<PAGE>   1
                         EXHIBIT 2(e)

     AGREEMENT TO FURNISH EXHIBITS AND SCHEDULES

     The Company hereby agrees to furnish supplementally to the
Securities and Exchange Commission upon its request a copy of any of
the exhibits and schedules to Exhibit 2(e) to this Report on Form 
10-K.  Each of such Exhibits to this Report on Form 10-K sets forth a
description of each schedule and exhibit.

<PAGE>   2

PURCHASE AND SALE AGREEMENT, dated as of July 15, 1998,
among MBL Life Assurance Corporation, a New Jersey stock life
insurance company (the "Seller"), SunAmerica Inc., a Maryland
corporation (the "Purchaser"), Anchor National Life Insurance
Company, an Arizona stock life insurance company ("ANLIC"), and
First SunAmerica Life Insurance Company, a New York stock life
insurance company ("First SunAmerica").

                           W I T N E S S E T H

I.   The Seller.

     A.   On July 16, 1991, pursuant to an order of the Superior
     Court of New Jersey (the "Court"), The Mutual Benefit Life
     Insurance Company, a New Jersey mutual life insurance
     company ("Mutual Benefit"), was placed in rehabilitation
     under the supervision of the New Jersey Commissioner of
     Insurance (now known as the Commissioner of Banking and
     Insurance) (the "Commissioner");

     B.   Pursuant to the Third Amended and Restated Plan of
     Rehabilitation of Mutual Benefit, dated January 24, 1994 (as
     amended, the "Plan"), on May 1, 1994, the Seller assumed and
     reinsured certain restructured and reaffirmed insurance
     contracts of Mutual Benefit in consideration for the sale,
     transfer and assignment to the Seller of substantially all
     of the assets of Mutual Benefit;

     C.   The Settlement Agreement In The Matter of Mutual
     Benefit Life Insurance Company, approved by the Court on
     January 9, 1997 (the "Settlement Agreement"), resolved
     certain appeals of and challenges to the Plan;

     D.   Pursuant to the Plan, Mutual Benefit transferred all of
     the Seller's issued and outstanding capital stock to the
     Stock Trust (the "Stock Trust"), a New Jersey stock trust
     governed by the Third Amended Stock Trust Agreement, dated
     April 29, 1994, between Mutual Benefit and the Commissioner
     (the "Stock Trust Agreement");

     E.   The Commissioner is the trustee (the "Trustee") of the
     Stock Trust and has the power, subject to Court and other
     approvals, to cause the Seller to dispose of all or
     substantially all of its assets;

     F.   Pursuant to the Settlement Agreement, the Report of the
     Joint Committee on Allocation, dated July 7, 1997 (the
     "Joint Allocation Report"), and the Order of the Court
     Approving Methodology for Allocating and Distributing
     Policyholder Value Share, dated February 25, 1998, prior to
     the Closing Date the Seller will seek an order of the Court
     approving certain amendments to the Plan, described in
     Exhibit I, including modifications to the calculation and
     payment of the Policy Enhancements, with respect to the
     annuity and life insurance policies that comprise the
     Reinsured Policies as described therein.

II.  The Acquisition.  Upon the terms and subject to the
     conditions of this Agreement, the Seller wishes to cede, and
     ANLIC and First SunAmerica wish to assume, the annuity
     contracts and life policies that comprise the Reinsured
     Policies and the obligations under the Inward Reinsurance
     Agreements, and, in connection therewith, the Seller wishes
     to transfer, and ANLIC and First SunAmerica wish to acquire,
     certain assets of the Seller used or held for use by the
     Seller in the conduct of its business of being the issuer of
     and administering the Reinsured Policies (the "Business").
     As of the Closing Date, all Reinsured Policies will be
     reinsured on an indemnity reinsurance basis by ANLIC
     pursuant to the Indemnity Reinsurance Agreement.  On the New
     York Assumption Date, the Indemnity Reinsurance Agreement
     will terminate with respect to the Reinsured Policies held


<PAGE>   3

     by Residents of New York as of the New York Assumption Date
     and the Seller will cede and First SunAmerica will assume
     such Reinsured Policies on an assumption reinsurance basis
     pursuant to the First SunAmerica Assumption Reinsurance
     Agreement.  On the Assumption Date for each other
     jurisdiction, the Indemnity Reinsurance Agreement will
     terminate with respect to the Reinsured Policies held by
     Residents of such jurisdiction as of such Assumption Date
     and the Seller will cede and ANLIC will assume such
     Reinsured Policies on an assumption reinsurance basis
     pursuant to the ANLIC Assumption Reinsurance Agreement.

          NOW, THEREFORE, the parties hereto agree as follows:


                        1.   SALE AND PURCHASE

1.1  Ceding Commission; Reinsurance Premium; Acquisition of
     Transferred Assets and Assumption of Assumed Liabilities.

     1.1.1     Ceding Commission.  The ceding commission for the
     Reinsured Policies (as adjusted pursuant to the terms hereof, the
     "Ceding Commission") will be $131,000,000 (the "Base Ceding
     Commission") less the sum of: (a) the Reserve Liabilities
     Adjustment Amount; (b) the Outward Reinsurance Adjustment Amount;
     (c) the Policy Enhancements Calculation Adjustment Amount; and
     (d) the Remedy Compromise Adjustment Amount.  The calculation of
     the Ceding Commission as set forth above is not intended to
     establish the amount, if any, of the "ceding commission"
     attributable to the Transactions for Tax purposes.

     1.1.2     Reinsurance Premium; Transferred Reserve Assets.  The
     reinsurance premium for the Reinsured Policies (the "Reinsurance
     Premium") will be an amount equal to the Reserve as of the
     Closing Date.  Subject to the terms and conditions hereof, on the
     Closing Date the Seller will transfer, convey, sell, assign and
     deliver to ANLIC and ANLIC will purchase and accept from the
     Seller, all of the Seller's right, title and interest in and to
     Transferred Reserve Assets with an aggregate Value as of the
     Closing Date equal to (a) the Reinsurance Premium, less (b) the
     Ceding Commission.  The Reinsurance Premium and the Ceding
     Commission, including each adjustment thereto as set forth in
     Section 1.1.1, will be estimated as of the end of the second
     calendar month preceding the Closing Date or, if the Closing Date
     is December 31, 1998, as of November 30, 1998 (the "Calculation
     Date") in accordance with Section 1.2.2, subject to adjustment
     following the Closing Date in accordance with Section 1.3.

     1.1.3     Changes to Transferred Reserve Assets.  The Seller will
     deliver, in place of any asset listed on Schedule 3 that is a
     receivable due from an Outward Reinsurer under an Outward
     Reinsurance Agreement that is not assigned to ANLIC as an
     Assigned Contract on the Closing Date pursuant to Section 1.1.4,
     cash or Cash Equivalents that have an aggregate Value as of the
     Closing Date equal to or greater than the Value reflected in
     Schedule 3 for such receivable.  The Seller can, without the
     prior written consent of the Purchaser, deliver at the Closing,
     in place of any asset listed on Schedule 3, cash or Cash
     Equivalents that have an aggregate Value as of the Closing Date
     equal to or greater than the Value reflected in Schedule 3 for
     such asset.  If the Seller receives any payment with respect to
     any asset listed in Schedule 3 or sells or otherwise disposes of
     any such asset on or prior to the Closing Date, the Seller will
     reinvest such proceeds in cash or Cash Equivalents that have an
     aggregate Value as of the Closing Date equal to or greater than
     the Value reflected in Schedule 3 for the asset collected, sold
     or disposed of by the Seller.

     1.1.4     Other Assets Transferred on the Closing Date.  In
     addition to the Transferred Reserve Assets, on the Closing Date
     the Seller will transfer, convey, sell, assign and deliver to
     ANLIC and ANLIC will acquire from the Seller, all of the Seller's


<PAGE>   4

     right, title and interest in and to the following:  (a) the Books
     and Records, provided, however, that the Seller will maintain the
     originals of all Books and Records in its possession until the
     Transition Period Termination Date (at which time all such
     original Books and Records will be delivered to ANLIC and First
     SunAmerica, as appropriate) and the Purchaser, ANLIC and First
     SunAmerica will have access to such original Books and Records in
     accordance with the terms hereof; and (b) Seller's rights in and
     all claims arising under the contracts listed on Schedule 4,
     comprised of (i) each Outward Reinsurance Agreement for which all
     necessary consents to assignment to ANLIC on the Closing Date
     (and, if applicable, the subsequent partial assignment by ANLIC
     to First SunAmerica relating to the New York Reinsured Policies
     on the New York Assumption Date) have been obtained on or prior
     to the Closing Date, excluding the Outward Reinsurance Agreements
     relating to the Policies ceded to Integrity Life Insurance
     Company, and each Substitute Outward Reinsurance Agreement
     effective as of the Closing Date; (ii) each Inward Reinsurance
     Agreement listed on Section 2.14.2 of the Seller's Disclosure
     Schedule of which the ceding insurer is an Outward Reinsurer of
     an Outward Reinsurance Agreement assigned to ANLIC pursuant to
     clause (i) above and for which all necessary consents to effect
     an assignment to ANLIC on the Closing Date have been obtained on
     or prior to the Closing Date; and (iii) the Commission Agreements
     with respect to the Reinsured Life Policies, provided that the
     Purchaser will not be obligated by virtue of the assignment of
     such Commission  Agreements to appoint the Agents as agents of
     ANLIC and/or First SunAmerica except as required pursuant to
     Section 5.20 (the agreements listed in clause (b) together with
     the agreements listed in Section 1.1.5(a) are, collectively, the
     "Assigned Contracts").  Without limiting the generality of the
     foregoing, the term "Assigned Contracts" will expressly exclude
     any administrative services contracts and other obligations with
     respect to group pension contracts, Fully Administered Qualified
     Plans or 401(k) Contracts that are not required to be performed
     by the Seller by the terms of the Reinsured Policies.

     1.1.5     Other Assets Transferred After the Closing Date.

     (a)  As promptly as reasonably practical following the date on
     which, pursuant to Section 5.16: (i) the Seller or the Purchaser
     obtains all necessary consents to effect an assignment of any
     Remaining Outward Reinsurance Agreement to ANLIC and First
     SunAmerica, as applicable (e.g., if such date occurs before the
     New York Assumption Date and the Remaining Outward Reinsurance
     Agreement relates to any New York Reinsured Policy, all necessary
     consents will include consents to an assignment first to ANLIC
     and then a subsequent partial assignment by ANLIC to First
     SunAmerica on the New York Assumption Date); or (ii) the date on
     which the Seller has entered into any Substitute Outward
     Reinsurance Agreement with respect to a Remaining Outward
     Reinsurance Agreement, the Seller will transfer, convey, sell,
     assign and deliver to ANLIC or First SunAmerica, as applicable,
     and ANLIC or First SunAmerica, as applicable, will acquire from
     the Seller, all of the Seller's right, title and interest in and
     to such Remaining Outward Reinsurance Agreement or Substitute
     Outward Reinsurance Agreement.  If, pursuant to Section 1.1.3,
     the Seller transferred cash or Cash Equivalents on the Closing
     Date in place of any receivable due from an Outward Reinsurer of
     a Remaining Outward Reinsurance Agreement listed on Schedule 3,
     and if the Seller subsequently effects an assignment of such
     Remaining Outward Reinsurance Agreement pursuant to
     Section 5.16.1 and this Section 1.1.5(a) then, together with the
     assignment of such Remaining Outward Reinsurance Agreement, the
     Seller may transfer, convey, sell, assign and deliver to ANLIC
     and First SunAmerica, as applicable, a receivable in an amount
     equal to the remainder of (x) (A) the amount due from the
     Reinsurer as listed on Schedule 3 minus (B) any amounts
     previously recovered by the Seller, minus (y) (A) any amounts in
     dispute with respect to such receivable plus (B) any amounts
     that, pursuant to the normal accounting cycle of the Remaining
     Outward Reinsurance Agreement, should have been paid prior to the


<PAGE>   5

     relevant date of transfer.  Within five Business Days of transfer
     of any such receivable, the Purchaser will deliver, or will cause
     ANLIC or First SunAmerica, as applicable, to deliver, cash or
     Cash Equivalents with an aggregate Value equal to the Value of
     the transferred receivable.

     (b)  On the Transition Period Termination Date the Seller will
     transfer, convey, sell, assign and deliver to ANLIC and First
     SunAmerica, as applicable, and ANLIC and First SunAmerica, as
     applicable, will acquire from the Seller, all of the Seller's
     right, title and interest in and to the Agent Debit Balance as of
     the Transition Period Termination Date.  In addition, on the
     Transition Period Termination Date the Seller will deliver to the
     location(s) designated by the Purchaser for such delivery the
     originals of all Books and Records; provided, however, that the
     Seller will be entitled to keep and maintain copies of all Books
     and Records from and after the Transition Period Termination
     Date, and to have access to the originals of the Books and
     Records in accordance with the terms hereof.

     (c)  On the Account Values True-Up Date the Seller will transfer,
     convey, sell, assign and deliver to ANLIC and First SunAmerica,
     as applicable, and ANLIC and First SunAmerica, as applicable,
     will acquire from the Seller, all of the Seller's right, title
     and interest in and to cash and Cash Equivalents that have an
     aggregate Value as of the Account Values True-Up Date equal to
     the Account Values True-Up Amount.

     (d)  On the IBNR Settlement Date the Seller will transfer,
     convey, sell, assign and deliver to ANLIC and First SunAmerica,
     as applicable, and ANLIC and First SunAmerica, as applicable,
     will acquire from the Seller, cash and Cash Equivalents that have
     an aggregate Value as of the IBNR Settlement Date equal to the
     IBNR Settlement Amount.  The assets referred to in Section 1.1.4,
     this Section 1.1.5, and the Transferred Reserve Assets are,
     collectively, the "Transferred Assets."

     1.1.6     Assumption of Liabilities; Excluded Liabilities.  Upon
     the terms and subject to the conditions of this Agreement: (a)
     on the Closing Date ANLIC will reinsure on a 100% coinsurance
     basis the Insurance Liabilities as of the Closing Date pursuant
     to the Indemnity Reinsurance Agreement; and (b) on the respective
     Assumption Dates, ANLIC and First SunAmerica will assume their
     respective Insurance Liabilities pursuant to the Assumption
     Reinsurance Agreements; provided, however, that with respect to
     each Reinstated Policy, ANLIC will reinsure on a 100% coinsurance
     basis the Insurance Liabilities in respect of such Reinstated
     Policy for the period, if any, from the Reinstatement Date to the
     applicable Assumption Date and ANLIC or First SunAmerica, as the
     case may be, will assume the Insurance Liabilities in respect of
     such Reinstated Policy as of the later of the Reinstatement Date
     and the applicable Assumption Date.  Other than (a) the Insurance
     Liabilities as of the Closing Date, the applicable Assumption
     Date or the applicable Reinstatement Date, as the case may be,
     and (b) obligations arising under each Assigned Contract on or
     after the date of transfer thereof, in each case in accordance
     with the terms thereof (e.g., excluding any liabilities or
     obligations arising from any breach thereof or default thereunder
     on or prior to the date of transfer thereof), none of the
     Purchaser, ANLIC or First SunAmerica is assuming, nor will any of
     them be deemed to have assumed, any liability or obligation of
     the Seller or Mutual Benefit, any predecessor of the Seller
     (including Mutual Benefit), or any Affiliate or Representative of
     any of them, of any kind or nature, whether absolute, contingent,
     accrued or otherwise, known or unknown, and whether arising
     before or after the Closing Date, including: (i) any liability
     arising under or in connection with any Contract other than the
     Reinsured Policies; (ii) any liability in respect of the
     marketing, sale or administration of the Reinsured Policies, the
     Policies subject to the Inward Reinsurance Agreements or the
     ownership or use of any Transferred Asset arising or relating to
     a date that is on or prior to the date of transfer thereof;


<PAGE>   6

     (iii) the Extra Contractual Obligations; (iv) any liability with
     respect to any Outward Reinsurance Agreement that is not an
     Assigned Contract, including the Outward Reinsurance Agreement
     with Integrity Life Insurance Company or arising under the
     Policies subject to such Outward Reinsurance Agreement; (v) any
     liability for Commissions accruing with respect to the Reinsured
     Annuity Contracts or the Reinsured Life Policies (x) prior to the
     Closing or (y) after the Closing other than pursuant to the
     express written terms of the relevant Assigned Contract; (vi) any
     liability for Commissions accruing with respect to the Reinsured
     Annuity Contracts or the Reinsured Life Policies whether before
     or after the Closing if arising under agreements or arrangements
     that are not Assigned Contracts; (vii) any liability under the
     Reinsured Policies or the Policies subject to the Inward
     Reinsurance Agreements resulting from the death of a Policyholder
     prior to the Closing Date that is reported prior to the
     Transition Period Termination Date; (viii) any liability arising
     under or in connection with any administrative services contracts
     or responsibilities with respect to Fully Administered Qualified
     Plans; and (ix) any liability arising under the Plan or any
     Rehabilitation Document other than payment of the Policy
     Enhancements in accordance with the Policy Enhancements
     Procedures and payment of the Account Values True-Up as expressly
     contemplated by this Agreement (collectively, the "Excluded
     Liabilities").

     1.1.7     Transfer and Sales Taxes.  Any transfer or sales Tax or
     other fees or charges imposed by a Governmental Authority upon
     the transfer, sale or recording of the Transferred Assets will be
     paid by the Seller.

     1.1.8     Allocation of Ceding Commission and Transferred Reserve
     Assets. The parties will allocate the Ceding Commission and the
     Transferred Reserve Assets between the Reinsured Life Policies
     and the Reinsured Annuity Contracts as of the Closing Date and
     among the Non New York Reinsured Life Policies, the New York
     Reinsured Life Policies, the Non New York Reinsured Annuity
     Contracts and the New York Reinsured Annuity Contracts as of the
     New York Assumption Date in accordance with procedures described
     in Schedule 7.  The Seller, the Purchaser, ANLIC and First
     SunAmerica will use such allocation procedures for all Tax and
     statutory filings and reports.

1.2  Closing; Estimated Closing Statement.

     1.2.1     Place and Time of Closing.  The closing of the
     Transactions (the "Closing") will take place at the offices of
     Debevoise & Plimpton, 875 Third Avenue, New York, New York 10022,
     as of 12:01 a.m. on the first day of the month immediately
     following the date on which all of the Closing Conditions have
     been satisfied unless all of the Closing Conditions have been
     satisfied during December 1998, in which case the Closing of the
     Transactions will take place on December 31, 1998, or at such
     other place and time as the Seller and the Purchaser may mutually
     agree (the "Closing Date").

     1.2.2     Estimated Closing Date Statement.  At least ten days
     prior to the Closing Date, the Seller will deliver to the
     Purchaser a statement (the "Estimated Closing Date Statement") of
     the Seller's good faith estimate as of the Calculation Date of
     the following:  (a) the Reserve (including an updated
     Schedule 5); (b) the Ceding Commission, including each adjustment
     thereto as set forth in Section 1.1.1; and (c) subject to
     compliance with Section 1.1.3 and Section 6.4.13, a list of each
     of the Transferred Reserve Assets to be delivered to the
     Purchaser at the Closing and the calculation of the Value thereof
     (including an updated Schedule 3).  Except for the calculation of
     the Policy Enhancements Amount (which will be made in accordance
     with the terms of this Agreement) and the IBNR Reserve Amount,
     the calculation of the Reserve and each component thereof,
     including the Tax reserves, reflected in the Estimated Closing
     Date Statement will be prepared using the same methodology and


<PAGE>   7

     assumptions used in preparing the Seller's December 31, 1997
     Audited SAP Statements, including the assumptions that the
     Rehabilitation Period Termination Date will be December 31, 1999
     and that the applicable credited rate during the Rehabilitation
     Period will be calculated as specified in the Settlement
     Agreement, notwithstanding any actual change thereto as a
     consequence of the Transactions.

1.3  Post-Closing Adjustment.

     1.3.1     Final Closing Date Statement.  No later than 45 days
     after the Closing Date, the Seller will prepare and deliver to
     the Purchaser (a) a statement (the "Final Closing Date
     Statement") that has been reviewed and certified by Coopers &
     Lybrand L.L.P. and that sets forth the actual amount as of the
     Closing Date of the following: (i) the Reserve (including an
     updated Schedule 5) (as may be finally determined in accordance
     with Section 1.3.2, the "Final Reserve"); (ii) the Ceding
     Commission, including each adjustment thereto as set forth in
     Section 1.1.1 (as may be finally determined in accordance with
     Section 1.3.2, the "Final Ceding Commission"); and (iii) a list
     of each of the Transferred Reserve Assets delivered to the
     Purchaser at the Closing and a calculation of the Value thereof
     as of the Closing Date (including an updated Schedule 3) (as may
     be finally determined in accordance with Section 1.3.2, the
     "Final Reserve Assets"); (b) a detailed explanation of changes
     from the Estimated Closing Date Statement; and (c) a copy of all
     documents used in the preparation of the Final Closing Date
     Statement and the explanation pursuant to clause (b).  The Final
     Closing Date Statement will be prepared in a manner consistent
     with the Estimated Closing Date Statement.  The fees and other
     expenses of review and certification of the Final Closing Date
     Statement by Coopers & Lybrand L.L.P. will be paid by the Seller.
     The Final Closing Date Statement will be binding on the Purchaser
     unless the Purchaser delivers to the Seller within 45 days after
     its receipt of the Final Closing Date Statement from the Seller
     written notice of disagreement specifying in reasonable detail
     the nature and extent of the disagreement.

     1.3.2     Final Determination of Disputes.  If the Purchaser and
     the Seller are unable to resolve any disagreement with respect to
     the Final Closing Date Statement within 30 days after the Seller
     receives a timely notice of disagreement, the items of
     disagreement alone will be referred for final determination to
     the U.S. national office of KPMG Peat Marwick or, if such firm is
     unable or unwilling to make such final determination, to such
     other independent accounting firm as the parties will mutually
     designate.  The firm making such determination is referred to
     herein as the "Independent Party."  The Final Closing Date
     Statement will be deemed to be binding on the Purchaser and the
     Seller upon the earliest to occur of: (a) the Purchaser's failure
     to deliver to the Seller a timely notice of disagreement;
     (b) resolution of any disagreement by mutual written agreement of
     the parties after a timely notice of disagreement has been
     delivered to the Seller; or (c) notification by the Independent
     Party of its final determination of the items of disagreement
     submitted to it.  If the net amount of the payment to be made
     pursuant to Section 1.3.3 to either the Seller or ANLIC is closer
     to the amount of such payment calculated on the basis of the
     Final Closing Date Statement than the amount of such payment
     calculated on the basis of the Purchaser's notice of
     disagreement, the fees and disbursements of the Independent Party
     will be paid by the Purchaser.  Otherwise, the fees and
     disbursements of the Independent Party will be paid by the
     Seller.

     1.3.3     Adjustments; Payment and Interest.  If the amount of
     the Final Reserve less the Final Ceding Commission is greater
     than the Value as of the Closing Date of the Final Reserve Assets
     transferred to ANLIC on the Closing Date, then the Seller will
     pay the difference to ANLIC.  If the amount of the Final Reserve
     less the Final Ceding Commission is less than the Value as of the


<PAGE>   8

     Closing Date of the Final Reserve Assets transferred to ANLIC on
     the Closing Date, then the Purchaser will pay (or will cause
     ANLIC to pay) the difference to the Seller.  Payments to be made
     under this Section 1.3.3 will be made, together with interest
     thereon from the Closing Date to the date of actual payment at
     the rate of 6.8% per annum, by wire transfer in cash by the
     applicable party.  Any amounts not subject to dispute pursuant to
     the Purchaser's notice of disagreement delivered pursuant to
     Section 1.3.1 will be paid by the applicable party within five
     Business Days of the delivery of such notice of disagreement.
     Any amount subject to dispute will be paid by the applicable
     party within five Business Days of the final determination of
     such amounts, whether through application of Section 1.3.1 or
     1.3.2.

1.4  Closing Items.  At the Closing, the parties will execute
     (where appropriate) and deliver the agreements and instruments
     described below, in each case dated as of the Closing Date.

     1.4.1     Assumption Reinsurance Agreements.  The Seller and
     ANLIC on the one hand, and the Seller and First SunAmerica on the
     other hand, will enter into the ANLIC Assumption Reinsurance
     Agreement and First SunAmerica Assumption Reinsurance Agreement,
     respectively, substantially in the forms of Exhibits A-1 and A-2
     (collectively, the "Assumption Reinsurance Agreements"),
     providing, among other things, for the assumption by First
     SunAmerica of the New York Reinsured Policies as of the New York
     Assumption Date and the assumption by ANLIC of all other
     Reinsured Policies as of the applicable Assumption Dates.

     1.4.2     Indemnity Reinsurance Agreement.  The Seller and ANLIC
     will enter into the Indemnity Reinsurance Agreement substantially
     in the form of Exhibit B (the "Indemnity Reinsurance Agreement"),
     providing, among other things, for the indemnity reinsurance as
     of the Closing Date by ANLIC of the Insurance Liabilities under
     the Reinsured Policies, pending reinsurance of such Reinsured
     Policies by ANLIC and First SunAmerica on an assumption basis
     pursuant to the Assumption Reinsurance Agreements.

     1.4.3     Administrative Services Agreement.  The Seller and the
     Purchaser will enter into the Administrative Services Agreement
     substantially in the form of Exhibit C, providing for the
     provision by the Purchaser or one or more of its Subsidiaries of
     certain administrative services to the Seller following the
     Closing Date with respect to the Reinsured Policies.

     1.4.4     Transition Services Agreement.  The Seller and ANLIC
     will enter into the Transition Services Agreement substantially
     in the form of Exhibit D, providing for the provision by the
     Seller of certain transition services to ANLIC from the Closing
     Date to the Transition Period Termination Date.

     1.4.5     Escrow Agreement.  The Seller, the Purchaser, ANLIC and
     First SunAmerica will enter into the Escrow Agreement
     substantially in the form of Exhibit E (the "Escrow Agreement"),
     providing, among other things, for the deposit by the Seller on
     the Closing Date for satisfaction of Escrow Claims of: (a) the
     Claims Escrow Amount; (b) the Tax Reserves Indemnity Escrow
     Amount; (c) the DAC Reduction Escrow Amount or the DAC Election
     Escrow Amount, as the case may be; (d) if applicable, the Outward
     Reinsurance Escrow Amount; (e) the COI Adjustment Escrow Amount;
     and (f) if applicable, the Policy Enhancements Endorsements
     Escrow Amount.

     1.4.6     Bill of Sale.  The Seller will execute and deliver to
     ANLIC and First SunAmerica a Bill of Sale substantially in the
     form of Exhibit F providing for the transfer and conveyance of
     the Transferred Assets.

     1.4.7     Other Deliveries.  All other agreements, certificates,
     opinions and documents required by the terms of this Agreement to
     be delivered by or on behalf of the parties will be executed and


<PAGE>   9

     delivered by the relevant Person(s).

          2.  REPRESENTATIONS AND WARRANTIES OF THE SELLER

          Except as expressly set forth in the relevant sections
of the Seller's Disclosure Schedule, the Seller represents and
warrants to the Purchaser as follows:

2.1  Corporate Status of the Seller.  The Seller is a stock
     insurance company duly organized, validly existing and in good
     standing under the laws of the State of New Jersey and has all
     requisite corporate power and authority to conduct its business
     and to own or lease its properties, as now conducted, owned or
     leased.

2.2  Authority.  The Seller has full corporate power and
     authority to execute and deliver this Agreement and the Ancillary
     Agreements, to perform its obligations and to consummate the
     Transactions.  Such execution, delivery, performance and
     consummation have been (a) duly authorized by its Board of
     Directors and its sole shareholder, which constitutes all
     necessary corporate action on the part of the Seller for such
     authorization, and (b) approved by the Commissioner in her
     capacity as Liquidator/Rehabilitator of Mutual Benefit.  Each of
     this Agreement and the Ancillary Agreements has been or will have
     been on or prior to the Closing, as applicable, duly executed and
     delivered by the Seller and (assuming its due execution and
     delivery by the Purchaser, ANLIC and/or, First SunAmerica, to the
     extent a party thereto) constitutes the legal, valid and binding
     obligation of the Seller, enforceable against the Seller in
     accordance with its terms, except as such enforceability may be
     limited by applicable bankruptcy, reorganization, insolvency,
     fraudulent conveyance, moratorium, receivership or similar laws
     affecting creditors of insurance companies and creditors' rights
     generally and by general principles of equity (whether considered
     at law or in equity).

2.3  No Conflicts, Consents and Approvals, etc..

     2.3.1     No Conflicts.  Neither the execution, delivery or
     performance of this Agreement and the Ancillary Agreements by the
     Seller, nor the consummation of the Transactions will result in:
     (a) any conflict with, or default under, any of the
     Organizational Documents of the Seller; (b) any breach or
     violation of, or default under, any Applicable Law or any
     condition imposed by any Governmental Authority binding upon
     Seller or any of its Subsidiaries with respect to the Business,
     the Reinsured Policies or any Transferred Asset; (c) any breach
     or violation of, or default under, the Plan or any Rehabilitation
     Document, or any breach or violation of, or default under any
     material mortgage, agreement, deed of trust, guaranty, note,
     bond, lease, indenture or any other instrument relating to or
     arising in connection with the Business or to which the Seller or
     any of its Subsidiaries is a party or by which any of them or any
     of their respective properties or assets are bound; (d) the
     creation or imposition of any Encumbrances on the Transferred
     Assets; or (e) the breach or violation of any of the terms or
     conditions of, or a default under, or otherwise cause an
     impairment or revocation of, any Permit related to the Business,
     the Reinsured Policies or the Transferred Assets, except for such
     conflicts, defaults, breaches, violations, conditions or
     Encumbrances that would not, individually or in the aggregate,
     reasonably be expected to result in a Material Adverse Effect.

     2.3.2     Consents.  Section 2.3.2 of the Seller's Disclosure
     Schedule sets forth each consent, approval, exemption or
     authorization required to be obtained from, notice required to be
     given to, and filing required to be made with, any Governmental
     Authority or any other Person by the Seller or any of its
     Subsidiaries in connection with the execution and delivery of
     this Agreement and the Ancillary Agreements, the consummation of
     the Transactions, or to prevent the termination of any material


<PAGE>   10

     right, privilege, franchise, Permit or agreement of the Seller or
     any of its Subsidiaries related to the Business, the Reinsured
     Policies or any of the Transferred Assets, except filings with,
     or consents or approvals of, (a) the Court, as specified in
     Section 6.2.3, (b) the Class Four Creditors, as specified in
     Section 6.2.4, (c) the Reinsurers, as specified in
     Section 6.2.5,(d) filings required with respect to the HSR Act,
     or (e) the Governmental Authorities having responsibility for the
     regulation of insurance in each jurisdiction in which the Seller
     holds a certificate of authority to engage in the business of
     insurance.  The Seller will deliver to the Purchaser not later
     than 30 days prior to the Closing Date an updated Section 2.3.2
     of the Seller's Disclosure Schedule setting forth all required
     filings with and consents or approvals of the Governmental
     Authorities described in clause (e) above.

2.4  Permits, Licenses, etc..  The Seller is duly licensed to
     conduct insurance business under the laws of the State of New
     Jersey and under the laws of each other State of the United
     States and the District of Columbia in the capacity and subject
     to the limitations set forth opposite each such jurisdiction on
     Section 2.4 of the Seller's Disclosure Schedule.  Such
     limitations individually or in the aggregate would not reasonably
     be expected to result in a Material Adverse Effect.  The Seller
     has been duly authorized by all necessary Governmental
     Authorities to issue the Reinsured Policies and to reinsure the
     Policies subject to the Inward Reinsurance Agreements in the
     respective jurisdictions in which they have been issued.  The
     Seller has all Permits necessary to conduct the Business in the
     manner and in the areas in which the Business is presently being
     conducted, subject, in the case of insurance licenses, to the
     limitations set forth opposite each jurisdiction on Section 2.4
     of the Seller's Disclosure Schedule, 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,
     result in a Material Adverse Effect.  No revocation or non-
     renewal of such Permits has occurred and, to the knowledge of the
     Seller, the Seller has not engaged in any activity that would
     cause revocation or suspension of any such Permits, no Action
     looking to or contemplating the revocation or suspension of any
     such Permit is pending or, to the knowledge of the Seller,
     threatened, and the Seller has not received notice from any
     Person of any intention to revoke or to refuse renewal of any
     such Permit, except for such revocations, non-renewals or
     suspensions that would not, individually or in the aggregate,
     result in a Material Adverse Effect.

2.5  Compliance with Laws.  Neither the Seller nor any of its
     Subsidiaries is, nor, to the knowledge of the Seller, has any of
     their Representatives been, in material violation (or with or
     without notice or lapse of time or both, would be in violation)
     of any Applicable Law with respect to the Business, the Reinsured
     Policies or any of the Transferred Assets except any such
     violation that has been cured, resolved through binding
     agreements with applicable Governmental Authorities, or barred by
     applicable statutes of limitations.  Neither the Seller nor any
     of its Subsidiaries has received any written notice of any
     violation by any of them of any Applicable Law, except for
     violations that, individually or in the aggregate, would not
     reasonably be expected to materially impair the ability of the
     Seller to perform its obligations under, or to consummate the
     Transactions.

2.6  Financial Statements.  The Seller has delivered to the
     Purchaser true, correct and complete copies of the financial
     statements described below.

     2.6.1     Audited GAAP Statements.  The audited consolidated
     balance sheets of the Seller and its Subsidiaries as at
     December 31, 1996 and December 31, 1997, and the related
     consolidated statements of income, changes in shareholders'
     equity, and cash flows for the periods then ended, together with


<PAGE>   11

     the notes thereto and the unqualified report of Coopers & Lybrand
     L.L.P. thereon (the "GAAP Statements");

     2.6.2     Statutory Statements.  The annual statements of the
     Seller, including all notes, exhibits and schedules thereto and
     any affirmations and certifications filed therewith and the
     actuarial opinions applicable to the Seller for such years (the
     "Statutory Statements") as filed with the Department of Banking
     and Insurance of the State of New Jersey for the years ended
     December 31, 1996 and December 31, 1997; and

     2.6.3     Audited SAP Statements.  The audited statutory-basis
     balance sheets of the Seller as at December 31, 1996 and
     December 31, 1997, and the related summaries of operations,
     statutory-basis statements of income, capital and surplus, and
     cash flow for the periods then ended, together with the notes
     thereto and the unqualified report of Coopers & Lybrand L.L.P.
     thereon (the "Audited SAP Statements;" and together with the
     Statutory Statements, the "SAP Statements").

     2.6.4     GAAP Representations.  The GAAP Statements present
     fairly, in all material respects, the consolidated financial
     position of the Seller and its Subsidiaries as at the respective
     dates thereof and the results of their consolidated income,
     changes in shareholders' equity and cash flows for the respective
     periods then ended, in each case, in accordance with GAAP applied
     on a consistent basis throughout the periods indicated, except
     for the deviations from GAAP disclosed thereon or in the notes
     thereto.

     2.6.5     SAP Representations. The SAP Statements have been
     prepared in accordance with accounting practices prescribed or
     permitted by the Department of Banking and Insurance of the State
     of New Jersey, and such accounting practices have been applied on
     a consistent basis throughout the periods indicated, except as
     expressly set forth or disclosed in the respective notes thereto.
     The Audited SAP Statements present fairly, in all material
     respects, the admitted assets, reserves, liabilities, capital and
     surplus of the Seller as at the respective dates thereof and the
     results of its operations and its cash flow for the respective
     periods then ended.  The Statutory Statements complied in all
     material respects with all Applicable Laws when filed, were
     timely filed with all required Governmental Authorities, and no
     material deficiency has been asserted or is otherwise known by
     the Seller with respect to such statements by the Department of
     Banking and Insurance of the State of New Jersey or any other
     applicable Governmental Authority.

2.7  Computer Software.  Section 2.7 of the Seller's Disclosure
     Schedule sets forth a listing of all Owned Software and a listing
     of all Licensed Software (each of which categorizes the Owned
     Software or the Licensed Software, as applicable, in accordance
     with their respective uses, including: (a) generating
     policyholder illustrations; (b) reinsurance administration;
     (c) group and individual annuity administration; (d) life
     administration; (e) commission payments; and (f) other financial
     or management reporting).  The Seller is the owner of all Owned
     Software necessary to perform the Seller's obligations under the
     Transition Services Agreement and has the right under valid
     licenses to use all Licensed Software necessary to perform the
     Seller's obligations under the Transition Services Agreement, in
     each case free and clear of any Encumbrances, except with respect
     to Licensed Software for royalty or other payment obligations
     (including any one-time license transfer fees imposed by the
     licensor).  The Owned Software and the Licensed Software
     constitute all of the computer software programs that are
     necessary to conduct the Business as presently conducted by the
     Seller.

2.8  Litigation.  To the extent related to the Business, the
     Reinsured Policies or the Transferred Assets, there are: (a) no
     outstanding orders, decrees or judgments by or with any


<PAGE>   12

     Governmental Authority before which the Seller or any of its
     Subsidiaries is or was a party; (b) no material Actions, pending
     or, to the knowledge of the Seller, threatened or contemplated,
     either by or against the Seller or any of its Subsidiaries; or
     (c) to the knowledge of the Seller, no events, facts or
     circumstances that have arisen or occurred (other than the
     routine claims for benefits under insurance policies and
     annuities in force, not including any claims for consequential or
     punitive damages) that would reasonably be expected to result in
     the commencement of any material Action against the Seller or any
     of its Subsidiaries.  Section 2.8 of the Seller's Disclosure
     Schedule, as to each Action disclosed therein, describes the
     parties, the nature of the proceeding, the date and method
     commenced, and the amount of damages (if known) or other relief
     sought, and if applicable, paid or granted.

2.9  Regulatory Filings.  The Seller has made available for
     inspection by the Purchaser all material registrations, filings
     and submissions made by the Seller or any of its Subsidiaries
     with any Governmental Authority and final financial, market
     conduct and other reports of examinations with respect to the
     Seller or any of its Subsidiaries issued by any such Governmental
     Authority along with Seller's or the Subsidiary's responses
     thereto to the extent that such registrations, filings,
     submissions and reports (a) were made or issued on or subsequent
     to December 31, 1996 and (b) relate to the Business, the
     Reinsured Policies or the Transferred Assets.  The Seller and its
     Subsidiaries have filed all material reports, statements,
     documents, registrations, filings or submissions (including any
     sales, marketing or advertising material) required to be filed by
     any of them with any Governmental Authority to the extent they
     relate to the Business, the Reinsured Policies or the Transferred
     Assets.  All such reports, statements, registrations, filings and
     submissions were in compliance in all material respects with
     Applicable Laws when filed or as amended or supplemented.  No
     material deficiencies have been asserted by any such Governmental
     Authority with respect to such registrations, filings or
     submissions that have not been cured to the satisfaction of such
     Governmental Authority.  Since December 31, 1996, neither the
     Seller nor any of its Subsidiaries has submitted any written
     response with respect to material comments from any Governmental
     Authority concerning such reports, statements, registrations,
     filings, submissions or reports of examinations.  Since
     December 31, 1996, no fine or penalty has been imposed on the
     Seller or any of its Subsidiaries with respect to the Business,
     the Reinsured Policies or the Transferred Assets.  No deposits
     have been made by the Seller or any of its Subsidiaries with, or
     at the direction of, any Governmental Authority with respect to
     the Business or the Reinsured Policies that are not shown on the
     most recent GAAP Statements of the Seller.

2.10 Tax Matters.

     2.10.1    Tax Treatment of Reinsured Policies.  None of the
     Reinsured Policies fails to meet the requirements under the Code
     that must be met in order for the Policyholder thereof to receive
     treatment under the Code that is no less favorable than the
     treatment that was (a) represented would be received by the
     Policyholder or any beneficiary thereof in materials provided to
     the Policyholder or any such beneficiary by the Seller, Mutual
     Benefit or any of their respective Affiliates or Representatives
     at any time prior to the Closing Date with respect to the
     Reinsured Policy or the predecessor policy issued by Mutual
     Benefit, or (b) customary for that type of Policy when issued.

     2.10.2    Tax Reserves.  The Seller's tax reserves for the
     Reinsured Policies as reflected in the Seller's federal income
     tax return for the fiscal year ended December 31, 1996 have been
     properly calculated under the Code, and such tax reserves have
     been maintained since such date in accordance with all applicable
     requirements of the Code.

<PAGE>   13

     2.10.3    Tax Impact on Policyholders.  The crediting to the
     Account Value of an Eligible Policy of the Policy Enhancement as
     expressly contemplated by this Agreement will, under the Code,
     other Applicable Law and official administrative or controlling
     judicial interpretations thereof as currently in effect, be
     treated with respect to each Policyholder as a deferred amount
     that is not includable in income for federal income tax purposes
     unless or until an amount with respect to the Policy Enhancements
     is actually received in cash by such Policyholder, its designee,
     or the beneficiary of an Eligible Policy; provided, that this
     representation will not apply with respect to funding agreements
     or annuity contracts described in Section 72(u) of the Code where
     interest or dividends are credited to the Account Value in the
     ordinary course of business (without regard to the Transactions)
     and are includable in taxable income when credited or ratably
     over the term of the Contract; and provided, further, that to the
     extent that the Purchaser and its Affiliates do not comply with
     the requirements of Section 5.23 and such failure causes this
     representation to be false, the Purchaser will not be entitled to
     assert a claim against the Seller for breach of this
     representation.

2.11 Absence of Changes.  Except as expressly contemplated or
     required by this Agreement, since December 31, 1997 the Seller
     has conducted the Business only in the ordinary course (taking
     into account the restrictions imposed on the Seller pursuant to
     the Plan) consistent with past practice and there has not
     occurred or arisen 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 that would reasonably be expected
     to have, a Material Adverse Effect, and neither the Seller nor
     any of its Subsidiaries has with respect to the Business, the
     Reinsured Policies or the Transferred Assets:

     (a)  subjected, or permitted to exist with respect to, any of the
     Transferred Assets (whether tangible or intangible) to any
     material Encumbrance;

     (b)  amended, terminated, cancelled or compromised any material
     claims of the Seller or any of its Subsidiaries or waived any
     other rights of substantial value to the Seller or any of its
     Subsidiaries;

     (c)  made any material change in the customary methods of
     operation of the Seller or any of its Subsidiaries, including any
     of their respective purchasing, marketing, selling, underwriting,
     pricing, actuarial or investment practices or policies, or made
     any change in any of their respective financial, Tax or
     accounting practices or policies, or in any assumption underlying
     such a practice or policy, in either case including any basis for
     calculating Reserve Liabilities or establishing reserves
     contained in the GAAP Statements or the SAP Statements (including
     the excess interest reserve) or any depreciation or amortization
     policies or rates other than as required by a change in GAAP, SAP
     or Applicable Law;

     (d)  taken any action to forfeit, abandon, modify, waive,
     terminate or otherwise change any of its Permits, or any
     insurance policies under which the Seller is an insured, or
     allowed such Permits or insurance policies to lapse or terminate
     except (i) as may have been required in order to comply with
     Applicable Law, or (ii) as may have been contemplated by this
     Agreement;

     (e)  amended any Reinsured Policies or issued or sold new
     policies in the categories of the Reinsured Policies, or amended
     existing Reinsured Policies, except to the extent required to
     comply with the terms of the Reinsured Policies or Applicable Law
     and disclosed in Section 2.11 of the Seller's Disclosure
     Schedule;



<PAGE>   14

     (f)  abandoned or permitted to lapse any Owned Software or
     Licensed Software necessary for the Seller to perform its
     obligations under the Transition Services Agreement;

     (g)  terminated or amended any Outward Reinsurance Agreement or
     Inward Reinsurance Agreement, or entered into as ceding or
     assuming insurer any reinsurance, coinsurance or other similar
     agreement or any trust agreement or security agreement related
     thereto, other than renewals of the Outward Reinsurance
     Agreements and the Inward Reinsurance Agreements on substantially
     the same terms and in the ordinary course of business; or

     (h)  agreed, whether in writing or otherwise, to take any of the
     actions specified in this Section 2.11, or granted any options to
     purchase, rights of first refusal, rights of first offer or any
     other similar rights or commitments with respect to any of the
     actions specified in this Section 2.11, except as expressly
     contemplated by this Agreement.

2.12 Reinsured Policies.

     2.12.1    Forms.

     (a)  Attached hereto are the following schedules, listing and
     describing the forms of all Reinsured Policies, including all
     endorsements, Benefit Plans and Qualified Contracts, utilized for
     all Reinsured Policies in effect on May 31, 1998: Schedule 1-A
     (All Reinsured Life Policies); Schedule 2-A (All Reinsured
     Annuity Contracts); Schedule 1-B (Non New York Reinsured Life
     Policies); Schedule 1-C (New York Reinsured Life Policies);
     Schedule 2-B (Non New York Reinsured Annuity Contracts); and
     Schedule 2-C (New York Reinsured Annuity Contracts).

     (b)  The Seller has delivered to the Purchaser supplements to
     Schedule 1-A and Schedule 2-A listing each Policy comprising the
     Reinsured Policies (i) in effect on March 31, 1998, and (ii) in
     effect on June 30, 1998.  Such supplements set forth with respect
     to each such Policy the following information: policy number,
     Policyholder name (both the owner and the insured) and Resident
     jurisdiction, policy form, plan code, Account Balance or
     statutory reserve for those Policies that do not have Account
     Balances (e.g., Contracts in Pay Status) and face amount, if
     applicable, except that the supplements as of March 31, 1998 do
     not set forth Policyholder name or policy form information.

     (c)  All Reinsured Policies in effect on the Closing Date or the
     New York Assumption Date, as applicable, will be set forth,
     together with (i) updated information in each category described
     in the supplements described in paragraph (b) above; (ii) for
     each Policy listed in an updated Schedule 1-A, Schedule 1-B,
     Schedule 1-C, Schedule 2-A, Schedule 2-B and Schedule 2-C, a
     calculation for each such Policy of the Reserves Liabilities
     associated with such Policy, where applicable, or for those
     Policies in which Reserve Liabilities are only calculated in the
     aggregate, a calculation of the aggregate Reserve Liabilities
     associated with such Policies; and (iii) for each Policy listed
     in an updated Schedule 1-A, Schedule 1-B and Schedule 1-C, a
     recalculation as of the Closing Date for each such Policy of the
     seven pay test in accordance with Section 7702A of the Code.  The
     Seller will deliver to the Purchaser such updated schedules not
     later than 30 days following each of the Closing Date and the New
     York Assumption Date.

     2.12.2    Life Policies.  The Reinsured Life Policies listed on
     Schedule 1-A and the supplements thereto include all Contracts
     that are life insurance policies (other than the Contracts ceded
     to Integrity Life Insurance Company) in effect on March 31, 1998,
     May 31, 1998 or June 30, 1998, as applicable.  The Non New York
     Reinsured Life Policies listed on Schedule 1-B and the
     supplements thereto include all Contracts that are life insurance
     policies (other than the Contracts ceded to Integrity Life
     Insurance Company) and are in effect on March 31, 1998, May 31,


<PAGE>   15

     1998 or June 30, 1998, as applicable, issued to Policyholders
     Resident as of such date in jurisdictions other than New York,
     and the New York Reinsured Life policies listed on Schedule 1-C
     and the supplements thereto include all Contracts that are life
     insurance policies (other than the Contracts ceded to Integrity
     Life Insurance Company) and are in effect on March 31, 1998,
     May 31, 1998 or June 30, 1998, as applicable, issued to
     Policyholders Resident as of such date in New York.  The
     Reinsured Life Policies listed on the updated Schedule 1-A, the
     Non New York Reinsured Life Policies listed on the updated
     Schedule 1-B and the New York Reinsured Life Policies listed on
     the updated Schedule 1-C, each as delivered by the Seller
     following each of the Closing Date and the New York Assumption
     Date as provided in Section 2.12.1(c), will include all Contracts
     that are life insurance policies (other than the Contracts ceded
     to Integrity Life Insurance Company) and are in effect on the
     Closing Date and the New York Assumption Date, respectively,
     issued to all Policyholders or to Policyholders Resident as of
     the applicable date in the specified jurisdictions, and will
     include updated information in each category set forth in
     Section 2.12.1(b) and all additional information required
     pursuant to Section 2.12.1(c).

     2.12.3    Annuity Contracts.  The Reinsured Annuity Contracts
     listed on Schedule 2-A and the supplements thereto include all
     Covered Accumulation Contracts and Contracts in Pay Status (other
     than the Excluded Annuity Contracts) in effect on March 31, 1998,
     May 31, 1998 or June 30, 1998, as applicable.  The Non New York
     Reinsured Annuity Contracts listed on Schedule 2-B and the
     supplements thereto include all Covered Accumulation Contracts
     and Contracts in Pay Status (other than the Excluded Annuity
     Contracts) in effect on March 31, 1998, May 31, 1998 or June 30,
     1998, as applicable, issued to Policyholders Resident as of such
     date in jurisdictions other than New York.  The New York
     Reinsured Annuity Contracts listed on Schedule 2-C and the
     supplements thereto include all Covered Accumulation Contracts
     and Contracts in Pay Status (other than Excluded Annuity
     Contracts) in effect on March 31, 1998, May 31, 1998 or June 30,
     1998, as applicable, issued to Policyholders Resident as of such
     date in New York.  The Reinsured Annuity Contracts listed on the
     updated Schedule 2-A, the Non New York Reinsured Annuity
     Contracts listed on the updated Schedule 2-B and the New York
     Reinsured Annuity Contracts listed on the updated Schedule 2-C,
     each as delivered by the Seller following each of the Closing
     Date and the New York Assumption Date as provided in
     Section 2.12.1(c), will include all Covered Accumulation
     Contracts and Contracts in Pay Status (other than Excluded
     Annuity Contracts) in effect on the Closing Date and the New York
     Assumption Date, respectively, issued to all Policyholders or to
     Policyholders Resident as of the applicable dates in the
     specified jurisdictions, and will include updated information in
     each category set forth in Section 2.12.1(b) and all additional
     information required pursuant to Section 2.12.1(c).

     2.12.4    Compliance with Law.

     (a)  All of the Reinsured Policies currently in effect or that
     the Seller has a current contractual obligation to issue are, to
     the extent required under Applicable Laws, on forms approved by
     applicable Governmental Authorities of the jurisdiction where
     issued or have been filed with and not objected to by such
     Governmental Authorities within the period provided for
     objection, and such forms comply in all material respects with
     Applicable Laws.

     (b)  All policy applications in respect of Reinsured Policies
     required to be filed with or approved by applicable Governmental
     Authorities under Applicable Laws have been so filed or approved.

     (c)  All rated and other elements, including Cost of Insurance
     and premium rates, with respect to Reinsured Policies required to
     be filed with or approved by applicable Governmental Authorities


<PAGE>   16

     under Applicable Laws have been so filed or approved and premiums
     charged conform thereto.

     (d)  No material deficiencies have been asserted by any
     Governmental Authority with respect to any filings referenced in
     paragraphs (a), (b) or (c) above that have not been cured or
     otherwise resolved to the satisfaction of such Governmental
     Authority.

     (e)  None of the Reinsured Policies is a "security" requiring
     registration under federal securities laws.

     (f)  The Seller has timely provided to all relevant Policyholders
     all annual statements and other material reports, in either case
     to the extent required by the terms of the Reinsured Policies or
     Applicable Laws.

     (g)  Each Reinsured Policy used as a funding vehicle or otherwise
     in connection with a Tax Deferred Annuity Arrangement satisfies
     and has satisfied all requirements under the Code and Applicable
     Law for it to be so used, and there is no obligation based on
     Applicable Law to amend or endorse any such Reinsured Policy so
     as to maintain such status.  Except for conflicts arising solely
     due to modifications of any such Reinsured Policy by the Plan
     (all of which are disclosed in Section 2.12.4(g) of the Seller's
     Disclosure Schedule), to the knowledge of the Seller no such
     Reinsured Policy which is an ERISA Plan is in conflict with, or
     provides any participant with any right that is in conflict with,
     the provisions of ERISA or the applicable provisions of the ERISA
     Plan.  To the knowledge of the Seller, no rights granted or
     provision in any Reinsured Policy violates the Code, ERISA or any
     other Applicable Law.

     (h)  No non-exempt "prohibited transaction," within the meaning
     of Section 4975 of the Code and Section 406 of ERISA, has
     occurred or, to the Seller's knowledge, is reasonably expected to
     occur with respect to any Reinsured Policy that involved any
     action or inaction by the Seller.

     2.12.5    Policies in Effect.

     (a)  All of the Reinsured Policies are (i) in full force and
     effect, (ii) legal, valid and binding obligations of the Seller,
     and, to the knowledge of the Seller, of the other parties
     thereto, and (iii) enforceable against the Seller, and, to the
     knowledge of the Seller, the other parties thereto, in each case
     in accordance with their respective terms.

     (b)  The Transactions will not affect the legality, validity or
     binding character of any Reinsured Policy.

     2.12.6    Sales Practices.

     (a)  Each Reinsured Policy complies with all Applicable Laws and
     each Reinsured Policy has been offered, sold and administered in
     accordance with its terms and in compliance with all Applicable
     Laws (it being understood that, without limiting the definition
     of Excluded Liabilities or any other provision of this Agreement,
     no representation is made in this Section 2.12.6(a) as to the
     Policies issued by Mutual Benefit previously held by
     Policyholders who received Restructured Contracts pursuant to the
     Plan).  All policy illustrations authorized or provided by the
     Seller or, to knowledge of the Seller, authorized or provided by
     any other Person, to Policyholders comply with the requirements
     of all Applicable Laws as in effect at such time and, if and to
     the extent applicable, (i) the requirements of Section 10(c) of
     the NAIC Life Illustration Model Regulation, and (ii) the
     illustration actuarial standards of the American Academy of
     Actuaries.

     (b)  The Seller has no liabilities of any kind or nature arising
     from or relating to the conduct or practices of Mutual Benefit,


<PAGE>   17

     its Affiliates or Representatives with respect to Policies issued
     or offered by Mutual Benefit.

     2.12.7    Payment of Policy Benefits.  All benefits payable by
     the Seller and, to the knowledge of the Seller, by any other
     Person that is a party to or bound by any reinsurance,
     coinsurance, or other similar contract with the Seller, with
     respect to the Reinsured Policies and the Policies subject to the
     Inward Reinsurance Agreements have been paid in accordance with
     the terms of the Reinsured Policy under which they arose, except
     for such benefits for which there is, in the reasonable opinion
     of the Seller, a reasonable basis to contest and all such
     contested benefits have been disclosed in Section 2.12.7 of the
     Seller's Disclosure Schedule.

     2.12.8    No Other Distributions.  No Reinsured Policy or Policy
     subject to an Inward Reinsurance Agreement issued, reinsured, or
     underwritten by the Seller entitles the Policyholder or any other
     Person to receive dividends, distributions, or other benefits
     based on the revenues or earnings of the Seller or any other
     Person.

     2.12.9    Underwriting Standards.  The underwriting standards
     utilized and ratings applied by the Seller with respect to the
     Reinsured Policies and the Policies subject to the Inward
     Reinsurance Agreements conform in all material respects to
     industry accepted practices and to the standards and ratings
     required pursuant to the terms of the respective reinsurance,
     coinsurance, or other similar contracts.

     2.12.10   Financial Status of Reinsurers.  The Seller has not
     received any non-public information that would cause it to
     believe that there is or may reasonably be expected to be any
     material impairment of or adverse trend with respect to the
     financial condition of any reinsurer under any Outward
     Reinsurance Agreement or insurer under any Inward Reinsurance
     Agreement, in either case if such agreement is included in the
     Assigned Contracts.

     2.12.11   No Waivers.  The Seller has not waived any defenses or
     Actions that would have been available to it under the Reinsured
     Policies or the Policies subject to the Inward Reinsurance
     Agreements that, individually or in the aggregate, have had or
     would reasonably be expected to have a material adverse effect on
     the applicable Policies on or after the Closing Date.

     2.12.12   Consistent with Books and Records.  All of the
     Reinsured Policies are consistent with the Books and Records and
     any amendments, riders, or other modifications to the Reinsured
     Policies are fairly and accurately reflected in the Books and
     Records.

     2.12.13   Guaranty Fund Assessments.  The Seller has not received
     at any time since December 31, 1997 any written notice of any
     assessments imposed or to be imposed on the Seller by any
     Governmental Authority or other Person administering any
     insurance guaranty fund or association in any jurisdiction with
     respect to the Reinsured Policies that is unpaid or will be
     unpaid after 30 days following receipt of such notice.
     Section 2.12.13 of the Seller's Disclosure Schedule sets forth
     the amounts of all unpaid assessments.

     2.12.14   Cost of Insurance and Interest Rates.  The Seller is in
     compliance with all contract provisions and Applicable Laws
     relating to Cost of Insurance rates and credited interest rates
     with respect to the Reinsured Policies.

     2.12.15   Taxable Basis.  The Seller's administration systems
     and/or the Books and Records (in a reasonably identifiable
     location, arranged in an orderly fashion) contain accurate
     information regarding the taxable basis of each Reinsured Policy.

<PAGE>   18

     2.12.16   Lists of Group Pension Customers.

     (a)  The Seller has delivered to the Purchaser a true and
     complete list, as of March 31, 1998, of each of the following:

          (i)  (A) the name of each Group Pension Customer; (B) whether the
          assets held on behalf of such Group Pension Customer in the Group
          Pension Accounts are held for a Qualified Plan, a Tax Deferred
          Annuity Arrangement or an Other Plan; (C) in the case of a
          Qualified Plan, whether such Qualified Plan is a Fully
          Administered Qualified Plan; (D) with regard to each Tax Deferred
          Annuity Arrangement or Other Plan, whether such plan is an ERISA
          Plan; (E) the dollar amount of assets held by the Seller on
          behalf of each Benefit Plan or Qualified Contract of such Group
          Pension Customer in each of the Group Pension Accounts;
          (F) whether the Group Pension Customer has an individual or a
          group annuity contract with the Seller; (G) where the Seller
          performs recordkeeping by participant, the number of lives that
          are covered by the Seller on behalf of each Benefit Plan or
          Qualified Contract of the Group Pension Customer; (H) in the case
          of each group annuity contract, whether or not the Group Pension
          Customer has an allocated contract for which recordkeeping by the
          Seller is done separately for each participant covered by such
          contract; and (I) whether or not such Group Pension Customer is
          making ongoing contributions to the Seller; and

         (ii) an aggregation, by type of product, of the data which sets
         forth the dollar amount of assets held by the Seller on behalf of
         such Group Pension Customer in each of the Group Pension
         Accounts, and, where the Seller performs recordkeeping by
         participant, the number of lives which are covered by the Seller
         on behalf of such Group Pension Customer in each of the Group
         Pension Accounts.

     (b)  The Seller has delivered to the Purchaser a true and
     complete list of each of the following, with respect to each
     Group Pension Customer:  (i) all fees or other amounts MBL has
     collected for administrative services performed during 1997 for
     such Group Pension Customer and, to the extent paid in advance,
     the amount allocable to future services to be performed; (ii) all
     Group Pension Customers who are making ongoing new contributions
     to plans with the Seller; (iii) the amount of such ongoing
     contributions (excluding loan repayments) by Group Pension
     Customers during 1997; (iv) all active life insurance contracts
     that the Seller has with a Group Pension Customer, under a
     Benefit Plan, along with the scheduled premium on each; and
     (v) all outstanding loans as of March 31, 1998 under the Tax
     Deferred Annuity Arrangements and Fully Administered Qualified
     Plans, including the amount of such loan, whether or not it is
     current and whether or not it has been treated as in default for
     tax reporting purposes.

     2.12.17   Contracts and Administrative Procedures of Group
     Pension Business; Group Pension Accounts; Reaffirmed Other
     Contracts.

     (a)  The Books and Records contain, in a reasonably identifiable
     location, arranged in an orderly fashion, a true and complete
     copy of: (i) each contract and each document or written
     communication that establishes (and a written summary of any oral
     communications or practices that establish) an agreement,
     arrangement, or understanding or practice (including internal
     memoranda or administrative manuals), with respect to any
     administrative or other services that the Seller provides or has
     provided in the calendar years of 1994 through 1997, inclusive,
     or under which the Seller has any responsibility relating to, or
     covering its Group Pension Business; and (ii) any other contract
     or agreement, including plans of operation for its separate
     accounts and obligations of indemnification from claims, damages
     or other matters relating to the Group Pension Business.

     (b)  All of the assets held on behalf of the customers in the


<PAGE>   19

     Group Pension Accounts are held only under the following types of
     contracts or accounts:  Covered Contracts, Wrapped Contracts,
     Combination Contracts, New Money Accumulation Contracts, pooled
     separate accounts, (including Variable Annuities) or are held by
     Persons other than the Seller in mutual funds.  True and complete
     copies of all organizational and operational documents,
     governmental filings, agreements with state insurance guarantee
     corporations or other insurance companies, prospectuses,
     disclosure statements and similar documentation with regard to
     the foregoing are contained in the Seller's Books and Records.

     2.12.18   Documents Relating to Fully Administered Qualified
     Plans.

     (a)  With respect to each Fully Administered Qualified Plan for
     which the Seller provides administrative or other services
     currently or as of the Closing Date, the Books and Records
     contain, in a reasonably identifiable location, arranged in an
     orderly fashion, true and complete copies, if applicable, of:
     (i) the documents embodying or relating to such Fully Qualified
     Administered Plan, including the Fully Qualified Administered
     Plan document(s) (past and present), the adoption agreements, all
     amendments thereto, the related trust or funding agreements,
     investment management agreements, administrative service
     contracts, insurance contracts, the current summary plan
     description and any summary of mutual modification since such
     summary plan description was distributed and, to the extent in
     the Seller's possession or control, all previous summary plan
     descriptions, summaries of material modifications, and material
     communications(s) to participants; (ii) the latest annual report,
     and all Schedule A's, and, to the extent in the Seller's
     possession or control, any prior annual reports; and (iii) each
     communication received since July 16, 1991 by the Seller or
     Mutual Benefit, or by the customer of which the Seller has a
     copy, from the IRS, the U.S. Department of Labor ("DOL"), or any
     other Governmental Authority, including an opinion letter from
     the IRS for each prototype plan, the two most recent applications
     for an opinion letter from the IRS submitted by the Seller or
     Mutual Benefit, the most recent application for a determination
     letter submitted to the IRS, and the most recent determination
     letter received from the IRS.  None of the Fully Administered
     Qualified Plans is subject to regulation under foreign law or is
     a "multiemployer plan" (within the meaning of Sections (3)(37) or
     4001(a)(3) of ERISA or Section 414(f) of the Code).

     (b)  Each Fully Administered Qualified Plan for which the Seller
     provides administrative or other services currently or as of the
     Closing Date has been amended to comply with, and has received a
     current determination letter (except in the case of a
     standardized prototype plan) from the IRS to the effect that such
     Fully Administered Qualified Plan is qualified under,
     Section 401(a) of the Code and any trust maintained pursuant
     thereto is exempt from federal income taxation under
     Section 501(a) of the Code or a current opinion letter from the
     IRS in the case of a plan that is a prototype plan to the effect
     that the form of the Plan and trust maintained pursuant thereto
     satisfy the requirements of Sections 401(a) and 501(a) of the
     Code.  None of such amendments, opinion or letters is required to
     cover amendments required by the Small Business Job Protection
     Act of 1996 or the Taxpayer Relief Act of 1997.

     2.12.19   No Excluded Policies. The Reinsured Policies do not
     include any Excluded Policy.

     2.12.20   Account Values True-Up. The Seller's calculation of the
     Account Values True-Up for each Reinsured Policy will, when
     delivered: (a) be correct and complete, (b) be calculated in
     accordance with the requirements of the Plan and the applicable
     Rehabilitation Documents, and (c) for each Reinsured Policy
     represent the maximum liability in respect thereof.

     2.12.21   Eligible Policies. The only Policies eligible for


<PAGE>   20

     Policy Enhancements pursuant to the Plan and the Rehabilitation
     Documents are the Eligible Policies.

     2.12.22   MEC's.  The Seller has delivered to the Purchaser a
     correct and complete list as of May 31, 1998 of each Reinsured
     Life Policy that may, in the absence of the Grandfathering
     Ruling, be deemed to be a MEC as a result of the consummation of
     the Transactions either (a) if the policyholder of such Policy
     makes annual premium payments in an amount equal to or greater
     than the average annual premium payment made with respect to such
     Policy during the four year period ending May 31, 1998, or (b) if
     the policyholder of such Policy makes annual premium payments in
     an amount equal to or greater than the premium payments made with
     respect to such Policy in 1997.

2.13 Reserves.  Section 2.13 of the Seller's Disclosure Schedule
     sets forth in detail the components of the Reserve.  All reserves
     and other liabilities of the Seller with respect to the Reinsured
     Policies and the Policies subject to the Inward Reinsurance
     Agreements as established or reflected, and all other provisions
     made for policy and contract claims with respect to the Reinsured
     Policies and the Policies subject to the Inward Reinsurance
     Agreements (excluding the Policy Enhancements Amount,
     collectively, "Reserve Liabilities") in the Statutory Statements
     have been determined in accordance with accounting practices
     prescribed or permitted by the Department of Banking and
     Insurance of the State of New Jersey (except as set forth
     therein) and GAAS using prescribed morbidity and mortality tables
     and interest rates that are in accordance with the nature of the
     benefits specified in the related Reinsured Policy or the
     relevant Policy subject to an Inward Reinsurance Agreement.
     Except with respect to the Seller's IBNR reserve in contemplation
     of the IBNR Settlement Amount and the Policy Enhancements Amount,
     each as expressly contemplated by this Agreement, no insurance
     reserving practice or policy of the Seller and its Subsidiaries
     with respect to the Business has changed, in any material
     respect, since December 31, 1996, and the results of the
     application of such practices and policies are reflected in the
     Statutory Statements and are at least as great as the minimum
     aggregate amounts required for the conduct of the Business in
     each other jurisdiction in which the Reinsured Policies and the
     Policies subject to the Inward Reinsurance Agreements have been
     issued.  Without limiting the foregoing, to the knowledge of the
     Seller, the Seller has made adequate provision for all Reserve
     Liabilities to cover the total amount of all reasonably
     anticipated matured and unmatured benefits, claims and other
     liabilities under all Reinsured Policies.  Reserve Liabilities
     with respect to the Restructured Life Contracts are at least as
     great as those that would be calculated by applying the CRVM
     Method to such Policies.  The Seller owns cash, Cash Equivalents
     and Investment Grade Securities that qualify as legal reserve
     assets under Applicable Laws in an aggregate amount at least
     equal to the amount of all such Reserve Liabilities less the
     amount of principal and accrued interest on Reinsured Policy
     loans.  All reserves and accrued liabilities for estimated
     losses, settlements, costs and expenses from pending Actions
     included in each Statutory Statement were determined in
     accordance with SAP and Statement of Financial Accounting
     Standards No. 5 issued by the Financial Accounting Standards
     Board.

2.14 Reinsurance Agreements.

     2.14.1    Outward Reinsurance Agreements.  Section 2.14.1 of the
     Seller's Disclosure Schedule lists all written Outward
     Reinsurance Agreements and a description or term sheet with all
     material terms of any oral Outward Reinsurance Agreements
     pursuant to which the Seller cedes or retrocedes or has any
     obligation to cede or retrocede risks assumed under the Reinsured
     Policies and all Reinsured Policies that are subject to such
     Outward Reinsurance Agreements.  All Outward Reinsurance
     Agreements: (a) are legal, valid, binding and in full force and


<PAGE>   21

     effect; (b) are enforceable against the Seller, and, to the
     Seller's knowledge, each other party thereto, in accordance with
     their respective terms; (c) conform in all material respects to
     all Applicable Laws; and (d) reinsure Reinstated Policies in
     accordance with the Seller's customary reinstatement practices
     and the terms of the relevant Policies.  No Outward Reinsurance
     Agreement will cease to be in full force and effect on terms
     identical to those currently in effect as a result of the
     consummation of the Transactions, nor will the consummation of
     the Transactions constitute a breach or default under any such
     Outward Reinsurance Agreement.  Each Outward Reinsurance
     Agreement is assignable to ANLIC on the Closing Date, and may be
     partially assigned by ANLIC to First SunAmerica with respect to
     the New York Reinsured Polices on the New York Assumption Date,
     on terms identical to those currently in effect.  Neither the
     Seller, nor, to the knowledge of the Seller, any other party
     thereto, is in default of any provision of any Outward
     Reinsurance Agreement.  The Seller has previously furnished or
     made available to the Purchaser true, correct and complete copies
     of each Outward Reinsurance Agreement.

     2.14.2    Inward Reinsurance Agreements.  Section 2.14.2 of the
     Seller's Disclosure Schedule lists all Inward Reinsurance
     Agreements pursuant to which the Seller reinsures or assumes or
     has any obligation to reinsure or assume risks of Policies issued
     or retroceded by reinsurers under the Outward Reinsurance
     Agreements.  All Inward Reinsurance Policies are: (a) legal,
     valid, binding and in full force and effect; (b) enforceable
     against the Seller, and, to the Seller's knowledge, each other
     party thereto, in accordance with their respective terms; and
     (c) conform in all material respects to all Applicable Laws.  No
     Inward Reinsurance Agreement will cease to be in full force and
     effect on terms identical to those currently in effect as a
     result of the consummation of the Transactions, nor will the
     consummation of the Transactions constitute a breach or default
     under any such Inward Reinsurance Agreement.  Each Inward
     Reinsurance Agreement is assignable to ANLIC on the Closing Date
     on terms identical to those currently in effect.  Neither the
     Seller nor, to the knowledge of the Seller, any other party
     thereto, is in default of any provision of any Inward Reinsurance
     Agreement.  The Seller has previously furnished or made available
     to the Purchaser, true, correct and complete copies of all Inward
     Reinsurance Agreements.

2.15 Brokers. All negotiations relating to this Agreement and the
     Transactions have been carried out without the intervention of
     any Person acting on behalf of the Seller in such a manner as to
     give rise to any valid claim against the Purchaser or the Seller
     for any brokerage, finder's or financial advisor's commission,
     fee or similar compensation, except for Goldman, Sachs & Co.,
     whose fees in respect hereof will be paid by the Seller.

2.16 Severance Plan.  The Seller's severance and retention plan
     as in effect on the date hereof (the "Severance Plan") is
     consistent in all material respects with the summary thereof that
     the Seller delivered to the Purchaser on June 26, 1998.

2.17 Absence of Undisclosed Liabilities.  Neither the Seller nor
     any of its Subsidiaries has incurred or is subject to any
     material liabilities with respect to the Business, the Reinsured
     Policies or the Transferred Assets (including obligations or
     liabilities arising from policyholder claims or guaranty fund
     assessments), and, to the knowledge of the Seller, the Seller has
     not incurred and is not subject to any other material
     liabilities, of any kind or nature, whether absolute, accrued,
     contingent or otherwise, that are required by GAAP or SAP to be
     reflected in a consolidated balance sheet (or reflected in the
     notes thereto), except for: (a) liabilities reflected or reserved
     against in the GAAP Statements, the Statutory Statements or the
     Audited SAP Statements in accordance with the standards of
     disclosure applicable thereto; (b) liabilities incurred since the
     date of the most recent such statement in the ordinary course of


<PAGE>   22

     business; (c) liabilities reflected in Section 2.17 of the
     Seller's Disclosure Schedule (and quantified by reference
     therein); and (d) liabilities arising after the date hereof for
     which separate reserves will be established on or prior to the
     Closing Date in addition to those reserves and other holdbacks
     referenced in the financial data previously provided by the
     Seller to the Purchaser.

2.18 Transferred Assets.  The Seller has legal and beneficial
     ownership of, and good and marketable title to, all of the
     Transferred Assets free and clear of all Encumbrances.  All of
     the Transferred Reserve Assets qualify as legal reserve assets
     and admitted assets under Applicable Laws, including the
     insurance laws of the states of New Jersey, New York and Arizona,
     and meet the requirements of the Plan for assets comprising the
     Reserve.  All Transferred Reserve Assets are, and will be when
     transferred to the Purchaser, either cash, Cash Equivalents,
     Investment Grade Securities, policy loans or amounts due from
     Outward Reinsurers or other receivables in respect of the
     Reinsured Policies and are, in each case, listed on Schedule 3,
     with such changes thereto as are required or permitted by
     Section 1.1.3.  None of the Investment Grade Securities is, or
     will be when transferred to the Purchaser, in default.

2.19 Books and Records.  The Books and Records are complete and
     accurate in all material respects, and have been maintained in
     accordance with all Applicable Laws and with good business and
     bookkeeping practices.

2.20 Threats of Cancellation.  Since December 31, 1997, through
     the date of this Agreement, no Policyholder, group of
     Policyholders, or Persons writing, selling, or producing, either
     directly or through reinsurance assumed, insurance business that
     individually or in the aggregate for each such Policyholder,
     group or Person, respectively, accounted for (a) five percent
     (5%) or more of the annual premium (as determined in accordance
     with SAP) or (b) one percent (1%) of reserves of the Seller
     relating to the Reinsured Policies, in each case at or for the
     twelve month period then ended, has terminated or, to the
     knowledge of the Seller, given notice that it intends to
     terminate its relationship with the Seller.

2.21 Rehabilitation Plan.

     2.21.1    List of Rehabilitation Documents.  The Plan (as
     amended, modified or supplemented to date) and all agreements
     entered into in connection with the Plan, together with all
     exhibits, schedules, attachments and amendments thereto,
     including the Rehabilitation Agreement and Settlement Agreement
     (collectively, the "Rehabilitation Documents") are listed on
     Section 2.21.1 of the Seller's Disclosure Schedule.  The Seller
     has delivered or made available to the Purchaser true, correct
     and complete copies of all of the Rehabilitation Documents.

     2.21.2    Approval; Compliance.  The Plan and each of the
     Rehabilitation Documents have been approved by all necessary
     Governmental Authorities, are in full force and effect and are
     legal, valid and binding on the Seller or its Subsidiaries, as
     applicable, and are enforceable in accordance with their
     respective terms.  The Seller is in compliance with all
     provisions of the Plan and all Rehabilitation Documents.  The
     Seller has no knowledge of any default by any other party of any
     of such other party's obligations under the Plan or any
     Rehabilitation Document.

     2.21.3    No Actions.  There is no Action pending or, to the
     knowledge of the Seller, threatened, arising out of, relating to
     or based upon the Plan or any Rehabilitation Document that
     relates to the Business, the Reinsured Policies or the
     Transferred Assets or that would otherwise reasonably be expected
     to have a Material Adverse Effect.

<PAGE>   23

2.22 Assigned Contracts.  Each of the Assigned Contracts is
     legal, valid, binding and enforceable against the Seller in
     accordance with its terms and, to the knowledge of the Seller,
     each other party thereto, in full force and effect according to
     its terms, and is freely assignable to ANLIC on the Closing Date
     and, if applicable, may be partially assigned by ANLIC to First
     SunAmerica with respect to the New York Reinsured Policies on the
     New York Assumption Date pursuant to this Agreement and the
     relevant Ancillary Agreements without notice to or consent of any
     Person.  The Seller is not in default, nor, to the knowledge of
     the Seller, is any other party to any Assigned Contract in
     default, in any material respect under any Assigned Contract.

2.23 Agreements Relating to Payment of Commissions.

     2.23.1    Forms of Commission Agreements.  Each of the Commission
     Agreements is in one of the forms attached as Section 2.23.1 of
     the Seller's Disclosure Schedule and is consistent with the Books
     and Records concerning such Commission Agreements.  Other than
     the Commission Agreements listed on Section 2.23.1 of the
     Seller's Disclosure Schedule, there are no agreements or
     arrangements pursuant to which Commissions are or may be payable
     with respect to the Reinsured Policies.  The Seller has duly
     performed all of the terms, conditions, covenants and warranties
     of the Commission Agreements required of it, including the
     payment of all Commissions, and to the knowledge of the Seller,
     all other parties to the Commission Agreements have duly
     performed all of the terms, conditions, covenants and warranties
     of the Commission Agreements required on their part.

     2.23.2    Insurance Agents.  Section 2.23.2 of the Seller's
     Disclosure Schedule sets forth (a) all insurance agents and other
     producers with respect to the Reinsured Policies, and
     (b) identifies each such agent or producer having an Agent Debit
     Balance and the nature and amount of such Agent Debit Balance.

     2.23.3    Renewal Commissions.  The Seller is not liable to pay
     Commissions upon the renewal of any Reinsured Policy nor is it a
     party to any agreement providing for the collection of annuity or
     insurance premiums payable to the Seller by any other Person,
     which Commissions or premiums exceed $50,000 in the aggregate,
     except in accordance with customary insurance industry practice.

2.24 Third Party Administration Agreements.  Section 2.24 of the
     Seller's Disclosure Schedule sets forth a complete and accurate
     listing and description of all third party administration
     agreements relating to the Reinsured Policies, regardless of
     whether the Seller is receiving or providing services (the "Third
     Party Administration Agreements").  Neither the Seller, nor, to
     the knowledge of the Seller, any other party thereto, is in
     breach of any Third Party Administration Agreement, and each
     Third Party Administration Agreement is in full force and effect
     and is legal, valid and binding on the Seller, enforceable
     against the Seller, and to the Seller's knowledge each other
     party thereto, in accordance with its terms, except to the extent
     that enforcement thereof may be limited by or subject to
     applicable bankruptcy, insolvency, fraudulent transfer,
     reorganization, moratorium and similar laws of general
     application relating to or affecting creditors' rights and to
     general equity principles.  To the knowledge of the Seller, each
     party acting as a third party administrator under a Third Party
     Administration Agreement is duly licensed, qualified or admitted
     to do business and is in good standing in all jurisdictions in
     which it is required to be so licensed, qualified or admitted to
     do business as a third party administrator by Applicable Laws.

2.25 Impairments.  With respect to the calculation of Impairments
     that is delivered by the Seller to the Purchaser pursuant to
     Section 4.17, the aggregate amount of the Impairments for the
     Reinsured Annuity Contracts and the Excluded Annuity Policies
     that are in each case Eligible Policies will be at least 60% of
     the aggregate amount of the Impairments for the Reinsured


<PAGE>   24

     Policies and the Excluded Policies that are in each case Eligible
     Policies as of the date of such calculation.

2.26 Wrapped Accumulation Contracts.  Prior to giving effect to
     any amendment to the Settlement Agreement contemplated by this
     Agreement, all Wrapped Accumulation Contracts terminate
     automatically on December 31, 1999 in accordance with the Plan
     and the Settlement Agreement.

2.27 Policyholder Lists.  Neither the Seller, any of its
     Affiliates nor any of their respective Representatives has given
     to any Person a complete or partial list (in any form) of holders
     of Reinsured Policies, Excluded Annuity Contracts, Wrapped
     Annuity Contacts or Variable Annuities, other than (a) the
     Purchaser, ANLIC, First SunAmerica or their respective
     Representatives or (b) parties to the Plan or participants in the
     auction process conducted by the Seller's investment bankers for
     the sale of the Seller's capital stock or the sale of all or any
     part of the Business (which participants received no greater
     information than the Purchaser and are bound by confidentiality
     agreements with the Seller).

         3.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER

          Except as expressly set forth  in the relevant Sections
of the Purchaser's Disclosure Schedule, the Purchaser represents
and warrants to the Seller as follows:

3.1  Corporate Status and Authority.  The Purchaser is duly
     organized, validly existing and in good standing under the laws
     of the State of Maryland, each of ANLIC and First SunAmerica are
     stock life insurance companies duly organized, validly existing
     and in good standing under the laws of the States of Arizona and
     New York, respectively, and each of Purchaser, ANLIC and First
     SunAmerica has all requisite corporate power and authority to
     conduct its business and to own or lease its properties, as now
     conducted, owned or leased.  Each of the Purchaser, ANLIC and
     First SunAmerica has full corporate power and authority to
     execute and deliver this Agreement and the Ancillary Agreements
     to which it is a party, to perform its obligations and to
     consummate the Transactions.  Such execution, delivery,
     performance and consummation have been or will have been on or
     prior to the Closing, as applicable, duly authorized by the Board
     of Directors of the Purchaser, ANLIC or First SunAmerica, as the
     case may be, which constitutes all necessary corporate action on
     the part of the Purchaser, ANLIC and First SunAmerica for such
     authorization.  Each of this Agreement and the Ancillary
     Agreements to which it is a party has been or will have been on
     or prior to the Closing, as applicable, duly executed and
     delivered by each of the Purchaser, ANLIC and First SunAmerica,
     as applicable, and (assuming its due execution and delivery by
     the Seller) constitutes the legal, valid and binding obligation
     of the Purchaser, ANLIC or First SunAmerica, as the case may be,
     enforceable against them in accordance with its terms, except as
     such enforceability may be limited by applicable bankruptcy,
     reorganization, insolvency, fraudulent conveyance, moratorium,
     receivership or similar laws affecting creditors or insurance
     companies and creditors' rights generally and by general
     principles of equity (whether considered at law or in equity).

3.2  No Conflicts, Consents and Approvals, etc..

     3.2.1     No Conflicts.  Neither the execution, delivery or
     performance by each of the Purchaser, ANLIC and First SunAmerica
     of this Agreement and the Ancillary Agreements to which it is a
     party, nor the consummation of the Transactions will result in:
     (a) any conflict with, or default under, any of the
     Organizational Documents of the Purchaser, ANLIC or First
     SunAmerica, as applicable; (b) any breach or violation of, or
     default under, any Applicable Law; (c) any breach or violation
     of, or default under, any material mortgage, agreement, deed of
     trust, guaranty, note, bond, lease, indenture or any other


<PAGE>   25

     instrument to which the Purchaser, ANLIC or First SunAmerica is a
     party or by which the Purchaser, ANLIC and First SunAmerica or
     any of their respective properties or assets are bound; (d) the
     creation or imposition of any Encumbrance on their respective
     properties or assets; or (e) the breach or violation of any of
     the terms and conditions of, or a default under, or otherwise
     cause an impairment or revocation of, any Permit held by the
     Purchaser, ANLIC or First SunAmerica except for such conflicts,
     defaults, breaches, violations, conditions or Encumbrances that
     would not, individually or in the aggregate, reasonably be
     expected to result in a Material Adverse Effect.

     3.2.2     Consents.  No consent, approval, exemption or
     authorization is required to be obtained from, no notice is
     required to be given to, and no filing is required to be made
     with, any Governmental Authority or any other Person by the
     Purchaser, ANLIC or First SunAmerica in connection with the
     execution and delivery of this Agreement and the Ancillary
     Agreements to which the Purchaser, ANLIC or First SunAmerica is a
     party or the consummation of the Transactions, except filings,
     consents or approvals required with respect to (a) the HSR Act,
     and (b) Governmental Authorities having responsibility for the
     regulation of insurance in each of the jurisdictions in which
     ANLIC or First SunAmerica holds a certificate of authority to
     engage in the business of insurance.  The Purchaser will deliver
     to the Seller not later than 30 days prior to the Closing Date an
     updated Section 3.2.2 of the Purchaser's Disclosure Schedule
     setting forth all filings with, consents or approvals of,
     Governmental Authorities described in clause (b) above.

3.3  Compliance with Laws.  None of the Purchaser, ANLIC or First
     SunAmerica is in violation or has received any written notice of
     any violation of any Applicable Law, except for violations that,
     individually or in the aggregate, would not reasonably be
     expected to result in a Material Adverse Effect.

3.4  Litigation.  Except as would not reasonably be expected to
     have, individually or in the aggregate, a Material Adverse
     Effect, there are: (a) no outstanding orders, decrees or
     judgments by or with any Governmental Authority before which the
     Purchaser, ANLIC or First SunAmerica is or was a party; (b) no
     Actions, pending or, to the knowledge of the Purchaser,
     threatened or contemplated, either by or against the Purchaser,
     ANLIC or First SunAmerica; or (c) to the knowledge of the
     Purchaser, no events, facts or circumstances that have arisen or
     occurred that would reasonably be expected to result in the
     commencement of any such Action.  Section 3.4 of the Purchaser's
     Disclosure Schedule, as to each Action disclosed therein,
     describes the parties, the nature of the proceeding, the date and
     method commenced, and the amount of damages (if known) or other
     relief sought, and, if applicable, paid or granted.

3.5  Permits, Licenses, etc..  First SunAmerica is duly licensed
     to conduct insurance business under the laws of the States of New
     York, Nebraska and New Mexico, and ANLIC is duly licensed to
     conduct insurance business under the laws of the State of Arizona
     and under the laws of each other state of the United States and
     the District of Columbia, except the State of New York.  ANLIC or
     First SunAmerica, as applicable, has been duly authorized by all
     necessary Governmental Authorities to transact insurance business
     of the types reflected by the Reinsured Policies in the
     respective jurisdictions in which they have been issued.  ANLIC
     or First SunAmerica, as applicable, have all Permits necessary to
     conduct the Business in the manner and in the areas in which the
     Business is presently being conducted, and all such Permits are
     valid and in full force and effect, except where the failure to
     have such a Permit would not, individually or in the aggregate,
     result in a Material Adverse Effect.  No revocation or non-
     renewal of such Permits has occurred, and, to the knowledge of
     the Purchaser, neither ANLIC nor First SunAmerica has engaged in
     any activity that would cause the revocation or suspension of any
     such Permit, no Action looking to or contemplating the revocation


<PAGE>   26

     or suspension of any such Permit is pending or, to the knowledge
     of ANLIC or First SunAmerica, as applicable, threatened, and
     neither ANLIC nor First SunAmerica has received a notice from any
     Person of any intention to revoke or to refuse renewal of any
     such Permit, except for such revocations, non-renewals or
     suspensions that would not, individually or in the aggregate,
     result in a Material Adverse Effect.

3.6  Financial Statements.  The Purchaser has delivered to the
     Seller true, correct and complete copies of the Financial
     Statements described below.

     3.6.1     Audited GAAP Statements.  The audited consolidated
     balance sheet of the Purchaser and its Subsidiaries at
     September 30, 1997 and September 30, 1996 and the related
     consolidated income statements and statement of cash flows for
     the periods then ended, together with the notes thereto and the
     unqualified report of Price Waterhouse LLP, the independent
     certified public accountant of the Purchaser (the "Audited
     Purchaser Financial Statements");

     3.6.2     Statutory Statements.  The annual statements of each of
     ANLIC and First SunAmerica, including all notes, exhibits and
     schedules thereto and any affirmations and certifications filed
     therewith and the actuarial opinions applicable to the insurance
     business for such years as filed with the Arizona Department of
     Insurance and the New York State Insurance Department,
     respectively, for the years ended December 31, 1996 and
     December 31, 1997 (the "ANLIC Statutory Statements"); and

     3.6.3     Audited SAP Statements.  The audited statutory-basis
     balance sheets of each of ANLIC and First SunAmerica as at
     December 31, 1996 and December 31, 1997, and the related
     summaries of operations, statutory-basis statements of income,
     capital and surplus, and cash flow for the periods then ended,
     together with the notes thereto and the unqualified report of
     Price Waterhouse LLP thereon (the "ANLIC Audited SAP Statements;"
     together with the ANLIC Statutory Statements, the "ANLIC SAP
     Statements").

     3.6.4     GAAP Statement Representations.  The Audited Purchaser
     Financial Statements present fairly, in all material respects,
     the consolidated financial position of the Purchaser and its
     Subsidiaries as at the respective dates thereof and the results
     of their consolidated income, changes in shareholders' equity and
     cash flows for the respective periods then ended, in each case,
     in accordance with GAAP applied on a consistent basis throughout
     the periods indicated, except for the deviations from GAAP
     disclosed thereon or in the notes thereto.

     3.6.5     SAP Statement Representations.  The ANLIC Audited SAP
     Statements have been prepared in accordance with accounting
     practices prescribed or permitted by the Arizona Department of
     Insurance (with respect to ANLIC) and the New York State
     Insurance Department (with respect to First SunAmerica), and such
     accounting practices have been applied on a consistent basis
     throughout the periods indicated, except as expressly set forth
     or disclosed in the respective notes thereto.  The ANLIC Audited
     SAP Statements present fairly, in all material respects, the
     admitted assets, reserves, liabilities, capital and surplus of
     ANLIC and First SunAmerica as at the respective dates thereof and
     the results of their respective operations and cash flow for the
     respective periods then ended.  The ANLIC Statutory Statements
     complied in all material respects with all Applicable Laws when
     filed, were timely filed with all required Governmental
     Authorities, and no material deficiency has been asserted with
     respect to such statements by either the Arizona Department of
     Insurance or the New York State Insurance Department or any other
     applicable Governmental Authority.

3.7  Absence of Changes.  Except as expressly contemplated or
     required by this Agreement, since December 31, 1997 (a) there has


<PAGE>   27

     not been any adverse change in the business, financial condition,
     results of operations or property of the Purchaser, ANLIC or
     First SunAmerica, and (b) the Purchaser has not received notice
     of, and it has no knowledge of any circumstances that would
     reasonably be expected to result in, any impending downgrades of
     the ratings of the Purchaser, ANLIC or First SunAmerica as set
     forth in Section 3.9, except for the changes or ratings
     downgrades, as the case may be, that have not had and would not
     reasonably be expected to have a Material Adverse Effect.

3.8  Brokers.  All negotiations relating to this Agreement and
     the Transactions have been carried out without the intervention
     of any Person acting on behalf of the Purchaser, ANLIC or First
     SunAmerica in such a manner as to give rise to any valid claim
     against the Purchaser, ANLIC or First SunAmerica or the Seller
     for any brokerage or finder's or financial advisor's commission,
     fee or similar compensation.

3.9  Rating.  As of the date hereof, the Standard & Poor's
     Ratings Group Claims-Paying Ability Rating of ANLIC is AA-, the
     Moody's Investor Service, Inc. Financial Strength Rating of ANLIC
     is A2, the Duff & Phelps Rating of ANLIC is A, and the A.M. Best
     & Co. Rating of each of ANLIC and First SunAmerica is A+.

                            4.   PRE-CLOSING COVENANTS

4.1  Consents; Cooperation.

     4.1.1     Consents to be Obtained.  The Purchaser and the Seller
     acknowledge that the consents, approvals and authorizations with
     respect to the consummation of the Transactions (a) referenced in
     Section 2.3.2 and set forth in Section 2.3.2 of the Seller's
     Disclosure Schedule, and (b) referenced in Section 3.2.2 and set
     forth in Section 3.2.2 of the Purchaser's Disclosure Schedule are
     required from the parties indicated thereon to consummate the
     Transactions at the Closing and that such consents, approvals and
     authorizations have not, as of the date hereof, been obtained.

     4.1.2     Cooperation.  Subject to the terms and conditions of
     this Agreement, each party will use its commercially reasonable
     efforts to cause the Closing to occur, including: (a) causing the
     Closing Conditions to be satisfied, to the extent within the
     control of such party; (b) cooperating as contemplated by
     Section 4.1.3; and (c) defending against any Actions that
     challenge this Agreement or any provision of it or the
     consummation of the Transactions, including seeking to have any
     temporary restraining order, preliminary injunction or other
     legal restraint or prohibition entered or imposed by any
     Governmental Authority that is not yet final and nonappealable,
     vacated or reversed; provided, however, if approval of any
     Governmental Authority is necessary to approve any Competitive
     Bid that is submitted pursuant to procedures adopted by the Court
     after the Seller has satisfied the requirements of Sections 4.15
     and 4.16, the Seller will not be required to oppose such
     approval.  Without limiting the foregoing, the Seller and the
     Purchaser will use their respective commercially reasonable
     efforts to cause the Closing to occur on or as soon as
     practicable after the satisfaction of all of the Closing
     Conditions.

     4.1.3     Regulatory Filings; Other Consents.

     (a)  Each of the Seller and the Purchaser will as promptly as
     practicable, but in no event later than 15 Business Days
     following the date of this Agreement, file with the United States
     Federal Trade Commission (the "FTC") and the United States
     Department of Justice (the "DOJ") the notification and report
     form, if any, required for the Transactions and any supplemental
     information requested in connection therewith pursuant to the HSR
     Act.  Any such notification and report form and supplemental
     information will be in substantial compliance with the
     requirements of the HSR Act.  The Seller and the Purchaser will


<PAGE>   28

     as promptly as practicable comply with any Applicable Laws of any
     jurisdiction pursuant to which any Permit of, or filing with, any
     Governmental Authority or any other Person in connection with the
     Transactions is necessary, including the filing by the Purchaser
     of a current report on Form 8-K on or after the Closing Date.
     The Seller and the Purchaser will keep each other apprised of the
     status of any communications with, and any inquiries or requests
     for additional information from, the FTC and the DOJ and any
     other Governmental Authority and will exercise commercially
     reasonable efforts to comply promptly with any such inquiry or
     request.  Each of the Seller and the Purchaser will use
     commercially reasonable efforts to obtain any clearance required
     under the HSR Act or any other Permit of any Governmental
     Authority necessary for the consummation of the Transactions.

     (b)  The Seller and the Purchaser will cooperate and use their
     commercially reasonable efforts to obtain Permits and agreements
     of, and give and make all notices and filings with, any
     Governmental Authorities necessary to authorize, approve or
     permit the consummation of the Transactions, including the
     preparation and filing by the Seller of the Petition for Court
     Approval and its attachments including the Plan amendments and
     motions for the other orders described in Section 4.11, the
     Policyholder Disclosure Statement and the Policy Enhancements
     Procedures, the filing by the Purchaser of a current report on
     Form 8-K on or after the Closing Date and the preparation and
     filing (i) by the Seller of the Policy Enhancements Endorsements
     and (ii) by the Purchaser of its endorsements with respect to the
     Policy Enhancements.  The Seller will not file any Policy
     Enhancements Endorsements or the Petition for Court Approval or
     any of its attachments without the prior review and approval of
     the Purchaser, which will not be unreasonably withheld or
     delayed.  The Seller will use its commercially reasonable efforts
     to obtain all consents and approvals contemplated by this
     Agreement and the Ancillary Agreements as referenced in
     Section 2.3.2 and as set forth in Section 2.3.2 of the Seller's
     Disclosure Schedule.  The Purchaser will use its commercially
     reasonable efforts to obtain all consents and approvals
     contemplated by this Agreement and the Ancillary Agreements as
     set forth in Section 3.2.2 of the Purchaser's Disclosure
     Schedule.

     (c)  Each of the Seller and the Purchaser will furnish to the
     other such necessary information and reasonable assistance as the
     other may request in connection with:  (i) its preparation of any
     filing that is necessary under any Applicable Law; (ii) its
     obtaining all other relevant Permits from Governmental
     Authorities; (iii) its obtaining the approval of the Court, as
     specified in Section 6.2.3; (iv) its obtaining the approval of
     the Class Four Creditors, as specified in Section 6.2.4; (v) its
     obtaining the approval of the Reinsurers as specified in
     Section 6.2.5; and (vi) its obtaining any other required consents
     or approvals of any Person.

4.2  Seller's Conduct of Business, etc.  Except as set forth in
     Section 4.2 of the Seller's Disclosure Schedule, from the date of
     this Agreement until the Closing, the Seller will, and will cause
     its Subsidiaries to, unless it receives the prior written consent
     of the Purchaser, and except as expressly contemplated by this
     Agreement:

     (a)  operate the Business as presently operated and only in the
     ordinary course (taking into account the restrictions imposed on
     the Seller by the Plan) and consistent with past practice, 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 the
     Seller in connection with the Business;

     (b)  give prompt notice to the Purchaser of any event, occurrence
     or circumstance of which the Seller has knowledge and that is
     reasonably likely to result in or contribute to a Material


<PAGE>   29

     Adverse Effect or result in or contribute to a breach by the
     Seller of this Agreement;

     (c)  not take any action or omit to take any action that would
     result in a breach or inaccuracy of any of the representations
     and warranties set forth in Section 2 in any material respect at,
     or as of any time prior to, the Closing;

     (d)  not directly or indirectly assign, transfer, mortgage,
     pledge, lease or otherwise dispose of or grant or create or
     permit to exist any material Encumbrance on, any Transferred
     Assets, other than a disposition of a Transferred Reserve Asset
     in accordance with Section 1.1.3;

     (e)  maintain its Books and Records and the Transferred Assets in
     its usual, regular and ordinary manner, consistent with its past
     practice;

     (f)  not make or permit any material change in its underwriting,
     pricing, actuarial, or investment practices or policies with
     respect to the Business, the Reinsured Policies or the
     Transferred Assets or make, or agree to make, any material change
     in its financial, Tax or accounting practices or policies, or in
     any assumption underlying such a practice or policy, in either
     case including any basis for establishing reserves (including
     excess interest reserves), or any depreciation or amortization
     policies or rates, in each case other than as required by a
     change in GAAP, SAP or Applicable Law after the date hereof and
     provided that the Seller gives the Purchaser prompt notice of any
     such required change;

     (g)  maintain all, and not take any action to forfeit, abandon,
     modify, waive, terminate or otherwise change any, of its Permits
     material to the Business, except (i) as may be required in order
     to comply with Applicable Law, (ii) as may be expressly
     contemplated by this Agreement, or (iii) such modifications or
     waivers of Permits made in the ordinary course of business of the
     Seller as would not reasonably be expected to have, individually
     or in the aggregate, a Material Adverse Effect;

     (h)  not issue or sell new Policies in the categories of the
     Reinsured Policies, or amend existing Reinsured Policies, except
     to the extent required to comply with the terms of the Reinsured
     Policies or Applicable Law;

     (i)  (i) cause all Reserve Liabilities with respect to Reinsured
     Policies established or reflected in the Books and Records to be
     (A) established or reflected on a basis consistent with those
     Reserve Liabilities and reserving methods followed by the Seller
     in the preparation of the December 31, 1997 Annual Statement and
     (B) in continued compliance with Section 2.13; and (ii) continue
     to own cash, Cash Equivalents, Investment Grade Securities,
     policy loans and amounts due from Outward Reinsurers or other
     receivables in respect of the Reinsured Policies as listed on
     Schedule 3, with such changes thereto as are required or
     permitted by Section 1.1.3, that qualify as legal reserve assets
     under all Applicable Laws in an amount at least equal to the
     amount of the Reserve less the amount listed on Schedule 3 with
     respect to principal and accrued interest on Reinsured Policy
     loans;

     (j)  to comply with all Applicable Laws with respect to the
     Business, the Reinsured Policies and the Transferred Assets,
     comply with the terms of the Plan and the Rehabilitation
     Documents, perform all obligations that it or any of its
     Subsidiaries have under the Plan and the Rehabilitation Documents
     and not amend or modify the Plan or any Rehabilitation Document
     except as expressly contemplated by this Agreement;

     (k)  prepare and deliver to Policyholders of Reinsured Policies
     all annual statements and other reports to the extent required by
     the terms of the Reinsured Policies or Applicable Laws;
<PAGE>   30

     (l)  as soon as practicable upon the request of any Policyholder,
     provide, prior to the Closing Date, a new illustration to such
     Policyholder that gives effect to the Transactions in accordance
     with the assumptions set forth on Schedule 8; and

     (m)  not agree or commit to do, or agree or commit not to do, as
     the case may be, any of the actions referred to in this
     Section 4.2.

4.3  Access and Information.  From the date hereof until the
     Closing, upon reasonable notice, the Seller will give to the
     Purchaser and its Representatives access at all reasonable times
     during normal business hours to the Books and Records and to the
     properties of the Seller and its Subsidiaries as they relate to
     the Business, the Transferred Assets, the Reinsured Policies, the
     Wrapped Accumulation Contracts, the Excluded Annuity Contacts, or
     the Variable Annuities and furnish for inspection and copying
     such Books and Records as the Purchaser reasonably requests.  All
     Books and Records obtained by the Purchaser and its
     Representatives will be subject to the terms of the
     Confidentiality Agreement.

4.4  Certain Transactions.  From the date of this Agreement
     through the Closing, neither the Seller nor any of its Affiliates
     or Representatives will, directly or indirectly, solicit,
     encourage or  initiate any inquiry, offer or proposal from or any
     negotiations or discussions with, provide any information to,
     participate in any negotiations or discussions with, or otherwise
     cooperate in any manner with, any Person or group (other than the
     Purchaser and its Affiliates) concerning (a) any direct or
     indirect sale, transfer or other disposition of (i) the Business
     (including the Reinsured Policies and, subject to Section 1.1.3,
     the Transferred Reserve Assets), (ii) the stock or assets of the
     Seller's Subsidiary First Priority Investment Corp., (iii) except
     as otherwise agreed by the Seller and the Purchaser, the 51%
     partnership interest in Markston Investment Management held by
     the Seller's Subsidiary MBL Sales Corporation, or (iv) the stock
     or assets of the Seller's Subsidiary Mutual Benefit Marketing
     Group d/b/a Financial Partners Marketing Group), or (b) any
     acquisition, disposition, merger, tender or exchange offer or
     other form of business combination the acceptance of which would
     be inconsistent with the consummation of the Transactions;
     provided, however, that the Seller will not be required to defend
     against any Action brought, nor will it be precluded from
     entertaining any bid or offer for the Seller or the Business
     required to be entertained by the Court, pursuant to the overbid
     procedures described in Section 4.16 or alternate overbid
     procedures mandated by the Court.  Within five Business Days of
     the Seller's receipt of any such inquiries, proposals, offers or
     discussions, the Seller will provide the Purchaser with a written
     notice of all relevant details of any such inquiries, proposals,
     offers or discussions.  Compliance with this Section 4.4 will not
     relieve the Seller of any other express or implied obligations
     under this Agreement, the Ancillary Agreements, or Applicable
     Law.

4.5  Financial Statements and Reports.  As promptly as
     practicable after each calendar quarter and year ending between
     the date hereof and the Closing Date, the Seller will deliver to
     the Purchaser true and complete copies of the GAAP basis and SAP
     basis financial statements prepared by the Seller for the quarter
     then ended and audited GAAP basis and SAP basis financial
     statements, together with the notes thereto and the unqualified
     report of Coopers & Lybrand L.L.P. thereon, for each year then
     ended.  The Seller will continue to prepare in the ordinary
     course consistent with past practice and will deliver, as soon as
     available, to the Purchaser, true and complete copies of such
     other financial statements and reports, or analyses as may be
     prepared or received by the Seller related to the Business, the
     Reinsured Policies or the Transferred Assets, including normal
     internal reports (such as those reflecting monthly cash flow,
     surrenders, assets under administration, operations expense, head


<PAGE>   31

     count and claims).

4.6  Intentionally Deleted.

4.7  Reinsurance Agreements.  Prior to the Closing Date, the
     Seller will either (a) enter into a legal, valid and binding
     written agreement embodying the terms of any oral Outward
     Reinsurance Agreement described in Section 2.14.1 of the Seller's
     Disclosure Schedule, or (b) transfer the Policies covered by any
     such oral agreement to a legal, valid and binding written Outward
     Reinsurance Agreement with another reinsurer.  The Seller will
     use its commercially reasonable efforts to cause each of the
     Outward Reinsurance Agreements and Inward Reinsurance Agreements
     listed on Sections 2.14.1 and 2.14.2, respectively, of the
     Seller's Disclosure Schedule to continue to be in full force and
     effect and to be assigned to ANLIC on the Closing Date (and, if
     applicable, to subsequently be partially assigned by ANLIC to
     First SunAmerica with respect to the New York Reinsured Policies
     on the New York Assumption Date), including by obtaining any
     necessary consent to effect such assignments.  Such assignment
     must be on terms identical to those currently in effect, except,
     if required to effect such assignment, with an adjustment of the
     applicable premium, in connection with the consummation of the
     Transactions.  In lieu of the Seller effecting such an assignment
     of any Outward Reinsurance Agreement, the Seller may enter into
     an agreement with a substitute reinsurer (each, a "Substitute
     Outward Reinsurer") that is identical in all material respects,
     other than the applicable premium, to the original Outward
     Reinsurance Agreement (each, a "Substitute Outward Reinsurance
     Agreement") and that is assignable to ANLIC as of the Closing
     Date (and, if applicable, may subsequently be partially assigned
     by ANLIC to First SunAmerica relating to the New York Reinsured
     Policies on the New York Assumption Date).  Each Substitute
     Outward Reinsurer must have a rating, as of the date of the
     Substitute Outward Reinsurance Agreement and as of the Closing
     Date, of "A" or better by both Standard & Poor's Ratings Group
     and Moody's Investor Service, Inc.

4.8  Expenses.  Subject to Sections 4.14, 4.15, 4.16 and 4.22 and
     except as otherwise expressly provided in this Agreement, the
     parties to this Agreement will bear their respective expenses
     incurred in connection with the preparation, execution and
     performance of this Agreement and the Transactions, including all
     fees and expenses of Representatives; provided, however, that
     (a) the Seller and the Purchaser will share equally the cost of
     the filing fees in connection with the filings with the FTC and
     the DOJ under the HSR Act with respect to the Transactions;
     (b) the Seller will pay the cost of, and reimburse the Purchaser
     for the Purchaser's actual out-of-pocket costs (other than fees
     and expenses of Representatives) relating to, obtaining required
     Permits for the implementation of this Agreement and the
     Ancillary Agreements from Governmental Authorities and the actual
     out-of-pocket costs of providing Policyholder notices and, with
     the exception of the expenses described in (c), otherwise
     implementing this Agreement and the Ancillary Agreements in
     accordance with their respective terms; and (c) the Purchaser
     will pay the costs of, and reimburse the Seller for the Seller's
     actual out-of-pocket costs (other than fees and expenses of
     Representatives) relating to, the filing and mailing of the
     certificates of assumption for the Reinsured Policies.
     Notwithstanding the foregoing, if it is commercially reasonable
     to do so, the Seller will include the Policyholder notices with
     respect to the certificates of assumption with its mailing of
     other Policyholder notices, thereby reducing additional mailing
     costs with respect to the certificates of assumption.

4.9  Publicity.  From and after the date hereof and until the
     effectiveness of this Section 4.9 is terminated pursuant to
     Section 5.9, except as may be required by (a) Applicable Law (in
     the reasonable opinion of counsel), (b) the applicable rules or
     regulations of, or any listing agreement with, a national or
     foreign securities exchange or (c) any order of any Governmental


<PAGE>   32

     Authority of competent jurisdiction, in which case the Seller and
     the Purchaser, as the case may be, will use commercially
     reasonable efforts to allow the other party sufficient time,
     consistent with such obligations, to review the nature of such
     legal obligations and to comment upon such disclosure prior to
     publication, and except for discussions and filings with
     Governmental Authorities and rating agencies, neither the Seller
     or its Affiliates or Representatives, on the one hand, nor the
     Purchaser or its Affiliates or Representatives, on the other
     hand, will make, or cause to be made, any press release or public
     announcement in respect of this Agreement or the Ancillary
     Agreements or the Transactions or otherwise communicate with news
     or other media in respect thereof, without the prior written
     consent of the other party.  The Seller and the Purchaser will
     cooperate as to the timing and contents of any press release or
     public announcement.

4.10 Contact with Employees, Policyholders and Other Constituencies.

     (a)  After reasonable consultation with the Seller regarding the
     timing and content of such communication, the Purchaser (and its
     Representatives) will be entitled to contact and communicate with
     (i) the employees, customers, policyholders, suppliers, creditors
     and brokers of the Seller and its Subsidiaries, and (ii) the
     Reinsurers, NOLHGA and other parties to the Rehabilitation
     Documents in connection with the Transactions.  The Purchaser
     will make commercially reasonable efforts to allow a
     Representative of the Seller to attend or otherwise be present
     during any contact or communication covered by this
     Section 4.10(a).  Prior to the Closing Date, except in compliance
     with procedures and a "script" or other content outline mutually
     agreed by the Seller and the Purchaser, neither the Seller nor
     any of its Subsidiaries will contact or communicate with any of
     the Policyholders with respect to the Transactions without the
     prior written consent of the Purchaser; provided, however, that
     the Seller and its Subsidiaries may contact or communicate with
     any of the Policyholders on any other matter in the ordinary
     course of business consistent with past practice without the
     prior written consent of the Purchaser.

     (b)  Without the prior written consent of the Seller, neither the
     Purchaser nor any of its Affiliates will directly solicit for
     employment any of the employees of the Seller with whom the
     Purchaser has had direct verbal or written communications during
     the investigation of and negotiations with the Seller, except for
     such employees who have been involuntarily terminated by the
     Seller.

4.11 Amendments to Plan and Other Orders.  The Seller and the
     Purchaser will cooperate with each other in preparing and filing
     with the Court as part of the Petition for Court Approval as
     promptly as practicable after execution of this Agreement, the
     proposed amendments to the Plan and the Rehabilitation Documents
     and motions requesting certain additional orders to effectuate
     and confirm the items described in Exhibit I by the respective
     dates indicated therein.

4.12 Funding of Policy Enhancements.

     4.12.1    Recognition of Liability.  As of the Closing, the
     Seller will recognize in its financial statements as a liability
     under insurance policies an amount equal to the Policy
     Enhancements Amount to fund the Policy Enhancements, and will
     record an appropriate liability on the Seller's balance sheet for
     such purpose.  On or before ten days prior to the Closing, the
     Seller will deliver to the Purchaser a calculation of the Policy
     Enhancements Amount.

     4.12.2    Allocation of Policy Enhancements to Policyholders.

     (a)  The Policy Enhancements will be credited at each Scheduled
     Vesting Date, or upon death, if sooner, as specified in the


<PAGE>   33

     Policy Enhancements Procedures.

     (b)  The Policy Enhancement for an individual Policyholder at a
     Scheduled Vesting Date will be the greater of (i) the guarantee
     to be made to that individual Policyholder under the terms of the
     Policy Enhancements Endorsement provided to such Policyholder;
     and (ii) the individual Policyholder's Policy Enhancement
     calculated in accordance with the Settlement Agreement but
     assuming that the total Policy Enhancements credited or paid to
     all eligible Policyholders on such Scheduled Vesting Date is the
     Guaranteed Policy Enhancement Amount as of such date (calculated
     for this purpose without including the aggregate amount of Policy
     Enhancements paid as death benefits with respect to deaths
     reported prior to such Scheduled Vesting Date and after the
     immediately preceding Scheduled Vesting Date, if any).  The
     guarantee to be made to an individual Policyholder pursuant to
     clause (i) above will be determined by ANLIC or First SunAmerica,
     as applicable, based on the Maximum Guaranteed Policy Enhancement
     Amount, the lapse assumptions used in the "Actuarial Analysis of
     MBL Life Assurance Corporation projected as of June 30, 1998"
     prepared by Coopers & Lybrand L.L.P., and the preliminary
     calculation of Impairments delivered pursuant to Section 4.17.
     Such guarantee for an individual Policyholder will in no event
     exceed the preliminary calculation of Impairment for that
     Policyholder.  Such guarantee, once established, may be reduced
     to consider net withdrawals by a Policyholder consistent with the
     terms of the Settlement Agreement.  The Seller will have the
     right to review information that it reasonably requests regarding
     the calculation of the individual Policyholder guarantees as well
     as the calculation of the Policy Enhancements credited or paid at
     each Scheduled Vesting Date.  Upon the death of a Policyholder,
     the Policy Enhancement to be credited or paid to such
     Policyholder will be the full remaining amount, whether vested or
     unvested, due such Policyholder as of the end of the previous
     calendar quarter.

     (c)  If all or any portion of any of the DAC Election Escrow
     Amount (or DAC Reduction Escrow Amount, as applicable), the COLI
     DAC Election Escrow Amount or the Policy Enhancements
     Endorsements Escrow Amount is released to the Seller prior to the
     final Scheduled Vesting Date, the Seller will deliver or cause to
     be delivered to ANLIC and First SunAmerica, not less than 60 days
     preceding the next Scheduled Vesting Date, cash in an amount
     equal to the applicable portion of the amounts released from such
     escrows that are to be added to the Policy Enhancements Amount in
     accordance with the Settlement Agreement (the "Additional Policy
     Enhancements Amount").  The Purchaser will cause ANLIC and First
     SunAmerica to credit (or, in the case of Eligible Policies that
     are Restructured Contracts in Pay Status, pay) the Additional
     Policy Enhancements Amount as of the next Scheduled Vesting Date
     to individual Eligible Policies in proportion to the respective
     Impairments of Eligible Policies remaining in effect on such
     Scheduled Vesting Date.  The amount and application of the
     Additional Policy Enhancements Amount (i) will be fully
     incremental to the amount to be credited (or paid, as the case
     may be), pursuant to paragraph (b) above; and (ii) will not
     affect the calculation of the guarantee described in clause (i)
     of paragraph (b) above.  Except for the obligation to credit (or
     pay, as the case may be) to policyholders of Eligible Policies
     amounts delivered to ANLIC or First SunAmerica as expressly set
     forth in this paragraph (c), none of the Purchaser or any of its
     Affiliates will have any obligation in connection with the
     Additional Policy Enhancements Amount, including the calculation
     thereof or the terms or timing of the release of funds from the
     COLI DAC Escrow Account.

     4.12.3    No Set-off.  The Purchaser agrees that it will have no
     right to set-off against its obligations under this Section 4.12
     any Damages awarded the Purchaser in any Action arising out of or
     relating to this Agreement.

     4.12.4    Endorsements to Eligible Policies.  The Seller will


<PAGE>   34

     prepare and file all necessary endorsements and use commercially
     reasonable efforts to obtain all necessary Permits to assure
     that:  (a) each Eligible Policy that is a Reinsured Life Policy
     has an endorsement providing that the Policy Enhancement for
     which such Policy is eligible will be credited to the Account
     Value of such Policy; and (b) each Eligible Policy that is a
     Reinsured Annuity Contract has and endorsement providing that the
     Policy Enhancement for which such Policy is eligible will be
     credited to the Account Value of such Policy (or, in the case of
     Eligible Policies that are Restructured Contracts in Pay Status,
     paid to the Policyholder) either (i) by the Seller, if the
     Closing does not occur and the Policy is not ceded to a reinsurer
     prior to December 31, 1999, or (ii) by ANLIC or First SunAmerica,
     as the case may be, if the Closing takes place but only if the
     Policyholder selects a Replacement Policy in accordance with
     Section 5.10 (collectively, the "Policy Enhancements
     Endorsements").  The Seller will cooperate with and assist the
     Purchaser in filing endorsements and obtaining necessary Permits
     with respect to the Policy Enhancements for the applicable
     Replacement Policies.

     4.12.5    Policy Enhancements Endorsements Escrow Amount.

     (a)  If the Seller has not obtained, at least five Business Days
     prior to the Closing Date, all Permits necessary to attach the
     Policy Enhancements Endorsements in all jurisdictions, the Seller
     will deposit the Policy Enhancements Endorsements Escrow Amount
     in the Policy Enhancements Endorsements Escrow Account
     established under the Escrow Agreement.  The "Policy Enhancements
     Endorsements Escrow Amount" means the dollar amount equal to the
     sum of (i) 1.5% of the Account Balances (or statutory reserves in
     the case of Restructured Contracts in Pay Status) as of the
     Calculation Date of those Reinsured Annuity Contracts that are
     Eligible Policies for which all necessary Permits to attach the
     Policy Enhancements Endorsements have not been obtained by the
     Seller prior to such date; plus (ii) 3.5% of the Account Balances
     as of the Calculation Date of those Reinsured Life Policies that
     are Eligible Policies for which all necessary Permits to attach
     the Policy Enhancements Endorsements have not been obtained by
     the Seller prior to such date.

     (b)  If the Seller obtains all Permits necessary to attach the
     Policy Enhancements Endorsements from additional jurisdictions
     within 60 days after the Closing Date, the Seller will be
     entitled to a payment out of the Policy Enhancements Endorsements
     Escrow Account of 100% of such portion of the Policy Enhancements
     Endorsements Escrow Amount that relates to the additional
     jurisdictions for which such Permits have been obtained during
     such period, together with net accrued interest or earnings on
     such amount.  If the Seller obtains all Permits necessary to
     attach the Policy Enhancements Endorsements for additional
     jurisdictions not sooner than 60 days but no later than 90 days
     after the Closing Date, the Seller will be entitled to a payment
     out of the Policy Enhancements Endorsements Escrow Account of 75%
     of such portion of the Policy Enhancements Endorsements Escrow
     Amount that relates to the additional jurisdictions for such
     Permits have been obtained during such period, together with net
     accrued interest or earnings on such amount.  If the Seller
     obtains all Permits necessary to attach the Policy Enhancements
     Endorsements for additional jurisdictions not sooner than 90 days
     but no later than 120 days after the Closing Date, the Seller
     will be entitled to payment out of the Policy Enhancements
     Endorsements Escrow Account of 50% of such portion of the Policy
     Enhancements Endorsements Escrow Amount that relates to the
     additional jurisdictions for which such Permits have been
     obtained during such period, together with net accrued interest
     or earnings on such amount.  All amounts remaining in the Policy
     Enhancements Endorsements Escrow Account 120 days after the
     Closing Date and not payable to the Seller pursuant to the
     foregoing sentences of this Section 4.12.5(b) will be released to
     the Purchaser and the Seller will continue to use commercially
     reasonable efforts to obtain all remaining Policy Enhancements


<PAGE>   35

     Endorsements.

4.13 Endorsement of Certain Associations.  The Seller will
     cooperate with the Purchaser in obtaining and/or maintaining the
     endorsements of the associations representing Policyholders.

4.14 Break-Up Fee; Expense Reimbursement.

     4.14.1    Break-Up Fee. If (a) this Agreement has been terminated
     for any reason (including a termination by the Purchaser pursuant
     to Section 10.3.1(c), a failure to obtain any consent, approval
     or order of any Person or Governmental Authority that is required
     for the Seller to lawfully consummate the Transactions, or a
     failure to satisfy any of the other conditions in Section 6)
     other than (i) a breach by the Purchaser of its obligations
     hereunder; (ii) a failure by the Purchaser to satisfy any of the
     conditions in Section 6.3 in accordance with the terms thereof;
     or (iii) a failure to satisfy any of the conditions in
     Section 6.2.1, Section 6.2.2 (but excluding for purposes of this
     clause (iii) any failure of such condition relating to an
     Applicable Law of or Action brought by any New Jersey
     Governmental Authority or the Commissioner in any of her
     capacities), or Section 6.2.8 (but excluding for purposes of this
     clause (iii) any failure to obtain any Permit from a New Jersey
     Governmental Authority or the Commissioner in any of her
     capacities), provided that the failure to satisfy any of the
     conditions specified in clauses (ii) and (iii) above is not
     waived by the Purchaser or caused by the failure of the Seller to
     fulfill its obligations under this Agreement; and (b) the Seller
     has entered into any binding agreement with one or more third
     parties prior to October 1, 1999 regarding an Acquisition
     Proposal, the Seller will promptly, but not later than five
     Business Days after the later of such termination or the date the
     Seller enters into any such agreement(s), pay $10,000,000 in same
     day funds to the Purchaser.

     4.14.2    Expense Reimbursement. On July 14, 1998, the Seller
     deposited $2,500,000  into the Expense Reimbursement Escrow
     Account.  If this Agreement has been terminated for any reason
     (including a termination by the Purchaser pursuant to
     Section 10.3.1(c), a failure to obtain any consent, approval or
     order of any Person or Governmental Authority that is required
     for the Seller to lawfully consummate the Transactions, or a
     failure to satisfy any of the other conditions in Section 6)
     other than a breach by the Purchaser of its obligations hereunder
     or the failure of the Purchaser to fulfill when due any of the
     conditions in Section 6.3, the Purchaser will be entitled to
     payment of said amount out of the Expense Reimbursement Escrow
     Account.  Such amount constitutes an agreed upon amount in
     consideration of the indirect costs and direct out-of-pocket
     expenses incurred by the Purchaser and its Representatives in
     connection with the Purchaser's due diligence investigation of
     the Business and the preparation and negotiation of this
     Agreement.  Such amount will be payable to the Purchaser without
     any showing of proof by the Purchaser of the actual incurrence of
     such expenses.

     4.14.3    Cumulative Remedies.  Sections 4.14.1, 4.14.2 and 4.22
     are cumulative, if applicable, and are not mutually exclusive.
     The Seller acknowledges:  (a) its extensive efforts to sell the
     Business and the lengthy bidding process involved in such
     efforts; (b) the complexity of the process of negotiating and
     consummating the Transactions; (c) its belief that the
     Transactions represent a fair purchase price for the Business
     that confers a significant benefit on the Seller and Persons
     having an interest in the Seller; (d) the considerable time and
     expense that the Purchaser has invested and expects to continue
     to invest in the Transactions; (e) the magnitude of the
     Purchaser's anticipated capital commitment if the Transactions
     are consummated; and (f) that without the agreements contained in
     this Section 4.14 and in Sections 4.15, 4.16 and 4.22, the
     Purchaser would not enter into this Agreement.

<PAGE>   36

4.15 Enforcement of Other Agreements.  The Seller has represented
     to the Purchaser that each Person with whom the Seller or its
     Representatives has had negotiations with respect to the purchase
     of the capital stock of the Seller or all or any part of the
     Business, or that submitted bids or indications of interest in
     connection therewith, are subject to confidentiality agreements
     all of which contain the provisions set forth on Schedule 13
     under the heading "unsolicited proposals" and certain of which
     contain the provisions set forth on Schedule 13 under the heading
     "challenges".  The Purchaser has relied on that statement in
     connection with entering into this Agreement.  The Seller will
     take such steps as are reasonably necessary to enforce the
     provisions of such agreements according to their respective terms
     and to prevent and prohibit such "unsolicited proposals" or
     "challenges" from such parties.

4.16 Overbidding Procedures.  Together with the filing of the
     Petition for Court Approval, the Seller will file a motion (which
     motion will request review by the Court on the most expedited
     basis available) with the Court for an order, in form and
     substance reasonably satisfactory to the Purchaser, establishing
     the procedures described below for any party other than the
     Purchaser (each, a "Competitive Bidder") who wishes to make an
     Acquisition Proposal on terms that it considers to be better or
     higher than those set forth in this Agreement to make such a
     proposal (the "Competitive Bid Order").  The Seller will use its
     commercially reasonable efforts to cause the Court to enter the
     Competitive Bid Order as soon as possible.  The Competitive Bid
     Order will include the following conditions and procedures, and
     no other conditions or procedures inconsistent in any material
     respect with the following:

     (a)  Before the Seller may commence discussions with the
     Competitive Bidder, the Competitive Bidder must move to intervene
     in the Court approval proceeding (which motion must include a
     mark-up of this Agreement that the Competitive Bidder would be
     willing to execute without further negotiation) not later than
     the earlier of (i) ten Business Days after the Competitive Bid
     Order has been entered by the Court, and (ii) the date scheduled
     by the Court for the hearing relating to the approval of the
     consummation of the Transactions to be completed at the Closing.

     (b)  The Competitive Bidder cannot be a Person or an Affiliate of
     a Person who (i) participated in the auction process conducted by
     the Seller's investment bankers for the sale of the Seller's
     capital stock or for the sale of all or any part of the Business,
     by receiving non-public information (including a Confidential
     Memorandum similar to the one delivered to the Purchaser)
     regarding the Seller or the Business, and/or submitting one or
     more proposals to acquire the capital stock of the Seller or all
     or any part of the Business, or (ii) is a Class Four Creditor
     that is or has at any time been a party to an agreement with the
     Seller restricting such Class Four Creditor from trading its
     Class Four Claims.

     (c)  The Acquisition Proposal must be with respect to all of the
     Business, including all of the Reinsured Life Policies and
     Reinsured Annuity Contracts.

     (d)  The total after-tax present value to the Seller of the
     Acquisition Proposal must be at least $12,500,000  higher than
     the total after-tax present value to the Company as of the date
     hereof of the Transactions (assuming that the Transactions had
     closed in accordance with their respective terms), as determined,
     based on reasonable and consistent assumptions, by Goldman Sachs
     & Co., the Seller's financial advisor.

     (e)  The other material terms of the Acquisition Proposal,
     including the nature and timing of consideration to the Seller
     and the conditions to closing, must be no less favorable to the
     Seller than the similar terms of the Transactions.

<PAGE>   37

     (f)  The Competitive Bidder must be at least as creditworthy
     (expressed in terms of credit ratings of at least two national
     ratings agencies) as ANLIC.

     (g)  The Acquisition Proposal must be accompanied by the latest
     available certified SAP basis and GAAP basis financial statements
     of the Competitive Bidder and such subsequent financial
     statements and other financial information that would enable the
     Seller to evaluate the Competitive Bidder's ability to consummate
     the Acquisition Proposal.

     (h)  The Competitive Bidder will have 10 Business Days after it
     submits the mark-up referred to in paragraph (a) above to conduct
     due diligence, after which it must, within three Business Days,
     submit to the Seller its best and last proposed purchase price
     and other terms.

     (i)  The Competitive Bidder will secure and deliver to the
     Seller, not later than the date it submits the mark-up referred
     to in paragraph (a) above, a surety bond in an amount equal to
     10% of the ceding commission under the Acquisition Proposal as a
     guarantee of payment of such ceding commission.

     (j)  If one or more Acquisition Proposals meet all of the above
     requirements, the Seller will select the highest and best to
     consider.  If the Seller commences consideration of such
     Acquisition Proposal, the Seller will, within ten Business Days,
     deliver to Purchaser a copy of the executed definitive agreement
     relating to such Acquisition Proposal, which will provide that
     the Seller may not amend or modify such agreement in any material
     respect except in a manner that would make it more favorable to
     the Seller and which will be subject to the Purchaser's right to
     match as set forth in this paragraph.  The Seller will be
     obligated to terminate such definitive agreement and proceed to
     consummate the Transactions with the Purchaser if the Purchaser
     agrees, within ten Business Days of its receipt of the definitive
     agreement relating to the Acquisition Proposal, to modify this
     Agreement to meet (without any requirement that the Purchaser
     exceed such terms) the material terms thereof.

     (k)  If the Purchaser does not elect to meet the material terms
     of the Acquisition Proposal as finally proposed by the
     Competitive Bidder pursuant to paragraphs (h) and (j) above, the
     Purchaser will be entitled, upon notice to the Seller to such
     effect, to immediate payment of the amounts required pursuant to
     Sections 4.14.1, 4.14.2 and 4.22.

4.17 Calculation of Impairments.  As soon as reasonably
     practicable, but not later than the earlier of (i) October 15,
     1998, and (ii) fifteen days after the end of the second calendar
     month preceding the Closing Date (or, if the Closing Date is
     December 31, 1998, November 30, 1998), the Seller will deliver to
     the Purchaser a preliminary calculation of the Impairment as of
     the last day of the month immediately preceding the date of
     delivery for each Reinsured Policy and each other Eligible
     Policy, which calculation will include the effect of the Account
     Values True-Up Amount that has accrued through the date of
     calculation, together with all supporting documentation used by
     the Seller as a basis for its calculation.

4.18 COI.

     4.18.1    Modified COI Scale.  The Seller will use its
     commercially reasonable efforts to file and obtain all Permits
     necessary to permit changes to mortality charges as set forth
     below (the "Modified COI Scale").  Mortality charges may be
     changed on the policy anniversary beginning 15 months after the
     Rehabilitation Period Termination Date, to scales reflecting the
     greater of (a) actual mortality experience and (b) anticipated
     mortality experience based on the following formulas:

     ----------------------------------------------------------------------


<PAGE>   38

-
     |            (A)                           |         (B)
|
     ----------------------------------------------------------------------
-
     | Aggregate Account Values of all          |
|
     | Reinsured Life Policies in effect        |
|
     | One Year following the Rehabilitation    |    Increase in COIs
|
     | Period Termination Date as a percent of  |
|
     | aggregate Account Values on 12/31/97     |
|
     ----------------------------------------------------------------------
-
     |             95% or more                  |          0%
|
     |                                          |
|
     |             Less than 95%                | .7% for each 1% that the
|
     |                                          | Aggregate Account Values
|
     |                                          | percentage in column (A)
|
     |                                          | is less than 95%
|
     ----------------------------------------------------------------------
-

     Such amounts may be further adjusted to reflect items such
     as: (i) an increase or anticipated increase in the
     reinsurance rates charged by Outward Reinsurers where such
     increase is made subsequent to the Closing Date and not
     considered in the Outward Reinsurance Adjustment Amount;
     (ii) changes in taxation; and (iii) changes in Applicable
     Laws that increase the cost of administering the Reinsured
     Policies.  In no event will any change in the Cost of
     Insurance scale increase the Cost of Insurance rate for any
     Reinsured Policy above the guaranteed COI rate contained in
     such Reinsured Policy.

     4.18.2    COI Adjustment Amount.  The COI Adjustment Amount will
     be calculated by the Purchaser as of the first anniversary of the
     Rehabilitation Period Termination Date and such calculation,
     together with a detailed statement explaining how such
     calculation was made, will be delivered to the Seller within 30
     days after the first anniversary of the Rehabilitation Period
     Termination Date.  The Seller will then have ten Business Days to
     dispute the Purchaser's calculation.  If the Seller does not give
     timely notice of any dispute regarding the Purchaser's
     calculation, the Purchaser will be entitled to payment of such
     amount out of the COI Adjustment Escrow Account.  If the Seller
     gives timely notice of any dispute regarding the Purchaser's
     calculation, the Purchaser will file a notice of its COI
     Adjustment Escrow Claim pursuant to the Escrow Agreement, and the
     parties will proceed to resolve such dispute by submitting such
     dispute to the Independent Party in accordance with Section 8.5.

4.19 Acquisition Agreement Regarding Broker/Dealer.  The Seller
     and the Purchaser will negotiate in good faith to reach an
     agreement prior to the Closing for the acquisition by the
     Purchaser or any Subsidiary designated by the Purchaser of the
     assets of the Seller's Subsidiaries First Priority Investment
     Corp. and Mutual Benefit Marketing Group d/b/a Financial Partners
     Marketing Group for a purchase price of $125,000.

4.20 Grandfathering Ruling.  On or before the date on which the
     Petition for Court Approval is filed, the Seller will file a
     request for a ruling which describes the facts associated with


<PAGE>   39

     the Transactions in a manner reasonably satisfactory to the
     Purchaser, and thereafter will use its best efforts to obtain, as
     promptly as possible a private letter ruling from the IRS (the
     "Grandfathering Ruling"): (a) describing the modification or
     restructuring of the Reinsured Life Policies that has or will
     have occurred as part of the rehabilitation of Mutual Benefit or
     the Seller pursuant to the Plan, including any modifications
     occurring pursuant to the Settlement Agreement or this Agreement
     (and including the attachment of the Policy Enhancements
     Endorsements to the Reinsured Life Policies), and (b) concluding,
     based on representations provided by the Seller (which
     representations will be reasonably acceptable to the Purchaser
     when submitted to the IRS) that the assumption of the Reinsured
     Life Policies by the Purchaser and its Affiliates pursuant to
     this Agreement (i) will not have an effect on the date that the
     Reinsured Life Policies were issued, entered into, or purchased
     for purposes of Sections 72, 101(f), 264, 7702 and 7702A of the
     Code, and (ii) will not require retesting or the start of a new
     test period under Sections 264(c)(1), 7702(f)(7)(B)-(E) and
     7702A(c); and (c) referring to the application of Rev. Proc. 92-
     57 to the Policy Enhancements and the Additional Policy
     Enhancements without negative comment.  The Purchaser will be
     provided an opportunity to participate in all material
     communications with the IRS with respect to the Grandfathering
     Ruling through its designated Representative, and the Seller will
     not withdraw the request for the Grandfathering Ruling without
     the Purchaser's written consent, which consent will not be
     unreasonably withheld.  The Purchaser will cooperate with the
     Seller in obtaining the Grandfathering Ruling on a timely basis.

4.21 Additional Enhancements DAC Amount.  The Additional
     Enhancements DAC Amount will be calculated by the Seller as of
     each date on which any Additional Policy Enhancement Amount is
     paid by the Seller to the Purchaser pursuant to
     Section 4.12.2(c), and such calculation, together with a detailed
     statement explaining how such calculation was made, will be
     delivered to the Purchaser within 30 days of such payment date.
     The Seller will then have 30 days to pay to the Purchaser the
     Additional Enhancements DAC Amount, and if such amount is not so
     paid, Purchaser will be entitled to payment of such amount out of
     the Claims Escrow Account; provided, that if the payment to the
     Purchaser in connection with the release to the Seller of the
     COLI DAC Escrow Amount or the Policy Enhancements Endorsements
     Escrow Amount occurs in the tax year of the Seller which includes
     the Closing Date and at the time of such payment there has not
     been a Final Determination that the Seller is qualified to make
     the Election, then the Seller may pay the Additional Enhancements
     DAC Amount into the DAC Tax Indemnity Account as an addition to
     the DAC Election Escrow Amount which will be released only under
     the terms of Section 7.1 hereof; and provided, further, that the
     Additional Enhancements DAC Amount will not be payable if, and to
     the extent that, pursuant to the Letter Ruling (but no other form
     of Final Determination) and as a result of the Election (or a
     comparable election pursuant to Treas. Reg. Section 1.848-2(i)(4)
     for the year in which such payment date occurs), the Seller
     demonstrates to the Purchaser's reasonable satisfaction that
     there will be an additional "reduction amount," as determined
     under the Allocation Regulations, available to the Purchaser or
     its Affiliates that is attributable to the payment and receipt of
     the Additional Policy Enhancements Amount.

4.22 Reimbursable Transition Expenses.  Prior to the Closing
     Date, the Purchaser will incur certain transition expenses
     relating to the conversion of its computer and other systems,
     including data mapping and conversion testing in preparation for
     the acquisition of the Business.  Before the Purchaser incurs any
     such expenses, the Purchaser will notify the Seller of the
     expenditure.  The Seller will then have five Business Days to
     approve or reject such expenditure.  If the Seller approves such
     expenditure, the Seller will immediately deposit a sum equal to
     the amount of such expenditure into the Expense Reimbursement
     Escrow Account.  If this Agreement has been terminated for any


<PAGE>   40

     reason (including a termination by the Purchaser pursuant to
     Section 10.3.1(c), a failure to obtain any consent, approval or
     order of any Person or Governmental Authority that is required
     for the Seller to lawfully consummate the Transactions, or a
     failure to satisfy any of the other conditions in Section 6),
     other than a breach by the Purchaser of its obligations hereunder
     or the failure of the Purchaser to fulfill when due any of the
     conditions set forth in Section 6.3, the Purchaser will be
     entitled to payment of all such approved expenditures out of the
     Expense Reimbursement Escrow Account upon presentation by the
     Purchaser of invoices or other reasonable evidence of such
     expenditures.  If the Seller rejects such expenditure and the
     Purchaser elects to incur it in any event, then the Purchaser
     will not be entitled to reimbursement for such expenditure.  Upon
     the Closing of the Transactions, the Seller will be entitled to
     payment of all amounts in the Expense Reimbursement Escrow
     Account (including amounts deposited pursuant to Section 4.14.2).

4.23 Transfer of Class Four Claims.  On the date hereof, the
     Seller has delivered to the Purchaser letter agreements executed
     by certain Class Four Creditors providing, among other things,
     for such Class Four Creditors' support of the provisions of
     Sections 4.14, 4.15 and 4.16.  Following the date hereof, the
     Seller will seek to obtain the consent of the Class Four
     Creditors to the consummation of the Transactions at the Closing
     and the other matters set forth in Exhibit I.  In each case,
     these documents provide for the agreements set forth therein to
     be binding on the Class Four Creditors' successors and assigns
     and require the Class Four Creditors to deliver a written
     confirmation of any successor or assign of a Class Four Claim
     acknowledging that the terms of such documents are binding on
     such Person to the same extent as if a signatory thereto.  In
     furtherance thereof, the Seller will instruct the transfer agent
     of such claims not to effect the transfer of any such claims
     without first being provided such confirmation.

4.24 Delivery of Updated Policy Lists.  On or prior to the
     Calculation Date, the Seller will deliver to the Purchaser
     correct and complete lists as of such date of each Reinsured Life
     Policy that may, in the absence of the Grandfathering Ruling, be
     deemed to be a MEC as a result of the consummation of the
     Transactions if (a) the policyholder makes annual premium
     payments in an amount equal to or greater than the average annual
     premium payment made with respect to such Policy during the four
     year period ending on the Calculation Date; and (b) if the
     policyholder makes annual premium payments in an amount equal to
     or greater than the premium payments made with respect to such
     Policy for the 12 month period ending on the Calculation Date;
     provided, however, if the Grandfathering Ruling is obtained prior
     to the Calculation Date, the Seller will not be required to
     deliver the lists described in this Section 4.24.

                       5.   CONTINUING COVENANTS

5.1  Continuing Access Obligations.

     5.1.1     Access Obligations During Transition Period.  Following
     the Closing Date until the Transition Period Termination Date,
     the Seller will continue to provide the Purchaser with all rights
     of access as provided in Section 4.3.  On the Transition Period
     Termination Date, the Seller will deliver to the location(s)
     designated by the Purchaser for such delivery, the originals of
     all Books and Records.

     5.1.2     Continuing Access Obligations of the Purchaser.
     Following the Transition Period Termination Date, the Purchaser
     will (a) allow the Seller, upon reasonable prior notice and
     during regular business hours, through its Representatives, the
     right, at the Seller's expense, to examine and make copies of the
     Books and Records delivered to the Purchaser on the Transition
     Period Termination Date, for any reasonable business purpose
     including the preparation or examination of Tax returns, filings


<PAGE>   41

     with Governmental Authorities and financial statements and the
     conduct of any Action whether pending or threatened, and
     (b) maintain such Books and Records for not less than seven years
     after the Closing Date for the Seller's examination and copying.
     Access to such Books and Records will be at the Seller's expense
     and may not unreasonably interfere with the Purchaser's or any
     successor company's business operations.

     5.1.3     Continuing Access Obligations of the Seller.  Following
     the Transition Period Termination Date, the Seller will (a) allow
     the Purchaser, upon reasonable prior notice and during regular
     business hours, through its Representatives, the right, at the
     Purchaser's expense, to examine and make copies of any documents,
     filings, information, records and lists relating to the Business,
     the Reinsured Policies, the Transferred Assets or the Excluded
     Policies retained by the Seller (the "Retained Books and
     Records"), for any reasonable business purpose, including (i) the
     preparation or examination of Tax Returns, filings with any
     Governmental Authority and financial statements and (ii) the
     conduct of any Action, whether pending or threatened, concerning
     the conduct of the Business prior to the Closing Date and
     (b) maintain such Retained Books and Records for not less than
     seven years after the Closing Date for the Purchaser's
     examination and copying; provided that if the Seller liquidates
     or dissolves prior to such date, Seller will deliver all such
     Retained Books and Records to the Purchaser.  Access to such
     Retained Books and Records will be at the Purchaser's expense and
     can not unreasonably interfere with the Seller's or any successor
     company's business operations.

5.2  Distribution of Class Four Creditor Value Share;
     Liquidation.

     5.2.1     Provision of Adequate Reserves.The Seller will not
     distribute any amount in respect of the Class Four Creditor Value
     Share or otherwise distribute assets in liquidation without
     providing and maintaining adequate reserves to satisfy the
     Seller's obligations under this Agreement and the Ancillary
     Agreements and all of the Seller's other liabilities and
     obligations, whether known or contingent.  The Seller will not
     dissolve or otherwise cease its corporate existence prior to the
     end of the sixth month following the Transition Period
     Termination Date.

     5.2.2     Distribution of Class Four Creditor Value Share.
     Without limiting the generality of Section 5.2.1 above, the
     distribution of the Class Four Creditor Value Share will be
     subject to the provisions of this Section 5.2.2.

     (a)  The Seller will not make any distribution of the Class Four
     Creditor Value Share prior to the Certified Statement Date (as
     defined below).  The "Certified Statement Date" means the earlier
     to occur of (i) the date of delivery to the Purchaser of the
     Final Closing Date Statement, or (ii) the date of delivery to the
     Purchaser of the Certified Estimated Closing Date Statement (as
     defined below); provided, however, that the Certified Statement
     Date will in no event be earlier than the Closing Date; further
     provided, that the Seller may only deliver the Certified
     Estimated Closing Date Statement on or before the 15th day
     following the Closing Date.  The "Certified Estimated Closing
     Date Statement" means the Estimated Closing Date Statement as
     reviewed and certified by Coopers & Lybrand L.L.P to accurately
     set forth the actual amount (rather than the Seller's good faith
     estimate) as of the Calculation Date of each of the amounts
     required to be set forth in the Estimated Closing Date Statement.
     Following the Certified Statement Date (and except as provided in
     Section 5.2.2(b)), the Seller may only distribute that portion of
     the Class Four Creditor Value Share that exceeds the Reserved
     Value Share (as defined below).  The "Reserved Value Share" means
     the sum of $285 million plus (x) if the Certified Statement Date
     is the date of delivery of the Final Closing Date Statement, an
     amount (which will not be less than zero) equal to the remainder


<PAGE>   42

     of (1) the Reserve minus the Ceding Commission, each as
     determined pursuant to the Final Closing Date Statement, minus
     (2) the Value (as of the Closing Date) of the Transferred Reserve
     Assets transferred to ANLIC on the Closing Date, or (y) if the
     Certified Statement Date is the date of delivery of the Certified
     Estimated Closing Date Statement, an amount (which will not be
     less than zero) equal to the remainder of (1) the Reserve minus
     the Ceding Commission, each as determined pursuant to the
     Certified Estimated Closing Date Statement, minus (2) the Value
     (as of the Closing Date) of the Transferred Reserve Assets
     transferred to ANLIC on the Closing Date.  The Reserved Value
     Share will be retained in cash and Cash Equivalents by the
     Seller.

     (b)  After (i) the earlier to occur of (A) the date the Purchaser
     delivers a notice of disagreement with the Final Closing Date
     Statement or (B) the end of the period provided for the
     Purchaser's review thereof as provided in Section 1.3.1, and
     (ii) the Seller's payment to ANLIC out of the Reserved Value
     Share of all undisputed amounts owing to ANLIC pursuant to
     Section 1.3.3, the Seller may make a distribution to the Class
     Four Creditors out of the remaining portion of the Reserved Value
     Share equal to the remainder of (x) the remaining portion of the
     Reserved Value Share, minus (y) the amount claimed as owing to
     ANLIC in such notice of disagreement to the extent disputed by
     the Seller.  Upon final resolution of such disputes and payment
     out of the remaining portion of the Reserved Value Share to ANLIC
     of the full amount owing to ANLIC with respect thereto, the
     Seller may make an additional distribution to the Class Four
     Creditors equal to any remaining portion of the Reserved Value
     Share.

     5.2.3     Restriction on Liquidating Distributions.  Without
     limiting the generality of Section 5.2.1 above, except as
     expressly contemplated pursuant to Section 5.2.2 above, the
     Seller will not distribute any amount in respect of the Class
     Four Creditor Value Share or otherwise distribute assets in
     liquidation prior to the Transition Period Termination Date.

5.3  Termination of Excluded Annuity Contracts.  If approved by
     the Court pursuant to Section 4.11, the Seller will make
     commercially reasonable efforts to terminate all Excluded Annuity
     Contracts (other than Variable Annuities that are Contracts in
     Pay Status) at the end of the Rehabilitation Period.

5.4  Termination of Wrapped Accumulation Contracts.  The Seller
     will, promptly after the termination of the Wrapped Accumulation
     Contracts, apply the surplus contained in Seller's Separate
     Account B as carried on the Seller's books on such date to such
     policies in compliance with the terms of the Plan and the
     relevant Rehabilitation Documents.

5.5  Marketing Support.  The Seller will: (a) provide the
     Purchaser with any information reasonably requested by the
     Purchaser or its Representatives with respect to the owners and
     holders of Wrapped Accumulation Contracts, Excluded Annuity
     Contracts and Variable Annuities (collectively, the "Terminating
     Policies"); (b) not provide any information with respect to the
     Terminating Policies to any other Person other than as necessary
     for the administration of the Terminating Policies; and
     (c) otherwise cooperate fully with the Purchaser in its marketing
     efforts to offer Replacement Policies to all owners and holders
     of Terminating Policies subject to the terms of the Transition
     Services Agreement.

5.6  Sufficiency of Staff and Assets.  The Seller will continue
     to maintain sufficient levels of employees and assets (whether
     tangible or intangible) and all Permits necessary to perform the
     services contemplated by the Transition Services Agreement.

5.7  Policy Endorsements.  At the Seller's cost and expense, the
     Seller will obtain all Permits from all relevant Governmental


<PAGE>   43

     Authorities regarding all endorsements to the Reinsured Policies
     and all other Policies issued by the Seller that are required to
     effect the termination of the Rehabilitation Period in accordance
     with the terms of this Agreement, each of which must be made
     available for review by, and be reasonably acceptable to, the
     Purchaser prior to the filing thereof with any Governmental
     Authority.  The Purchaser and First SunAmerica, as applicable,
     will cooperate with the Seller in preparing, filing and obtaining
     the Purchaser's related endorsements for the Replacement
     Policies.

5.8  Rehabilitation Documents. The Seller will continue to
     perform, and will cause each of its Subsidiaries to perform, all
     of their respective obligations relating to the Business, the
     Reinsured Policies and the Transferred Assets pursuant to the
     Plan and each Rehabilitation Document, as amended in accordance
     with this Agreement,  to the extent that any such obligations
     continue in effect after the Closing.

5.9  Post-Closing Publicity.  Following the Closing Date and
     until the Assumption Reinsurance Agreements have become effective
     with respect to all Reinsured Policies, the provisions of
     Section 4.9 will continue to apply.

5.10 Post-Rehabilitation Treatment of Reinsured and Replacement
     Policies.

     5.10.1    Continuation or Replacement.  With respect to each
     Reinsured Life Policy, the Purchaser agrees to provide or cause
     ANLIC or First SunAmerica to provide a continuation of the
     existing Reinsured Life Policy in accordance with its terms.
     With respect to each Reinsured Annuity Contract, Purchaser agrees
     to provide or cause ANLIC or First SunAmerica to provide, as
     applicable, in its sole discretion, either (a) a continuation of
     the existing Reinsured Annuity Contract in accordance with its
     terms, or (b) a replacement policy written by the Purchaser,
     ANLIC or First SunAmerica, as applicable, that is substantially
     similar to the existing Reinsured Annuity Contract (each such
     replacement policy, a "Preserved Replacement Policy").  Any
     Preserved Replacement Policy will fully preserve all
     contractually guaranteed rights and values expressly provided in
     the existing Policy.  Except for the Reinsured Policies for which
     the Policyholders have elected reduced paid-up or reduced face-
     amount options, to the extent any such Reinsured Policy has cash
     surrender rights, the cash surrender value of the Preserved
     Replacement Policy immediately after replacement will equal or
     exceed the Account Value of the Reinsured Policy immediately
     before replacement (without reduction for any moratorium or
     surrender charges).

     5.10.2    Additional Replacement Policies.  The Purchaser may
     offer, or may cause ANLIC or First SunAmerica to offer, as
     applicable, other replacement Policies written by the Purchaser
     or any Subsidiary of the Purchaser, that do not need to comply
     with the requirements of Section 5.10.1 (each, an "Additional
     Replacement Policy"; each Preserved Replacement Policy and each
     Additional Replacement Policy is referred to as a "Replacement
     Policy").  For all such Additional Replacement Policies, the
     Purchaser agrees to establish, as applicable, all guaranteed
     contractual terms in a commercially fair and reasonable manner
     which terms are in the aggregate at least as favorable as those
     provided by the Purchaser, ANLIC or First SunAmerica, as the case
     may be, to its own existing policyholders under substantially
     similar Policies currently in force.  Such exchange will be based
     on the full Account Value from the Reinsured Policy without
     application of any front-end sales charges other than premium
     taxes, if applicable, but such Additional Replacement Policy can
     include surrender charges and other customary policy features.

     5.10.3    Non-Guaranteed Elements.  For all Replacement Policies
     issued pursuant to either Section 5.10.1 or 5.10.2, the Purchaser
     agrees to establish, or to cause ANLIC or First SunAmerica to


<PAGE>   44

     establish, as applicable, all non-guaranteed elements of
     Replacement Policies in a competitive manner which elements will
     be, in the aggregate, at least as favorable as those provided
     from time to time by the Purchaser, ANLIC, First SunAmerica or
     any other Subsidiary of the Purchaser that may assume Reinsured
     Policies or issue Replacement Policies, as the case may be, to
     its own policyholders under substantially similar circumstances.
     In establishing such non-guaranteed elements, the Purchaser may
     take into consideration all relevant factors, including the
     presence or absence of surrender charges, actual and anticipated
     persistency, the interest rate environment in which the premium
     was received and in which crediting rates were established,
     actual and anticipated mortality, reinsurance premiums charged by
     third party reinsurers, administrative expenses and Taxes,
     notwithstanding the non-guaranteed elements used in policy
     illustrations prior to the date hereof.

     5.10.4    Eligible Policies.  The following Policies are the only
     Policies that are eligible for Policy Enhancements: (a) each
     Policy that is either a continuation of an existing Reinsured
     Life Policy or a Replacement Policy for any such Reinsured Life
     Policy; (b) each Policy that is an Additional Replacement Policy
     for any Reinsured Annuity Contract that is a Covered Accumulation
     Contract; (c) each Additional Replacement Policy for any Excluded
     Annuity Contract that is a Covered Accumulation Contract; and
     (d) each Policy that is a continuation of an existing Reinsured
     Policy that is a Restructured Contract in Pay Status
     (collectively, the "Eligible Policies").  A Replacement Policy
     offered pursuant to Section 5.10.1 or 5.10.2 that falls within
     one of the above categories, will constitute an Eligible Policy
     even if such Replacement Policy is accepted by a policyholder
     prior to the Rehabilitation Period Termination Date.  With
     respect to such Eligible Policies, the Purchaser, ANLIC and First
     SunAmerica agree to comply with all of the terms of Sections
     5.10.1, 5.10.2, and 5.10.3 without regard to the Policy
     Enhancements Amount to be applied to such Eligible Policies.  The
     amount of any Policy Enhancement must be fully incremental to
     each Eligible Policy (other than the Restructured Contracts in
     Pay Status where such Policy Enhancement is paid in cash),
     including any cash surrender value (other than Reinsured Policies
     that have elected "reduced paid up" or "reduced face amount"
     options in connection with the Rehabilitation), on the date such
     amount is applied.

     5.10.5    Approvals.  The Purchaser agrees that prior to the time
     it offers or causes ANLIC or First SunAmerica to offer, as
     applicable, any Replacement Policy pursuant to this Section 5.10,
     the Purchaser, ANLIC or First SunAmerica, as applicable, will
     have obtained all policy form and endorsement Permits required to
     be obtained from Governmental Authorities for such Replacement
     Policy.  Prior to the Closing, the Seller will cooperate with the
     Purchaser and its Subsidiaries in securing all such  policy form
     and endorsement Permits.

     5.10.6    Guidelines for Restructured Life Policies.  In addition
     to the above provisions, the Purchaser, ANLIC and First
     SunAmerica agree to the following with respect to the
     administration of Reinsured Life Policies (excluding those
     Reinsured Policies with respect to which the Policyholders have
     elected non-forfeiture options, including reduced paid-up and
     extended term insurance).

     (a)  Mortality and expense charges will be initially established
     at the end of the Rehabilitation Period at the current
     "Preferred" COI scales, as modified prior to the Closing Date by
     mutual agreement of the Seller and the Purchaser.

     (b)  Credited rates will be initially established at the end of
     the Rehabilitation Period at 5.0% based on the United States
     Treasury Rate on March 12, 1998.  Such rate will be adjusted
     upward to the nearest 25 basis points if such rate declines, or
     downward to the nearest 25 basis points if such rate increases,


<PAGE>   45


     in either case from the United States Treasury Rate on March 12,
     1998 as compared to the United States Treasury Rate on last
     Business Day of the fourth month preceding the Rehabilitation
     Period Termination Date.

     (c)  year crediting rates on funds paid into any Restructured
     Life Policy after the Rehabilitation Period Termination Date will
     be initially established at the end of the Rehabilitation Period
     at a level at least 50 basis points higher than the generally
     applicable crediting rate with respect to that Reinsured Policy.
     Such rate, once established, will remain in effect through
     December 31, 1999 and will apply to funds received prior to such
     date for one year from the date of receipt.

     (d)  After the current elements have been initially established
     as set forth above, the Purchaser may establish, or cause ANLIC
     or First SunAmerica to establish, as applicable, such rates and
     charges from time to time in accordance with the requirements of
     Sections 4.18 and 5.10.3.

     5.10.7    Covered Accumulation Contract Replacement Policies.
     Except as set forth in the last sentence in this Section 5.10.7
     and in Section 5.14, the Purchaser agrees to offer, or to cause
     ANLIC or First SunAmerica to offer, as applicable, at least one
     suitable contemporary fixed annuity and one suitable contemporary
     variable annuity as an Additional Replacement Policy, to be
     written by the Purchaser or any Subsidiary of the Purchaser with
     an issue date on or prior to January 1, 2000, for each Reinsured
     Annuity Contract (other than a 401(k) Contract) that is a Covered
     Accumulation Contract and each Excluded Annuity Contract that is
     a Covered Accumulation Contract and to offer at least one
     suitable contemporary Additional Replacement Policy to be written
     by any such Person for each Reinsured Annuity Contract that is a
     401(k) Contract; provided, however, that the Purchaser and its
     Subsidiaries will only be obligated to offer a fixed annuity with
     respect to any Unallocated Accumulation Contract included in the
     Reinsured Policies.  Such exchange will be based on the full
     Account Value from the relevant Policy without application of any
     front-end sales charges other than premium taxes, if applicable,
     but such Additional Replacement Policy can include surrender
     charges and other customary policy features.  Notwithstanding the
     foregoing, the Purchaser will not be required to offer Additional
     Replacement Policies to those policyholders in any jurisdiction
     for which all necessary endorsements (including the Policy
     Enhancements Endorsements) and/or Permits have not been received.

5.11 Election to Capitalize Specified Policy Acquisition
     Expenses.  Pursuant to Treas. Reg Section 1.848-2(g)(8), the
     Seller, the Purchaser, ANLIC and First SunAmerica hereby elect to
     determine specified policy acquisition expenses with respect to
     the Transactions without regard to the general deductions
     limitation.  The provisions of this Section 5.11 will remain in
     effect for all taxable years for which the Indemnity Reinsurance
     Agreement remains in effect.  The Seller, the Purchaser, ANLIC
     and First SunAmerica agree that the entity with net positive
     consideration for each taxable year will capitalize specified
     policy acquisition expenses with respect to the Transactions
     without regard to the general deductions limitation of
     Section 848(c)(1) of the Code.  The Seller, the Purchaser, ANLIC
     and First SunAmerica agree to exchange information pertaining to
     the amount of net positive consideration for all reinsurance
     agreements in force between the Seller, on the one hand, and the
     Purchaser, ANLIC and First SunAmerica, on the other, each year to
     maintain consistency.  To achieve this, the Seller will provide
     to the Purchaser a schedule of its calculation of net positive
     consideration for all reinsurance agreements in force between the
     Seller and the Purchaser, ANLIC or First SunAmerica for each
     taxable year by no later than April 30 of the succeeding year.
     The Purchaser will advise the Seller if it disagrees with the
     amounts provided by no later than May 31 of such year, otherwise
     the amounts will be presumed correct and will be reported by the
     parties in their respective federal income Tax returns for such
     year.  If the Purchaser contests the Seller's calculation of the


<PAGE>   46

     net positive consideration, the parties agree to act in good
     faith to resolve any differences within 30 days of the date the
     Purchaser submits its alternative calculation in accordance with
     the provisions of Section 8.2.2.  Any disputed item that cannot
     be resolved within such period will be submitted to the
     Independent Party in accordance in Section 8.5.  The Seller,
     ANLIC and First SunAmerica represent and warrant that they are
     subject to U.S. taxation under Subchapter L of the Code.  The
     first taxable year for which this election will be effective is
     the taxable year in which the Closing Date occurs.  As used in
     this Section 5.11, the terms "net positive consideration,"
     "specified policy acquisition expenses," and "general deductions
     limitation" will have the meanings specified in Section 848 of
     the Code and Treas. Reg. Section 1.848-2.

5.12 Maintenance of Business.  The Seller will refrain and will
     cause its present and future Affiliates to refrain from causing
     or attempting to cause or influence (or assisting any other
     Person in causing or attempting to cause or influence) (a) any
     Policyholder or customer to replace or terminate any Reinsured
     Policy or any Replacement Policy issued by the Purchaser or any
     of its Affiliates, in whole or in part, with products of any
     other Person at any time; or (b) any reinsurer to terminate or
     reduce any reinsurance, coinsurance or other similar contact, or
     sever a relationship with the Purchaser or any of its Affiliates
     at any time.  The Seller will include in any transaction for the
     sale or disposition of any of its present and future Affiliates a
     covenant of the purchaser or successor thereof undertaking the
     terms of this Section 5.12 and making the Purchaser a third party
     beneficiary of such covenant.  The Seller further agrees to
     promptly take all reasonable actions to enforce the terms of any
     rights it may have, whether under contract or Applicable Law,
     against any Person causing or attempting to cause or influence
     any event set forth above.

5.13 IBNR Settlement Amount.

     5.13.1    Allocation of Liability.  Any liability under the
     Reinsured Policies or the Policies subject to the Inward
     Reinsurance Agreements resulting from the death of a Policyholder
     prior to the Closing Date that is reported to the Seller prior to
     the Transition Period Termination Date is an Excluded Liability
     and the Seller agrees that it will promptly service all such
     claims in the ordinary course of its business in accordance with
     past practices, including the Seller's policies regarding claims
     in course of settlement, due and unpaid claims and resisted
     claims.  The Purchaser will make the payments with respect to the
     Account Values of such Policies required by the Transition
     Services Agreement.  Any liability under the Reinsured Policies
     or the Policies subject to Inward Reinsurance Agreements
     resulting from the death of a Policyholder prior to the Closing
     Date that is not reported to the Seller prior to the Transition
     Period Termination Date will, subject to the terms hereof, become
     an Insurance Liability assumed by ANLIC or First SunAmerica, as
     applicable, on the IBNR Settlement Date and the Seller will
     transfer to ANLIC and First SunAmerica, as applicable, cash
     and/or Cash Equivalents equal to the IBNR Settlement Amount on
     the IBNR Settlement Date.

     5.13.2    Calculation of IBNR Settlement Amount.

     (a)  The IBNR Settlement Amount will be calculated as follows:
     if the Transition Period Termination Date occurs no more than
     five days after the end of the preceding calendar quarter, the
     Purchaser will use the Social Security Sweep for such calendar
     quarter to determine the Policyholders who have died prior to the


<PAGE>   47

     Closing Date and whose deaths have not been reported to the
     Seller.  If the Transition Period Termination Date occurs more
     than five days after the end of the preceding calendar quarter,
     the Purchaser will use the Social Security Sweep for the next
     calendar quarter ending after the Transition Period Termination
     Date to determine the Policyholders who have died prior to the
     Closing Date and whose deaths have not otherwise been reported to
     the Seller.  With respect to all such Policyholders, the IBNR
     Settlement Amount will be an amount in cash equal to the face
     amount of such Policyholders' Policies less the sum of (i) the
     Account Value of such Policies; (ii) the amount recoverable from
     any Outward Reinsurer with respect to such Policies, provided
     that such Outward Reinsurance Agreement or Substitute Outward
     Reinsurance Agreement has been assigned to ANLIC or First
     SunAmerica; and (iii) any amounts paid by the Seller in
     settlement of death benefits with respect to such Policies
     (exclusive of amounts paid in (i) and (ii) above).

     (b)  If the Transition Period Termination Date occurs no more
     than five days after the end of the preceding calendar quarter,
     the Purchaser will deliver its calculation of the amount of the
     IBNR Settlement Amount to the Seller within 60 days after the end
     of such calendar quarter.  If the Transition Period Termination
     Date occurs more than five days after the end of the preceding
     calendar quarter, the Purchaser will deliver its calculation of
     the amount of the IBNR Settlement Amount to the Seller within 60
     days after the end of the next calendar quarter following the
     Transition Period Termination Date.  The Purchaser will provide
     the Seller access to any information used by the Purchaser in
     making its calculation of the IBNR Settlement Amount.

5.14 Solicitation of Policyholders.  If the Purchaser solicits
     any policyholder to take any Replacement Policy prior to the end
     of the Rehabilitation Period, the Purchaser will make
     commercially reasonable efforts to solicit all of the
     Policyholders within 90 days of the first solicitation; provided
     that if any Policyholder accepts a Replacement Policy, the Seller
     will, with respect to the Account Value transferred to the
     Replacement Policy, conditionally waive the moratorium charge
     applicable to the surrendered Policy, which waiver will become
     irrevocable if the Replacement Policy is in force on the day
     following the last day of the applicable "free look" period.
     Notwithstanding the foregoing, neither the Purchaser nor any of
     its Affiliates will be required to offer any Policyholder a
     product if that Policyholder (a) does not meet the Purchaser's or
     such Affiliate's customary underwriting requirements for such
     product; or (b) is a Resident of a jurisdiction in which the
     Seller has not taken all actions and obtained all Permits
     required in connection with the Seller's Policy Enhancements
     Endorsement.  In addition, neither the Purchaser nor any of its
     Affiliates will be required to offer a Replacement Policy with
     respect to any Restructured Contract in Pay Status.

5.15 Reinstated Policies.  The Seller will only permit lapsed
     Policies in the categories of the Reinsured Policies to be
     reinstated as expressly required by the terms of such Policies.
     All reinstatement premiums received by the Seller will, for the
     period from the Closing Date through the Transition Period
     Termination Date, be transferred to ANLIC in accordance with the
     Indemnity Reinsurance Agreement and the Transition Services
     Agreement, and thereafter by direct payment from the Seller to
     ANLIC or First SunAmerica, as applicable.

5.16 Outward Reinsurance Agreements.

     5.16.1    Remaining Outward Reinsurance Agreements.  If on or
     prior to the Closing Date the Seller has not, with respect to
     100% of the aggregate face amount reinsured of all Reinsured
     Policies subject to Outward Reinsurance Agreements, either
     (a) effected an assignment (with or without an adjustment to the
     applicable premium) of the Outward Reinsurance Agreements by the
     Seller to ANLIC, including obtaining any consents required to
     effect such assignment (and, if applicable, the subsequent
     partial assignment by ANLIC to First SunAmerica relating to the
     New York Reinsured Policies on the New York Assumption Date), or
     (b) entered into one or more Substitute Outward Reinsurance
     Agreements (each Outward Reinsurance Agreement not so assigned or
     substituted being a "Remaining Outward Reinsurance Agreement" and


<PAGE>   48

     the reinsurer thereunder being a "Remaining Outward Reinsurer"),
     the provisions of this Section 5.16 will apply.  The Seller will
     use its commercially reasonable efforts to effect the
     assignment(s) or substitution of all Remaining Outward
     Reinsurance Agreements within 90 days after the Closing Date.  At
     the end of such period, the Seller will, within five Business
     Days, pay to the Purchaser the amount that would have been added
     to the Outward Reinsurance Adjustment Amount with respect to the
     Outward Reinsurance Agreements assigned and the Substitute
     Outward Reinsurance Agreements effected during such period had
     the Outward Reinsurance Adjustment Amount been calculated as of
     the date such assignment or substitution became effective,
     together with interest thereon at a rate of 6.8% per annum from
     such effective date to the date of payment.  If the Seller does
     not pay such amount within the stated time period, the Purchaser
     will be entitled to payment of such amount out of the Outward
     Reinsurance Escrow Account.

     5.16.2    Outward Reinsurance Escrow Amount.  On the Closing
     Date, the Seller will deposit into escrow under the Escrow
     Agreement an amount (the "Outward Reinsurance Escrow Amount")
     equal to the sum of (a) for each Remaining Outward Reinsurance
     Agreement the greater of (i) five times the average aggregate
     claims paid by the Remaining Outward Reinsurer with respect to
     Reinsured Policies in 1996 and 1997, and (ii) five times the
     average aggregate reinsurance premium paid to such Remaining
     Outward Reinsurer in 1996 and 1997; plus (b) for all Remaining
     Outward Reinsurance Agreements, the sum of the two largest single
     life or second-to-die policies, with the respective size of
     single life policies measured as 100% of the net amount at risk,
     and with the respective size of second-to-die policies measured
     as 100% of the net amount at risk if only one Policyholder is
     alive or 50% of the net amount at risk if both Policyholders are
     alive.  Such calculation will be made based on the financial
     information as of the Calculation Date for the Remaining Outward
     Reinsurance Agreements.

     5.16.3    Monthly Accounting.  If at the beginning of the month
     in which the Closing Date occurs or any month following the
     Closing Date there are Reinsured Life Policies subject to a
     Remaining Outward Reinsurance Agreement (such month being an
     "Uncovered Month"), ANLIC and First SunAmerica will submit to the
     Seller within 30 days after the end of such Uncovered Month a
     calculation of (a) the amounts that would have been recoverable
     from the Remaining Outward Reinsurers for such month had the
     relevant Outward Reinsurance Agreements been assigned on the
     Closing Date, minus (b) an amount equal to one-twelfth of the
     cumulative annualized premium that would have been paid by the
     Purchaser to such Remaining Outward Reinsurers (adjusted for
     reinsurance of risk under Policies that would no longer be in
     force at the end of the Uncovered Month), in each case between
     the Closing Date and the end of the month for which the
     accounting is being prepared.  If such calculation yields a net
     amount owing to ANLIC and/or First Sun America, then a portion of
     the Outward Reinsurance Escrow Amount equal to such amount plus
     interest thereon at a rate of 6.8% per annum from the end of the
     relevant Uncovered Month to the date of payment will be released
     from escrow and paid to ANLIC and/or First SunAmerica, as
     applicable.

     5.16.4    Settlement.  If within 90 days after the Closing Date
     the Seller has failed to effect the assignment or substitution of
     all Remaining Outward Reinsurance Agreements, then the Purchaser
     will have an additional 180 days to obtain such assignment or
     substitution on such terms as the Purchaser, acting in good
     faith, deems appropriate.  The Seller will provide information
     reasonably requested by the Purchaser and prospective Substitute
     Reinsurers at the Seller's cost.  At the end of such period, the
     Seller will, within five Business Days, pay to the Purchaser the
     amount that would have been added to the Outward Reinsurance
     Adjustment Amount with respect to the Outward Reinsurance
     Agreements assigned and the Substitute Outward Reinsurance


<PAGE>   49

     Agreements effected during such period, together with interest
     thereon at a rate of 6.8% per annum from the date such assignment
     or substitution became effective to the date of payment.  If the
     Purchaser is not able to obtain all needed assignments or
     substitutions within such period, the parties will negotiate in
     good faith for a period of 30 days for a reduction of the Ceding
     Commission in accordance with the terms of Section 8.2.2.  If
     they are unable to reach a settlement, the issue will be
     submitted to the Independent Party for a binding resolution to be
     determined in accordance with the procedures set forth in
     Section 8.5.  Prior to the assignment or substitution of all
     Remaining Outward Reinsurance Agreements or the agreement of the
     parties set forth above, the Seller will continue to assume
     responsibility for claims thereunder and will make all
     appropriate claims against the applicable Outward Reinsurers with
     respect thereto.

     5.16.5    Release of Escrowed Funds and Payment of Net
     Reinsurance Premium to Seller.  After obtaining all assignments
     or substitutions of Remaining Outward Reinsurance Agreements or
     the Seller's payment in full of any settlement with the Purchaser
     described in Section 5.16.4, (a) any remaining amounts in the
     Outward Reinsurance Escrow Account in excess of 10% of the
     original Outward Reinsurance Escrow Amount will be released to
     the Seller, and the remaining amounts will be held to satisfy
     claims arising during the Uncovered Months and (b) the Purchaser
     will pay (or will cause ANLIC or First SunAmerica, as applicable,
     to pay) to the Seller an amount in cash equal to the amount of
     net positive reinsurance premium for all Uncovered Months, if
     any, owing to the Seller pursuant to the calculation set forth in
     Section 5.16.3.  After release of all amounts owing to ANLIC and
     First SunAmerica for Uncovered Months ending during such 180 day
     period, all remaining amounts in the Outward Reinsurance Escrow
     Account will be released to the Seller and the Seller will have
     no further liability for death claims incurred during any
     Uncovered Month.

5.17 Taxable Basis of Reinsured Policies.  On or prior to
     December 31, 1998, the Seller's Life Insurance Administration
     System will contain accurate information regarding the taxable
     basis of all but 13,000 or fewer Reinsured Life Policies with an
     Account Value of $5,000 or more.  If this requirement is not
     satisfied on or prior to December 31, 1998, the Purchaser will be
     entitled to be paid $250,000 from the Claims Escrow Account.

5.18 Calculation of Account Values True-Ups.  On or prior to the
     Account Values True- Up Date, the Seller will deliver to the
     Purchaser an audited calculation of the Account Values True-Up
     Amount for each Reinsured Policy as of the Rehabilitation Period
     Termination Date.  Such calculation will be complete and correct
     when delivered and will comply with all applicable requirements
     of the Plan and the Rehabilitation Documents.  The Purchaser's
     only obligation with respect thereto will be to credit or pay
     such amount promptly following receipt of cash and/or Cash
     Equivalents from the Seller as provided in Section 1.1.5(c).

5.19 Sale of Broker/Dealer.  If the parties have not reached an
     agreement for the sale of the assets described in Section 4.19
     prior to the Closing Date, the Seller agrees that it will not
     consummate a sale of such assets to any other Person for six
     months after the Transition Period Termination Date unless as
     part of such sale, the Seller obtains a non-competition covenant
     of the purchaser or successor thereof pursuant to which such
     Person undertakes the terms of Section 5.12 of this Agreement and
     makes the Purchaser a third party beneficiary of such covenant.

5.20 Agents.  From and after the Closing Date the Purchaser
     agrees to pay, or cause ANLIC and/or First SunAmerica to pay, to
     Agents the commissions and other fees and compensation accruing
     after such date under the express written terms of the Assigned
     Contracts.  The Purchaser further agrees that, to the extent
     necessary in order to allow it to fulfill its obligations to pay


<PAGE>   50

     such commissions and other fees and compensation, it will cause
     ANLIC and/or First SunAmerica, as applicable, to appoint the
     Agents as agents of ANLIC and/or First SunAmerica under the
     Reinsured Life Policies, enter into appropriate agency contracts
     with the Agents and make all appropriate regulatory filings to
     effectuate such appointment.

5.21 Transfer of Assets to First SunAmerica.  On the New York
     Assumption Date, ANLIC will transfer the appropriate amount of
     assets to First SunAmerica in respect of Reinsured Policies that
     First SunAmerica is assuming pursuant to the First SunAmerica
     Assumption Reinsurance Agreement.  All assets transferred by
     ANLIC to First SunAmerica pursuant to this Section 5.21 will
     comply with applicable New York insurance laws and regulations
     relating to reserve assets.  The Seller will have the right to
     review the documents effecting such transfer, such documents to
     be in form and substance that are reasonably satisfactory to the
     Seller.

5.22 Amendment of Schedules.  On or prior to the New York
     Assumption Date, the Seller will deliver to the Purchaser amended
     and restated versions of Schedules 3, 5 and Section 2.13 of the
     Seller's Disclosure Schedule allocating the items reflected in
     such Schedules to reflect the termination of the Indemnity
     Reinsurance Agreement with respect to the New York Reinsured Life
     Policies and the New York Reinsured Annuity Contracts and the
     assumption reinsurance of such Policies by First SunAmerica
     pursuant to the First SunAmerica Assumption Reinsurance
     Agreement.

5.23 Treatment of Policy Enhancements.  Except with respect to
     Eligible Policies for which cash is distributed with respect to
     the Policy Enhancements to the Policyholder, its designee or the
     beneficiary of the Eligible Policy, as of the date the Policy
     Enhancements are credited to any Eligible Policy, the Purchaser
     and its Affiliates will reflect such crediting for SAP and Tax
     purposes as credited interest in the calculation of reserves with
     respect to such Eligible Policy, except to the extent required by
     a change in the Code, a published IRS ruling or a change in
     Applicable Law or SAP after the date of this Agreement.

5.24 Sale of Non-Terminated Variable Annuities.  If the Court
     does not approve the termination of all Variable Annuities in
     accordance with Section 4.11, (a) the Seller will not enter into
     any transaction to reinsure or otherwise transfer any Variable
     Annuities in accumulation phase to any other Person prior to the
     three month anniversary of the Transition Period Termination
     Date; and (b) the Seller will not enter into any transaction to
     reinsure or otherwise transfer any Variable Annuities in pay-out
     status to any other Person prior to the Transition Period
     Termination Date; provided, however, that before the Seller
     enters into any binding agreement to reinsure or otherwise
     transfer any Variable Annuities, the Purchaser will have a right
     of first offer with respect thereto; and provided, further, any
     such sale to another Person must be on terms that are no less
     favorable to the Seller than the terms offered by the Purchaser.

5.25 Grandfathered Premiums Indemnity.

     (a)  If the Grandfathering Ruling has not been obtained prior to
     the Closing Date, the Seller will keep track of the Grandfathered
     Premiums and Net Grandfathered Premiums as part of the services
     provided to the Purchaser under the Transition Services Agreement
     prior to the Transition Period Termination Date.  If the
     Grandfathering Ruling has not been received prior to the ten
     month anniversary of the Closing Date or such earlier date as the
     Purchaser and the Seller in good faith agree that the
     Grandfathering Ruling will not be obtained, the Grandfathered
     Premiums Indemnity Amount will be calculated by the Purchaser as
     of the 14th month anniversary of the Closing Date, and such
     calculation, together with a detailed statement explaining how
     such calculation was made, will be delivered to the Seller within


<PAGE>   51

     30 Business Days after the 14th month anniversary of the Closing
     Date.  The Seller will then have ten Business Days to dispute the
     Purchaser's calculation.  If the Seller does not give timely
     notice of any dispute regarding the Purchaser's calculation, the
     Purchaser will be entitled to payment of such amount out of the
     Claims Escrow Account.  If the Seller gives timely notice of any
     dispute regarding the Purchaser's calculation, the Purchaser will
     file a notice of its Claims Escrow Claim pursuant to the Escrow
     Agreement, and the parties will proceed to resolve such dispute
     by submitting such dispute to the Independent Party in accordance
     with Section 8.5.

     (b)  If the Grandfathering Ruling has not been received prior to
     the ten month anniversary of the Closing Date, the Purchaser will
     cause ANLIC and/or First SunAmerica, as applicable, to give the
     policyholders of the Reinsured Policies listed on the deliveries
     specified in Section 4.24 the option to have Grandfathered
     Premiums returned and to have their Account Value reduced
     accordingly.  The Purchaser may provide such notice earlier than
     the ten month anniversary of the Closing Date if the Purchaser
     and the Seller in good faith agree that the Grandfathering Ruling
     will not be obtained.

5.26 Severance Plan.  Prior to the Transition Period Termination
     Date, the Seller will maintain in effect and not amend or modify
     its Severance Plan in any material respect without the prior
     written consent of the Purchaser, which will not be unreasonably
     withheld.

5.27 Transition Period Termination Date Policy Lists.  On or
     prior to the 15th Business Day after the Transition Period
     Termination Date, the Seller will deliver to the Purchaser a
     correct and complete schedule containing the following
     information with respect to each Reinsured Policy:  (a) the
     Account Value as of the Transition Period Termination Date;
     (b) all premiums received after the Closing Date and prior to the
     Transition Period Termination Date; and (c) each premium
     identified in clause (b) accumulated to the Transition Period
     Termination Date at the credited interest rate actually applied
     to that premium; provided, however, the Seller will not be
     obligated to provide the information specified in clauses (b) and
     (c) above if the Grandfathering Ruling has been obtained on or
     prior to the Transition Period Termination Date.

                      6.   CONDITIONS PRECEDENT

6.1  General.  The respective obligations set forth herein of the
     Seller and the Purchaser to consummate the Transactions at the
     Closing are subject to the satisfaction, on or before the Closing
     Date, in the case of the Seller, of the conditions set forth in
     Sections 6.2 and 6.3, and in the case of the Purchaser, of the
     conditions set forth in Sections 6.2 and 6.4 (collectively, the
     "Closing Conditions").  It is the specific intent of the parties
     that each obligation to be satisfied and each agreement to be
     performed prior to the Closing Date or in the event of a
     termination prior to the consummation of the Transactions is a
     separate agreement of the parties and is a presently enforceable
     obligation of the relevant parties not subject to satisfaction of
     the Closing Conditions except as expressly set forth in the
     provision giving rise to such obligation or agreement.  The
     Seller will not contest or support the effort of any Person to
     contest the enforceability of any such obligation or agreement
     and, to the fullest extent permitted by Applicable Law, waives
     any claim or objection it might have to the effect that any such
     obligation or agreement is subject to satisfaction of the Closing
     Conditions.

6.2  Conditions to Obligations of Both Parties.

     6.2.1     HSR Act.  The waiting period under the HSR Act will
     have expired or been terminated.


<PAGE>   52

     6.2.2     No Injunction, etc.  Except with respect to the
     approval of the Court as set forth in Section 6.2.3 below or in
     connection with the proceedings before the Court with respect to
     such approval:  (a) consummation of the Transactions will not
     have been restrained, enjoined or otherwise prohibited by any
     Applicable Law, including any order, injunction, decree or
     judgment of any Governmental Authority; and (b) no Action will
     have been instituted and remain pending at the Closing Date by
     any Governmental Authority or any other Person to restrain,
     enjoin or otherwise prevent the consummation of the Transactions.
     There will not have been promulgated, entered, issued or
     determined by any Governmental Authority to be applicable to this
     Agreement or the Ancillary Agreements any Applicable Law making
     illegal the consummation of the Transactions.

     6.2.3     Approval of the Court.  The Court will have entered
     orders, none of which will be subject to conditions that are
     materially burdensome and each of which will have become a Final
     Order, with respect to the amendments and other orders to be
     filed with the Court as described in Exhibit I and indicated in
     Exhibit I as conditions to the obligations of both the Seller and
     the Purchaser to consummate the Transactions to be completed at
     the Closing.

     6.2.4     Approval of the Class Four Creditors.  The Class Four
     Creditors, representing the requisite percentage as set forth in
     the Plan, the Stock Trust Agreement and the Settlement Agreement,
     will have approved, in the form attached hereto as Exhibit J, the
     consummation of the Transactions in accordance with
     Section 6.08(b) of the Plan and Section 4.1(b) of the Stock Trust
     Agreement.

     6.2.5     Approval of the Reinsurers.  A majority in interest of
     the Reinsurers (determined in accordance with the Reinsurance
     Agreement) will have approved, in form and substance satisfactory
     to the Purchaser, (a) the consummation of the Transactions in
     accordance with Section 12(j) of the Reinsurance Agreement, and
     (b) the amendments to the Plan modifying their participation,
     obligations and rights under certain Rehabilitation Documents as
     of the Rehabilitation Period Termination Date.

     6.2.6     Approval of NOLHGA on Behalf of the Participating
     Guaranty Associations. NOLHGA, on behalf of the Participating
     Guaranty Associations, will have approved, in form and substance
     satisfactory to the Purchaser, the amendments to the Plan
     modifying their participation, obligations and rights under
     certain Rehabilitation Documents as of the Rehabilitation Period
     Termination Date.

     6.2.7     Approval of First SunAmerica by the Commissioner.  The
     Commissioner will have approved First SunAmerica as an accredited
     reinsurer in the State of New Jersey.

     6.2.8     Other Permits.  All other Permits required to be made
     or obtained prior to the Closing in connection with the execution
     and delivery of this Agreement and the Ancillary Agreements and
     consummation of the Transactions, in addition to those referred
     to in Sections 6.2.1 through 6.2.7, will have been made or
     obtained.

     6.2.9     Ancillary Agreements.  Each Ancillary Agreement will
     have been signed and delivered by the parties thereto.

     6.2.10    Additional Instruments and Documents.  Additional
     instruments or documents reasonably requested by a party in
     connection with the execution of this Agreement and the Ancillary
     Agreements and the consummation of the Transaction will have been
     signed and delivered by the parties thereto.

     6.2.11    Change in Law Regarding Tax Impact on Policyholders.
     There has not been, since the date of this Agreement, (a) a
     change in the Code, (b) a published IRS ruling, or (c) a change


<PAGE>   53

     in SAP or other Applicable Law that would result in a change in
     the Purchaser's treatment for SAP and Tax purposes of the
     crediting of the Policy Enhancements from that provided in
     Section 5.23, in any case that causes the representation and
     warranty in Section 2.10.3 not to be true and correct in all
     material respects.

6.3  Conditions to Obligations of the Seller.

     6.3.1     Representations, Warranties and Agreements of the
     Purchaser.  The representations and warranties in Section 3 will
     be true and correct in all material respects when made and at and
     as of the Closing with the same effect as though made at and as
     of such time.  The Purchaser will have duly performed and
     complied in all material respects with all agreements contained
     herein required to be performed or complied with by it at or
     before the Closing.

     6.3.2     Officer's Certificate. The Purchaser will have
     delivered to the Seller a certificate, dated the Closing Date and
     signed by an authorized executive officer, as to the fulfillment
     of the conditions set forth in Section 6.3.1.

     6.3.3     Opinions of Counsel.  The Seller will have received
     opinions from the general counsel of the Purchaser and O'Melveny
     & Myers LLP and McElroy, Deutsch and Mulvaney, each as special
     counsel for the Purchaser, in the form of Exhibits G-1, G-2 and G-
     3, respectively.

6.4  Conditions to Obligations of the Purchaser.

     6.4.1     Representations, Warranties and Agreements of the
     Seller.  The representations and warranties in Section 2 will be
     true and correct in all material respects when made and at and as
     of the Closing with the same effect as though made at and as of
     such time.  The Seller will have duly performed and complied in
     all material respects with all agreements contained herein
     required to be performed or complied with by it at or before the
     Closing.

     6.4.2     Officer's Certificate.  The Seller will have delivered
     to the Purchaser a certificate, dated the Closing Date and signed
     by an authorized executive officer, as to the fulfillment of the
     conditions set forth in Section 6.4.1.

     6.4.3     Opinions of Counsel.  The Purchaser will have received
     opinions from the general counsel of the Seller, and Debevoise &
     Plimpton and Gibbons, Del Deo, Dolan, Griffinger & Vecchione,
     each as special counsel for the Seller, as set forth on
     Exhibits H-1, H-2 and H-3, respectively.

     6.4.4     Funding of Escrow Agreement.  The Seller will have
     deposited into escrow cash and Cash Equivalents with an aggregate
     Value on the Closing Date equal to the sum of: (a) the Claims
     Escrow Amount; (b) the Tax Reserves Indemnity Escrow Amount;
     (c) the DAC Reduction Escrow Amount or the DAC Election Escrow
     Amount, as the case may be; (d) if applicable, the Outward
     Reinsurance Escrow Amount; (e) the COI Adjustment Escrow Amount;
     and (f) if applicable, the Policy Enhancements Endorsements
     Escrow Amount, in each case in accordance with the terms of the
     Escrow Agreement.

     6.4.5     Policy Enhancements Amount.  The Policy Enhancements
     Amount as of the Closing Date will not be less than the remainder
     of (a) $225,000,000, minus (b) the Integrity Policy Enhancements
     Amount.

     6.4.6     Reserve Liabilities.  The aggregate amount of the
     Reserve Liabilities as of the Closing Date excluding reserves for
     pending death claims will not be less than (a) if the Closing
     Date is on or before January 1, 1999: (i) $5,248,519,895 if the
     Reinsured 401(k) Contracts exclude the Policies described in


<PAGE>   54

     clause (b) of the definition thereof, or (ii) $5,340,004,108 if
     the Reinsured 401(k) Contracts include the Policies described in
     clause (b) of the definition thereof; and (b) if the Closing Date
     is after January 1, 1999: $4,849,175,990 if the Reinsured 401(k)
     Contracts exclude the Policies described in clause (b) of the
     definition thereof, or (ii) $4,933,699,448 if the Reinsured
     401(k) Contracts include the Policies described in clause (b) of
     the definition thereof, and, in either case, the Seller will have
     delivered to the Purchaser a certificate signed by its chief
     financial officer confirming the foregoing.

     6.4.7     Assurances Regarding Simultaneous Assumption of
     Reinsured Policies. The Purchaser will have received assurances
     in form and substance reasonably satisfactory to it that a
     simultaneous assumption of all Reinsured Policies held by
     Residents of the states of New York, New Jersey and Arizona can
     be effected on the Rehabilitation Period Termination Date without
     obtaining Policyholder consent thereto in any such jurisdiction.

     6.4.8     Outward Reinsurance Agreements.  The Seller will have,
     with respect to not less than 75% of the aggregate face amount
     reinsured of all Reinsured Policies subject to Outward
     Reinsurance Agreements on the date of this Agreement, either
     (a) effected an assignment to the Purchaser of the Outward
     Reinsurance Agreements (with or without an adjustment to the
     applicable premium), or (b) entered into one or more Substitute
     Outward Reinsurance Agreements.

     6.4.9     Court Order, Regulatory Approvals and Other Filings.

     (a)  The Court will have entered orders, each of which will have
     become a Final Order with respect to the amendments and other
     orders to be filed with the Court as described in Exhibit I and
     indicated in Exhibit I as conditions to the obligations of the
     Purchaser to consummate the Transactions at the Closing.

     (b)  The New York State Insurance Department will have waived any
     requirement for the posting of security by reason of ANLIC's
     status as a non-New York licensed reinsurer and the Purchaser
     will have received assurances in form and substance reasonably
     satisfactory to it that ANLIC will not be subject to regulatory
     requirements in New York or regulatory oversight by the New York
     State Insurance Department by virtue of the transactions
     contemplated by the Indemnity Reinsurance Agreement or this
     Agreement.

     (c)  The Seller will have obtained the approval from the
     appropriate Governmental Authority in all jurisdictions of the
     forms of the Reaffirmed Contracts and the Restructured Contracts.
     If the approval of a particular jurisdiction is not obtained, the
     Purchaser may elect to treat the Policies of that jurisdiction as
     Excluded Policies with appropriate adjustments to the Ceding
     Commission, the Policy Enhancements Amount and other applicable
     elements.

     (d)  The Seller will have obtained all necessary Permits to
     attach the Policy Enhancements Endorsements in at least as many
     jurisdictions as are required to account for 85% of the aggregate
     Account Values of each of the Reinsured Life Policies and the
     Reinsured Annuity Contracts, measured as of the Calculation Date,
     and such jurisdictions will include Arizona, New York, New
     Jersey, Michigan and Illinois.

     6.4.10    Updated Calculation of Impairments.  The Seller will
     have delivered to the Purchaser an updated calculation of the
     Impairment for each Reinsured Policy and each other Eligible
     Policy as of a date not more than 45 nor less than 30 days before
     the Closing Date, which calculation will include the effect of
     the Account Values True-Up Amount that has accrued through the
     date of calculation, together with all supporting documentation
     used by the Seller as a basis for its calculation.

<PAGE>   55

     6.4.11    Changes to COI Scale.  The Seller will have obtained
     all necessary Permits for the Purchaser to implement the Modified
     COI Scale in Arizona, New York and New Jersey.

     6.4.12    Estimated Closing Date Statement and Updated Schedules.
     The Seller will have delivered to the Purchaser the documents
     required to be delivered prior to the Closing Date pursuant to
     Section 1.2.2.

     6.4.13    Transferred Reserve Assets.  Of the Transferred Reserve
     Assets transferred to ANLIC at Closing, not less than
     $1.0 billion will consist of cash, Cash Equivalents and
     Investment Grade Securities that mature no later than
     September 30, 1999.

     6.4.14    Updated Policy Lists.  Unless the Grandfathering Ruling
     has been obtained prior to the Closing Date, the Seller will have
     delivered to the Purchaser a copy of the lists described in
     Section 4.24, which lists will not reflect a material increase in
     either the total number of policyholders or total amount of
     premiums with respect to the Reinsured Life Policies contained on
     such lists from the lists provided to the Purchaser in accordance
     with Section 2.12.22.  For purposes of this Section 6.4.14,
     (a) the list provided to the Purchaser pursuant to
     Section 2.12.22(a) will be compared to the list provided to the
     Purchaser pursuant to Section 4.24(a) and the list provided to
     the Purchaser pursuant to Section 2.12.22(b) will be compared to
     the list provided to the Purchaser pursuant to Section 4.24(b);
     (b) a "material increase" in the number of Policyholders will
     mean that the list provided to the Purchaser pursuant to
     Section 4.24(a) includes 100,000 or more Policyholders; and (c) a
     "material increase" in the total amount of premiums will mean
     that the aggregate amount of premiums reflected on the list
     provided pursuant to Section 4.24(a) is 120% or more of the
     aggregate amount of premiums reflected on the list provided
     pursuant to Section 2.12.22(a).

                    7.   INDEMNIFICATION AND SURVIVAL

7.1  Tax Indemnification and Other Tax Matters.

     7.1.1     Section 848 Election Tax Benefit.  In calculating the
     payments to be made pursuant to Section 1.1, the parties have
     assumed that the Purchaser will not be required to capitalize any
     portion of its specified policy acquisition expenses calculated
     pursuant to Section 848(c)(1) of the Code as a result of the
     assumption and reinsurance (or indemnity reinsurance) of the
     Reinsured Policies (any amount of specified policy acquisition
     expenses required to be capitalized by the Purchaser as
     calculated under Section 848 of the Code is referred to herein as
     the "DAC Amount").  To the extent this assumption proves to be
     incorrect, the parties agree that payments will be made in
     accordance with this Section 7.1, which is intended to reach a
     result consistent with this principle.

     7.1.2     Assumptions for Insolvent Insurance Company Election
     Tax Benefit.  The amounts payable pursuant to Section 1.1 have
     been agreed to by the parties based, in part, upon the assumption
     that:  (a) the Seller is qualified to make the election provided
     pursuant to Treas. Reg. Section 1.848-2(i)(4) with respect to the
     reinsurance of the Reinsured Policies by the Purchaser pursuant
     to this Agreement (the "Election"); (b) as a result of the
     Election, there will be a "reduction amount," as determined under
     Treas. Reg. 1.848-2(i)(4)(iii)(A)-(D) (the "Allocation
     Regulations"), that is equal to, and in no event less than, the
     DAC Amount that would result from the Purchaser's assumption and
     reinsurance of the Reinsured Policies in the absence of the
     Election; and (c) the full amount referred to in clause (b) will
     be available to the Purchaser as a result of the Election
     (collectively, the "Assumptions").

     7.1.3     Deposits to DAC Tax Indemnity Account at Closing.  If a


<PAGE>   56

     ruling from the IRS, reasonably satisfactory to the Purchaser
     addressing the Transactions and in which the Purchaser has
     participated, to the effect that Seller is qualified to make the
     Election (the "Letter Ruling") has been received prior to the
     Closing Date, then the Seller at Closing will deposit the DAC
     Reduction Escrow Amount into the DAC Tax Indemnity Account
     created pursuant to the Escrow Agreement.  If the Letter Ruling
     has not been received prior to the Closing Date, then the Seller
     will deposit the DAC Election Escrow Amount into the DAC Tax
     Indemnity Account created pursuant to the Escrow Agreement.

     7.1.4     Computation of DAC Reduction Amount.

     (a)  No later than 135 days after the end of its taxable year
     that includes the Closing Date, the Seller will provide to the
     Purchaser its initial calculation of the DAC Reduction Amount,
     together with all reasonably requested documentation supporting
     such calculation (the "Initial Calculation").  If the Seller
     fails to provide such Initial Calculation by the date set forth
     in the preceding sentence, the Initial Calculation amount will
     equal the DAC Reduction Escrow Amount.  Regardless of whether the
     Letter Ruling will have been received prior to the date thereof,
     such calculation will be prepared in a manner consistent with the
     Assumption set forth in clause (a) of Section 7.1.2.  Within 30
     Business Days following its receipt of such Initial Calculation,
     including supporting documentation, the Purchaser will inform the
     Seller, in writing, of any dispute regarding the amounts set
     forth in such report, and such dispute, if not resolved by the
     parties within 30 Business Days following the Seller's receipt of
     notice of the dispute, will be resolved by the Independent Party.
     The amount determined pursuant to the preceding sentence,
     including the resolution of any dispute with respect thereto, is
     referred to as the "Final DAC Reduction Amount".

     (b)  On the date that is 30 Business Days after the determination
     of the Final DAC Reduction Amount an amount equal to the Final
     DAC Reduction Amount (but not less than the Initial Calculation
     amount) will be paid from the DAC Tax Indemnity Account to the
     Purchaser, together with a pro rata portion of the earnings on
     such amount in the DAC Tax Indemnity Account from the date of
     deposit until the date of such payment ("Interest").  If, on the
     date provided in the preceding sentence, there will have been a
     Final Determination that the Seller is qualified to make the
     Election, the remaining balance in the DAC Tax Indemnity Account
     will be paid from the DAC Tax Indemnity Account to the Seller.
     If, on such date, a Final Determination that the Seller is
     qualified to make the Election has not occurred, the remaining
     balance in the DAC Tax Indemnity Account will be retained in such
     account and distributed only as provided below.

     7.1.5     Release of the DAC Election Escrow Amount.  If a Final
     Determination that the Seller is qualified to make the Election
     occurs at any time at least 30 days prior to the last date,
     taking into account automatic extensions, that First SunAmerica
     (if the Closing Date is in 1998) or ANLIC (if the Closing Date is
     in 1999) is eligible to file its federal income tax return for
     the taxable year that includes the Closing Date (the "Filing
     Date"), then, on the date that is 20 Business Days after the date
     on which the Seller provides to the Purchaser a copy of the
     Letter Ruling or a copy of such other documents evidencing a
     Final Determination, Seller will be paid the following from the
     DAC Tax Indemnity Account:

     (a)  if, on or before such date, the Purchaser has received
     payment pursuant to Section 7.1.4(b), the remaining balance in
     the DAC Tax Indemnity Account will be paid to Seller; or

     (b)  if, on or before such date, the Purchaser has not received
     payment pursuant to Section 7.1.4(b) an amount equal to the
     excess of (x) the amount deposited by the Seller into the DAC Tax
     Indemnity Account pursuant to Section 7.1.3 over (y) the DAC
     Reduction Escrow Amount, plus a pro rata portion of Interest on


<PAGE>   57

     such excess, will be paid to Seller.
     If at least 30 days prior to the Filing Date a Final
     Determination that the Seller is qualified to make the
     Election has not occurred, then the amount  held in the DAC
     Tax Indemnity Account (as reduced by any distribution to the
     Purchaser pursuant to Section 7.1.4(b)) will be retained in
     the account and distributed only as provided in
     Section 7.1.6 or Section 7.1.7.

     7.1.6     Filing of the Purchaser's Tax Return.

     (a)  If at least 30 days prior to the Filing Date a Final
     Determination that the Seller is qualified to make the Election
     has not occurred, the Seller will provide to the Purchaser a
     legal opinion (the "Qualification Opinion") addressed to the
     Purchaser from a nationally recognized law firm, which firm is
     reasonably acceptable to the Purchaser (an "Acceptable Law Firm")
     concluding that a court would more likely than not hold that the
     Seller is qualified to make the Election.  If, and only if, a
     Final Determination that the Seller is qualified to make the
     Election has occurred or the Purchaser has received the
     Qualification Opinion when and as provided for pursuant to this
     Section 7.1.6, then the Purchaser will, and will cause its
     Affiliates to, make (and not modify or withdraw) the Election as
     required by Treas. Reg. 1.848-2(i)(4)(iv) and prepare and file
     its federal income tax returns (and all state or local tax
     returns and all financial and statutory reports reflecting the
     Tax consequences of the Transactions) in a manner consistent with
     having made the Election.  If the Purchaser is not required,
     pursuant to this Section 7.1.6, to file its federal income tax
     returns for the taxable year in which the Closing Date occurs, in
     a manner consistent with having made the Election, then the
     amount in the DAC Tax Indemnity Account will be paid to the
     Purchaser from such account on the Filing Date.

     (b)  If the Purchaser is required pursuant to Section 7.1.6(a) to
     make the Election and to file its federal income tax returns in a
     manner consistent with having made the Election, the Seller will
     make (and not modify or withdraw) the Election and will give
     evidence to the Purchaser that such Election has been properly
     made under Treas. Reg. 1.848-2(i)(4)(iv).  Appropriate forms for
     making the Election will be executed by the Seller at Closing and
     deposited with the Purchaser.  If the Purchaser is required
     pursuant to Section 7.1.6(a) to make the Election and to file its
     federal income tax returns in a manner consistent with having
     made the Election, the Seller will, and will cause its Affiliates
     to, prepare and file its federal income Tax returns (and all
     state or local Tax returns and all financial and statutory
     reports reflecting the Tax consequences of the Transactions) in a
     manner consistent with having made the Election.

     7.1.7     Method for Ensuring Benefits.  The Seller will
     indemnify the Purchaser for the benefit determined under
     Section 7.1.1 (the "Insolvent Insurer Election Tax Indemnity");
     provided, that the Purchaser's right to indemnification will be
     limited to the funds held in the DAC Tax Indemnity Account, as
     reduced by any amounts previously distributed from such account
     in accordance with the terms of this Agreement.  The Insolvent
     Insurer Election Tax Indemnity will be implemented as follows:

     (a)  If a Final Determination that the Seller is qualified to
     make the Election has not occurred as of 30 days prior to the
     Filing Date, then 30 days after a Final Determination that the
     Seller is eligible to make the Election and has done so, if the
     distribution to the Purchaser has been made pursuant to
     Section 7.1.4(b), the remaining balance in the DAC Tax Indemnity
     Account, or if the distribution to the Purchaser has not been
     made pursuant to Section 7.1.4(b), an amount equal to (x) the
     amount deposited by the Seller into the DAC Tax Indemnity Account
     pursuant to Section 7.1.3 over (y) the DAC Reduction Escrow
     Amount, plus a pro rata portion of Interest on such excess, will
     be paid to Seller from the DAC Tax Indemnity Account.

<PAGE>   58

     (b)  If a Final Determination is made, whether as a result of a
     settlement agreement with the IRS or otherwise, that the
     Purchaser is entitled to a portion of the federal income tax
     benefit attributable to the Election, then a portion of the
     remaining DAC Election Escrow Amount in an amount that is not
     greater than the amount necessary to indemnify the Purchaser
     (including any previously unreimbursed reasonable out-of-pocket
     costs of contest, interest and penalties) with respect to the
     disallowed portion of such benefit, will be paid to the Purchaser
     from the DAC Tax Indemnity Account, together with Interest on
     such portion, and any remainder of the DAC Election Escrow
     Amount, together with Interest on such remainder, will be paid to
     the Seller from the DAC Tax Indemnity Account.

     (c)  Upon a Final Determination that the Seller is not eligible
     to make the Election, provided the Purchaser has filed its
     federal income Tax return consistent with having made the
     Election to the extent required by Section 7.1.6(a) or (b), the
     remaining balance in the DAC Tax Indemnity Account will be paid
     to the Purchaser from the DAC Tax Indemnity Account.

     (d)  Any amount payable from the DAC Tax Indemnity Account
     pursuant to Section 7.1.7(b) will be determined by agreement
     between the Purchaser and the Seller, and any dispute between
     them will be resolved, in a manner consistent with the principles
     set forth in Section 7.1.1, by the Independent Party.
     All amounts payable to the Seller pursuant to this
     Section 7.1.7 will be reduced by any previously unreimbursed
     reasonable out-of-pocket costs of contest with the IRS
     incurred by the Purchaser in reaching a Final Determination,
     which amount will be paid from the DAC Tax Indemnity Account
     to the Purchaser.

     7.1.8     Calculation of DAC Escrow Amounts.

     (a)  The DAC Election Escrow Amount will be determined by the
     Seller in good faith on an estimated basis in accordance with the
     procedures set forth in Schedule 9 and reported to the Purchaser
     no later than five Business Days prior to the Closing Date, and
     such estimated amount will, if a Final Determination that the
     Seller is qualified to make the Election has not occurred by such
     date, be used on the Closing Date for purposes of determining the
     amount deposited in the DAC Tax Indemnity Account.  No later than
     60 days after the Closing Date the Purchaser will provide to the
     Seller its report of the final DAC Election Escrow Amount,
     calculated in a manner consistent with the preceding sentence,
     and any dispute with respect thereto will be resolved by the
     Independent Party.  If a Final Determination that the Seller is
     qualified to make the Election has not occurred within five
     Business Days after the later of Seller's receipt of such report
     or the resolution of any such dispute, the Seller will deposit
     into the DAC Tax Indemnity Account an additional amount, equal to
     the excess, if any, of the DAC Election Escrow Amount as so
     finally determined over the amount deposited on the Closing Date,
     or an amount equal to the excess, if any, of the amount of the
     DAC Election Escrow Amount deposited on the Closing Date over the
     amount as so finally determined will be released from escrow and
     delivered to the Seller.

     (b)  The DAC Reduction Escrow Amount will be determined by the
     Seller in good faith on an estimated basis in accordance with the
     procedures set forth in Schedule 9 and reported to the Purchaser
     no later than five Business Days prior to the Closing Date, and,
     if a Final Determination that the Seller is qualified to make the
     Election has occurred, such estimated amount will be used on the
     Closing Date for purposes of determining the DAC Reduction Escrow
     Amount deposited in the DAC Tax Indemnity Account on the Closing
     Date.  No later than 60 days after the end of its taxable year
     that includes the Closing Date, the Seller will deliver to the
     Purchaser its report of the final DAC Reduction Escrow Amount in
     a manner consistent with preceding sentences, and any dispute
     with respect thereto will be resolved by the Independent Party.


<PAGE>   59

     If a Final Determination that the Seller is qualified to make the
     Election has not occurred, within five Business Days after the
     later of the Purchaser's receipt of such report or the resolution
     of any such dispute, the Seller will deposit into the DAC Tax
     Indemnity Account an additional amount equal to the excess, if
     any, of the DAC Reduction Escrow Amount as so finally determined
     over the amount deposited on the Closing Date, or an amount equal
     to the excess, if any, of the amount of the DAC Reduction Escrow
     Amount deposited on the Closing Date over the amount as so
     finally determined will be released from escrow and delivered to
     the Seller.

7.2  Survival of Representations and Covenants of the Purchaser.
     The representations and warranties set forth in Section 3 will
     survive the execution, delivery and performance of this Agreement
     and the consummation of the Transactions for a period of two
     years following the Closing Date.  The covenants and agreements
     of the Purchaser set forth in this Agreement will survive such
     execution, delivery, performance and consummation until the
     expiration of all applicable statutes of limitations.  No Action
     can be commenced by the Seller with respect to any claim arising
     out of or relating to such warranties, representations, covenants
     or agreements after the expiration of the period for which such
     representations, warranties, covenants and agreements will
     survive pursuant to this Section 7.2 (the "Applicable Purchaser
     Survival Period"); provided, however, that subject to this
     Section 7.2, the Seller will have the right to commence an Action
     after the expiration of the Applicable Purchaser Survival Period
     with respect to claims arising out of or relating to such
     representations, warranties, covenants or agreements that have
     been asserted by Seller under Section 7.4 hereof before the
     expiration of the Applicable Purchaser Survival Period.


7.3  Survival of Representations and Covenants of the Seller.
     The representations and warranties set forth in Section 2 will
     survive the execution, delivery and performance of this Agreement
     and the consummation of the Transactions for a period of two
     years following the Closing Date; provided, however, that the
     representations contained in Sections 2.2, 2.3, 2.10, 2.18 and
     2.21 will survive until the expiration of all applicable statutes
     of limitations (including all periods of extension, whether
     automatic or permissive).  The covenants and agreements of the
     Seller set forth in this Agreement will survive such execution,
     delivery, performance and consummation until the expiration of
     all applicable statutes of limitations.  No Action, including any
     Escrow Claim, can be commenced by the Purchaser with respect to
     any claim arising out of or relating to such warranties,
     representations, covenants or agreements after the expiration of
     the period for which such representations, warranties, covenants
     and agreements will survive pursuant to this Section 7.3 (the
     "Applicable Seller Survival Period"); provided, however, that,
     subject to this Section 7.3, Purchaser will have the right to
     commence an Action or make an Escrow Claim after the expiration
     of the Applicable Seller Survival Period with respect to claims
     arising out of or relating to such representations, warranties,
     covenants and agreements that have been asserted by Purchaser, as
     the case may be, under Section 7.5 before the expiration of the
     Applicable Seller Survival Period.


7.4  Indemnification by the Purchaser.  Subject to Section 7.2,
     the Purchaser will indemnify the Seller for, and will hold it
     harmless from, any and all Damages incurred or sustained by the
     Seller relating to, associated with or arising out of (a) any
     breach of any covenant or agreement contained in this Agreement
     or in any Ancillary Agreement by the Purchaser, ANLIC or First
     SunAmerica; (b) any breach of any of the warranties or
     representations of the Purchaser set forth in Section 3 of this
     Agreement or in any Ancillary Agreement; (c) any Insurance
     Liability; (d) the failure by the Purchaser, ANLIC or First
     SunAmerica to administer the Policy Enhancements in accordance


<PAGE>   60

     with the Policy Enhancements Procedures; or (e) the failure of
     the Purchaser, ANLIC or First SunAmerica to perform its
     obligations arising under Assigned Contracts.

7.5  Indemnification by the Seller.

     7.5.1     General Indemnity.  Subject to Section 7.3, the Seller
     will indemnify the Purchaser, ANLIC and First SunAmerica for, and
     will hold the Purchaser, ANLIC and First SunAmerica harmless
     from, any and all Damages asserted against or incurred or
     sustained by the Purchaser, ANLIC or First SunAmerica relating
     to, associated with or arising out of:  (a) any Excluded
     Liability; (b) any breach of any covenant or agreement contained
     in this Agreement or in any Ancillary Agreement by the Seller;
     (c) death benefits, net of the sum of any amounts recovered from
     reinsurers and Account Values, on deaths occurring on or before
     the Closing Date that are reported prior to the Transition Period
     Termination Date; and (d) any breach of any of the warranties or
     representations of the Seller set forth in Section 2 of this
     Agreement (deleting, for this purpose, (i) any materiality or
     knowledge qualifier or requirement regarding Material Adverse
     Effect contained in the following: Section 2.3.1, Section 2.5,
     Section 2.8, Section 2.12.4, Section 2.12.6, Section 2.12.11 and
     Section 2.17; and (ii) any scheduled exception contained in
     Section 2.12.4(g) of the Seller's Disclosure Schedule).

     7.5.2     Tax Treatment of Policies Indemnity.  Without limiting
     the generality of Section 7.5.1 and subject to Section 7.6.1, the
     Seller will indemnify the Purchaser, ANLIC and First SunAmerica
     for, and will hold the Purchaser, ANLIC and First SunAmerica
     harmless from, any and all Damages asserted against or incurred
     or sustained by the Purchaser, ANLIC or First SunAmerica
     attributable to: (a) costs and losses incurred by Policyholders
     of Reinsured Policies, or payments required to be made to any
     Governmental Authority or Policyholders of Reinsured Policies in
     respect of such costs or losses as a result of the breach of the
     representation contained in Section 2.10.1; and (b) increased
     Taxes of the Purchaser, ANLIC or First SunAmerica as a result of
     the breach of the representation contained in Section 2.10.1;
     provided, that unless and until the cumulative amounts described
     in clauses (a) and (b) of this Section 7.5.2 exceed $750,000, the
     Seller's indemnification obligation will be limited to 50% of
     such Damages and only such 50% share will be applied against and
     reduce the threshold described in Section 7.6.1.  Notwithstanding
     the foregoing sentence, the Seller will have no obligation to
     indemnify or hold harmless the Purchaser, ANLIC or First
     SunAmerica hereunder solely to the extent that any such Damages
     arise as a result of an amendment or modification of a Reinsured
     Policy effected after the assumption of such Policy by ANLIC by
     any Person other than the Seller.

     7.5.3     Tax Reserves Indemnity.  Without limiting the
     generality of Section 7.5.1, the Seller will indemnify the
     Purchaser, ANLIC and First SunAmerica for, and will hold the
     Purchaser, ANLIC and First SunAmerica harmless from, any and all
     Damages asserted against or incurred or sustained by the
     Purchaser, ANLIC or First SunAmerica attributable to costs,
     expenses and increased Taxes as a result of any overstatement in
     the tax reserves as of the Closing Date due to the treatment by
     the Seller (for tax reserving purposes) of the moratorium
     charges.

     7.5.4     Tax Contests.  The Purchaser will: (a) give prompt
     notice to the Seller of any federal income tax adjustment
     proposed in writing pursuant to any tax audit or other proceeding
     with respect to the Purchaser or any of its Affiliates that could
     give rise to a claim under Section 7.1 or with respect to the
     breach of any representation contained in Section 2.10; (b) upon
     the Seller's reasonable request, discuss with the Seller and the
     Seller's counsel the position that the Purchaser or its Affiliate
     intends to take regarding such proposed adjustment; (c) afford
     the Seller and its counsel reasonable opportunity to participate


<PAGE>   61

     in any IRS conference, other administrative proceeding or
     judicial proceeding regarding such proposed adjustment, including
     the right to attend conferences or submit pertinent material in
     support of the Seller's position.  Subject to the preceding
     sentence, the Purchaser will control the forum and contest of any
     challenge by the IRS to the claimed benefit of the Election or
     that could otherwise give rise to a claim for indemnification
     under this Section 7 arising in connection with the audit of a
     federal income tax return or report filed by the Purchaser or its
     Affiliates.  The Seller will control the contest of all other Tax
     matters relating to the Seller or its Affiliates; however, the
     Seller will (i) promptly provide the Purchaser with copies of all
     correspondence and other written communication and notice of
     other communication to or from the IRS with respect to any of the
     Transactions, the Reinsured Policies, the Replacement Policies
     issued with respect to the Reinsured Policies, and the Additional
     Replacement Policies issued with respect to the Excluded
     Policies; (ii) not settle any Tax matter described in clause (i)
     above in a manner which purports to bind the Purchaser or
     adversely affects the Purchaser or its policyholders without the
     Purchaser's written consent, which consent will not be
     unreasonably withheld; and (iii) consult with the Purchaser with
     respect to such Tax matters.  The Purchaser or the Seller will
     appeal any adverse IRS determination arising in a contest subject
     to its control to a court of competent jurisdiction, only if a
     law firm reasonably acceptable to the Seller (or the Purchaser,
     as the case may be) renders an opinion that the Purchaser (or the
     Seller, as the case may be) would have a reasonable likelihood of
     success if such determination were appealed.  Such contest will
     continue only so long as reasonable out-of-pocket expenses of
     such contest (including reasonable legal, accounting and
     actuarial costs, fees and expenses) have been paid by the party
     requesting such appeal within 20 Business Days of a written
     request therefor by the Purchaser.  The Purchaser will not settle
     any dispute with respect to any issue described in clause (a) of
     this Section 7.5.4 absent express written consent by the Seller,
     which will not be unreasonably withheld; provided, however, that
     if the Seller breaches its obligations with respect to reporting
     or fails to pay the out-of-pocket expenses of the contest and
     appeal of the matter when due, the Purchaser will be entitled to
     settle the dispute in its judgment without the Seller's consent.
     So long as amounts are held in the Claims Escrow Account, the
     Purchaser will not, and will not permit any of its Affiliates to,
     request relief from the IRS with respect to any alleged failure
     of any Reinsured Life Policy or Reinsured Annuity Policy to meet
     the requirements for any tax treatment under the Code (for
     example, relief pursuant to Section 7702(f)(8) of the Code,
     Treas. Reg.  1.817-5(a)(2) or any comparable provision of law,
     regulation, rulings or IRS procedures presently or subsequently
     adopted) without the express written consent of the Seller, which
     consent will not be unreasonably withheld.  In connection with
     any such request, and any administrative or judicial proceedings
     with respect thereto, the Seller will be afforded the rights
     granted to it pursuant to this Section 7.5.4 with respect to a
     proposed adjustment arising in connection with the audit of a
     federal income tax return or report filed by the Seller or its
     Affiliates, including the right to consent to any settlement that
     could give rise to the claim for indemnification under this
     Agreement (which consent will not be unreasonably withheld),
     subject to the conditions described above.

7.6  Damages.

     7.6.1     Basket and Threshold.  No claim for indemnification
     will be made by the Purchaser, ANLIC and First SunAmerica on the
     one hand, or the Seller on the other hand, until and unless the
     cumulative Damages incurred by it or them exceeds $1,500,000 in
     the aggregate, it being understood that after such Damages exceed
     such amount, the Indemnifying Party will be liable to the
     Indemnified Party or Parties, in the aggregate, for all
     cumulative Damages in excess of $750,000; provided, however, that
     the limitations in this Section 7.6.1 will not apply to Damages


<PAGE>   62

     claimed or other amounts to be paid out of escrow pursuant to
     Sections 4.12.5, 4.18, 4.21, 5.17, 5.25 and 7.5.3, which Damages
     and amounts will be recoverable from the first dollar thereof.

     7.6.2     Limit on Tax Reserves Indemnity.  The maximum aggregate
     liability of the Seller with respect to Damages claimed pursuant
     to the indemnity set forth in Section 7.5.3 will be the Tax
     Reserves Indemnity Escrow Amount and the earnings thereon held in
     the Tax Reserves Indemnity Escrow Account under the terms of the
     Escrow Agreement.

     7.6.3     Limit on COI Adjustment Amount Recovery.  The maximum
     aggregate liability of the Seller with respect to Damages claimed
     pursuant to Section 4.18 will be the COI Adjustment Escrow Amount
     and the earnings thereon held in the COI Adjustment Escrow
     Account under the terms of the Escrow Agreement.

     7.6.4     Limit on Policy Enhancements Endorsements Indemnity.
     The maximum aggregate liability of the Seller with respect to
     Damages claimed pursuant to Sections 4.12.4 and 4.12.5 will be
     the Policy Enhancements Endorsements Escrow Amount and the
     earnings thereon held in the Policy Enhancements Endorsements
     Escrow Account under the terms of the Escrow Agreement.

     7.6.5     Intentionally Deleted.

     7.6.6     Excluded Damages.  Except with respect to Damages
     arising from any Indemnifying Party's intentional, willful or
     reckless misrepresentation or breaches of warranties or
     agreements made as part of or pursuant to this Agreement, no
     Indemnitor will be liable to any Indemnitee for any punitive,
     exemplary, lost profits, consequential or similar Damages
     relating to the breach or alleged breach of this Agreement.  In
     addition, the Seller will not be liable for Damages relating to
     the breach or alleged breach of any representation or warranty
     set forth in Section 2.10 if the Purchaser takes any position
     with respect to the Reinsured Policies, the calculation of the
     tax reserves for the Reinsured Policies or the crediting of the
     Policy Enhancements Amount to the Account Value of an  Eligible
     Policy for federal income tax purposes which is inconsistent with
     such representation or warranty unless the Purchaser, prior to
     taking such position, will have provided to the Seller a legal
     opinion, addressed to the Seller from a nationally recognized law
     firm, which firm is reasonably acceptable to the Seller,
     concluding that there is not substantial authority (as determined
     for purposes of Section 6662 of the Code) for the Purchaser to
     take a position that is consistent with such representation or
     warranty.

     7.6.7     Exclusive Remedy.  Except with respect to Damages
     arising from: (a) the Seller's failure to pay when due the
     amounts described in Section 4.14.1 and 4.14.2; (b) the Seller's
     failure to authorize the release of funds from escrow to pay the
     expense reimbursements set forth in Sections 4.14.2 and 4.22;
     (c) the Seller's failure to pay or deliver when due amounts or
     other assets relating to the Ceding Commission, the Transferred
     Reserve Assets, the other Transferred Reserve Assets, and the
     amounts to be funded into escrow under the Escrow Agreement; or
     (d) the Excluded Liabilities, the indemnities provided for in
     this Section 7 will be the sole and exclusive remedy for monetary
     damages of the Purchaser after the Closing for any inaccuracy of
     any representation or warranty of the Seller or any failure or
     breach of any covenant, obligation, condition or agreement to be
     performed or fulfilled by the Seller in this Agreement and the
     Seller's maximum liability under such indemnities will be limited
     to the amounts deposited into escrow and, where applicable, the
     earnings thereon, under the Escrow Agreement.  Except as provided
     in the preceding sentence, no claim may be brought by the
     Purchaser, ANLIC or First SunAmerica in excess of the aggregate
     escrowed amount plus all accrued interest and earnings on such
     amount; provided, however, none of the Purchaser, ANLIC or First
     SunAmerica will be prohibited from bringing any claim against the


<PAGE>   63

     Seller, whether pursuant to this Section 7 or another Action,
     arising from the Seller's intentional, willful or reckless
     misrepresentation or breach of representations, warranties or
     agreements made as part of or pursuant to this Agreement even if
     such claim, when taken together with all prior Damages recovered
     pursuant to this Section 7, exceeds the aggregate escrowed
     amount; and provided further, Outward Reinsurance Escrow Claims
     (as defined in the Escrow Agreement) that exceed the Outward
     Reinsurance Escrow Amount will be satisfied out of the Claims
     Escrow Account.

7.7  Indemnification Procedure.

     7.7.1     Notice of Claim.  Within a reasonable time after
     obtaining knowledge thereof, a Person who may be entitled to
     indemnification hereunder (the "Indemnitee") will promptly give
     the party who may be obligated to provide such indemnification
     (the "Indemnitor") written notice (a "Notice of Claim") of any
     Damages suffered by the Indemnitee that the Indemnitee has
     reasonably determined has given or could give rise to a claim for
     indemnification hereunder.  No failure or delay in giving any
     such Notice of Claim will relieve the Indemnitor of its
     obligations unless, and only to the extent, that it is materially
     prejudiced thereby.  A Notice of Claim will specify in reasonable
     detail the nature and scope of such Damages.  The Indemnitor,
     after making a good faith determination, based on the facts
     alleged in such Notice of Claim or that are otherwise known to
     Indemnitor, will, within 30 days after the Indemnitor has
     received such Notice of Claim, either (a) inform the Indemnitee
     in writing that the Indemnitor acknowledges that it has an
     indemnification obligation hereunder in respect of such Damages
     set forth in the Notice of Claim (a "Claim Acceptance Notice")
     and will perform its indemnification obligations in respect of
     such Damages, including, where the Seller is the Indemnitor, by
     executing an instruction to the escrow agent under the Escrow
     Agreement to release escrowed funds in the amount of such
     Damages; or (b) dispute such Notice of Claim in writing,
     specifying in reasonable detail the nature and extent of the
     dispute (a "Claim Dispute Notice"); provided, however, that with
     respect to Tax matters arising in connection with a government
     tax audit of the Seller, the Purchaser or their Affiliates, for
     which procedures are provided in Section 7.1 or Section 7.5.4,
     the parties will follow the procedures set forth in Section 7.1.
     The Indemnitee can take any action it deems necessary to preserve
     its rights with respect to such Damages during such 30 day
     period, but will not settle the claim giving rise to such Damages
     or proceed to final judgment with respect thereto prior to the
     expiration of such 30 day period.  If Indemnitor fails to respond
     with either a Claim Acceptance Notice or a Claim Dispute Notice
     within such 30 day period, Indemnitor will be deemed to have
     delivered a Claim Acceptance Notice on the 30th day.

     7.7.2     Third Party Claims.  Other than with respect to those
     Tax matters that are covered by Section 7.1 or Section 7.5.4, if
     the Damages relate to a Third Party Claim and the Indemnitor has
     delivered a Claim Acceptance Notice, the Indemnitor will be
     entitled, in good faith and at its own cost and expense, to
     participate in any Action and/or direct the defense or settlement
     of any Action or otherwise to cure, remediate, mitigate, remedy
     or otherwise handle any event or circumstance that gives rise to
     such Damages.  Subject to the following provisions of this
     Section 7.7.2 and, other than with respect to those Tax matters
     that are covered by Section 7.5.4, such right will include:
     (a) the right to investigate any such event or circumstance;
     (b) the right to cure, mitigate, remediate, remedy and otherwise
     handle any such event or circumstance on such terms and
     conditions and by such means as the Indemnitor may reasonably
     determine; and (c) the right to defend, contest or otherwise
     oppose any Third Party Claim with legal counsel selected by it.
     The Indemnitor will promptly inform the Indemnitee of all
     material developments related to any such Third Party Claim.
     Other than with respect to Tax matters which are covered by


<PAGE>   64

     Section 7.5.4, notwithstanding anything contained herein to the
     contrary, the Indemnitee will have the right, but not the
     obligation, to participate, at its own cost and expense, in the
     defense, contest or other opposition of any such Third Party
     Claim through legal counsel selected by it, and will have the
     right, but not the obligation, to assert any and all
     cross-claims, counterclaims or other Actions that it may have. So
     long as the Indemnitor is assuming the defense of such Action in
     accordance with this Section 7.7.2, the Indemnitee will (a) at
     Indemnitor's cost and expense, cooperate in all reasonable ways
     with, make its relevant files and records available for
     inspection and copying by, make its employees reasonably
     available to and otherwise render reasonable assistance to the
     Indemnitor upon request and (b) not compromise or settle any such
     Action without the prior written consent of the Indemnitor.  If
     the Indemnitor does not elect to assume the defense of any such
     claim or action, the Indemnitee will act reasonably and in
     accordance with its good faith business judgment with respect
     thereto, and will not settle or compromise any such claim or
     action without providing the Indemnitor the opportunity to
     participate in the settlement or reassume the defense of the
     Action.  If the Indemnitee is entitled to indemnification
     hereunder in respect of the event or circumstance as to which the
     Indemnitee takes such actions, then the Indemnitor will, in
     addition to indemnifying Indemnitee for the Damages, indemnify
     the Indemnitee for all of the reasonable legal, accounting,
     actuarial and other costs, fees and expenses incurred in
     connection therewith; provided, however, that after notice to the
     Indemnitee of the Indemnitor's election to assume the defense of
     such claim or action, the Indemnitor will not be liable to the
     Indemnitee under this Section 7 for any such legal, accounting,
     actuarial costs, fees and expenses subsequently incurred by the
     Indemnitee in connection with the defense thereof other than
     reasonable costs of investigation, provided that the Indemnitee
     will have the right to employ counsel to represent it if the
     Indemnitee has available to it one or more defenses or
     counterclaims that are inconsistent with one or more of those
     claims alleged by the Indemnitor, and in any such event the fees
     and expenses of such separate counsel will be paid by the
     Indemnitee.  If the Indemnitor proposes to settle or compromise
     any such Third Party Claim, the Indemnitor will give written
     notice to that effect (together with a statement in reasonable
     detail of the terms and conditions of such settlement or
     compromise) to the Indemnitee a reasonable time prior to
     effecting such settlement or compromise.  The Indemnitee will
     have the right: (x) to approve such settlement or compromise;
     (y) to object to such settlement or compromise, whereupon, if
     such settlement or compromise is solely for cash, the Indemnitee
     will assume the defense, contest or other opposition of such
     Third Party Claim for its own account and as if it were the
     Indemnitor and the Indemnitor will be released from any and all
     liability with respect to such Third Party Claim to the extent
     that such liability exceeds the liability that the Indemnitor
     would have had in respect of such a settlement or compromise; or
     (z) to assume, at any time by giving written notice to that
     effect to the Indemnitor, the cure, mitigation, remediation,
     remedy or other handling of such event or circumstance and the
     defense, contest or other opposition of such Third Party Claim
     for its own account, whereupon the Indemnitor will be released
     from any and all liability with respect to such event or
     circumstance and such Third Party Claim.

     7.7.3     Disputes.  If the Indemnitor timely delivers a Claim
     Dispute Notice, the Indemnitor and the Indemnitee will proceed to
     resolve the dispute in accordance with the provisions of
     Section 8.  Prior to final resolution thereof, the Indemnitee can
     take any action it deems necessary to preserve its rights with
     respect to the relevant Damages, but will not settle the claim
     giving rise to such Damages or proceed to final judgment with
     respect thereto.

     7.7.4     Mitigation.  Notwithstanding anything contained herein


<PAGE>   65

     to the contrary, each party will use, and will cause its
     Affiliates to use, commercially reasonable efforts to mitigate
     any and all Damages in respect of which it may be entitled to
     indemnification hereunder.

7.8  Release of Funds From Escrow.

     7.8.1     DAC Election/Reduction Escrow Amount.  Subject to the
     terms of the Escrow Agreement with respect thereto, the remaining
     amount, if any, in the DAC Tax Indemnity Account, less the
     aggregate amount sought under any pending claims, will be
     released from escrow and delivered to the Seller as provided in
     Section 7.1.

     7.8.2     Outward Reinsurance Escrow Amount.  Subject to the
     terms of the Escrow Agreement with respect thereto, the remaining
     amount, if any, in the Outward Reinsurance Escrow Account, less
     the aggregate amount of any pending claims, will be released from
     escrow and delivered to the Seller as provided in Section 5.16.

     7.8.3     Tax Reserves Indemnity Escrow Amount.  Subject to the
     terms of the Escrow Agreement with respect thereto, the remaining
     amount, if any, in the Tax Reserves Indemnity Escrow Amount, less
     the aggregate amount sought under any pending claims, will be
     released from escrow and delivered to the Seller upon the
     earliest to occur of (a) the date that is 20 Business Days after
     the date on which the Seller provides to the Purchaser a copy of
     the documents evidencing a Final Determination that the treatment
     either (x) by the Purchaser of the moratorium charges (for tax
     reserving purposes), so long as the Purchaser's treatment is
     consistent with the Seller's treatment, is appropriate, or (y) by
     the Seller of the moratorium charges, if the Purchaser's
     treatment is not consistent with the Seller's treatment of such
     charges, is appropriate; (b) the Business Day following payment
     in full of the Purchaser's Damages (up to the amount held in the
     Tax Reserves Indemnity Account) as a result of a Final
     Determination that the treatment by the Seller of the moratorium
     charges is not appropriate; or (c) on the Escrow Termination
     Date.  If the Purchaser and the Seller are unable to agree on the
     calculation of the Purchaser's Damages within 30 days of the
     Seller's providing to the Purchaser the documents specified in
     clause (b) above, the dispute will be submitted for final
     resolution by the Independent Party in accordance with
     Section 8.5.

     7.8.4     Claims Escrow Amount.  Subject to the terms of the
     Escrow Agreement with respect thereto, (a) the remaining amount
     in the Claims Escrow Account in excess of the sum of $22,500,000
     and the aggregate amount sought under any pending claims will be
     released from escrow and delivered to the Seller on the second
     anniversary of the Closing Date; (b) the remaining amount in the
     Claims Escrow Account in excess of the sum of $11,250,000 and the
     aggregate amount sought under any pending claims, will be
     released from escrow and delivered to the Seller on the fourth
     anniversary of the Closing Date; and (c) the remaining amount in
     the Claims Escrow Account in excess of the aggregate amount
     sought under any pending claims will be released from escrow and
     delivered to the Seller on the Escrow Termination Date.

     7.8.5     COI Adjustment Escrow Amount.  Subject to the terms of
     the Escrow Agreement with respect thereto, the remaining amount,
     if any, in the COI Adjustment Escrow Account, less the aggregate
     amount sought under any pending claims, will be released from
     escrow and delivered to the Seller on the last day of the 15th
     month following the Rehabilitation Period Termination Date.

     7.8.6     Policy Enhancements Endorsements Escrow Amount.
     Subject to the terms of the Escrow Agreement with respect
     thereto, the remaining amount, if any, in the Policy Enhancements
     Endorsements Escrow Account, less the aggregate amount sought
     under any pending claims, will be released from escrow and
     delivered as provided in Section 4.12.5.

<PAGE>   66

     7.8.7     Notices and Joint Instructions.  In each case where
     funds are to be added to or released from escrow pursuant to this
     Agreement on a date that is not certain as of the date hereof,
     the parties will each execute and deliver an appropriate notice
     or joint instruction to the Escrow Agent establishing such date,
     specifying the amount to be added to or released from escrow and
     either directing the Escrow Agent to release such amount to the
     party entitled to receive such amount or including with such
     notice or instruction a deposit from the party obligated to add
     such amount to the relevant escrow.  The parties will also each
     execute a notice to the Escrow Agent if this Agreement is
     terminated pursuant to Section 10.3.

                       8.   DISPUTE RESOLUTION

8.1  Governing Law.  This Agreement will be construed, performed
     and enforced in accordance with the laws of the State of New
     Jersey.

8.2  Arbitration of Disputes.

     8.2.1     Matters in Exclusive Jurisdiction of Court.  Prior to
     the Closing Date, any dispute will remain in the exclusive
     jurisdiction of the Court.  Following the Closing Date, any claim
     for indemnification or other dispute involving any of the
     following matters will remain in the exclusive jurisdiction of
     the Court: the calculation or payment of the Policy Enhancements
     or Account Values True-Up, the issuance of Replacement Policies
     in accordance with the terms of this Agreement and the
     termination of the Rehabilitation Period.

     8.2.2     Pre-Arbitration Dispute Resolution.  Except as
     expressly provided in Section 8.2.1, the parties will attempt in
     good faith to resolve any dispute, controversy or claim under,
     arising out of, relating to, or in connection with this Agreement
     or any of the Ancillary Agreements, including the negotiation,
     execution, interpretation, construction, performance, non-
     performance, breach, termination, validity, scope, coverage or
     enforceability of this Agreement or any of the Ancillary
     Agreements or of this Section 8.2 (a "Dispute"), promptly by
     negotiations between the parties without the initiation of an
     Action by either party, unless necessary to preserve any
     applicable statute of limitations.  If the parties are unable to
     resolve said Dispute within 30 days after a party gives a notice,
     referring to this Section 8.2, that it wants to commence such
     negotiations (which period can be extended by mutual agreement),
     the parties will resolve the Dispute as set forth below;
     provided, however, if this Agreement expressly provides that such
     Dispute will be resolved by the Independent Party, the parties
     will proceed in accordance with the procedures set forth in
     Section 8.5.

     8.2.3     Arbitration.  If the parties are unable to resolve any
     Dispute in the time period set forth in Section 8.2.2, and such
     Dispute is not to be resolved by the Independent Party pursuant
     to the terms of this Agreement, the parties hereby agree to
     arbitrate all such Disputes pursuant to the terms of this
     Section 8.2.3.  To initiate arbitration, a party must give notice
     to the other party after the time period set forth in
     Section 8.2.2 expires.  All arbitrations will be conducted in
     accordance with the Center For Public Resources ("CPR") Rules for
     Non-Administered Arbitration of Business Disputes before a panel
     of three arbitrators, one of whom will be selected by the
     Purchaser, the second of whom will be selected by the Seller and
     the third of whom will be selected by the other two arbitrators
     and will chair the tribunal.  If either party fails or refuses to
     select an arbitrator within fifteen days after notice of the
     selection of the first arbitrator, or the two arbitrators
     selected fail to select the third arbitrator within fifteen days
     after their selection, the necessary arbitrator or arbitrators
     will be selected by the presiding judge of a court of general
     jurisdiction in New York.  Decisions of the tribunal must be made


<PAGE>   67

     by not less than two of the arbitrators.  The arbitration will be
     governed by the Federal Arbitration Act (9 U.S.C.  1-16). The
     arbitration, including the determination of any amount of Damages
     suffered by any party hereto by reason of the acts or omissions
     of any party, will be final and binding upon the parties to the
     maximum extent permitted by Applicable Law, except that the
     arbitrators will not be authorized to award punitive damages with
     respect to any such Dispute or to revise or restructure the
     business or economic terms of the Transactions.  No party will
     seek punitive Damages relating to any matter under, arising out
     of, in connection with or relating to this Agreement in any other
     forum.  The parties intend this Section 8 to be legal, valid,
     binding, enforceable and irrevocable and that it survive any
     termination of this Agreement.

     (a)  Upon request of either party, the arbitrators will order
     such discovery (including third-party discovery) as the
     arbitrators determine to be reasonable under the circumstances.
     The arbitrators will, however, impose reasonable schedules and
     deadlines to ensure that discovery is produced, conducted and
     concluded on a timely basis and will impose sanctions on either
     party for abuse or delay of discovery.  Rules of evidence will be
     applied as the arbitrators determine to be reasonable under the
     circumstances.

     (b)  In their award, the arbitrators must allocate between the
     parties all costs and expenses of arbitration, including the fees
     and expenses of the arbitrators, and reasonable attorneys' fees,
     costs and expert witness and other expenses.  Any arbitration
     proceedings hereunder must be held in New York, New York.
     Judgment upon any award rendered by the arbitrators can be
     entered by any Court having jurisdiction thereof.
     (c)  If the rules of the CPR differ from those of this
     Section 8.2.3, the provisions of this Section 8.2.3 will control.

     8.2.4     Confidentiality.  All offers, promises, conduct and
     statements, whether oral or written, made in the course of the
     settlement discussions, Independent Party process or arbitration
     process (including the notices) by any party or its
     Representatives are confidential.  All such information will be
     considered "settlement negotiations" and will not be referred to
     or used, or be admissible or discoverable, for any purpose in any
     subsequent Action between the parties (other than to the limited
     extent that it would be relevant to establish the intent of the
     parties if necessary to clarify any ambiguity in any final,
     written settlement reached).  Notwithstanding the foregoing, the
     Independent Party and/or the arbitrators are disqualified as
     witnesses in any subsequent Action for any party to the
     Independent Party proceedings or arbitration and any oral or
     written statement or opinion expressed by the Independent Party
     or the arbitrators during the Independent Party proceedings or
     arbitration is inadmissible for all purposes in any subsequent
     Action.

     8.2.5     Interim Relief.  If a party believes immediate interim
     relief is necessary to preserve the status quo during or prior to
     Independent Party proceedings or arbitration, or to compel
     Independent Party proceedings or arbitration as required hereby,
     it can file an Action in an appropriate court identified in
     Section 8.3 to seek interim relief as contemplated by
     Section 8.4.  The substantially prevailing party under this
     Section 8.2.5 will have all of its reasonably incurred costs in
     bringing, or opposing, as the case may be, such Action, including
     all reasonable attorneys' fees and any out-of-pocket expenses
     paid by the other party.

     8.2.6     Enforcement.  Any refusal to proceed with Independent
     Party review or arbitrate under this Section 8.2 is a breach of
     contract for which Damages can be recovered.  If the party who
     ultimately prevails in any Action institutes an Action (other
     than under Section 8.2.5) without first attempting Independent
     Party review or arbitration as required hereby, such party will


<PAGE>   68

     not be entitled to attorneys' fees or costs that might otherwise
     be available to it under this Agreement in connection with such
     Action.  If a party refuses to proceed with Independent Party
     review or arbitrate prior to filing an Action and ultimately is
     not the substantially prevailing party in the Action, it will be
     liable for all attorneys' fees and costs reasonably incurred in
     the Action by the other party.

8.3  Consent to Jurisdiction; Waiver of Jury Trial, etc..

     8.3.1     Consent to Jurisdiction.

     (a)  Subject to Sections 8.2 and 8.5, each of the parties hereto
     hereby submits to the jurisdiction of the Court, and any
     appellate court thereof, to enforce any settlement, Independent
     Party or arbitration award pursuant to Sections 8.2 and 8.5, and
     each of the parties hereto hereby agrees that all such claims may
     be heard and determined in such New Jersey state court or, to the
     extent permitted by Applicable Law, in a federal court in New
     Jersey.  A final judgment in any such Action will be conclusive
     and can be enforced in other jurisdictions by suit on the
     judgment or in any other manner provided by Applicable Law.

     (b)  Each of the parties hereto hereby waives, to the fullest
     extent it may legally and effectively do so, any objection that
     it may now or hereafter have to the laying of venue of any Action
     in any New Jersey state or federal court.  Each of the parties
     hereto hereby waives, to the fullest extent permitted by
     Applicable Law, the defense of an inconvenient forum to the
     maintenance of such Action in any such court.

     (c)  Each party to this Agreement irrevocably consents to service
     of process in the manner provided for notices in Section 10.5.
     Nothing in this Agreement will affect the right of any party to
     this Agreement to serve process in any other manner permitted by
     Applicable Law.

     8.3.2     Waiver of Jury Trial.  EACH PARTY ACKNOWLEDGES AND
     AGREES THAT ANY CONTROVERSY THAT MAY ARISE UNDER THIS AGREEMENT
     IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND
     THEREFORE IT HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY
     RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
     DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS
     AGREEMENT OR THE TRANSACTIONS.

8.4  Injunctive Relief.  Each party acknowledges and agrees that
     its failure to perform any of its agreements and covenants in
     this Agreement would cause irreparable injury to the other party
     and would cause Damages that would be difficult to ascertain or
     quantify.  Accordingly, without limiting any remedies that may be
     available with respect to any breach of this Agreement, each
     party consents to the entry by an arbitrator or a court of
     temporary restraining orders, preliminary and permanent
     injunctions, and other appropriate interim relief or equitable
     remedies or to compel Independent Party proceedings or
     arbitration as required hereby.

8.5  Independent Party.  Except with respect to Disputes
     involving the calculation of the Final Closing Date Statement,
     which will be resolved in accordance with the procedures set
     forth in Section 1.3.2, the parties will employ the following
     procedures with respect to the submission of Disputes to the
     Independent Party.  If the parties are unable to resolve a
     Dispute that is required by this Agreement to be submitted to the
     Independent Party within the time period set forth in
     Section 8.2.2 (or such other time period provided in the relevant


<PAGE>   69

     section), such Dispute will be submitted to the Independent
     Party, who will be selected in the manner described in
     Section 1.3.2.  To initiate the Independent Party review process,
     a party must give notice to the other party of its intent to
     commence such review process after the time period set forth in
     Section 8.2.2 (or such other time period provided in the relevant
     section) expires.  Upon confirmation or selection of the
     Independent Party by the parties, the parties will have ten
     Business Days to provide the Independent Party with any and all
     information relevant to the Independent Party's determination,
     and will otherwise cooperate with the Independent Party to assist
     its prompt resolution of any Dispute brought before it.  The
     parties will also notify the Independent Party if final payment
     of a Dispute will be made out of one of the escrow accounts
     established pursuant to this Agreement and the Escrow Agreement,
     and if so, the proper address that the Independent Party should
     use for notifying the Escrow Agent of its final decision of the
     Dispute (as required below).  The Independent Party will make a
     final decision within 30 days of the submission of such
     information.  Once the Independent Party makes a final decision
     as to a Dispute brought before it, the Independent Party will
     notify the parties and the Escrow Agent, if applicable, of its
     decision.  The decision of the Independent Party will be final
     and binding upon the parties to the maximum extent permitted by
     Applicable Law.  Within five Business Days of the Independent
     Party's notice of its final decision, the relevant party will
     deliver to the recipient party cash, or where amounts with
     respect to such Dispute are to be paid out one of the escrow
     accounts established pursuant to this Agreement and the Escrow
     Agreement, a written consent to the immediate release of such
     amount to the recipient party, in the amount indicated in such
     notice, together (except with respect to amounts payable out of
     the DAC Tax Indemnity Account) with interest on such amount from
     the date initially due under this Agreement to the date of
     payment at the rate of 6.8% per annum.  The fees and expenses of
     the Independent Party will be paid by the party that is not
     deemed by the Independent Party to be the substantially
     prevailing party of such Dispute.  However, if either (i) no
     party is deemed the substantially prevailing party by the
     Independent Party, or (ii) the Dispute is settled by the parties
     prior to resolution by the Independent Party, then the fees and
     expenses of the Independent Party will be paid equally by the
     Seller and the Purchaser.

                             9.   DEFINITIONS

As used herein, the following terms have the following meanings:

"401(k) Contract" means a Covered Contract relating to a plan
intended to qualify under Section 401(k) of the Code.

"Acceptable Law Firm" is defined in Section 7.1.6.

"Account Value" means, as of a reference date, (i) with respect
to each Contract other than Contracts in Pay Status and term life
policies, the amount that would be payable to the Policyholder in
the event of surrender on such date, before the application of
surrender charges or moratorium charges, and (ii) with respect to
each Contract in Pay Status and term life policy, the statutory
reserve for such Contract as of such date.

"Account Values True-Up" means the amount of additional credited
interest to be applied to certain Reinsured Policies pursuant to
enhanced guarantees under the Plan and certain Rehabilitation
Documents.

"Account Values True-Up Amount" means the maximum amount of the
Account Values True-Up as calculated by the Seller in compliance
with the terms of the Plan and the Rehabilitation Documents as in
effect on the Closing Date.

"Account Values True-Up Date" means as soon as reasonably
practicable after the Rehabilitation Period Termination Date, but
in no event later than the 15th Business Day following the
Rehabilitation Period Termination Date.

"Accumulation Contract" means any individual or group annuity
Contract, except that the term "Accumulation Contract" does not


<PAGE>   70

include a Separate Account Contract or a Contract in Pay Status.
The term "Accumulation Contract" includes an income certificate
elected prior to July 16, 1991 pursuant to the election of an
"interest income option" under a matured or surrendered life
insurance Contract (including pursuant to the application of
death benefit proceeds).

"Action"  means any action, complaint, petition, audit,
investigation, suit, claim, dispute, controversy or other
proceeding whether civil, criminal or administrative, in law or
in equity or by or before any Governmental Authority.

"Acquisition Proposal" means any proposal or proposals for, or
agreement or agreements relating to, the sale or disposition
(including pursuant to a reinsurance or similar arrangement
involving the Reinsured Life Policies, the Reinsured Annuity
Contracts and the Transferred Assets) of all or substantially all
of the Business in one or a series of transactions with one or
more Persons other than the Purchaser or its Affiliates.

"Additional Enhancements DAC Amount" means the product of (a) .22
multiplied by (b) the sum of the products of (i) the amount of
the Additional Policy Enhancements Amount paid to the Purchaser
or its Affiliates that is allocated to each category (as
described in Section 848(c) of the Code) of Specified Insurance
Contracts (as defined in Section 848(e) of the Code) (following
allocation of the Additional Policy Enhancements Amount between
Specified Insurance Contracts and non-Specified Insurance
Contracts) based on the relative Impairments of all contracts on
the Scheduled Vesting Date, multiplied by (ii) the percentage
provided in Section 848(c)(1) of the Code applicable to each such
category of Specified Insurance Contracts.

"Additional Policy Enhancements Amount" is defined in
Section 4.12.2.

"Additional Replacement Policy" is defined in Section 5.10.2.

"Administrative Services Agreement"  means the Administrative
Services Agreement to be entered into between the Seller and the
Purchaser substantially in the form of Exhibit C.

"Affiliate" with respect to any Person means any other Person
that directly or indirectly controls, is controlled by, or is
under common control with, the referenced Person.

"Agent Debit Balance" means a balance owed to the Seller by an
insurance agent or other producer for advances, loans and other
payments.

"Agreement" means this Purchase and Sale Agreement, including the
Schedules and Exhibits.

"Allocation Regulations" is defined in Section 7.1.2.

"Allowed Claim" is defined in the Plan.

"Ancillary Agreements" means the Assumption Reinsurance
Agreements, the Indemnity Reinsurance Agreement, the
Administrative Services Agreement, the Transition Services
Agreement, the Bill of Sale, the Escrow Agreement, the Expense
Reimbursement Escrow Agreement and any other agreements to
effect, or in connection with, the Transactions.

"ANLIC" is defined in the introductory paragraph.


"ANLIC Assumption Reinsurance Agreement" means the Assumption
Reinsurance Agreement that is substantially in the form of
Exhibit A-1.

"ANLIC Audited SAP Statements" is defined in Section 3.6.3.

<PAGE>   71

"ANLIC SAP Statements" is defined in Section 3.6.3.

"ANLIC Statutory Statements" is defined in Section 3.6.2.

"Annuity Contracts" means all individual and group annuity
Contracts in effect on the date hereof, or on the Closing Date,
as applicable, including the Reinsured Annuity Contracts and the
Excluded Annuity Contracts.

"Applicable Law"  with respect to any Person means any domestic
or foreign, federal, state, provincial or local statute, law
(including common law), ordinance, rule, administrative
interpretation or other interpretation by a Governmental
Authority, regulation, bulletin, order, writ, injunction,
directive, judgment, decree, rule or other requirement of any
Governmental Authority applicable to such Person, its business or
any of its respective properties or assets, including the
insurance laws, rules and regulations of the jurisdictions in
which the Reinsured Policies are issued, as well as those of any
other applicable jurisdictions.

"Applicable Purchaser Survival Period" is defined in Section 7.2.

"Applicable Seller Survival Period" is defined in Section 7.3.

"Assigned Contracts" is defined in Section 1.1.4.

"Assumption Date" is defined in the Assumption Reinsurance
Agreements.

"Assumption Reinsurance Agreements" is defined in Section 1.4.1.

"Assumptions" is defined in Section 7.1.2.

"Audited Purchaser Financial Statements" is defined in
Section 3.6.1.

"Audited SAP Statements" is defined in Section 2.6.3.

"Base Ceding Commission" is defined in Section 1.1.1.

"Benefit Plan" means a Fully Administered Qualified Plan, a Tax
Deferred Annuity Arrangement or an Other Plan.

"Bill of Sale" means the Bill of Sale to be delivered by the
Seller at the Closing substantially in the form of Exhibit F.

"Books and Records" means the originals or copies of all
policyholder, accountholder, and customer lists, policy
information, Reinsured Policies, forms and rating plans,
disclosure and other documents and filings required under
Applicable Laws, claim records, sales records, underwriting
records and financial, accounting, Tax, business, marketing and
compliance records relating to the operation of the Business, the
Reinsured Policies or the Transferred Assets, including any data
base, magnetic, electronic or optical media (to the extent not
subject to licensing restrictions) and any other form of
recorded, computer generated or stored information or process.

"Business" is defined in the Recitals.

"Business Day" means any day other than a Saturday, Sunday or a
day on which banking institutions in the States of New Jersey,
Arizona, California or New York are permitted or obligated by law
to be closed.

"Calculation Date" is defined in Section 1.1.2.

"Cash Equivalents" means: (a) securities issued or directly and
unconditionally guaranteed by the United States Government or
issued by any agency thereof and backed by the full faith and
credit of the United States, in each case maturing not later than


<PAGE>   72

June 30, 1999; (b) commercial paper maturing not later than
June 30, 1999 and, as of the relevant date of valuation having a
rating of at least A-1 from Standard & Poor's Ratings Group and
at least P-1 from Moody's Investors Service; (c) certificates of
deposit or bankers' acceptances maturing not later than June 30,
1999 issued by any commercial bank organized under the laws of
the United States of America or any state thereof or the District
of Columbia having unimpaired capital and surplus of not less
than $500,000,000; and (d) money market funds that maintain a
stable net asset value and have the highest rating obtainable
from either Standard & Poor's Ratings Group or Moody's Investors
Service, Inc.

"Ceding Commission" is defined in Section 1.1.1.

"Certified Estimated Closing Date Statement" is defined in
Section 5.2.2.

"Certified Statement Date" is defined in Section 5.2.2.

"Claim Acceptance Notice"  is defined in Section 7.7.1.

"Claim Dispute Notice"  is defined in Section 7.7.1.

"Claims Escrow Account" is defined in the Escrow Agreement.

"Claims Escrow Amount" means $45,000,000, comprised of cash and
Cash Equivalents, each valued at their respective Value as of the
Closing Date, and deposited by the Seller on the Closing Date in
the Claims Escrow Account.

"Class Four Creditor" is defined in the Settlement Agreement.

"Class Four Creditor Value Share" is defined in the Settlement
Agreement.

"Closing" is defined in Section 1.2.1.

"Closing Conditions" is defined in Section 6.1.

"Closing Date" is defined in Section 1.2.1.

"Code" means the Internal Revenue Code of 1986, as amended, and
the rules and regulations promulgated thereunder.

"COI Adjustment Amount" means an amount equal to $750,000
multiplied by the product of (a) 100 multiplied by (b) the
percentage increase in the Modified COI Scale pursuant to
Section 4.18, plus accrued interest at a rate of 6.8% per annum
from the date of any such adjustment pursuant to Section 4.18.2
until the date of payment.  For example, if the Account Values
for Reinsured Life Policies remaining one year following the
Transition Period Termination Date, expressed as a percentage of
Account Values on December 31, 1997, is 91.8%, then the percent
increase in COI is calculated as follows: the result of:
(i) (A) .7% multiplied by (B) 95% minus 91.8%; divided by
(ii) 1%.  This example would yield a COI Scale factor equal to
2.24 and a COI Adjustment Amount of $1,680,000 (2.24 multiplied
by $750,000) plus interest thereon at the above rate.

"COI Adjustment Escrow Account" is defined in the Escrow
Agreement.

"COI Adjustment Escrow Amount" means $6,000,000, comprised of
cash and Cash Equivalents, each valued at their respective Value
as of the Closing Date, and deposited by the Seller on the
Closing Date in the escrow account established pursuant to the
Escrow Agreement.

"COLI DAC Election Escrow Amount" means the amount placed in
escrow in connection with the separate sale of the Seller's COLI
business to a third party with respect to the DAC election sought


<PAGE>   73

by the Seller in such transaction.

"Combination Contracts" means Contracts with respect to which
assets are held in both Seller's general account and in Seller's
Separate Account B.

"Commission Agreements" means all agreements providing for the
payment of Commissions relating to any Reinsured Policy.

"Commissioner" is defined in the Recitals.

"Competitive Bidder" is defined in Section 4.16.

"Competitive Bid Order" is defined in Section 4.16.

"Confidentiality Agreement" means that certain Confidentiality
Agreement dated October 30, 1997 between the Purchaser and
Goldman Sachs & Co., as representative of the Seller.

"Contract" means a life insurance, health insurance, disability
income insurance, endowment or annuity contract issued by the
Seller or Mutual Benefit.  The term "Contract" includes, without
limitation, any and all individual and group annuity and
investment contracts issued by the Seller or Mutual Benefit under
or in connection with employee benefit plan or programs to which
Section 401, 403(b), 408 or 457 of the Code relate, to whomever
or whatever Persons such Contracts are issued, together with all
individual annuities issued pursuant to such Contracts.

"Contract in Pay Status" means any Contract, the terms of which
provide for the Seller or Mutual Benefit to make periodic
payments for a period measured by the life or lives of
individuals or for a period of years, including: (a) obligations
under individual annuity contracts (including individual
retirement annuities); (b) annuity certificates issued under
group annuity contracts; and (c) income certificates evidencing
settlement options elected under matured or surrendered life
insurance policies (other than "interest income options" elected
prior to July 16, 1991), provided such payments have commenced.
The term "Contract in Pay Status" includes a Contract designated
by the Seller or Mutual Benefit as a dedicated investment
portfolio Contract or as a lottery Contract and does not include
a Separate Account Contract.

"Cost of Insurance" means the monthly rate to be charged to
provide mortality and other ancillary benefits on a life
insurance policy.

"Court" is defined in the Recitals.

"Covered Accumulation Contracts" means Accumulation Contracts
that are Covered Contracts.

"Covered Contract" means (i) those Restructured Contracts and
Reaffirmed Contracts that are covered, in whole or in part, by a
Participating Guaranty Association under the Participation
Agreement and (ii) those unsupported Contracts that would have
been Covered Contracts if the relevant Guaranty Association had
been a Participating Guaranty Association.

"CPR" is defined in Section 8.2.3.

"CRVM Method" means the Commissioner Reserve Valuation Method as
prescribed by each jurisdiction in which the Seller files its
Statutory Statements.

"DAC Amount" is defined in Section 7.1.1.

"DAC Election Escrow Amount" means the amount determined in
accordance with the calculation set forth in Section 1 of
Schedule 9, as provided in Section 7.1.8(a), with respect to the
Purchaser's assumption and reinsurance of the Reinsured Policies


<PAGE>   74

in the absence of the Election.

"DAC Reduction Amount" means the product of .22 multiplied by
that portion of the sum of (a) the unamortized balance (as of the
beginning of its taxable year which includes the Closing Date) of
amounts previously capitalized by the Seller under Section 848(a)
of the Code, plus (b) any amount required to be capitalized by
the Seller under Section 848(a) of the Code for its taxable year
which includes the Closing Date that is allocable to the
Purchaser and its Affiliates in connection with the Transactions,
as determined under the Allocation Regulations.

"DAC Reduction Escrow Amount" means the amount determined in
accordance with the calculation set forth in Section 3 of
Schedule 9, as provided in Section 7.1.8(b).

"DAC Tax Indemnity Account" means the separate account
established pursuant to the Escrow Agreement for the DAC
Reduction Escrow Amount or the DAC Election Escrow Amount, as the
case may be.

"Damages"  means any and all costs, damages, liabilities, fines,
fees, penalties, interest obligations, deficiencies, losses and
expenses, amounts paid in settlement, interest, court costs,
costs of investigation, reasonable fees and expenses of
attorneys, accountants, actuaries and other experts.

"Dispute" is defined in Section 8.2.2.

"DOJ" is defined in Section 4.1.3.

"DOL" is defined in Section 2.12.18.

"Election" is defined in Section 7.1.2.

"Eligible Policy" is defined in Section 5.10.4.

"Encumbrances" means any liens, security interests, pledges,
mortgages, adverse claims, charges, encumbrances on, licenses,
royalty or profit sharing obligations, or similar agreements.

"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time.

"ERISA Plan" means each "employee pension benefit plan" within
the meaning of Section 3(2) of ERISA (a) the assets of which are
held in whole or in part in the Group Pension Account or (b) with
respect to which the Seller has any obligation.

"Escrow Agent" means the escrow agent pursuant to the Escrow
Agreement.

"Escrow Agreement" is defined in Section 1.4.5.

"Escrow Claim"  means a claim by the Purchaser, ANLIC and/or
First SunAmerica for satisfaction (a) out of the Claims Escrow
Amount in respect of Damages determined in accordance with
Sections 5.17, 7.5.1, 7.5.2 and 7.5.6; (b) out of the Tax
Reserves Indemnity Escrow Amount in respect of Damages determined
in accordance with Section 7.5.3; (c) out of the DAC Election
Escrow Amount or the DAC Reduction Amount, as the case may be,
for amounts determined in accordance with Section 7.1; (d) out of
the Outward Reinsurance Escrow Amount for amounts determined in
accordance with Section 5.16; (e) out of the COI Adjustment
Escrow Amount for amounts determined in accordance with
Section 4.18.2; and (f) out of the Policy Enhancements
Endorsements Escrow Amount for amounts determined in accordance
with Section 4.12.5.

"Escrow Termination Date" means the sixth anniversary of the
Closing Date.

<PAGE>   75

"Estimated Closing Date Statement" is defined in Section 1.2.2.

"Excluded Annuity Contracts" means, collectively, (a) each
Wrapped Accumulation Contract; (b) each Separate Account Contract
(including each Variable Annuity and each 401(k) Contract with
respect to which assets are held in any of the Seller's Separate
Accounts); (c) if termination thereof is approved by the Court
pursuant to Section 4.11, each 401(k) Contract with respect to
which assets are held in the Seller's general account and for
which the Seller provides services; and (d) each Covered
Accumulation Contract issued as a Restructured Contract together
with any Variable Annuity.

"Excluded Liabilities" is defined in Section 1.1.6.

"Excluded Policies" means all of (a) the Excluded Annuity
Contracts, (b) the Purchase Opt-Out Contracts, (c) the LICGC
Contract, (d) if the Court does not approve bifurcation thereof
pursuant to Section 4.11, the Combination Contracts, (e) any
Policy that would otherwise be a Reinsured Policy with respect to
which Seller has received notice of a death claim on or prior to
the Closing Date and (f) the Policies ceded to Integrity Life
Insurance Company.

"Expense Reimbursement Escrow Account" is defined in the Expense
Reimbursement Escrow Agreement.

"Expense Reimbursement Escrow Agreement" means the escrow
agreement dated as of July 14, 1998 attached hereto as Exhibit K.

"Extra Contractual Obligations"  means all liabilities (a) for
compensatory, consequential, exemplary, punitive or similar
damages that relate to or arise in connection with any alleged or
actual act, error, omission, fraud or misrepresentation by the
Seller, any predecessor of the Seller including Mutual Benefit,
any of their respective Affiliates or any of their respective
Representatives, prior to the Closing Date, whether intentional
or otherwise, or (b) from any actual or alleged reckless conduct
or bad faith by the Seller, any predecessor of the Seller
including Mutual Benefit, any of their respective Affiliates or
any of their respective Representatives in connection with the
handling of any claim under any of the Reinsured Policies or any
predecessor Policy in connection with the issuance, offer, sale,
delivery, cancellation or administration of any of the Reinsured
Policies or any predecessor Policy.

"Filing Date" is defined in Section 7.1.5.

"Final Ceding Commission" is defined in Section 1.3.1.

"Final Closing Date Statement" is defined in Section 1.3.1.

"Final Determination" will have been made with respect to an
issue upon the earliest to occur of: (a) with respect to the
Election, the receipt of the Letter Ruling; (b) a decision,
judgment, decree, or other Final Order being issued by any court
of competent jurisdiction, other than a decision adverse to the
Purchaser by the first court of competent jurisdiction, in which
case, such adverse decision will be a Final Tax Determination,
unless appealed by the IRS; (c) the IRS having entered into a
binding agreement with the Purchaser or having reached a final
administrative or judicial determination with respect to the
Purchaser that, whether by Applicable Law or agreement, has
become a Final Order; and (d) the expiration of the applicable
statute of limitations, including extensions thereof granted by
the Purchaser to the IRS, which the Purchaser can grant in its
sole discretion (such expiration will be treated as a Final
Determination that the position as reported on the Purchaser's
Federal income tax return is correct) with respect to the
Purchaser's return.  If (i) either (x) a private letter ruling
has been issued by the IRS, or (y) a decision, judgment, decree
or other Final Order has been issued by any court of competent


<PAGE>   76

jurisdiction, providing that the  Seller is qualified to make the
election provided in Treas. Reg.  1.848-2 (i)(4) with respect to
any other reinsurance transaction occurring in the Seller's Tax
year that includes the Closing Date; and (ii) the Seller has
provided to the Purchaser an opinion, reasonably acceptable to
the Purchaser, of nationally recognized Tax counsel (which
counsel will be reasonably acceptable to the Purchaser),
concluding, based upon the reasoning underlying such private
letter ruling, decision, judgment, decree or other order, that it
is more likely than not that the Seller is entitled to make the
Election, together with non-cancelable insurance, all of the
premiums of which have been fully prepaid and that will pay to
the Purchaser or its Affiliates an amount equal to the amount to
be paid to the Seller as a consequence of having satisfied the
requirements of this sentence, plus interest and potential
penalties thereon in the event of a Final Determination (as
defined without regard to this sentence) that the Seller is not
qualified to make the Election on terms, including that the
expenses of obtaining any Final Determination are paid by the
insurer and the Purchaser is entitled to control any contest to
the same extent as set forth in Section 7.5.4 hereof, and from a
carrier (with at least an AA claims-paying ability rating from
Standard & Poors Rating Group and an A+ claims-paying rating from
A. M. Best & Co.) each reasonably acceptable to the Purchaser,
then the delivery of such opinion and insurance to the Reinsurer
will be treated for purposes of this Agreement as a Final
Determination that the Seller is entitled to make the Election.
If, following the Closing Date, the Seller will have provided to
the Purchaser an opinion, reasonably acceptable to the Purchaser,
of nationally recognized Tax counsel (which counsel will be
reasonably acceptable to the Purchaser), concluding, based on
(x) any statute enacted after the date hereof; (y) any published
IRS ruling or regulation promulgated after the date hereof,
addressing the treatment of moratorium charges similar to the
moratorium charges as adjustments to tax reserves; or (z) any
decision, judgment, decree or other Final Order of a court of
competent jurisdiction after the date hereof, addressing the
treatment of moratorium charges similar to the moratorium charges
as adjustments to tax reserves, that the Seller's treatment of
the moratorium charges for Tax reserving purposes as of the
Closing Date will more likely than not be considered appropriate
under the Code, together with non-cancelable insurance all of the
premiums of which have been fully prepaid and that will pay to
the Purchaser or its Affiliates an amount equal to the amount
paid to the Seller as a consequence of having satisfied the
requirements of this sentence, plus interest and potential
penalties thereon, in the event of a Final Determination (as
defined without regard to this sentence) that the Seller's
treatment of the moratorium charges (for tax reserving purposes)
is not appropriate on terms, including that the expenses of
obtaining any Final Determination are paid by the insurer and the
Purchaser is entitled to control any contest to the same extent
as set forth in Section 7.5.4 hereof, and from a carrier (with at
least an AA claims-paying rating from Standard & Poors and an A+
claims-paying rating from A.B. Best & Company) each reasonably
acceptable to the Purchaser, then the delivery of such opinion
and insurance will be treated for purposes of this Agreement as a
Final Determination that the treatment by the Seller of the
moratorium charges (for tax reserving purposes) is appropriate.

"Final Order" means an order or judgment of a court entered on
the docket, which has not been reversed, vacated or stayed and as
to which the time to appeal, petition for certiorari or move for
a new trial, reargument or rehearing has expired and as to which
no appeal, petition for certiorari or other proceedings for a new
trial, reargument or rehearing will then be pending or if an
appeal, writ of certiorari, new trial, reargument or rehearing
thereof has been sought, such order or judgment of the court
shall have been affirmed by the highest court to which such order
was appealed, or certiorari shall have been denied or a new
trial, reargument or rehearing shall have been denied or resulted
in no modification of such order, and the time to take any


<PAGE>   77

further appeal, petition for certiorari or move for a new trial,
reargument or rehearing shall have expired; provided, however,
the possibility that a motion under Rule 60 of the Federal Rules
of Civil Procedure, or similar rule or civil procedure of any
state, may be filed relating to such order will not cause such
order to lose its status as a Final Order.

"Final Reserve" is defined in Section 1.3.1.

"Final Reserve Assets" is defined in Section 1.3.1.

"First SunAmerica" is defined in the introductory paragraph.

"First SunAmerica Assumption Reinsurance Agreement" means the
Assumption Reinsurance Agreement to be delivered at Closing
substantially in the form of Exhibit A-2.

"FTC" is defined in Section 4.1.3.

"Fully Administered Qualified Plan" means each Qualified Plan
that uses, or has used since July 16, 1991, any of the Seller's
or Mutual Benefit's compliance services or that maintains, or on
or after July 16, 1991 maintained, a prototype plan sponsored by
the Seller or Mutual Benefit.

"GAAP" means United States generally accepted accounting
principles, consistently applied.

"GAAP Statements" is defined in Section 2.6.1.

"GAAS" means generally accepted actuarial standards as adopted by
the Actuarial Standards Board and the National Association of
Insurance Commissioners, as applicable, including Actuarial
Guidelines as found in the Financial Condition Examiners
Handbook, consistently applied.

"Governmental Authority" means any national government, any state
or other political subdivision thereof, and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government, including any
government authority, agency, department, board, commission,
court, tribunal  or instrumentality of the United States, any
State of the United States, or any political subdivision thereof,
and any alternative dispute resolution tribunal with binding
authority.

"Grandfathered Premiums" means the premiums collected from the
policyholders of Reinsured Policies listed or required to be
listed on the delivery specified in clause (a) of Section 4.24 on
or prior to the 12 month anniversary of the Closing Date.

"Grandfathered Premiums Indemnity Amount" means an amount (that
is not less than zero) which will be calculated as follows: the
product of (a) 50% multiplied by (b) the remainder of
(i) $20,000,000 less (ii) Net Grandfathered Premiums.

"Grandfathering Ruling" is defined in Section 4.20.

"Group Pension Accounts" means the assets held by the Seller for
the benefit of its Group Pension Customers which are accounted
for in the Seller's annual report to contractholders as part of
MBL's group pension line of business, including any Tax Deferred
Annuity Arrangement or Qualified Plan, Qualified Plan Contract
and Other Plan.

"Group Pension Business" means the business that is accounted for
in the Seller's annual report to contractholders as the Seller's
group pension line of business.

"Group Pension Customer" means each customer on whose behalf
assets are held by the Seller or any former customer to whom the
Seller has any liabilities that, in each case are accounted for


<PAGE>   78

in the Seller's annual report to contractholders as part of the
Seller's group pension line of business.  References to a Group
Pension Customer will not include non-related business of such
customer with the Seller or Mutual Benefit.

"Guaranteed Policy Enhancement Amount" means, with respect to any
Scheduled Vesting Date, (a) the amount vested on such Scheduled
Vesting Date, plus (b) the amount unvested but accelerated on
deaths between the previous Scheduled Vesting Date and such
Scheduled Vesting Date, if any, and therefore credited or paid,
the aggregate amount of which equals the applicable amounts
credited or paid as set forth in Schedule 10.

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

"IBNR Reserve Amount" means $250,000, such amount to be a reserve
for liabilities incurred for deaths prior to the Closing Date but
not reported prior to the Transition Period Termination Date.
Deaths "reported" pursuant to the Social Security Sweep
procedures described in Section 5.13.2 will be deemed reported
prior to the Transition Period Termination Date for all purposes
under this Agreement.

"IBNR Settlement Amount" means a dollar amount calculated as
described in Section 5.13.2.

"IBNR Settlement Date" means the 10th Business Day after the
delivery by the Purchaser of its calculation of the IBNR
Settlement Amount.

"Impairment" is defined in the Joint Allocation Report.

"Indemnitee" is defined in Section 7.7.1.

"Indemnitor" is defined in Section 7.7.1.

"Indemnity Reinsurance Agreement" means the Indemnity Reinsurance
Agreement that is substantially in the form of Exhibit B.

"Independent Party" is defined in Section 1.3.2.

"Initial Calculation" is defined in Section 7.1.4.

"Insolvent Insurer Election Tax Indemnity" is defined in
Section 7.1.7.

"Insurance Liabilities" means the following liabilities with
respect to the Reinsured Policies only and no other liabilities
whatsoever: (a) the contractual liabilities and obligations
arising under the Reinsured Policies as evidenced by the written
policy forms and riders; (b) liability for the Policy
Enhancements in accordance with the terms of Section 4.12 not in
excess of the Policy Enhancements Amount as represented by the
Seller; (c) all liability for premium Taxes arising on account of
premiums paid or annuities purchased after the Closing Date;
(d) all amounts payable after the Closing Date for returns or
refunds of premiums under the Reinsured Policies; (e) all
liability for Commissions payable with respect to the Reinsured
Life Policies to or for the benefit of brokers and service
providers, including renewal Commissions and service fees, to the
extent that such amounts accrue after the Closing Date under the
terms of Commission Agreements that are Assigned Contracts; and
(f) all Guaranty Fund Assessments and similar charges imposed
with respect to the Reinsured Policies based on premiums paid
after the Closing Date.  Without limiting the generality of the
foregoing, Insurance Liabilities do not include Excluded
Liabilities or Extra Contractual Obligations.

"Integrity Policy Enhancements Amount" means the portion of the
Policy Enhancements attributable to Policies ceded to Integrity
Life Insurance Company pursuant to reinsurance agreements, which

<PAGE>   79

amount will not exceed $5,000,000.

"Interest" is defined in Section 7.1.4.

"Investment Grade Security" means: (a) a security issued or
directly and unconditionally guaranteed by the United States
Government or issued by an agency thereof and backed by the full
faith and credit of the United States; (b) any corporate bond
that (i) is Marketable (as defined below); (ii) is rated by at
least two nationally recognized statistical rating organizations
and that does not have (A) a rating below BBB- by Standard &
Poor's Ratings Group, (B) a rating below Baa3 by Moody's
Investors Service, or (C) a rating below a comparable investment
grade by another nationally recognized statistical rating
organization; (iii) has a rating of at least category "2" by the
Securities Valuation Office, or any successor thereto, of the
National Association of Insurance Commissioners; and (iv) is not
in default.  For purposes of the foregoing, "Marketable" means
securities (i) that will have a readily available public bid by
at least two broker/dealers in the OTC market and/or have a
posted bid price on listed markets and which carry no
restrictions as to their transferability; or (ii) that were sold
pursuant to Rule 144A of the Securities Act of 1933, as amended,
and for which (A) the initial issuance was at least $100 million,
(B) the sale was either through initial purchasers to qualified
institutional buyers or pursuant to a medium term notes facility,
and (C) there is a public CUSIP number.  Notwithstanding the
foregoing, an instrument is not "Marketable" if (1) it is subject
to lock-ups or other legal or contractual restrictions on
transferability, including restrictions on the amount that can be
transferred, or (2) it is not registered under the Securities Act
of 1933, as amended, or freely transferable without registration
thereunder.

"Inward Reinsurance Agreements" means any binder, agreement,
treaty, certificate, retrocession or other instrument of
reinsurance assumed by the Seller with respect to any annuity
contract or life insurance policy of a type included in the
Reinsured Policies from any of the Reinsurers under the Outward
Reinsurance Agreements.

"IRS" means the Internal Revenue Service of the United States.

"Joint Allocation Report" is defined in the Recitals.

"Letter Ruling" is defined in Section 7.1.3.

"Licensed Software" means all computer software programs used in
the conduct of the Business that are either licensed by the
Seller from a third party or licensed by a third party and
assigned by such third party to the Seller in accordance with the
terms of such licenses.

"LICGC Contract" means the Accumulation Contract issued to the
Life Insurance Company Guaranty Corporation of New York in
exchange for payment to the Seller of payments under the Plan.

"Market Value"  means with respect to each asset that is a Cash
Equivalent or Investment Grade Security, (a) that matures not
later than six months after Closing Date, the average of the
"bid" and "ask" price quotations, and (b) that matures later than
six months after the Closing Date, the "bid" price quotation, in
each case as provided by Goldman, Sachs & Co. as of the close of
business (New York City time) on the Business Day immediately
preceding the Closing Date, for settlement on the Closing Date.

"Material Adverse Effect"  means (a) with respect to the Seller,
a material adverse effect on the business, property, financial
condition or results of operations of the Seller and its
Subsidiaries with respect to the Business taken as a whole or on
the Reinsured Policies or Transferred Assets or on the legality,
validity or enforceability of this Agreement or the Ancillary


<PAGE>   80

Agreements or on the consummation of the Transactions, and
(b) with respect to the Purchaser, a material adverse effect on
the business, property, financial condition or results of
operation of the Purchaser and its Subsidiaries taken as a whole
or on the legality, validity or enforceability of this Agreement
or the Ancillary Agreements or on the consummation of the
Transactions.  In either case, effects attributable to (x) the
Transactions or (y) changes in general economic conditions,
including changes affecting the insurance industry, will not be
considered to be, or to contribute to, a Material Adverse Effect.

"Maximum Guaranteed Policy Enhancements Amount" means the amount
that is determined pursuant to Schedule 10 based on "Account
Value (or Statutory Reserves for Restructured Contracts in Pay
Status or Supplementary Contracts) Eligible at Vesting Date"
being greater than or equal to $4.3 billion.

"MEC's" means those Life Policies that qualify as modified
endowment contracts under 7702A of the Code.

"Modified COI Scale" is defined in Section 4.18.

"Mutual Benefit" is defined in the Recitals.

"Net Grandfathered Premiums" means the total premiums collected
from the policyholders of Reinsured Policies listed or required
to be listed on the delivery specified in clause (a) of
Section 4.24 on or prior to the 12-month anniversary of the
Closing Date, less any refund paid to such policyholders on or
prior to the 14-month anniversary of the Closing Date.

"New Money Accumulation Contract" means a contract covering
assets delivered to Mutual Benefit or the Seller on or after
July 16, 1991.

"New York Assumption Date" means the date on which the mandatory
simultaneous assumption of the New York Reinsured Policies
pursuant to the First SunAmerica Reinsurance Agreement becomes
effective, which will be no earlier than the Rehabilitation
Period Termination Date.

"New York Reinsured Annuity Contracts" means the Reinsured
Annuity Contracts listed on Schedule 2-B, as updated as of the
Closing Date, and as further updated as of the New York
Assumption Date.

"New York Reinsured Life Policies" means the Reinsured Life
Policies listed on Schedule 1-B as updated a of the Closing Date,
and as further updated as of the New York Assumption Date.

"NOLHGA" means the National Organization of Life and Health
Insurance Guaranty Associations.

"Non New York Reinsured Annuity Contracts" means the Reinsured
Annuity Contracts listed on Schedule 1-A, as updated as of the
Closing Date, and as further updated as of the New York
Assumption Date.

"Non New York Reinsured Life Policies" means the Reinsured Life
Policies listed on Schedule 2-A, as updated as of the Closing
Date, and as further updated as of the New York Assumption Date.

"Notice of Claim" is defined in Section 7.7.1.

"Organizational Documents" as to any Person, as applicable, means
its certificate or articles of incorporation or charter, by-laws,
trust agreement, partnership agreement and any other
organizational documents, as amended to date.

"Other Plan" means any individual or group annuity contract or
other contract, arrangement or plan, other than a Qualified Plan,
a Qualified Plan Contract or a Tax Deferred Annuity Plan, (a) the


<PAGE>   81

assets of which are held in whole or in part in the Group Pension
Accounts, or (b) with respect to which the Seller has any
responsibility to a Group Pension Customer, including Code
Section 457 plans and deferred compensation arrangements.

"Outward Reinsurance Adjustment Amount" means an amount equal to
the sum of the present value of the excess of future reinsurance
premium for each of the subsequent 30 years (a) charged by a
reinsurer of an Outward Reinsurance Agreement pursuant to any
amendment or modification to the Outward Reinsurance Agreement
after the date hereof, including in connection with giving
consent to the assignment of such Outward Reinsurance Agreement
to the Purchaser, over those charged by such reinsurer under the
Outward Reinsurance Agreement as in effect on the date hereof,
and (b) charged by each Substitute Outward Reinsurer over those
charged by the reinsurer of the original Outward Reinsurance
Agreement, in each case calculated based on an 11% discount rate
compounded annually.  For purposes of calculating the Outward
Reinsurance Adjustment Amount, the reinsurance premium under both
the original Outward Reinsurance Agreement and the modified
Outward Reinsurance Agreement or the Substitute Outward
Reinsurance Agreement, as the case may be, will be based on the
Reinsured Life Policies as of the end of the second month
preceding the Closing Date and as projected using persistency
assumptions outlined in the "Actuarial Appraisal of MBL Life
Assurance Corporation projected as of June 30, 1998" prepared by
Coopers & Lybrand L.L.P.

"Outward Reinsurance Agreements" means any binder, contract,
agreement, treaty, certificate, retrocession, understanding or
other instrument of reinsurance ceded by the Seller, other than
the Assumption Reinsurance Agreements or the Indemnity
Reinsurance Agreements, in respect of any Reinsured Policy.

"Outward Reinsurance Escrow Account" is defined in the Escrow
Agreement.

"Outward Reinsurance Escrow Amount" means an amount determined
pursuant to Section 5.16.2, comprised of cash and Cash
Equivalents, each valued at their respective Value as of the
Closing Date, and deposited by the Seller on the Closing Date in
the Outward Reinsurance Escrow Account as defined in and
established pursuant to the Escrow Agreement.

"Outward Reinsurer" means a reinsurer under an Outward
Reinsurance Agreement or a Substitute Outward Reinsurance
Agreement, as applicable.

"Owned Software" means all computer software programs used in the
conduct of the Business that are owned by the Seller.

"Participating Guaranty Association" means a life and health
insurance guaranty association (or other entity performing
similar functions) established under the laws of any jurisdiction
that is a party to the Participation Agreement.

"Participation Agreement" means the Third Amended Participation
Agreement, dated January 24, 1994, as amended, among the Seller,
Mutual Benefit, the Commissioner, NOLHGA and each of the
Participating Guaranty Associations.

"Permits" means all licenses, permits, orders, consents,
approvals, registrations, authorizations, qualifications and
filings with any Governmental Authority or pursuant to any
Applicable Laws.

"Petition for Court Approval" means the petition filed by the
Seller with the Court to approve inter alia, the proposed
amendments to the Plan and the Rehabilitation Documents and
certain other orders as described in Exhibit I, the consummation
of the Transactions to be completed at Closing, and the Policy
Enhancements Procedures.

<PAGE>   82

"Person"  means any individual, partnership, limited liability
company, corporation, unincorporated organization or association,
trust, or other entity.

"Plan" is defined in the Recitals.

"Policies" means all forms of insurance policies, annuity
contracts and guaranteed interest contracts, and amendments and
riders thereto.

"Policy Enhancements" means the enhancements described in Article
6 of the Settlement Agreement (as such Settlement Agreement will
be modified pursuant to the terms of this Agreement) to provide
Policyholders reimbursement of a portion of previously impaired
amounts which are in the aggregate the amount of the sum of the
Policy Enhancements Amount and the Integrity Policy Enhancements
Amount.

"Policy Enhancements Amount" means an amount equal to the total
liability for Policy Enhancements as determined by the Seller
pursuant to the terms of the Plan and the Rehabilitation
Documents as of the Closing Date, excluding the Integrity Policy
Enhancements Amount.

"Policy Enhancements Calculation Adjustment Amount" means an
amount equal to 15% of the remainder, if any, of (a) the Policy
Enhancements Amount as of the Closing Date minus (b) the
remainder of (i) $275,000,000, minus (ii) the amount of the
Integrity Policy Enhancements Amount.

"Policy Enhancements Endorsements" is defined in Section 4.12.4.

"Policy Enhancements Endorsements Escrow Account" is defined in
the Escrow Agreement.

"Policy Enhancements Endorsements Escrow Amount" is defined in
Section 4.12.5.

"Policy Enhancements Procedures" means the detailed procedures
for calculation and administration of the Policy Enhancements
(including the Policy Enhancements Amount and the Additional
Policy Enhancements Amount) as submitted with the Petition for
Court Approval.

"Policyholder" means any holder, owner or beneficiary  of a
Reinsured Policy.

"Policyholder Disclosure Statement" means the statement provided
by the Seller to its policyholders notifying them of the
Transactions.

"Preserved Replacement Policy" is defined in Section 5.10.1.

"Purchase Opt-Out Contracts" means the Accumulation Contracts
issued to Participating Guaranty Associations (other than the
LICGC Contract) in exchange for payment to the Seller of opt-out
payments under the Plan.

"Purchaser" is defined in the introductory paragraph; provided,
however, for purposes of all Tax matters, including Section 7.1,
any reference to the "Purchaser" will be deemed to mean the
Purchaser and its Subsidiaries, including ANLIC and First
SunAmerica, unless the context otherwise clearly indicates.

"Purchaser's Disclosure Schedule" means the Disclosure Schedule
delivered by the Purchaser on the date hereof.  Section numbers
in the Purchaser's Disclosure Schedule refer to the corresponding
section numbers in this Agreement and, together with all matters
under such heading will be deemed to qualify only that
Section unless any matter under any heading is explicitly stated
to qualify other Sections.

<PAGE>   83

"Qualification Opinion" is defined in Section 7.1.6.

"Qualified Contract" means an individual or group annuity
contract (a) pursuant to which the assets of a Qualified Plan or
Tax Deferred Annuity Arrangement are held in its Group Pension
Accounts, or (b) with respect to which the Seller has any
responsibility to a Group Pension Customer.

"Qualified Plan" means a plan intended to qualify under
Section 401(a) or 403(a) of the Code, (a) the assets of which are
held in whole or in part in the Group Pension Accounts or
(b) with respect to which the Seller has any responsibility to a
Group Pension Customer.

"Reaffirmed Contract" means any Contract or portion of a Contract
that is reaffirmed by Mutual Benefit and then transferred and
assigned to, and assumed and reinsured by the Seller, as provided
in the Plan and in Articles 2 and 4 of the Rehabilitation
Agreement.

"Rehabilitation Agreement" means the Third Amended Agreement in
Connection with the Rehabilitation of The Mutual Benefit Life
Insurance Company between Mutual Benefit and the Seller dated
January 24, 1994.

"Rehabilitation Documents" is defined in Section 2.21.1.

"Rehabilitation Period" means the period commencing on April 29,
1994 and ending on December 31, 1999, as modified pursuant to the
terms of this Agreement to end on the Rehabilitation Period
Termination Date.

"Rehabilitation Period Termination Date" means the date on which
the Rehabilitation Period ends as accelerated to the Transition
Period Termination Date pursuant to the Court's approval of the
Transactions.

"Reinstated Policies" is defined in the Indemnity Reinsurance
Agreement.

"Reinstatement Date" with respect to any Reinstated Policy means
the date on which such Reinstated Policy is deemed to be in force
in accordance with the terms of such Reinstated Policy.

"Reinsurance Agreement" means the Third Amended and Restated
Reinsurance and Participation Agreement, dated January 24, 1994,
as amended, among the Seller and each of the Reinsurers.

"Reinsurance Premium" is defined in Section 1.1.2.

"Reinsured 401(k) Contracts" means (a) 401(k) Contracts for which
assets are held only in the Seller's general account and for
which the Seller does not provide services; and (b) 401(k)
Contracts for which assets are held only in the Seller's general
account and for which the Seller does provide services if and
only if the Court has not approved their termination in
accordance with Section 4.11.

"Reinsured Annuity Contracts" means the Annuity Contracts listed
on Schedule 2-A, Schedule 2-B and Schedule 2-C, as updated as of
the Closing Date.

"Reinsured Life Policies" means the life insurance policies
listed on Schedule 1-A, Schedule 1-B, and Schedule 1-C, as
updated as of the Closing Date.

"Reinsured Policies" means (a) Reinsured Life Policies, Reinsured
Annuity Contracts and Reinsured 401(k) Contracts in effect as of
the Closing Date; (b) any Reinstated Policy in effect as of the
Reinstatement Date; and (c) any Resurrected Policy in effect as
of the Resurrection Date.  The term Reinsured Policies will also
include all certificates and participation agreements in effect


<PAGE>   84

as of the Closing Date (or in the case of Reinstated Policies or
Resurrected Policies, as of the Reinstatement Date or the
Resurrection Date, as applicable) issued in accordance with the
terms of such Reinsured Life Policies, Reinsured Annuity
Contracts, Reinsured 401(k) Contracts, Reinstated Policies and
Resurrected Policies (including all supplements, endorsements,
riders and ancillary agreements in connection therewith).

"Reinsurers" means the reinsurers named in Schedule B to the
Reinsurance Agreement.

"Remaining Outward Reinsurance Agreement" is defined in
Section 5.16.1.

"Remaining Outward Reinsurer" is defined in Section 5.16.1.

"Remedy Compromise Adjustment Amount" means $2,580,000, which
amount is equal to 3% of the sum of the Base Ceding Commission
less the Claims Escrow Amount.

"Replacement Policy" is defined in Section 5.10.2.

"Representatives"  means, with respect to any Person, such
Person's employees, officers, directors, legal counsel,
investment bankers, accountants, actuaries and other agents.

"Reserve" means an amount equal to (a) the sum of the Statutory
Values of all the Reserve Liabilities in respect of the Reinsured
Policies, plus (b) the Policy Enhancements Amount, plus (c) the
IBNR Reserve Amount, all of which are listed in Schedule 5.

"Reserve Liabilities" is defined in Section 2.13.

"Reserve Liabilities Adjustment Amount" means an amount equal to
the sum of (a) (i) 1% of the Base Ceding Commission multiplied by
(ii) a fraction, (x) the numerator of which is a number equal to
the basis point decline, from and excluding 300 basis points to
and including 500 basis points, of the aggregate Reserve
Liabilities as of the Closing Date (the "Closing Date Reserve
Liabilities") from the aggregate Reserve Liabilities as of
December 31, 1997 (calculated in accordance with the December 31,
1997 Audited SAP Statements, the "Base Reserve Liabilities"), and
(y) the denominator of which is 100, plus (b) (i) 2% of the Base
Ceding Commission multiplied by (ii) a fraction, (1) the
numerator of which is a number equal to the basis point decline,
from but excluding 500 basis points to and including 800 basis
points, of the Closing Date Reserve Liabilities from the Base
Reserve Liabilities, and (2) the denominator of which is 100.  In
addition, if the Closing Date is after January 1, 1999, the
Reserve Liabilities Adjustment Amount will be increased by an
amount equal to the sum of (A) 5% of the amount by which the
Closing Date Reserve Liabilities have declined when compared to
the Base Reserve Liabilities to the extent such decline is from
but excluding 800 basis points to and including 1100 basis
points, plus (B) 7% of the amount by which the Closing Date
Reserve Liabilities have declined when compared to the Base
Reserve Liabilities to the extent such decline is from but
excluding 1100 basis points to and including 1500 basis points.
For example, if the Closing Date Reserve Liabilities are 98% of
the Base Reserve Liabilities, the Reserve Liabilities Adjustment
Amount is zero.  However, if the Closing Date Reserve Liabilities
are 93.5% of the Base Reserved Liabilities, the Reserve
Liabilities Adjustment Amount is the sum of (a) 1% of the Base
Ceding Commission multiplied by 2, plus (b) 2% of the Base Ceding
Commission multiplied by 1.5.  Assuming the Base Ceding
Commission is $131,000,000, this example would yield a Reserve
Liabilities Adjustment Amount of $6,550,000.  If the Closing Date
Reserve Liabilities are 88% of the Base Reserve Liabilities and
the Closing Date is after January 1, 1999, assuming the same Base
Ceding Commission and Base Reserve Liabilities of $4 billion, the
Reserve Liabilities Adjustment Amount is the sum of (a) 1% of the
Base Ceding Commission multiplied by 2, plus (b) 2% of the Base


<PAGE>   85

Ceding Commission multiplied by 3, plus (c) .05 multiplied by the
product of $4 billion multiplied by .03 (i.e., the 300 basis
point additional decline calculated at 5%), plus (d) .07
multiplied by the product of $4 billion multiplied by .01 (i.e.,
the 100 basis point additional decline calculated at 7%).  This
example would yield a Reserve Liabilities Adjustment Amount of
$19,280,000.

"Reserved Value Share" is defined in Section 5.2.2.

"Resident" means, with respect to a jurisdiction, Persons
residing or domiciled in such jurisdiction as of the referenced
date; provided, that certain Reinsured Annuity Contracts that are
group annuity contracts for which the plan sponsor or custodian
is a Resident of another jurisdiction but the majority of
participants are Residents of New York (all of which are
indicated on the supplement as of June 30, 1998 to Schedule 2-
C) will be deemed to be held by Residents of New York.

"Restructured Annuity Contract" means the annuity contracts that
are Restructured Contracts.

"Restructured Contract" means any Contact or portion of a
Contract that is or has been restructured by Mutual Benefit, and
then transferred and assigned to, and assumed and reinsured by
the Seller as provided in the Plan and Articles 2 and 4 of the
Rehabilitation Agreement.

"Restructured Contract in Pay Status" means a Restructured
Contract that is a Contract in Pay Status.

"Restructured Life Policies" means the life insurance policies
that are Restructured Contracts.

"Resurrected Policy" means any Policy that is considered on the
Calculation Date to be an Excluded Policy under clause (e) of the
definition of Excluded Policies but for which the Seller
subsequently receives a notice that the death claim with respect
to such Policy was made in error.

"Resurrection Date" with respect to any Resurrected Policy means
the date on which the Seller transfers to ANLIC and First
SunAmerica, as applicable, cash and Cash Equivalents with an
aggregate Value equal to the Account Value with respect to such
Resurrected Policy.

"Retained Books and Records" is defined in Section 5.1.3.

"SAP" means the statutory accounting principles and practices
required or permitted for life insurance companies by Applicable
Laws of the National Association of Insurance Commissioners and
the insurance regulatory authority in the State of New Jersey, as
the case may be, consistently applied throughout the specified
period and in the immediately prior comparable period.

"SAP Statements" is defined in Section 2.6.3.

"Scheduled Vesting Date" means any of January 1, 2000, June 30,
2001, June 30, 2002, or June 30, 2003.

"Seller" is defined in the introductory paragraph.

"Seller's Disclosure Schedule" means the Disclosure Schedule
delivered by the Seller on the date hereof.  Section numbers in
the Seller's Disclosure Schedule refer to the corresponding
section numbers in this Agreement and, together with all matters
under such heading, will be deemed to qualify only that
Section unless any matter under any heading is explicitly stated
to qualify other Sections.

"Seller's Separate Account B" means the separate account of the
Seller with respect to assets relating to the Wrapped


<PAGE>   86

Accumulation Contracts.

"Seller Separate Accounts" means Seller's Separate Account B and
the separate accounts of the Seller with respect to assets
relating to the Variable Annuities, all of which accounts are
listed on Schedule 6.

"Separate Account Contract" means a variable life or annuity
Contract or any Contract to the extent that assets held under
such Contacts are allocated to one or more Separate Accounts,
except that the term "Separate Account Contract" will not include
a Wrapped Accumulation Contract.

"Settlement Agreement" is defined in the Recitals.

"Severance Plan" is defined in Section 2.16.

"Social Security Sweep" means the quarterly listing published by
the Untied States Social Security Administration of American
deaths for the two years prior to Closing.

"Statutory Statements" is defined in Section 2.6.2.

"Statutory Value" means the value of an asset or liability
determined in accordance with SAP, utilizing the same accounting
principles, consistently applied, as those used in the
preparation of the December 31, 1997 Audited SAP Statements.

"Stock Trust" is defined in the Recitals.

"Stock Trust Agreement"  is defined in the Recitals.

"Subsidiary" means, with respect to any Person, any other Person
of which more than 50% of the securities or other ownership
interests having by their terms ordinary voting power to elect a
majority of the board of directors, or other Persons performing
similar functions, of such other Person, is directly or
indirectly owned or controlled by such Person, by one or more of
such Person's Subsidiaries or by such Person and any one or more
of such Person's Subsidiaries.

"Substitute Outward Reinsurance Agreement" is defined in
Section 4.7.

"Substitute Outward Reinsurer" is defined in Section 4.7.

"Tax Deferred Annuity Arrangement" means an individual or group
annuity contract intended to satisfy the requirements of
Section 403(b) of the Code, whether or not subject to the
requirements of ERISA, (a) the assets of which are held in whole
or in part in the Group Pension Accounts, or (b) with respect to
which the Seller has any responsibility to a Group Pension
Customer.

"Tax Reserves Indemnity Escrow Account" is defined in the Escrow
Agreement.

"Tax Reserves Indemnity Escrow Amount" means $1,500,000,
comprised of cash and Cash Equivalents, each valued at their
respective Value as of the Closing Date, and deposited by the
Seller on the Closing Date in the Tax Reserves Indemnity Escrow
Account as defined and established pursuant to the Escrow
Agreement.

"Tax Returns" means all federal, state, local and foreign tax
returns, declarations, statements, reports, schedules, forms and
information returns and any amendments to any of the foregoing
relating to Taxes.

"Taxes" means all federal, state, local and foreign taxes, and
other assessments of a similar nature (whether imposed directly
or through withholding), including any interest, additions to


<PAGE>   87

tax, or penalties applicable thereto.

"Terminating Policies" is defined in Section 5.5.

"Third Party Administration Agreements" is defined in
Section 2.24.

"Third Party Claim" means any demand or Action for which an
Indemnitee would have a Loss that is asserted against or sought
to be collected from the Indemnitee by any Person other than a
party hereto or an Affiliate thereof.

"Transactions" means the transactions contemplated by this
Agreement and the Ancillary Agreements.

"Transferred Assets" is defined in Section 1.1.5.

"Transferred Reserve Assets" means the assets listed on
Schedule 3, with such changes therein, additions thereto or
deletions therefrom as are permitted or required pursuant to the
terms of Section 1.1.3 or as otherwise agreed by the Seller and
the Purchaser in writing.  The Transferred Reserve Assets listed
on Schedule 3 consist of: (a) cash; (b) Cash Equivalents;
(c) Investment Grade Securities; (d) all of the Seller's rights
and interests under the Reinsured Policies to receive principal
and interest paid on Reinsured Policy loans on or after the
Closing Date; (e) amounts due from reinsurers under the Outward
Reinsurance Agreements and Substitute Outward Reinsurance
Agreements that are transferred as Assigned Contracts on the
Closing Date pursuant to Section 1.1.4, in each case due in
accordance with the terms of such Outward Reinsurance Agreements
and Substitute Outward Reinsurance Agreements; and (f) other
receivables listed on Schedule 3 in respect of the Reinsured
Policies.

"Transition Period" means the period from the Closing Date to and
including the Transition Period Termination Date.

"Transition Period Termination Date" means the day that is the
six month anniversary of the Closing Date or, if not a Business
Day, the next succeeding Business Day.

"Transition Services Agreement" means the Transition Services
Agreement to be entered into between the Seller and ANLIC at the
Closing, substantially in the form of Exhibit D.

"Trustee" is defined in the Recitals.

"Unallocated Accumulation Contract" means any Accumulation
Contract for which allocation to individual participants is not
provided by the Policyholder or otherwise required for the
administration of such Accumulation Contract.

"Uncovered Month" is defined in Section 5.16.3.

"United States Treasury Rate" means the five-year treasury
constant maturity rate on U.S. government securities as reported
in the Federal Reserve Statistical Release H.15(519) on a given
date.

"Value" means with respect to (a) cash, the actual amount of
immediately available funds; (b) Cash Equivalents, Market Value;
(c) Investment Grade Securities, Market Value; (d) receivables
with respect to Reinsured Policy loans, Statutory Value;
(e) receivables with respect to Outward Reinsurance Agreements,
Statutory Value; and (f) other receivables, Statutory Value.

"Value Sharing Percentage" means the percentages set forth in
Article 5 of the Settlement Agreement.

"Variable Annuities" means all variable Annuity Contracts with
respect to which assets are held in any of the Seller's Separate


<PAGE>   88

Accounts.

"Wrapped Accumulation Contracts" means all Restructured Annuity
Contracts with respect to which assets are held in Seller's
Separate Account B.

                      10.  GENERAL PROVISIONS

10.1 Modification; Waiver.  This Agreement can be modified only
     by agreement of all of the parties hereto.  Any provision of this
     Agreement can be waived at any time by the party entitled to the
     benefits thereof, but such waiver must be in writing.  Every
     amendment must be in writing and designated as an amendment and
     signed by all parties.  No failure by any party to insist on the
     strict performance of any provision of this Agreement or any
     Ancillary Agreement, or to exercise any right or remedy, will be
     deemed a waiver of such performance, right or remedy, or of any
     other provision of this Agreement or any Ancillary Agreement.

10.2 Entire Agreement.  This Agreement, including the Schedules
     and Exhibits (which are hereby incorporated by reference and made
     a part hereof), together with the Ancillary Agreements, represent
     the entire agreement of the parties with respect to the subject
     matter hereof.  It supersedes all other prior agreements,
     understandings, statements, representations and warranties, oral
     or written, express or implied, between the parties hereto and
     their respective Affiliates and Representatives in respect of the
     subject matter hereof (including the Confidential Memorandum,
     dated October 1997, with respect to the Seller, and any
     supplements thereto).  This Agreement does not, however, as to
     the Seller's business that is not part of the Business, supersede
     the Confidentiality Agreement, which the parties expressly
     reaffirm.

10.3 Termination By the Parties.

     10.3.1    Events Causing Termination.  This Agreement can be
     terminated:

     (a)  at any time prior to the Closing Date by mutual consent of
     the Purchaser and the Seller;

     (b)  at any time prior to the Closing by the Purchaser upon ten
     days notice to the Seller if the conditions set forth in Sections
     6.2.4 and 6.2.5 have not been fulfilled within 15 Business Days
     after the date hereof, or the condition set forth in
     Section 6.2.6 has not been fulfilled within the later of (i) 15
     days after the date hereof or (ii) the date the Petition for
     Court Approval is first filed with the Court, and, in each case,
     have not been waived by the Purchaser or cured during said notice
     period;

     (c)  at any time prior to the Closing by the Purchaser upon
     notice to the Seller if (i) the Court fails to approve the
     overbid procedures set forth in Section 4.16 in all material
     respects prior to the later of (x) 75 days after the date of this
     Agreement or (y) the date on which an Acquisition Proposal is
     presented to the Seller or the Court, or (ii) an Acquisition
     Proposal is entertained by the Seller or the Court prior to
     approval of the overbid procedure set forth in Section 4.16 in
     all material respects, or (iii) an Acquisition Proposal that does
     not comply with the requirements of Section 4.16 is entertained
     by the Seller or the Court at any time;

     (d)  by the Purchaser or the Seller, upon notice to the other, if
     the Closing has not taken place on or before April 1, 1999 or
     such later date as the parties agree to, provided that the
     non-occurrence of the Closing is not attributable to a breach
     hereof by the party seeking termination;

     (e)  at any time prior to the Closing by the Seller, upon ten
     days notice to the Purchaser, if any of the conditions set forth


<PAGE>   89

     in Sections 6.2 and 6.3 have become incapable of fulfillment and
     have not been waived by the Seller or cured during said notice
     period, provided the non-fulfillment of such conditions is not
     attributable to a breach hereof by the Seller; or

     (f)  at any time prior to the Closing by the Purchaser, upon ten
     days notice to the Seller if: (i) any of the conditions set forth
     in Sections 6.2 and 6.4 have become incapable of fulfillment and
     have not been waived by the Purchaser or cured during said notice
     period, provided the non-fulfillment of such conditions is not
     attributable to a breach hereof by the Purchaser; (ii) the Seller
     or any of its Representatives violates Section 4.4 or 4.14, 4.15
     or 4.16; or (iii) an event or condition occurs that has resulted
     in or would reasonably be expected to result in a Material
     Adverse Effect that is incapable of cure and has not been waived
     by the Purchaser.

     10.3.2    Automatic Termination.

     (a)  If the Court approves the overbid procedures as set forth in
     Section 4.16 in all material respects and if the Seller has
     complied in all respects with Sections 4.14, 4,15 and 4.16, this
     Agreement will automatically terminate, without any further
     action taken by the parties, upon the election of the Purchaser
     not to match the Acquisition Proposal of a Competitive Bidder
     pursuant to paragraph (j) of Section 4.16.

     (b)  If the Court does not approve the overbid procedures as set
     forth in Section 4.16 in all material respects and the Purchaser
     does not terminate this Agreement as a result of such failure,
     then this Agreement will immediately terminate, without any
     further action taken by the parties, if the Seller has after the
     date hereof, pursuant to a bidding procedure approved by the
     Court or any other bid or offer required to be entertained by the
     Court, entered into a definitive agreement or agreements with
     another Person regarding an Acquisition Proposal.
     10.3.3    Effect of Termination. If this Agreement is terminated,
     no party (or any of their respective Representatives) will have
     any further liability hereunder, except as set forth in the next
     sentence and except with respect to a breach occurring prior to
     the termination.  The Confidentiality Agreement, this
     Section 10.3, Section 4.14.1, Section 4.14.2, Section 4.14.3,
     Section 4.22, and second and third sentences of Section 6.1,
     Section 8.2, Section 10.5 and Section 10.11 will survive any
     termination and remain in full force and effect.

10.4 Further Actions.  Each party will execute and deliver such
     certificates and other documents and take such other commercially
     reasonable actions as may reasonably be requested by the other
     party in order to consummate or implement the Transactions.

10.5 Notices.  All notices, requests, demands and other
     communications hereunder must be in writing and will be deemed to
     have been duly given or made as follows:  (a) if sent by
     registered or certified mail in the United States return receipt
     requested, upon receipt; (b) if sent by reputable overnight air
     courier (such as DHL or Federal Express), two Business Days after
     delivery to the courier; (c) if sent by facsimile transmission,
     with a copy sent on the same day in the manner provided in (a) or
     (b) above, when transmitted and receipt is confirmed by
     telephone; or (d) if actually personally delivered, when
     delivered. Any such materials must be delivered as follows:

     if to the Seller:             if to the Purchaser, ANLIC or First
                                   SunAmerica:
     MBL Life Assurance
           Corporation             SunAmerica Inc.
     520 Broad Street              1 SunAmerica Center
     Newark, New Jersey  07102     Los Angeles, CA
     Attention: Alan J. Bowers     90067-6022
     Fax Number: (973) 268-4319    Attention: Jay S. Wintrob
                                   Fax Number: (310) 772-6604


<PAGE>   90

     with a copy to:
                                   with a copy to:
     Debevoise & Plimpton
     875 Third Avenue              O'Melveny & Myers LLP
     New York, New York  10022     1999 Avenue of the Stars, #700
     Attn: Thomas M. Kelly, Esq.   Los Angeles, CA  90067
     Fax Number: (212) 909-6836    Attention: Kent V. Graham, Esq.
                                   Fax Number: (310) 246-6779

     or to such other address or to such other person as either
     party hereto last designated by notice to the other party.

10.6 Assignment.  This Agreement is binding upon and will inure
     to the benefit of the parties hereto and their respective
     successors and permitted assigns, but will not be assignable, by
     operation of law or otherwise, by either party hereto without the
     prior written consent of the other party, except that the
     Purchaser may assign all or part of its, ANLIC's or First
     SunAmerica's rights and obligations to any  Subsidiary of the
     Purchaser, provided that no such assignments will relieve the
     Purchaser of its obligations hereunder.  Any purported assignment
     or other transfer made in violation of this Section 10.6 will be
     void and unenforceable.

10.7 No Third-Party Beneficiaries.  Nothing in this Agreement
     will confer any rights or remedies upon any Person not a party or
     a successor or permitted assignee of a party to this Agreement,
     nor does anything in this Agreement relieve or discharge any
     obligation or liability of any third person to any party.  No
     provision of this Agreement gives any third person any right of
     subrogation or action over or against any party to this
     Agreement.

10.8 Counterparts. This Agreement may be executed in
     counterparts, all of which will constitute one and the same
     instrument.

10.9 Certain Rules of Construction.

     10.9.1    Headings, etc. All Article, Section, Subsection or
     paragraph titles or other captions in this Agreement are for
     convenience only, are not part of this Agreement and in no way
     define, limit, extend or describe the scope or intent of any of
     its provisions.

     10.9.2    General Concepts. Unless the context otherwise
     requires:  (a) a term has the meaning assigned to it; (b) an
     accounting term not otherwise defined has the meaning assigned to
     it in accordance with GAAP; (c) "or" is not exclusive; (d) words
     in the singular include the plural, and words in the plural
     include the singular; (e) "amended," with reference to a law,
     statute, rule or regulation, is deemed to be followed by "from
     time to time"; (f) "herein," "hereof" and other words of similar
     import refer to this Agreement as a whole and not to any
     particular Article, Section, Subsection, paragraph, clause, or
     other subdivision; (g) all references to "Appendix," "clause,"
     "Exhibits," "Section," "Subsection," "Paragraph" or "Article"
     refer to the particular Appendices, clauses, Exhibits, Sections,
     Subsections, Paragraphs or Articles in or attached to this
     Agreement; (h) "desirable" includes "necessary," "advisable" and
     "appropriate"; and (i) "including" or "includes," when following
     any general provision, sentence, clause, statement, term or
     matter, will be deemed to be followed by ", but not limited to,"
     and ", but is not limited to," respectively.

     10.9.3    Discretion. If in this Agreement a Person is permitted
     or required to make a decision or determination:  (a) in its
     "discretion" or "sole discretion" or under a grant of similar
     authority or latitude, the Person will be entitled to consider
     any interests and factors as it desires, including its own
     interests; (b) in its "good faith," in a "commercially
     reasonable" manner, using "reasonable best efforts," or under


<PAGE>   91

     another express standard, the Person will act under that express
     standard and will not be subject to any other or different
     standards imposed by this Agreement or otherwise; or (c) and no
     standard is expressed, the Person will apply relevant provisions
     of this Agreement in making the decision or determination.

     10.9.4    Interpretation.  If any claim is made by a party
     relating to any conflict, omission or ambiguity in the provisions
     of this Agreement, no presumption or burden of proof or
     persuasion will be implied because this Agreement was prepared by
     or at the request of any party or its counsel. The parties waive
     any statute or rule of law to the contrary.

10.10 Knowledge.  Any references to the Seller's knowledge or
     the knowledge of the Seller will mean the actual knowledge of
     those individuals listed on Schedule 11 after reasonable inquiry.
     Any references to the Purchaser's knowledge or the knowledge of
     the Purchaser will mean the actual knowledge of those individuals
     listed on Schedule 12 after reasonable inquiry.

10.11 Severability.  If any provision of this Agreement is
     held to be illegal, invalid, or unenforceable under any present
     or future Applicable Law, and if the rights or obligations of the
     parties under this Agreement will not be materially and adversely
     affected thereby, (a) such provision will be fully severable;
     (b) this Agreement will be construed and enforced as if such
     illegal, invalid, or unenforceable provision had never comprised
     a part hereof; (c) the remaining provisions of this Agreement
     will remain in full force and effect and will not be affected by
     the illegal, invalid, or unenforceable provision or by its
     severance herefrom; and (d) in lieu of such illegal, invalid, or
     unenforceable provision, there will be added automatically as a
     part of this Agreement a legal, valid, and enforceable provision
     as similar in terms to such illegal, invalid or unenforceable
     provision as may be possible.

<PAGE>   92

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

                               MBL LIFE ASSURANCE CORPORATION




                               By:
                                  --------------------------------
                                  Name:
                                  Title:


                               SUNAMERICA INC.




                               By:
                                  --------------------------------
                                  Name:
                                  Title:


                               ANCHOR NATIONAL LIFE INSURANCE
                               COMPANY




                               By:
                                  --------------------------------
                                  Name:
                                  Title:


                               FIRST SUNAMERICA LIFE INSURANCE
                               COMPANY




                               By:
                                  --------------------------------
                                  Name:
                                  Title:

<PAGE>   93

              Acknowledgement and Agreement of the Commissioner

          The Commissioner, in her relevant capacities as
rehabilitator/liquidator of Mutual Benefit and as trustee of the
Stock Trust, hereby acknowledges and consents to the foregoing
agreement and to the execution, delivery and performance of the
foregoing agreement by the Seller.

          Further, the undersigned agrees that she will, unless
otherwise required by law or legal responsibility: (a) not
approve any arrangement or agreement with any third party that
(i) would restrict or prevent the Purchaser's collection of the
amounts set forth in Sections 4.14.1, 4.14.2, or 4.22 when due;
and (ii) would permit a sale of all or substantially all of the
Business (including the Reinsured Policies and the Transferred
Assets) in one or a series of transactions without providing for
the payment to the Purchaser of such amounts; (b) not initiate or
support, directly or indirectly, any legal or administrative
proceeding or other attempt to modify or set aside the provisions
of Sections 4.14, 4.15, or 4.16; (c) to the extent necessary,
join in and/or file affidavits or other documents to support the
Seller's motion contemplated by Section 4.16 in the same
capacities in which she executed this Acknowledgement and
Agreement; and (d) take all actions as are reasonably necessary
to obtain from Governmental Authorities any consents or approvals
that are necessary to consummate the Transactions, including
correspondence, filings and other communications encouraging
approval by the insurance commissioners of other jurisdictions.


Dated: July ___, 1998
                              -----------------------------------
                              Elizabeth E. Randall
                              New Jersey Commissioner
                              of Banking and Insurance
<PAGE>   94
                         SCHEDULE 7

           Allocation Procedures for Ceding Commission

Allocation of Ceding Commission between Reinsured Life Policies
and Reinsured Annuity Contracts

The initial allocation of Ceding Commission and Final Ceding
Commission to Reinsured Life Policies and Reinsured Annuity
Contracts will be made assuming that each of the Seller and the
Purchaser makes an Election.  The allocation to each of the
Reinsured Life Policies and Reinsured Annuity Contracts will be
calculated so that Ceding Commission that results has the same
internal rate of return (IRR) for each of Reinsured Life Policies
and Reinsured Annuity Contracts, where such determination of IRR
considers the projected profits of the Reserves, the required
capital and investment income thereon, and one time expenses for
each block of business, all on an after-tax basis.

As amounts are released from escrow pursuant to Section 7.1, the
allocation to each of the Reinsured Annuity Contracts and
Reinsured Life Polices will be recalculated using the assumptions
described in the preceding paragraph.

Allocation of Ceding Commission between Non New York Reinsured
Life Policies and New York Reinsured Life Policies

Allocation between Non New York Reinsured Life Policies and New
York Reinsured Life Policies will be made pro-rata on the basis
of the total Account Values thereof or, for the Policies that do
not provide for accumulation of Account Value, the Statutory
Reserves of the respective Reinsured Life Policies; provided,
however, such allocation will be adjusted as appropriate to
reflect the elapsed time period between the Closing Date and the
New York Assumption Date.

Allocation of Ceding Commission between Non New York Reinsured
Annuity Contracts and New York Reinsured Annuity Contracts

Allocation between the Non New York Reinsured Annuity Contracts
and New York Reinsured Annuity Contracts will be made pro-rata on
the basis of the total of Account Value for Covered Accumulation
Contracts and Statutory Reserves for Contracts in Pay Status of
the respective Reinsured Annuity Contracts; provided, however,
such allocation will be adjusted as appropriate to reflect the
elapsed time period between the Closing Date and the New York
Assumption Date.

Allocation of Transferred Reserve Assets

With respect to all Transferred Reserve Assets that relate to
specific Policies or groups of Policies, an updated Schedule 3 as
of the New York Assumption Date indicates which of such assets
relate to New York Life Policies and Annuity Contracts.

<PAGE>   95

                          SCHEDULE 8

              Assumptions Regarding Illustrations

In the preparation of Policyholder illustrations, the Seller will
use the following assumptions from the date of this Agreement
through the Closing Date:

     -    Credited Interest Rates After the Rehabilitation Period
          Termination Date:  The assumed credited rates for all Reinsured
          Life Policies other than "reduced paid up" policies will be 5.0%.
          The assumed credited rate will be adjusted upward to the nearest
          .25% for decreases and downward to the nearest .25% for increases
          in the United States Treasury Rate from March 12, 1998 as
          compared to the United States Treasury Rate on the Rehabilitation
          Period Termination Date on all Account Values other than Account
          Values resulting from premiums assumed to be deposited after the
          Rehabilitation Period Termination Date ("Post Moratorium
          Premiums").  Post Moratorium Premiums will, for one year from
          receipt, be credited at a rate .50% higher than that generally
          credited on the Account Value.

     The assumed credited rates for all Reinsured Life Policies
     that are "reduced paid up" policies will be 4.0%.

     From time to time the Purchaser will notify the Seller of
     the crediting rate to use on a periodic basis, but in any
     case no more frequently than once each month.

     -    Cost of Insurance Rates and Expense Charges After the
          Rehabilitation Period Termination Date:  The current "Preferred"
          COI scales as modified by mutual agreement of the Seller and the
          Purchaser.

     -    End of the Rehabilitation Period:  Beginning on the Closing
          Date, the Rehabilitation Period will be projected to end on the
          Transition Period Termination Date.

     -    Disclosures:  From the date of this Agreement, the Seller
          will make the following disclosures, which will be subject to the
          Purchaser's review and approval prior to implementation, as part
          of or provided together with the Policyholder illustrations:

     -    that there is a pending sale of the Business, which may
     shorten the Rehabilitation Period.  After December 31, 1999,
     the Current Elements (as defined below) otherwise guaranteed
     during the Rehabilitation Period pursuant to the Plan will
     no longer be guaranteed.

     -    if the Policyholder holds an Eligible Policy, the
     Policy Enhancements Amount applicable to such Policy will
     vest proportionately on each of January 1, 2000, July 1,
     2001, July 1, 2002, and July 1, 2003 if his Policy is still
     in force on each of these dates.  Such Policy Enhancement
     may increase the cash value of the Policy.  The Policy
     Enhancement vests fully on death  for deaths after the
     Rehabilitation Period Termination Date but before July 1,
     2003.  The impact of the application of such Policy
     Enhancements Amount is not reflected in the illustration,
     and may increase the death benefit over and above that shown
     in the illustration.

                              *****

Definition:  "Current Elements" means credited interest, Cost of
Insurance rates, and expense charges that may be different than
those guaranteed in the applicable Policy.

<PAGE>   96

                           SCHEDULE 9

                   DAC Calculation Procedures


1.   DAC Election Escrow Amount

     A.   Reinsured Reserve Liabilities at Closing will be divided
     into life and annuity and qualified vs. nonqualified subgroups.

     B.   The DAC Election Escrow Amount will be calculated as
     $40 million minus the product of .22 multiplied by the positive
     or negative difference of (x) $174 million, over (y) 7.7% of the
     Reinsured Reserve Liability for the nonqualified life subgroup,
     as determined in 1A above.
     2.   DAC Reduction Amount

     A.   The net consideration for the year that includes the Closing
     Date for each reinsurance arrangement, to which the Seller is a
     party, that yields a net negative consideration will be
     determined.

     B.   The DAC taxable income associated with each of these will be
     determined as prescribed in Section 848 of the Code and summed.
     C.   The ratio applicable to this Transaction will be calculated
     by dividing the DAC taxable income attributable to this
     Transaction by the sum of the amounts determined in 2B.
     D.   The Seller's usable DAC will be determined by adding its
     unamortized DAC balance as of December 31 for the year preceding
     the Closing Date to the positive DAC taxable income arising from
     direct premiums and positive net reinsurance considerations
     during the year that includes the Closing Date.
     E.   The DAC Reduction Amount will be calculated as the product
     of .22 multiplied by the usable DAC determined in 2D multiplied
     by the ratio determined in 2C.

     3.   DAC Reduction Escrow Amount

     A.   To determine the escrow amount at time of closing, the
     method described in 2 above will be used to calculate an
     estimated DAC Reduction Amount.

     B.   For this purpose, (i) reinsurance transactions in the
     ordinary course of business will be ignored; and (ii) for
     reinsurance transactions other than in the ordinary course, only
     reinsurance transactions that have closed by the Closing Date of
     this transaction and within the Seller's same tax year, will be
     considered in determining the ratio described in 2C.
     C.   For usable DAC, the Seller's estimate of positive DAC for
     the year that includes the Closing Date will be combined with the
     actual unamortized DAC balance as of December 31 for the year
     preceding the Closing Date (or the Seller's estimate thereof if
     the Closing occurs after December 31, 1998.
     D.   The DAC Reduction Escrow Amount will be calculated as 120%
     of 22% of the product of the ratio determined in 3B multiplied by
     the estimate of usable DAC determined in 3C.  Notwithstanding the
     foregoing, if (i) the separate sale of the COLI business has
     closed, the DAC Reduction Escrow Amount will be no less than
     $3 million and no more than $7 million, and (ii) if the separate
     sale of the COLI business has not closed, the DAC Reduction
     Escrow Amount will be no less than $5 million and no more than $7
     million.

<PAGE>   97
                             SCHEDULE 10
<TABLE>
<CAPTION>
                           Guaranteed Policy Enhancements Amount

---------------------------------------------------------------------------
-------------
|                           | Guaranteed Policy
|
|                           | Enhancements Amount
|
|                           | per Vesting Date
|
---------------------------------------------------------------------------
-------------
|Account Value              | Policy Enhancements Amount | Policy        |Policy       |
|(or Statutory Reserves for | Greater than               | Enhancements  |Enhancements |
|Restructured Contracts in  | $250 million**             | Amount        |Amount       |
|Pay Status or Supplemen-   |                            | $250 million  |$225 million |
|tary Contracts) Eligible*  |                            |               |
|at Vesting Date            |                            |               |
|
----------------------------------------------------------------------------------------
<S>                          <C>                          <C>             <C>
|Greater than or equal to   |                            |               |
|
|$4.30 billion              | $80 million + 110% of A    | $80.0 million |$72.0 million|
----------------------------------------------------------------------------------------
|Greater than 3.85 billion  |                            |               |
|but less than $4.30 billion| $74 million + 107% of A    | $74.0 million |$66.6 million|
----------------------------------------------------------------------------------------
|Greater than $3.40 billion |                            |               |
|but less than $3.85 billion| $68 million + 103% of A    | $68.0 million |$61.2 million|
----------------------------------------------------------------------------------------
|$3.40 billion or less      | $62.5 million + 100% of A  | $62.5 million |$56.3 million|
----------------------------------------------------------------------------------------
</TABLE>

For a Policy Enhancement Amount between $225 million and $250 million,
the amounts shown in the table will be interpolated.  Should the
Policy Enhancement Amount be less than $225 million due to the
Integrity Policy Enhancements Amount, the Guaranteed Policy
Enhancement Amounts will be pro rated down from $225 million.

* For purposes of this Schedule 10, the term "Eligible" means those
Contracts for which the Policy Enhancements Endorsement has been
obtained.

** A = (Policy Enhancement Amount less $250 million) divided by 4

Adjustment to Guaranteed Policy Enhancements Amount for Closing Dates
Beyond January 1, 1999:

For each month that the Closing Date is delayed beyond January 1,
1999, the following adjustments will be made to reduce the
Guaranteed Policy Enhancement Amounts (expressed as a percent of
the Guaranteed Policy Enhancement Amount).

<TABLE>
<CAPTION>
-----------------------------------------------------------------------------------
| Account Value (or Statutory Reserves for Restructured Contracts   |Monthly   |
| in Pay Status or Supplementary Contracts) Eligible at Vesting     |Adjustment  |
| Date                                                              |
-----------------------------------------------------------------------------------
<S>                                                                   <C>
| Greater than or equal to $4.30 billion                            |.125%     |
-----------------------------------------------------------------------------------
| Greater than $3.85 billion but less than $4.30 billion            |.083%     |
-----------------------------------------------------------------------------------
| Greater than $3.40 billion but less than $3.85 billion            |.042%     |
-----------------------------------------------------------------------------------
| $3.40 billion or less                                             |    0%
|
-----------------------------------------------------------------------------------
</TABLE>

The result would be rounded to the nearest $100,000.


For example:  If the Closing Date is April 1, 1999 and the Policy
Enhancement Amount is $270 million, the Guaranteed Policy
Enhancement Amount is:

<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------
| Account Value (or Statutory Reserves   |  Calculation of Guaranteed    |Guaranteed   |
| for Restructured Contracts in          |  Policy Enhancement           |Policy       |
| Pay Status or Supplementary Contracts) |                               |Enhancement  |
| Eligible at Vesting Date               |                               |
|
-----------------------------------------------------------------------------------------
<S>                                       <C>                             <C>
| Greater than or equal to $4.30 billion |80 +110%(5) - 3 * .125% * 270  |$84.5 million|
-----------------------------------------------------------------------------------------
| Greater than $3.85 billion but
| less than $4.30 billion                |74 + 107%(5) - 3 * .083% * 270 |$78.7 million|
-----------------------------------------------------------------------------------------
| Greater than $3.40 billion but
| less than $3.85 billion                | 68 +103%(5) - 3 * .042% * 270 |$72.8 million|
-----------------------------------------------------------------------------------------
| $3.40 billion or less                  | 62.5 + 100%(5) - 3 * 0 * 270  |$67.5 million|
-----------------------------------------------------------------------------------------
</TABLE>
<PAGE>   98

                               SCHEDULE 12

            Purchaser's Employee List for Knowledge Qualifications


                       (a) For all of Section 3:

                            Andrew Cushnir
                              Lorin Fife
                             Marc Gamsin
                             Deborah Gero
                             James Rowan
                             Richard Smith


              (b) With respect to Sections 3.6 and 3.7, only:

                               Eli Broad
                               Jay Wintrob
                              Scott Robinson


                  (c) With respect to Section 3.7 only:

                               James Belardi

<PAGE>   99

                                SCHEDULE 13

                    Confidentiality Agreement Language


                          "unsolicited proposals"

          You hereby acknowledge that the Evaluations Material is
          being furnished to you in consideration of your
          agreement that you will not propose to the Company or
          any other person any transaction between you and the
          Company and/or its security holders or involving any of
          its securities or security holders unless the Company
          shall have requested in writing that you make such a
          proposal, and that you will not acquire, or assist,
          advise or encourage any other persons in acquiring,
          directly or indirectly, control of the Company or any
          of the Company's securities, business or assets for a
          period of three years from the date of this letter
          unless the Company shall have consented in advance in
          writing to such acquisition.  You also agree that the
          Company shall be entitled to equitable relief,
          including injunction, in the event of any breach of the
          provisions of this paragraph and that you shall not
          oppose the granting of such relief.

                               "challenges"

          As long as you and the Company have not entered into a
          written agreement regarding a transaction, you agree
          that in the event the Company enters into an agreement
          with another party to pursue with the Company a
          transaction of the type that is the subject of this
          letter, you will not, directly or indirectly, challenge
          such proposed transaction in any judicial forum,
          including, but not limited to, any hearing before the
          Superior Court of New Jersey to approve such proposed
          transaction, solicit or encourage the initiation of any
          competing proposal or offer by another party in any
          judicial forum or otherwise interfere with the
          consummation of such transaction.



     For purposes of this Schedule 13, "the Company" means the Seller.


<PAGE>   100

                        PURCHASE AND SALE AGREEMENT

                              By and Among

                       MBL LIFE ASSURANCE CORPORATION

                             on the one hand

                                  and

                             SUNAMERICA INC.,

                   ANCHOR NATIONAL LIFE INSURANCE COMPANY

                                  and

                   FIRST SUNAMERICA LIFE INSURANCE COMPANY

                             on the other hand


                        Dated as of July 15, 1998


<PAGE>   101

                            TABLE OF CONTENTS

1.   SALE AND PURCHASE                                         2
     1.1  Ceding Commission; Reinsurance Premium;
          Acquisition of Transferred Assets and Assumption
          of Assumed Liabilities                               2
          1.1.1   Ceding Commission                            2
          1.1.2   Reinsurance Premium; Transferred Reserve
                  Assets                                       2
          1.1.3   Changes to Transferred Reserve Assets        3
          1.1.4   Other Assets Transferred on the Closing
                  Date                                         3
          1.1.5   Other Assets Transferred After the Closing
                  Date                                         4
          1.1.6   Assumption of Liabilities; Excluded
                  Liabilities                                  5
          1.1.7   Transfer and Sales Taxes                     6
          1.1.8   Allocation of Ceding Commission and
                  Transferred Reserve Assets                   6
     1.2  Closing; Estimated Closing Statement                 6
          1.2.1   Place and Time of Closing                    6
          1.2.2   Estimated Closing Date Statement             6
     1.3  Post-Closing Adjustment                              7
          1.3.1   Final Closing Date Statement                 7
          1.3.2   Final Determination of Disputes              7
          1.3.3   Adjustments; Payment and Interest            7
     1.4  Closing Items                                        8
          1.4.1   Assumption Reinsurance Agreements            8
          1.4.2   Indemnity Reinsurance Agreement              8
          1.4.3   Administrative Services Agreement            8
          1.4.4   Transition Services Agreement                8
          1.4.5   Escrow Agreement                             8
          1.4.6   Bill of Sale                                 9
          1.4.7   Other Deliveries                             9
2.   REPRESENTATIONS AND WARRANTIES OF THE SELLER              9
     2.1  Corporate Status of the Seller                       9
     2.2  Authority                                            9
     2.3  No Conflicts, Consents and Approvals, etc.           9
          2.3.1   No Conflicts                                 9
          2.3.2   Consents                                    10
     2.4  Permits, Licenses, etc.                             10
     2.5  Compliance with Laws                                11
     2.6  Financial Statements                                11
          2.6.1   Audited GAAP Statements                     11
          2.6.2   Statutory Statements                        11
          2.6.3   Audited SAP Statements                      11
          2.6.4   GAAP Representations                        11
          2.6.5   SAP Representations                         11
     2.7  Computer Software                                   12
     2.8  Litigation                                          12
     2.9  Regulatory Filings                                  12
     2.10 Tax Matters                                         13
          2.10.1  Tax Treatment of Reinsured Policies         13
          2.10.2  Tax Reserves                                13
          2.10.3  Tax Impact on Policyholders                 13
     2.11 Absence of Changes                                  14
     2.12 Reinsured Policies                                  15
          2.12.1  Forms                                       15
          2.12.2  Life Policies                               16
          2.12.3  Annuity Contracts                           16
          2.12.4  Compliance with Law                         16
          2.12.5  Policies in Effect                          17
          2.12.6  Sales Practices                             18
          2.12.7  Payment of Policy Benefits                  18
          2.12.8  No Other Distributions                      18
          2.12.9  Underwriting Standards                      18
          2.12.10 Financial Status of Reinsurers              18
          2.12.11 No Waivers                                  19
          2.12.12 Consistent with Books and Records           19
          2.12.13 Guaranty Fund Assessments                   19
          2.12.14 Cost of Insurance and Interest Rates        19
          2.12.15 Taxable Basis                               19
          2.12.16 Lists of Group Pension Customers            19
          2.12.17 Contracts and Administrative Procedures of
                  Group Pension Business; Group Pension
                  Accounts; Reaffirmed Other Contracts        20
          2.12.18 Documents Relating to Fully Administered
                  Qualified Plans                             21
          2.12.19 No Excluded Policies                        21
          2.12.20 Account Values True-Up                      21
          2.12.21 Eligible Policies                           22
          2.12.22 MEC's                                       22
     2.13 Reserves                                            22
     2.14 Reinsurance Agreements                              23


<PAGE>   102

          2.14.1 Outward Reinsurance Agreements               23
          2.14.2 Inward Reinsurance Agreements                23
     2.15 Brokers                                             23
     2.16 Severance Plan                                      24
     2.17 Absence of Undisclosed Liabilities                  24
     2.18 Transferred Assets                                  24
     2.19 Books and Records                                   24
     2.20 Threats of Cancellation                             24
     2.21 Rehabilitation Plan                                 24
          2.21.1 List of Rehabilitation Documents             25
          2.21.2 Approval; Compliance                         25
          2.21.3 No Actions                                   25
     2.22 Assigned Contracts                                  25
     2.23 Agreements Relating to Payment of Commissions       25
          2.23.1 Forms of Commission Agreements               25
          2.23.2 Insurance Agents                             25
          2.23.3 Renewal Commissions                          26
     2.24 Third Party Administration Agreements               26
     2.25 Impairments                                         26
     2.26 Wrapped Accumulation Contracts                      26
     2.27 Policyholder Lists                                  26
3.   REPRESENTATIONS AND WARRANTIES OF THE PURCHASER          27
     3.1  Corporate Status and Authority                      27
     3.2  No Conflicts, Consents and Approvals, etc.          27
          3.2.1  No Conflicts                                 27
          3.2.2  Consents                                     28
     3.3  Compliance with Laws                                28
     3.4  Litigation                                          28
     3.5  Permits, Licenses, etc.                             28
     3.6  Financial Statements                                29
          3.6.1  Audited GAAP Statements                      29
          3.6.2  Statutory Statements                         29
          3.6.3  Audited SAP Statements                       29
          3.6.4  GAAP Statement Representations               29
          3.6.5  SAP Statement Representations                29
     3.7  Absence of Changes                                  30
     3.8  Brokers                                             30
     3.9  Rating                                              30
4.   PRE-CLOSING COVENANTS                                    30
     4.1  Consents; Cooperation                               30
          4.1.1  Consents to be Obtained                      30
          4.1.2  Cooperation                                  30
          4.1.3  Regulatory Filings; Other Consents           31
     4.2  Seller's Conduct of Business, etc                   32
     4.3  Access and Information                              33
     4.4  Certain Transactions                                34
     4.5  Financial Statements and Reports                    34
     4.6  Intentionally Deleted                               34
     4.7  Reinsurance Agreements                              34
     4.8  Expenses                                            35
     4.9  Publicity                                           35
     4.10 Contact with Employees, Policyholders and Other
          Constituencies                                      36
     4.11 Amendments to Plan and Other Orders                 36
     4.12 Funding of Policy Enhancements                      36
          4.12.1 Recognition of Liability                     36
          4.12.2 Allocation of Policy Enhancements to
                 Policyholders                                37
          4.12.3 No Set-off                                   38
          4.12.4 Endorsements to Eligible Policies            38
          4.12.5 Policy Enhancements Endorsements Escrow
                 Amount                                       38
     4.13 Endorsement of Certain Associations                 39
     4.14 Break-Up Fee; Expense Reimbursement                 39
          4.14.1 Break-Up Fee                                 39
          4.14.2 Expense Reimbursement                        40
          4.14.3 Cumulative Remedies                          40
     4.15 Enforcement of Other Agreements                     40
     4.16 Overbidding Procedures                              40
     4.17 Calculation of Impairments                          42
     4.18 COI                                                 42
          4.18.1 Modified COI Scale                           42


<PAGE>   103

          4.18.2 COI Adjustment Amount                        43
     4.19 Acquisition Agreement Regarding Broker/Dealer       43
     4.20 Grandfathering Ruling                               43
     4.21 Additional Enhancements DAC Amount                  44
     4.22 Reimbursable Transition Expenses                    44
     4.23 Transfer of Class Four Claims                       45
     4.24 Delivery of Updated Policy Lists                    45
5.   CONTINUING COVENANTS                                     45
     5.1  Continuing Access Obligations                       45
          5.1.1  Access Obligations During Transition
                 Period                                       45
          5.1.2  Continuing Access Obligations of the
                 Purchaser                                    46
          5.1.3  Continuing Access Obligations of the
                 Seller                                       46
     5.2  Distribution of Class Four Creditor Value Share;
          Liquidation                                         46
          5.2.1  Provision of Adequate Reserves               46
          5.2.2  Distribution of Class Four Creditor Value
                 Share                                        46
          5.2.3  Restriction on Liquidating Distributions     47
     5.3  Termination of Excluded Annuity Contracts           47
     5.4  Termination of Wrapped Accumulation Contracts       48
     5.5  Marketing Support                                   48
     5.6  Sufficiency of Staff and Assets                     48
     5.7  Policy Endorsements                                 48
     5.8  Rehabilitation Documents                            48
     5.9  Post-Closing Publicity                              48
     5.10 Post-Rehabilitation Treatment of Reinsured and
          Replacement Policies                                48
          5.10.1 Continuation or Replacement                  48
          5.10.2 Additional Replacement Policies              49
          5.10.3 Non-Guaranteed Elements                      49
          5.10.4 Eligible Policies                            49
          5.10.5 Approvals                                    50
          5.10.6 Guidelines for Restructured Life Policies    50
          5.10.7 Covered Accumulation Contract Replacement
                 Policies                                     51
     5.11 Election to Capitalize Specified Policy
          Acquisition Expenses                                51
     5.12 Maintenance of Business                             52
     5.13 IBNR Settlement Amount                              52
          5.13.1 Allocation of Liability                      52
          5.13.2 Calculation of IBNR Settlement Amount        52
     5.14 Solicitation of Policyholders                       53
     5.15 Reinstated Policies                                 53
     5.16 Outward Reinsurance Agreements                      54
          5.16.1 Remaining Outward Reinsurance Agreements     54
          5.16.2 Outward Reinsurance Escrow Amount            54
          5.16.3 Monthly Accounting                           54
          5.16.4 Settlement                                   55
          5.16.5 Release of Escrowed Funds and Payment of
                 Net Reinsurance Premium to Seller            55
     5.17 Taxable Basis of Reinsured Policies                 55
     5.18 Calculation of Account Values True-Ups              56
     5.19 Sale of Broker/Dealer                               56
     5.20 Agents                                              56
     5.21 Transfer of Assets to First SunAmerica              56
     5.22 Amendment of Schedules                              56
     5.23 Treatment of Policy Enhancements                    57
     5.24 Sale of Non-Terminated Variable Annuities           57
     5.25 Grandfathered Premiums Indemnity                    57
     5.26 Severance Plan                                      58
     5.27 Transition Period Termination Date Policy Lists     58
6.   CONDITIONS PRECEDENT                                     58
     6.1  General                                             58
     6.2  Conditions to Obligations of Both Parties           58
          6.2.1  HSR Act                                      58
          6.2.2  No Injunction, etc                           58
          6.2.3  Approval of the Court                        59
          6.2.4  Approval of the Class Four Creditors         59
          6.2.5  Approval of the Reinsurers                   59


<PAGE>   104

          6.2.6  Approval of NOLHGA on Behalf of the
                 Participating Guaranty Associations          59
          6.2.7  Approval of First SunAmerica by the
                 Commissioner                                 59
          6.2.8  Other Permits                                59
          6.2.9  Ancillary Agreements                         59
          6.2.10 Additional Instruments and Documents         59
          6.2.11 Change in Law Regarding Tax Impact on
                 Policyholders                                60
     6.3  Conditions to Obligations of the Seller             60
          6.3.1  Representations, Warranties and Agreements
                 of the Purchaser                             60
          6.3.2  Officer's Certificate                        60
          6.3.3  Opinions of Counsel                          60
     6.4  Conditions to Obligations of the Purchaser          60
          6.4.1  Representations, Warranties and Agreements
                 of the Seller                                60
          6.4.2  Officer's Certificate                        60
          6.4.3  Opinions of Counsel                          60
          6.4.4  Funding of Escrow Agreement                  60
          6.4.5  Policy Enhancements Amount                   61
          6.4.6  Reserve Liabilities                          61
          6.4.7  Assurances Regarding Simultaneous
                 Assumption of Reinsured Policies             61
          6.4.8  Outward Reinsurance Agreements               61
          6.4.9  Court Order, Regulatory Approvals and
                 Other Filings                                61
          6.4.10 Updated Calculation of Impairments           62
          6.4.11 Changes to COI Scale                         62
          6.4.12 Estimated Closing Date Statement and
                 Updated Schedules                            62
          6.4.13 Transferred Reserve Assets                   62
          6.4.14 Updated Policy Lists                         62
7.   INDEMNIFICATION AND SURVIVAL                             63
     7.1  Tax Indemnification and Other Tax Matters           63
          7.1.1  Section 848 Election Tax Benefit             63
          7.1.2  Assumptions for Insolvent Insurance
                 Company Election Tax Benefit                 63
          7.1.3  Deposits to DAC Tax Indemnity Account at
                 Closing                                      63
          7.1.4  Computation of DAC Reduction Amount          63
          7.1.5  Release of the DAC Election Escrow Amount    64
          7.1.6  Filing of the Purchaser's Tax Return         65
          7.1.7  Method for Ensuring Benefits                 65
          7.1.8  Calculation of DAC Escrow Amounts            66
     7.2  Survival of Representations and Covenants of the
          Purchaser                                           67
     7.3  Survival of Representations and Covenants of the
          Seller                                              67
     7.4  Indemnification by the Purchaser                    68
     7.5  Indemnification by the Seller                       68
          7.5.1  General Indemnity                            68
          7.5.2  Tax Treatment of Policies Indemnity          68
          7.5.3  Tax Reserves Indemnity                       69
          7.5.4  Tax Contests                                 69
     7.6  Damages                                             70
          7.6.1  Basket and Threshold                         70
          7.6.2  Limit on Tax Reserves Indemnity              70
          7.6.3  Limit on COI Adjustment Amount Recovery      70
          7.6.4  Limit on Policy Enhancements Endorsements
                 Indemnity                                    71
          7.6.5  Intentionally Deleted                        71
          7.6.6  Excluded Damages                             71
          7.6.7  Exclusive Remedy                             71
     7.7  Indemnification Procedure                           72
          7.7.1  Notice of Claim                              72
          7.7.2  Third Party Claims                           72
          7.7.3  Disputes                                     74
          7.7.4  Mitigation                                   74
     7.8  Release of Funds From Escrow                        74
          7.8.1  DAC Election/Reduction Escrow Amount         74
          7.8.2  Outward Reinsurance Escrow Amount            74


<PAGE>   105

          7.8.3  Tax Reserves Indemnity Escrow Amount         74
          7.8.4  Claims Escrow Amount                         74
          7.8.5  COI Adjustment Escrow Amount                 75
          7.8.6  Policy Enhancements Endorsements Escrow
                 Amount                                       75
          7.8.7  Notices and Joint Instructions               75
8.   DISPUTE RESOLUTION                                       75
     8.1  Governing Law                                       75
     8.2  Arbitration of Disputes                             75
          8.2.1  Matters in Exclusive Jurisdiction of Court   75
          8.2.2  Pre-Arbitration Dispute Resolution           75
          8.2.3  Arbitration                                  76
          8.2.4  Confidentiality                              77
          8.2.5  Interim Relief                               77
          8.2.6  Enforcement                                  77
     8.3  Consent to Jurisdiction; Waiver of Jury Trial,
          etc.                                                77
          8.3.1  Consent to Jurisdiction                      77
          8.3.2  Waiver of Jury Trial                         78
     8.4  Injunctive Relief                                   78
     8.5  Independent Party                                   78
9.   DEFINITIONS                                              79
10.  GENERAL PROVISIONS                                      101
     10.1 Modification; Waiver                               101
     10.2 Entire Agreement                                   101
     10.3 Termination By the Parties                         101
          10.3.1 Events Causing Termination                  101
          10.3.2 Automatic Termination                       102
          10.3.3 Effect of Termination                       102
     10.4 Further Actions                                    103
     10.5 Notices                                            103
     10.6 Assignment                                         103
     10.7 No Third-Party Beneficiaries                       103
     10.8 Counterparts                                       104
     10.9 Certain Rules of Construction                      104
          10.9.1 Headings, etc.                              104
          10.9.2 General Concepts                            104
          10.9.3 Discretion                                  104
          10.9.4 Interpretation                              104
     10.10 Knowledge                                         104
     10.11 Severability                                      105


Exhibits

Exhibit A-1         ANLIC Assumption Reinsurance Agreement
Exhibit A-2         First SunAmerica Assumption Reinsurance
                    Agreement
Exhibit B           Indemnity Reinsurance Agreement
Exhibit C           Administrative Services Agreement
Exhibit D           Transition Services Agreement
Exhibit E           Escrow Agreement
Exhibit F           Bill of Sale
Exhibit G-1         Opinion of Purchaser's General Counsel
Exhibit G-2         Opinion of O'Melveny & Myers LLP
Exhibit G-3         Opinion of McElroy, Deutsch and Mulvaney
Exhibit H-1         Opinion of Seller's General Counsel
Exhibit H-2         Opinion of Debevoise & Plimpton
Exhibit H-3         Opinion of Gibbons, Del Deo, Dolan,
                    Griffinger & Vecchione
Exhibit I           Proposed Amendments to the Plan and Other Orders
Exhibit J           Class Four Creditors Approval
Exhibit K           Expense Reimbursement Escrow Agreement


Schedules

Seller's Disclosure Schedule
Purchaser's Disclosure Schedule

Schedule 1-A        All Reinsured Life Policies
Schedule 1-B        Non New York Reinsured Life Policies


<PAGE>   106

Schedule 1-C        New York Reinsured Life Policies
Schedule 2-A        All Reinsured Annuity Contracts
Schedule 2-B        Non New York Reinsured Annuity Contracts
Schedule 2-C        New York Reinsured Annuity Contracts
Schedule 3          Transferred Reserve Assets
Schedule 4          Assigned Contracts Transferred at Closing
Schedule 5          Reserve Liabilities
Schedule 6          Seller Separate Accounts
Schedule 7          Allocation Procedures
Schedule 8          Assumptions Regarding Illustrations
Schedule 9          DAC Calculation Procedures
Schedule 10         Guaranteed Policy Enhancements Amount
Schedule 11         Seller's Employee List for Knowledge
                    Qualifications
Schedule 12         Purchaser's Employee List for Knowledge
                    Qualifications
Schedule 13         Confidentiality Agreement Language