Document:

EX-10.1

Exhibit 10.1

August 2, 2009

Hicks Acquisition Company I, Inc.

100 Crescent Court, Suite 1200

Dallas, TX 75201

Attention: Joseph B. Armes

We are writing to set forth an amendment to the Underwriting Agreement between and among Hicks
Acquisition Company I, Inc. (the “Company”) and Citigroup Global Markets Inc. as Representative for
the Several Underwriters, dated September 27, 2007 (the “Underwriting Agreement”). Capitalized
terms used herein that are not otherwise defined have the meanings ascribed to them in the
Underwriting Agreement.

The Underwriters agree that in the event that the Deferred Discount becomes payable such Deferred
Discount will be in an aggregate amount equal to $5,500,000 (hereby being reduced from the
$17,388,000 that would otherwise be payable (the “New Deferred Discount Amount”). Each of the
undersigned represent and warrant that they are parties entitled to such fee and thereby the
parties authorized to agree to the afore-mentioned discount. The Underwriters are making the
foregoing amendment in consideration of efforts that are being expended by the Company in pursuing
a Business Combination and acknowledge that the Company is pursuing the structuring of such
Business Combination in reliance on this letter. This letter sets forth the entire agreement with
respect to the discount and may only be amended by a writing signed by the Company and the
Underwriters.

	 	 	 	 	 
	 	Very truly yours,

CITIGROUP GLOBAL MARKETS INC.

 	 
	 	By:  	/s/ Jason Cunningham
 	 
	 	Name:  	Jason Cunningham 	 
	 	Title:  	Managing Director 	 
	 
	 	LAZARD CAPITAL MARKETS, LLC

 	 
	 	By:  	/s/
David G. McMillan, Jr. 	 
	 	Name:  	David
G. McMillan, Jr. 	 
	 	Title:  	Managing Director 	 
	 
	 	LADENBURG THALMANN & CO. INC.

 	 
	 	By:  	/s/ Peter H. Blum
 	 
	 	Name:  	Peter H. Blum 	 
	 	Title:  	Vice Chairman 	 
	 

 

 

Accepted and agreed to as of
the date set forth above:

Hicks Acquisition Company I, Inc.

By:        /s/ Joseph B. Armes                    
Name:   Joseph B. Armes
Title:     President & CEOEX-10.2

Exhibit 10.2

TERMINATION OF PURCHASE AGREEMENT

     THIS
TERMINATION OF PURCHASE AGREEMENT (this
“Agreement”), dated as of August 2, 2009, is
entered into by and between Hicks Acquisition Company I, Inc., a Delaware corporation (the
“Company”), Thomas O. Hicks (the “Buyer”) and HH-HACI, L.P. (collectively, the “Parties,” and each,
a “Party.”)

PRELIMINARY STATEMENTS

     A. The Buyer and the Company have entered into a Co-Investment Securities Purchase Agreement
dated as of September 26, 2007 (the “Purchase Agreement”); and

     B. Upon the advice of financial advisors and a majority of the independent directors of the
Company, the Company wishes to terminate the Purchase Agreement.

STATEMENT OF AGREEMENT

     NOW, THEREFORE, in consideration of the foregoing and the agreements set forth below, the
Parties hereto agree as follows:

     1. Termination. The Purchase Agreement is hereby terminated and of no further force
and effect. For the avoidance of doubt, Section 6.1 (Failure to Purchase) of the Purchase
Agreement is hereby rendered null and void.

     2. Authority. Each Party represents that such Party has full power and authority to
enter into this Agreement, and that this Agreement constitutes a legal, valid and binding
obligation of such Party, enforceable against such Party in accordance with its terms.

     3. Counterparts. This Agreement may be executed in one or more counterparts, each of
which will be deemed to be an original, but all of which will constitute one and the same
agreement.

     4. Applicable Law. This Agreement, the entire relationship of the Parties, and any
litigation between the Parties (whether grounded in contract, tort, statute, law or equity) shall
be governed by, construed in accordance with, and interpreted pursuant to the laws of the State of
Delaware, without giving effect to its choice of laws principles.

[Signature Page Follows]

 

 

     IN WITNESS WHEREOF, the undersigned have executed this Agreement to be effective as of the
date first set forth above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	COMPANY:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	HICKS ACQUISITION COMPANY I, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Joseph B. Armes	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Joseph B. Armes	 	 
	 	 	 	 	President, Chief Executive Officer	 	 
	 	 	 	 	and Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	BUYER:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	/s/ Thomas O. Hicks	 	 
	 	 	 	 	 
	 	 	Thomas O. Hicks	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	HH-HACI, L.P.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	By: HH-HACI GP, LLC,

its general partner	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	By:
	 	/s/ Thomas O. Hicks	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Thomas O. Hicks	 	 
	 

	 	 	 	 	 	 	 	Sole Member and Managerexv10w1

Exhibit 10.1

     EXECUTION COPY

AMENDED AND RESTATED

GROUP LIFE AND HEALTH

INDEMNITY REINSURANCE AGREEMENT

     THIS AMENDED AND RESTATED GROUP LIFE AND HEALTH INDEMNITY REINSURANCE AGREEMENT, dated as of
December 31, 2003 (this “Agreement”), is entered into by and between CONTINENTAL ASSURANCE
COMPANY, a stock insurance company organized under the laws of Illinois (“CAC”), and VALLEY
FORGE LIFE INSURANCE COMPANY, a stock insurance company organized under the laws of Pennsylvania
(“VFL” and together with CAC, the “Insurers”, with each of CAC and VFL also
sometimes referred to herein as an “Insurer”), and CNA GROUP LIFE ASSURANCE COMPANY, a
stock insurance company organized under the laws of Illinois (the “Reinsurer”).

WITNESSETH

          WHEREAS, the parties hereto entered into a reinsurance agreement (the “Original
Reinsurance Agreement”), dated as of March 31, 2001, pursuant to which the Reinsurer agreed to
reinsure the group life insurance and group health insurance businesses and certain other
businesses of the Insurers;

          WHEREAS, the parties hereto also entered into an administrative services agreement (the
“Original Administrative Services Agreement”), dated as of March 31, 2001, pursuant to
which the Reinsurer agreed to provide the administrative services described therein with respect to
the business reinsured under the Original Reinsurance Agreement;

          WHEREAS, Continental Casualty Company, an Illinois stock insurance company (“CCC”),
CAC, CNA Financial Corporation, a Delaware corporation (“CNA”), Hartford Life and Accident
Insurance Company, a stock insurance company organized under the laws of Connecticut
(“Purchaser”) and Hartford Life, Inc., a Delaware corporation, have entered into an Amended
and Restated Stock Purchase Agreement, dated as of November 30, 2003 (the “Stock Purchase
Agreement”), pursuant to which CCC, CAC and CNA have agreed, among other things, to sell to
Purchaser all of the issued and outstanding capital stock of the Reinsurer and Charles Stedman &
Co., Inc.;

          WHEREAS, pursuant to the Stock Purchase Agreement, CNA, CCC, CAC and Purchaser have agreed
that at the Closing (as defined in the Stock Purchase Agreement) certain business and liabilities
previously ceded to and reinsured by the Reinsurer under the Original Reinsurance Agreement would
be commuted effective upon the Closing Date (as defined in the Stock Purchase Agreement) pursuant
to a Commutation Agreement among CAC, VFL and the Reinsurer, the form of which is attached hereto
as Exhibit A (the “Commutation Agreement”);

          WHEREAS, pursuant to the Stock Purchase Agreement, CNA, CCC, CAC and Purchaser have agreed
that the Original Reinsurance Agreement and the Original Administrative Services Agreement would be
amended and restated to recognize the effect of the Commutation Agreement and to give effect to
certain other changes;

 

 

          WHEREAS, the parties hereto are entering into the Amended and Restated Group Life and Health
Administrative Services Agreement, dated as of the date hereof, which amends and restates in its
entirety the Original Administrative Services Agreement (the “Amended and Restated
Administrative Services Agreement”); and

     WHEREAS, the Insurers and the Reinsurer desire to enter into this Agreement to amend and
restate in its entirety the Original Reinsurance Agreement as herein set forth.

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

ARTICLE I

BUSINESS REINSURED

     1. Effective as of 12:01 a.m. on the Closing Date (the “Revised Effective Time”), the
Insurers hereby cede to the Reinsurer, and the Reinsurer hereby accepts and indemnity reinsures, on
a coinsurance basis, from the Insurers, 100% of the Policy Liabilities (as defined below), but none
of the Retained Policy Liabilities (as defined below) and Excluded Liabilities (as defined below),
in each case, arising from:

(i) any and all binders, endorsements, riders, policies, certificates and contracts of
insurance and assumed reinsurance included in the Subject Business issued, renewed or
assumed by the Insurers prior to, on or after the Original Effective Time (as defined in
Article VII of this Agreement), including without limitation all such binders,
endorsements, riders, policies, certificates and contracts lapsed and terminated with
unpaid claims or subsequently reinstated; (ii) Accommodation Policies (as defined in the
Amended and Restated Administrative Services Agreement) for the Subject Business; and (iii)
Insurer Additional Policies (as defined in the Amended and Restated Administrative Services
Agreement) for the Subject Business (each such binder, endorsement, rider, policy,
certificate or contract of insurance and reinsurance being referred to in (i), (ii) and
(iii) above shall be hereinafter referred to individually as a “Policy” and
collectively as the “Policies”).

     2. The term “Certificateholder” shall mean each insured or reinsured under a Policy.

     3. The term “Third Party Reinsurance Agreement” shall have the meaning provided
therefore in the Stock Purchase Agreement.

     4. The term “Unnovated Third Party Reinsurance Agreement” shall mean a Third Party
Reinsurance Agreement which has not been novated pursuant to the terms of Section 5.12.2(b) of the
Stock Purchase Agreement.

     5. The term “Retained Policy Liabilities” shall mean any Policy Liabilities (a) ceded
by an Insurer under an Unnovated Third Party Reinsurance Agreement or (b) required to
be retained by the Insurers under applicable state law or, in the case of Policies

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reinsured under any Third Party Reinsurance Agreement, by the terms of such Third Party
Reinsurance Agreement (giving effect to any consents or modifications of such applicable
agreement), with such Retained Policy Liabilities referred to in clause (b) being reflected in
Schedule A hereto.

     6. The term “Subject Business” shall mean all of the insurance business that
corresponds to the policy forms of the Insurers identified on Schedule B.  

     7. The term “Policy Liabilities” shall mean the gross liability and obligations
(whether arising from assumed reinsurance or directly written insurance) of the Insurers, based
upon or arising under the express written terms and conditions of the Policies (except for Excluded
Liabilities (as defined below) and Retained Policy Liabilities), including without limitation
liabilities for:

	 	(a)	 	withdrawals, surrenders, Policy loans, returns of premium and other deposits
and any other disbursement, Policyholder interest, dividends, dividend accumulations,
benefits, claims, losses and benefit and claim expenses (but excluding any amounts
claimed or allegedly payable due to the accelerating or discounting of contingent or
future benefits, claims or losses following the insolvency of an Insurer) in respect
of the Policies;

	 
	 	(b)	 	Extra Contractual Obligations (as defined below), but only to the extent such
Extra Contractual Obligations are based on acts, errors or omissions on or after the
Revised Effective Time by the Reinsurer or any of its respective officers, employees,
agents, subcontractors or representatives, and any attorneys’ fees incurred by an
Insurer and the Reinsurer related to such liabilities;

	 
	 	(c)	 	guaranty association assessments in connection with participation by an
Insurer in any guaranty fund or association established or governed by any state or
jurisdiction to the extent arising on account of premiums, deposits and other
consideration paid or payable after January 1, 2001 in respect of the Policies;

	 
	 	(d)	 	other assessments or payments required to be made with respect to the
Policies for or on account of regulatory agencies, including but not limited to
valuation fees or payments after January 1, 2001;

	 
	 	(e)	 	returns or refunds of premiums (irrespective of when due) and any other
benefits or dividends under the Policies paid or payable after January 1, 2001;

	 
	 	(f)	 	premium taxes and municipal taxes paid or payable by an Insurer or the
Reinsurer in respect of the Policies after January 1, 2001;

	 
	 	(g)	 	commissions or other compensation due insurance brokers, agents and producers
and reinsurance intermediaries in connection with the Policies;

3

 

	 	(h)	 	amounts payable under assumed reinsurance arrangements, and obligations to
return premiums or portions thereof;

	 
	 	(i)	 	premiums or portions thereof payable under Third Party Reinsurance Agreements
with respect to the Policies other than the Unnovated Third Party Reinsurance
Agreements; and

	 
	 	(j)	 	accrued interest on all unpaid Policy Liabilities.

     8. The term “Excluded Liabilities” shall mean the liabilities or obligations of each
Insurer that are not Policy Liabilities, including, without limitation: (i) any Extra Contractual
Obligations ceded by the Insurers to the Reinsurer prior to the Revised Effective Time; (ii) Extra
Contractual Obligations based on acts, errors or omissions by an Insurer, or any of its officers or
employees, agents, subcontractors or representatives (other than the Reinsurer on or after the
Revised Effective Time pursuant to the Amended and Restated Administrative Services Agreement), and
not at the direction or request of the Reinsurer on or after the Revised Effective Time and any
attorneys’ fees incurred by the Insurer related to such liabilities or obligations; (iii) any
Extra Contractual Obligations based on acts, errors or omissions by the Reinsurer or any of its
officers or employees, agents, subcontractors or representatives prior to the Revised Effective
Time and any attorneys’ fees incurred by an Insurer related to such liabilities or obligations; and
(iv) any risk, obligations or liabilities commuted and transferred to the Insurers under the
Commutation Agreement.

     9. The term “Extra Contractual Obligations” shall mean all liabilities and obligations
other than those arising under the express terms and conditions, and within the limits, of the
Policies, including, without limitation, any liability for fines, penalties, forfeitures or
punitive, exemplary, special or any other form of extra contractual damages, relating to the
Policies, which arise from any act, error or omission, whether intentional, negligent or in bad
faith, including, without limitation, any act, error or omission relating to (i) the marketing,
underwriting, production, issuance, cancellation or administration of the Policies, (ii) the
investigation, defense, trial, settlement or handling of claims, benefits, or payments under the
Policies, or (iii) the failure to pay or the delay in payment of benefits, claims or any other
amounts due or alleged to be due under or in connection with the Policies.

     10. The Reinsurer is entitled to the benefit of any and all rights, assets, defenses, setoffs
and counterclaims to which the Insurers are entitled with respect to the Policy Liabilities or the
satisfaction thereof, it being expressly understood and agreed by the parties hereto that no such
rights, assets, defenses, setoffs or counterclaims are waived by the execution of this Agreement or
the consummation of the transactions contemplated hereby and that the Reinsurer shall be fully
subrogated to all such rights, assets, defenses, setoffs and counterclaims. The liability of the
Reinsurer hereunder shall remain in effect until all liability under the Policies has been fully
liquidated. An Insurer, on its own initiative, will not change the terms and conditions of any
Policy or the assumptions and methods used by

4

 

Company to determine statutory reserves in respect of the Policies unless required by regulatory authority.

     11. The Reinsurer shall have the benefit of any premium tax credits and reductions
attributable to guaranty fund assessments and similar assessments paid or payable by such Insurer
with respect to the Policies but only if and to the extent that (i) the Reinsurer reinsures the Insurers for such guaranty fund and similar assessments pursuant to
this Agreement and (ii) such credits are actually applied by the Insurers to reduce their premium
tax liabilities, provided that Insurers shall apply such credits and any other premium tax credits
and reductions attributable to guaranty fund assessments and similar assessments on a pro rata
basis.

     12. The Reinsurer may, at its sole option, elect to (a) novate certain or all of the Policies
by assumption reinsurance (the “Novation Option”) or (b) amend this Agreement as
appropriate to add a “cut-through” for designated Policies, making Policy benefits that are
included in the Policy Liabilities payable directly to the policyholders (the “Cut-Through
Option”). As part of the Cut-Through Option, the Reinsurer also may elect, in it sole discretion,
for the Insurers and the Reinsurer to issue a related endorsement for the designated Policies. The
Reinsurer’s election, if any, to pursue either the Novation Option or the Cut-Through Option, shall
be subject to obtaining any regulatory approvals, consents or confirmations deemed necessary or
advisable by the Reinsurer, in its sole discretion. The Reinsurer shall promptly notify the
Insurers prior to pursuing the Novation Option or Cut-Through Option, and the Insurers shall
cooperate with the Reinsurer in implementing the Novation Option or Cut-Through Option (including,
without limitation, amending this Agreement), provided that the Reinsurer shall be solely and
exclusively responsible for the costs and expenses of effecting the Novation Option or Cut-Through
Option. Notwithstanding the foregoing, the Reinsurer shall have no obligation to seek the Novation
Option or Cut-Through Option, and this provision by itself shall in no way be interpreted as
amending Article IX to provide any rights to any third party.

ARTICLE II

PAYMENT AND ACCOUNTING FOR CERTAIN ASSUMED POLICY LIABILITIES

     In connection with the Reinsurer’s assumption of the Policy Liabilities described in
paragraphs (c), (d) and (f) of Section 7 of Article I hereof (the “Tax/Assessment
Liabilities”), it is agreed that an Insurer will make direct payment of such Tax/Assessment
Liabilities and that the Reinsurer’s assumption of liability therefor shall be discharged by an
Insurer reporting the Tax/Assessment Liabilities paid by the Insurer to the Reinsurer in accordance
with Section 7 of Article VII, and the Reinsurer reimbursing the Insurer for such amounts also in
accordance with Section 7 of Article VII.

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ARTICLE III

TERRITORY

     This Agreement shall apply to Policies covering persons and risks wherever resident or
situated.

ARTICLE IV

POLICY ADMINISTRATION

     The Policies and the Policy Liabilities shall be administered by the Reinsurer pursuant to the
terms of the Amended and Restated Administrative Services Agreement. In connection therewith,
Reinsurer will provide such periodic reports to the Insurers as are required by the Amended and
Restated Administrative Services Agreement. Settlements of amounts due from the Reinsurer to the
Insurers and amounts due from the Insurers to the Reinsurer, as set forth in such reports, shall be
made on a monthly basis as set forth in the Amended and Restated Administrative Services Agreement.

ARTICLE V

PREMIUMS; RECOVERIES

     1. Each Insurer hereby transfers, conveys and assigns to the Reinsurer all of its rights,
title and interest to, and the Reinsurer shall be entitled to, 100% of the following, except to the
extent that any such amounts are attributable to Retained Policy Liabilities: all premiums
(irrespective of when due), premium adjustments, reinsurance receivables, balances due from agents,
principal and interest due on policy loans, retroactive increases in premiums based upon
experience, accrued interest receivables and recoveries received at or after January 1, 2001 by the
Insurers or the Reinsurer with respect to the Policies, together with all Policy-related rights of
the Insurers, including, without limitation, subrogation and coordination of benefits rights,
including, for the benefit of the Reinsurer, any and all premium tax credits attributable to
guaranty fund and other assessments paid or payable by the Insurers (the “Premium Tax
Credits”) to the extent provided in Section 11 of Article I.

     2. Each Insurer shall promptly endorse and remit to the Reinsurer all of the following, except
to the extent that any such amounts are attributable to Retained Policy Liabilities: any premiums,
premium adjustments, reinsurance receivables, balances due from agents, amounts due on policy
loans, accrued interest receivables, rights, assets and recoveries received by the Insurers at or
after January 1, 2001 in respect of any of the Policies or the satisfaction of Policy Liabilities,
including the Premium Tax Credits, to the extent provided in Section 11 of Article I. Each Insurer
shall treat any such amounts as the property of the Reinsurer to be held in a fiduciary capacity
for the sole benefit of Reinsurer.

     3. Each Insurer shall provide reasonable assistance to the Reinsurer, upon the Reinsurer’s
request therefor, and at the Reinsurer’s expense, in the collection of any

6

 

premiums, premium adjustments, reinsurance receivables, balances due from agents, amounts due on policy loans,
accrued interest receivables, rights, assets and recoveries due such Insurer at or after the
Revised Effective Time in respect of any of the Policies or the satisfaction of Policy Liabilities.
Furthermore, with respect to any such remittance, each Insurer shall also promptly furnish the
Reinsurer with all pertinent information which it receives at and after the Revised Effective Time
pertaining thereto (e.g., the nature of the payment, source of funds, policy or certificate number
or agreement (as appropriate) and period(s) to which it relates and any instructions accompanying
same); provided, however, that such Insurer may retain a copy thereof (subject to the restrictions upon use set forth in this
Agreement).

     4. Each Insurer agrees to execute and deliver to the Reinsurer any further instruments or
assurances that the Reinsurer may reasonably request for more effectual vesting of the Reinsurer’s
right, title and interest in the following, except to the extent that any such amounts are
attributable to Retained Policy Liabilities: any premiums, premium adjustments, reinsurance
receivables, balances due from agents, amounts due on policy loans, accrued interest receivables,
rights, assets and recoveries received by the Insurers at or after January 1, 2001 in respect of
any of the Policies or the satisfaction of Policy Liabilities. Such action shall include, without
limitation, each Insurer’s execution and delivery of any financing statements reasonably requested
by the Reinsurer to the extent that it may appear appropriate to the Reinsurer to file such
financing statements under Article 9 of the Uniform Commercial Code.

     5. Effective as of the Revised Effective Time, the Insurers have no responsibility for billing
and collecting premiums in respect of the Policies or, subject to Section 7 of this Article V
regarding Unnovated Third Party Reinsurance Agreements, otherwise servicing or administering any
Policies, except as may otherwise be set forth in the Amended and Restated Administrative Services
Agreement or in other signed writing of the relevant parties.

     6. Effective as of the Revised Effective Time, the Insurers have no responsibility for
ascertaining or collecting reinsurance recoverables with respect to Policy Liabilities under the
Third Party Reinsurance Agreements other than the Unnovated Third Party Reinsurance Agreements,
provided that the Reinsurer shall assume responsibility for administering the Unnovated Third Party
Reinsurance Agreements on behalf of the Insurers under the Amended and Restated Administrative
Services Agreement. The collectibility of reinsurance with respect to the Policies from reinsurers
under Third Party Reinsurance Agreements other than the Unnovated Third Party Reinsurance
Agreements shall be at the risk of and for the account of the Reinsurer. The risk of
collectibility of reinsurance with respect to the Policies from reinsurers under the Unnovated
Third Party Reinsurance Agreements shall be shared as follows: (i) the Reinsurer shall be
obligated to the applicable Insurer for 50% of any amounts more than 60 days past due from
reinsurers under the Unnovated Third Party Reinsurance Agreements, with settlements of such amounts
to be made on a monthly basis as set forth in the Amended and Restated Administrative Services
Agreement, and (ii) all other reinsurance recoverables under the Unnovated Third Party Reinsurance
Agreements shall be at the collection risk of the Insurers. With respect to any

7

 

past due reinsurance recoverables under Unnovated Third Party Reinsurance Agreements for which the Reinsurer
is obligated to the Insurers hereunder, the Reinsurer shall be entitled to its pro rata share of
any subsequent recovery of such reinsurance recoverables.

     7. The Reinsurer shall have responsibility and full power and authority to act for and on
behalf of the Insurers, and the Insurers shall take such measures as reasonably requested by the
Reinsurer, with respect to any and all letters of credit outstanding or assets in trust held for
the benefit of the Insurers pursuant to the terms of the Third Party Reinsurance Agreements.

ARTICLE VI

REINSURANCE CREDIT

     1. Licensed or Accredited Status. The Reinsurer is, and shall maintain its status as,
a licensed life insurer or accredited life reinsurer in all jurisdictions of the United States
where necessary so that the Insurers, in the statements required to be filed with their regulatory
authority(ies), shall receive full credit as admitted reinsurance for all of the Reinsurer’s share
of the Obligations (as defined in this Article).

     2. Reinsurance Credit. If a jurisdiction of the United States will not permit any
Insurer, in the statements required to be filed with its regulatory authority(ies), to receive full
credit as admitted reinsurance for any of the Reinsurer’s share of Obligations (as defined in this
Article), such Insurer may, in its discretion, in the case of each such instance and for each
applicable filing date, elect to forward to the Reinsurer a statement of the Reinsurer’s share of
such Obligations. If the Insurer and the Reinsurer, cooperating reasonably, cannot resolve the
matter with insurance regulatory authority(ies) in the applicable jurisdiction(s) within thirty
(30) days of the Reinsurer’s receipt of such statement, then the Reinsurer shall, at its option,
promptly either:

	 	(a)	 	Provide such Insurer with a letter of credit that complies with the terms of
New York Insurance Regulation 133, in the amount specified in the statement submitted
so that full credit as admitted reinsurance shall be given for the Obligations of the
Reinsurer under this Agreement; or

	 
	 	(b)	 	Establish a trust account for the benefit of such Insurer in compliance with
the terms of New York Insurance Regulation 114, at least in the amount specified in
the statement submitted so that full credit as admitted reinsurance shall be given for
the Obligations of the Reinsurer under this Agreement. The assets in the trust
account shall be pledged to the Insurer in accordance with a securities pledge
agreement in form and substance reasonably satisfactory to the Insurer in order to
perfect a security interest in favor of the Insurer in the trust account under Article
9 of the Uniform Commercial Code.

8

 

     3. Definition. “Obligations”, as used in this Article, shall mean the sum of
the following, all determined in accordance with SAP (as defined in the Stock Purchase Agreement),
losses paid by the relevant Insurer but not yet recovered from the Reinsurer, plus the relevant
Insurer’s reserves for future policy benefits, including, but not limited to, active life reserves
for universal life and permanent life insurance contracts, group life premium waiver reserves and
long term disability reserves, the relevant Insurer’s reserves for reported losses and benefits and
claim expenses, and losses, benefits and claim expenses incurred but not reported and premiums
unearned, if any, with respect to the Policies.

     4. Security Trust Agreement. At the Closing or at any time thereafter, if the
Obligations ceded by an Insurer under this Agreement exceed $50 million, the Reinsurer shall
transfer to a trust account, for the benefit of such Insurer, assets adequate to secure such
Insurer’s Obligations, which trust account shall be established under, and be governed
by the terms of, the Security Trust Agreement attached as Exhibit B hereto (the
“Security Trust Agreement”). Such trust account shall be in effect for the term provided
for in the Security Trust Agreement. Notwithstanding the foregoing, in the event that the
Obligations ceded to the Reinsurer under this Agreement and the Amended and Restated CCC
Reinsurance Agreement (as defined in the Stock Purchase Agreement) are less than $250 million in
the aggregate, the Reinsurer shall not be obligated to establish or maintain any trust account
pursuant to this Section 4 of Article VI.

ARTICLE VII

NET LIABILITIES, TRANSFER OF ASSETS AND CEDING COMMISSION

     1. Net GAAP Liabilities Calculation. No later than the Original Effective Time (as
defined in the following paragraph), each Insurer prepared and distributed to Reinsurer, a
statement, as of December 31, 2000, of all Net GAAP Liabilities for the Subject Business. Net GAAP
Liabilities for purposes of such statement consisted of all insurance liabilities associated with
the policies, including claim and claim expense reserves, reserves for future policy benefits (such
as active life reserves, unearned premium reserves and advance premiums), policyholder funds left
on deposit, reserves in provision of rate credits payable under experience rated contracts, unpaid
commissions, accrued premium taxes and guaranty association assessments, allocable valuation fees
imposed under state law, amounts payable under reinsurance contracts and accrued interest due on
all unpaid liabilities; net of insurance assets associated with the policies, including due and
uncollected premiums, balances due from agents, policy, loans, amounts due under reinsurance
contracts and accrued interest receivable on all amounts due and uncollected. Such statement was
prepared in accordance with generally accepted accounting principles on a basis consistent with the
financial reporting and accounting practices of the Insurers with respect to the Subject Business
(“Historical GAAP”) and was binding on all parties for purposes of determining the cash
transfer pursuant to paragraph 2 of this Article VII. The calculation of the Net GAAP Liabilities,
as of December 31, 2000, of the Subject Business of the Insurers was $336,284,921.

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     2. Transfer of Assets. On or before March 31, 2001 (or as promptly as practicable
following compliance with insurance laws and regulations requiring prior notice or approval of
transactions between affiliated insurance companies) (the “Original Effective Time”) and as
partial consideration for the reinsurance of liability by the Reinsurer with respect to the
Policies, the Insurers transferred to the Reinsurer cash and/or investment securities designated by
the Insurers (and valued at market value as of the time of transfer) equal in value to the amount
determined pursuant to the statement described in paragraph 1 of this Article VII. In addition to
and together with the principal amount described and transferred in accordance with the preceding
sentence, the Insurers also transferred cash and/or investment securities equal in value to six
percent (6%) per annum simple interest on the described principal amount for the period between
January 1, 2001 and the actual date of transfer.

     3. Interim Period Adjustment. The parties computed both (a) the aggregate amount
collected by Insurers in respect of Policies (not including balances, receivables, accruals, rights
and other items assigned in kind pursuant to Article V) between January 1, 2001 and the Original Effective Time (the “Stub Period”), and (b) the aggregate amount
paid during the Stub Period in respect of Policy Liabilities (not including liabilities assumed by
Reinsurer at the Original Effective Time pursuant to Article V). The difference between (a) and
(b) (the “Stub Amount”) was resolved by payment of the Stub Amount (plus or minus any net
interest and investment return during the Stub Period that was neither assigned or assumed pursuant
to Article V nor addressed by the 6% per annum interest allowance otherwise specified in paragraphs
2, 3 and 4 of this Article VII), from the Insurers to Reinsurer if the Stub Amount was positive and
from Reinsurer to Insurers if the Stub Amount was negative. Payment of the Stub Amount (adjusted
as described for any net interest or investment return) was made by addition to or subtraction from
the first quarterly payment due under paragraph 5 following, it being understood that the purpose
of the foregoing described payment computation was to transfer effectively the financial results of
Subject Business operations during the Stub Period from Insurers to Reinsurer. Any irreconcilable
dispute between the parties with respect to the conformity of the statements delivered in
accordance with this Article VII to Historical GAAP was resolved by the firm of Deloitte & Touche.

     4. Initial Ceding Commission. Insurers, on the Original Effective Time, received a
one time ceding commission in the amount of $9,278,800, plus six percent (6%) per annum simple
interest upon said amount for the period between January 1, 2001 and the date of receipt by
Insurers.

     5. Additional Ceding Commission. The Reinsurer shall pay to the Insurers a ceding
commission equal to the amount determined in accordance with Schedule C to this Agreement
on all direct premiums collected on and after the Revised Effective Time through December 31, 2005
on all Policies.

     6. Commutation. The Insurers and Reinsurer acknowledge and agree that: (a) as of the
Revised Effective Time, the Insurers and the Reinsurer completed a commutation of certain risks,
liabilities and obligations pursuant to the Commutation Agreement; (b) all

10

 

risks, liabilities and obligations subject to such Commutation Agreement have been commuted and transferred to the
Insurers; (c) none of such risks, obligations or liabilities are reinsured under this Agreement;
and (d) no consideration is payable under this Agreement by the Reinsurer to the Insurers in
respect of such commutation.

     7. Monthly Reconciliation. Insurers will incur Tax/Assessment Liabilities, and
miscellaneous expenses, including but not limited to commissions and other acquisition costs,
related to the Policies. Within 30 days following the close of each calendar month, the Insurers
will report such expenses to Reinsurer, and Reinsurer will, to the extent the foregoing expenses
are included within the Policy Liabilities and Reinsurer has not already paid (from the Reinsurer’s
funds, including premiums ceded under this Agreement) the foregoing expenses on behalf of the
Insurers to third parties, pay the unsatisfied portion thereof to the Insurers within 15 days of
receiving the report. The foregoing monthly report and following payment shall also include and
account for other activity relating to the Subject Business requiring financial settlement under
this Agreement and the Amended and Restated Administrative Services Agreement between the Insurers
and the Reinsurer, including, without limitation, ceding commissions payable under Section 5 of
this Article VII.

ARTICLE VIII

INSOLVENCY

     1. Payments. In the event of the insolvency of an Insurer and the appointment of a
liquidator, receiver, conservator or statutory successor, this reinsurance shall be payable by the
Reinsurer immediately upon demand, with reasonable provision for verification, on the basis of the
liability of the Insurer as a result of claims allowed against the Insurer by any court of
competent jurisdiction or any liquidator, receiver, conservator or statutory successor having
authority to allow such claims, without diminution because of such insolvency or because such
liquidator, receiver, conservator or statutory successor has failed to pay all or a portion of any
claims.

     2. Direction of Payments. Payments by the Reinsurer as above set forth shall be made
directly to the Insurer or to its liquidator, receiver, conservator or statutory successor, except
where (1) this Agreement specifies another payee in the event of the insolvency of the Insurer, or
(2) the Reinsurer with the consent of the direct insureds has assumed such policy obligations of
the Insurer as its direct obligations to the payees under the Policies, in substitution for the
obligations of the Insurer to such payees.

     3. Notice of Claims. In the event of the insolvency of an Insurer, the liquidator,
receiver, conservator or statutory successor of the Insurer shall give written notice to the
Reinsurer of the pendency of a claim against the insolvent Insurer on the Policies within a
reasonable time after such claim is filed in the insolvency proceeding and during the pendency of
such claim the Reinsurer may investigate such claim and interpose, at its own expense, in the
proceeding where such claim is to be adjudicated any defense or defenses which it may deem
available to the Insurer or its liquidator, receiver, conservator or statutory

11

 

successor. The expense thus incurred by the Reinsurer shall be chargeable subject to court approval against the
insolvent Insurer as part of the expense of liquidation to the extent of a proportionate share of
the benefit which may accrue to the Insurer solely as a result of the defense undertaken by the
Reinsurer.

     4. Apportionment. Where two or more reinsurers are involved in the same claim and a
majority in interest elect to interpose defense to such claim, the expense shall be apportioned in
accordance with the terms of this Agreement as though such expense had been incurred by the
Insurer.

     5. Set-Off. Except as expressly stated herein, it is understood and agreed that any
debits or credits, liquidated or unliquidated, in favor of or against Reinsurer and an Insurer,
under this Agreement, the Amended and Restated Administrative Services Agreement and, with respect
to undisputed amounts and amounts provided for in a final judgment not subject to appeal, the Stock
Purchase Agreement, on the date of the entry of the receivership or liquidation order, are deemed
mutual debits or credits, as the case may be, and shall be set off and the balance only shall be
allowed or paid. Although such claim, if any, on the part of either such party against the other
may be unliquidated or undetermined in amount on the date of the entry of the receivership or
liquidation order, such claim, if any, is hereby deemed to be in existence as of such date. Any credits or claims then in existence
and held by the other party may be offset against it.

ARTICLE IX

NO THIRD PARTY BENEFICIARY RIGHTS

     The Reinsurer’s reinsurance of 100% of the Policy Liabilities of the Insurers with respect to
the Policies is intended for the sole benefit of the parties to this Agreement and shall not create
any right on the part of any third party, including, without limitation, any policyholder,
Certificateholder, insured, claimant or beneficiary under or agent, broker or producer for such
Policies against the Reinsurer or any legal relation between any third-party and the Reinsurer.

ARTICLE X

DIVIDENDS; NON-GUARANTEED ELEMENTS

     Except as required under applicable law or regulation or under the terms of any Policy, the
Insurers shall not declare or pay dividends on any participating Policy or reset any non-guaranteed
element of any Policy, unless requested by the Reinsurer.

12

 

ARTICLE XI

ERRORS AND OMISSIONS

     Inadvertent delays, errors or omissions made in connection with this Agreement or any
transaction hereunder shall not relieve either party from any liability which would have attached
had such delay, error or omission not occurred, provided always that such error or omission is
rectified as soon as reasonably possible after discovery.

ARTICLE XII

COOPERATION

     The parties shall cooperate with one another in a commercially reasonable manner to carry out
and implement the terms and objectives of this Agreement, and shall perform such further acts,
execute such further documents and enter into such further agreements as are commercially
reasonable and reasonably necessary to carry out and implement the terms and objectives of the
Agreement. Without limiting the foregoing, each party shall permit the other (and its authorized
representatives) reasonable access to examine its premises, files and records relating to the
Subject Business and each party shall make reasonably available to the other party (and its
authorized representatives) responsible officials for reasonable consultation for the purpose of
more fully carrying out the terms and objectives of this Agreement, provided that the same be at
the examining party’s sole cost and expense, requested during normal business hours of the
non-examining party, and upon reasonable notice to and without unreasonably disrupting the business
of the non-examining party. Such access and consultation shall be at the cost of the requesting
party. Each party shall retain, in accordance with its corporate retention policies, all files and records related to
the Subject Business, but in any event for a period not less than ten years following the Revised
Effective Time. The Insurers and the Reinsurer shall not alter or destroy any files or records
relating to the Subject Business without the prior written consent of the other party.

ARTICLE XIII

ARBITRATION

     1. Arbitration. As a condition precedent to any cause of action, any and all disputes
between the Insurers and the Reinsurer arising out of, relating to, or concerning this Agreement,
whether sounding in contract or tort and whether arising during or after termination of this
Agreement, shall be submitted to the decision of a board of arbitration composed of two arbitrators
and an umpire (the “Board”) meeting at a site in Chicago, Illinois. The arbitration shall
be conducted under the Federal Arbitration Act and shall proceed as set forth below.

     2. Notice of Arbitration. A notice requesting arbitration, or any other notice made
in connection therewith, shall be in writing and shall be sent certified or registered mail, return
receipt requested to the affected parties. The notice requesting arbitration shall

13

 

state in particulars all issues to be resolved in the view of the claimant, shall appoint the arbitrator
selected by the claimant and shall set a tentative date for the hearing, which date shall be no
sooner than ninety (90) days and no later than one year from the date that the notice requesting
arbitration is mailed, unless otherwise agreed to by the parties. Within thirty (30) days of
receipt of claimant’s notice, the respondent shall notify claimant of any additional issues to be
resolved in the arbitration and of the name of its appointed arbitrator.

     3. Arbitration Panel. Unless otherwise mutually agreed, the members of the Board
shall be impartial and disinterested and shall be active or former officers of life insurance
companies, reinsurance companies, or Lloyd’s Underwriters or active or inactive lawyers with at
least twenty (20) years of experience in insurance and reinsurance. The Insurers, together, and
Reinsurer shall each appoint an arbitrator and the two (2) arbitrators shall choose an umpire
before instituting the hearing. If the respondent fails to appoint its arbitrator within thirty
(30) days after having received claimant’s written request for arbitration, the claimant is
authorized to and shall appoint the second arbitrator. If the two arbitrators fail to agree upon
the appointment of an umpire within thirty (30) days after notification of the appointment of the
second arbitrator, within ten (10) days thereof, the two (2) arbitrators shall request the American
Arbitration Association (the “AAA”) to appoint an umpire for the arbitration with the
qualifications set forth in this Article. If the AAA fails to name an umpire, either party may
apply to the court named below to appoint an umpire with the above required qualifications. The
umpire shall promptly notify in writing all parties to the arbitration of his selection and of the
scheduled date for the hearing. Upon resignation or death of any member of the Board, a
replacement shall be appointed in the same fashion as the resigning or deceased member was
appointed.

     4. Submission of Briefs. The claimant and respondent shall each submit initial briefs
to the Board outlining the issues in dispute and the basis, authority and reasons for their
respective positions within thirty (30) days of the date of notice of appointment of the
umpire. The claimant and the respondent may submit reply briefs to the Board within ten (10)
days after filing of the initial brief(s). Initial and reply briefs may be amended by the
submitting party at any time, but not later than ten (10) days prior to the date of commencement of
the arbitration hearing. Reasonable responses shall be allowed at the arbitration hearing to new
material contained in any amendments filed to the briefs but not previously responded to.

     5. Arbitration Board’s Decision. The Board shall make a decision and award with
regard to the terms of this Agreement and the original intentions of the parties to the extent
reasonably ascertainable. The Board’s decision and award shall be in writing and shall state the
factual and legal basis for the decision and award. The decision and award shall be based upon a
hearing in which evidence shall be allowed and which the formal rules of evidence shall not
strictly apply but in which cross examination and rebuttal shall be allowed. Every decision by the
Board shall be by a majority of the members of the Board and each decision and award by the
majority of the members of the Board shall be final and binding upon all parties to the proceeding.

14

 

     6. Jurisdiction. Either party may apply to the United States District Court for the
Northern District of Illinois for an order confirming any decision and the award; a judgment of
that Court shall thereupon be entered on any decision or award. If such an order is issued, the
attorneys’ fees of the party so applying and court costs will be paid by the party against whom
confirmation is sought. The Board may award interest calculated from the date the Board determines
that any amounts due the prevailing party should have been paid to the prevailing party.

     7. Expenses. Each party shall bear the expense of the one arbitrator appointed by it
and shall jointly and equally bear with the other party the expense of any stenographer requested,
and of the umpire. The remaining costs of the arbitration proceedings shall be finally allocated
by the Board.

     8. Production of Documents and Witnesses. Subject to customary and recognized legal
rules of privilege, each party participating in the arbitration shall have the obligation to
produce those documents and as witnesses to the arbitration those of its employees as any other
participating party reasonably requests providing always that the same witnesses and documents be
obtainable and relevant to the issues before the arbitration and not be unduly burdensome or
excessive. The parties may mutually agree as to pre-hearing discovery prior to the arbitration
hearing and in the absence of agreement, upon the request of any party, pre-hearing discovery may
be conducted as the Board shall determine in its sole discretion to be in the interest of fairness,
full disclosure, and a prompt hearing, decision and award by the Board. The Board shall be the
final judge of the procedures of the Board, the conduct of the arbitration, of the rules of
evidence, the rules of privilege and production and of excessiveness and relevancy of any witnesses
and documents upon the petition of any participating party. To the extent permitted by law, the
Board shall have the authority to issue subpoenas and other orders to enforce their decisions.

     9. Relief Available. Nothing herein shall be construed to prevent any participating
party from applying to the United States District Court for the Northern District of Illinois to
issue a restraining order or other equitable relief to maintain the “status quo” of the parties participating in the arbitration pending the decision and award by the
Board or to prevent any party from incurring irreparable harm or damage at any time prior to the
decision and award of the Board. The Board shall also have the authority to issue interim
decisions or awards in the interest of fairness, full disclosure, and a prompt and orderly hearing
and decision and award by the Board.

     10. Consolidation. In the event that there is a dispute between an Insurer and
Reinsurer that implicates the provisions of this Agreement and the related Amended and Restated
Administrative Services Agreement, such Insurer and Reinsurer shall consolidate any such dispute
under such agreements in a single arbitration proceeding.

15

 

ARTICLE XIV

DURATION

     This Agreement shall continue in force until the earlier of (a) such time that each Insurer’s
liability for the Policy Liabilities reinsured hereunder is terminated in accordance with the terms
of the Policies; and (b) if the Reinsurer elects, at its sole option, to novate all then
outstanding Policies, such time that the novation has been completed.

     Notwithstanding anything to the contrary stated in this Agreement, Sections 2 and 4 of Article
XV shall remain in full force and effect following termination of this Agreement.

ARTICLE XV

GENERAL PROVISIONS

     1. Notices. Any notice, request or other communication to be given by any party
hereunder shall be in writing and shall be delivered personally, sent by registered or certified
mail, postage prepaid or by overnight courier with written confirmation of delivery or by facsimile
transmission with written confirmation of error-free transmission. Any such notice shall be deemed
given when so delivered personally or if sent by facsimile transmission (and immediately after
transmission confirmed by telephone), if mailed, on the date shown on the receipt therefor, or if
sent by overnight courier, on the date shown on the written confirmation of delivery. Such notices
shall be given to the following address:

	 	 	 
	If to the Reinsurer:

	 	CNA Group Life Assurance Company

2 North LaSalle Street

Suite 2500

Chicago, IL 60602-3702

Attention: Steven A. Sack

Tel: (312) 384-7715

Fax: (312) 384-7825
	 
	 	 
	 
	 	 
	With a copy to:

	 	James R. Dwyer

Lord, Bissell & Brook LLP

115 South LaSalle Street

Chicago, Illinois 60603

Telephone No.: (312) 443-0632

Fax Number: (312) 443-0336

16

 

	 	 	 
	If to the Company:

	 	Continental Assurance Company

Valley Forge Life Insurance Company

CNA Plaza

Chicago, Illinois 60685-0001

Attention: Secretary

Tel: (312) 822-1384

Fax: (312) 822-1297
	 
	 	 
	 
	 	 
	With a copy to:

	 	Dewey Ballantine LLP

1301 Avenue of the Americas

New York, NY 10011

Attention: James A. FitzPatrick, Jr.

                 Jeff S. Liebmann

Tel: (212) 259-8000

Fax: (212) 259-6333

     Any party may by notice given in accordance with this Section 1 of Article XV to the other
party hereto designate another address or Person for receipt of notices hereunder.

     2. Tax Election. With respect to this Agreement, each of the Insurers and the
Reinsurer hereby make the election provided for in Section 1.848-2(g)(8) of the Treasury
Regulations issued under Section 848 of the Internal Revenue Code of 1986, as amended (the
“Code”), as set forth in Exhibit C, which is made a part hereof. Each of the
parties hereto agrees to take such further actions as may be necessary to ensure the effectiveness
of such election.

     3. Confidentiality. The Insurers and the Reinsurer shall hold and cause their
respective officers, directors, employees, agents, advisors or other representatives (each a
“Representative”) to hold in strict confidence, unless compelled to disclose by a
governmental authority or applicable law, (i) any term of this Agreement or the transactions
contemplated hereby, except to the extent mutually agreed by the parties; and (ii) any information
that is furnished by or on behalf of the other party or its Representatives in connection with the
transactions contemplated by this Agreement, except to the extent such information can be shown to
have been (w) previously known by the party to which it was furnished, (x) in the public domain
through no fault of the party to which it was furnished, (y) later lawfully acquired from other
sources by the party to which it was furnished; provided that such source is not, to such party’s
knowledge, bound by a confidentiality agreement with the other party or its Representatives and is
not, to such party’s knowledge, otherwise prohibited from transmitting the information by a
contractual, legal or fiduciary obligation or (z) independently developed by the party to which it
was furnished without violating any obligations under this Agreement. Notwithstanding the
foregoing, the parties agree that the obligations set forth in the covenant in this Section 3 of
Article XV above shall not apply to the Reinsurer in connection with the attempted sale by the
Reinsurer (including by means of a reinsurance transaction) of all or any substantial portion of
the Subject Business following the Closing, so long as the Reinsurer ensures that any person

17

 

receiving any such information enters into a confidentiality agreement with respect to such
information substantially consistent with this Section 3 of Article XV.

     4. Indemnification.

	 	(a)	 	Each Insurer shall indemnify and hold Reinsurer and its
directors, officers, stockholders, employees, representatives, Affiliates (as
defined in the Stock Purchase Agreement), successors and assigns harmless from
and against any Loss (as defined in the Stock Purchase Agreement) relating to
or arising or resulting from: (i) any breach or nonfulfillment of any covenant
or agreement made by the Insurers under this Agreement; (ii) any Retained
Policy Liabilities; and (iii) any Excluded Liabilities. Notwithstanding the
foregoing, the obligations of each Insurer under this Section 4 of Article XV
shall be only for Losses relating to such Insurer’s breaches or liabilities,
and neither Insurer shall be liable for any Losses resulting from breaches or
liabilities of the other Insurer or the enforcement of this indemnity against
the other Insurer.

	 
	 	(b)	 	The Reinsurer shall indemnify and hold the Insurers and their
respective directors, officers, stockholders, employees, representatives,
Affiliates (as defined in the Stock Purchase Agreement), successors and
assigns harmless from and against any Loss (as defined in the Stock Purchase
Agreement) relating to or arising or resulting from: (i) any breach or
nonfulfillment of any covenant or agreement made by the Reinsurer under this
Agreement; and (ii) any Policy Liabilities.

	 
	 	(c)	 	In the event the Insurers or the Company shall have a claim
for indemnity against the other party under the terms of this Agreement, the
parties shall follow the procedures set forth in Section 10.3 of the Stock
Purchase Agreement.

     5. Equitable Relief. Each party hereto acknowledges that if it or its employees or
representatives violate the terms of this Agreement, the other parties will not have an adequate
remedy at law. In the event of such a violation, the other parties shall have the right, in
addition to any other rights that may be available to them, to obtain in any court of competent
jurisdiction injunctive relief to restrain any such violation and to compel specific performance of
the provisions of this Agreement. The seeking or obtaining of such injunctive relief shall not
foreclose or limit in any way relief against either party hereto for any monetary damage arising
out of such violation.

     6. Set-Off. Except in the circumstances described in Section 5 of Article VIII, as to
which the provisions of such section will apply, any debits or credits between the Insurers and the
Reinsurer arising under this Agreement, the Amended and Restated Administrative Services Agreement
and, with respect to undisputed amounts and amounts provided for in a final judgment not subject to
appeal, the Stock Purchase Agreement, are

18

 

deemed mutual debits or credits, as the case may be, and shall be netted or set off, as the
case may be, and only the balance shall be allowed or paid hereunder.

     7. Entire Agreement; Amendments. This Agreement (including the Exhibits and Schedules
hereto), the Amended and Restated Administrative Services Agreement, the Purchase Agreement, and
the other Related Agreements contain the entire agreement and understanding between the parties
with respect to the matters contemplated hereby, and supersede all prior agreements and
understandings, written or oral, between the parties hereto with respect to such matters. Any
change or modification to this Agreement shall be null and void unless made by amendment to this
Agreement and signed by all the parties hereto.

     8. Invalidity. The invalidity or unenforceability of any provision or portion hereof
shall not affect the validity or enforceability of the other provisions or portions hereof.

     9. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original and all of which together shall constitute one and the same instrument.

     10. Exclusivity. This Agreement is not intended to confer any rights upon any person
other than the parties hereto and their respective successors and permitted assigns.

     11. Binding Effect. This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.

     12. Governing Law. This Agreement shall be governed by and construed in accordance
with the laws of the State of Illinois, without giving effect to the principles of conflicts of
laws thereof.

     13. Successors and Assignment. No party hereto shall assign this Agreement or any
rights or obligations hereunder, by operation of law or otherwise, or subcontract any other party
to perform such party’s obligations hereunder, without the prior written consent of the other
parties hereto, and any such attempted assignment or subcontracting without such prior written
consent shall be void and of no force and effect. Notwithstanding the foregoing, the Reinsurer may
assign its rights and obligations under this Agreement with respect to Policies covering persons
and risks resident or situated in Canada to an Affiliate (as defined in the Stock Purchase
Agreement), provided that such Affiliate enters into an agreement with the Insurers substantially
in the form of this Agreement.

19

 

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

	 	 	 	 	 
	 	CONTINENTAL ASSURANCE COMPANY

 	 
	 
	 	By:  	/s/ Lawrence J. Boysen	 
	 	 	Name:  	Lawrence J. Boysen	 
	 	 	Title:  	Senior Vice President & Corporate Controller	 
	 
	 
	 	VALLEY FORGE LIFE INSURANCE COMPANY

 	 
	 
	 	By:  	/s/ Lawrence J. Boysen	 
	 	 	Name:  	Lawrence J. Boysen	 
	 	 	Title:  	Senior Vice President & Corporate Controller	 
	 
	 
	 	CNA GROUP LIFE ASSURANCE COMPANY

 	 
	 
	 	By:  	/s/ Lawrence J. Boysen	 
	 	 	Name:  	Lawrence J. Boysen	 
	 	 	Title:  	Senior Vice President & Corporate Controller	 

20

 

	 	 	 	 	 

SCHEDULE A

RETAINED POLICY LIABILITIES

     None.

 

Schedule B

CAC and VFL Business

Employer Life Insurance

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	R-LP

	 	 	Master Policy
	 	 	CAC	 
	 	R-LC

	 	 	Certificate
	 	 	CAC	 
	 	Z3-66577-SF

	 	 	Master Application
	 	 	CAC	 
	 	MMD-GTLP (1)

	 	 	Master Policy (Voluntary)
	 	 	CAC	 
	 	MMD-GTLC (1)

	 	 	Certificate
	 	 	CAC	 
	 	TLMA1AA (1)

	 	 	Master Application
	 	 	CAC	 
	 	SBGTL-P (2)

	 	 	Master Policy
	 	 	CAC	 
	 	SBGTL-C (2)

	 	 	Certificate
	 	 	CAC	 
	 	Z3-131856-A (2)

	 	 	Master Application
	 	 	CAC	 
	 

Affinity Life Insurance

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	MMD-GTLP (1)

	 	 	Master Policy
	 	 	CAC	 
	 	MMD-GTLC (1)

	 	 	Certificate
	 	 	CAC	 
	 	TLMA1AA (1)

	 	 	Master Application
	 	 	CAC	 
	 	P3-99944-C

	 	 	Master Policy
	 	 	CAC	 
	 	Q3-99945-B

	 	 	Certificate
	 	 	CAC	 
	 	Z3-99946-B

	 	 	Master Application
	 	 	CAC	 
	 	P3-99483-A

	 	 	Franchise Policy
	 	 	CAC	 
	 	PO-94398-A Rev. 1

	 	 	Individual Term Life Policy
	 	 	VFL	 
	 	ZO-43361-A

	 	 	Individual Term Life Application
	 	 	VFL	 
	 	P0-116605-A

	 	 	Master Policy
	 	 	VFL	 
	 	Q0-116607-A

	 	 	Certificate
	 	 	VFL	 
	 	Z0-116606-A

	 	 	Master Application
	 	 	VFL	 
	 	SBGTL-P (2)

	 	 	Master Policy
	 	 	CAC	 
	 	SBGTL-C (2)

	 	 	Certificate
	 	 	CAC	 
	 	Z3-131856-A (2)

	 	 	Master Application
	 	 	CAC	 
	 

Stedman Trust Employer Life Insurance

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	GPIT-P

	 	 	Master Policy
	 	 	CAC	 
	 	GPIT-C

	 	 	Certificate
	 	 	CAC	 
	 

 

 

	 	 	 	 	 	 	 	 	 
	 	Z3-138310-A

	 	 	Master Application
	 	 	CAC	 
	 

Portable Life Insurance

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	P3-128912-A

	 	 	Master Policy (3-Year)
	 	 	CAC	 
	 	Q3-128913-A

	 	 	Certificate
	 	 	CAC	 
	 	Z3-128914-A

	 	 	Master Application
	 	 	CAC	 
	 	P3-138368-A12

	 	 	Master Policy (Pathway)
	 	 	CAC	 
	 	Q3-138369-A12

	 	 	Certificate
	 	 	CAC	 
	 	Z3-138370-A12

	 	 	Master Application
	 	 	CAC	 
	 

Universal Life Insurance

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	P3-114021-A(BX)

	 	 	Master Policy
	 	 	CAC	 
	 	Q3-114022-A(BX)

	 	 	Certificate
	 	 	CAC	 
	 	Z3-114024-A(BX)

	 	 	Master Application
	 	 	CAC	 
	 

Employer AD&D Insurance

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	SBGADD-P

	 	 	Master policy (New VAD/CO)
	 	 	CAC	 
	 	SBGADD-C

	 	 	Certificate (New VAD/CO)
	 	 	CAC	 
	 	Z3-140196-A

	 	 	Application (New VAD/CO)
	 	 	CAC	 
	 	Z3-140198-A

	 	 	Application (New VAD/CO)
	 	 	CAC	 
	 

Employer Disability Insurance

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	SBDI-P (3)

	 	 	Policy
	 	 	CAC	 
	 	SBDI-C (3)

	 	 	Certificate
	 	 	CAC	 
	 	SBDI-Z (3)

	 	 	Master Application
	 	 	CAC	 
	 

Legacy Life Insurance — Selman

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	Not available

	 	 	Guaranteed Insurability Option
	 	 	VFL	 
	 	RO-10409-C

	 	 	Monthly Disability Income Benefit Rider
	 	 	VFL	 
	 	P.E. P. 100

	 	 	Special Participating Whole Life
	 	 	VFL	 
	 	IC-110A

	 	 	Special Participating 20 Pay Life
	 	 	VFL	 
	 	3-N7-45-UW

	 	 	Whole Life
	 	 	VFL	 
	 	NN1YN

	 	 	Preferred Whole Life
	 	 	VFL	 
	 

 

 

	 	 	 	 	 	 	 	 	 
	 	6401-L100

	 	 	Whole Life
	 	 	VFL	 
	 	PO-94817-A

	 	 	Whole Life Independent Plan Male/Fem.
	 	 	VFL	 
	 	IC 75

	 	 	Juvenile Life PD up @ 65
	 	 	VFL	 
	 

Legacy Life Insurance — Selman (Continued)

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	PO-77766-A

	 	 	Golden Life 65
	 	 	VFL	 
	 	3-N7-52-UW

	 	 	Select Life 15
	 	 	VFL	 
	 	6401

	 	 	Life Paid up @ 85
	 	 	VFL	 
	 	PO-10454-A

	 	 	ILP and ILP2 Whole Life Insurance
	 	 	VFL	 
	 	IC-11-A

	 	 	20 Pay Life
	 	 	VFL	 
	 	PO-10144-A12

	 	 	22 Pay Life
	 	 	VFL	 
	 	PO-10212-A98

	 	 	30 Pay Life Policy
	 	 	VFL	 
	 	PO-10024-B

	 	 	Guardsman Life
	 	 	VFL	 
	 	3-N7-45-UW

	 	 	Life paid up at 65
	 	 	VFL	 
	 	3-N7-54-UW

	 	 	Juvenile Estate Builder
	 	 	VFL	 
	 	3-N7-12-IR

	 	 	Juvenile Special
	 	 	VFL	 
	 	V-103-013

	 	 	Life paid up at age 96
	 	 	VFL	 
	 	I78-H10-I56

	 	 	Life insurance paid up at age 97
	 	 	VFL	 
	 	PO-10229-A

	 	 	Xtra Life or life paid up @ 99
	 	 	VFL	 
	 	PO-10574-A

	 	 	Life paid up at 98
	 	 	VFL	 
	 	106

	 	 	Endowment at age 90
	 	 	VFL	 
	 	NN-1-U)-(3-57)

	 	 	Endowment at age 85
	 	 	VFL	 
	 	3-N7-47-UW

	 	 	Endowment at age 65
	 	 	VFL	 
	 	3-N7-47-UW

	 	 	20 Year Endowment
	 	 	VFL	 
	 	NN-2-UO-(3-57)

	 	 	20 Pay Endowment at age 85
	 	 	VFL	 
	 	3-N7-47-UW

	 	 	Juvenile 20 Endowment 65
	 	 	VFL	 
	 	3-N7-2267-DP

	 	 	Student Graduate Life
	 	 	VFL	 
	 	V-103-012

	 	 	2500 Retirement Income 65
	 	 	VFL	 
	 	3-N7-2170-UW

	 	 	Family Insurance Benefit
	 	 	VFL	 
	 	RO-75006-A

	 	 	Family Insurance Benefit — Lifeguard
	 	 	VFL	 
	 	Not Available

	 	 	Family Plan Rider
	 	 	VFL	 
	 	3-N7-2171 UW

	 	 	Children’s Insurance Benefit
	 	 	VFL	 
	 	Not Available

	 	 	Children’s Term Life Rider (Lifeguard)
	 	 	VFL	 
	 	Not Available

	 	 	Family Policy
	 	 	VFL	 
	 	3-N7-59-HW

	 	 	Valley Forge 76 Family Policy
	 	 	VFL	 
	 

 

 

	 	 	 	 	 	 	 	 	 
	 	305

	 	 	Jefferson LP99
	 	 	VFL	 
	 	V103-011

	 	 	10 Year Deposit Term
	 	 	VFL	 
	 	PO-10405-A

	 	 	Level Term to age 65
	 	 	VFL	 
	 	3-N7-2166-UW

	 	 	Family Income Benefit
	 	 	VFL	 
	 

Legacy Life Insurance — Selman (Continued)

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	3-N7-58-UW

	 	 	Mortgage Protection
	 	 	VFL	 
	 	Not Available

	 	 	Supplemental Term Benefit
	 	 	VFL	 
	 	Not Available

	 	 	Reducing Term Rider
	 	 	VFL	 
	 	PO-10404-A

	 	 	Executive Decreasing Term to age 65
	 	 	VFL	 
	 	PO-10029-A

	 	 	Level Lifeguard
	 	 	VFL	 
	 	PO-10029-A

	 	 	Decreasing Lifeguard
	 	 	VFL	 
	 	PO-10351-A

	 	 	Decreasing Term Insurance to age 100
	 	 	VFL	 
	 	3-N7-35-BV

	 	 	Mortgage Security Policy
	 	 	VFL	 
	 	PO-94531-A

	 	 	5 Year Renewable & Convertible Term
	 	 	VFL	 
	 	RO-95543-A

	 	 	Family Rider Independent Plan +AD
	 	 	VFL	 
	 	RO-95542-A

	 	 	Children’s Insurance Benefit
	 	 	VFL	 
	 

Legacy Association Group — Selman

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	P3-91726-B42

	 	 	Level Premium Whole Life Individual Policy
	 	 	CAC	 
	 	P3-93409-B37

	 	 	Whole Life Paid Up @ 65 Individual Policy
	 	 	CAC	 
	 	Q3-91632-A24

	 	 	Group Endowment @ 65 Certificate
	 	 	CAC	 
	 	Q3-91713-A

	 	 	Group Life 50% Paid Up @ 65 Certificate
	 	 	CAC	 
	 	Q3-92204-A

	 	 	Group Endowment @ 65 Certificate
	 	 	CAC	 
	 	Q3-96835-B

	 	 	Group Whole Life Certificate
	 	 	CAC	 
	 	Q0-90308-A

	 	 	Whole Life Insurance Certificate — VFW
	 	 	VFL	 
	 

Legacy Association Group — JP Pearl

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	966

	 	 	ALA Group Plans
	 	 	CAC	 
	 	57096

	 	 	United Synagogue of America
	 	 	CAC	 
	 	43219

	 	 	United Synagogue of America
	 	 	CAC	 
	 	43219

	 	 	United Synagogue of America
	 	 	CAC	 
	 	77290

	 	 	Knights of Pythias
	 	 	VFL	 
	 	57096

	 	 	Chicago Motor Club
	 	 	CAC	 
	 	57096

	 	 	Chicago Motor Club
	 	 	CAC	 
	 

 

 

	 	 	 	 	 	 	 	 	 
	 	99950

	 	 	Transportation ACC Ins
	 	 	CAC	 
	 	57096

	 	 	Illinois Retired Teachers Assoc
	 	 	CAC	 
	 	43219

	 	 	Illinois Retired Teachers Assoc
	 	 	CAC	 
	 	43219

	 	 	Illinois Retired Teachers Assoc
	 	 	CAC	 
	 	43219

	 	 	Illinois Retired Teachers Assoc
	 	 	CAC	 
	 

Legacy Association Group — JP Pearl (Continued)

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	57096

	 	 	Pact Trust Direct Bill
	 	 	CAC	 
	 	57096

	 	 	Gov Employees Benefit Assoc
	 	 	CAC	 
	 	57096

	 	 	The Automobile Club of MD
	 	 	CAC	 
	 	43219

	 	 	Amvets
	 	 	CAC	 
	 	43219

	 	 	Amvets
	 	 	CAC	 
	 	43219

	 	 	Amvets
	 	 	CAC	 
	 	43219

	 	 	Winnebago Itasca Travelers Club
	 	 	CAC	 
	 	43219

	 	 	Winnebago Itasca Travelers Club
	 	 	CAC	 
	 	43219

	 	 	Illinois Education Association
	 	 	CAC	 
	 	00703

	 	 	National Insurance Trust
	 	 	CAC	 
	 	00000

	 	 	Professionals
	 	 	CAC	 
	 	43538

	 	 	American Legion of Iowa
	 	 	CAC	 
	 	57096

	 	 	Beta Sigma Phi
	 	 	CAC	 
	 	77290

	 	 	ALA Group
	 	 	VFL	 
	 	77290

	 	 	Jewish War Vets
	 	 	VFL	 
	 

Progeny

	 	 	 	 	 	 	 	 	 
	 	Form No.

	 	 	Description
	 	 	Company	 
	 	P3-69668-A41

	 	 	Policy
	 	 	CAC	 
	 	Q3-69669-A41

	 	 	Certificate
	 	 	CAC	 
	 	Z3-69667-A

	 	 	Master Application
	 	 	CAC	 
	 	P3-99472-A

	 	 	Policy
	 	 	CAC	 
	 	Q3-99473-A41

	 	 	Certificate
	 	 	CAC	 
	 	Z3-99300-A

	 	 	Master Application
	 	 	CAC	 
	 	P3-67422-A

	 	 	Policy
	 	 	CAC	 
	 	Q3-67448-A

	 	 	Certificate
	 	 	CAC	 
	 	Z3-67425-A

	 	 	Master Application
	 	 	CAC	 
	 	MMD-GTLP

	 	 	Policy
	 	 	CAC	 
	 	MMD-GTLC

	 	 	Certificate
	 	 	CAC	 
	 

 

 

	 	 	 	 	 	 	 	 	 
	 	TLAR1

	 	 	Master Application
	 	 	CAC	 
	 	MMD-IGTLP

	 	 	Policy
	 	 	CAC	 
	 	TLMA1AA

	 	 	Application
	 	 	CAC	 
	 	Z3-103681-B/Z3-131823-A

	 	 	Individual Application
	 	 	CAC	 
	 	MMCC-P

	 	 	Policy
	 	 	CAC	 
	 	MMCC-Q

	 	 	Certificate
	 	 	CAC	 
	 	Z3-113120-A

	 	 	Master Application
	 	 	CAC	 
	 

(1) Excludes policy numbers SR400102 through SR400168 administered by Provident Agency,
Inc.

(2) Excludes Policies corresponding to Benefit Value Life risk code 59983 which have
been sold or are administered by Strategic Resource Company or its Affiliates as of the Closing
Date.

(3) Excludes Policies corresponding to Benefit Value Disability risk code 59984 which
have been sold or are administered by Strategic Resource Company or its Affiliates as of the
Closing Date.

 

 

SCHEDULE C

ADDITIONAL CEDING COMMISSION

0.58% of direct collected life insurance premiums and 0.14% of all other direct collected premiums.

 

 

EXHIBIT A

COMMUTATION AGREEMENT

[See Item 98]

 

 

EXHIBIT B

SECURITY TRUST AGREEMENT

[See Item 123]

 

 

EXHIBIT C

TAX ELECTION

	A.	 	The parties will make a joint election, in accordance with Treas. Reg. 1.848-2(g)(8) (the
“Regulation”), issued December 31, 1992, under Section 848 of the Internal Revenue
Code of 1986 (the “Code”), and:

	 	(1)	 	the party with the net positive consideration under this Agreement will capitalize
specified policy acquisition expenses with respect to this Agreement for such taxable year
without regard to the general deductions limitations of Section 848(c)(1) of the Code;
	 
	 	(2)	 	the election will take effect on the Original Effective Time and will remain in
effect for all subsequent years that this Agreement remains in effect; and
	 
	 	(3)	 	each party shall attach a schedule to its federal income tax return for its first
taxable year ending after the election becomes effective that identifies the agreement
(including this Agreement) for which joint elections have been made under the Regulation.

	B.	 	Pursuant to this joint election:

	 	(1)	 	each party will exchange information pertaining to the amount of net consideration
under this Agreement to assure consistency or as may otherwise be required by the Internal
Revenue Service;
	 
	 	(2)	 	the Reinsurer will submit its calculation of the “net consideration”, as defined
under Treas. Reg. 1.848-2(f), to the Insurers not later than May 1 for each and every tax
year for which this Agreement is in effect;
	 
	 	(3)	 	the Insurers may challenge such calculation within ten (10) working days of
receipt of the Reinsurer’s calculation; and
	 
	 	(4)	 	the parties will act in good faith to reach agreement as to the correct amount of
net consideration whenever there is disagreement as to the amount of net consideration, as
determined under Treas. Reg. 1.848- 2(f).

	C.	 	Each Insurer and the Reinsurer represent and warrant that they are subject to U.S. taxation
under Subchapter L of Chapter 1 of the Code.

 

 

Agreed and Accepted:

	 	 	 	 	 
	 	CONTINENTAL ASSURANCE COMPANY

 	 
	 
	By:  	/s/ Lawrence J. Boysen	 	 
	 	Name:  	Lawrence J. Boysen	 	 
	 	Title:  	Senior Vice President & Corporate Controller	 	 
	 
	 
	 	VALLEY FORGE LIFE INSURANCE COMPANY

 	 
	 
	By:  	/s/ Lawrence J. Boysen	 	 
	 	Name:  	Lawrence J. Boysen	 	 
	 	Title:  	Senior Vice President & Corporate Controller	 	 
	 
	 
	 	CNA GROUP LIFE ASSURANCE COMPANY

 	 
	 
	By:  	/s/ Lawrence J. Boysen	 	 
	 	Name:  	Lawrence J. Boysen	 	 
	 	Title:  	Senior Vice President & Corporate Controller

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}], [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00161-of-00352.parquet"}]]