLOYMENT WITH PURCHASER PRIOR TO THE
DATE THAT IS 20 MONTHS AFTER THE CLOSING
DATE AND:                                         SELLER PAYS TO PURCHASER:                    PURCHASER PAYS TO SELLER:
-----------------------------------------         -------------------------                    -------------------------
<S>                                               <C>                                          <C>
Re-employed by Seller                             Nothing                                      Amount determined under Note 4

Terminated prior to attaining age                 Nothing                                      Nothing
55 and completing 5 years of
service, and not re-employed by
Seller

Terminated after attaining age 55                 Amount determined under Note 5               Nothing
and completing 5 years of service,
and not re-employed by Seller

Terminated after (1) attaining age 55 and         Nothing                                      Nothing
completing 5 years of service prior to
Closing Date and (2) having elected to be
covered under Seller's plan, not re-
employed by Seller

<CAPTION>

BENEFITS AFFECTED EMPLOYEE WHO REMAINS
EMPLOYED BY PURCHASER ON THE DATE THAT IS
20 MONTHS AFTER THE CLOSING DATE AND:             SELLER PAYS TO PURCHASER:                    PURCHASER PAYS TO SELLER:
-----------------------------------------         -------------------------                    -------------------------
<S>                                               <C>                                          <C>
For past service costs prior to                   Amount determined under Note 6               Nothing
Closing Date

For costs of coverage                             Nothing                                      Nothing
for employees who had attained age
55 and completed 5 years of
service prior to Closing Date and
who elected to be covered under
Seller's plan
</TABLE>


          NOTE 4:  Purchaser shall be obligated to make a payment to Seller in
an amount to be determined as follows:  Seller shall calculate for each Benefits
Affected Employee the pro rata service cost, as described herein, for accrued
retiree welfare benefits under Seller's


                                      -92-
<PAGE>

Employee Welfare Plan, for each Benefits Affected Employee who accepts
employment with Purchaser or any of its Affiliates as of the Closing Date and
who terminates employment with Purchaser and all its Affiliates before the date
that is 20 months after the Closing Date, for the period from the Closing Date
to the date of termination of the employee's employment with Purchaser and all
its Affiliates.  In making this calculation, Seller shall use the following
assumptions:  (1) Demographic and health care trend assumptions used by Seller
(as published in the January 1, 1995, actuarial valuation report of retiree
welfare benefits under Seller's Employee Welfare Plan), except that the
retirement rate assumption established by the January 1, 1995, actuarial
valuation report of Purchaser's Retiree Welfare Plans shall be used;
(2) Interest rate (discount rate):  7.5%; (3) Average Salary Scale (Seller's
graded rates):  4.7%; (4) Retiree welfare benefit provisions under Seller's
Employee Welfare Plan as in effect on the Closing Date; (5) Census data as set
forth on the Benefits Information Schedule; (6) Attribution of the expected
post-retirement benefit obligation will be between the date of hire and the
expected retirement age as determined using the applicable assumptions under
Purchaser's Defined Benefit Plan.

          Seller shall calculate the difference between the accumulated post-
retirement benefit obligations (using the methodology established by Financial
Accounting Standard No. 106 ("FAS 106"), except as provided in item (6) of the
preceding paragraph concerning use of attribution of the expected post-
retirement benefit obligation) as of January 1, 1998, and January 1, 1997
(adjusted for interest to January 1, 1998), respectively, for each such
employee, to determine the 12-month service costs.  Seller shall then determine
the final service costs for each such employee by prorating the 12-month service
costs to reflect the number of years and months


                                      -93-
<PAGE>

(determined on the basis that 15 or more days equals one month) of employment
for each such employee from the Closing Date to the date of termination of the
employee's employment with the Purchaser and all its Affiliates.  (Example: In
the case of an employee employed by Purchaser from a closing date of July 1,
1996, through September 30, 1997, the 12-month service cost would be multiplied
by 1.25 to reflect one year and three months of employment.)

          NOTE 5:  Seller shall be obligated to make a payment to Purchaser in
an amount to be determined as follows:  Purchaser shall calculate for each
Benefits Affected Employee the accumulated post-retirement benefit obligation
(using the methodology established by FAS 106) for Purchaser's Retiree Welfare
Plan, as of the Closing Date, for each Benefits Affected Employee who (A) either
(1) after becoming employed by Purchaser, attains age 55 and completes 5 or more
years of service during the 20-month period following the Closing Date or
(2) had attained age 55 and completed 5 years of service before the Closing
Date, (B) terminates employment with Purchaser and all its Affiliates before the
date that is 20 months after the Closing Date, and (C) does not irrevocably
decline coverage under Purchaser's Retiree Welfare Plans, for the period from
the Closing Date to the date of the termination of the employee's employment
with Purchaser and all its Affiliates.  If an individual irrevocably declines
one coverage, then the foregoing calculation shall apply to any other coverage
not irrevocably declined (E.G., an irrevocable declination of medical coverage
would nevertheless require a calculation for life and dental coverage).  Such
amount shall be projected for interest to the date that is 20 months after the
Closing Date.  In making this calculation, Purchaser shall make the following
assumptions:  (1) Demographic and health care trend assumptions used by
Purchaser (as published in the January 1, 1995, actuarial valuation report for
Purchaser's Retiree Welfare


                                      -94-
<PAGE>

Plans); (2) Interest rate (discount rate):  7.5%; (3) Salary Scale:  5%; (4)
Provisions of Purchaser's Retiree Welfare Plans as in effect on the Closing
Date; (5) Census data as set forth on the Benefits Information Schedule;
(6) Attribution of the expected benefit obligation will be between the date of
hire and the eligibility date for full benefits under Purchaser's Retiree
Welfare Plans.

          NOTE 6:  Seller shall be obligated to make a payment to Purchaser in
an amount to be determined as follows:  Purchaser shall calculate for each
Benefits Affected Employee the accumulated post-retirement benefit obligation
(using the methodology described herein) for retiree welfare benefits accrued
under Purchaser's Retiree Welfare Plans as in effect as of the Closing Date, for
each Benefits Affected Employee who remains employed by Purchaser or its
Affiliates on the date that is 20 months after the Closing Date.  Such amount
shall be projected for interest to the date that is 20 months after the Closing
Date.  In making this calculation, Purchaser shall use the following
assumptions:  (1) Demographic and health care trend assumptions used by
Purchaser (as published in the January 1, 1995, actuarial valuation report of
Purchaser's Retiree Welfare Plans); (2) Interest rate (discount rate):  7.5%;
(3) Salary Scale:  5%; (4) Provisions of Purchaser's Retiree Welfare Plans as in
effect on the Closing Date; (5) Census data as set forth on the Benefits
Information Schedule; (6) Use of the methodology established by FAS 106 for
employees who either (A) after being employed by the Purchaser attain the age of
55 and complete 5 or more years of service during the period beginning on the
Closing Date and ending on the date that is 20 months after the Closing Date or
(B) had attained the age of 55 and completed 5 years of service before the
Closing Date and for all other employees attribution of the expected post-
retirement benefit obligation between the date of hire


                                      - 95-
<PAGE>

and the expected retirement age as determined using the applicable assumptions
under Purchaser's Defined Benefit Plan.

               (ii) Seller and Purchaser shall jointly prepare, as soon as
practicable after the Closing Date, a schedule which shall set forth, with
respect to each Benefits Affected Employee, the employee's name; Social Security
Number; 12-month service cost in accordance with Note 1 to Table 5.20(F)(1) and
Note 4 to Table 5.20(F)(2); 167% of the 12-month service cost in accordance with
Note 2 to Table 5.20(F)(1); projected benefit obligation in accordance with Note
3 to Table 5.20(F)(1); and accumulated post-retirement benefit obligation in
accordance with Notes 5 and 6 to Table 5.20(F)(2).  Such schedule shall be used
to determine the net adjustment to the Final Purchase Price with respect to the
items set forth therein.  The net adjustment to the Final Purchase Price
calculated under such schedule is assumed to be paid 20 months after the Closing
Date.  This net adjustment to the Final Purchase Price shall be projected for
interest at 7.5% per year from 20 months after the Closing Date to the actual
settlement date.

          (g)  Seller shall retain responsibility for and shall indemnify and
hold harmless Purchaser from and against any and all claims, losses, damages and
expenses (including, without limitation, reasonable attorneys' fees) and other
liabilities and obligations relating to or arising out of all workers'
compensation claims of Affected Employees for injuries, as defined under the
applicable Workers' Compensation Act, sustained on or before the Closing Date,
regardless of when the claim is actually made.  Purchaser shall have
responsibility for and shall indemnify and hold harmless Seller from and against
any and all claims, losses, damages and expenses (including, without limitation,
reasonable attorneys' fees) and other liabilities and obligations relating to or
arising out of all workers' compensation claims of Affected Employees (or


                                      -96-
<PAGE>

replacement employees of Seller who become employed by Purchaser) for injuries,
as defined under the applicable Workers' Compensation Act, sustained after the
Closing Date.

          Section 5.21.  ALLOCATION OF FINAL PURCHASE PRICE.  Seller and
Purchaser agree for all Tax purposes to report the purchase of the Business as
an assumption reinsurance transaction.

          Within 120 days after Closing, Purchaser and Seller shall agree upon
the valuation of the assets purchased and shall complete a Form 8594 for
submission to the IRS with their 1996 federal income tax returns.

          The methodology for the allocation of the final purchase price to the
intangibles for federal tax purposes is the following:

          Tax reserves assumed in the transaction                $
          Other non-insurance liabilities assumed
          Cash paid by reinsurer                                  
                                                                  ------------
          Total consideration incurred by reinsurer         (a)   
                                                                  ------------
                                                                  ------------

          Cash received by the reinsurer
          Fair market value of investment assets
          Accounts receivable and other assets                    
                                                                  ------------
          Total value of non-intangible assets              (b)   
                                                                  ------------
                                                                  ------------

          Amount allocable to the ceding commission         (a-b) 
                                                                  ------------
                                                                  ------------


                                      -97-
<PAGE>

          Section 5.22.  NEWCO.  Purchaser shall use commercially reasonable
efforts to acquire or organize Newco (commercially reasonable for these purposes
to be interpreted in light of the regulatory requirements customarily imposed by
the New York Insurance Department) and to cause each warranty and representation
contained in this Agreement with respect to Newco to be true and correct no
later than September 30, 1996.  Purchaser shall also use commercially reasonable
efforts to cause Newco, no later than September 30, 1996, to become an
accredited reinsurer in the State of Maine and in other states where becoming an
accredited reinsurer is required in order for Seller to receive statutory
statement credit for the reinsurance under the Newco Indemnity Reinsurance
Agreement.  Purchaser shall similarly use commercially reasonable efforts to
obtain for Newco ratings from Standard & Poor's, Moody's Investor Services, Inc.
and A.M. Best & Co., which shall be no lower than those assigned to Purchaser.
Seller shall use commercially reasonable efforts to assist Purchaser in
obtaining accredited reinsurer status as provided in this Section 5.22.

          Section 5.23.  BROKER/DEALER TRANSITION.  Purchaser agrees to use
commercially reasonable efforts prior to the Closing Date to:  (a) enter into
new agreements with the registered representatives (including dually registered
representatives) and selling agreement partners listed on Schedule 5.23 hereto
that provide for payment of commissions on substantially the same terms as their
current arrangements with UNUM Sales Corporation with respect to the Insurance
Contracts and any contracts sold pursuant to the Coinsurance and Assumption
Agreement; and (b) obtain the necessary approvals and make the necessary filings
and appointments so that the registered representatives and selling agreement
partners listed on Schedule 5.23 hereto can lawfully receive from Purchaser
commissions on the Insurance


                                      -98-
<PAGE>

Contracts and any contracts sold pursuant to the Coinsurance and Assumption
Agreement.  Purchaser agrees to assume the costs incurred as a result of the
negotiation of the agreements and regulatory filings, registrations and
appointments referred to above.  Seller agrees to provide reasonable assistance
to Purchaser in effectuating an orderly transition from UNUM Sales Corporation
to Purchaser, and each of the parties will use commercially reasonable efforts
to effectuate such transition by the Closing Date.

          Section 5.24.  OTHER AGREEMENTS.  Seller and Purchaser shall,
following the date hereof, work in good faith to complete the First UNUM
Agreement and the schedules and exhibits thereto as soon as practicable.
Following such completion, Seller shall cause First UNUM to execute the First
UNUM Agreement, which will include as a condition of closing a guaranty by UNUM
Corporation, a Delaware corporation, of the obligations of First UNUM
thereunder.  In addition, prior to the Closing, Seller and Purchaser shall work
in good faith, and in accordance with the financial terms set forth herein and
in the Transition Services Agreement, to complete the exhibits provided for in
the Transition Services Agreement.  In addition, prior to the Closing, Seller
and Purchaser shall work in good faith to prepare the License Agreements in
accordance with the terms and conditions specified in the definition of the
License Agreements.

          Section 5.25.  BANK ACCOUNTS AND LOCKBOXES.  Prior to the Closing,
Seller and Purchaser shall agree upon the treatment after Closing of Seller's
bank accounts and lock-box arrangements which are used primarily in the
Business.  Such agreements shall be in accordance with applicable laws,
regulations and industry standards for financial controls and banking


                                      -99-
<PAGE>

arrangements.  Such agreements shall be reflected in the Administrative Services
Agreement and the Transition Services Agreement.

          Section 5.26.  COMPUTER SYSTEMS.  Seller shall, prior to the Closing,
take, at the expense of Seller, actions to ensure that Seller's computer systems
are capable of inputing, processing and outputing information relating to
(i) the Insurance Contracts to enable the Insurance Contracts to be administered
in the name of Seller, Newco or Purchaser (as applicable depending upon whether
such Insurance Contracts have been novated to Purchaser pursuant to the
Purchaser Assumption Reinsurance Agreement or Newco pursuant to the Newco
Assumption Reinsurance Agreement), as contemplated by the Administrative
Services Agreement, and to permit Purchaser to prepare the reports contemplated
to be prepared by Purchaser under Sections 4.04 and 4.05 of the Administrative
Services Agreement and (ii) the Insurance Contracts (as defined in the First
UNUM Agreement) to enable the Insurance Contracts (as defined in the First UNUM
Agreement) to be administered in the name of First UNUM or Newco (as applicable
depending upon whether such Insurance Contracts have been novated to Newco
pursuant to the Assumption Reinsurance Agreement (as defined in the First UNUM
Agreement)), as contemplated by the Administrative Services Agreement (as
defined in the First UNUM Agreement), and to permit Purchaser to prepare the
reports contemplated to be prepared by Purchaser under Sections 4.04 and 4.05 of
the Administrative Services Agreement (as defined in the First UNUM Agreement).

          Section 5.27.  COMPUTER SOFTWARE.  With respect to Licensed Generally
Used Software and the Licensed Principally Used Software, Seller and Purchaser
shall work together cooperatively to determine the most economical method of
obtaining from the licensors of the


                                      -100-
<PAGE>

Licensed Generally Used Software and the licensors of the Licensed Principally
Used Software the right for Purchaser to operate the Licensed Generally Used
Software and the Licensed Principally Used Software, which license, in the case
of the Licensed Generally Used Software, will grant Purchaser the right to use
such software solely in connection with the conduct of the Combined Business.
Seller shall be responsible for all costs and expenses associated with obtaining
such right from the licensors of the Licensed Generally Used Software and the
Licensed Principally Used Software.  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.  With respect to the Licensed Generally
Used Software and 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; PROVIDED, HOWEVER, that Purchaser shall
not be responsible for the payment of any annual licensing fees payable with
respect to the Shared Cost Period.  Seller shall pay all licensing fees payable
with respect to the Shared Cost Period in connection with the Licensed Generally
Used Software and the Licensed Principally Used Software.

          Section 5.28.  CONTRACT ADMINISTRATION.  As of the Closing Date,
Seller will have in place and be operating a process for:

          (a)  notifying Participants (and, where appropriate, their employers)
when contributions or payments to a Transferred Contract on behalf of any
individual under a salary


                                      -101-
<PAGE>

deferral agreement exceed or appear to exceed the applicable maximum annual
dollar limit under section 402(g) of the Code in any calendar year;

          (b)  notifying each Participant (and, where appropriate, their
employers or former employers) of the minimum required distribution rules under
applicable provisions of sections 401(a)(9) and 403(b)(10) of the Code in the
year such Participant reaches age 70 and each year thereafter, and for
calculating such minimum required distributions;

          (c)  promptly and properly allocating forfeitures to Participant
accounts where forfeitures are not applied to reduce future employer
contributions;

          (d)  verifying (prior to any distribution or contract loan) signatures
authorizing distributions or contract loans from any Transferred Contract
exceeding $50,000; and

          (e)  verifying Participant changes of address by correspondence
directed to the old as well as the new address.

          Section 5.29.  CREDIT FOR REINSURANCE.  In the event that Newco is not
successful, on or prior to December 1, 1997, in obtaining accredited reinsurance
status in all states where such status is required for Seller to obtain
statutory statement credit for the reinsurance under the Newco Indemnity
Reinsurance Agreement, as contemplated by Section 5.22 hereof, Seller and
Purchaser shall endeavor in good faith to revise the applicable Ancillary
Agreements and/or to enter into new agreements in order to provide Seller with
such statutory statement credit.  Such arrangements may include, without
limitation, (a) the issuance of a letter of credit for the benefit of Seller
which complies with applicable law for credit for reinsurance or (b) a cession
to Purchaser instead of Newco of the reinsurance contemplated under the Newco
Indemnity Reinsurance Agreement, with a retrocession of such business by
Purchaser to Newco.  The


                                      -102-
<PAGE>

parties contemplate that Seller would bear the costs of establishing any letters
of credit as referenced above, provided that Purchaser would bear the
incremental costs of establishing a letter of credit to the extent that the
amount of such letter of credit should exceed $100 million.

          Section 5.30.  CUSTODIAN ACCOUNT.  In the event that the New York
Insurance Department rejects a proposal submitted to the New York Insurance
Department by the parties calling for the establishment by Newco of a custodian
arrangement for the benefit of holders of Insurance Contracts issued in New York
and for the release of assets held pursuant to the Seller Custodian Agreement
with a fair market value equal to the portion of the General Account Reserves
that pertains to those Insurance Contracts that are subject to the provisions of
the Seller Custodian Agreement, the parties shall negotiate in good faith to
formulate a revised proposal for submission to the New York Insurance Department
with the objective of securing the release of such assets.  Notwithstanding this
Section 5.30, in no event shall Purchaser or Newco be required to (i) fund any
custodian account in an amount exceeding 100% of the General Account Reserves
pertaining to the relevant Insurance Contracts minus the aggregate amount of
contract loans under such Insurance Contracts or (ii) bear any costs that are
significantly in excess of those that Purchaser or Newco would have borne had
the relevant assets been maintained under the Newco Trust Agreement.


                                      -103-

<PAGE>

                                   ARTICLE VI

                     CONDITIONS PRECEDENT TO THE OBLIGATION
                              OF PURCHASER TO CLOSE

          The obligations of Purchaser 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 COVENANTS.  (a)  The
representations and warranties of Seller contained in this Agreement and in the
Ancillary Agreements shall be true and correct in all respects on and as of the
Closing Date with the same force and effect as though made on and as of the
Closing Date, except to the extent that the failure of any such representations
and warranties to be true and correct (excluding, for these purposes, any
materiality limitations contained therein) would not, individually or in the
aggregate, have a Material Adverse Effect on the Business; PROVIDED, HOWEVER,
that any such representations and warranties that are given as of a particular
date and relate solely to a particular date or period shall be true and correct
in all respects as of such date or period, except to the extent that the failure
of any such representations and warranties to be true and correct (excluding,
for these purposes, any materiality limitations contained therein) would not,
individually or in the aggregate, have a Material Adverse Effect on the
Business.

          (b)  Seller shall have performed and complied in all material respects
with all covenants and agreements required by this Agreement to be performed or
complied with by Seller on or prior to the Closing.

          (c)  Seller shall periodically until the Closing update the
information contained in the Schedules hereto that have been prepared by or on
behalf of Seller and any matters


                                      -104-
<PAGE>

previously disclosed by Seller to Purchaser with respect to the representation
and warranties of Seller set forth herein, so that such Schedules and other
disclosures shall be true and correct in all respects on and as of the Closing
Date, and such updated information shall not affect the obligations of the
parties to proceed with the Closing (provided all other conditions to the
Closing are satisfied or waived) to the extent that such information as updated,
individually or in the aggregate, and considered collectively with any breaches
of any representations and warranties contained herein or in the Ancillary
Agreements (excluding, for these purposes, any materiality limitations contained
therein), would not have a Material Adverse Effect on the Business.

          (d)  On the Closing Date, Seller shall have delivered to Purchaser a
certificate of Seller, dated as of the Closing Date and signed by an executive
officer of Seller, as to the matters set forth in this Section 6.01.

          (e)  In the event that (i) the representations and warranties of
Seller contained in this Agreement fail to be true and correct on and as of the
Closing Date (ignoring, for these purposes, any updated information provided by
Seller pursuant to Section 6.01(c)) and (ii) such failure would not,
individually or in the aggregate, have a Material Adverse Effect on the
Business, neither Purchaser nor Newco shall be precluded from seeking
indemnification pursuant to Article X of this Agreement with respect to any
breaches of the representations and warranties of Seller contained in this
Agreement that were breaches as of the date of this Agreement.

          Section 6.02.  OTHER AGREEMENTS.  The Ancillary Agreements and each of
the other agreements and instruments contemplated hereby and thereby to which
Seller is a party shall have been duly executed and delivered by Seller on the
Closing Date and each of such


                                      -105-
<PAGE>

agreements, documents and instruments shall be in full force and effect with
respect to Seller on the Closing Date.

          Section 6.03.  GOVERNMENTAL AND REGULATORY CONSENTS AND APPROVALS.
(a)  All Permits and authorizations required by either party or Newco from
governmental and regulatory bodies listed on Schedule 6.03 hereto, and all
Permits and authorizations from any other governmental or regulatory bodies that
are legally required by either party or Newco to close this Agreement and to
implement the Indemnity Reinsurance Agreements shall have been obtained and
shall be in full force and effect and without conditions or limitations which
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.

          Section 6.04.  THIRD PARTY CONSENTS.  All consents from Persons set
forth on Schedule 4.05 hereto shall have been obtained without conditions or
limitations which are unacceptable to Purchaser in the exercise of its
reasonable business judgment, and shall be in full force and effect.

          Section 6.05.  PARTICIPATION AGREEMENTS.  Purchaser and Newco shall
have entered into a new participation agreement with each of the investment
companies listed on Schedule 6.05 hereto and the investment adviser for and the
principal underwriter of such company, as applicable, on substantially the same
terms as such agreement with Seller.

          Section 6.06.  POSSESSION OF ASSETS; INSTRUMENTS OF CONVEYANCE.  On
the Closing Date, Seller shall have delivered (and caused the Seller Custodian
to have delivered) to


                                      -106-
<PAGE>

Purchaser, Newco or the Trustee, as applicable, possession of the Transferred
Assets to be transferred on the Closing Date and shall have transferred (and
caused the Seller Custodian to have transferred) to Purchaser, Newco or the
Trustee, 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 6.07.  OPINION OF COUNSEL TO SELLER.  Purchaser shall have
received the opinion of the General Counsel of Seller dated as of the Closing
Date, addressed to Purchaser and substantially in the form of Exhibit I hereto.

          Section 6.08.  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.

          Section 6.09.  CUSTOMER ASSET VALUE.  The sum of (a) the Customer
Asset Value, as adjusted as set forth below, as of the date of the Closing
Balance Sheet, and (b) the Customer Asset Value as defined in the First UNUM
Agreement, as adjusted as set forth below, as of the date of the Closing Balance
Sheet, shall not be less than $2,059,050,000; PROVIDED, HOWEVER, that, for the
purposes of this Section 6.09, in determining Customer Asset Value (as defined
herein and in the First UNUM Agreement), there shall be excluded from the
calculation an amount equal to the aggregate GAAP reserves relating to all
Insurance Contracts (as defined herein and in the First UNUM Agreement) that are
not Core Insurance Contracts.

          Section 6.10.  CREDITING RATES.  The weighted aggregate general
account crediting rate in effect from the date hereof to the Closing Date with
respect to the Core Insurance Contracts, averaged over such period of time,
shall not be greater than 6.06%.


                                      -107-
<PAGE>

          Section 6.11.  NEW YORK SUBSIDIARY.  Newco shall be a New York life
insurance company subsidiary of Purchaser that is licensed by the New York
Insurance Department to conduct life and annuity businesses in the State of New
York and that is recognized as an accredited reinsurer in the State of Maine.

          Section 6.12.  EMPLOYMENT CONTRACTS.  Purchaser shall have entered
into employment contracts with the employee(s) listed on Schedule 6.12 hereof
and such employee(s) shall not be in material breach thereof.  In addition, such
employee(s) shall be employed by Seller as of the Closing Date, unless the
employment of such employee(s) shall have terminated prior to such date due to
death or permanent disability.

          Section 6.13.  FIRST UNUM CLOSING.  Simultaneous with the Closing
under this Agreement, the closing under the First UNUM Agreement shall have
occurred.


                                   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 COVENANTS.  (a) The representations
and warranties of Purchaser contained in this Agreement and in the Ancillary
Agreements shall be true and correct in all respects on and as of the Closing
Date with the same force and effect as though made on and as of the Closing
Date, except to the extent that the failure of any such representations and
warranties to be true and correct (excluding, for these purposes, any


                                      -108-
<PAGE>

materiality limitations contained therein) would not, individually or in the
aggregate, materially and adversely affect the ability of Purchaser and Newco
(giving effect to the Closing) to conduct the Business; PROVIDED, HOWEVER, that
any such representations and warranties that are given as of a particular date
and relate solely to a particular date or period shall be true and correct in
all respects as of such date or period, except to the extent that the failure of
any such representations and warranties to be true and correct (excluding, for
these purposes, any materiality limitations contained therein) would not,
individually or in the aggregate, materially and adversely affect the ability of
Purchaser and Newco (giving effect to the Closing) to conduct the Business.

          (b)  Purchaser and Newco shall have performed and complied in all
material respects with all covenants and agreements required by this Agreement
to be performed or complied with by Purchaser and Newco, respectively, on or
prior to the Closing Date.

          (c)  Purchaser shall periodically until the Closing update the
information contained in the Schedules hereto that have been prepared by or on
behalf of Purchaser so that such Schedules shall be true and correct in all
respects on and as of the Closing Date, and such updated information contained
in the Schedules hereto shall not affect the obligations of the parties to
proceed with the Closing (provided all other conditions to the Closing are
satisfied or waived) to the extent that such information contained in the
Schedules hereto as updated, individually or in the aggregate, and considered
collectively with any breaches of any representations and warranties contained
herein or in the Ancillary Agreements (excluding, for these purposes, any
materiality limitations contained therein), would not have a Material Adverse


                                      -109-
<PAGE>

Effect on Purchaser or Newco or (after giving effect to the Closing) have a
Material Adverse Effect on the Business.

          (d)  On the Closing Date, Purchaser shall have delivered to Seller a
certificate of Purchaser, dated as of the Closing Date and signed by an
executive officer of Purchaser, as to the matters set forth in this
Section 7.01.

          (e)  In the event that (i) the representations and warranties of
Purchaser contained in this Agreement fail to be true and correct on and as of
the Closing Date (ignoring, for these purposes, any updated information provided
by Purchaser pursuant to Section 7.01(c)) and (ii) such failure would not,
individually or in the aggregate, materially and adversely affect the ability of
Purchaser and Newco (giving effect to the Closing) to conduct the Business,
Seller shall not be precluded from seeking indemnification pursuant to Article X
of this Agreement with respect to any breach of the representations and
warranties of Purchaser contained in this Agreement that were breaches as of the
date of this Agreement.

          Section 7.02.  OTHER AGREEMENTS.  The Ancillary Agreements and each of
the other agreements and instruments contemplated hereby and thereby to which
Purchaser or Newco is a party shall have been duly executed and delivered by
Purchaser or Newco, as applicable, on the Closing Date and each of such
agreements and instruments shall be in full force and effect with respect to
Purchaser or Newco on the Closing Date, as applicable.

          Section 7.03.  GOVERNMENTAL AND REGULATORY CONSENTS AND APPROVALS.
(a)  All Permits required by either party or Newco from governmental and
regulatory bodies listed on Schedule 6.03 and all Permits and authorizations
from any other governmental or regulatory bodies that are legally required by
either party or Newco to close this Agreement and to


                                      -110-
<PAGE>

implement the Indemnity Reinsurance Agreements shall have been obtained and
shall be in full force and effect and without conditions or limitations which
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.

          (c)  The New York Insurance Department shall have approved a transfer
at Closing to the Trustee of cash and Cash Equivalents held in the Seller
Custodian Account, with a fair market value equal to the portion of the General
Account Reserves that pertain to those Insurance Contracts that are subject to
the provisions of the Custodial Agreement.

          Section 7.04.  THIRD PARTY CONSENTS.  All consents from Persons set
forth on Schedule 3.05 hereto shall have been obtained without conditions or
limitations which are unacceptable to Seller in the exercise of its reasonable
business judgment, and shall be in full force and effect.

          Section 7.05.  PURCHASE PRICE.  Purchaser and Newco shall have paid to
Seller an aggregate amount equal to the Preliminary Purchase Price as provided
in this Agreement.

          Section 7.06.  OPINION OF COUNSEL TO PURCHASER.  Seller shall have
received the opinion of Michael J. Wilkins, an Associate General Counsel of
Lincoln National Corporation, dated as of the Closing Date, addressed to Seller
and substantially in the form of Exhibit J hereto.


                                      -111-
<PAGE>

          Section 7.07.  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.

          Section 7.08.  RATINGS.  Seller shall have received confirmation in
form and substance reasonably satisfactory to Seller that, as of the Closing
Date, the Standard & Poor's Corporation Claims-Paying Ability rating of
Purchaser is A+ or higher and the Moody's Investors Service, Inc. Financial
Strength rating of Purchaser is A1 or higher.  Seller shall have received
confirmation in form and substance reasonably satisfactory to Seller that, as of
the Closing Date, (i) the Standard & Poor's Corporation Claims-Paying Ability
rating of Newco and the Moody's Investors Service, Inc. Financial Strength
rating of Newco shall be not lower than those assigned by such rating agencies
to Purchaser and (ii) either (A) a rating shall be assigned to Newco by A.M.
Best & Co. which shall be no lower than that assigned to Purchaser or (B)
Purchaser shall guaranty the obligations of Newco to the holders of the
Insurance Contracts.

          Section 7.09.  NEW YORK SUBSIDIARY.  Seller shall have received from
Purchaser evidence reasonably satisfactory to Seller that Newco is a New York
life insurance company subsidiary of Purchaser that is licensed by the New York
Insurance Department to conduct life and annuity businesses in the State of New
York.

          Section 7.10.  PRINCIPAL UNDERWRITER.  Purchaser or an affiliated
broker-dealer will have entered into any agreements with Seller that are
required for Purchaser or such affiliated broker-dealer to perform, commencing
on the Closing Date, the functions of a principal underwriter, as defined in the
1940 Act, of the Insurance Contracts and any contracts sold pursuant to the
Coinsurance and Assumption Agreement until such time as such contracts are


                                      -112-
<PAGE>

novated.  In addition, if an affiliate of Purchaser serves as principal
underwriter, Purchaser and its affiliate will have entered into any agreements
between those two entities necessary to allow the registered representatives and
selling agreement partners listed on Schedule 5.23 to lawfully receive
commissions on the Insurance Contracts and any contracts sold pursuant to the
Coinsurance and Assumption Agreement.  Any such agreements shall contain
customary representations, warranties and indemnities and shall terminate in the
event of the termination of the Administrative Service Agreement.

          Section 7.11.  FIRST UNUM AGREEMENT CLOSING.  Simultaneously with the
Closing under this Agreement, the closing under the First UNUM Agreement shall
have occurred.


                                  ARTICLE VIII

                               FURTHER AGREEMENTS

          Section 8.01.  SELLER'S NON-COMPETE.  (a)  Seller agrees that, except
as set forth in Section 8.01(d) hereof, following the Closing Date until the
second anniversary of the Closing Date (the "Non-Compete Period") Seller shall
not, and Seller agrees that none of its Affiliates shall, in the United States,
without the consent of Purchaser:

                 (i)     solicit any holder of an Insurance Contract for the
purpose of (A) obtaining applications for new group annuity contracts which
constitute the Business or (B) inducing or attempting to induce any such Person
to cancel, replace, surrender, withdraw assets or fail to make contributions to
an Insurance Contract, or provide any incentive for any insurance agent of
Seller or any broker to, directly or indirectly, do any of the foregoing;


                                      -113-
<PAGE>

                (ii)     establish a sales force for the purpose of soliciting
applications for new contracts to be issued by Seller or by any such Affiliate
which would be included in the Business if issued by Purchaser or Newco or an
Affiliate of Purchaser or Newco; or

               (iii)     disclose or reveal to any Person other than Purchaser
or Newco any trade secret or other confidential information relating solely to
the Business, unless Seller is legally required (whether by binding court or
regulatory order, statute or otherwise) to disclose or reveal such information,
provided that Seller shall only disclose such information to the extent required
to satisfy such legal requirement.

          (b)  Purchaser and Seller acknowledge that any damage caused to
Purchaser and Newco by reason of the breach by Seller or by any of Seller's
Affiliates 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 Newco 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 any violation of this Section 8.01.

          (c)  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.

          (d)  The provisions of Sections 8.01(a)(i) and (ii) hereof shall apply
to Colonial Life & Accident Insurance Company only with respect to the
solicitation of group contractholders of


                                      -114-
<PAGE>

the Insurance Contracts for issuance of new group annuity contracts.  Purchaser
agrees that the provisions of this Section 8.01 shall not prevent Colonial Life
& Accident Insurance Company from soliciting any insurance contracts or policies
on its behalf or on behalf of any other insurer from Persons other than such
group contractholders.


                                   ARTICLE IX

                   SURVIVAL OF REPRESENTATIONS AND WARRANTIES

          Section 9.01.  SURVIVAL OF REPRESENTATIONS AND WARRANTIES.  All
representations and warranties of Seller and Purchaser contained in this
Agreement shall survive the execution and delivery hereof; PROVIDED, HOWEVER,
that the representations and warranties of Seller and Purchaser herein shall
terminate and expire on the second anniversary of the Closing Date, except for
(a) representations and warranties of Seller pursuant to Section 3.10(c), which
representations and warranties shall terminate and expire as follows:  (i)
representations and warranties relating to a federal tax matter, including,
without limitation, matters relating to the qualification of any Insurance
Contract under the Code, shall continue until the earlier of (A) December 31 of
the fourth year following the calendar year in which the Closing Date falls or
(B) the lapse of the applicable statute of limitations under the Code for the
assessment of any relevant Tax and (ii) representations and warranties relating
to a claim for a breach of a fiduciary obligation under ERISA shall continue
until the earlier of (A) December 31 of the sixth year following the calendar
year in which the Closing Date falls or (B) the lapse of the statute of
limitations under ERISA for the assertion of such claim and (b) representations
and warranties as to which a written notice pursuant to Article X, action, suit,
proceeding or arbitration shall


                                      -115-
<PAGE>

have been made or commenced prior to the applicable expiration date, which
representations shall continue until such matters have been finally decided,
settled or adjudicated.


                                    ARTICLE X

                                 INDEMNIFICATION

          Section 10.01.  OBLIGATION TO INDEMNIFY.  (a)  Subject to the
limitations set forth in this Article X, Seller agrees to indemnify, defend and
hold harmless Purchaser and Newco (and their respective directors, officers,
employees, Affiliates, successors and permitted assigns) from and against all
Losses (as hereinafter defined), based upon:  (i)(A) any breach of or inaccuracy
in the representations and warranties of Seller contained in Article III hereof
(other than those contained in Sections 3.10(c) and 3.25(d) hereof) or in any
Ancillary Agreement; or (B) any breach, nonfulfillment or default in the
performance of any of the covenants and agreements of Seller contained in this
Agreement (other than those contained in Sections 5.28(a), (b) and (c)), any
Ancillary Agreement or in any certificate or document delivered by Seller
pursuant to any of the provisions of, or in connection with, this Agreement or
any Ancillary Agreement, to the extent that the sum of Losses in connection with
clauses (a)(i)(A) and (a)(i)(B) of this Section 10.01 and Losses (as defined in
the First UNUM Agreement) in connection with the corresponding provisions of the
First UNUM Agreement exceeds $1 million in the aggregate, and then only in the
amount of such excess; (ii) any Asserted Liability arising out of any breach of
or inaccuracy in the representations and warranties of Seller contained in
Section 3.10(c) hereof or any breach, nonfulfillment or default in the
performance of any of the covenants and agreements of Seller contained in
Section 5.28(a), (b) or (c) hereof, if the sum of Losses in connection therewith
and Losses (as defined in the First UNUM Agreement) in connection with


                                      -116-
<PAGE>

any Asserted Liability arising out of any breach of or inaccuracy in the
representations and warranties of First UNUM, or any breach, nonfulfillment or
default by First UNUM contained in the corresponding provisions of the First
UNUM Agreement exceeds $500,000 in the aggregate, in which case all such Losses
shall be indemnified (there being no indemnification hereunder for Losses based
on any breach of or inaccuracy in the representations and warranties of Seller
contained in Section 3.10(c) hereof or any breach, nonfulfillment or default in
the performance of any of the covenants and agreements of Seller contained in
Section 5.28(a), (b) or (c) hereof except for Losses resulting from an Asserted
Liability); (iii) any Extra Contractual Obligations; (iv) all liabilities or
obligations arising out of or related to the Assigned and Assumed Contracts
based on acts of Seller occurring prior to the Closing Date other than those
liabilities or obligations reflected on the Final Balance Sheet and (v) any
breach of or inaccuracy in the representations and warranties contained in
Section 3.25(d) hereof.  Solely for the purposes of this Section 10.01(a), the
question whether any representation or warranty contained in Section 3.10(c) or
3.25(d) hereof has been breached shall be made without regard to matters
previously disclosed to Purchaser, so that no such disclosure made prior to the
date hereof, and no update to any such disclosure made on or prior to the
Closing Date, shall be taken into account in determining whether any such breach
has occurred.

          As used in this Article X, Loss and/or Losses shall mean 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, Purchaser
agrees to indemnify, defend and hold harmless Seller (and its directors,
officers, employees, Affiliates, successors and permitted assigns) from and
against all Losses, based upon:  (i)(A) any breach


                                      -117-
<PAGE>

of or inaccuracy in the representations and warranties of Purchaser contained in
Article IV hereof or in any Ancillary Agreement; or (B) any breach,
nonfulfillment or default in the performance of any of the covenants and
agreements of Purchaser contained in this Agreement or any of the covenants or
agreements of Purchaser or Newco contained in any Ancillary Agreement or in any
certificate or document delivered by Purchaser or Newco pursuant to any of the
provisions of, or in connection with, this Agreement or any Ancillary Agreement,
to the extent that the sum of Losses in connection with clauses (b)(i)(A) and
(b)(i)(B) of this Section 10.01 and Losses (as defined in the First UNUM
Agreement) in connection with the corresponding provisions of the First UNUM
Agreement exceeds $1 million in the aggregate, and then only in the amount of
such excess; and (ii) the Insurance Liabilities and any claim (other than an
Extra Contractual Obligation) of any Person other than Seller or its Affiliates
with respect to or arising out of any Insurance Liability.

          (c)  The aggregate amount for which Purchaser shall be liable under
Section 10.01(b) shall be $35 million less any amounts paid under the
corresponding provision of the First UNUM Agreement.  The aggregate amount for
which Seller shall be liable under Sections 10.01(a)(i), (iii) and (iv) shall be
$35 million less any amounts paid under the corresponding provisions of the
First UNUM Agreement.  The aggregate amount for which Seller shall be liable
under Section 10.01(a)(ii) shall be (i) $210 million with respect to Claims
Notices received by Seller from Purchaser during the period commencing on the
Closing Date and ending on December 31, 1997, (ii) $140 million with respect to
Claims Notices received by Seller from Purchaser during the period commencing on
January 1, 1998 and ending on December 31, 1998, and (iii) $70 million with
respect to Claims Notices received by Seller from


                                      -118-
<PAGE>

Purchaser during the period commencing on January 1, 1999 and ending on December
31 of the sixth year following the calendar year in which the Closing Date falls
less, in each case, any amount paid under the corresponding provision of the
First UNUM Agreement; PROVIDED, HOWEVER, that the aggregate amount for which
Seller shall be liable under Section 10.01(a)(ii) during any period described in
this Section 10.01(c) shall be reduced by any amounts paid or payable by Seller
with respect to Claims Notices received by Seller during any prior period
pursuant to Section 10.01(a)(ii) and amounts paid or payable under the
corresponding provision of the First UNUM Agreement; and, PROVIDED FURTHER, that
in no event shall the liability of Seller with respect to Section 10.01(a)(ii)
exceed $210 million less any amount paid under the corresponding provision of
the First UNUM Agreement.

          Section 10.02.  CLAIMS NOTICE.  Any claim for indemnification that
Newco wishes to assert hereunder shall be asserted by Purchaser on behalf of
Newco.  In the event that either Purchaser, Newco 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 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, HOWEVER, that,


                                      -119-
<PAGE>

notwithstanding the foregoing, the failure to deliver a Claims Notice with
respect to a claim within twenty (20) Business Days of the Indemnified Party's
receipt of written notice of such claim shall be deemed a waiver of the
Indemnified Party's right to indemnification hereunder for Losses in connection
with such claim.

          Section 10.03.  RIGHT TO CONTEST CLAIMS OF THIRD PARTIES.  (a)
Subject to Section 10.04 hereof, if an Indemnified Party asserts 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
Section 10.01 hereof 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
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 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 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 Claims Notice been timely delivered; PROVIDED, HOWEVER,
that, notwithstanding the foregoing, 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


                                      -120-
<PAGE>

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)  Subject to Section 10.04 hereof, 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 Section 10.01 hereof; 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.  The
failure of the Indemnifying Party to provide the above-mentioned written notice
to the Indemnified Party within thirty (30) 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 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 thirty (30) day period referred to above.

          (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


                                      -121-
<PAGE>

defend, or as to which it does not have the right to defend under
Section 10.03(b) or 10.04(a), with its own counsel and at its own expense.  If
the Indemnifying Party seeks to question (i) the manner in which the Indemnified
Party defended an Asserted Liability with respect to which the Indemnifying
Party elected, or is deemed to have elected, not to defend or (ii) the amount or
nature of any settlement entered into by the Indemnified Party in connection
with such Asserted Liability, the Indemnifying Party shall have the burden to
prove by a preponderance of the evidence that the Indemnified Party did not
defend or settle such Asserted Liability in a reasonably prudent manner.

          (d)  Except as provided in the first sentence of Section 10.03(b), and
subject to the provisions of Section 10.04 hereof, 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 and Seller shall, and Purchaser shall cause Newco to,
make mutually available to each other all non-privileged relevant information in
their possession relating to any Asserted Liability and shall cooperate with
each other in the defense thereof.

          Section 10.04.  SECTION 10.01(a)(ii) INDEMNIFICATION.  Notwithstanding
any contrary provision in Section 10.03 and except as provided in subsection
(a)(iii) of this Section 10.04, the provisions of this Section 10.04 shall
govern the procedures by which Purchaser and/or Newco shall seek indemnification
under Section 10.01(a)(ii) with respect to Employer Claims and IRS Claims.

          (a) (i)  In the event that any Contractholder asserts a claim against
Purchaser and/or Newco or indicates to Purchaser and/or Newco that it believes
that the IRS may assert a Tax


                                      -122-
<PAGE>

liability against such Contractholder (or against one or more participants or
holders of certificates under the relevant Transferred Contract) (an "Employer
Claim"), Purchaser shall deliver to Seller a written notice with respect thereto
no later than ten (10) Business Days after such Employer Claim is actually known
to (A) Purchaser, in the case of an Employer Claim against Purchaser, (B) Newco,
in the case of an Employer Claim against Newco, or (C) the first of Purchaser
and Newco to have such actual knowledge, in the case of an Employer Claim
against both Purchaser and Newco, specifying the facts constituting the basis
for, and the amount, if known, of such Employer Claim.  Failure to deliver such
written notice with respect to an Employer Claim in a timely manner as specified
in the preceding sentence shall not be deemed a waiver of Purchaser's and/or
Newco's right to indemnification hereunder for Losses in connection with such
Employer Claim, but the amount of reimbursement to which Purchaser and/or Newco
is entitled shall be reduced by the amount, if any, by which Purchaser's and/or
Newco's Losses would have been less had such written notice been timely
delivered; PROVIDED, HOWEVER, that, notwithstanding the foregoing, the failure
to deliver such written notice with respect to an Employer Claim within twenty
(20) Business Days of (x) Purchaser's receipt, in the case of an Employer Claim
against Purchaser, (y) Newco's receipt, in the case of an Employer Claim against
Newco, or (z) the first of Purchaser's receipt or Newco's receipt, in the case
of an Employer Claim against both Purchaser and Newco, of written notice of such
Employer Claim shall be deemed a waiver of Purchaser's or Newco's, as
applicable, right to indemnification hereunder for Losses in connection with
such Employer Claim.  Seller shall be entitled to participate in (but not
control) the investigation of any Employer Claim, with its own counsel and at
its own expense.  Purchaser or Newco, as applicable, shall have the right, but


                                      -123-
<PAGE>

not the obligation, to investigate and to settle on, with respect to Seller,
exclusively monetary terms, any such Employer Claim without the consent of
Seller, either by making the settlement payment to the relevant Contractholder,
participant or holders of certificates or by making such payment directly to the
IRS.  In the event that Losses incurred by Purchaser and/or Newco in connection
with the settlement of any such Employer Claim do not exceed $250,000, Purchaser
shall provide written notice (the "Settlement Notice") to Seller within ten (10)
Business Days of the making of such payment by Purchaser or Newco, which
Settlement Notice shall set forth in reasonable detail the amount of Losses
incurred by Purchaser and/or Newco in connection with the settlement of such
Employer Claim and the portion thereof for which Purchaser and/or Newco seeks
indemnification.  Seller shall either pay in full the amount for which Purchaser
and/or Newco seeks indemnification or request arbitration in accordance with
Section 10.04(a)(ii).  If Seller neither pays in full the amount for which
Purchaser and/or Newco seeks indemnification nor requests arbitration in
accordance with the provisions of Section 10.04(a)(ii) within thirty (30) days
of the date on which Seller received such Settlement Notice, Purchaser shall be
entitled to request arbitration in accordance with Section 10.04(a)(ii).  In the
event that Losses in connection with any settlement of an Employer Claim exceed
$250,000, or in the event that any such Losses, when added to other Losses as to
which Purchaser or Newco has entered into settlements in accordance with this
Section 10.04(a)(i) or the corresponding provision of the First UNUM Agreement
during the same calendar year, would exceed $2,500,000 in the aggregate, neither
Purchaser nor Newco shall be entitled to seek indemnification under, and such
Losses shall not count towards the $500,000 threshold set forth in, Section
10.01(a)(ii).


                                      -124-
<PAGE>

           (ii)  (A)     In the event that an arbitration proceeding is
commenced in accordance with the provisions of subsection (a)(i) of this Section
10.04, the party requesting the arbitration shall have the right to arbitrate,
pursuant to the procedures specified below, with regard to (i) whether the
relevant Losses were based upon any breach of or inaccuracy in the
representations and warranties of Seller contained in Section 3.10(c) hereof or
the covenants and agreements of Seller contained in Section 5.28(a), (b) or (c)
hereof, (ii) the reasonableness of the amount of the settlement entered into by
Purchaser and/or Newco and (iii) the reasonableness of any proposed allocation
of settlement between Purchaser and/or Newco on the one hand and Seller on the
other hand.  In any such arbitration proceeding, Purchaser shall have the burden
to prove by a preponderance of the evidence the matters set forth in clauses (i)
and (iii) of the preceding sentence.  In the event that the arbitrators rule in
favor of Purchaser as to such matters, Seller shall have the burden to prove by
a preponderance of the evidence that Purchaser and/or Newco did not settle such
Employer Claim in a reasonable manner.  In the event that the arbitrators rule
in favor of Seller on the issue of the reasonableness of the settlement, they
shall be entitled to determine a lesser amount to be indemnified by Seller.

                    (B)  In the event that Seller wishes to exercise its right
to seek arbitration with respect to an Employer Claim that has been settled, it
shall deliver a written notice of exercise to Purchaser within thirty (30) days
of the date on which Seller received the Settlement Notice with respect to such
settlement.  In the event that Seller neither requests arbitration in accordance
with the foregoing sentence nor pays in full the amount for which Purchaser
and/or Newco seeks indemnification within thirty (30) days of the date on which
Seller received the applicable Settlement Notice and Purchaser wishes to
exercise its right to seek arbitration,


                                      -125-
<PAGE>

Purchaser shall deliver a written notice of exercise to Seller within ten (10)
Business Days of the expiration of such 30-day period.  The arbitration panel
shall consist of three attorneys widely recognized as having expertise in
matters relating to ERISA and section 403(b) of the Code; PROVIDED, HOWEVER,
that there shall be excluded from the arbitration panel the following
individuals:  (x) any attorney who worked on this Agreement, any Ancillary
Agreement or any of the transactions contemplated hereby or thereby; (y) any
attorney employed by or partner of the firm with which any attorney described in
clause (x) is affiliated as of the date hereof or as of the Closing Date; and
(z) any attorney employed by or partner of any firm advising either party with
respect to any matter at the time of such arbitration.  Seller shall appoint one
such arbitrator and Purchaser shall appoint the second arbitrator.  Such
arbitrators shall then select the third arbitrator before arbitration commences.
Should either Seller or Purchaser decline to appoint an arbitrator, or should
the two arbitrators be unable to agree upon the choice of a third, such
arbitrator shall be appointed in accordance with the rules of the American
Arbitration Association.  The arbitration shall be held in New York, New York,
as soon as possible after the arbitrators are appointed.  Each party will have
the opportunity to present evidence and to cross-examine witnesses.  Discovery
shall be limited to the production of written documents and the taking of
depositions, in each case as found by the arbitrators to be directly relevant
to, and reasonably necessary to the resolution of, the issues in the
arbitration, and such other discovery as the arbitrators may order.  Decisions
of the arbitrators shall be by majority vote.  Each party shall bear its own
costs and those of its counsel in connection with any such arbitration, but the
costs of arbitration, including the fees of the arbitrators, shall be shared
equally by the parties.  Judgment upon any award of the arbitrators may be
entered in a Federal court of competent


                                      -126-
<PAGE>

jurisdiction located in the City, County and State of New York.  Any out-of-
pocket expenses incurred by Purchaser or Newco in connection with the
enforcement of any such decision shall be reimbursed by Seller (but shall not be
included in determining the limitations on Seller's liability under Section
10.01(c)).

               (iii)     In the event that neither Purchaser nor Newco settles
an Employer Claim under Section 10.04(a)(i), Purchaser shall be entitled to
deliver a Claims Notice to Seller with respect to such Employer Claim at any
time provided that neither Purchaser nor Newco has made any pleading or other
filing in any court or other tribunal with respect to such Employer Claim and
that Seller receives such Claims Notice at least twenty (20) days prior to the
date upon which any such filing is due in response to a complaint or other
filing made by the IRS or the relevant Contractholder.  In the event that
Purchaser delivers a Claims Notice to Seller with respect to such an Employer
Claim, the provisions of Section 10.03 shall apply to such Employer Claim;
provided, that the requirement that Claims Notices with respect to Asserted
Liabilities be delivered within ten (10) Business Days after the Asserted
Liability is actually known to the Indemnified Party shall not be applicable.

          (b) (i)  In the event that the IRS asserts a claim against Purchaser
and/or Newco or indicates to Purchaser and/or Newco that it may assert a Tax
liability against one or more Contractholders (an "IRS Claim"), Purchaser shall
deliver to Seller written notice with respect thereto no later than ten (10)
Business Days after such IRS Claim is actually known to (A) Purchaser, in the
case of an IRS Claim against Purchaser, (B) Newco, in the case of an IRS Claim
against Newco, or (C) the first of Purchaser and Newco to have such actual
knowledge, in the case of an IRS Claim against both Purchaser and Newco,
specifying the basis for and the


                                      -127-
<PAGE>

amount, if known, of such IRS Claim, and Purchaser and/or Newco, on the one
hand, and Seller, on the other hand, shall jointly investigate, contest, defend
or settle such IRS Claim.  In any such joint defense, Purchaser and/or Newco, on
the one hand, and Seller, on the other hand, shall cooperate in good faith.  In
the event that Purchaser and/or Newco, on the one hand, and Seller, on the other
hand, agree to a settlement with the IRS and to an allocation of the settlement
between Purchaser and/or Newco, on the one hand, and Seller, on the other hand,
the amount of (A) Seller's allocable share (as determined by Purchaser and/or
Newco, on the one hand, and Seller, on the other hand) of the settlement and of
the legal fees and other expenses incurred by Purchaser and/or Newco in
connection with the IRS Claim and (B) the legal fees and other expenses incurred
by Seller in connection with the IRS Claim shall be paid by Seller.  In the
event that a settlement offer is made by the IRS and either Purchaser and/or
Newco, on the one hand, or Seller, on the other hand, wishes to accept the
offer, the other party shall not unreasonably withhold its consent to the
settlement.  If Seller rejects the offer but Purchaser or Newco, as applicable,
nonetheless agrees to the settlement, or if Seller wishes to accept the offer
but Purchaser or Newco, as applicable, does not agree to the settlement, the
procedures set forth in Section 10.04(b)(ii) shall apply.

               (ii) (A)  In the event that the amount of Losses sought by
Purchaser and/or Newco in connection with a settlement offer rejected by Seller
in connection with an IRS Claim is $1,000,000 or less, Purchaser shall have the
right to arbitrate the reasonableness of Seller's rejection of such offer.  The
arbitrators shall be selected in accordance with the procedures set forth in
Section 10.04(a)(ii)(B) except as specifically provided in this
Section 10.04(b)(ii)(A).  The arbitrators shall determine (i) whether and the
extent to which the IRS Claim was based


                                      -128-
<PAGE>

upon any breach of or inaccuracy in the representations and warranties of Seller
contained in Section 3.10(c) hereof or the covenants and agreements of Seller
contained in Section 5.28(a), (b) or (c) hereof, (ii) the reasonableness of the
amount of the settlement offer in light of their determination as to the
question set forth in clause (i) of this sentence and (iii) the reasonableness
of any proposed allocation of settlement between Purchaser and/or Newco, on the
one hand, and Seller, on the other hand.  In any such arbitration proceeding,
Purchaser shall have the burden to prove by a preponderance of the evidence the
matters set forth in clauses (i) and (iii) of the preceding sentence.  In the
event that the arbitrators rule in favor of Purchaser as to such matters, Seller
shall have the burden to prove by a preponderance of the evidence that its
rejection of the settlement offer was reasonable.  In the event that the
arbitrators rule that Seller's rejection of the settlement was unreasonable,
Seller shall indemnify Purchaser and/or Newco for Seller's allocable share of
Losses based upon the IRS Claim (allocated based on Seller's liability, on the
one hand, and Purchaser's and/or Newco's liability, on the other hand, with
respect to such IRS Claim), and for out-of-pocket expenses incurred by Purchaser
in connection with the arbitration.  In the event that the arbitrators rule that
Seller's rejection of the settlement was reasonable, the arbitrators shall be
entitled to determine a lesser amount to be indemnified by Seller.  Judgment
upon any award of the arbitrators may be entered in a Federal court of competent
jurisdiction located in the City, County and State of New York.  Any out-of-
pocket expenses incurred by Purchaser in connection with the enforcement of any
such decision shall be reimbursed by Seller (but shall not be included in
determining the limitations on Seller's liability under Section 10.01(c)).


                                      -129-
<PAGE>

               (B)  In the event that the amount of Losses sought by Purchaser
and/or Newco in connection with a settlement offer rejected by Seller in
connection with an IRS Claim is greater than $1,000,000, Purchaser or Newco, as
applicable, shall have the right to bring an action in any court of competent
jurisdiction to seek resolution of the matters set forth in clauses (i) and (ii)
of Section 10.04(b)(ii)(A).  In the event that the court rules that Seller's
rejection of the settlement was unreasonable, Seller shall indemnify Purchaser
and/or Newco for Seller's allocable share of Losses based upon the IRS Claim
(allocated based on Seller's liability, on the one hand, and Purchaser's and/or
Newco's liability, on the other hand, with respect to such IRS Claim), and for
out-of-pocket expenses incurred by Purchaser or Newco, as applicable, in
connection with the litigation (which shall not be included in determining the
limitations on Seller's liability under Section 10.01(c)).  In the event that
the court rules that Seller's rejection of the settlement was reasonable, the
court shall be entitled to determine a lesser amount to be indemnified by
Seller.

          (C)  In the event that the amount of Losses allocable to Seller in
connection with a settlement offer rejected by Purchaser and/or Newco in
connection with an IRS Claim is $1,000,000 or less, Seller shall have the right
to arbitrate the reasonableness of Purchaser's and/or Newco's rejection of such
offer.  The arbitrators shall be selected in accordance with the procedures set
forth in Section 10.04(a)(ii)(B) except as specifically provided in this
Section 10.04(b)(ii)(C).  The arbitrators shall determine the reasonableness of
the amount of the settlement offer.  Purchaser shall have the burden to prove,
by a preponderance of the evidence, that its and/or Newco's rejection of the
settlement offer was reasonable.  In the event that the arbitrators rule that
Purchaser's and/or Newco's rejection of the settlement was unreasonable,


                                      -130-
<PAGE>

Purchaser shall indemnify Seller for out-of-pocket expenses incurred by Seller
in connection with the arbitration and Seller's aggregate indemnification
obligation under Section 10.01(a)(ii), if any, arising from such IRS Claim and
from any subsequent IRS Claim or Employer Claim relating to the issue or issues
that (x) were the subject of the IRS Claim in question and (y) would have been
resolved by the relevant settlement offer (regardless of whether such IRS Claim
or Employer Claim arises out of the identical Insurance Contract or Insurance
Contracts) shall be limited, in the aggregate, to the portion of such IRS Claim
in question that is allocable to Seller (as determined by the arbitrators and
specified in written findings of the arbitrators).  Judgment upon any award of
the arbitrators may be entered in a Federal court of competent jurisdiction
located in the City, County and State of New York.  Any out-of-pocket expenses
incurred by Seller in connection with the enforcement of any such decision shall
be reimbursed by Purchaser (but shall not be included in determining the
limitations on Purchaser's liability under Section 10.01(c)).

               (D)  In the event that the amount of Losses allocable to Seller
in connection with a settlement offer rejected by Purchaser and/or Newco in
connection with an IRS Claim is greater than $1,000,000, Seller shall have the
right to bring an action in any court of competent jurisdiction to seek
resolution of the reasonableness of the amount of the settlement offer.  In the
event that the court rules that Purchaser's and/or Newco's rejection of the
settlement was unreasonable, Seller's aggregate indemnification obligation under
Section 10.01(a)(ii), if any, arising from such IRS Claim and from any
subsequent IRS Claim or Employer Claim relating to the issue or issues that (x)
were the subject of the IRS Claim in question and (y) would have been resolved
by the relevant settlement offer (regardless of


                                     -131-
<PAGE>

whether such IRS Claim or Employer Claim arises out of the identical Insurance
Contract or Insurance Contracts) shall be limited, in the aggregate, to the
portion of such IRS Claim in question that is allocable to Seller (as determined
by the court).  In addition, Purchaser shall indemnify Seller for out-of-pocket
expenses incurred by Seller in connection with the litigation (which shall not
be included in determining the limitations on Purchaser's liability under
Section 10.01(c)).

          (c)  The parties intend that in determining whether a settlement or a
settlement offer pursuant to this Section 10.04 was reasonable, arbitrators or a
court, as applicable, shall consider the factors typically considered by
insurers in settling claims of policyholders and contractholders including, but
not be limited to, (i) whether Purchaser and/or Newco acted in good faith in
settling an Employer Claim, or a portion of an IRS Claim allocable to Seller (in
the event of a settlement by Purchaser and/or Newco) and (ii) the likely results
of litigation had the Employer Claim, or a portion of an IRS Claim allocable to
Seller, been litigated to a final judgment before a court of competent
jurisdiction (in the event of a settlement by Purchaser and/or Newco or a
settlement offer rejected by Seller or Purchaser and/or Newco), (iii) the
potential costs of litigation, (iv) the potential for additional claims to
develop in the course of litigation or continued settlement negotiations, (v)
adverse publicity that would result from litigation and (vi) the potential for
the establishment of adverse legal precedent in a court proceeding, in each
case, as such may be applicable; PROVIDED, HOWEVER, that in determining any such
reasonableness, the arbitrators shall consider the future business interests of
Purchaser and/or Newco with respect to the Contractholders only to the extent
that such business interests are included within the factors specifically
referred to above in clauses (i) through (vi); and,


                                      -132-
<PAGE>

PROVIDED FURTHER, that, with respect to an IRS Claim, the arbitrators shall
consider solely the factors specifically referred to above in clauses (i)
through (vi) and whether the settlement of Seller's allocable portion of the IRS
Claim would have been reasonable had such allocable portion been the sole
subject of the IRS Claim.

          (d)  Unless and until Purchaser or Seller shall have commenced an
arbitration or judicial proceeding against the other party pursuant to the
provisions hereof, Purchaser and Seller shall, and Purchaser shall cause Newco
to, make mutually available to each other all non-privileged relevant
information in their possession relating to any Employer Claim or IRS Claim and
shall cooperate with each other in the investigation or defense thereof.

          Section 10.05.  INDEMNIFICATION PAYMENTS.  Subject to a party's right
to defend pursuant to Section 10.03 or Section 10.04 hereof, an Indemnifying
Party hereunder shall make a required indemnification payment with respect to a
Loss promptly after a Claims Notice is received.  All such payments 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 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 in writing, if Purchaser shall (i) fail to perform in
any material respect its agreements contained herein or in the First UNUM
Agreement required to be performed on or prior to the Closing Date or (ii)
breach any of its representations, warranties,


                                      -133-
<PAGE>

covenants or agreements contained herein, which breach would, individually or in
the aggregate, materially and adversely affect the ability of Purchaser to
consummate the transactions contemplated hereby or (after giving effect to the
Closing) the ability of Purchaser and Newco to conduct the Business, which
failure or breach is not cured within ten (10) days after Seller has notified
Purchaser of its intent to terminate this Agreement pursuant to this
Section 11.01(a);

          (b)  by Purchaser in writing, if Seller shall (i) fail to perform in
any material respect its agreements contained herein or in the First UNUM
Agreement required to be performed on or prior to the Closing Date or (ii)
breach any of its representations, warranties, covenants or agreements contained
herein, which breach would, individually or in the aggregate, have a Material
Adverse Effect on the Business or materially and adversely affect the ability of
Seller to consummate the transactions contemplated hereby, which failure or
breach is not cured within ten (10) days after Purchaser has notified Seller of
its intent to terminate this Agreement pursuant to this Section 11.01(b);

          (c)  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 best
efforts to have any such order, writ, injunction or decree lifted and the same
shall not have been lifted by December 15, 1996;

          (d)  by either of Seller or Purchaser in writing, if the Closing has
not occurred on or prior to December 15, 1996 unless the absence of such
occurrence shall be due to the failure


                                      -134-
<PAGE>

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;

          (e)  at any time on or prior to the Closing Date, by mutual written
consent of Seller and Purchaser; and

          (f)  by Seller in writing if, at any time prior to the Closing Date,
(i) the ratings of Purchaser shall become lower than the ratings specified in
Section 7.08 hereof or (ii) Purchaser shall be placed on credit watch with an
indication of a reduction in rating to a rating lower than the ratings so
specified and Purchaser is not removed from credit watch within fourteen (14)
days after being so placed on credit watch.

          Section 11.02.  BREAK-UP FEE.  (a)  In the event that Seller or
Purchaser shall terminate this Agreement pursuant to Section 11.01(a) or (b)
hereof or otherwise fail to close this Agreement in accordance with the terms
hereof, other than a failure to close this Agreement in accordance with Section
11.01(c), (d) or (e), in addition to any other remedy available to the non-
breaching party at law or equity, the breaching party shall pay to the non-
breaching party, within ten (10) Business Days of such termination, the sum of
$2 million, as well as all out-of-pocket fees and expenses incurred by the non-
breaching party in connection with the negotiation and preparation of this
Agreement and the Ancillary Agreements.

          (b)  In the event that Seller shall terminate this Agreement pursuant
to Section 11.01(f) hereof, Purchaser shall pay to Seller, within ten (10)
Business Days of such termination, the sum of $2 million, as well as all out-of-
pocket fees and expenses incurred by Seller in connection with the negotiation
and preparation of this Agreement and the Ancillary Agreements.


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<PAGE>

          (c)  The parties recognize that this Section 11.02 shall not apply if
this Agreement fails to close solely due to the failure of Purchaser to satisfy
by December 15, 1996 the condition to close set forth in Section 7.09 hereof,
provided that Purchaser shall not have failed to perform its covenants contained
in Section 5.22 hereof.

          (d) The parties recognize that this Section 11.02 shall not apply if
this Agreement fails to close solely due to the failure of Seller to satisfy the
condition to close set forth in Section 6.12 hereof.

          Section 11.03.  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,
11.02, 12.01 and this Section 11.03.


                                   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 approval thereof by Seller and
Purchaser.  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


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<PAGE>

limitation, the Schedules hereto and thereto, except as otherwise required by
law (including, without limitation, pursuant to any federal or state securities
laws 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, registered or express mail, postage prepaid and return
receipt requested.  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
               1300 South Clinton Street
               P.O. Box 1110
               Fort Wayne, Indiana  48601-1110
               Attention:  Carl L. Baker
               Telecopier No.:  (219) 455-5135

               With a concurrent copy to:

               Sutherland, Asbill & Brennan
               1275 Pennsylvania Avenue, N.W.
               Washington, D.C.  20004
               Attention:  David A. Massey
               Telecopier No.:  (202) 637-3593

          (ii) If to Seller:

               UNUM Life Insurance Company of America
               2211 Congress Street
               Portland, Maine  04122
               Attention:  Kevin J. Tierney
               Telecopier No.:  (207) 770-4377


                                      -137-
<PAGE>

               With a concurrent copy to:

               LeBoeuf, Lamb, Greene & MacRae, L.L.P.
               125 West 55th Street
               New York, New York  10019-5389
               Attention:  Donald B. Henderson, Jr.
               Telecopier No.:  (212) 424-8500

          Any party may, by notice given in accordance with this Section 12.02
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; PROVIDED, HOWEVER, that the
Confidentiality Agreement entered into between Seller and Purchaser dated
September 19, 1995 shall remain in full force and effect in accordance with its
terms both prior to and subsequent to the Closing (except, following Closing, as
to the utilization of Books and Records and the hiring of Seller's employees as
provided for in this Agreement).

          Section 12.05.  WAIVERS AND AMENDMENTS; NON-CONTRACTUAL REMEDIES;
PRESERVATION OF REMEDIES.  This Agreement may be amended, superseded, cancelled,
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.  Nor
shall any waiver on the part of any party of any right, power or privilege, nor
any single or partial exercise of any such right, power or privilege, preclude
any further exercise thereof or


                                      -138-
<PAGE>

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 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; PROVIDED,
that Seller and Purchaser agree that Newco shall enter into the Newco Assumption
Reinsurance Agreement, the Newco Indemnity Reinsurance Agreement, the Newco
Trust Agreement and a Custodian Agreement, as contemplated herein, with respect
to Insurance Contracts issued to residents of the State of New York.

          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 or in the Assumption Reinsurance
Agreements.

          (b)  Except as otherwise provided in Section 10.04 hereto, the parties
acknowledge and agree that 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


                                      -139-
<PAGE>

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.  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.


                                      -140-
<PAGE>

          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.

          Section 12.14.  NEWCO SIGNATURE PAGE.  Prior to the Closing Date,
Purchaser shall cause Newco to execute a signature page to this Agreement in
substantially the form of Exhibit L hereto, and Newco shall thereafter be deemed
to be a party to this Agreement for all purposes as if it had executed this
Agreement concurrently with Seller and Purchaser.

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

                    UNUM LIFE INSURANCE COMPANY OF AMERICA

                    By:       /s/ Kevin J. Tierney
                         -------------------------------
                         Name:    Kevin J. Tierney
                         Title:   Senior Vice President
                                    and General Counsel


                    THE LINCOLN NATIONAL LIFE INSURANCE COMPANY

                    By:       /s/ Kelly D. Clevenger
                         -------------------------------
                         Name:    Kelly D. Clevenger
                         Title:   Vice President




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