Document:

ex10-22.htm

    
      Exhibit
10.23

       

       

       

       

     

     

     

     

    ASSET
AND STOCK PURCHASE AGREEMENT

     

     

    by
and among

     

     

    GREAT-WEST
LIFE & ANNUITY INSURANCE COMPANY,

     

     

    FIRST
GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY,

     

     

    THE
CANADA LIFE ASSURANCE COMPANY

     

     

    and

     

     

    CONNECTICUT
GENERAL LIFE INSURANCE COMPANY

     

     

    Dated
as of November 26, 2007

     

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      

        TABLE OF
CONTENTS

        Page

        ARTICLE
I

        

        DEFINITIONS

        

        
          	
                  Section
      1.01

                	
                  Definitions

                	
                  2

                

        

        

        ARTICLE
II

        

        TRANSFER
AND ACQUISITION OF ASSETS

        
          	 
      	 
      	 
      
	
                  Section
      2.01

                	
                  Consideration

                	
                  25

                
	
                  Section
      2.02

                	
                  Acquisition
      of Transferred Assets and Shares; Assumption of Assumed
      Liabilities

                	
                  25

                
	
                  Section
      2.03

                	
                  Payments
      at and After Closing.

                	
                  26

                
	
                  Section
      2.04

                	
                  Additional
      Adjustment of Purchase Price

                	
                  29

                
	
                  Section
      2.05

                	
                  Place
      and Date of Closing.

                	
                  31

                
	
                  Section
      2.06

                	
                  Transactions
      to be Effected at the Closing

                	
                  31

                
	
                  Section
      2.07

                	
                  Nonassignability
      of Assets

                	
                  32

                
	
                  Section
      2.08

                	
                  Delayed
      Approvals

                	
                  32

                

        

        

        ARTICLE
III

        

        RENEWAL
RIGHTS

        

        
          	
                  Section
      3.01

                	
                  Cessation
      of Renewals

                	
                  33

                
	
                  Section
      3.02

                	
                  Renewal
      Rights

                	
                  33

                
	 
      	 
      	 
      

        

        ARTICLE
III A

        

        UNRELATED
ADMINISTERED CONTRACTS

        

        
          	
                  Section
      3A.01

                	
                  Cessation
      of Renewals.

                	
                  36

                
	
                  Section
      3A.02

                	
                  Renewal
      Rights

                	
                  36

                

        

        

        ARTICLE
IV

        

        REPRESENTATIONS
AND WARRANTIES OF SELLER, FGWLA AND CLAC

        

        
          	
                  Section
      4.01

                	
                  Organization,
      Standing and Authority

                	
                  36

                
	
                  Section
      4.02

                	
                  Capitalization.

                	
                  37

                
	
                  Section
      4.03

                	
                  Authorization.

                	
                  38

                
	
                  Section
      4.04

                	
                  Non-Contravention

                	
                  38

                

        

        

        

        
          
            
            

          

          
            i

            
              

            

          

          
            
            

          

        

         

        
          	
                  Section
      4.05

                	
                  Consents
      and Approvals

                	
                  39

                
	
                  Section
      4.06

                	
                  Statement
      of Assets and Liabilities

                	
                  39

                
	
                  Section
      4.07

                	
                  Insurance
      Company Subsidiary Financial Statements

                	
                  40

                
	
                  Section
      4.08

                	
                  Absence
      of Certain Changes

                	
                  40

                
	
                  Section
      4.09

                	
                  Business
      Contracts

                	
                  42

                
	
                  Section
      4.10

                	
                  Business
      Reinsurance Agreements

                	
                  42

                
	
                  Section
      4.11

                	
                  Transferred
      Assets

                	
                  43

                
	
                  Section
      4.12

                	
                  Litigation;
      Orders

                	
                  43

                
	
                  Section
      4.13

                	
                  Compliance
      with Law

                	
                  43

                
	
                  Section
      4.14

                	
                  Permits

                	
                  46

                
	
                  Section
      4.15

                	
                  Brokers

                	
                  46

                
	
                  Section
      4.16

                	
                  Employees

                	
                  46

                
	
                  Section
      4.17

                	
                  Employee
      Plans

                	
                  48

                
	
                  Section
      4.18

                	
                  Real
      Property

                	
                  50

                
	
                  Section
      4.19

                	
                  Computer
      Software

                	
                  51

                
	
                  Section
      4.20

                	
                  Intellectual
      Property Rights...

                	
                  53

                
	
                  Section
      4.21

                	
                  Tax
      Matters

                	
                  54

                
	
                  Section
      4.22

                	
                  Security
      Deposits

                	
                  57

                
	
                  Section
      4.23

                	
                  Bank
      Accounts

                	
                  57

                
	
                  Section
      4.24

                	
                  Sufficiency
      of Assets...

                	
                  57

                
	
                  Section
      4.25

                	
                  Actuarial
      Reports

                	
                  57

                
	
                  Section
      4.26

                	
                  Disclosure

                	
                  57

                
	
                  Section
      4.27

                	
                  Producer
      Appointments and Contracts

                	
                  58

                
	
                  Section
      4.28

                	
                  Certain
      Insurance Contracts

                	
                  58

                
	
                  Section
      4.29

                	
                  Books
      and Records

                	
                  58

                
	
                  Section
      4.30

                	
                  Officer
      and Director Claims

                	
                  58

                
	
                  Section
      4.31

                	
                  Noncompetition
      Agreements

                	
                  58

                
	
                  Section
      4.32

                	
                  Insurance
      Coverage

                	
                  58

                
	
                  Section
      4.33

                	
                  Stop
      Loss Insurance Contracts

                	
                  58

                

        

        

        ARTICLE
V

        

        REPRESENTATIONS
AND WARRANTIES OF PURCHASER

        

        
          	
                  Section
      5.01

                	
                  Organization,
      Standing and Authority

                	
                  59

                
	
                  Section
      5.02

                	
                  Authorization

                	
                  59

                
	
                  Section
      5.03

                	
                  Non-Contravention

                	
                  59

                
	
                  Section
      5.04

                	
                  Compliance
      with Law

                	
                  60

                
	
                  Section
      5.05

                	
                  Consents
      and Approvals

                	
                  60

                
	
                  Section
      5.06

                	
                  Brokers

                	
                  61

                
	
                  Section
      5.07

                	
                  Ratings

                	
                  61

                
	
                  Section
      5.08

                	
                  Licenses
      and Franchises

                	
                  61

                
	
                  Section
      5.09

                	
                  Purchaser
      Financial Statements

                	
                  61

                
	
                  Section
      5.10

                	
                  Absence
      of Certain Changes

                	
                  61

                
	
                  Section
      5.11

                	
                  Sufficient
      Funds.

                	
                  62

                
	
                  Section
      5.12

                	
                  Investment
      Intent

                	
                  62

                

        

        

        
          
            
            

          

          
            ii

            
              

            

          

          
            
            

          

        

         

        ARTICLE
VI

        

        COVENANTS

        

        
          	
                  Section
      6.01

                	
                  Conduct
      of Business

                	
                  62

                
	
                  Section
      6.02

                	
                  Exclusivity

                	
                  66

                
	
                  Section
      6.03

                	
                  Access
      to Information; Confidentiality

                	
                  67

                
	
                  Section
      6.04

                	
                  Reasonable
      Best Efforts

                	
                  67

                
	
                  Section
      6.05

                	
                  Consents,
      Approvals, Filings and Costs

                	
                  67

                
	
                  Section
      6.06

                	
                  Representations
      and Warranties

                	
                  69

                
	
                  Section
      6.07

                	
                  Notification

                	
                  70

                
	
                  Section
      6.08

                	
                  Further
      Assurances

                	
                  70

                
	
                  Section
      6.09

                	
                  Expenses

                	
                  70

                
	
                  Section
      6.10

                	
                  Resources

                	
                  70

                
	
                  Section
      6.11

                	
                  Employees
      and Employee Benefits.

                	
                  70

                
	
                  Section
      6.12

                	
                  Form
      and Rate Filing

                	
                  76

                
	
                  Section
      6.13

                	
                  Intercompany
      Relationships

                	
                  76

                
	
                  Section
      6.14

                	
                  Non-Compete

                	
                  77

                
	
                  Section
      6.15

                	
                  Cooperation/Integration

                	
                  79

                
	
                  Section
      6.16

                	
                  Core
      Administration System

                	
                  79

                
	
                  Section
      6.17

                	
                  Seller
      Confidentiality Agreements

                	
                  79

                
	
                  Section
      6.18

                	
                  Books
      and Records

                	
                  80

                
	
                  Section
      6.19

                	
                  Confidentiality

                	
                  80

                
	
                  Section
      6.20

                	
                  Insurance
      Coverage

                	
                  82

                
	
                  Section
      6.21

                	
                  Great-West
      Healthcare Holdings, Inc

                	
                  82

                
	
                  Section
      6.22

                	
                  Seller
      Subsidiaries Acquisition Agreements.

                	
                  83

                
	
                  Section
      6.23

                	
                  Supplements
      to Schedules

                	
                  83

                
	
                  Section
      6.24

                	
                  Electronic
      Delivery of Computer Software

                	
                  83

                
	
                  Section
      6.25

                	
                  Resolution
      of Certain Issues.

                	
                  83

                
	
                  Section
      6.26

                	
                  Termination
      of Certain Contracts

                	
                  83

                
	
                  Section
      6.27

                	
                  Preparation
      for Closing.

                	
                  84

                
	
                  Section
      6.28

                	
                  Optional
      Business

                	
                  84

                
	
                  Section
      6.29

                	
                  Tax
      Returns

                	
                  85

                

        

        

        ARTICLE
VII

        

        CONDITIONS
PRECEDENT TO THE OBLIGATIONS OF PURCHASER

        

        
          	
                  Section
      7.01

                	
                  Representations
      and Covenants

                	
                  85

                
	
                  Section
      7.02

                	
                  Secretary’s
      Certificate

                	
                  86

                
	
                  Section
      7.03

                	
                  Other
      Agreements

                	
                  86

                
	
                  Section
      7.04

                	
                  Governmental
      and Regulatory Consents and Approvals

                	
                  86

                
	
                  Section
      7.05

                	
                  Third
      Party Consents

                	
                  87

                
	
                  Section
      7.06

                	
                  No
      Injunctions or Restraints

                	
                  87

                
	
                  Section
      7.07

                	
                  Resignation
      of Officers and Directors

                	
                  87

                

        

        
 

        
          
            
            

          

          
            iii

            
              

            

          

          
            
            

          

        

         

        ARTICLE
VIII

        

        CONDITIONS
PRECEDENT TO THE OBLIGATIONS

        OF
SELLER, FGWLA AND CLAC

        

        
          	
                  Section
      8.01

                	
                  Representations
      and Covenants

                	
                  87

                
	
                  Section
      8.02

                	
                  Secretary’s
      Certificate

                	
                  
                    88 

                  

                
	
                  Section
      8.03

                	
                  Other
      Agreements.

                	
                  88

                
	
                  Section
      8.04

                	
                  Governmental
      and Regulatory Consents and Approvals

                	
                  88

                
	
                  Section
      8.05

                	
                  Third
      Party Consents

                	
                  88

                
	
                  Section
      8.06

                	
                  No
      Injunctions or Restraints

                	
                  88

                
	 
      	 
      	 
      

        

        ARTICLE
IX

        

        FURTHER
AGREEMENTS

        

        
          	
                  Section
      9.01

                	
                  Access
      to Books and Records

                	
                  89

                
	
                  Section
      9.02

                	
                  Cooperation

                	
                  90

                
	
                  Section
      9.03

                	
                  Actuarial
      Appraisal

                	
                  90

                
	
                  Section
      9.04

                	
                  Use
      of Names

                	
                  90

                
	
                  Section
      9.05

                	
                  Reserves.

                	
                  91

                
	
                  Section
      9.06

                	
                  Control
      of Litigation

                	
                  91

                
	
                  Section
      9.07

                	
                  License
      to Owned Generally Used Software

                	
                  93

                

        
          ARTICLE
X

          

          SURVIVAL
OF REPRESENTATIONS, WARRANTIES AND COVENANTS

          

          
            	
                    Section
      10.01

                  	
                    Survival
      of Representations, Warranties and Covenants.

                  	
                    94

                  

          

          
 
ARTICLE
XI

        

        INDEMNIFICATION

        

        
          	
                  Section
      11.01

                	
                  Obligation
      to Indemnify

                	
                  94

                
	
                  Section
      11.02

                	
                  Indemnification
      Procedures

                	
                  96

                

        

        

        ARTICLE
XII

        

        TAXES

        

        
          	
                  Section
      12.01

                	
                  Tax
      Indemnity

                	
                  97

                
	
                  Section
      12.02

                	
                  Returns
      and Payments.

                	
                  99

                
	
                  Section
      12.03

                	
                  Refunds

                	
                  100

                
	
                  Section
      12.04

                	
                  Contests

                	
                  101

                
	
                  Section
      12.05

                	
                  Time
      of Payment

                	
                  102

                
	
                  Section
      12.06

                	
                  Cooperation
      and Exchange of Information

                	
                  102

                
	
                  Section
      12.07

                	
                  Miscellaneous.

                	
                  103

                

        

         

         

        
          
            
            

          

          
            iv

            
              

            

          

          
            
            

          

        

         

         

        
          	
                  Section
      12.08

                	
                  Exclusivity

                	
                  105

                
	 
      	 
      	 
      

        

         

         

        
          ARTICLE
XIII

        

        

        TERMINATION
PRIOR TO CLOSING

        

        
          	
                  Section
      13.01

                	
                  Termination
      of Agreement.

                	
                  105

                
	
                  Section
      13.02

                	
                  Survival

                	
                  106

                
	 
      	 
      	 
      

        

        ARTICLE
XIV

        

        GENERAL
PROVISIONS

        

        
          	
                  Section
      14.01

                	
                  Publicity

                	
                  106

                
	
                  Section
      14.02

                	
                  Dollar
      References

                	
                  107

                
	
                  Section
      14.03

                	
                  Notices

                	
                  107

                
	
                  Section
      14.04

                	
                  Entire
      Agreement

                	
                  108

                
	
                  Section
      14.05

                	
                  Waivers
      and Amendments; Non-Contractual Remedies;

                	 
      
	
                   

                	
                  
                    Preservation
      of Remedies

                  

                	
                  108
      

                
	
                  Section
      14.06

                	
                  Governing
      Law.

                	
                  108

                
	
                  Section
      14.07

                	
                  Jurisdiction

                	
                  108

                
	
                  Section
      14.08

                	
                  Binding
      Effect; Assignment

                	
                  109

                
	
                  Section
      14.09

                	
                  Interpretation

                	
                  109

                
	
                  Section
      14.10

                	
                  No
      Third Party Beneficiaries

                	
                  110

                
	
                  Section
      14.11

                	
                  Counterparts

                	
                  110

                
	
                  Section
      14.12

                	
                  Exhibits
      and Schedules

                	
                  110

                
	
                  Section
      14.13

                	
                  Headings

                	
                  110

                

        

        

        
          
             

          

          
            v

            
              

            

          

          
             

          

        

EXHIBITS

    

     

    
      	
              Exhibit
      A

            	
              Form
      of Assumption Agreement

            
	
              Exhibit
      B

            	
              Form
      of Bill of Sale and General Assignment

            
	
              Exhibit
      C

            	
              December
      31 Net Worth Statement

            
	
              Exhibit
      D

            	
              December
      31 Statement of Assets and Liabilities

            
	
              Exhibit
      E

            	
              Form
      of FGWLA Administrative Services Agreement

            
	
              Exhibit
      F

            	
              Form
      of FGWLA Indemnity Reinsurance Agreement

            
	
              Exhibit
      G

            	
              Form
      of Network Licensing Agreement

            
	
              Exhibit
      H

            	
              Form
      of Seller Administrative Services Agreement

            
	
              Exhibit
      I

            	
              Form
      of Seller Indemnity Reinsurance Agreement

            
	
              Exhibit
      J

            	
              Form
      of CLAC Administrative Services Agreement

            
	
              Exhibit
      K

            	
              Form
      of CLAC Indemnity Reinsurance Agreement

            
	
              Exhibit
      L

            	
              Form
      of Subsidiary Assumption Agreement

            
	
              Exhibit
      M

            	
              Form
      of Transition Services Agreement

            
	
              Exhibit
      N

            	
              Form
      of Headquarters Leases

            
	
              Exhibit
      O

            	
              Form
      of Employee Lease Agreement

            
	
              Exhibit
      P

            	
              Examples
      of Adjustment to Purchase Price

            
	
              Exhibit
      Q

            	
              CSRP
      Business Plan

            
	 
      	 
      
	 
      	 
      

    

     

    

     

    
      
        
        

      

      
        vi

        
          

        

      

      
        
        

      

    

     

    

    SCHEDULES

     

    
      	
              Schedule
      1.01(a)

            	
              ADA
      Contracts

            
	
              Schedule
      1.01(b)

            	
              Administered
      Contracts

            
	
              Schedule
      1.01(c)

            	
              ASO
      Agreements

            
	
              Schedule
      1.01(d)

            	
              Assigned
      and Assumed Acquisition-Related Contracts

            
	
              Schedule
      1.01(e)

            	
              Assumed
      Liabilities Services Agreement

            
	
              Schedule
      1.01(f)

            	
              Assumed
      Reinsurance Agreements

            
	
              Schedule
      1.01(g)

            	
              CLAC
      Insurance Contracts

            
	
              Schedule
      1.01(h)

            	
              Continued
      Practices

            
	
              Schedule
      1.01(i)

            	
              Excluded
      Assets

            
	
              Schedule
      1.01(j)

            	
              FGWLA
      Insurance Contracts

            
	
              Schedule
      1.01(k)

            	
              Inactive
      HMOs

            
	
              Schedule
      1.01(l)

            	
              Insurance
      Company Subsidiaries

            
	
              Schedule
      1.01(m)

            	
              Composite
      Marks

            
	
              Schedule
      1.01(n)

            	
              Seller’s
      Knowledge

            
	
              Schedule
      1.01(o)

            	
              FGWLA’s
      Knowledge

            
	
              Schedule
      1.01(p)

            	
              CLAC’s
      Knowledge

            
	
              Schedule
      1.01(q)

            	
              Purchaser’s
      Knowledge

            
	
              Schedule
      1.01(r)

            	
              Methodologies

            
	
              Schedule
      1.01(s)

            	
              Non-Insurance
      Company Subsidiaries

            
	
              Schedule
      1.01(t)

            	
              Purchased
      Subsidiaries

            
	
              Schedule
      1.01(u)

            	
              Seller
      Insurance Contracts

            
	
              Schedule
      1.01(v)

            	
              Special
      Incentive and Severance Agreements

            
	
              Schedule
      1.01(w)

            	
              Subsidiary
      Insurance Contracts

            
	
              Schedule
      1.01(x)

            	
              Tangible
      Assets

            
	
              Schedule
      1.01(y)

            	
              Business
      Bank Accounts

            
	
              Schedule
      2.01

            	
              Allocation
      of Purchase Price

            
	
              Schedule
      4.01(b)

            	
              Seller
      Subsidiary Organization

            
	
              Schedule
      4.02

            	
              Seller
      Subsidiary Capitalization

            
	
              Schedule
      4.04

            	
              Non-Contravention

            
	
              Schedule
      4.05(a)(i)

            	
              Seller
      Regulatory Closing Consents

            
	
              Schedule
      4.05(a)(ii)

            	
              Other
      Seller Regulatory Consents

            
	
              Schedule
      4.05(b)

            	
              Other
      Seller Governmental Consents

            
	
              Schedule
      4.05(c)

            	
              Seller
      Third Party Consents

            
	
              Schedule
      4.06(b)

            	
              Unaudited
      Financial Statements

            
	
              Schedule
      4.08

            	
              Absence
      of Certain Changes

            
	
              Schedule
      4.09

            	
              Material
      Business Contracts

            
	
              Schedule
      4.10

            	
              Business
      Reinsurance Agreements

            
	
              Schedule
      4.12(a)

            	
              Litigation

            
	
              Schedule
      4.12(b)

            	
              Orders

            
	
              Schedule
      4.13(a)

            	
              Compliance
      with Law

            
	
              Schedule
      4.13(c)

            	
              Filings
      Compliance

            
	
              Schedule
      4.13(d)(i)

            	
              Policy
      Forms

            
	
              Schedule
      4.13(d)(ii)

            	
              Policy
      Form Compliance

            

    

     

     

    
      
        
        

      

      
        vii

        
          

        

      

      
        
        

      

    

     

     

    
      	
              Schedule
      4.13(e)

            	
              Premium
      Rate, Plan and Policy Filings

            
	
              Schedule
      4.13(f)

            	
              Privacy
      Compliance

            
	
              Schedule
      4.14

            	
              Permits

            
	
              Schedule
      4.16(b)

            	
              Unions

            
	
              Schedule
      4.16(h)

            	
              Certain
      Notices

            
	
              Schedule
      4.17(a)

            	
              Employee
      Plans

            
	
              Schedule
      4.17(c)

            	
              Seller
      Subsidiary Plans

            
	
              Schedule
      4.18(a)(i)

            	
              Transferred
      Leases

            
	
              Schedule
      4.18(a)(ii)

            	
              Subleased
      Leases

            
	
              Schedule
      4.19(a)

            	
              Principally
      Used Software

            
	
              Schedule
      4.19(b)

            	
              Generally
      Used Software

            
	
              Schedule
      4.19(c)

            	
              Excluded
      Software

            
	
              Schedule
      4.19(e)

            	
              Software
      Fees

            
	
              Schedule
      4.20(a)

            	
              Intellectual
      Property Violations

            
	
              Schedule
      4.20(b)

            	
              Intellectual
      Property

            
	
              Schedule
      4.20(d)

            	
              Intellectual
      Property Licenses and Fees

            
	
              Schedule
      4.21

            	
              Tax
      Matters

            
	
              Schedule
      4.22

            	
              Security
      Deposits

            
	
              Schedule
      4.23

            	
              Bank
      Accounts

            
	
              Schedule
      4.24(a)

            	
              Sufficiency
      of Assets

            
	
              Schedule
      4.24(b)

            	
              Assets

            
	
              Schedule
      4.25

            	
              Actuarial
      Reports

            
	
              Schedule
      4.27

            	
              Material
      Producer Contracts

            
	
              Schedule
      4.28

            	
              Certain
      Insurance Contracts

            
	
              Schedule
      4.30

            	
              Officer
      and Director Claims

            
	
              Schedule
      4.31

            	
              Noncompetition
      Agreements

            
	
              Schedule
      4.32

            	
              Insurance
      Coverage

            
	
              Schedule
      5.03

            	
              Non-Contravention

            
	
              Schedule
      5.04(a)

            	
              Compliance
      with Law

            
	
              Schedule
      5.04(b)

            	
              Threatened
      Investigations

            
	
              Schedule
      5.05(a)

            	
              Purchaser
      Regulatory Consents

            
	
              Schedule
      5.05(b)

            	
              Other
      Purchaser Governmental Consents

            
	
              Schedule
      5.05(c)

            	
              Purchaser
      Third Party Consents

            
	
              Schedule
      5.08

            	
              Licenses

            
	
              Schedule
      6.01(a)

            	
              Conduct
      of Business:  Seller, FGWLA and CLAC

            
	
              Schedule
      6.01(b)

            	
              Conduct
      of Business:  Seller Subsidiaries

            
	
              Schedule
      6.05(f)

            	
              Replacement
      of Certain Arrangements

            
	
              Schedule
      6.11(a)(1)

            	
              Business
      Employees

            
	
              Schedule
      6.11(a)(2)

            	
              Corporate
      Employees

            
	
              Schedule
      6.11(m)

            	
              Severance
      Benefits

            
	
              Schedule
      6.13

            	
              Intercompany
      Obligations

            
	
              Schedule
      6.21

            	
              Subsidiaries
      of Great-West Healthcare Holdings, Inc.

            
	
              Schedule
      6.25

            	
              Resolution
      of Certain Issues

            
	
              Schedule
      7.05

            	
              Purchaser
      Required Third Party Consents

            
	
              Schedule
      8.05

            	
              Seller
      Required Third Party Consents

            
	
              Schedule
      9.04(a)

            	
              Use
      of Names

            

    

     

    
      
        
        

      

      
        viii

        
          

        

      

      
        
        

      

    

     

     

    
      	
              Schedule
      9.04(b)

            	
              Subsidiary
      Corporate Names

            

    

    

    
      
         

      

      
        ix

        
          

        

      

      
         

      

    

    

     

    ASSET
AND STOCK PURCHASE AGREEMENT

     

    This
ASSET AND STOCK PURCHASE AGREEMENT (this “Agreement”), dated as
of November 26, 2007, is entered into by and among Great-West Life & Annuity
Insurance Company, a Colorado domiciled insurance company (“Seller”), First
Great-West Life & Annuity Insurance Company, a New York domiciled insurance
company (“FGWLA”), The Canada
Life Assurance Company, a Canadian insurance company entered into the United
States under the laws of the State of Michigan (“CLAC”), and
Connecticut General Life Insurance Company, a Connecticut domiciled insurance
company (“Purchaser”).

     

    W I T N E S S E T
H:

     

    WHEREAS, upon the terms and
subject to the conditions of this Agreement, Seller, FGWLA and CLAC desire to
sell, and Purchaser desires to acquire, the Acquired Operations of Seller, FGWLA
and CLAC as described herein (all capitalized terms used in these recitals and
not otherwise defined having the respective meanings assigned to them in Section
1.01 hereto); and

     

    WHEREAS, in order to
effectuate the foregoing, it is contemplated that, upon the terms and subject to
the conditions of this Agreement:  (i) Seller and Purchaser, FGWLA and
Purchaser and CLAC and Purchaser will enter into the Seller Indemnity
Reinsurance Agreement, the FGWLA Indemnity Reinsurance Agreement and the CLAC
Indemnity Reinsurance Agreement, respectively, providing, among other things,
for the indemnity reinsurance as of the Effective Date of the Insurance
Liabilities; (ii) Seller and Purchaser, FGWLA and Purchaser and CLAC and
Purchaser will enter into the Seller Administrative Services Agreement, the
FGWLA Administrative Services Agreement and the CLAC Administrative Services
Agreement, respectively, providing for Purchaser’s provision of certain
administrative services on behalf of Seller, FGWLA and CLAC with respect to the
Insurance Contracts, the Reinsured Contracts and the Administered Contracts;
(iii) Seller will transfer the Shares to Purchaser; (iv) Seller, Purchaser and
FGWLA will enter into the Transition Services Agreement, providing, among other
things, for Seller’s and FGWLA’s provision to Purchaser of certain transition
services for transition periods following the Closing Date; (v) Seller, FGWLA
and CLAC will execute and deliver to Purchaser the Transfer Documents providing
for the transfer to Purchaser of the Transferred Assets; (vi) Seller, FGWLA,
CLAC and Purchaser will enter into the Assumption Agreement, providing for the
assumption by Purchaser of the Other Assumed Liabilities; and (vii) Seller,
FGWLA, CLAC and Purchaser will execute and deliver such other agreements,
instruments and documents as are described herein.

     

    NOW, THEREFORE, in
consideration of the representations, warranties, covenants and agreements set
forth herein, the parties hereto agree as follows:

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    ARTICLE
I

     

     

    DEFINITIONS

     

      Section
1.01     Definitions

     

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

     

    “Acquisition Date”
means, for any Seller Subsidiary, the later of (a) the date on which such Seller
Subsidiary became an Affiliate of Seller and (b) January 1, 2002.

     

    “Acquired Operations”
means the Transferred Assets, the Insurance Liabilities, the Other Assumed
Liabilities and the Purchased Subsidiaries.

     

    “Acquisition Proposal”
shall have the meaning set forth in Section 6.02.

     

    “Actual Results” shall
have the meaning set forth in Section 2.04(a)(ii).

     

    “Action” shall have
the meaning set forth in Section 4.12.

     

    “ADA Contracts” means
all administrative services agreements by and between Seller and the American
Dental Association, including those listed on Schedule 1.01(a), the reinsurance
agreements listed on Schedule 1.01(a) pursuant to which Seller reinsures certain
group policies issued to the American Dental Association, and the staff plans
listed on Schedule 1.01(a).

     

    “Adjustment Amount”
means, with respect to a Net Worth Statement, (a) the net worth of the Insurance
Company Subsidiaries shown in such Net Worth Statement minus the Target
Insurance Company Subsidiaries Statutory Net Worth, plus (b) the GAAP tangible
book equity of the Non-Insurance Company Subsidiaries shown in such Net Worth
Statement minus the Target Non-Insurance Company Subsidiaries GAAP
Equity.

     

    “Administered
Contracts” means (a) the ASO Agreements entered into by Seller, FGWLA or
CLAC, (b) those specialty market contracts entered into by Seller, FGWLA or CLAC
in connection with the Business and listed on Schedule 1.01(b), (c) the Assumed
Liabilities Services Agreements, (d) other contracts and agreements entered into
by Seller, FGWLA or CLAC in connection with the Business between the date hereof
and the Closing Date in the ordinary course of business of the types set forth
on such schedule, to the extent that such contracts remain in effect on the
Closing Date and (e) all contracts of the types set forth on such schedule that
are entered into after the Closing Date in accordance with the terms of the
Administrative Services Agreements, all of which contracts will be administered
by Purchaser pursuant to the terms of the Administrative Services Agreements;
for the avoidance of doubt, Administered Contracts shall not include any ADA
Contracts.

     

    “Administration Adjustment
Factor” means 1/6 of the sum of the Monthly Administration Adjustment
Factors for the applicable Relevant Period.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

     

    “Administration
Margin” means (a) the Administration Adjustment Factor times (i) gross
administration fees collected or accrued in connection with the Group Health
Business during the applicable Relevant Period, plus (ii) Pharmacy Benefits
Management Revenue collected or accrued during the applicable Relevant Period,
minus (iii) commissions paid in connection with the Group Health Business during
the applicable Relevant Period, minus (iv) premium taxes incurred in connection
with the Group Health Business during the applicable Relevant Period, minus (b)
the greater of (i) (A) actual operating expenses incurred in connection with the
Group Health Business during the applicable Relevant Period times (B) the
Administration Adjustment Factor and (ii) $240,000,000.  In
determining each of the components of Administration Margin, accounting
methodologies applied by Seller and its Affiliates in the preparation of the
Unaudited Financial Statements shall be used on a consistent basis, and the
effects of Extraordinary Items shall be excluded.

     

    “Administrative Services
Agreements” means the Seller Administrative Services Agreement, the FGWLA
Administrative Services Agreement and the CLAC Administrative Services
Agreement.

     

    “Admitted Receivables”
means claim and premium receivables of the Acquired Operations which are
included in the Transferred Assets and accorded positive value in accordance
with the Methodologies.

     

    “Affiliate” means,
with respect to any Person, at the time in question, any other Person
controlling, controlled by or under common control with such
Person.  For purposes of the foregoing, “control”, including the terms
“controlling”, “controlled by” and “under common control with”, means the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of an institution, whether through the ownership of
voting securities, by contract or otherwise.

     

    “Agreement” shall have
the meaning set forth in the introductory paragraph hereof.

     

    “Allocable Amount”
shall have the meaning set forth in Section 12.07(d).

     

    “Alternate Bidder”
shall have the meaning set forth in Section 6.02.

     

    “Ancillary Agreements”
means the Seller Indemnity Reinsurance Agreement, the FGWLA Indemnity
Reinsurance Agreement, the CLAC Indemnity Reinsurance Agreement, the Seller
Administrative Services Agreement, the FGWLA Administrative Services Agreement,
the CLAC Administrative Services Agreement, the Transition Services Agreement,
the Headquarters Leases, the Network Licensing Agreement, the Employee Lease
Agreement, the Assumption Agreement, the Subsidiary Assumption Agreement, the
Transfer Documents and the Subleases.

     

    “Antitrust Division”
shall have the meaning set forth in Section 6.05(b).

     

    “Annualized
Difference” shall have the meaning set forth in Section
2.04(a)(ii).

     

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    “Applicable SAP” means
with respect to Seller, FGWLA, CLAC, the Insurance Company Subsidiaries and
Purchaser, statutory accounting practices prescribed or permitted by the
Commissioner (or equivalent title) of the state of domicile of such insurer, but
disregarding any permitted practices applicable specifically to any such
Person.

     

    “ASO Agreements” means
those agreements under which Seller, FGWLA, CLAC or any Seller Subsidiary agrees
to perform specific administrative duties for the maintenance of a self-funded
health insurance plan (a) reflected on Schedule 1.01(c), or (b) that are entered
into between September 30, 2007 and the Closing Date in substantially the same
form as the agreements listed on Schedule 1.01(c), allowing for variation of
terms arising from negotiations between the parties to such an agreement in the
ordinary course of business.

     

    “Assigned and Assumed
Contracts” means those contracts and agreements entered into by Seller,
FGWLA, CLAC or the Inactive HMOs in connection with the Business and relating
exclusively to the Healthcare Division, to the extent that such contracts remain
in effect on the Closing Date, but excluding (a) the Administered Contracts, (b)
the Producer Contracts, (c) Contracts entered into in connection with any
transaction by which the stock or other equity interests in any Person,
including any Seller Subsidiary, were acquired, other than the Contracts listed
in Schedule 1.01(d) and (d) the Contracts to be replaced as described in
Schedule 6.05(f).

     

    “Assumed Liabilities”
means (a) the Insurance Liabilities and (b) the Other Assumed
Liabilities.

     

    “Assumed Liabilities Services
Agreements” means those contracts listed on Schedule 1.01(e) pursuant to
which Seller administers the Reinsured Contracts.

     

    “Assumed Reinsurance
Agreements” means those Contracts of assumed reinsurance set forth on
Schedule 1.01(f); for the avoidance of doubt, Assumed Reinsurance Agreements
shall not include any ADA Contracts.

     

    “Assumption Agreement”
means an Assumption Agreement in the form of Exhibit
A.

     

    “Benchmark” means
$70,373,000, if the Closing occurs prior to August 1, 2008, and $78,225,000, if
the Closing occurs on or after August 1, 2008.

     

    “Bill of Sale and General
Assignment” means a Bill of Sale and General Assignment in the form of
Exhibit
B.

     

    “Books and Records”
means the Business Books and Records and the Corporate Books and
Records.

     

    “Business” means the
(a) business of Seller, FGWLA, and CLAC of issuing, reinsuring and administering
as applicable, the Insurance Contracts, the Reinsured Contracts and the
Administered Contracts in the United States and (b) the 

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    businesses
operated by the Seller Subsidiaries in the United States, in each case as
conducted as of the date hereof.  For the avoidance of doubt, the
Business shall not include any ADA Contracts.

     

    
                                      “Business Books and
Records” means (a) the originals or copies of all records of Seller,
FGWLA and CLAC (including computer generated, recorded or stored records) which
relate to the Business or which are otherwise necessary to operate the Business,
including customer lists, policy information, personnel records (to the extent
that the personnel records may be transferred by Seller, FGWLA and CLAC, as
applicable, under applicable Law), Insurance Contract forms and rating plans,
claim records, sales records, underwriting records, financial records and
compliance records and records relating to the Assumed Reinsurance Agreements,
in each case, in the possession or control of Seller, FGWLA, CLAC, the Seller
Subsidiaries or any of their Affiliates, but excluding any such records that
relate to Seller Legal Proceedings and are subject to the attorney client
privilege, and (b) Tax Returns and workpapers of or relating solely to the
Seller Subsidiaries, the Business or the Transferred Assets, in each case, in
the possession or control of Seller, FGWLA, CLAC, the Seller Subsidiaries or any
of their Affiliates.

    

     

    “Business Contracts”
means, collectively, the Assigned and Assumed Contracts, the Administered
Contracts and the Subsidiary Contracts.

     

    “Business Day” means
any day other than a Saturday, Sunday, a day on which banking institutions in
either of the States of Colorado or New York are permitted or obligated by Law
to be closed or a day on which the New York Stock Exchange is closed for
trading.

     

    “Business Employees”
shall have the meaning set forth in Section 6.11(a).

     

    “Business Reinsurance
Agreements” means, collectively, the Ceded Reinsurance Agreements and the
Subsidiary Reinsurance Agreements.

     

    “Cap” shall have the
meaning set forth in Section 2.04(a)(i).

     

    “Ceded Reinsurance
Agreements” means, to the extent that such treaties or agreements relate
to the Insurance Liabilities, Sellers Extra Contractual Obligations or Purchaser
Extra Contractual Obligations, (a) the reinsurance and retrocession treaties and
agreements to which Seller, FGWLA, CLAC or any of their Affiliates is a ceding
party that are in force on the date hereof or entered into by Seller, FGWLA or
CLAC, other than in violation of Section 6.01, between the date hereof and the
Closing Date and (b) any such treaty or agreement that is terminated or expired
but under which Seller, FGWLA or CLAC may continue to receive reinsurance
coverage.

     

    “CLAC” shall have the
meaning set forth in the introductory paragraph hereof.

     

    “CLAC Administrative Services
Agreement” means an Administrative Services Agreement in the form of
Exhibit
J.

     

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

     

    “CLAC Indemnity Reinsurance
Agreement” means an Indemnity Reinsurance Agreement in the form of Exhibit
K.

     

    “CLAC Insurance
Contracts” means (a) all of the Stop Loss Insurance Agreements written by
CLAC in the United States reflected on Schedule 1.01(g), (b) contracts on the
same forms as those Stop Loss Insurance Agreements reflected on Schedule 1.01(g)
written by CLAC between September 30, 2007 and the Closing Date, and (c) any
such contracts that are issued by CLAC on or after the Closing Date in
accordance with the terms of the CLAC Administrative Services Agreement
(including, in each case of (a), (b) and (c), renewals thereof and all
supplements, endorsements, enhancement letters, riders and ancillary agreements
in connection therewith).

     

    “Closing” means the
closing of the transactions contemplated by this Agreement.

     

    “Closing Date” means
(a) if the last of the conditions to Closing set forth in this Agreement (other
than those conditions that by their nature are to be satisfied at the Closing)
is satisfied or waived in writing on or prior to the 20th day of a given month,
the last day of such month, or (b) if such satisfaction or waiver in writing
occurs or is granted after the 20th day of any given month, the last day of the
month following the month in which the last of such conditions was so satisfied
or waived in writing; provided, however, that if such
date is not a Business Day, the Closing Date shall be the immediately succeeding
Business Day; provided, further, that the
Closing may occur on such other day as the parties may agree to in
writing.

     

    “Closing Net Worth
Statement” means a Net Worth Statement as of the date of the Closing
Statement of Assets and Liabilities as estimated by Seller in good faith in
accordance with the Methodologies.

     

    “Closing Statement of Assets
and Liabilities” means the Statement of Assets and Liabilities of the
Business (excluding the Seller Subsidiaries) as of the last day of the month
immediately preceding the month in which the Effective Date falls, as estimated
by Seller in good faith in accordance with the Methodologies.

     

    “COBRA Coverage” shall
have the meaning set forth in Section 6.11(j)(i)(2).

     

    “Code” means the
Internal Revenue Code of 1986, as amended.

     

    “Consent Period” shall
have the meaning set forth in Section 2.07.

     

    “Commissions” means
all commissions, expense allowances, and other fees and compensation payable to
Producers.

     

    “Confidentiality
Agreement” shall have the meaning set forth in Section 6.03.

     

    “Consolidated Group”
shall have the meaning set forth in Section 4.21(f).

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

     

    “Consolidated Tax
Return” shall have the meaning set forth in Section
12.02(a).

     

    “Continued Policies”
shall have the meaning set forth in Section 6.20(a).

     

    “Continued Practice”
means (a) any policy or other regular practice of Seller, FGWLA, CLAC or a
Seller Subsidiary, existing prior to the Closing, which (i) are not disclosed
hereunder (ii) violates applicable Law, (iii) is not the policy or regular
practice of Purchaser, and (iv) is carried out by or under the supervision of
Business Employees, Corporate Employees or Subsidiary Employees on behalf of
Purchaser or its Affiliates, at any time between the Closing Date and the day
which is one hundred and twenty (120) days after the Closing Date, or (b) any
policy or other practice of Seller, FGWLA, CLAC or a Seller Subsidiary listed on
Schedule 1.01(h).

     

    “Contract” means any
written or oral agreement, contract, lease, sublease, license, sublicense,
undertaking, indenture, evidence of indebtedness, guaranty, loan, or
mortgage.

     

    “Contractholder” means
the holder of an Insurance Contract or the counterparty under an Administered
Contract, as applicable.

     

    “Corporate Books and
Records” means the originals or copies of all of the books, records, data
and information relating to the assets, properties, business, conduct and
operations of the Seller Subsidiaries, including all licenses held by the
Insurance Company Subsidiaries, and all such items relating to each Seller
Subsidiary’s legal existence, stock ownership, corporate management or other
such corporate records, in each case, in the possession or control of Seller,
FGWLA, a Seller Subsidiary or any of their respective Affiliates.

     

    “Corporate Employees”
shall have the meaning set forth in Section 6.11(a).

     

    “December 31 Net Worth
Statement” means the pro forma Net Worth Statement prepared in accordance
with the Methodologies as of December 31, 2006, attached hereto as Exhibit
C.

     

    “December 31 Statement of
Assets and Liabilities” means the pro forma Statement of Assets and
Liabilities of the Business (excluding the Seller Subsidiaries) prepared in
accordance with the Methodologies as of December 31, 2006, attached hereto as
Exhibit
D.

     

    “Delayed Approvals”
has the meaning set forth in Section 2.08.

     

    “Due and Uncollected
Premiums” means premiums due but uncollected with respect to an Insurance
Contract as of any given time.

     

    “Effective Date” means
the Closing Date if such date is the last day of a month and, if not (i) due to
the Closing Date being the next succeeding Business Day, then the last day of
the month immediately preceding the month in which the Closing 

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    Date
falls or (ii) due to the Closing Date being another day agreed to in writing by
the parties, such date as may be agreed to in writing by the
parties.

     

    “Election” shall have
the meaning set forth in Section 12.07(e).

     

    “Employee Lease
Agreement” means an Employee Lease Agreement in the form of Exhibit
O.

     

    “Employee Plans” means
all “employee benefit plans” within the meaning ascribed to such term by Section
3(3) of ERISA and all other employee benefit arrangements or payroll practices,
including, but not limited to each employment agreement, termination or
severance agreement or plan, deferred compensation plan, incentive compensation
plan, equity compensation plan, severance pay, sick leave, vacation pay, salary
continuation for disability, hospitalization, medical insurance, life insurance,
scholarship program, stock option or restricted stock plan sponsored or
maintained by Seller, FGWLA or any ERISA Affiliate that provide benefits or
compensation to or on behalf of Business Employees and Corporate Employees
(whether formal or informal, whether for the benefit of a single individual or
for more than one individual and whether for the benefit of current or former
employees or their beneficiaries), and the Seller Subsidiary Plans.

     

    “Employment Commencement
Date” means, with respect to each Transferred Employee, the date
following the last day such Transferred Employee is employed by Seller or FGWLA,
and with respect to Subsidiary Employees, the Closing Date.

     

    “Environmental Laws”
shall mean any Law relating to the protection of the environment, or to the
manufacture, use, transport, treatment, storage, disposal, release or threatened
release of any substance listed, classified or regulated as “hazardous” or
“toxic” or any similar term under such Environmental Law.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, as amended, and the regulations
promulgated thereunder.

     

    “ERISA Affiliate”
means any trade or business (whether or not incorporated) which is or has ever
been under common control, or which is or has ever been treated as a single
employer, with Seller, FGWLA, the Seller Subsidiaries or any of their Affiliates
under section 414(b), (c), (m) or (o) of the Code.

     

    “Excluded Assets”
means those assets utilized in the Business and listed or described on Schedule
1.01(i).

     

    “Excluded Liabilities”
means (a) premium Taxes due in respect of premiums collected prior to the
Effective Date; (b) any assessment or similar charges in connection with
guaranty fund or risk pool participation other than those set forth in clause
(e) to the definition of “Insurance Liabilities”; (c) premiums, payments for or
other consideration due prior to the Effective Date with respect to Ceded
Reinsurance Agreements; (d) returns or refunds of premiums payable prior to the
Effective Date; (e) 

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

     

    any
Sellers Extra Contractual Obligations; (f) contributions due or benefits payable
under any Employee Plans, other than with respect to contributions due or
benefits payable with respect to Subsidiary Employees for the period prior to
the Effective Date; (g) judgments, settlements, defense costs or other fees,
costs and expenses arising out of, under or relating to Existing Litigation; and
(h) any other liabilities that are not Assumed Liabilities.

     

    “Excluded Software”
shall have the meaning set forth in Section 4.19(c).

     

    “Existing Litigation”
means (a) any dispute relating to an Insurance Contract, an Assigned and Assumed
Contract, an Administered Contract or an Assumed Reinsurance Agreement and as to
which (i) a complaint, or notice of a complaint, has been served or filed in a
court on behalf of or against Seller, FGWLA or CLAC or any of their respective
officers or directors prior to the Closing Date, (ii) a demand for arbitration
has been served or filed on behalf of or against Seller, FGWLA or CLAC or any of
their respective officers or directors prior to the Closing Date or (iii) a
written notice has been delivered to Seller, FGWLA or CLAC or any of their
respective officers or directors prior to the Closing Date by an attorney
threatening a course of action reasonably likely to result in either of the
foregoing or, (b) any dispute as to which (i) a complaint, or notice of a
complaint, has been served or filed in a court on behalf of or against a Seller
Subsidiary or any of its officers or directors prior to the Closing Date, or
(ii) a demand for arbitration has been served or filed on behalf of or against a
Seller Subsidiary or any of its officers or directors prior to the Closing Date
or (iii) a written notice has been delivered to a Seller Subsidiary or any of
its respective officers or directors prior to the Closing Date by an attorney
threatening a course of action reasonably likely to result in either of the
foregoing; in each case of (a) and (b), excluding (A) claims that are
administered by Seller, FGWLA, CLAC or a Seller Subsidiary pursuant to an ASO
Agreement but as to which none of Seller, FGWLA, CLAC or any Seller Subsidiary
is a named party, (B) Purchaser Legal Proceedings and (C) Shared Actions
(including Actions which initially constitute Existing Litigation but which
become Purchaser Legal Proceedings or Shared Actions after the
Closing).

     

    “Extraordinary Item”
means (a) a special, nonrecurring item of income or expense, including the
effects of the Closing and severance and special employee compensation paid in
connection with the Closing, but excluding fees due under the Transition
Services Agreement and rents under the Headquarters Leases, and (b) for the
portion of the Relevant Period after the Closing, the effect of any material
difference between the manner in which the Group Health Business was conducted
prior to the Closing and the manner in which it is conducted by Purchaser after
the Closing.

     

    “FGWLA” shall have the
meaning set forth in the introductory paragraph hereof.

     

    “FGWLA Administrative
Services Agreement” means an Administrative Services Agreement in the
form of Exhibit
E.

     

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

     

    “FGWLA Indemnity Reinsurance
Agreement” means an Indemnity Reinsurance Agreement in the form of Exhibit
F.

     

    “FGWLA Insurance
Contracts” means (a) all of the Stop Loss Insurance Agreements written by
FGWLA in the United States reflected on Schedule 1.01(j), (b) all other
insurance contracts written by FGWLA in the United States reflected on Schedule
1.01(j), (c) contracts on the same forms as those insurance contracts reflected
on Schedule 1.01(j) written by FGWLA between September 30, 2007 and the Closing
Date, and (d) any such contracts that are issued by FGWLA on or after the
Closing Date in accordance with the terms of the FGWLA Administrative Services
Agreement (including, in each case of (a), (b), (c) and (d), renewals thereof
and individual certificates issued thereunder and all supplements, endorsements,
enhancement letters, riders and ancillary agreements in connection therewith,
and including any individual policies issued by FGWLA upon the exercise of
conversion rights with respect to health coverages under any such
contracts).

     

    “Filing Party” shall
have the meaning set forth in Section 12.02(b).

     

    “Final Calculation of PP
Reduction Amount” shall have the meaning set forth in Section
2.04(b)(ii).

     

    “Final Net Worth
Statement” shall have the meaning set forth in Section
2.03(c).

     

    “Final Statement of Assets
and Liabilities” shall have the meaning set forth in Section
2.03(c).

     

    “FTC” shall have the
meaning set forth in Section 6.05(b).

     

    “GAAP” means United
States generally accepted accounting principles.

     

    “Governmental Entity”
means any federal, state, local, foreign, international or multinational agency,
commission, court, entity or authority exercising executive, legislative,
judicial, regulatory, administrative or taxing functions of or pertaining to
government or any non-governmental United States or foreign self-regulatory
agency, commission or authority or any arbitral tribunal.

     

    “Group Health
Business” means the Business, excluding that segment of the Healthcare
Division that is included in the “Specialty” segment in the financial reporting
of Seller and its Affiliates.

     

    “Guaranteed Renewal
Contracts” means those Insurance Contracts which by their terms provide
multi-year rate guarantees or are guaranteed renewable such that they cannot, by
their terms or under applicable law, be terminated at any given time by notice
from, or by other unilateral action initiated or taken by, Seller, FGWLA or
CLAC.

     

    “Headquarters” means
the corporate headquarters property located in Greenwood Village,
Colorado.

     

    
      
        
        

      

      
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    “Headquarters Leases”
means leases with respect to the Headquarters between Seller and Purchaser in
the forms included in Exhibit
N.

     

    “Healthcare Division”
means the division of Seller which is engaged in the operation of the
Business.

     

    “HIPAA” shall have the
meaning set forth in Section 4.13(g).

     

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

     

    “Inactive HMOs” means
those health maintenance organizations or health care service providers set
forth in Schedule 1.01(k).

     

    “Incentive Cash
Compensation” shall have the meaning set forth in Section
6.11(g).

     

    “Indemnified Party”
shall have the meaning set forth in Section 11.02(a).

     

    “Indemnifying Party”
shall have the meaning set forth in Section 11.02(a).

     

    “Indemnity Reinsurance
Agreements” means the Seller Indemnity Reinsurance Agreement, the FGWLA
Indemnity Reinsurance Agreement and the CLAC Indemnity Reinsurance
Agreement.

     

    “Independent Firm”
shall have the meaning set forth in Section 12.05.

     

    “Insurance Company Subsidiary
SAP Statements” shall have the meaning set forth in Section
4.07.

     

    “Insurance Company
Subsidiaries” means those Subsidiaries of Seller set forth on Schedule
1.01(l) hereto.

     

    “Insurance Contracts”
means the Seller Insurance Contracts, the FGWLA Insurance Contracts and the CLAC
Insurance Contracts.

     

    “Insurance
Liabilities” means the following liabilities of Seller, FGWLA and CLAC,
in each case excluding the Excluded Liabilities, and net of all amounts actually
collected by Seller, FGWLA and CLAC on or after the Effective Date under the
Ceded Reinsurance Agreements to the extent that such collected amounts relate to
the Business and not to Sellers Extra Contractual Obligations: (a) the
liabilities under the Insurance Contracts, including all liabilities for unpaid
claims, incurred but not reported claims, benefits or other payments (including
dividends or other experience refunds payable on or after the Effective Date)
under the Insurance Contracts, whether incurred before, on or after the
Effective Date; (b) all loss adjustment expenses and expense reimbursement
amounts arising out of or relating to the Insurance Contracts; (c) all
liabilities under the Insurance Contracts arising out of any changes to the
terms and conditions of the Insurance Contracts mandated by applicable Law
whether incurred 

     

    
      
        
        

      

      
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    before,
on or after the Effective Date; (d) premium Taxes due in respect of premiums
collected on or after the Effective Date with respect to the Insurance
Contracts; (e) assessments and similar charges with respect to the Insurance
Contracts in connection with the participation by Seller, FGWLA, CLAC or
Purchaser whether voluntary or involuntary, in any guaranty association or risk
pool established or governed by any state or other jurisdiction, arising on
account of premiums collected on or after the Effective Date; (f) Commissions
payable with respect to the Insurance Contracts in respect of premiums collected
on or after the Effective Date; (g) premiums, payments, fees or other
consideration or amounts due on or after the Effective Date under any Ceded
Reinsurance Agreements; (h) all liabilities for amounts payable on or after the
Effective Date for returns or refunds of premiums with respect to the Insurance
Contracts; (i) all liabilities arising out of Purchaser Extra Contractual
Obligations; (j) all liabilities with respect to Contractholder funds on deposit
(advance premiums, premium deposit funds or retired lives reserve funds) with
Seller, FGWLA or CLAC; (k) all unclaimed property liabilities arising under or
relating to the Insurance Contracts with respect to amounts paid or received on
or after the Effective Date or otherwise related to bank over-drafts as
reflected on the Final Statement of Assets and Liabilities and (l) all
liabilities arising under the Assumed Reinsurance Agreements.  For the
avoidance of doubt, Purchaser assumes the risk that reinsurance under the Ceded
Reinsurance Agreements is not collected.

     

    
                  “Intangible Assets”
means (i) all renewal rights and ownership of expirations relating to the
Insurance Contracts and (ii) the Intellectual Property Rights owned by Seller,
FGWLA or CLAC.

    

     

    “Intellectual Property
Rights” shall mean all intellectual property used or held for use
principally in the Business including, but not limited to, patents, trademarks,
service marks, trade names and associated goodwill in the foregoing, copyrights,
processes, trade secrets, inventions, know-how, confidential information and
domain names (in each case, including any common law rights, registrations,
applications, licenses or rights relating to any of the foregoing), other than
the composite marks set forth on Schedule 1.01(m).

     

    “Intercompany
Agreements” shall have the meaning set forth in Section
6.13.

     

    “Intercompany
Obligations” shall have the meaning set forth in Section
6.13.

     

    “Knowledge” means, (a)
as to Seller, the knowledge of any of the persons listed on Schedule 1.01(n)
after reasonable inquiry, (b) as to FGWLA, the knowledge of any of the persons
listed on Schedule 1.01(o) after reasonable inquiry, (c) as to CLAC, the
knowledge of any of the persons listed on Schedule 1.01(p) after reasonable
inquiry, and (d) as to Purchaser, the knowledge of any of the persons listed on
Schedule 1.01(q) after reasonable inquiry.

     

     

    
      
        
        

      

      
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    “Law” means any
constitution, law, ordinance, rule, principle of common law, regulation,
statute, treaty, order, judgment, decree, administrative interpretation or other
requirement of any Governmental Entity or any order, writ, injunction,
directive, judgment or decree of any Governmental Entity applicable to a Person
or such Person’s business, property or assets.

     

    “Leased Property”
means the regional or other offices of Seller, FGWLA or a Seller Subsidiary that
are leased or subleased by Seller, FGWLA or any Seller Subsidiary, used in
connection with the Business and leased pursuant to the Leased Property
Leases.

     

    “Leased Property
Leases” shall have the meaning set forth in Section 4.18(a).

     

    “Licensed Generally Used
Software” shall have the meaning set forth in Section
4.19(b).

     

    “Licensed Principally Used
Software” shall have the meaning set forth in Section
4.19(a).

     

    “Lien” means any
pledge, claim, lien, charge, mortgage, encumbrance or security
interest.

     

    “Losses” shall have
the meaning set forth in Section 11.01(a).

     

    “Management
Presentation” means the Great-West Healthcare Management Presentation
dated April 2007, as presented to Purchaser.

     

    “Material Business
Contracts” means those Business Contracts which constitute vendor
contracts (excluding Contracts with Providers) entered into in the ordinary
course of business (a) under which the total of the amounts reasonably expected
to be paid or received by Seller, FGWLA, CLAC and the Seller Subsidiaries in any
year exceeds $75,000 or (b) whose termination or cancellation would reasonably
be expected to result in a Sellers Material Adverse Effect, after allowing for
replacement with any substitute arrangement readily available on market
terms.

     

    “Material Producer
Contract” shall have the meaning set forth in Section 4.27.

     

    “Methodologies” means
(subject to Section 2.03(e) with respect to the Final Statement of Assets and
Liabilities and the Final Net Worth Statement) (a) first, the accounting,
actuarial, financial, valuation, estimation, determination and other rules and
principles specified in Schedule 1.01(r); (b) second, to the extent not
contemplated by the items referred to in (a), and solely as applied to
statements other than the December 31 Statement of Assets and Liabilities, the
methods used in the preparation of the December 31 Statement of Assets and
Liabilities; (c) third, to the extent not contemplated by the items referred to
in (a) and (b), the most recent past practices of Seller, FGWLA and CLAC with
respect to the Business used in preparing statutory financial statements, with

     

    
      
        
        

      

      
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    respect
to Seller, FGWLA, CLAC, and the Insurance Company Subsidiaries, and Seller’s
consolidated financial statements filed with the SEC, with respect to the
Non-Insurance Company Subsidiaries; and (d) fourth, to the extent not
contemplated by the items referred to in (a), (b) and (c), Applicable SAP, with
respect to Seller, FGWLA, CLAC, and the Insurance Company Subsidiaries, and
GAAP, with respect to the Non-Insurance Company Subsidiaries.

     

                                  
“Monthly
Administration Adjustment Factor” means, for January 2008, 1; and for
each month from February 1, 2008 through and including the last day of the
applicable Relevant Period, 1 plus (a) the sum of the average monthly
gross administration fees collected by the Group Health Business during the 12
month period ending on the last day of the last full month in which such fees
were collected (or, if such fees were not collected during the entire 12 month
period, such fees collected during the full month period during which such fees
were collected) from each group health plan which both (i) as of January 31,
2008, was serviced by the Group Health Business and (ii) as of the end of the
month in question, is serviced by Purchaser or any of its Affiliates divided by
(b) the aggregate gross administration fees collected by the Group Health
Business during such month.

     

    “Monthly Payments”
shall have the meaning set forth in Section 2.03(h).

     

    “Monthly Risk Adjustment
Factor” means, for January 2008, 1; and for each month from
February 1, 2008 through and including the last day of the applicable
Relevant Period, 1 plus (a) the sum of the average monthly net premium
written by the Group Health Business during the 12 month period ending on the
last day of the last full month in which the applicable Insurance Contract(s)
was in force (or, if the applicable Insurance Contract(s) was not in force for
the entire 12 month period, for such shorter full month period that such
contract(s) was in force) for each group health plan which both (i) as of
January 31, 2008, held an Insurance Contract issued by the Group Health Business
and (ii) as of the end of the month in question, holds a group health insurance
or stop loss contract issued by Purchaser or any of its Affiliates divided by
(b) the aggregate net premium written by the Group Health Business during
such month.

     

    “Multiemployer Plan”
shall have the meaning provided in Section 3(37) of ERISA.

     

    “Negative Condition”
shall have the meaning set forth in Section 6.05(e).

     

    “Network Licensing
Agreement” means a Network Licensing Agreement in the form of Exhibit
G.

     

    “Net Reinsurance
Premium” means, with respect to a Statement of Assets and Liabilities,
for any one of Seller, FGWLA or CLAC, the liabilities for such company shown in
such Statement of Assets and Liabilities minus the assets for such company shown
in such Statement of Assets and Liabilities.

     

    
      
        
        

      

      
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    “Net Worth Statement”
means a calculation of the pro forma net worth of the Seller Subsidiaries,
taking into account the Subsidiary Liabilities but not the Subsidiary
Indemnified Liabilities, in the form of the December 31 Net Worth Statement and
prepared in accordance with the Methodologies.

     

    “Neutral Auditor”
means a certified public accounting firm independent of all parties, which shall
be selected by the parties in good faith, or, if the parties are unable to agree
on such a firm, a senior partner in an independent certified public accounting
firm who shall be selected by the American Arbitration Association.

     

    “New Retention and Severance
Agreements” shall have the meaning set forth in Section
6.11(n).

     

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

     

    “Non-Acceptance Offer
Employee” shall have the meaning set forth in Section
6.11(e).

     

    “Non-Insurance Company
Subsidiaries” means those Subsidiaries of Seller set forth on Schedule
1.01(s).

     

    “Non-Renewal Date”
means (a) with respect to the Insurance Contracts and Related Administered
Contracts issued in a particular state of the United States or the District of
Columbia in which Purchaser is not fully authorized as of the Closing Date to
issue policies in substantially the form of the Insurance Contracts, the last
day of the sixth month following the date upon which Purchaser becomes fully
authorized to issue policies in substantially the form of the Insurance
Contracts, utilizing premium rates determined by Purchaser and approved by
applicable regulatory authorities, but no later than the date which is 18 months
following the Closing Date and (b) with respect to (i) Insurance Contracts and
Related Administered Contracts issued in a particular state of the United States
or the District of Columbia in which Purchaser is fully authorized as of the
Closing Date to issue policies in substantially the form of the Insurance
Contracts utilizing premium rates determined by Purchaser and approved by
applicable regulatory authorities and (ii) Unrelated Administered Contracts, six
months after the Closing Date.

     

    “Optional Business”
means the portion of the Business and the business of the Seller Subsidiaries
involving the issuance, underwriting, reinsurance, sales, marketing or
administration of any product or arrangement sold or marketed as “life
insurance” within the meaning of section 7702 of the Code, involving a death
benefit purportedly excluded from income from under section 101 of the Code,
constituting an annuity, endowment or life insurance contract the proceeds from
which are or purport to be subject to section 72 of the Code, or included in the
Supplemental Contracts (within the meaning of the Methodologies).

     

     

    
      
        
        

      

      
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    “Order” shall have the
meaning set forth in Section 4.12.

     

    “Organizational
Documents” shall have the meaning set forth in Section
4.01(c).

     

    “Other Assumed
Liabilities” means (a) all liabilities, obligations and commitments of
Seller, FGWLA and CLAC under the Assigned and Assumed Contracts and the
Administered Contracts other than the Excluded Liabilities, (i) relating to
periods prior to the Effective Date, up to the amounts specifically reflected on
the Final Statement of Assets and Liabilities, or (ii) relating to periods after
the Effective Date, (b) Seller, FGWLA and CLAC sales force incentive
compensation accrued through the Effective Date up to the amount specifically
reflected on the Final Statement of Assets and Liabilities, (c) amounts accrued
through the Effective Date under the broker incentive compensation plans of
Seller, FGWLA and CLAC up to the amounts specifically reflected on the Final
Statement of Assets and Liabilities and (d) all other liabilities and
obligations (other than Insurance Liabilities) reflected on the Final Statement
of Assets and Liabilities up to the respective amounts specifically so
reflected.

     

    “Other Party” has the
meaning set forth in Section 9.06(e).

     

    “Owned Generally Used
Software” shall have the meaning set forth in Section
4.19(b).

     

    “Owned Principally Used
Software” shall have the meaning set forth in Section
4.19(a).

     

    “Paid Purchase Price”
shall have the meaning set forth in Section 2.04(a)(i).

     

    “Parent” means
GWL&A Financial Inc.

     

    “Payment Date” shall
have the meaning set forth in Section 12.05.

     

    “Permit” means all
permits and insurance and other licenses, franchises, approvals, authorizations,
exemptions, classifications, certificates, registrations and similar
documents.

     

    “Permitted Liens”
means, as to any asset, (a) any Liens for Taxes by Governmental Entities that
(i) are not yet due or delinquent, (ii) are disclosed in Schedule 4.21 and are
being contested in good faith by appropriate proceedings or (iii) have been
accrued or otherwise reflected on the applicable financial statements (in
accordance with Applicable SAP or GAAP, as applicable), (b) Liens arising by
operation of law; (c) other Liens that do not in the aggregate materially
detract from the value or materially interfere with the present or reasonably
contemplated use of such asset in the Business; and (d) in the case of the
Material Business Contracts, the Liens set forth in such contracts.

     

    “Person” means any
individual, corporation, partnership, firm, joint venture, association, limited
liability company, limited liability partnership, joint-stock

     

    
      
        
        

      

      
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     company,
trust, unincorporated organization, Governmental Entity, business unit, division
or other entity.

     

    
                                      “Pharmacy Benefits Management
Revenue” means the revenue of Seller and its Affiliates from the
pharmacy management benefits operations of the Group Health Business, as
historically reported by Seller and its Affiliates in their financial
statements.

    

     

    “Post-Closing PP
Adjustment” shall have the meaning set forth in Section
2.04(a)(i).

     

    “PPR Review Period”
shall have the meaning set forth in Section 2.04(b)(i).

     

    “Primary Party” has
the meaning set forth in Section 9.06(e).

     

    “Producer” means any
agent, broker, producer, managing general agent, general agent or sales
representative of Seller, FGWLA, CLAC or any Seller Subsidiary involved in the
placement or marketing of the Insurance Contracts (excluding those individuals
employed by either Seller, FGWLA, CLAC or any Seller Subsidiary).

     

    “Producer Contracts”
means Contracts between Seller, FGWLA or CLAC and Producers regarding the
placement or marketing of Insurance Contracts.

     

    “Proposed Allocation”
shall have the meaning set forth in Section 12.07(e)(iv).

     

    “Proposed Calculation of PP
Reduction Amount” shall have the meaning set forth in Section
2.04(b)(i).

     

    “Proposed Net Worth
Statement” shall have the meaning set forth in Section
2.03(c).

     

    “Proposed Statement of Assets
and Liabilities” shall have the meaning set forth in Section
2.03(c).

     

    “Provider” means a
hospital, physician, clinical laboratory, ancillary provider, health care
practitioner, supplier, other Person, or combination of the foregoing, that
renders or provides health care services or supplies.

     

    “Purchase Price” means
One Billion Five Hundred Million dollars ($1,500,000,000) (for the avoidance of
doubt, without regard for any Adjustment Amount).

     

    “Purchase Price Reduction
Amount” shall have the meaning set forth in Section
2.04(a)(ii).

     

    “Purchased
Subsidiaries” means those Seller Subsidiaries set forth on Schedule
1.01(t).

     

     

    
      
        
        

      

      
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    “Purchaser” shall have
the meaning set forth in the introductory paragraph hereof.

     

    “Purchaser Extra Contractual
Obligations” means all liabilities for compensatory, consequential,
exemplary, punitive or other special or similar damages which relate to or arise
in connection with, and any settlement, defense or investigation costs incurred
in connection with, any alleged or actual act, error, omission or other event in
connection with the handling of any claims by Purchaser or any of its Affiliates
on or after the Closing Date, whether acting on behalf of Seller, FGWLA or CLAC
or any of their Affiliates pursuant to the Administrative Services Agreements or
otherwise, under any of the Insurance Contracts, Reinsured Contracts,
Administered Contracts or Assigned and Assumed Contracts in connection with the
marketing, issuance, delivery, cancellation or administration of any of any such
Contracts on or after the Closing Date; provided, however, that in no
event shall Purchaser Extra Contractual Obligations include Sellers Extra
Contractual Obligations.  Acts or omissions of the Business Employees
under the supervision of Purchaser or any of its Affiliates on or after the
Closing Date shall be attributed to Purchaser for the purposes of this
definition.

     

    “Purchaser Legal
Proceedings” shall have the meaning set forth in Section
9.06(a).

     

    “Purchaser
Liabilities” has the meaning set forth in Section 9.06(e).

     

    “Purchaser Material Adverse
Effect” means (a) an adverse effect on the business, properties, assets,
liabilities, operation, results of operations or financial condition of
Purchaser such that the likelihood that Contractholders and holders of
Administered Contracts will agree to renew Insurance Contracts and Administered
Contracts with Purchaser, as contemplated in Article III, will be materially
reduced, or (b) a material adverse effect on the ability of Purchaser to perform
its obligations under this Agreement or any Ancillary Agreement or to consummate
any of the transactions contemplated hereby or thereby; provided, however, to the
extent such effect results from any of the following, such effect shall not be
considered a Purchaser Material Adverse Effect:  (i) unless affecting
Purchaser in a substantially disproportionate manner as compared to similar
companies, (A) general economic or business conditions, including interest or
currency rates, or changes therein or any act of terrorism, similar calamity or
war, (B) changes in Law including insurance laws or regulations, and (C)
conditions generally affecting the health insurance industry, and (ii)
conditions or effects resulting from the announcement of the transaction
contemplated hereby.

     

    “Purchaser
Requirements” shall have the meaning set forth in Section
6.11(e).

     

    “Purchaser SAP
Statements” shall have the meaning set forth in Section
5.09.

     

    “Reinsured Contracts”
means the policies administered by Seller or FGWLA pursuant to the Assumed
Liabilities Services Agreements.

     

    
      
        
        

      

      
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    “Related Administered
Contract” shall have the meaning set forth in Section 3.01.

     

    “Relevant Period”
shall have the meaning set forth in Section 2.04(a)(i).

     

    “Replacement Retention
Agreement” shall have the meaning set forth in Section
6.11(m)(i).

     

    “Review Period” shall
have the meaning set forth in Section 2.03(c).

     

    “Risk Adjustment
Factor” means 1/6 of the sum of the Monthly Risk Adjustment Factors for
the applicable Relevant Period.

     

    “Risk Margin” means
(a) (i) net premium written in connection with the Group Health Business during
the applicable Relevant Period minus (ii) net claims incurred (including
incurred but not reported claims, but excluding prior period reserve
adjustments) in connection with the Group Health Business during the applicable
Relevant Period times (b) the Risk Adjustment Factor.  In determining
the components of Risk Margin, accounting methodologies applied by Seller and
its Affiliates in the preparation of the Unaudited Financial Statements shall be
used on a consistent basis.

     

    “SEC” means the United
States Securities and Exchange Commission.

     

    “Seller” shall have
the meaning set forth in the introductory paragraph hereof.

     

    “Seller Administrative
Services Agreement” means an Administrative Services Agreement in the
form of Exhibit
H.

     

    “Seller Confidentiality
Agreement” shall have the meaning set forth in Section 6.02.

     

    “Seller Indemnity Reinsurance
Agreement” means an Indemnity Reinsurance Agreement in the form of Exhibit
I.

     

    “Seller Insurance
Contracts” means (a) all of the Stop Loss Insurance Agreements written by
Seller in the United States reflected on Schedule 1.01(u), (b) all other
insurance contracts written by Seller in the United States reflected on Schedule
1.01(u), (c) contracts on the same forms as those insurance contracts or policy
forms reflected on Schedule 1.01(u) written by Seller between September 30, 2007
and the Closing Date, and (d) any such contracts that are issued by Seller on or
after the Closing Date in accordance with the terms of the Seller Administrative
Services Agreement (including, in each case of (a), (b) and (c), renewals
thereof and individual certificates issued thereunder and all supplements,
endorsements, enhancement letters, riders and ancillary agreements in connection
therewith, and including any individual policies issued by Seller upon the
exercise of conversion rights with respect to health coverages under any such
contracts).

     

     

    
      
        
        

      

      
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    “Seller Legal
Proceedings” shall have the meaning set forth in Section
9.06(a).

     

    “Seller Liabilities”
has the meaning set forth in Section 9.06(e).

     

    “Seller Subsidiaries”
means the Insurance Company Subsidiaries and the Non-Insurance Company
Subsidiaries.

     

    “Seller Subsidiary
Plans” means all “employee benefit plans” within the meaning ascribed to
such term by Section 3(3) of ERISA and all other employee benefit arrangements
or payroll practices, including, but not limited to each employment, termination
or severance agreement, deferred compensation plan, incentive compensation plan,
equity compensation plan, severance pay, sick leave, vacation pay, salary
continuation for disability, hospitalization, medical insurance, life insurance,
scholarship program, stock option or restricted stock plan sponsored or
maintained by Seller, FGWLA, the Seller Subsidiaries or any ERISA Affiliate that
provide benefits or compensation to or on behalf of Subsidiary Employees
(whether formal or informal, whether for the benefit of a single individual or
for more than one individual and whether for the benefit of current or former
employees or their beneficiaries).

     

    “Seller Title IV Plan”
means any Employee Plan that is subject to Title IV of ERISA or section 412 of
the Code, maintained by Seller, FGWLA, the Seller Subsidiaries or any ERISA
Affiliate or to which Seller, FGWLA, the Seller Subsidiaries or any ERISA
Affiliate contributed or is or may be obligated to contribute thereunder on
behalf of the Business Employees and/or Subsidiary Employees.

     

    “Sellers Extra Contractual
Obligations” means all liabilities for compensatory, consequential,
exemplary, punitive or other special or similar damages which relate to or arise
in connection with, and any settlement, defense or investigation costs incurred
in connection with, any alleged or actual act, error, omission or other event in
connection with the issuance, marketing or administration of any Insurance
Contract, Reinsured Contract, Administered Contract or Assigned and Assumed
Contract or the handling of any claims under any such Contract (a) prior to the
Closing Date, by Seller or any of its Affiliates, or (b) on or after the Closing
Date (i) by Seller (and not by Purchaser as Administrator under the
Administrative Services Agreements), other than as provided for in the prior
written consent or direction of, or explicit recommendation by, Purchaser as
Administrator under the Administrative Services Agreements or (ii) by Purchaser
as Administrator under the Administrative Services Agreement, if the act, error,
omission or other event giving rise to such liability was explicitly (1)
directed by Seller pursuant to the terms of the Administrative Services
Agreements and (2) objected to in advance in writing by Purchaser.

     

    “Sellers Material Adverse
Effect” means any material adverse effect (a) on the business, financial
condition or results of operations of the Acquired Operations taken as a whole,
or (b) on the ability of Seller, FGWLA, CLAC or any of their Affiliates to
perform its obligations under this Agreement or any Ancillary Agreement or to
consummate any of the transactions contemplated hereby or thereby; provided, however,

     

    
      
        
        

      

      
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    to the
extent such effect results from any of the following, such effect shall not be
considered a Sellers Material Adverse Effect:  (i) unless affecting
the Acquired Operations in a substantially disproportionate manner as compared
to similar businesses, (A) general economic or business conditions, including
interest or currency rates, or changes therein or any act of terrorism, similar
calamity or war, (B) changes in Law including insurance laws or regulations, and
(C) conditions generally affecting the health insurance industry, or (ii)
conditions or effects resulting from the announcement of this Agreement or the
transaction contemplated hereby.

     

    “Shared Action” has
the meaning set forth in Section 9.06(e).

     

    “Shares” means all of
the issued and outstanding shares of capital stock or other equity interests of
the Purchased Subsidiaries, other than such shares or interests indicated in
Schedule 4.02 as being owned by a party other than Seller.

     

    “Special Incentive and
Severance Agreements” means the Special Incentive and Severance
Agreements set forth on Schedule 1.01(v).

     

    “Statement of Assets and
Liabilities” means a statement of assets and liabilities of the Business
(excluding the Seller Subsidiaries) in the same format as the December 31
Statement of Assets and Liabilities prepared in accordance with the
Methodologies.

     

    “Statutory Reserves”
means statutory reserves of Seller, FGWLA and CLAC (without regard to the
transactions contemplated by the Indemnity Reinsurance Agreements) with respect
to the Insurance Liabilities, calculated in accordance with Applicable
SAP.

     

    “Stop Loss Insurance
Agreements” means insurance or reinsurance contracts issued by Seller,
FGWLA or CLAC to the Business’s self-funded clients that either (or both) (a)
fully insure all claims in excess of a designated aggregate threshold of total
expected annual claims of a client’s self-funded plan, or (b) fully insure
claims of an individual participant in a client’s self-funded plan in excess of
a designated annual individual deductible amount.

     

    “Sublease” shall have
the meaning set forth in Section 6.27(a).

     

    “Subleased Leases”
means the Leased Property Leases set forth in Schedule 4.18(a)(ii).

     

    “Subsidiary” means,
with respect to any Person on a given date, any other Person of which 50% or
more of the voting power or value of the equity securities or equity interests
is owned directly or indirectly by such Person.

     

    “Subsidiary Assumption
Agreement” means a Subsidiary Assumption Agreement between Seller and the
Seller Subsidiaries in the form of Exhibit
L.

     

     

    
      
        
        

      

      
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    “Subsidiary Contracts”
means all Contracts entered into by the Seller Subsidiaries, to the extent such
contracts remain in effect on the Closing Date, other than the Subsidiary
Insurance Contracts.

     

    “Subsidiary Employees”
means those individuals employed by the Seller Subsidiaries immediately prior to
the Closing Date.

     

    “Subsidiary Extra Contractual
Liabilities” means all liabilities for compensatory, consequential,
exemplary, punitive or other special or similar damages which relate to or arise
in connection with, and any settlement, defense or investigation costs incurred
in connection with, any alleged or actual act, error, omission or other event in
connection with the handling of any claims by Seller, FGWLA, CLAC, the Seller
Subsidiaries or any of their respective Affiliates under any of the Subsidiary
Insurance Contracts or in connection with the marketing, issuance, delivery,
cancellation or administration of any of the Subsidiary Insurance Contracts by
Seller, FGWLA, CLAC, the Seller Subsidiaries or any of their respective
Affiliates, in any case occurring prior to the Closing Date.

     

    “Subsidiary Indemnified
Liabilities” means all liabilities and obligations of any kind of the
Seller Subsidiaries (i) existing as of the Closing Date or (ii) arising out of
or relating to acts, omissions, facts or conditions occurring or existing prior
to the Closing Date, in each case other than the Subsidiary
Liabilities.

     

    “Subsidiary Insurance
Contracts” means (a) all of the Stop Loss Insurance Agreements written by
Insurance Company Subsidiaries in the United States reflected on Schedule
1.01(w), (b) all other insurance contracts written by Insurance Company
Subsidiaries in the United States reflected on Schedule 1.01(w), (c) contracts
on the same forms as those insurance contracts reflected on Schedule 1.01(w)
written by Insurance Company Subsidiaries between September 30, 2007 and the
Closing Date.

     

    “Subsidiary Insurance
Liabilities” means the liabilities and obligations of the Seller
Subsidiaries under the Subsidiary Insurance Contracts, other than judgments,
settlements, defense costs or other fees, costs and expenses arising out of,
under or relating to Existing Litigation and Subsidiary Extra Contractual
Liabilities, whether or not subject to reinsurance.

     

    “Subsidiary
Liabilities” means (a) the Subsidiary Insurance Liabilities, (b) the
liabilities of the Seller Subsidiaries arising under Subsidiary Contracts up to
the amounts specifically reflected on the Final Statement of Assets and
Liabilities, (c) the liabilities of the Seller Subsidiaries for judgments,
settlements, defense costs or other fees, costs and expenses arising out of,
under, or relating to any dispute relating to a Subsidiary Insurance Contract,
other than Subsidiary Extra Contractual Obligations or Existing Litigation, (d)
the Seller Subsidiaries’ sales force incentive compensation accrued through the
Effective Date up to the amounts specifically reflected on the Final Statement
of Assets and Liabilities, (e) amounts accrued through the Effective Date under
the broker incentive compensation plans of the Seller Subsidiaries up to the
amounts specifically reflected on the Final Statement of Assets and Liabilities
and (f) all other

     

    
      
        
        

      

      
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     liabilities
and obligations reflected on the Final Statement of Assets and Liabilities up to
the respective amounts so reflected.

     

    “Subsidiary Reinsurance
Agreements” means (a) the reinsurance and retrocession treaties and
agreements to which any of the Seller Subsidiaries is a ceding party that are in
force on the date hereof or entered into by any Seller Subsidiary other than in
violation of Section 6.01, between the date hereof and the Closing Date and (b)
any such treaty or agreement that is terminated or expired but under which the
Seller Subsidiaries may continue to receive reinsurance coverage.

     

    “Tangible Assets”
means all of the furniture, fixtures, equipment, supplies and other tangible
personal property owned by Seller or FGWLA listed on Schedule 1.01(x), to the
extent that Seller or FGWLA continues to own such assets on the Closing
Date.

     

    “Target Insurance Company
Subsidiaries Statutory Net Worth” means $150,200,000 in statutory capital
and surplus, determined in accordance with Applicable SAP.

     

    “Target Non-Insurance Company
Subsidiaries GAAP Equity” means $2,000,000 in GAAP tangible book
equity.

     

    “Tax” or “Taxes” means all
taxes, charges, fees, levies or other assessments, including, without
limitation, any income, net income, franchise tax or any tax based on income,
any alternative or add-on minimum taxes, any gross income, gross receipts,
estimated, retaliatory, commercial activity, margin, single business, business,
premium, sales, use, ad valorem, value added, transfer, profits, license,
payroll, employment, withholding, excise, severance, stamp, occupation,
property, environmental or windfall profit tax, assessments or similar charges
in connection with guaranty fund or risk pool participation, custom duty or
other tax, governmental fee or other like assessment including all interest,
penalties and additions imposed with respect thereto.

     

    “Tax Authority” means
the Internal Revenue Service and any other domestic or foreign Governmental
Entity responsible for the administration and/or collection of any
Tax.

     

    “Tax Contest” shall
have the meaning set forth in Section 4.21(e).

     

    “Tax Indemnifying
Party” shall have the meaning set forth in Section 12.02(b).

     

    “Tax Returns” means
all returns, reports, forms, estimates or information statements relating to or
required to be filed in connection with any Tax including any schedule or
attachment thereto and any amendment or supplement thereof.

     

    “Third Party Claim”
shall have the meaning set forth in Section 11.02(a).

     

    
      
        
        

      

      
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    “Transfer Documents”
means the Bill of Sale and General Assignment and such other documents and
instruments as Purchaser may reasonably request in order to transfer all of
Seller’s, FGWLA’s, CLAC’s and the Inactive HMOs’ respective right, title and
interest in the Transferred Assets to Purchaser.

     

    “Transfer Taxes” shall
have the meaning set forth in Section 2.01(b).

     

    “Transferred Assets”
means (i) all rights of Seller and FGWLA with respect to the Due and Uncollected
Premiums (including outstanding and to be billed), (ii) all receivables of the
Business as of the close of business prior to the Effective Date, (iii) all
rights of Seller and FGWLA with respect to broker commission advances and
advance claims payments as of the close of business prior to the Effective Date
and reflected on the Final Statement of Assets and Liabilities, (iv) such of the
Business Books and Records as are reasonably required by Purchaser to conduct
the Business on or after the Closing Date, (v) the Assigned and Assumed
Contracts, (vi) the Transferred Leases, (vii) the Tangible Assets, (viii) the
Intangible Assets, (ix) the Owned Principally Used Software, other than the
Excluded Software, (x) all accounts maintained and all fees received under the
Administered Contracts for services rendered thereunder on or after the
Effective Date, (xi) the bank accounts of Seller, FGWLA and CLAC utilized
exclusively in connection with the Business and set forth on Schedule 1.01(y)
and (xii) all other assets of Seller and FGWLA principally used in the Business,
in each case other than the Excluded Assets.

     

    “Transferred Employee”
shall have the meaning set forth in Section 6.11(e).

     

    “Transferred Leases”
means the Leased Property Leases set forth in Schedule 4.18(a)(i) under which
Seller is indicated as tenant.

     

    “Transition Services
Agreement” means a Transition Services Agreement in the form of Exhibit
M.

     

    “Treasury Regulations”
means the Treasury Regulations (including temporary regulations) promulgated by
the United States Treasury Department with respect to the Code or other federal
tax statutes.

     

    “Unaudited Financial
Statements” shall have the meaning set forth in Section
4.06(b).

     

    “United States” means
the United States of America.

     

    “Unrelated Administered
Contracts” shall have the meaning set forth in Section
3A.01.

     

    “WARN Act” means the
Worker Adjustment and Retraining Notification Act of 1988 or any similar
applicable state or local law requiring notice to employees in the event of a
closing or layoff.

     

    
      
        
        

      

      
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    “Welfare Benefits”
shall have the meaning set forth in Section 6.11(j)(i)(1).

     

    ARTICLE
II

     

    TRANSFER AND ACQUISITION OF
ASSETS

     

    Section
2.01     Consideration

     

    (a)         Upon
the terms and subject to the conditions of this Agreement, Purchaser shall pay
to Seller, FGWLA and CLAC on the Closing Date an aggregate amount equal to the
Purchase Price, adjusted by the Adjustment Amount, calculated in accordance with
the provisions of Sections 2.02 and 2.03.  For the avoidance of doubt,
if the Adjustment Amount with respect to the Final Net Worth Statement is
positive, the Purchase Price will be increased by such Adjustment Amount, but if
the Adjustment Amount with respect to the Final Net Worth Statement
is negative, the Purchase Price will be reduced by such Adjustment
Amount.  The Purchase Price shall be allocated among Seller, FGWLA and
CLAC in accordance with Schedule 2.01.

     

    (b)         All
excise, sales, use, transaction, conveyance, stock transfer, value added,
transfer (including real property transfer or gains), stamp, documentary,
filing, recordation and other similar Taxes, levies or assessments (“Transfer Taxes”)
resulting from the transactions contemplated by this Agreement shall be borne
one half by Seller and one half by Purchaser.  For the avoidance of
doubt, any and all Transfer Taxes or any other Taxes resulting from any
restructuring or other transactions undertaken by Seller, FGWLA, CLAC of the
Seller Subsidiaries prior to the Closing shall be borne by Seller.

     

    (c)         Each
party shall be entitled to deduct and withhold income or franchise Taxes imposed
as a result of the sale of the Seller Subsidiaries or the Transferred Assets
from any payment otherwise payable or deliverable pursuant to this Agreement
with respect to such transactions as such party is required by applicable Tax
Law to deduct and withhold with respect to such payment; provided, such
withholding party shall first notify the other party of such requirement no
later than 15 days prior to the Closing Date and; provided, further, however, that no
amounts shall be so withheld pursuant to this Section 2.01(c) to the extent (i)
the withholding party is notified in writing by the other party to not withhold
such amounts from such payment and (ii) such other party agrees to indemnify the
withholding party against claims made by a Tax Authority with respect to the
collection of such Taxes that were not withheld.  To the extent that
amounts are so deducted and withheld by any party such deductions and
withholdings shall be treated for all purposes of this Agreement as having been
paid by such party in respect of which such deduction and withholding was
made.

     

    Section
2.02     Acquisition of Transferred
Assets and Shares; Assumption of Assumed Liabilities

     

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    (a)         Upon
the terms and subject to the conditions of this Agreement and the payment of the
Purchase Price, on the Closing Date, Seller, FGWLA and CLAC, as applicable,
shall sell, assign and transfer to Purchaser all of their right, title and
interest in the Transferred Assets.  All sales, assignments and
transfers of the Transferred Assets shall be effected by the Transfer
Documents.  Subject to the restrictions set forth in Section 6.19,
Seller, FGWLA and CLAC shall be entitled to keep and maintain copies of all
Books and Records and other items from and after the Closing, and to have access
to the originals of the Books and Records in accordance with Sections 9.01 and
12.06.

     

    (b)         Upon
the terms and subject to the conditions of this Agreement, on the Closing Date,
Seller, FGWLA and CLAC shall cede to Purchaser their respective Insurance
Liabilities, and Purchaser shall assume 100% of the Insurance Liabilities
pursuant to the Indemnity Reinsurance Agreements, as applicable, in exchange for
payment to Purchaser of the applicable Net Reinsurance Premium by each of
Seller, FGWLA and CLAC.

     

    (c)         Upon
the terms and subject to the conditions of this Agreement, on the Closing Date,
Seller, FGWLA and CLAC shall assign to Purchaser and Purchaser shall assume the
Other Assumed Liabilities, and the Seller shall assume the Subsidiary
Indemnified Liabilities pursuant to the Subsidiary Assumption
Agreement.

     

    (d)         Upon
the terms and subject to the conditions of this Agreement, on the Closing Date,
Seller shall sell, assign and transfer the Shares to Purchaser.

     

    (e)         Upon
the terms and subject to the conditions of this Agreement, on the Closing Date,
Seller shall sublease the Leased Property subject to the Subleased Leases to
Purchaser pursuant to the Subleases.

     

    Section
2.03     Payments at and After
Closing.

     

    (a)         Not
later than the third Business Day prior to the Closing Date, Seller shall
deliver to Purchaser drafts of the Closing Statement of Assets and Liabilities
and of the Closing Net Worth Statement, together with a certificate of the Chief
Financial Officer of Seller certifying that such statements were prepared in
accordance with the terms of this Agreement.  Seller, FGWLA and CLAC
shall consult in good faith with Purchaser regarding the drafts so delivered,
and shall make any changes thereto agreed with Purchaser.

     

    (b)         On
the Closing Date, the Purchase Price will be adjusted by the Adjustment Amount,
and the Net Reinsurance Premiums will be calculated, as reflected in the Closing
Statement of Assets and Liabilities and the Closing Net Worth Statement, in the
manner described in Section 2.01(a).  Such amounts shall be
transferred between Purchaser and Seller, FGWLA and CLAC, as appropriate, by
wire transfer of immediately available funds in U.S. Dollars.

     

     

    
      
        
        

      

      
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    (c)         Within
90 days after the Closing Date, Seller shall prepare and deliver to Purchaser a
Statement of Assets and Liabilities as of the close of business on the day
preceding the Effective Date (the “Proposed Statement of Assets
and Liabilities”) and a Net Worth Statement as of the close of business
on the Business Day preceding the Effective Date (the “Proposed Net Worth
Statement”).  Seller shall deliver or make available to
Purchaser and its Affiliates upon request copies of all work papers used as the
basis for determining the Proposed Statement of Assets and Liabilities and
Proposed Net Worth Statement.  Purchaser shall have reasonable rights
to monitor and participate with Seller in Seller’s preparation of the Proposed
Statement of Assets and Liabilities, it nevertheless being understood that
Seller shall have the final authority in such preparation.  Purchaser
and its representatives shall have until the date that is 90 days after the
delivery of the Proposed Statement of Assets and Liabilities and the Proposed
Net Worth Statement (the “Review Period”) to
review the Proposed Statement of Assets and Liabilities and Proposed Net Worth
Statement and all supporting determining papers and documentation and to suggest
changes, if any, therein.

     

    If Seller
and Purchaser are able to agree in writing on the manner in which all items on
the Proposed Statement of Assets and Liabilities and Proposed Net Worth
Statement should be treated then the resulting statements shall be binding on
the parties and the Proposed Statement of Assets and Liabilities shall be
referred to as the “Final Statement of Assets
and Liabilities,” and the Proposed Net Worth Statement shall be referred
to as the “Final Net
Worth Statement.”  If Seller and Purchaser are unable, within
30 days from the last day of the Review Period, to agree on the manner in which
any item or items should be treated in the preparation of the Final Statement of
Assets and Liabilities and Final Net Worth Statement, then all items remaining
in dispute shall be submitted to the Neutral Auditor; provided, however, that
Purchaser shall have the right to dispute the determination of any such item or
items only on the basis of, and to the extent it claims that, in determining
such item (i) was not determined in accordance with the Methodologies or (ii)
there were mathematical errors in the calculation of such item.  The
Neutral Auditor shall determine the resolution, based on the criteria referred
to in the immediately preceding sentence, of those issues (and only those
issues) still in dispute and shall have no jurisdiction to award any other
relief. The parties shall notify the Neutral Auditor (if previously designated)
of any items remaining in dispute within 45 days from the last day of the Review
Period, or if the Neutral Auditor was not previously designated or is unable to
serve, promptly request the American Arbitration Association to appoint a
Neutral Auditor.  The parties shall provide to the Neutral Auditor
written summaries of all items in dispute prepared by Purchaser, on the one
hand, and Seller, on the other hand within the later of (i) 60 days from the
last day of the Review Period or (ii) five days from the appointment of the
Neutral Auditor.  The Neutral Auditor’s determination shall be made as
soon as possible, if practicable within 30 days after receipt of the written
summaries and shall be set forth in a written statement delivered to Seller and
Purchaser and shall be final, binding and conclusive; provided, however, that the
dollar amount of each item in dispute shall be determined between the range of
dollar amounts proposed by Seller and Purchaser.  The Proposed
Statement of Assets and Liabilities and Proposed Net Worth Statement, adjusted
to give effect to such determination and any other agreement of the parties,
shall in that case be referred to as the Final Statement of Assets and
Liabilities and Final Net Worth Statement.  Each party 

     

    
      
        
        

      

      
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    agrees to
execute, if requested by the Neutral Auditor, a reasonable engagement
letter.  One-half of the fees and expenses relating to the work, if
any, to be performed by the Neutral Auditor shall be borne by Seller and
one-half of such fees and expenses shall be borne by Purchaser.  The
decision of the Neutral Auditor may be entered and enforced in any court having
jurisdiction.

     

    (d)         Within
five Business Days after the Final Statement of Assets and Liabilities and the
Final Net Worth Statement have been determined:

     

    (i)                 if
the Adjustment Amount, minus the sum of the Net Reinsurance Premiums, with
respect to the Final Statement of Assets and Liabilities and the Final Net Worth
Statement as determined in the manner described in Section 2.01(a) exceeds the
Adjustment Amount, minus the sum of the Net Reinsurance Premiums, with respect
to the Closing Statement of Assets and Liabilities and the Closing Net Worth
Statement, Purchaser shall pay to Seller, FGWLA and CLAC cash in an aggregate
amount equal to such excess, together with interest thereon from and including
the Closing Date to but not including the date of such transfer computed at an
annual rate equal to the 90-Day Treasury Rate in effect on the Closing Date;
or

     

    (ii)                 if
the Adjustment Amount, minus the sum of the Net Reinsurance Premiums, with
respect to the Closing Statement of Assets and Liabilities and the Closing Net
Worth Statement exceeds the Adjustment Amount, minus the sum of the Net
Reinsurance Premiums, with respect to the Final Statement of Assets and
Liabilities and the Final Net Worth Statement as determined in the manner
described in Section 2.01(a), Seller, FGWLA and CLAC shall pay to Purchaser cash
in an aggregate amount equal to such excess, together with interest thereon from
and including the Closing Date to but not including the date of such transfer
computed at the annual rate specified above.

     

    (e)         Purchaser
and the Seller Subsidiaries shall use commercially reasonable efforts to collect
in the ordinary course of business the Admitted Receivables for the first 18
months after the Closing Date.  On the first Business Day that is 18
months after the Closing Date, Purchaser and the Seller Subsidiaries shall
assign all Admitted Receivables not then collected in full to
Seller.  Seller shall pay to Purchaser the aggregate amount reflected
in the Final Statement of Assets and Liabilities and the Final Net Worth
Statement in respect of the Admitted Receivables minus the amount collected with
respect thereto on or prior to such date.

     

    (f)         If,
following the determination of the Final Net Worth Statement but prior to 9
months following the Closing Date, Purchaser shall determine that one or more
Insurance Contracts that were ceded to Purchaser pursuant to the Indemnity
Reinsurance Agreements, or one or more Subsidiary Insurance Contracts, were
erroneously not considered by Seller, Purchaser and, if applicable, the Neutral
Auditor in the determination of the Final Statement of Assets and Liabilities or
the Final Net Worth Statement, Purchaser may deliver to Seller a written notice
explaining Purchaser’s determination of such error and Purchaser’s proposal for
an adjustment that should be 

     

    
      
        
        

      

      
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    made to
the Purchase Price, the Net Reinsurance Premium and/or the Adjustment Amount on
account of such determination.  Purchaser shall make available to
Seller the Books and Records and workpapers used in Purchaser’s calculation and
such other information as Seller shall reasonably request in considering such
notice.  Seller and Purchaser shall cooperate in good faith in
determining the appropriate adjustment that should be made.  If Seller
and Purchaser are unable, within 90 days following the date of Purchaser’s
notice, to resolve any dispute as to the appropriate adjustment, such dispute
shall be referred to the Neutral Auditor (or to the American Arbitration
Association for the appointment of a Neutral Auditor if necessary), and the
Neutral Auditor which shall determine the appropriate resolution of such dispute
in accordance with the criteria of this Section 2.03(f) within 30 days from the
date of the retention of the Neutral Auditor for this purpose.  The
procedures for the retention of the Neutral Auditor, its decision and the
enforcement thereof set forth in Section 2.03(d) shall apply under this Section
2.03(f) to the extent applicable.

     

    (g)         Cash
transferred pursuant to clause (i) or (ii) of Section 2.03(d), Section 2.03(e)
and Section 2.03(f) shall be by wire transfer of immediately available funds to
one or more accounts specified in writing by the party receiving such
funds.

     

    (h)         As
additional consideration for the Transferred Assets and the Shares, at the time
of each of Purchaser’s first 4 monthly payments of fees to Seller under the
Transition Services Agreement (the “Monthly Payments”),
Purchaser shall pay to Seller $4,000,000 minus the portion of such Monthly
Payment due on account of “Corporate Services” as defined in the Transition
Services Agreement (unless such portion exceeds $4,000,000).  Such
payment shall be made in the manner specified in the Transition Services
Agreement for the Monthly Payments.

     

    Section
2.04     Additional Adjustment of
Purchase Price

     

                                                    (a)         Post-Closing PP
Adjustment.

     

    (i)                 As
set forth in this Section 2.04, the Purchase Price as finally determined in
accordance with Section 2.03 (the “Paid Purchase Price”)
shall be subject to reduction following the Closing (the “Post-Closing PP
Adjustment”) based on certain results of the Business, as described
below, (A) for the six month period of January 1, 2008 through June 30, 2008, if
the Closing occurs prior to August 1, 2008 and (B) for the six month period of
April 1, 2008 through September 30, 2008, if the Closing occurs on or after
August 1, 2008 (in each case of (A) or (B), the “Relevant Period”);
provided, however, that in no
event shall the Paid Purchase Price be reduced by more than $200,000,000 (the
“Cap”) as a
result of the Post-Closing PP Adjustment.

     

    (ii)                 The
Post-Closing PP Adjustment will be determined by comparing the sum of the Risk
Margin and the Administration Margin, in each case for the Relevant Period (such
sum, the “Actual
Results”), to the Benchmark.  “Annualized
Difference” means (A) the greater of (1) zero and (2) (I) 92.5% of

     

    
      
        
        

      

      
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    the
Benchmark minus (II) the Actual Results divided by (B) (1) 0.4453, if the
Closing occurs prior to August 1, 2008, and (2) 0.4946, if the Closing occurs on
or after August 1, 2008.  “Purchase Price Reduction
Amount” means the lesser of (A) the Cap and (B) 7 times the Annualized
Difference.  Examples of this calculation are set forth in Exhibit
P.

     

    (b)         Calculation of Purchase
Price Reduction
Amount.

     

    (i)                 Within
90 days after the end of the Relevant Period, Purchaser shall prepare and
deliver to Seller a calculation of the Purchase Price Reduction Amount (the
“Proposed Calculation
of PP Reduction Amount”).  Purchaser shall deliver or make
available to Seller and its Affiliates upon request copies of all material work
papers used as the basis for calculating the Proposed Calculation of PP
Reduction Amount.  Seller shall have reasonable rights to monitor the
preparation of the Proposed Calculation of PP Reduction Amount by
Purchaser.  Seller and its representatives shall have until the date
that is 45 days after the delivery of the Proposed Calculation of PP Reduction
Amount (the “PPR
Review Period”) to review the Proposed Calculation of PP Reduction Amount
and all supporting determining papers and documentation and to suggest changes,
if any, therein.

     

    (ii)                 If
Seller and Purchaser are able to agree in writing on the manner in which all
items on the Proposed Calculation of PP Reduction Amount should be treated then
the resulting statements shall be binding on the parties and the Proposed
Calculation of PP Reduction Amount shall be referred to as the “Final Calculation of PP
Reduction Amount.”  If Seller and Purchaser are unable, within
30 days from the last day of the PPR Review Period, to agree on the manner in
which any item or items should be treated in the calculation of the Final
Calculation of PP Reduction Amount, then all items remaining in dispute shall be
submitted to the Neutral Auditor; provided, however, that Seller
shall have the right to dispute the determination of any such item or items only
on the basis of, and to the extent it claims that, in determining such item (A)
was not determined in accordance with the methodologies set forth in this
Section 2.04 or (B) there were mathematical errors in the calculation of such
item.  The Neutral Auditor shall determine the resolution, based on
the criteria referred to in the immediately preceding sentence, of those issues
(and only those issues) still in dispute and shall have no jurisdiction to award
any other relief. The parties shall notify the Neutral Auditor (if previously
designated) of any items remaining in dispute within 45 days from the last day
of the PPR Review Period, or if the Neutral Auditor was not previously
designated or is unable to serve, promptly request the American Arbitration
Association to appoint a Neutral Auditor.  The parties shall provide
to the Neutral Auditor written summaries of all items in dispute prepared by
Purchaser, on the one hand, and Seller, on the other hand within the later of
(A) 60 days from the last day of the PPR Review Period and (B) five days from
the appointment of the Neutral Auditor.  The Neutral Auditor’s
determination shall be made as soon as possible, if practicable within 30 days
after receipt of the written summaries and shall be set forth in a written
statement 

     

    
      
        
        

      

      
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    delivered
to Seller and Purchaser and shall be final, binding and conclusive; provided, however, that the
dollar amount of each item in dispute shall be determined between the range of
dollar amounts proposed by Seller and Purchaser.  The Proposed
Calculation of PP Reduction Amount, adjusted to give effect to such
determination and any other agreement of the parties, shall in that case be
referred to as the Final Calculation of PP Reduction Amount.  Each
party agrees to execute, if requested by the Neutral Auditor, a reasonable
engagement letter.  One-half of the fees and expenses relating to the
work, if any, to be performed by the Neutral Auditor shall be borne by Seller
and one-half of such fees and expenses shall be borne by
Purchaser.  The decision of the Neutral Auditor may be entered and
enforced in any court having jurisdiction.

     

    (iii)                 Within
five Business Days after the Final Calculation of PP Reduction Amount has been
determined, Seller shall pay to Purchaser cash in an amount equal to the
Purchase Price Reduction Amount as reflected in the Final Calculation of PP
Reduction Amount.  Cash transferred pursuant to this clause (iii)
shall be by wire transfer of immediately available funds to an account specified
in writing by Purchaser.

     

    Section
2.05     Place and Date of Closing. 
The Closing shall take place at the offices of Dewey &
LeBoeuf LLP, 125 West 55th Street, New York, New York, at 10:00 a.m. New York
time on the Closing Date or at such other time or place as the parties may
mutually agree.

     

    Section
2.06     Transactions to be Effected
at the Closing

     

    .                                              (a)         At
the Closing, Seller, FGWLA and CLAC, as applicable, shall execute and deliver to
Purchaser, and shall cause their Affiliates (including the Inactive HMOs) to
execute and deliver to Purchaser, as applicable: (i) the Seller Indemnity
Reinsurance Agreement; (ii) the FGWLA Indemnity Reinsurance Agreement; (iii) the
CLAC Indemnity Reinsurance Agreement; (iv) the Seller Administrative Services
Agreement; (v) the FGWLA Administrative Services Agreement; (vi) the CLAC
Administrative Services Agreement; (vii) the Transition Services Agreement;
(viii) the Assumption Agreement; (ix) the Network Licensing Agreement; (x) the
Transfer Documents; (xi) the Headquarters Leases; (xii) the Subleases, (xiii)
certificates representing the Shares, duly endorsed in blank or accompanied by
duly executed instruments of transfer reasonably acceptable to Purchaser; (xiv)
the Subsidiary Assumption Agreement and (xv) such other agreements, instruments
and documents as are required by this Agreement to be delivered by Seller,
FGWLA, CLAC or their Affiliates at the Closing.

     

    (b)         At
the Closing, Purchaser shall execute and deliver to Seller, FGWLA and CLAC, as
applicable:  (i) the Seller Indemnity Reinsurance Agreement; (ii) the
FGWLA Indemnity Reinsurance Agreement; (iii) the CLAC Indemnity Reinsurance
Agreement; (iv) the Seller Administrative Services Agreement; (v) the FGWLA
Administrative Services Agreement; (vi) the CLAC Administrative Services
Agreement; (vii) the Transition Services Agreement; (viii) the Assumption
Agreement; (ix) the 

     

    
      
        
        

      

      
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    Network
Licensing Agreement; (x) the Transfer Documents; (xi) the Headquarters Leases;
(xii) the Subleases; and (xiii) such other agreements, instruments and documents
as are required by this Agreement to be delivered by Purchaser at the
Closing.

     

    Section
2.07     Nonassignability of Assets. 
Notwithstanding anything to the contrary contained in this
Agreement, to the extent that the assignment or transfer or attempted assignment
or transfer to Purchaser of any Transferred Asset or any benefit arising
thereunder or resulting therefrom would require any third party consents or
waivers and such consents or waivers shall not have been obtained prior to the
Closing, neither this Agreement nor any Ancillary Agreement shall constitute an
assignment or transfer, or any attempted assignment or transfer
thereof.  Following the Closing, for a period of 18 months (the “Consent Period”), the
parties shall continue to use their reasonable best efforts, and shall cooperate
fully with each other, to obtain promptly such consents or
waivers.  Pending receipt of such consent or waiver, the parties shall
cooperate with each other to effect mutually agreeable, reasonable and lawful
arrangements pursuant to the Transition Services Agreement or otherwise designed
to provide to Purchaser the benefits of any such Transferred
Asset.  Once consent or waiver for the assignment or transfer of any
such Transferred Asset not assigned or transferred at the Closing is obtained,
Seller, FGWLA or CLAC, as applicable, shall assign or transfer such Transferred
Asset to Purchaser at no additional cost.  In the event that Seller or
its Affiliate are unable to provide as a transition service the benefits of such
Transferred Asset, or any such Transferred Asset is still not transferred by the
end of the Consent Period, Seller shall reimburse Purchaser for an amount equal
to Purchaser’s incremental costs of replacing such Transferred Asset with a
substantially equivalent asset for the same remaining contractual time as such
Transferred Asset; such incremental costs are equal to the difference between
the cost of the Transferred Asset and the cost of its
replacement.  Notwithstanding the foregoing sentence, to the extent
that Seller is unable to obtain any such required consent with respect to one or
more of the Leased Properties prior to the end of the Consent Period, pursuant
to the Transition Services Agreement, Seller shall continue to lease the
affected Leased Properties for the benefit of Purchaser until such consent is
obtained and delivered to Purchaser, or the expiration or termination of the
affected Leased Property Lease, whichever is earlier.  In the event
that, after the Closing, the attempted assignment of any agreement listed in
Schedule 1.1(d) proves to be ineffective but the closing contemplated herein for
the sale of Shares to which such agreement relates has occurred, Seller shall
take such actions in connection with such agreement for the benefit of Purchaser
as Purchaser shall direct, to the extent it is reasonable to do so, and
Purchaser shall reimburse Seller and its Affiliates for any Losses in connection
with such agreement or such actions.  For the avoidance of doubt, this
Section 2.07 shall not limit the rights of Purchaser under Section 7.05 or of
Seller, FGWLA or CLAC under Section 8.05.

     

    Section
2.08     Delayed Approvals. 
In the event that the Closing has not occurred by December 31,
2008 due to the lack of the receipt of one or more of (i) required approvals
from the California Department of Managed Care for the acquisition of control of
Great-West Healthcare of California, Inc. by Purchaser, (ii) required approvals
from the New York Insurance Department to close the transactions contemplated by
this Agreement with regards to the Business of FGWLA, and (iii) 

     

    
      
        
        

      

      
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    required
approvals from the Canadian Office of the Superintendent of Financial
Institutions to close the transactions contemplated by this Agreement with
regards to the Business of CLAC (such approvals which have not been obtained,
the “Delayed
Approvals”), the parties shall negotiate in good faith the possibility of
consummating some of the transactions contemplated hereby without, or prior to,
closing the transactions subject to the Delayed Approvals.

     

    ARTICLE
III

     

    RENEWAL
RIGHTS

     

    Section
3.01     Cessation of Renewals. 
From and after the Non-Renewal Date with respect to each
Insurance Contract and Administered Contract written in conjunction with an
Insurance Contract (each, a “Related Administered
Contract”) or such earlier date as requested in writing by Purchaser,
Seller, FGWLA and CLAC shall cease renewing the Insurance Contracts and Related
Administered Contracts, except (i) with respect to Guaranteed Renewal Contracts
that are not terminated by or with the consent of the Contractholders or
otherwise terminated in accordance with their terms, (ii) to the extent required
by applicable Law or (iii) to honor binding quotes outstanding on such
date.

     

    Section
3.02     Renewal
Rights.

     

    (a)         Seller,
FGWLA and CLAC shall provide to Purchaser on the Closing Date a true, complete
and correct list of clients which have Insurance Contracts and Related
Administered Contracts that are either in-force on the Closing Date or lapsed as
of the Closing Date but subject to reinstatement.

     

    (b)         In
connection with the first policy anniversary or other renewal date of each
Insurance Contract and the applicable Related Administered Contract on or after
the Non-Renewal Date applicable to such Insurance Contract and Related
Administered Contract with respect to which no renewal rate quote is outstanding
on such date (or, with respect to such Insurance Contracts and Related
Administered Contracts as remain in effect with Seller, FGWLA and CLAC
subsequent to such Non-Renewal Date based on renewal rate quotes so outstanding,
in connection with the next such policy anniversary or other renewal date),
Purchaser shall send, on behalf of Seller, FGWLA and CLAC, as appropriate, (i)
to each applicable Contractholder who does not have a Guaranteed Renewal
Contract a written notice in a form reasonably acceptable to Seller, notifying
such Contractholder of the termination of such Insurance Contract and Related
Administered Contract by Seller, FGWLA or CLAC, as applicable, and encouraging
such Contractholder to obtain replacement insurance and services with Purchaser
and (ii) to each applicable Contractholder who has a Guaranteed Renewal Contract
a written notice substantially in a form reasonably acceptable to Seller,
encouraging such Contractholder to replace its Guaranteed Renewal Contract and
Related Administered Contract with a new insurance policy and services agreement
issued by Purchaser.

     

     

    
      
        
        

      

      
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    (c)         Purchaser
shall, in connection with the first policy anniversary date or other renewal
date on or after the Non-Renewal Date applicable to each Insurance Contract and
the applicable Related Administered Contract with respect to which no renewal
rate quote is outstanding on such date (or, with respect to such Insurance
Contracts and Related Administered Contracts continued to be written by Seller,
FGWLA and CLAC subsequent to such Non-Renewal Date for the reasons set forth in
Section 3.01, in connection with the next such policy anniversary), offer to
issue a replacement policy and a new services agreement on Purchaser’s forms and
at Purchaser’s rates and subject to Purchaser’s underwriting criteria, and
Purchaser shall make a good faith effort to place the same in
effect.  In connection with such replacements, Purchaser shall honor
outstanding rate guarantees that are binding on Seller, FGWLA and
CLAC.

     

    (d)         From
and after the applicable Non-Renewal Date, in connection with any Insurance
Contract and applicable Related Administered Contract with respect to which
renewal rate quotes or quotes for new business are outstanding on the applicable
Non-Renewal Date, Purchaser and Seller, Purchaser and FGWLA or Purchaser and
CLAC, as applicable, shall each use its commercially reasonable efforts to
actively encourage Contractholders and prospective Contractholders to accept
Purchaser in substitution for Seller, FGWLA and CLAC as the issuing carrier and
service provider.  In the event that a Contractholder or prospective
Contractholder should decline to so accept Purchaser and accepts a continuation
of its policy and service agreement issued by Seller, FGWLA or CLAC or a new
policy and service agreement issued by Seller, FGWLA or CLAC, such policy and
service agreement shall nevertheless be subject to the provisions of Section
3.02(b); for the avoidance of doubt, the provisions of Section 3.02(b) shall be
applicable to such policy and service agreement on the first anniversary after
the date of issuance of such policy and service agreement by Seller, FGWLA or
CLAC.

     

    (e)         From
and after the Closing, upon the exercise of conversion rights with respect to
health coverages under any Insurance Contract, Purchaser and Seller, Purchaser
and FGWLA or Purchaser and CLAC, as applicable, shall each use its commercially
reasonable efforts to actively encourage individuals exercising such rights to
accept Purchaser in substitution for Seller, FGWLA and CLAC as the issuing
carrier.  For the avoidance of doubt, in the event that an individual
should decline to so accept Purchaser the individual conversion policy issued by
Seller, FGWLA or CLAC, as applicable, shall constitute an Insurance Contract
hereunder and the provisions of Section 3.02(b) shall be applicable to such
individual conversion policy on the first anniversary date of issuance of the
individual conversion policy.

     

    (f)         For
Guaranteed Renewal Contracts or when otherwise required by law, the policy
issued by Purchaser that replaces such Insurance Contract shall not, unless
otherwise agreed by the applicable Contractholder, exclude from coverage any
pre-existing condition occurring after the effective date of the Insurance
Contract it replaced; provided, that such pre-existing condition did not
preclude coverage under any such existing Insurance Contract.

     

    
      
        
        

      

      
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    (g)         Notwithstanding
anything in this Agreement to the contrary, in no event shall Seller, FGWLA or
CLAC be obligated under this Agreement to renew any Insurance Contract and
applicable Related Administered Contract subsequent to the policy anniversary
date of such Insurance Contract or Related Administered Contract following the
applicable Non-Renewal Date or to send any notices to Contractholders or
otherwise attempt to encourage Contractholders to obtain coverage or services
with Purchaser after the second policy anniversary date after the applicable
Non-Renewal Date.  Notwithstanding the foregoing, Seller, FGWLA and
CLAC shall continue to renew the Guaranteed Renewal Contracts for as long as is
required pursuant to the terms of such contracts or applicable Law.

     

    (h)         From
and after the Closing Date, in connection with the renewal of the Insurance
Contracts and Related Administered Contracts by Purchaser, Seller, FGWLA and
CLAC shall:

     

    (i)                 not
object to the cancellation, on a pro rata basis, subject to the consent of the
insured, the Contractholder and/or agent thereof, of any existing Insurance
Contract which Purchaser desires to write;

     

    (ii)                 subject
to the Administrative Services Agreements, for two years after the applicable
Non-Renewal Date, refrain from filing any withdrawal plans or notices with any
insurance regulatory authorities in any state relating to withdrawal from any
lines, kinds or classes of insurance business relating to the Insurance
Contracts, except as set forth in Schedule 4.05(a)(ii), as required by a change
in applicable Law following the date hereof or as requested by a Governmental
Entity;

     

    (iii)                 subject
to the Administrative Services Agreements, for two years after the applicable
Non-Renewal Date, refrain from sending out notices of any kind, including
notices under HIPAA, to the Contractholders or holders of Administered Contracts
relating to withdrawal from any lines, kinds or classes of insurance business,
except as set forth in Schedule 4.05(a)(ii), as required by a change in
applicable Law following the date hereof or as requested by a Governmental
Entity;

     

    (iv)                 (1)
consult with Purchaser regarding any withdrawal plan or similar filing with a
Governmental Entity that Seller, FGWLA or CLAC may wish to file as permitted by
the foregoing clauses, and (2) make any such filing in a form reasonably
satisfactory to Purchaser, and at a time and in a manner designed to minimize,
to the extent practicable, any disruption to the conduct of the Business by
Purchaser, including the renewal of the Insurance Contracts and Related
Administered Contracts; and

     

    (v)                 cooperate
with Purchaser in identifying and making available to Purchaser the form filing
files and related regulatory approvals of Seller, FGWLA and CLAC with respect to
the Business and assist Purchaser in all 

     

    
      
        
        

      

      
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    reasonable
respects in making “me-too” or similar filings of policy forms of the types
included in the Business.

     

    (i)         Seller,
FGWLA and CLAC agree that the intent of this Article III is to convey to
Purchaser on an exclusive basis all of Seller’s, FGWLA’s and CLAC’s rights,
title and interest in the rights to renew the Insurance Contracts and the
Related Administered Contracts.  Seller, FGWLA and CLAC shall not
retain any such renewal rights and shall not sell, assign, transfer or
facilitate the transfer of such rights to any third party other than
Purchaser.

     

    
      ARTICLE
IIIA

UNRELATED ADMINISTERED
CONTRACTS

     

    Section
3A.01     Cessation of Renewals. 
From and after the Non-Renewal Date, Seller shall cease renewing
the Administered Contracts that were issued by Seller not in conjunction with an
Insurance Contract (the “Unrelated Administered
Contracts”), except to honor renewal fee quotes outstanding on such date,
if applicable.

     

                                  
Section 3A.02      Renewal Rights. 
Purchaser shall, in connection with the first contract
anniversary date of each Unrelated Administered Contract selected by Purchaser
in its discretion on or after the Non-Renewal Date with respect to which no
renewal fee quote is outstanding on such date, if applicable (or, with respect
to such Unrelated Administered Contracts renewed by Seller subsequent to the
Non-Renewal Date based on renewal fee quotes outstanding on such date, in
connection with the next such contract anniversary), offer to issue a
replacement contract under terms determined by Purchaser and make a good faith
effort to place the same in effect.  In connection with such
replacements, at Purchaser’s request, Seller shall reasonably cooperate with
Purchaser in Purchaser’s efforts to replace such contracts.

     

    ARTICLE
IV

     

    REPRESENTATIONS AND
WARRANTIES OF SELLER, FGWLA AND CLAC

     

    Seller,
FGWLA and CLAC hereby represent and warrant to Purchaser as follows (it being
understood that each of FGWLA and CLAC hereby makes only those representations
and warranties that specifically relate to it).

     

    Section
4.01     Organization, Standing and
Authority

     

    (a)         Seller
is duly organized, validly existing and in good standing under the Law of
Colorado and has the requisite power and authority to carry on the operations of
the Business as it is now being conducted by Seller.  FGWLA is duly
organized, validly existing and in good standing under the Law of New York and
has the requisite power and authority to carry on the operations of the Business
as it is now being conducted by FGWLA.  CLAC is duly organized,
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    under the
Law of Canada and has the requisite power and authority to carry on the
operations of the Business as it is now being conducted by CLAC.

     

    (b)         Each
Seller Subsidiary is validly existing and is a corporation or other legal entity
duly organized under the Law of the jurisdiction indicated in Schedule 4.01(b)
and has the requisite corporate power and authority to carry on its business as
now being conducted.  Each Seller Subsidiary is duly qualified to do
business and is in good standing in each jurisdiction in which the nature of its
business or the ownership or leasing of its properties make such qualification
necessary.

     

    (c)         Seller
has delivered or made available to Purchaser complete and correct copies of the
certificate of incorporation and bylaws (or comparable organizational documents)
(as amended to date, the “Organizational
Documents”) for each of
the Seller Subsidiaries.  No Seller Subsidiary is in material default
under or in material violation of any provision of its Organizational Documents
and such Organizational Documents as made available to Purchaser are in full
force and effect.  The minute books (containing the records of
meetings of the stockholders, the board of directors, and any committees of the
board of directors) of each Seller Subsidiary are true and complete in all
material respects.  The stock certificate books and the stock record
books of each Seller Subsidiary are correct and complete in all material
respects.

     

    Section
4.02     Capitalization. 
Schedule 4.02 accurately sets forth, with respect to each Seller
Subsidiary, (i) the number of and designation of all authorized shares of
capital stock and (ii) the number of issued and outstanding shares of capital
stock by class, the names of the holders thereof and the number of shares held
by each such holder.  Such shares have been duly authorized, validly
issued and are fully paid and, to the extent applicable, non-assessable and have
been issued in compliance with all foreign, federal and state securities
laws.  Seller and/or one or more Seller Subsidiaries are and shall be
on the Closing Date the sole record and beneficial owners and holders of good
and valid title to such shares, except as set forth on Schedule 4.02, free and
clear of all Liens.  Except as listed on Schedule 4.02, no legend or
other reference to any purported encumbrance appears on any certificate
representing any of such shares.  Upon delivery of payment for the
Shares as herein provided, Purchaser will acquire good and valid title to the
Shares, free and clear of all Liens, other than any Liens arising from acts of
Purchaser.  Except as set forth in Schedule 4.02, there are no
outstanding options, warrants, calls, preemptive or similar rights, commitments
or agreements of any kind to which Seller or any of its Subsidiaries is a party,
or by which Seller or any of its Subsidiaries is bound, relating to the sale,
issuance or voting of, or the granting of rights to acquire, all or any portion
of the outstanding shares of capital stock of any Seller Subsidiary, or any
securities convertible or exchangeable into or evidencing the right to purchase
all or a portion of such shares.  There are no outstanding stock
appreciation, phantom stock, profit participation, or similar rights with
respect to any Seller Subsidiary.  There are no voting trusts or other
agreements or understandings to which Seller or any of the Seller Subsidiaries
is a party with respect to the voting of the outstanding shares of capital stock
of the Seller Subsidiaries.  There are no outstanding bonds,
debentures, notes or other obligations the holders of which have the right to
vote (or convertible into 

     

    
      
        
        

      

      
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    or
exercisable for securities having the right to vote) with the holders of such
shares on any matter.

     

    Section
4.03     Authorization. 
 Each
of Seller, FGWLA, CLAC and, if applicable, their Affiliates has the requisite
power and authority to execute, deliver and perform its obligations under this
Agreement, each of the Ancillary Agreements to be executed by it and the other
agreements, documents and instruments to be executed and delivered in connection
with this Agreement or the Ancillary Agreements.  The execution and
delivery by Seller, FGWLA, CLAC and, if applicable, their Affiliates of this
Agreement, the Ancillary Agreements and the other agreements, documents and
instruments to be executed and delivered in connection with this Agreement or
the Ancillary Agreements by Seller, FGWLA, CLAC and, if applicable, their
Affiliates, and the performance by Seller, FGWLA, CLAC and, if applicable, their
Affiliates of their respective obligations hereunder and thereunder, have been
duly authorized by all necessary corporate action on the part of Seller, FGWLA,
CLAC and, if applicable, their Affiliates.  This Agreement has been
duly executed and delivered by Seller, FGWLA and CLAC and, subject to the due
execution and delivery hereof by Purchaser, this Agreement is a valid and
binding obligation of Seller, FGWLA and CLAC, respectively, enforceable against
Seller, FGWLA and CLAC, as appropriate, in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in equity or at
law).  Each Ancillary Agreement and each other agreement, document and
instrument to be executed and delivered in connection with this Agreement or the
Ancillary Agreements, when executed and delivered by Seller, FGWLA, CLAC and, if
applicable, their Affiliates, will be duly executed and delivered by Seller,
FGWLA, CLAC and their Affiliates, as applicable, and, subject to the due
execution and delivery of such agreements, documents and instruments by the
other parties thereto, each Ancillary Agreement and each other agreement,
document and instrument to be delivered in connection with this Agreement or the
Ancillary Agreements executed by Seller, FGWLA, CLAC or their Affiliates will be
a valid and binding obligation of Seller, FGWLA, CLAC or their Affiliates, as
applicable, enforceable against Seller, FGWLA, CLAC or their Affiliates, as
appropriate, in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium and other similar
laws relating to or affecting creditors’ rights generally and by general
equitable principles (regardless of whether such enforceability is considered in
a proceeding in equity or at law).

     

    Section
4.04     Non-Contravention. 
Except as disclosed in Schedule 4.04, the execution and delivery
by each of Seller, FGWLA, CLAC and their Affiliates, as applicable, of this
Agreement and of the Ancillary Agreements to which it is a party do not, and the
consummation by Seller, FGWLA, CLAC and their Affiliates, as applicable, of the
transactions contemplated by this Agreement and by such Ancillary Agreements and
compliance with the provisions hereof and thereof will not, (i) conflict with
any of the provisions of the Organizational Documents of Seller, FGWLA, CLAC,
any Seller Subsidiary or any of their Affiliates, as applicable, (ii) conflict
with, result in a breach of or default (with or without notice or lapse of,
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    termination,
cancellation or acceleration of any obligation or loss of a benefit under or
result in the creation of any Lien (other than Permitted Liens) on any property
or asset of Seller, FGWLA, CLAC, any Seller Subsidiary or any of their
Affiliates, as applicable, under, any indenture or other agreement, permit,
franchise, license or other instrument or undertaking to which Seller, FGWLA,
CLAC, any Seller Subsidiary or any of their Affiliates, as applicable, is a
party or by which Seller, FGWLA, CLAC, any Seller Subsidiary or any of their
Affiliates, as applicable, or any of their respective properties or assets is
bound or affected, or (iii) contravene any statute, law, ordinance, rule,
regulation, order, judgment, injunction, decree, determination or award
applicable to Seller, FGWLA, CLAC, any Seller Subsidiary or any of their
Affiliates, as applicable, or any of their respective properties or assets
except, with respect to (ii), as would not, individually or in the aggregate,
have a Sellers Material Adverse Effect.

     

    Section
4.05     Consents and
Approvals

     

                                                   
(a)         There is no requirement
applicable to Seller, FGWLA, CLAC, any Seller Subsidiary or any of their
Affiliates to make any filing with, or to obtain any Permit, authorization,
consent or approval from, any Governmental Entity that is either a health or
insurance regulatory authority (i) in order to permit the Closing, except for
the filings, permits, authorizations, consents or approvals set forth in
Schedule 4.05(a)(i), or (ii) otherwise in connection with the implementation of
the transactions contemplated by this Agreement and the Ancillary Agreements,
except for the filings, permits, authorizations, consents or approvals
set forth in Schedule 4.05(a)(ii).

     

    (b)         There
is no requirement applicable to Seller, FGWLA, CLAC or any Seller Subsidiary to
make any filing with, or to obtain any Permit, authorization, consent or
approval from, any Governmental Entity that is neither a health nor insurance
regulatory authority in connection with the consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements, except for the
filings, permits, authorizations, consents or approvals as set forth in Schedule
4.05(b).

     

    (c)         There
is no requirement applicable to Seller, FGWLA, CLAC or any Seller Subsidiary to
obtain any consent or approval from any third party (excluding any Governmental
Entity) in connection with the execution or consummation of the transactions
contemplated by this Agreement and the Ancillary Agreements, except for the
consents, approvals or notices set forth in Schedule 4.05(c), Schedule 4.09,
Schedule 4.19(a), and Schedule 4.19(b) and such other consents, approvals, or
notices as may be required under the terms of the Business Contracts which are
not Material Business Contracts.

     

    Section
4.06     Statement of Assets and
Liabilities.

     

    (a)         The
December 31 Statement of Assets and Liabilities and December 31 Net Worth
Statement were prepared from the Business Books and Records in accordance with
the Methodologies.  The Statutory Reserves set forth on the December
31 Statement of Assets and Liabilities and the December 31 Net Worth Statement
were computed in accordance with the Methodologies and in accordance with
commonly

     

    
      
        
        

      

      
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    accepted
actuarial standards consistently applied and are fairly stated in accordance
with sound actuarial principles and were based, in all material respects, on
actuarial assumptions which were in accordance with those called for in the
provisions of the related Insurance Contracts and Reinsured
Contracts.

     

    
                                                     
(b)         Attached hereto as
Schedule 4.06(b) are copies of the unaudited pro-forma GAAP balance sheets and
income statements of the Business as of and for the twelve months ended December
31, 2006 and the six months ended June 30, 2007 (such financial statements,
together with the notes thereto, the “Unaudited Financial
Statements”).  Except as set forth in the notes to the
Unaudited Financial Statements, the Unaudited Financial Statements (i) were
prepared in accordance with GAAP applied on a consistent basis with the audited
GAAP financial statements of Seller for the year ended as of December 31, 2006,
and the unaudited consolidated financial statements of Seller for the six months
ended June 30, 2007, as applicable, (ii) were prepared using the same data with
respect to the Business as was used in preparing the audited GAAP financial
statements of Seller for the year ended as of December 31, 2006 and the
unaudited financial statements of Seller for the six months ended June 30,
2007, as applicable, and (iii) fairly present in all material respects the
combined financial position and the results of operations of the Business for
the periods indicated.

    

     

    (c)         Except
for liabilities accrued or reserved against in the Unaudited Financial
Statements or incurred in the ordinary course of business since December 31,
2006, the Seller Subsidiaries have not incurred any liabilities, whether
absolute, accrued or contingent, of a nature which would, individually or in the
aggregate, be required to be reflected on a balance sheet prepared in
accordance with GAAP (or disclosed in the notes thereto), except as would not
result in a material increase in the aggregate liabilities shown in the
Unaudited Financial Statements.

     

    Section
4.07     Insurance Company
Subsidiary Financial Statements. 
Seller has previously delivered or made available to Purchaser
true, complete and correct copies of the statutory financial statements of each
Insurance Company Subsidiary, as filed with the applicable domestic regulators
for the years ended December 31, 2006 and 2005 and for each subsequent quarterly
or annual period previously filed (or, in the case of such statements filed
after the date hereof, will promptly provide such statements to Purchaser after
the filing thereof), together with all exhibits and schedules thereto (the
“Insurance Company
Subsidiary SAP Statements”).  The Insurance Company Subsidiary
SAP Statements present (or, when filed, will present) fairly, in all material
respects, the respective statutory financial conditions of the Insurance Company
Subsidiaries at the respective dates thereof, and the statutory results of
operations for the periods then ended in accordance with Applicable SAP applied
on a consistent basis throughout the periods indicated and consistent with each
other, except as otherwise specifically noted therein.

     

    Section
4.08     Absence of Certain Changes. 
Except as disclosed in Schedule 4.08, since December 31, 2006,
and with respect to Section 4.08(l) since December 31, 2005, Seller, FGWLA and
CLAC have conducted the Business, and the Seller Subsidiaries have conducted
their businesses, only in the ordinary course consistent with past practice, and
since such date, there has not been:

     

    
      
        
        

      

      
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    (a)         any
occurrence, development or event that has had or would, individually or in the
aggregate, reasonably be expected to have a Sellers Material Adverse
Effect;

     

    (b)         any
material change in the statutory accounting methods, principles or practices
used by Seller, FGWLA or CLAC in connection with the Business or by the
Insurance Company Subsidiaries, including but not limited to any material change
with respect to establishment of reserves for losses and loss adjustment
expenses, except insofar as may be required by a change in Applicable SAP or a
change in Law, or, after the date hereof, by any Governmental
Entity;

     

    (c)         any
increase, other than in the ordinary course of business consistent with past
practice or as permitted or required under an existing agreement or as required
by applicable Law, in the compensation of, or the value of any pension,
retirement allowance, severance or other employee benefit plan, agreement or
arrangement applicable to any Business Employee, or, except as provided by
Section 6.11(m) or 6.11(n), any establishment of any new Employee Plan
applicable to any Business Employee;

     

    (d)         any
change in underwriting standards, pricing bases, retention limits,
administrative practices or claims practices and standards of Seller, FGWLA,
CLAC or the Insurance Company Subsidiaries, other than in the ordinary course of
business consistent with past practice;

     

    (e)         any
entry into, or material amendment of, a Business Contract or Leased Property
Lease, except for any such change (i) as a result of a renewal or expiration or
(ii) in the ordinary course of business consistent with past
practices;

     

    (f)         any
transaction or commitment made, or any material contract or agreement entered
into by Seller, FGWLA or CLAC related to the Business or by any Seller
Subsidiary (including the acquisition or disposition of any assets) or any
relinquishment by Seller, FGWLA or CLAC of any material contract or other right
related to the Business or by any Seller Subsidiary of any material contract or
other right, other than transactions and commitments in the ordinary course of
business consistent with past practices;

     

    (g)         other
than in the ordinary course of business consistent with past practice, with
respect to the Business, any material forgiveness, cancellation, compromise,
waiver or release of any debts, claims or rights;

     

    (h)         other
than investment portfolio activities in the ordinary course of business
consistent with past practice, any material acquisition or disposition of (i)
any asset that otherwise would have been a Transferred Asset upon consummation
of the Closing or (ii) any asset of a Seller Subsidiary;

     

    (i)         any
entering into or commutation of any reinsurance contract (i) with respect to the
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    CLAC or
(ii) with respect to the Subsidiary Insurance Contracts by any Insurance Company
Subsidiary, other than in the ordinary course of business consistent with past
practice;

     

    (j)         declared,
set aside, made or paid any dividend or other distribution in respect of any
shares of capital stock of any Seller Subsidiary or otherwise purchased or
redeemed, directly or indirectly, any such shares;

     

    (k)         issued,
sold, granted, conferred, awarded, pledged, or otherwise encumbered any shares
of capital stock of any Seller Subsidiary;

     

    (l)         any
material change in Tax accounting methods, policies or practices, except as
required by a change in GAAP or SEC rules, regulations or guidelines or
applicable Law, any material Tax election or settlement or compromise of any
material Tax liability, any amended material Tax Return or claim for refund
filed, any consent to extension of the period of limitations for the payment or
assessment of any material Tax, or any closing agreement affecting any material
Tax liability or refund entered into, in each case, by any Seller Subsidiary or
solely with respect to the Business or the Transferred
Assets; or

     

    (m)           any
agreement or commitment (contingent or otherwise) to do any of the
foregoing.

     

    Section
4.09     Business Contracts. 
Schedule 4.09 sets forth (i) a list of the Material Business
Contracts in effect on the date hereof and (ii) whether consent from a
third-party is required to assign each such Material Business Contract to
Purchaser.  True and complete copies of all Material Business
Contracts have been made available to Purchaser for its review.  Each
Business Contract is in full force and effect and is the valid and binding
obligation of each of Seller, FGWLA, CLAC, or each Seller Subsidiary party
thereto, as applicable, and, to the Knowledge of Seller, FGWLA and CLAC, each
other party thereto, except as the enforceability of any thereof may be limited
by bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).  Except as set forth in Schedule
4.09, none of Seller, FGWLA, CLAC, any Seller Subsidiary or any of their
Affiliates or, to the Knowledge of Seller, FGWLA and CLAC, any other Person is
(or, with the giving of notice or the lapse of time or both, will be) in
violation or breach of or default under any of the Business Contracts in any
material respect.

     

    Section
4.10     Business Reinsurance Agreements. 
Schedule 4.10 sets forth a list of the Business Reinsurance
Agreements as of the date hereof.  Each of the Business Reinsurance
Agreements is in full force and effect and is the valid and binding obligation
of Seller, FGWLA, CLAC or each Seller Subsidiary and, to the Knowledge of
Seller, FGWLA and CLAC, each other party thereto, except as the enforceability
of any thereof may be limited by bankruptcy, insolvency, reorganization,
moratorium and other similar laws relating to or affecting creditors’ rights
generally and by general equitable principles (regardless of whether such
enforceability is considered in a proceeding in 

     

    
      
        
        

      

      
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    equity or
at law).  Except as set forth in Schedule 4.10, none of Seller, FGWLA,
CLAC, any Seller Subsidiary or any of their Affiliates, or, to the Knowledge of
Seller, FGWLA and CLAC, any other Person is (or, with the giving of notice or
the lapse of time or both, will be) in violation or breach of or default under
any of the Business Reinsurance Agreements in any material
respects.  To the Knowledge of Seller, FGWLA and CLAC, there is no
event that has occurred which, with the passage of time or the giving of notice,
or both, would create a default or breach by Seller, FGWLA, CLAC or any Seller
Subsidiary under any Business Reinsurance Agreement.  None of the
transactions contemplated hereby or by an Ancillary Agreement would, directly or
indirectly, cause a default or breach under any Business Reinsurance
Agreement.  Neither Seller, FGWLA, CLAC, any Seller Subsidiary nor any
other party under any Business Reinsurance Agreement has given any notice of
termination with respect to any such arrangement or treaty, and, to the
Knowledge of Seller, FGWLA and CLAC, there is no dispute under any such
arrangement or treaty.

     

    Section
4.11     Transferred Assets. 
Seller, FGWLA and CLAC, as applicable, have good title to all of
the Transferred Assets, free and clear of all Liens, except for Permitted
Liens.  At the Closing, subject to Section 2.07, Purchaser will
acquire the Transferred Assets, free and clear of all Liens, except for
Permitted Liens and except for any Liens arising from acts of Purchaser or any
of its Affiliates.  Each of the Seller Subsidiaries has good title to
all of its respective assets, free and clear of all Liens, except for Permitted
Liens.

     

    Section
4.12     Litigation; Orders. 
Except as set forth in Schedule 4.12(a), and except for claims
litigation arising under the Insurance Contracts, the Reinsured Contracts, or
the ASO Contracts and litigation with Providers, in each case in the ordinary
course of business, there is no action, suit, proceeding or arbitration (each,
an “Action”)
pending or threatened in writing against Seller, FGWLA or CLAC (in each case, to
the extent relating to the Business) or against any Seller
Subsidiary.  Except as set forth in Schedule 4.12(b), there are no
judgments, decrees, injunctions, or orders of any Governmental Entity or
arbitrator or any consent agreements, commitment agreements or similar written
agreements entered into between any Governmental Entity and (i) any Seller
Subsidiary, but disregarding any such agreement issued prior to the date of
acquisition of the Seller Subsidiary and not within the Knowledge of Seller, or
(ii) Seller, FGWLA or CLAC, with respect to the Business (each an “Order”), in each case
issued after January 1, 2004 or under which Seller, FGWLA, CLAC or any Seller
Subsidiary has any continuing obligations.  Seller, FGWLA, CLAC and
the Seller Subsidiaries have not been advised by any Governmental Entity that it
is currently considering issuing or requesting any such Order in the
future.

     

    Section
4.13     Compliance with
Law

     

    .                                              (a)         Except
as disclosed in Schedule 4.13(a), since January 1, 2005 Seller, FGWLA and CLAC
have been in compliance with all applicable Law as regards the Business in all
material respects, and the Seller Subsidiaries have been in compliance with all
applicable Law in all material respects.

     

    
      
        
        

      

      
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    (b)         Since
January 1, 2005, neither Seller, FGWLA, CLAC (in each case, to the extent
relating to the Business) nor any Seller Subsidiary nor, to the respective
Knowledges of Seller, FGWLA or CLAC, any third party service provider acting on
behalf of Seller, FGWLA, CLAC (in each case, to the extent relating to the
Business) or any Seller Subsidiaries, has received, nor otherwise has any
knowledge of, any written notice from any Governmental Entity that (i) alleges
any material noncompliance (or that Seller, FGWLA, CLAC or any Seller Subsidiary
or any such third party service provider is under investigation or the subject
of an inquiry by any such Governmental Entity for such alleged material
noncompliance) with any applicable Law, or (ii) asserts any risk-based capital
deficiency.  Since January 1, 2005, no Governmental Entity has
threatened in writing any investigation or inquiry related to any material
noncompliance with any applicable Law by Seller, FGWLA, CLAC (in each case, to
the extent relating to the Business) or any Seller Subsidiary.

     

    (c)         Except
as set forth on Schedule 4.13(c), Seller, FGWLA, CLAC (in each case, to the
extent relating to the Business) and the Seller Subsidiaries have filed with the
appropriate Governmental Entities, including state health and insurance
regulatory authorities and any applicable federal regulatory authorities,
all material reports, statements, documents, registrations, filings or
submissions required to be filed by them.  Except as set forth in
Schedule 4.13(c), all such registrations, filings and submissions filed by
Seller, FGWLA, CLAC or the Seller Subsidiaries were in compliance in all
material respects with applicable Law when filed or as amended or supplemented,
and no material deficiencies have been asserted by any Governmental Entity with
respect to such registrations, filings or submissions that have not been
cured.

     

    (d)         Schedule
4.13(d)(i) sets forth a list of standard contract forms (subject to state
variations) utilized by Seller, FGWLA, CLAC and the Insurance Company
Subsidiaries in issuing the Insurance Contracts and the Subsidiary Insurance
Contracts.  Except as set forth on Schedule 4.13(d)(ii), (i) all
policy forms, and certificates used in the Business, the forms of all policies
and certificates on which Insurance Contracts and Subsidiary Insurance Contracts
were written and all amendments, endorsements and riders thereto and (ii) all
applications, brochures and marketing materials pertaining thereto have been, in
all material respects, approved by all applicable Governmental Entities or filed
with and not objected to by such Governmental Entities within the period
provided by applicable Law for objection, to the extent required by Law, and
comply in all material respects with all requirements of Law.  Seller,
FGWLA and CLAC in each case, to the extent relating to the Business and the
Seller Subsidiaries have, in the aggregate, performed their obligations with
respect to the Insurance Contracts and Subsidiary Insurance Contracts, as
applicable, in accordance with the terms of the Insurance Contracts and
Subsidiary Insurance Contracts, as applicable, in all material
respects.

     

    (e)         Except
as set forth in Schedule 4.13(e), all premium rates, rating plans and policy
terms established or used by Seller, FGWLA, CLAC (in each case, to the extent
relating to the Business) or any Insurance Company Subsidiary that are required
to be filed with and/or approved by Governmental Entities have been so filed
and/or approved in all material 

     

    
      
        
        

      

      
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    respects,
the premiums charged conform in all material respects to the premiums so filed
and/or approved and comply with the insurance Law applicable
thereto.

     

    (f)         Seller,
FGWLA, CLAC (in each case, to the extent relating to the Business) and the
Seller Subsidiaries have implemented policies, procedures and/or programs
designed to assure that their agents nd employees are in compliance in all
material respects with applicable Law

     

    (g)         Except
as set forth on Schedule 4.13(f), Seller, FGWLA, CLAC and the Seller
Subsidiaries have at all times complied in all material respects with all
applicable Law relating to privacy, data protection and the collection and use
of personal information and user information gathered, accessed, collected or
used in the course of the operations of Seller, FGWLA, CLAC and the Seller
Subsidiaries, as applicable, including the applicable provisions of the Health
Insurance Portability and Accountability Act of 1996 (“HIPAA”) and the
Privacy Rule and the Security Rule adopted thereunder.  To the
respective Knowledges of Seller, FGWLA and CLAC, each of Seller, FGWLA, CLAC and
the Seller Subsidiaries have complied in all material respects with the
requirements of HIPAA to have agreements with all of its “business associates”
(as such term is defined by and as such agreements are required by the Privacy
Rule adopted under HIPAA).  No Action is pending or threatened in
writing against Seller, FGWLA, CLAC or any Seller Subsidiary alleging a
violation of any Person’s privacy, personal information or data
rights.  Each of Seller, FGWLA, CLAC and the Seller Subsidiaries have
at all times complied in all material respects with all rules, policies and
procedures established by Seller, FGWLA, CLAC and the Seller Subsidiaries, as
applicable, from time to time and as applicable with respect to privacy, data
protection or collection and use of personal information and user information
gathered or accessed in the course of the operations of Seller, FGWLA, CLAC and
the Seller Subsidiaries.  No Action is pending or threatened in
writing against Seller, FGWLA, CLAC or any Seller Subsidiary by any Person
alleging a violation of such Person’s or privacy, personal or
confidentiality rights under any such rules, policies or
procedures.  The consummation of the transactions contemplated herein
will not breach or otherwise cause any violation of any Law related to privacy,
data protection or the collection and use of personal information and user
information gathered or accessed from then current users (at the time of
consummation of the transactions contemplated hereunder) in the course of the
operations of Seller, FGWLA, CLAC and the Seller Subsidiaries, in each case in
any material respect.

     

    (h)         With
respect to all personal and user information described in clause (g) above, each
of Seller, FGWLA, CLAC and the Seller Subsidiaries has at all times taken all
steps reasonably necessary (including implementing and monitoring compliance
with adequate measures with respect to technical and physical security) to
ensure that such information is protected against loss and against unauthorized
access, use, modification, disclosure or other misuse.  There has been
no unauthorized access to or other misuse of that information that has had or
would, individually or in the aggregate, reasonably be expected to have a Seller
Material Adverse Effect.  Seller, FGWLA, CLAC and the Sellers
Subsidiaries, as applicable, maintain systems and procedures reasonably designed
to respond to complaints received alleging violation of third party content
rights.

     

    
      
        
        

      

      
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    (i)         All
forms of Business Contracts with third parties that currently are in use by each
of Seller, FGWLA, CLAC and the Seller Subsidiaries conform in all material
respects to the requirements of applicable Law.

     

    Section
4.14     Permits. 
Schedule
4.14 hereto lists (i) all jurisdictions in which each of Seller, FGWLA,
CLAC (in each case, to the extent relating to the Business) and the Seller
Subsidiaries, as applicable, is licensed, (ii) the authority granted under each
such license in each jurisdiction and (iii) all third-party accreditations held
by each of Seller, FGWLA, CLAC (in each case, to the extent relating to the
Business) and the Seller Subsidiaries.  Each of Seller, FGWLA, CLAC
(in each case, to the extent relating to the Business) and the Seller
Subsidiaries has all Permits (whether or not related to the business of
insurance) and third-party accreditations necessary for the conduct of its
business as it is currently conducted in each jurisdiction in which Seller,
FGWLA, CLAC and the Seller Subsidiaries require such Permits or
accreditations.  The Business has been and is being conducted in
compliance with all such Permits and accreditations in all material
respects.  Except as set forth in Schedule 4.14, all such Permits and
accreditations are in full force and effect, and neither Seller, FGWLA, CLAC nor
any Seller Subsidiary has received any written notice of any proceeding or
investigation pending or threatened in writing, which would reasonably be
expected to lead to the revocation, amendment, failure to renew, limitation,
modification, suspension or restriction of any such Permit or
accreditation.

     

    Section
4.15     Brokers. 
No
broker, investment banker, financial advisor or other Person, other than
Goldman, Sachs & Co., the fees and expenses of which will be paid by Seller,
is entitled to any broker’s, finder’s, financial advisor’s or other similar fee
or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Seller, FGWLA, CLAC or any of
their Affiliates.

     

    Section
4.16     Employees

     

                                                   
(a)         Seller
and FGWLA have made available to Purchaser a true and complete listing of the
Business Employees and Subsidiary Employees as of the date hereof (which listing
shall be updated by Seller from time to time, as appropriate), including each
such Business Employee’s and Subsidiary Employee’s job title, classification and
hire date.

     

    (b)         Except
as set forth in Schedule 4.16(b), no union or other labor organization
represents or claims to represent the Business Employees or Subsidiary Employees
and, to the respective Knowledges of Seller and FGWLA, since January 1, 2005,
there have been no union organizing activities among such Business Employees or
Subsidiary Employees.  Neither Seller nor FGWLA nor any Seller
Subsidiary is now bound, nor has at any time during the last five years been
bound, by any collective bargaining or similar agreement with any labor
organization applicable to the Business Employees or Subsidiary
Employees.

     

     

    
      
        
        

      

      
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    (c)         Seller
and FGWLA have made available to Purchaser true and complete copies of all
employee manuals or handbooks containing personnel or employee relations
policies applicable to Business Employees and/or Subsidiary
Employees.

     

    (d)         All
persons classified by Seller or its Affiliates as independent contractors
satisfy and have at all times satisfied the requirements of applicable Law in
all material respects to be so classified.  Seller and its Affiliates
have in all material respects fully and accurately reported their compensation
on IRS Form 1099 when required to do so and have no material obligations to
provide benefits with respect to such persons under any Employee Plans or
otherwise.  Except pursuant to intercompany servicing or third party
temporary staffing arrangements, no individuals are currently providing services
to any Seller Subsidiary pursuant to a leasing agreement or similar type of
arrangements, nor has any Seller Subsidiary entered into any arrangements
whereby services will be provided by such individuals.  There is no
proceeding pending or threatened in writing against Seller, FGWLA or any Seller
Subsidiary challenging the classification of any person as an employee or an
independent contractor, including any claim for unpaid benefits, for or on
behalf of, any such person.

     

    (e)         Seller,
FGWLA and the Seller Subsidiaries are in compliance in all material respects
with all applicable laws respecting employment and employment practices,
including, without limitation, all laws respecting terms and conditions of
employment, health and safety, wages and hours, child labor, immigration,
employment discrimination, disability rights or benefits, equal opportunity,
plant closures and layoffs, affirmative action, workers’ compensation, labor
relations, employee leave issues and unemployment insurance.

     

    (f)         Seller,
FGWLA and the Seller Subsidiaries are not and have not been: (i) a “contractor”
or “subcontractor” (as defined by Executive Order 11246), (ii) required to
comply with Executive Order 11246 or (iii) required to maintain an affirmative
action plan; it being nevertheless understood that Seller voluntarily complies
with Executive Order 11246.

     

    (g)         Seller,
FGWLA and the Seller Subsidiaries are not delinquent in any material respects in
payments to any present or former Business Employees or Subsidiary Employees for
any services or amounts required to be reimbursed or otherwise
paid.

     

    (h)         Except
as set forth on Schedule 4.16(h), to the respective Knowledges of Seller and
FGWLA, neither Seller nor FGWLA nor any of the Seller Subsidiaries has received
(i) notice of any unfair labor practice charge or complaint with respect to it
which is still pending before the National Labor Relations Board or any other
Governmental Entity against it, (ii) notice of any complaints, grievances or
arbitrations with respect to it arising out of any collective bargaining
agreement which is still pending, (iii) notice of any charge or complaint with
respect to it before the Equal Employment Opportunity Commission or any other
Governmental Entity responsible for the prevention of unlawful employment
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    intent of
any Governmental Entity responsible for the enforcement of labor, employment,
wages and hours of work, child labor, immigration, or occupational safety and
health laws to conduct an investigation with respect to it or notice that such
investigation is in progress in either case which is still pending, or (v)
notice of any lawsuit or other proceeding pending in any forum by or on behalf
of any present or former Business Employee or Subsidiary Employee of such
entities, any applicant for employment or classes of the foregoing alleging
breach of any express or implied contract of employment, any applicable law
governing employment or the termination thereof or other discriminatory,
wrongful or tortuous conduct in connection with the employment
relationship.

     

    (i)         Seller,
FGWLA and each Seller Subsidiary are and have been in compliance in all material
respects with all notice and other requirements under the WARN Act and any
similar foreign, state or local law relating to plant closings and
layoffs.

     

    (j)         To
the respective Knowledges of Seller and FGWLA, no Business Employee or
Subsidiary Employee is in any material respect in violation of any term of any
employment agreement, nondisclosure agreement, common law nondisclosure
obligation, fiduciary duty, noncompetition agreement, restrictive covenant or
other obligation to a former employer of any such Business Employee or
Subsidiary Employee relating (i) to the right of any such Business Employee or
Subsidiary Employee to be employed by Seller, FGWLA or any Seller Subsidiary or
(ii) to the knowledge or use of trade secrets or proprietary
information.

     

    (k)         The
execution of this Agreement and the consummation of the transactions
contemplated by this Agreement will not result in any breach, or obligation to
pay any amounts under, any collective bargaining agreement, employment
agreement, consulting agreement or any other labor-related agreement to which
Seller, FGWLA or any Seller Subsidiary is a party.

     

    Section
4.17     Employee
Plans

     

                                                   (a)         Schedule
4.17(a) contains a list of each Employee Plan.  Seller or FGWLA has
made available, or has caused the Seller Subsidiaries to make available, to
Purchaser the plan documents or other writing constituting each such Employee
Plan and the summary plan description for each such Employee Plan (if
applicable).

     

    (b)         No
Employee Plan is a Multiemployer Plan and since January 1, 2002, neither Seller,
FGWLA, the Seller Subsidiaries nor any ERISA Affiliate has had any obligation to
contribute to, or has incurred any withdrawal liability with respect to a
Multiemployer Plan.  No Employee Plan is a “multiple employer plan”
described in Section 4063 of ERISA.  There is no amount or payment
arising from or in connection with any Employee Plan, including any Seller Title
IV Plan but excluding any Seller Subsidiary Plan, with respect to which
Purchaser is or will be liable to any Person, including any Governmental Entity
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    their
ERISA Affiliates.  No funding waiver has been requested under section
412 of the Code with respect to any Seller Title IV Plan.  There has
occurred no non-exempt “prohibited transaction” (within the meaning of section
4975 of the Code or section 406 of ERISA) or breach of any fiduciary duty
described in Section 404 of ERISA that would reasonably be expected to result in
any material liability, direct or indirect, for Purchaser or any of its
Affiliates (including without limitation the Seller Subsidiaries as of and
following the Closing) or any officer, director or employee of Purchaser or any
of its Affiliates (including without limitation the Seller Subsidiaries as of
and following the Closing).

     

    (c)         Except
as set forth in Schedule 4.17(c), with respect to Seller Subsidiary
Plans:  (i) Seller has provided or has caused the Seller Subsidiaries
to provide to Purchaser (in addition those documents contemplated by Section
4.17(a)) (A) if any Seller Subsidiary Plan is funded through a trust or any
third party funding vehicle, a copy of the trust or other funding agreement and
the latest financial statements thereof, (B) where applicable, Forms 5500 with
respect to the two most recently completed plan years, including all related
schedules, (C) with respect to each Seller Subsidiary Plan intended to be
qualified under section 401(a) of the Code, the most recent determination letter
from the Internal Revenue Service, and (D) since the Acquisition Date of the
sponsor of any Seller Subsidiary Plan or to the Knowledge of Seller, any
correspondence between Seller or any of its Affiliates and any Governmental
Entity concerning any issue that could reasonably be expected to result in a
material liability to such sponsor; (ii) no Seller Subsidiary Plan provides
for post-employment surgical, medical, hospitalization, death or similar
benefits (whether or not insured) other than as required under applicable Law;
(iii) no Seller Subsidiary Plan is subject to Section 302 or Title IV of ERISA;
(iv) each Seller Subsidiary Plan intended to be qualified under section 401(a)
of the Code is so qualified, the trusts maintained thereunder are exempt from
taxation under section 501(a) of the Code, and no condition exists that would
reasonably be expected to adversely affect such qualifications; (v) the
execution and the delivery of this Agreement or the consummation of the
transactions contemplated hereby will not, alone or with any other event, cause
there to be paid any bonuses other compensation or cause the accelerated vesting
of benefits or payments under any Seller Subsidiary Plan; (vi) each Seller
Subsidiary Plan has been established and maintained in compliance in all
material respects with its terms and applicable Law; (vii) each Seller
Subsidiary Plan that constitutes a “non-qualified deferred compensation plan”
within the meaning of section 409A(d)(1) of the Code has been operated in good
faith compliance with section 409A of the Code and the guidance issued
thereunder; (viii) neither Seller nor any Seller Subsidiary has incurred any
liability for any excise, income or other taxes or penalties with respect to any
Seller Subsidiary Plan that would reasonably be expected to result in any
liability, direct or indirect, for Purchaser or any of its Affiliates (including
without limitation the Seller Subsidiaries as of and following the Closing); and
(ix) there are no pending or, to the respective Knowledges of Seller and FGWLA,
threatened claims by or on behalf of any Seller Subsidiary Plan, or by or on
behalf of any participants or beneficiaries of any Seller Subsidiary Plan or
other persons, other than claims for benefits made in the ordinary operation of
Seller Subsidiary Plans, and no condition exists which would reasonably be
expected to result in the assertion of any such claim.

     

     

    
      
        
        

      

      
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    Section
4.18     Real
Property

     

    (a)         Schedules
4.18(a)(i) and 4.18(a)(ii) hereto, taken together, set forth a true and complete
list and summary description of all Leased Property.  All of the
leases or subleases of Leased Property including all amendments thereto (the
“Leased Property
Leases”) are valid and in full force and effect in all material respects
and all rents and additional rents due to date on each Leased Property Lease
have been paid or will be timely paid in accordance with the customary practice
permitted by such Leased Property Lease.

     

    (b)         No
notice of default which is extant (i.e., not cured within the applicable grace
period) has been given by the lessor to the lessee, or by the lessee to the
lessor, under any of the Leased Property Leases.  None of Seller,
FGWLA or any Seller Subsidiary is in material default under any Leased Property
Lease and, to the respective Knowledges of Seller and FGWLA, no lessor is in
material default under any Leased Property Lease.  No event has
occurred which, with the passage of time or the giving of notice, or both, would
constitute a material default thereunder by Seller or FGWLA or which would
entitle any party to any of the Leased Property Leases to exercise any default
remedy thereunder or which could result in the termination thereof.

     

    (c)         Seller
has delivered to Purchaser or otherwise made available to Purchaser true,
correct and complete copies of the Leased Property Leases, together with all
amendments, modifications or supplements, if any, thereto.

     

    (d)         Seller,
FGWLA or a Seller Subsidiary, as applicable, enjoys peaceful and undisturbed
possession in all material respects under all Leased Property
Leases.

     

    (e)         To
the respective  Knowledges of Seller and FGWLA, no notice of violation
of any material law, ordinance or administrative regulation (including any
zoning or building law) has been received by Seller, FGWLA or any Seller
Subsidiary with respect to any Leased Property or the
Headquarters.  Each Leased Property and the Headquarters is in a
state of reasonable maintenance and repair.  To the respective
Knowledges of Seller and FGWLA, neither the whole nor any portion of any Leased
Property or the Headquarters is being condemned or otherwise taken by any public
authority, nor has any notice been received of any such condemnation or
taking.

     

    (f)         Seller,
FGWLA and the Seller Subsidiaries have obtained all material permits required
pursuant to any applicable Environmental Laws in connection with the occupancy
of the Leased Property pursuant to the Leased Property Leases and the
Headquarters, and each of them has operated in compliance in all material
respects with applicable Environmental Laws regarding the Leased Property and
the Headquarters.  Neither Seller, FGWLA or a Seller Subsidiary has
received from any Governmental Entity or any Person (i) any written notice of a
(nor to the Knowledge of Seller has there been any) violation, alleged
violation, non compliance, inquiry, investigation, liability or potential
liability regarding compliance with applicable Environmental Laws by any of
Seller, FGWLA or a Seller Subsidiary relating to the Leased Property or the
Headquarters, 

     

    
      
        
        

      

      
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    or (ii)
any written demand or claim (A) seeking (nor to the Knowledge of Seller has
there been any) payment, contribution, indemnification, remedial action or
removal action or (B) alleging (nor to the Knowledge of Seller has there been)
any environmental damage or injury to person, property or natural resources,
concerning (in the case of (A) or (B)) any of the Leased Real Property, the
Headquarters, or any real property formerly owned, leased or operated (in part
or in whole) by a Seller Subsidiary.

     

                                                    (g)         None
of the Leased Property has been pledged or assigned by Seller, FGWLA or a Seller
Subsidiary.

     

    (h)         Neither
Seller, FGWLA nor a Seller Subsidiary has given any notice to any landlord under
any of the Leased Property Leases indicating that it will not be exercising any
extension or renewal options under the Leased Property Leases.  All
security deposits required under the Leased Property Leases have been paid to
and have not been applied in respect of a breach or a default under such Leased
Property Lease unless all amounts so applied have been redeposited in
full.

     

    (i)         There
are currently in effect such insurance policies for each Leased Property and
Headquarters as are customarily maintained or required by a tenant or owner, as
applicable, with respect to similar properties.  All premiums due on
such insurance policies have been paid by Seller, FGWLA or a Seller Subsidiary
and Seller, FGWLA or a Seller Subsidiary will maintain such insurance policies
(or substantially similar substitute coverage) from the date hereof through the
Closing Date or earlier termination of this Agreement.  Seller, FGWLA
or a Seller Subsidiary has not received and has no knowledge of any notice from
any insurance company requesting the performance of any work or alteration with
respect to any Leased Property or the Headquarters or any portion
thereof.  Seller, FGWLA or a Seller Subsidiary has received no notice
from any insurance company concerning, nor is Seller, FGWLA nor a Seller
Subsidiary aware of, any defects or inadequacies in any Leased Property or the
Headquarters, which, if not corrected, would result in the termination of
insurance coverage or materially increase its cost.

     

    Section
4.19     Computer
Software

     

                                                   
(a)         Set forth on Schedule
4.19(a) hereto is a true and complete listing of all material computer software
programs and databases used or held for use principally in the conduct of the
Business.  Schedule 4.19(a) hereto also sets forth whether each such
computer software program or database is (i) owned by Seller, FGWLA, CLAC or any
Seller Subsidiary (together with any other computer software programs and
databases owned by Seller, FGWLA, or CLAC and used or held for use principally
in the conduct of the Business, the “Owned Principally Used
Software”) or (ii) licensed by Seller, FGWLA, CLAC or any Affiliate of
Seller from a third party (together with any other computer software programs
and databases licensed by Seller, FGWLA, or CLAC and used or held for use
principally in the conduct of the Business, the “Licensed Principally Used
Software”), and whether consent from a third party to assign the license
in the Licensed Principally Used Software to Purchaser is required.

     

     

    
      
        
        

      

      
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    (b)         Set
forth on Schedule 4.19(b) hereto a true and complete listing of all material
computer software programs and databases used or held for use both (i) in the
conduct of the Business and also (ii) in the conduct of any of the other
businesses of Seller, FGWLA, CLAC or any Affiliate of Seller and not used
principally in the conduct of the Business.  Schedule 4.19(b) hereto
also sets forth whether each such computer software program or database is (i)
owned by Seller, FGWLA, CLAC or any Affiliate of Seller (together with any other
computer software programs and databases owned by Seller, FGWLA, CLAC or any of
their Affiliates and used or held for use both (x) in the conduct of the
Business and also (y) in the conduct of any other business of Seller, FGWLA,
CLAC or any of their Affiliates and not used principally in the conduct of the
Business, the “Owned
Generally Used Software”) or (ii) licensed by Seller, FGWLA, CLAC or any
Affiliate of Seller from a third party (together with any other computer
software programs and databases licensed by Seller, FGWLA, CLAC or any of their
Affiliates and used or held for use both (x) in the conduct of the Business and
also (y) in the conduct of any other business of Seller, FGWLA, CLAC or any of
their Affiliates and not used principally in the conduct of the Business, the
“Licensed Generally
Used Software”).  Schedule 4.19(b) hereto also sets forth
whether consent from a third party is required to provide Purchaser with the
right to use each such Licensed Generally Used Software.

     

    (c)         Set
forth on Schedule 4.19(c) are all items of Owned Principally Used Software and
Licensed Principally Used Software that are not to be licensed, sublicensed,
assigned or otherwise transferred to Purchaser (“Excluded
Software”).  On the Closing Date, except with respect to the
Excluded Software and subject to the receipt of all required third party
consents or waivers therefor as contemplated by Section 6.05, Purchaser or the
Seller Subsidiaries will have (A) exclusive ownership of all rights whatsoever
in the Owned Principally Used Software, including all copyright and other rights
in its source code, object code, utilities required to compile code,
executables, documentation and all copies thereof, free and clear of any royalty
or other payment obligations or Liens, (B) pursuant to an assignment of all
of Seller’s, FGWLA’s, CLAC’s or any Affiliate of Seller’s (other than the Seller
Subsidiaries’) right to the Licensed Principally Used Software, the right to
use, in the same manner in connection with the Business as used by Seller,
FGWLA, CLAC or the Seller Subsidiaries prior to the Closing Date the Licensed
Principally Used Software licensed by Seller, FGWLA, CLAC or any Affiliate of
Seller (other than the Seller Subsidiaries), and (C) pursuant to the Transition
Services Agreement, the benefit of the Owned Generally Used Software and the
Licensed Generally Used Software as it was used in connection with the Business
as used by Seller, FGWLA, CLAC or the Seller Subsidiaries prior to the Closing
Date.  For the avoidance of doubt, the parties hereto agree that all
costs and expenses associated with the matters set forth in clauses (B) and (C)
above shall be borne by Seller and Purchaser in accordance with Section
6.05(d).

     

    (d)         With
respect to the Owned Principally Used Software, the Owned Generally Used
Software, the Licensed Principally Used Software, the Licensed Generally Used
Software (other than the Excluded Software), and the Intellectual Property
Rights to be transferred, licensed, sublicensed or assigned to Purchaser under
this Agreement or any Ancillary Agreement:  to the respective
Knowledges of Seller, 

     

    
      
        
        

      

      
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    FGWLA and
CLAC, nothing in such software or Intellectual Property Rights, in whole or in
part, infringes the intellectual property rights of any other Person, including
rights of copyright, trademark, patent, trade secret or any other proprietary
right except for infringements which would not, individually or in the
aggregate, have a Sellers Material Adverse Effect; none of Seller, FGWLA or CLAC
has received any written notice of any claim that any of such property infringes
the intellectual property rights of any third party; such property does not, to
the respective Knowledges of Seller, FGWLA and CLAC, contain any disabling
devices, Trojan horses, or other embedded mechanisms by which use thereof may be
impeded; and except for the fees set forth on Schedules 4.19(e) and 4.20(d) or
in the Transition Services Agreement, no such property to be transferred,
licensed or assigned hereunder requires any payment for the use of any patent,
trade name, service mark, trade secret, trademark, copyright or other
intellectual property right or technology owned by any third party.

     

    (e)         Set
forth on Schedule 4.19(e) is a true and correct list of all maintenance fees,
third party licensing fees and similar charges required to be paid for the use
of the material Licensed Principally Used Software and the material Owned
Principally Used Software, other than the Excluded Software.

     

     

    (f)         Seller,
FGWLA, CLAC and the Seller Subsidiaries have established and maintain
commercially reasonable security programs and are in material compliance with
such programs.  Seller, FGWLA, CLAC and the Seller Subsidiaries have
not had a security breach, with respect to the Business that resulted in or
required the notification of customers of the Business of such security
breach.

     

    Section
4.20     Intellectual Property
Rights

     

    .                                              
(a)         Except
as set forth in Schedule 4.20(a) and subject to the receipt of all required
third party consents or waivers therefor as contemplated by Section 6.05, the
execution and delivery of this Agreement by Seller, FGWLA and CLAC, and the
consummation of the transactions contemplated hereby, will neither cause Seller,
FGWLA, CLAC or any Seller Subsidiary to be in violation or default under any
licenses, sub-licenses or other agreements to which Seller, FGWLA, CLAC or any
Seller Subsidiary is a party and pursuant to which Seller, FGWLA, CLAC or any
Seller Subsidiary is authorized, or has granted rights, to use any Intellectual
Property Rights, nor entitle any other party to any such license,
sub-license or agreement to terminate or modify such license, sub-license or
agreement, except for such violations, defaults, terminations or modifications
as would not, individually or in the aggregate, have a Sellers Material Adverse
Effect.

     

    (b)         Set
forth on Schedule 4.20(b) is a complete and correct list and a brief description
(including whether such is licensed or owned and the licensee and owner thereof)
of, all Intellectual Property Rights (other than as set forth in Schedules
4.19(a) and 4.19(b)) that are material to the conduct of the Business and,
whether material or not, all registrations and applications for registration of
any Intellectual Property Rights owned by Seller or its Affiliates.

     

     

    
      
        
        

      

      
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    (c)         All
registrations for trademarks, service marks, copyrights, issued patents and
domain names included in the Intellectual Property Rights and owned by Seller or
its Affiliates are valid and subsisting and in full force and effect, unless
otherwise noted on Schedule 4.20(b).

     

    (d)         Schedule
4.20(d) sets forth a list of all licenses and other agreements in which Seller,
FGWLA, CLAC or the Seller Subsidiaries has granted another Person (other than an
Affiliate of Seller) the right to use any of the Intellectual Property
Rights.

     

    (e)         On
the Closing Date, Purchaser or the Seller Subsidiaries will have (i) exclusive
ownership of all rights whatsoever in the Intellectual Property Rights owned by
Seller, FGWLA, CLAC or the Seller Subsidiaries, free and clear of any royalty or
other payment obligations or Liens, (ii) pursuant to an assignment of all of
Seller’s, FGWLA’s, CLAC’s or any Affiliate of Seller’s (other than the Seller
Subsidiaries’) right to the Intellectual Property Rights owned by any third
party, the right to use such intellectual property, in the same manner in
connection with the Business as used by Seller, FGWLA, CLAC or the Seller
Subsidiaries prior to the Closing Date, and (iii) pursuant to the Transition
Services Agreement, the benefit of the use in the same manner in connection with
the Business as used by Seller, FGWLA, CLAC or the Seller Subsidiaries prior to
the Closing Date, all intellectual property owned by a third party and used or
held for use in both the conduct of the Business and also in the conduct of any
of the other business of Seller FGWLA, CLAC or any Affiliate of Seller and not
used principally in the conduct of the Business.  For the avoidance of
doubt, the parties hereto agree that all costs and expenses associated with the
matters set forth in clauses (ii) and (iii) above shall be borne in accordance
with Section 6.05(d).

     

    (f)         To
the Knowledge of Seller, FGWLA and CLAC, the conduct of the Business as
currently conducted does not infringe or otherwise violate the intellectual
property rights of any third party, except for infringements which would not,
individually or in the aggregate, have a Sellers Material Adverse
Effect.

     

    Section
4.21     Tax Matters. 
Except as disclosed in Schedule 4.21:

     

    (a)         All
material Tax Returns of or relating to the Seller Subsidiaries, the Business or
the Transferred Assets required to be filed on or prior to the Closing Date have
been timely filed (or will have been timely filed prior to the Closing
Date).

     

    (b)         All
Tax Returns referred to in paragraph (a) above were true, correct and complete
in all material respects when filed.

     

    (c)         All
material amounts of Taxes of or relating to the Seller Subsidiaries, the
Business or the Transferred Assets required to be paid or withheld under
applicable Law have (or by the Closing Date will have) been timely paid or
remitted, as appropriate, to the proper Tax Authority except for
Taxes  that are disclosed in Schedule 4.21 and are being contested in
good faith through appropriate proceedings.

     

     

    
      
        
        

      

      
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    (d)         There
is (i) currently not in effect any written agreement that extends the period of
assessment or collection of any Taxes of or relating to the Seller Subsidiaries,
the Business or the Transferred Assets that has been executed or filed with any
Tax Authority and (ii) no power of attorney that is currently in force has been
granted with respect to any matter relating to Taxes that could affect any of
the Seller Subsidiaries, the Business or the Transferred Assets after the
Closing Date.

     

    (e)         No
federal, state, local or foreign audit, examination, refund litigation,
adjustment, controversy or other administrative proceeding or court proceeding
(each a “Tax
Contest”) exists, is pending, is proposed, or has been initiated or
threatened in writing with regard to any material amount of Taxes of or relating
to the Seller Subsidiaries, the Business or the Transferred Assets.

     

    (f)         Each
of the Seller Subsidiaries is a member of the affiliated group (within the
meaning of section 1504(a)(1) of the Code) for which Parent files a federal
consolidated income tax return as the common parent (the “Consolidated Group”),
and has not been includible in any other federal consolidated income tax return
for any taxable period for which the statute of limitations has not
expired.

     

    (g)         None
of the Seller Subsidiaries has any liability for a material amount of Taxes of
any Person (other than any of the Seller Subsidiaries) under Treasury
Regulations section 1.1502-6 (or similar provision of state, local, or foreign
Law), as a transferee or successor, or (other than as specifically set forth in
(A) this Agreement or (B) the Ancillary Agreements) by contract.

     

    (h)         No
election has been made by or with respect to any of the Seller Subsidiaries
under section 846(e) of the Code.

     

    (i)         Seller
has delivered to Purchaser a true and complete copy of all Tax sharing
agreements involving any of the Seller Subsidiaries.

     

    (j)         The
Seller Subsidiaries have established (and until the Closing Date will maintain)
on their books and records reserves adequate to satisfy all liabilities for
Taxes that are not yet due and payable and are required to be accrued in
accordance with GAAP of each of the Seller Subsidiaries through the Closing
Date.

     

    (k)         There
are no Tax liens on any of the assets of any of the Seller Subsidiaries or the
Business or any of the Transferred Assets other than any Liens for Taxes by
Governmental Entities that (i) are not yet due or delinquent, (ii) are disclosed
in Schedule 4.21 and are being contested in good faith by appropriate
proceedings or (iii) have been accrued or otherwise reflected on the applicable
financial statements (in accordance with Applicable SAP or GAAP, as
applicable).

     

    (l)         
Seller has delivered to Purchaser correct and complete copies of all (i) income
and  franchise Tax Returns filed by or with respect to the Seller
Subsidiaries for the 2004, 2005 and 2006 tax years; and (ii) premium Tax Returns
for the 2004, 2005 and 2006 tax years, in each case to the extent that such Tax
Returns are in its

     

    
      
        
        

      

      
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     possession.  With
respect to Tax Returns described in the previous sentence that are not currently
in the possession of Seller, Seller shall cooperate with Purchaser in order to
deliver such Tax Returns to Purchaser prior to the Closing Date.

     

                                                   (m)           None
of the Seller Subsidiaries has any material amount of income reportable for a
period ending after the Closing Date but attributable to a transaction not in
the ordinary course of business (e.g., resulting from an installment sale)
occurring in, or a change in accounting method made for, a period ending on or
prior to the Closing Date which resulted in a deferred reporting of a material
amount of income from such transaction or from such change in accounting
method.

     

    (n)         None
of the Seller Subsidiaries has constituted a “distributing corporation” or a
“controlled corporation” (within the meaning of section 355(a)(1)(A) of the
Code) in a distribution of stock qualifying for tax-free treatment under section
355 of the Code in the two years prior to the date of this
Agreement.

     

    (o)         None
of the Seller Subsidiaries has a “policyholders surplus account” within the
meaning of section 815 of the Code.

     

    (p)         None
of the Seller Subsidiaries maintains a “special loss discount account” or makes
“special estimated tax payments” within the meaning of section 847 of the
Code.

     

    (q)         As
required by applicable Tax law, (A) Seller, FGWLA or CLAC (with respect to the
Business or the Transferred Assets) and (B) the Seller Subsidiaries have
reported to the Internal Revenue Service all “reportable transactions” (as such
term is defined in Treasury Regulations section 1.6011-4).  Seller has
delivered to Purchaser correct and complete copies of all disclosures described
in the preceding sentence.

     

    (r)         Since
December 31, 2006, none of (i) Seller, FGWLA or CLAC (with respect to the
Business or the Transferred Assets) or (ii) the Seller Subsidiaries, has
participated in any “listed transactions” (as such term is defined in Treasury
Regulations section 1.6011-4).

     

    (s)         No
Seller Subsidiary Plan provides for the payment of any amount which would not be
deductible by reason of section 280G of the Code (or any corresponding provision
of state, local or foreign Law).

     

    (t)         Written
notice has not been received by (A) Seller, FGWLA or CLAC (with respect to the
Business or the Transferred Assets) or (B) any Seller Subsidiary from any Tax
Authority in a jurisdiction where it does not file a Tax Return asserting that
it is subject to Tax by or required to file a Tax Return in that
jurisdiction.

     

    (u)         Other
than Alta Health & Life Insurance Company, none of the Seller Subsidiaries
is a “life insurance company” as defined in section 816 of the
Code.

     

     

    
      
        
        

      

      
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    This
Section 4.21 and Section 4.08(l) contain the sole and exclusive representations
and warranties provided by Seller, FGWLA and CLAC to Purchaser and its
Affiliates with respect to all matters relating to Taxes of Seller, FGWLA, CLAC,
the Seller Subsidiaries, the Business and the Transferred Assets.

     

    Section
4.22     Security Deposits. 
Schedule
4.22 sets forth a true and correct list of all securities deposited by
each of the Seller Subsidiaries with Governmental Entities.

     

    Section
4.23     Bank Accounts. 
Schedule
4.23 sets forth a true and correct list of bank accounts and investment
accounts of the Seller Subsidiaries, including the name of each bank or other
institution, account numbers, a list of the signatories to such accounts and the
names of all persons holding a power of attorney with respect to such
accounts.

     

    Section
4.24     Sufficiency
of Assets. 
Except as
set forth in Schedule 4.24(a), after giving effect to the transactions
provided for under this Agreement, including the rights granted to Purchaser
under the Ancillary Agreements, Purchaser will, as respects the Acquired
Operations, own, possess, license, lease or, through an enforceable written
obligation, have access to, or the benefit of, all assets and contractual rights
necessary for the conduct of the Business and the affairs of the Seller
Subsidiaries immediately following the Closing in all material respects as
conducted on the date of this Agreement.  Schedule 4.24(b) lists all
Contracts, Intellectual Property Rights and other assets of Seller, FGWLA and
CLAC which are used in the Business as presently conducted, are material to the
conduct of the Business and not included in the Transferred Assets, the Assigned
and Assumed Contracts, the Insurance Contracts, the Assumed Reinsurance
Agreements or the Administered Contracts, other than the Excluded Assets, the
Owned Generally Used Software, the Licensed Generally Used Software and the
Producer Contracts.

     

    Section
4.25     Actuarial Reports. 
Schedule
4.25 lists all of the actuarial reports which were prepared internally or
externally in connection with Seller’s, FGWLA’s, CLAC’s and the Insurance
Company Subsidiaries’ statutory annual filings since January 1, 2006, and prior
to the date of this Agreement, and all attachments, addenda, supplements thereto
and Seller, FGWLA and CLAC have delivered or made available to Purchaser
complete and accurate copies of all such actuarial reports; provided, however, that with
respect to any such actuarial reports with respect to Seller, FGWLA and CLAC,
only the portions thereof with respect to the Business of such company have been
delivered or made available to Purchaser.

     

    Section
4.26     Disclosure. 
Each of
Seller, FGWLA, CLAC and the Seller Subsidiaries have made all disclosures
to Contractholders with respect to compensation paid to Producers to the extent
that such disclosures are required to be made by applicable Law, and all such
disclosures complied in all material respects with applicable Law when
made.

     

    
      
        
        

      

      
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    Section
4.27     Producer Appointments and Contracts. 
Schedule
4.27 lists each contract that Seller, FGWLA, CLAC (in each case, to the
extent relating to the Business) or any Seller Subsidiary has with a Producer in
effect as of the date hereof which resulted, in calendar year 2006, in more than
$20,000,000 in direct written premium and premium equivalents (each a “Material Producer
Contract”).  None of Seller, FGWLA, CLAC or the Seller
Subsidiary that is a party to a Material Producer Contract or, to the Knowledge
of Seller, FGWLA and CLAC, any other party to such Material Producer Contract is
in breach thereof in any material respect.

     

    Section
4.28     Certain Insurance Contracts. 
 Schedule
4.28 lists all Insurance Contracts and Subsidiary Insurance Contracts in force
as of the date hereof that (a) are Guaranteed Renewal Contracts, (b) provide for
the payment of policy dividends or (c) provide for experience
rating.

     

    Section
4.29     Books and Records. 
 The
Books and Records are complete and accurate in all material
respects.

     

    Section
4.30     Officer and Director Claims. 
As of the
date of this Agreement, except as set forth in Schedule 4.30, no Person
is pursuing or, to the Knowledge of Seller, FGWLA and CLAC, is threatening in
writing to pursue any Action against any current or former officer or director
of the Seller Subsidiaries in his or her capacity as an officer or director of
the Seller Subsidiaries, and none of Seller, FGWLA nor CLAC is pursuing or
threatening to pursue any Action against any current or former officer or
director of the Seller Subsidiaries in his or her capacity as an officer or
director of the Seller Subsidiaries.

     

    Section
4.31     Noncompetition Agreements. 
 Except
as set forth in Schedule 4.31, none of Seller or any of its Affiliates,
including the Seller Subsidiaries, is a party to any Contract, including any
Assigned and Assumed Contract, which, by its terms, will restrict Purchaser’s or
any Seller Subsidiary’s rights to compete with other entities, engage in any
line of business, or solicit, employ or contract with employees, customers or
Providers.

     

    Section
4.32     Insurance Coverage. 
Schedule
4.32 sets forth a true and complete list of the insurance policies
covering the Seller Subsidiaries as of the date of this Agreement.  As
of the date of this Agreement, none of the Seller Subsidiaries has any claims
under review, in dispute or unpaid by any Person providing such insurance
coverage to or on behalf of the Seller Subsidiaries, other than workers
compensation claims in the ordinary course of business.

     

    Section
4.33     Stop Loss Insurance
Contracts. 
Seller has
implemented in all material respects the business plans set forth in the
Management Presentation as regards (i) the renewal of Stop Loss Insurance
Agreements and (ii) the increase of manual rates applicable to the issuance of
new Stop Loss Insurance Agreements.

     

    
      
        
        

      

      
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    ARTICLE
V

     

    REPRESENTATIONS AND
WARRANTIES OF PURCHASER

     

    Purchaser
hereby represents and warrants to Seller, FGWLA and CLAC as
follows.

     

    Section
5.01     Organization, Standing and
Authority.   Purchaser
is duly organized, validly existing and in good standing under the Law of
Connecticut and has the requisite power and authority to carry on the operations
of its businesses as they are now being conducted by Purchaser.

     

    Section
5.02     Authorization. 
Purchaser has the requisite power and authority to execute,
deliver and perform its obligations under this Agreement, each of the Ancillary
Agreements to be executed by it and the other agreements, documents and
instruments to be executed and delivered in connection with this Agreement or
the Ancillary Agreements.  The execution and delivery by Purchaser of
this Agreement, the Ancillary Agreements to be executed by it and the other
agreements, documents and instruments to be executed and delivered in connection
with this Agreement or the Ancillary Agreements, and the performance by
Purchaser of its obligations hereunder and thereunder, have been duly authorized
by all necessary corporate action on the part of Purchaser.  This
Agreement has been duly executed and delivered by Purchaser and, subject to the
due execution and delivery hereof by Seller, FGWLA and CLAC, this Agreement is a
valid and binding obligation of Purchaser enforceable against Purchaser in
accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium and other similar laws
relating to or affecting creditors’ rights generally and by general equitable
principles (regardless of whether such enforceability is considered in a
proceeding in equity or at law).  Each Ancillary Agreement and each
other agreement, document and instrument to be executed and delivered in
connection with this Agreement or the Ancillary Agreements, when executed and
delivered by Purchaser will be duly executed and delivered by Purchaser and,
subject to the due execution and delivery of such agreements, documents and
instruments by the other parties thereto, each Ancillary Agreement and each
other agreement, document and instrument to be delivered in connection with this
Agreement or the Ancillary Agreements executed by Purchaser will be a valid and
binding obligation of Purchaser enforceable against Purchaser in accordance with
its terms, except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium and other similar laws relating to or affecting
creditors’ rights generally and by general equitable principles (regardless of
whether such enforceability is considered in a proceeding in equity or at
law).

     

    Section
5.03     Non-Contravention. 
 Except
as disclosed on Schedule 5.03, the execution and delivery by Purchaser of this
Agreement and the Ancillary Agreements to which it is a party do not, and the
consummation by Purchaser of the transactions contemplated by this Agreement and
by such Ancillary Agreements and compliance with the provisions hereof and
thereof will not, (i) conflict with any of the provisions of the Organizational
Documents of Purchaser, (ii) conflict with, result in a breach of or default

     

    
      
        
        

      

      
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    (with or
without notice or lapse of time, or both) under, give rise to a right of
termination, cancellation or acceleration of any obligation or loss of a benefit
under, or result in the creation of any Lien (other than Permitted Liens) on any
property or asset of Purchaser under, any indenture or other agreement, permit,
franchise, license or other instrument or undertaking to which Purchaser is a
party or by which Purchaser or any of its properties or assets is bound or
affected, or (iii) contravene any statute, law, ordinance, rule, regulation,
order, judgment, injunction, decree, determination or award applicable to
Purchaser or any of its subsidiaries or any of its properties or assets, except,
with respect to (ii), as would not, individually or in the aggregate, have a
Purchaser Material Adverse Effect.

     

    Section
5.04     Compliance with
Law

     

    .                                               (a)         Except
as disclosed in Schedule 5.04(a), since January 1, 2005 Purchaser has been in
compliance with all Law, except where the failure to be in compliance would not,
individually or in the aggregate, have a Purchaser Material Adverse
Effect.

     

    (b)         Except
as disclosed in Schedule 5.04(b) or as would not have a Purchaser Material
Adverse Effect, since January 1, 2005, Purchaser has not received, nor otherwise
has any Knowledge of, any written notice from any Governmental Entity that (i)
alleges any material noncompliance (or that Purchaser is under investigation
or the subject of an inquiry by any such Governmental Entity for such
alleged material noncompliance) with any applicable Law, or (ii) asserts any
risk-based capital deficiency.

     

    Section
5.05     Consents and
Approvals.

     

    (a)         There
is no requirement applicable to Purchaser or any of its Affiliates to make any
filing with, or to obtain any Permit, authorization, consent or approval from,
any Governmental Entity that is either a health or insurance regulatory
authority in connection with the consummation of the transactions contemplated
by this Agreement and the Ancillary Agreements, except for the filings, permits,
authorizations, consents or approvals set forth in Schedule
5.05(a).

     

    (b)         There
is no requirement applicable to Purchaser to make any filing with, or to obtain
any Permit, authorization, consent or approval from, any Governmental Entity
that is neither a health nor insurance regulatory authority in connection with
the consummation of the transactions contemplated by this Agreement and the
Ancillary Agreements, except for the filings, permits, authorizations, consents
or approvals as set forth in Schedule 5.05(b).

     

    (c)         There
is no requirement applicable to Purchaser to obtain any consent or approval from
any third party (excluding any Governmental Entity) in connection with the
execution or consummation of the transactions contemplated by this Agreement,
except for the consents, approvals or notices set forth in Schedule 5.05(c) and
such other consents, approvals, authorizations, declarations, filings or notices
the failure

     

    
      
        
        

      

      
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     to
obtain or make which, in the aggregate, would not have a Purchaser Material
Adverse Effect.

     

    Section
5.06     Brokers. 
No
broker, investment banker, financial advisor or other Person, other than
Banc of America Securities LLC, the fees and expenses of which will be paid by
Purchaser, is entitled to any broker’s, finder’s, financial advisor’s or other
similar fee or commission in connection with the transactions contemplated by
this Agreement based upon arrangements made by or on behalf of Purchaser or any
of its Affiliates.

     

    Section
5.07     Ratings.   Purchaser
has an A.M. Best claims paying rating of at least A- and a Standard & Poor’s
Corporation rating of at least BBB+, and Purchaser has received no notification
that its A.M. Best claims paying rating will be downgraded below A- or that its
Standard & Poor’s Corporation rating will be downgraded below BBB+
as  a result of the consummation of the transaction contemplated
hereby.

     

    Section
5.08     Licenses and Franchises. 
  Except
as listed on Schedule 5.08 and for policy form, rate and similar approvals and
small group market approvals, after acquiring the Seller Subsidiaries, Purchaser
will have all Permits necessary to (a) conduct the Business in the manner and in
the jurisdictions in which the Business is presently being conducted; and (b)
perform its obligations under this Agreement and each Ancillary
Agreement.  All such Permits are valid and in full force and effect,
and Purchaser is not operating under any formal or informal agreement or
understanding with any Governmental Entity which restricts its authority in a
manner that would materially limit its ability to so conduct the Business or to
perform its obligations under this Agreement or any Ancillary
Agreement.  Except as listed on Schedule 5.08, no material violations
exist in respect of any such license or authorization and no investigation or
proceeding is pending or, to the Knowledge of Purchaser, threatened, that would
be reasonably likely to result in the suspension, revocation or material
limitation or restriction of any such license or authorization and, to the
Knowledge of Purchaser, there is no reasonable basis for the assertion of any
such violation or the institution of any such proceeding or
investigation.

     

    Section
5.09     Purchaser Financial Statements. 
Purchaser has previously delivered to Seller, FGWLA and CLAC
true, complete and correct copies of the statutory financial statements of
Purchaser as filed with the Insurance Department of the State of Connecticut,
for the years ended December 31, 2006 and 2005 and for the calendar quarter
ended March 31, 2007, together with all exhibits and schedules thereto (the
“Purchaser SAP
Statements”).  The Purchaser SAP Statements present fairly, in
all material respects, the statutory financial condition of Purchaser at the
respective dates thereof, and the statutory results of operations for the
periods then ended in accordance with Applicable SAP applied on a consistent
basis throughout the periods indicated and consistent with each other, except as
otherwise specifically noted therein.

     

    Section
5.10      Absence of Certain Changes. 
Since December 31, 2006, there has not been any change, event,
occurrence, circumstance, fact or other matter that

     

    
      
        
        

      

      
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     has
had or would, individually or in the aggregate, reasonably be expected to have a
Purchaser Material Adverse Effect.

     

    Section
5.11     Sufficient Funds. 
 Purchaser
has or will have at Closing sufficient surplus and funds available (through
existing credit arrangements or otherwise) to pay the amounts required by
Article II, to assume the Assumed Liabilities and to pay all fees and expenses
related to the transactions contemplated by this Agreement that are the
obligation of Purchaser.

     

    Section
5.12     Investment Intent. 
The Shares will be acquired by Purchaser for its own account and
not with a view to, or for sale in connection with, any distribution
thereof.  Purchaser will refrain from transferring or otherwise
disposing of any of the Shares, or any interest therein, in such manner as to
violate any registration provision of any applicable federal or state securities
law regulating the disposition thereof.

     

    ARTICLE
VI

     

    COVENANTS

     

    Section
6.01     Conduct of Business

     

                                                                          (a)         Except
as set forth on Schedule 6.01(a) or as otherwise contemplated by this Agreement,
during the period from the date of this Agreement to the Closing Date, Seller,
FGWLA and CLAC (1) shall carry on the Business only in the ordinary course of
business consistent with past practice, (2) shall use their reasonable best
efforts to preserve intact the present business organization and operations of
the Business, to keep available the services of the Business Employees and to
preserve their relationships with Governmental Entities, licensors, producers,
Providers, customers and others having business relationships with the Business
and (3) shall not without the prior consent of Purchaser:

     

    (i)                 make
any change in the Tax or statutory accounting methods, principles or practices
used by Seller, FGWLA or CLAC in connection with the Business, including but not
limited to any change with respect to establishment of reserves for losses and
loss adjustment expenses, except insofar as may be required by a change in
Applicable SAP or as may be required by Law or any Governmental
Entity;

     

    (ii)                 pay,
discharge, compromise or satisfy any material claims, liabilities or obligations
associated with the Business other than the payment, discharge, compromise or
satisfaction of claims, liabilities or obligations in the ordinary course of the
business consistent with past practice;

     

    (iii)                 make,
with respect to the Business, any loans or advances to, or investments in any
Person other than in the ordinary course of business consistent with past
practice;

     

    
      
        
        

      

      
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    (iv)                 amend
in any material respect, assign or terminate any Ceded Reinsurance Agreement or
enter into any new reinsurance or retrocession agreements with respect to the
Business, except in the ordinary course of business consistent with past
practice;

     

    (v)                 amend
in any material respect, assign or terminate any Assigned and Assumed Contract
or Administered Contract, except in the ordinary course of business consistent
with past practice;

     

    (vi)                 sell,
dispose of, transfer, guarantee, mortgage or encumber any asset that would
otherwise be a Transferred Asset, except in the ordinary course of business
consistent with past practice;

     

    (vii)                 increase,
other than in the ordinary course of business consistent with past practice or
as permitted or required by an existing agreement or as required by applicable
Law, the compensation of, or the value of any pension, retirement allowance,
severance or other employee benefit plan, agreement or arrangement applicable to
any Business Employee, or establish any new Employee Plan applicable to any
Business Employee;

     

    (viii)                 (A)
make any change in underwriting standards, pricing bases, retention limits,
administrative practices or claims practices and standards used in connection
with the Business, other than in the ordinary course of business consistent with
past practice, or (B) make any material change that would relax the standards in
pricing and underwriting procedures for the issuance or renewal of Insurance
Contracts and Reinsured Contracts or the standards by which Insurance Contracts
or Reinsured Contracts are administered or monitored;

     

    (ix)                 permit,
allow, or suffer any assets which will be Transferred Assets upon consummation
of the Closing to be subjected to any Lien other than Permitted
Liens;

     

    (x)                 incur
any long-term indebtedness that would be required hereunder to be assumed by
Purchaser;

     

    (xi)                 enter
into any collective bargaining agreement with respect to the Business or
involving Business Employees or Corporate Employees except insofar as may be
required by applicable law;

     

    (xii)                 cancel
any debts or waive any material claims or rights relating to any assets which
will be Transferred Assets upon consummation of the Closing, other than in the
ordinary course of business consistent with past practice;

     

    (xiii)                 enter
into any agreement containing any provision or covenant that would on or after
the Closing directly limit Purchaser’s or its Affiliates’ ability to (i) sell
any products or services of or to any other Person, (ii) engage in the Business
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    any
Person or limiting the ability of any person to provide products or services
relating to the Business;

     

    (xiv)                 enter
into any Contract not entered into the ordinary course of business consistent
with past practice and which, if in effect on the date hereof, would constitute
a Material Business Contract;

     

    (xv)                 make
any filings with any Governmental Entities in any state relating to the
withdrawal from any lines, kinds or classes of insurance business included in
the Insurance Contracts, except as required by a change in applicable Law
following the date hereof or as requested by a Governmental Entity;

     

    (xvi)                 with
respect to the Insurance Contracts and the Reinsured Contracts, reduce rates,
fail to implement actuarially based rate increases, extend existing policy
terms, accelerate renewals, or take any other actions similar to the foregoing,
in each case other than in the ordinary course of business consistent with past
practice;

     

    (xvii)                 cease
providing any services to the Business that are provided to the Business as of
the date hereof;

     

    (xviii)                 take
any action which would be contrary to the representation set forth in Section
4.08(l) had such action occurred prior to the date hereof; or

     

    (xix)                 commit
or agree to take any of the foregoing actions.

     

    (b)         Except
as set forth on Schedule 6.01(b) or as otherwise contemplated by this Agreement,
during the period from the date of this Agreement to the Closing Date, Seller
shall cause the Seller Subsidiaries (i) to carry on their respective businesses
only in the ordinary course of business consistent with past practice and (ii)
use their reasonable best efforts to preserve intact their respective present
business organizations and operations, to keep available the services of the
Subsidiary Employees and to preserve their respective relationships with
Governmental Entities, licensors, Providers, customers and others having
business relationships with the Seller Subsidiaries, and Seller shall not permit
any Seller Subsidiary to, without the prior consent of Purchaser:

     

    (i)                 make
any change in the Tax or accounting methods, principles or practices used by
such Seller Subsidiary, including but not limited to any change with respect to
establishment of reserves for losses and loss adjustment expenses maintained by
the Insurance Company Subsidiaries, except insofar as may be required by a
change in Applicable SAP or generally accepted accounting principles, or as may
be required by Law or any Governmental Entity;

     

    (ii)                 pay,
discharge, compromise or satisfy any material claims, liabilities or obligations
other than the payment, discharge, compromise or 

     

    
      
        
        

      

      
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    satisfaction
of claims, liabilities or obligations in the ordinary course of the business
consistent with past practice;

     

    (iii)                 make
any material capital expenditure, except (A) expenditures in the ordinary course
of business consistent with past practice and (B) as would not reduce non-cash
assets of the business of such Seller Subsidiary;

     

    (iv)                 amend
in any material respect, assign or terminate any reinsurance or retrocession
agreement or enter into any new reinsurance or retrocession agreements, except
in the ordinary course of business consistent with past practice;

     

    (v)                 make
any change in underwriting standards, pricing bases, retention limits,
administrative practices or claims practices and standards other than in the
ordinary course of business consistent with past practice;

     

    (vi)                 (A)
sell, dispose of, transfer, guarantee, mortgage or encumber any assets, other
than in the ordinary course of business consistent with past practice or (B)
terminate, modify or change in any material respect any material contract, other
than in the ordinary course of business consistent with past
practice;

     

    (vii)                 (A)
permit or allow any assets to become subject to any Liens except Permitted Liens
or, (B) waive any material claims or rights relating to its
business;

     

    (viii)                 declare,
set aside or pay any dividends on, or make any other distributions (whether in
cash, stock or property) in respect of, any of its outstanding capital
stock;

     

    (ix)                 issue,
sell, grant, repurchase or redeem any shares of its capital stock, any other
voting securities or any securities convertible into, or any rights, warrants or
options to acquire, any such shares, voting securities or convertible
securities;

     

    (x)                 amend
its organizational documents;

     

    (xi)                 (A)
incur any indebtedness for borrowed money or guarantee or otherwise become
responsible for any such indebtedness of another person or (B) make any loans,
advances or capital contributions to, or investments in, any other person, other
than purchases of investment assets in the ordinary course of business
consistent with past practice;

     

    (xii)                 enter
into any collective bargaining agreement, except insofar as may be required by
applicable Law;

     

    
      
        
        

      

      
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    (xiii)                 cancel
any debts or waive any material claims or rights relating to any assets of such
Seller Subsidiary, other than in the ordinary course of business consistent with
past practice;

     

    (xiv)                 enter
into any agreement containing any provision or covenant that would on or after
the Closing directly limit Purchaser’s or its Affiliates’ ability to (A) sell
any products or services of or to any other Person, (B) engage in the business
of such Seller Subsidiary or (C) compete with or to obtain products or services
from any Person or limiting the ability of any person to provide products or
services relating to the business of such Seller Subsidiary;

     

    (xv)                 enter
into any Contract not entered into in the ordinary course of business consistent
with past practices and which, if in effect on the date hereof, would constitute
a Material Business Contract;

     

    (xvi)                 make
any filings with any Governmental Entities in any state relating to the
withdrawal of any licenses held by such Seller Subsidiary, except as required by
a change in applicable Law following the date hereof or as requested by a
Governmental Entity;

     

    (xvii)                 acquire
(A) any business or any corporation, partnership, joint venture, association or
other business organization or division thereof or (B) any assets that are
material, individually or in the aggregate, to such Seller Subsidiary, other
than purchases of investment assets in the ordinary course of business
consistent with past practice;

     

    (xviii)                 increase,
other than in the ordinary course of business consistent with past practice or
as permitted or required by an existing agreement or as required by applicable
Law, the compensation of, or the value of any pension, retirement allowance,
severance or other employee benefit plan, agreement or arrangement
applicable to any Subsidiary Employee, or establish any new Employee Plan
applicable to any Subsidiary Employee;

     

    (xix)                 not
take any action which would be contrary to the representation set forth in
Section 4.08(l) had such action occurred prior to the date hereof;
or

     

    (xx)                 commit
or agree to take any of the foregoing actions.

     

    Section
6.02     Exclusivity.  From and after the date of this Agreement, Seller, FGWLA, CLAC
and their Affiliate shall not, directly or indirectly, through any director,
officer, employee, shareholder, financial advisor, representative or agent of
such Person (i) solicit, initiate, aid or encourage (including by way of
furnishing information or advice) or take any other action to facilitate any
inquiries or proposals that constitute, or could reasonably be expected to lead
to, a proposal or offer for a merger, consolidation, amalgamation, business
combination, sale or transfer of assets or properties, sale of shares of capital
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    transaction
involving any part of the Acquired Operations (an “Acquisition
Proposal”), (ii) engage in negotiations or discussions with any Person
(or group of Persons) other than Purchaser or its advisors (an “Alternate Bidder”)
concerning, or provide any nonpublic information or advice to any Person
relating to, any Acquisition Proposal, (iii) continue any prior discussions or
negotiations with any Alternate Bidder concerning any Acquisition Proposal or
(iv) accept, or enter into any contract (whether or not contingent upon
consummation of the transactions contemplated by this Agreement) concerning, any
Acquisition Proposal with any Alternate Bidder or consummate any Acquisition
Proposal other than as contemplated by this Agreement.  In the event
that any of Seller, FGWLA, CLAC or their Affiliate receives an Acquisition
Proposal, the Person receiving such Acquisition Proposal shall promptly notify
Purchaser of such proposal and provide a copy thereof (if in written or
electronic form) or, if in oral form, a written summary of the terms and
conditions thereof, including the names of the interested
parties.  Seller, FGWLA, CLAC and their Affiliate shall request that
all Alternate Bidders who executed a confidentiality agreement in connection
with the consideration of a possible Acquisition Proposal (each a “Seller Confidentiality
Agreement”) return, or destroy, all confidential information heretofore
furnished to such Alternate Bidder by or on behalf of Seller, FGWLA, CLAC, the
Seller Subsidiaries or their Affiliates subject to the terms of such Seller
Confidentiality Agreement.

     

    Section
6.03     Access to Information; Confidentiality. 
Seller, FGWLA and CLAC shall, upon reasonable notice, afford to
Purchaser and to the officers, employees, counsel, financial advisors,
accountants, actuaries and other representatives of Purchaser reasonable access
during normal business hours during the period prior to the Closing Date to the
Books and Records and the other Transferred Assets and, during such period,
shall furnish as promptly as practicable to Purchaser such information
concerning the Acquired Operations as Purchaser may from time to time reasonably
request.  Purchaser agrees that they will hold, and will cause their
Affiliates and each of their respective directors, officers, employees,
partners, counsel, financial advisors, accountants, actuaries and other
representatives and Affiliates to hold, any information so obtained in
confidence to the extent required by, and in accordance with, the provisions of
the Confidentiality Agreement, dated April 25, 2007 (the “Confidentiality
Agreement”), between Seller and CIGNA Corporation.

     

    Section
6.04     Reasonable Best Efforts. 
Upon the terms and subject to the conditions and other agreements
set forth in this Agreement, each of the parties agrees to use its reasonable
best efforts to take, or cause to be taken, all actions, and to do, or cause to
be done, and to assist and cooperate with the other parties in doing, all things
necessary, proper or advisable to consummate and make effective, as promptly as
practicable (subject to Section 6.05(e)), the transactions contemplated by this
Agreement or any Ancillary Agreement.

     

    Section
6.05     Consents, Approvals, Filings
and Costs

     

                                                   (a)         Seller,
FGWLA, CLAC and Purchaser will make and cause their respective Affiliates to
make all necessary filings as soon as practicable, including any filing required
under state insurance Law, in order to facilitate prompt
consummation

     

    
      
        
        

      

      
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    of the
transactions contemplated by this Agreement or any Ancillary
Agreement.  In addition, Seller, FGWLA, CLAC and Purchaser will each
use their reasonable best efforts, and will cooperate fully with each other to
obtain as promptly as practicable all necessary consents, approvals, permits or
authorizations of Governmental Entities and consents or waivers of all third
parties necessary or advisable for the consummation of the transactions
contemplated by this Agreement or any Ancillary Agreement.  Each of
Seller, FGWLA, CLAC and Purchaser shall use their reasonable best efforts to
provide such information and communications to Governmental Entities as
such Governmental Entities may reasonably request.

     

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

     

    (c)         Each
of the parties shall notify the other party and keep it advised as to the status
of all applications to, communications with and proceedings before, Governmental
Entities in connection with the transactions contemplated by this
Agreement.

     

    (d)         The
parties agree that any costs and expenses payable to third parties (other than
the respective agents, representatives, counsel, financial advisors, actuaries
and accountants of the parties to this Agreement) in connection with the
procurement of any consents or waivers of third parties (other than Governmental
Entities) necessary or advisable for the consummation of the transactions
contemplated by this Agreement or any Ancillary Agreement (whether such costs
and expenses are incurred prior to the Closing or after the Closing pursuant to
Section 2.07), including any consents or waivers for the assignment or transfer
to Purchaser of any Transferred Asset, shall be borne one half by Seller and one
half by Purchaser.  Without limiting the foregoing, the parties hereto
agree that Seller and Purchaser shall bear equally (i) all costs and expenses
payable to third parties (other than the respective agents, representatives,
counsel, financial advisors, actuaries and accountants of the parties to this
Agreement) in connection with the assignment of the Licensed Principally Used
Software contemplated by clause (B) of Section 4.19(c), and (ii) all costs and
expenses payable to third parties (other than the respective agents,
representatives, counsel, financial advisors, actuaries and accountants of the
parties to this Agreement) (a) in connection with the procurement of any
consents or waivers of third parties necessary or advisable for Seller to
provide to Purchaser or a Seller Subsidiary use of the Licensed Generally Used
Software pursuant to the Transition Services Agreement, as contemplated by
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    (b) in
providing to Purchaser or a Seller Subsidiary such use of the Licensed Generally
Used Software, including any increase in costs and expenses to Seller or
Seller’s Affiliates as a result of providing such use of the Licensed Generally
Used Software.  In lieu of procuring any consent or waiver described
in this Section 6.05(d), until (but not after) the end of the Consent Period,
Seller may, in cooperation with Purchaser, obtain for Purchaser or the
applicable Seller Subsidiary a substantially equivalent replacement for the
Transferred Asset, license, contract, lease or other right whose assignment
requires such consent or waiver, and the cost of such replacement shall be borne
one half by Seller and one half by Purchaser, but only if Seller has reasonably
determined that the cost of such replacement is less than the cost of procuring
such consent or waiver.  For the avoidance of doubt, any cost or
expenses in connection with the procurement of any consents or waivers of third
parties to be borne by any Seller Subsidiary on or following the Effective Date
and not taken into account in the Final Net Worth Statement shall be
treated as having been borne by Purchaser.

     

    (e)         Notwithstanding
anything herein to the contrary, no party shall be obligated to take or refrain
from taking or to agree to it, its Affiliates or the Acquired Operations taking
or refraining from any action or to suffer to exist any restriction or
requirement which would, individually or together with all other such actions,
restrictions or requirements, reasonably be expected to result in a material
negative effect on the benefits, taken as a whole, which such party could
otherwise reasonably expect to derive from the consummation of the transactions
contemplated hereby had such party not been obligated to take or refrain from or
to agree to the taking or refraining from such action or suffer to exist such
restriction or requirement, excluding the effects of any such restriction or
requirement that (i) is customary for the applicable Governmental Entity to
impose in transactions of the type of transaction contemplated hereby, (ii)
results from any business plans of Purchaser with respect to any of the Acquired
Operations that materially change the existing business plan of such part of the
Acquired Operations or (iii) results from any prior activities of Purchaser or
any of its Affiliates unrelated to the transactions contemplated under this
Agreement or the Business (“Negative
Condition”).

     

    (f)         Notwithstanding
anything herein to the contrary, the cost and expenses in connection with the
arrangements listed in Schedule 6.05(f)
shall be allocated as described in such schedule.

     

    Section
6.06     Representations and Warranties. 
From the date hereof through the Closing Date (a) Seller, FGWLA,
CLAC and their Affiliates shall use their reasonable best efforts to conduct
their affairs in such a manner so that except as otherwise contemplated or
permitted by this Agreement, the representations and warranties contained in
Article IV shall continue to be true, complete and correct on and as of the
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    representations
and warranties that are expressly stated to be made as of an earlier date; (b)
Purchaser shall use its reasonable best efforts to conduct its affairs in such a
manner so that, except as otherwise contemplated or permitted by this Agreement,
the representations and warranties contained in Article V shall continue to be
true and correct on and as of the Closing Date as if made on and as of the
Closing Date, except for representations and warranties that are expressly
stated to be made as of an earlier date; (c) Seller, FGWLA or CLAC shall notify
Purchaser promptly of any event, condition or circumstance, to the respective
Knowledges of Seller, FGWLA or CLAC, occurring from the date hereof through the
Closing Date that would constitute a violation or breach of this Agreement by
Seller, FGWLA or CLAC; and (d) Purchaser shall notify Seller, FGWLA and CLAC
promptly of any event, condition or circumstance, to the Knowledge of Purchaser,
occurring from the date hereof through the Closing Date that would constitute a
violation or breach of this Agreement by Purchaser.

     

    Section
6.07     Notification. 
From the date hereof through the Closing Date, Seller, FGWLA,
CLAC and Purchaser shall each promptly notify the others and keep them advised
as to (i) any litigation or administrative proceeding pending and known to it
or, to its Knowledge, threatened in writing which challenges or seeks to
restrain or enjoin the consummation of any of the transactions contemplated
hereby and (ii) the occurrence of any event that would, individually or in the
aggregate, reasonably be expected to have a Sellers Material Adverse Effect or
Purchaser Material Adverse Effect.

     

    Section
6.08     Further Assurances. 
On and after the Closing Date, each of Seller, FGWLA, CLAC and
Purchaser shall take all reasonably appropriate action and execute any
additional documents, instruments or conveyances of any kind which may be
reasonably necessary to carry out any of the provisions of this Agreement or
consummate any of the transactions contemplated by this Agreement.

     

    Section
6.09     Expenses. 
Except as otherwise specifically provided in this Agreement, the
parties to this Agreement shall bear their respective expenses incurred in
connection with the preparation, execution and performance of this Agreement and
consummation of the transactions contemplated hereby, including all fees and
expenses of agents, representatives, counsel, financial advisors, actuaries and
accountants.

     

    Section
6.10     Resources.  Each party shall have and maintain, from the date hereof and
during the terms of the Transition Services Agreement, the Indemnity Reinsurance
Agreements and the Administrative Services Agreements, sufficient expertise,
trained personnel, resources, systems, controls and procedures (financial,
legal, accounting, administrative or otherwise) as may be necessary or
appropriate to discharge its obligations after Closing under the terms of this
Agreement, the Transition Services Agreement, the Indemnity Reinsurance
Agreements, the Administrative Services Agreements or any other Ancillary
Agreement.  Without limiting the foregoing, none of Seller, FGWLA,
CLAC, Purchaser or any of their respective Affiliates shall  fail to
maintain in full force and effect all Permits, including form and rate filings,
necessary for the performance of its obligations under this Agreement or any
Ancillary Agreement.

     

    Section
6.11     Employees and Employee
Benefits

     

    .                                              
(a)         For
purposes of this Section 6.11, and except as otherwise agreed upon in writing by
the parties or as reflected in the final list described in the last sentence of
this Section 6.11(a), “Business Employees”
shall mean the individuals listed

     

    
      
        
        

      

      
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     in
Schedule 6.11(a)(1) and “Corporate Employees”
shall mean the individuals described on Schedule 6.11(a)(2) and such other
employees of the Seller’s corporate division that the parties hereto agree to in
writing.  Such list on Schedule 6.11(a)(1) shall consist of all active
employees in the Healthcare Division (including all employees on approved leaves
of absence or on short-term disability but excluding those employees or former
employees receiving long-term disability benefits).  Schedule
6.11(a)(1) shall be updated by Seller at least monthly between the date of this
Agreement and the Closing Date, and no later than five days prior to the Closing
Date, to add new hires whose employment is in the Healthcare Division and to
remove individuals who have terminated employment or service (it being
understood that an individual absent due to vacation, holiday or an approved
leave of absence shall not be deemed to have terminated employment or service)
or whose employment or service is no longer in the Healthcare
Division.

     

    (b)         As
provided in Section 6.11(j), after the Employment Commencement Date, Seller
shall not be responsible for wages, salaries and other benefits for Business
Employees with respect to their services as employees of Purchaser for periods
as of and after the Employment Commencement Date, it being understood that with
respect to Business Employees whose Employment Commencement Date occurs after
the Closing Date, such Business Employees shall remain employed by Seller or its
Affiliates and shall be seconded to Purchaser on the terms and conditions set
forth in the Employee Lease Agreement until the Employment Commencement Date for
such Business Employees.  The Employment Commencement Date may be
different dates for different Business Employees.

     

    (c)         Prior
to the earliest anticipated Closing Date, Purchaser shall deliver to each
Business Employee (except for Business Employees who are offered Replacement
Retention Agreements and fail to enter into such agreements) an offer of
employment with Purchaser or one of its Affiliates to be effective upon the
Employment Commencement Date on terms (except as provided in this Section 6.11)
that include eligibility to participate in Purchaser benefit programs as of the
Employment Commencement Date on the same basis as similarly-situated Purchaser
employees, at least the same rate of base pay as such individual’s base pay rate
in effect on the date of the Agreement, and employment, to the extent reasonably
practicable, at a worksite that is geographically proximate to such employee’s
primary work location in effect immediately prior to Closing.  Seller
acknowledges and agrees that, except as otherwise provided in Section 6.11(m)
and Section 6.11(n), an offer of employment made consistent with this Section
6.11(c) will not give rise to an obligation to provide severance benefits to any
such Business Employee regardless of whether such Business Employee accepts such
offer of employment.

     

    (d)         From
and after the Closing Date, and continuing to the date that is 4 months
following the Closing Date or such later date as mutually agreed to by the
parties hereto, Purchaser may elect to deliver to any Corporate Employee an
offer of employment with Purchaser or one of its Affiliates to be effective
on the date that is 4 months following the Closing Date or such later date as
mutually agreed to by the parties hereto, on terms (except as provided in this
Section 6.11) that include eligibility to participate in Purchaser benefit
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    the same
basis as similarly-situated Purchaser employees, at least the same rate of base
pay as such individual’s base pay rate in effect on the date of the Agreement,
and employment, to the extent reasonably practicable, at a worksite that is
geographically proximate to such employee’s primary work location in effect
immediately prior to Closing.  Seller acknowledges and agrees that an
offer of employment made consistent with this Section 6.11(d) will not give rise
to an obligation to provide severance benefits to any such Corporate Employee
regardless of whether such Corporate Employee accepts such offer of
employment.

     

    (e)         A
Business Employee or Corporate Employee who chooses to accept the offer
described in Section 6.11(c) or (d) must respond in writing to Purchaser’s offer
within 14 Business Days after receipt of the offer.  For purposes of
this Agreement, “Transferred Employee”
shall mean a Business Employee or Corporate Employee who (1) accepts the
employment offer in a timely fashion and (2) meets Purchaser’s reasonable
employment requirements with respect to satisfactory results of background
checks, drug tests, immigration verification and similar requirements (the
“Purchaser
Requirements”).  Any Business Employee or Corporate Employee
who fails to accept the offer in a timely fashion, or who fails to meet the
Purchaser Requirements, shall be a “Non-Acceptance Offer
Employee.”  Transferred Employees shall become employees of
Purchaser or one of its Affiliates upon the applicable Employment Commencement
Date.  A Business Employee or Corporate Employee who meets conditions
(1) and (2) above but is on an approved leave of absence for any reason or on
short-term disability on the Employment Commencement Date shall become
an employee of Purchaser or one of its Affiliates upon his or her return
from leave of absence or upon presenting as able to return to work following
such short-term disability, but only if such return is within 90 days after the
Employment Commencement Date.

     

    (f)         Subsidiary
Employees who remain employed by a Seller Subsidiary until immediately before
the Closing shall remain Subsidiary Employees upon the Closing.  As to
any such Subsidiary Employee, the Employment Commencement Date as used in this
Section 6.11 shall be the Closing Date applicable to that
Subsidiary.

     

    (g)         Except
as otherwise provided in this Section 6.11, as of the Employment Commencement
Date, Seller and its Affiliates shall cause each Transferred Employee to become
fully vested under all Employee Plans that are tax-qualified pension or
retirement plans and in which such Transferred Employee is participating as of
immediately prior to such Transferred Employee’s Employment Commencement
Date.  Prior to and effective as of the applicable Employment
Commencement Date, with respect to each Transferred Employee, Seller and its
Affiliates shall cause to be contributed to Seller’s Staff and Agents Savings
Plan all contributions (including matching and catch-up contributions, if
applicable) with respect to all periods prior to the Employment Commencement
Date.  Except as otherwise provided in Section 6.11(m) and excepting
accrued incentive cash compensation, as of the Employment Commencement Date
under Seller’s annual bonus program (“Incentive Cash
Compensation”), Seller and its Affiliates shall cause all accrued
benefits to be distributed to each Transferred Employee within 30 days after the
applicable Employment Commencement Date or otherwise in accordance with the
terms of the applicable plan.  

     

    
      
        
        

      

      
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    Seller
and Affiliates shall transfer the aggregate accrued Incentive Cash Compensation
in respect of the Transferred Employees to Purchaser with sufficient
documentation to permit Purchaser to identify such Incentive Cash Compensation
accrued with respect to each Transferred Employee.  Where active
participation in an Employee Plan does not cease by operation of Law, Seller
shall (except to the extent otherwise specifically provided herein) terminate
the participation of each Transferred Employee in each Employee Plan as of the
applicable Employment Commencement Date.

     

    (h)         As
of the Employment Commencement Date, except as specifically provided herein,
Purchaser or one of its Subsidiaries shall (A) become solely responsible for all
severance, termination and other liabilities related to the termination of
employment of each Transferred Employee whose employment is terminated by
Purchaser on or subsequent to the Employment Commencement Date; and (B) be
responsible for all other liabilities relating to the Transferred Employees,
including workers compensation liabilities, that arise on or after the
Employment Commencement Date on account of occurrences or conditions that
commence after the Employment Commencement Date.  Purchaser shall not
be responsible for any severance, termination, workers compensation or other or
liabilities related to any Non-Acceptance Offer Employee.

     

    (i)         Except
as otherwise provided in this Section 6.11, all employee-related liabilities,
including any workers compensation liabilities, of Seller and their respective
Affiliates with respect to all Transferred Employees, Subsidiary Employees or
any other present or former employee of Seller relating to events or
circumstances existing or occurring prior to the Employment Commencement Date
under an Employee Plan (including all liabilities with respect to Business
Employees under Employee Plans that are long-term incentive compensation,
deferred compensation, retention, retirement, savings or pension plans, but
excluding any Incentive Cash Compensation transferred to Purchaser under Section
6.11(g)) or under any workers compensation program, shall be retained by Seller
and their respective Affiliates and shall be Excluded Liabilities.

     

    (j)         Except
as otherwise provided in this Agreement to the contrary:

     

    (i)                 Seller
and its Affiliates shall be solely responsible for (1) claims for the type of
benefits described in Section 3(1) of ERISA whether or not covered by ERISA
(other than any claims for severance benefits, which shall be governed under
other provisions of this Section 6.11) (“Welfare Benefits”) that
are incurred under any Employee Plans by or with respect to (A) any Business
Employee and his or her beneficiaries or dependents before the Employment
Commencement Date and (B) any Non-Acceptance Offer Employee whether before or
after the Closing Date and (2) claims relating to continuation coverage under
Section 4980B of the Internal Revenue Code (“COBRA Coverage”)
attributable to “qualifying events” with respect to any Business Employee and
his or her beneficiaries and dependents that occur before the Employment
Commencement Date.

     

    
      
        
        

      

      
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    (ii)                 Purchaser
and its Affiliates shall be solely responsible for (1) claims for Welfare
Benefits that are incurred by or with respect to any Transferred Employee and
his or her beneficiaries or dependents on or after the Employment Commencement
Date and (2) claims relating to COBRA Coverage attributable to “qualifying
events” with respect to any Transferred Employee and his or her beneficiaries
and dependents that occur on or following the Employment Commencement
Date.  Purchaser shall waive any pre-existing condition exclusions
otherwise applicable to the Transferred Employees under any benefit plan of
Purchaser providing medical, dental, disability, and vision benefits in which
such Transferred Employees become eligible to participate, except to the
extent such pre-existing condition excluded participation in Seller’s
plan.

     

    (iii)                 Welfare
Benefits liabilities under Seller Subsidiary Plans shall remain with such plans
upon Closing when sponsorship of such plans is transferred to Purchaser or its
Affiliates.  Seller or its Affiliates shall cause the applicable
Seller Subsidiaries to meet all contribution and other funding obligations with
respect to Seller Subsidiary Plans up to the Closing Date.

     

    (iv)                 For
purposes of this Section 6.11(j), a medical/dental claim shall be considered
incurred when the services are rendered, the supplies are provided or
medications are prescribed, and not when the condition arose.  A
disability claim shall be considered incurred when the injury or illness
resulting in such claim occurs.

     

    (k)         Purchaser
shall provide each Transferred Employee credit for such employee’s service with
Seller and its Affiliates and any of their respective predecessors prior to the
Employment Commencement Date for purposes of participation, vesting and benefit
accrual (except for purposes of benefit accrual under any defined benefit
pension plan sponsored by Purchaser or any of its Affiliates), under any benefit
plan or program of Purchaser and its Affiliates, except to the extent that such
credited service would result in a duplication of benefits.  Within 30
days after the Employment Commencement Date, Seller shall provide Purchaser with
accurate information about each Transferred Employee’s service with Seller and
its Affiliates and any of their respective predecessors.

     

    (l)         With
respect to Transferred Employees, except as specifically provided in this
Section 6.11, Purchaser shall not assume, accept assignment of or otherwise be
responsible in any manner for any employment contracts, agreements or
arrangements such employee may have with Seller or any of its Affiliates and
shall not have any liabilities or obligations under any such contracts,
agreements or arrangements.

     

    (m)           Replacement Retention
Agreements.

     

    (i)                 Prior
to the Closing, Purchaser shall offer to each individual listed in Schedule
1.01(v) an agreement intended to be in lieu of the provisions for transition
bonus and severance benefits of the Special Incentive and 

     

    
      
        
        

      

      
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    Severance
Agreement with such individual and with the intention that such new agreement
shall be entered into prior to Closing and effective as of and subject to the
Closing (each such new agreement, a “Replacement Retention
Agreement”).  Each Replacement Retention Agreement shall
provide for transition bonus and severance benefits that are similar in all
material respects to those provided under the Special Incentive and Severance
Agreements and a release in favor of Seller with respect to the rights in
respect of transition bonus and severance benefits under the Special Incentive
and Severance Agreements, along with other terms to be agreed by Purchaser and
Seller.  Seller acknowledges and agrees that under no circumstances
whatever shall Purchaser assume any of Seller’s obligations under the Special
Incentive and Severance Agreements.

     

    (ii)                 Seller
shall promptly reimburse Purchaser for transition bonus amounts actually paid to
Transferred Employees pursuant to the terms of the Replacement Retention
Agreements (without giving effect to any post-Closing amendments thereto). 
Seller shall also promptly reimburse Purchaser for severance amounts actually
paid to Transferred Employees pursuant to the terms of the Replacement Retention
Agreements (without giving effect to any post-Closing amendments thereto) to the
extent that such severance amounts exceed the severance benefits available under
the severance pay plans of Purchaser and its Affiliates currently in effect with
respect to employees of Purchaser or its Affiliates of comparable
levels.  The additional benefits available over those under such plans
of Purchaser and its Affiliates are set forth on Schedule 6.11(m).

     

    (iii)                 In
addition to the reimbursement of transition bonus amounts paid under the
Replacement Retention Agreements as provided in Section 6.11(m)(ii), Seller
shall promptly reimburse Purchaser for any transition bonus amounts actually
paid to any of the Transferred Employees (other than those Transferred Employees
who are party to a Special Incentive and Severance Agreement) during the 14
month period commencing on the Closing Date pursuant to any transition-bonus
plans adopted by Purchaser.

     

    (iv)                 In
no event shall Seller’s obligation to reimburse Purchaser for severance pursuant
to Section 6.11(m)(ii) exceed an aggregate of $10 million.  In no
event shall Seller’s obligation to reimburse Purchaser for transition bonuses
pursuant to Section 6.11(m)(ii) and Section 6.11(m)(iii) exceed an aggregate of
$10 million.

     

    (n)         Prior
to the Closing, Seller shall offer to a set of individuals to be agreed by
Seller and Purchaser agreements which shall be effective as of and subject to
the Closing (the “New
Retention and
Severance
Agreements”).  The New Retention and Severance Agreements shall
provide for retention and severance benefits, the amount, timing and form of
which shall be mutually agreed between Purchaser and Seller and such other terms
and conditions as Purchaser shall determine, and shall provide that, upon the
Closing, Seller’s obligations may be assumed by Purchaser, with Seller released
therefrom, without the consent of the individual party
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    use its
reasonable best efforts to enter into the New Retention and Severance Agreements
no later than 10 business days prior to the Closing.  Upon the
Closing, Seller shall assign to Purchaser, and Purchaser shall assume from
Seller, Seller’s obligations under the New Retention and Severance Agreements so
as to cause the release of Seller under the New Retention and Severance
Agreements.

     

    (o)         With
respect to Transferred Employees, Purchaser shall assume all liabilities and
obligations for all unused vacation and other time-off earned or accrued by such
Transferred Employee through the Employment Commencement Date in accordance with
the policies of Seller and its Affiliates to the extent such accrued time-off is
reflected in the Final Statement of Assets and Liabilities.

     

    (p)         Seller
shall cause any Seller Subsidiary Plan that is a “non-qualified deferred
compensation plan” within the meaning of section 409A(d)(1) of the Code to be
amended to the extent necessary to bring any provisions of such plans relating
to time and form of payment into documentary compliance with such Code section
and all guidance issued thereunder prior to the Closing Date to the extent that
such guidance is to be effective as of or prior to the Closing Date or, if
earlier, December 31, 2008.  Any such amendments shall be in a form
reasonably acceptable to Purchaser.

     

    (q)         Purchaser
and Seller shall, subject to applicable Law, each make its appropriate employees
and data regarding employee benefit coverage available to the other at such
reasonable times as may be reasonably necessary for the proper administration by
the other of any and all matters relating to employee benefits and worker’s
compensation claims affecting its employees.  Subject to applicable
Law, Seller shall provide Purchaser with copies of the personnel files for each
Transferred Employee no later than the applicable Employment Commencement
Date.

     

    Section
6.12     Form and Rate
Filing

     

    .  Purchaser,
with Seller’s, FGWLA’s and CLAC’s reasonable cooperation, shall, as soon as
reasonably practicable after the execution of this Agreement, diligently proceed
with the necessary regulatory filings and applications so that Purchaser may
begin conducting the Business directly as soon as reasonably practicable
following the Closing Date.  Such filings and applications shall
include, but are not limited to, making form and rate filings in all
jurisdictions where such filings are required for the conduct of the
Business.  Purchaser shall use reasonable best efforts to obtain
approval of such forms and rates as promptly as reasonably
practicable.

     

    Section
6.13     Intercompany Relationships. 
Except as
set forth on Schedule 6.13 or as otherwise contemplated by this Agreement,
Seller, FGWLA and CLAC shall cause all intercompany accounts, loans, advances,
payables and receivables between the Seller Subsidiaries, on the one hand, and
Seller, FGWLA, CLAC or any other Affiliate of the Seller Subsidiaries (other
than another Seller Subsidiary), on the other hand (collectively, the “Intercompany
Obligations”), to be settled prior to the Closing Date to the extent that
amounts are due thereunder in the ordinary course.  Except as set
forth on Schedule 6.13 or as otherwise contemplated by this Agreement, all
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    terminated
prior to the Closing Date and, in each case, the Seller Subsidiaries shall be
fully released from all liability with respect thereto.  Seller, FGWLA
and CLAC shall cause the participation of the Seller Subsidiaries in all
agreements, arrangements and understandings, whether written or oral, between
any of the Seller Subsidiaries, on the one hand, and Seller, FGWLA, CLAC or any
other Affiliate of the Seller Subsidiaries (other than another Seller
Subsidiary), on the other hand (collectively, the “Intercompany
Agreements”), to be terminated and cancelled on or prior to the Closing
Date and the Seller Subsidiaries to be fully released from all liability with
respect thereto, other than with respect to the settlement of amounts accrued
but not then due thereunder through the Closing Date, which the parties agree to
cause to be settled in accordance with past practices, but in any event prior to
the delivery of the Proposed Statement of Assets and Liabilities and the
Proposed Net Worth Statement by Seller to Purchaser.  Prior to the
Closing Date, Seller and its Affiliates shall provide to Purchaser evidence
reasonably satisfactory to Purchaser of the completion of the actions
contemplated by this Section 6.13.  For the avoidance of doubt, (A)
the Intercompany Agreements include (i) all reinsurance agreements between the
Insurance Company Subsidiaries on the one hand, and Seller, FGWLA, CLAC or any
other Affiliate of the Insurance Company Subsidiaries (other than another Seller
Subsidiary), on the other hand, and (ii) the participation of the Seller
Subsidiaries in any Tax sharing agreements, (B) the Intercompany Obligations
include the statutory reserves ceded under such agreements and (C) all
settlements of Intercompany Agreements on or after the Closing Date shall be
taken into account in the Proposed Statement of Assets and Liabilities, the
Proposed Net Worth Statement, the Final Statement of Assets and Liabilities and
the Final Net Worth Statement.

     

    Section
6.14     Non-Compete

     

    .                                              
(a)         From
and after the Closing Date up to and including December 31, 2009, neither
Seller, FGWLA nor any of their Affiliates shall market, underwrite or issue stop
loss, group life, group disability, group medical, group dental, group vision,
group prescription drug coverage or group accidental death and dismemberment
insurance contracts anywhere in the United States other than ADA Contracts and
corporate or bank owned life insurance products, which would be included in the
Business.  Notwithstanding the foregoing, Seller, FGWLA, CLAC or any
of their Affiliates shall be permitted to (i) acquire, by merger or otherwise,
and operate the business, assets or stock of any other Persons or (ii) be
acquired by any other Person, provided that, in the
case of the preceding sub-clause (i), if the business so acquired derived more
than 20% of its U.S. revenue or operating profits for either of the prior two
calendar years from the issuance, marketing or underwriting of group medical,
group dental, group vision, and group prescription drug coverages, Seller,
FGWLA, CLAC or such Affiliate, as the case may be, shall after any such
acquisition, use its commercially reasonable efforts to sell, spin off or
otherwise divest itself of the division, unit or other portion of the acquired
business or entity that engages in the issuance, marketing or underwriting of
such coverages as soon as reasonably practical.

     

                                                    (b)         Notwithstanding
anything to the contrary set forth in this Section 6.14 (except as provided in
Section 6.14(d)), for a period of 30 months after the Closing Date, neither
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    indirectly
establish a marketing plan designed (i) to specifically target the
Contractholders or (ii) to specifically target the Business.

     

    (c)           Notwithstanding
any other provision of this Section 6.14 to the contrary, in the event of an
acquisition described in Section 6.14(a)(ii), or if any Person otherwise
acquires control of Seller, FGWLA, CLAC or any of their respective Affiliates,
the provisions of Section 6.14(a) and (b) shall not apply to such Person or any
of its Affiliates (other than Seller, FGWLA, CLAC or any of the respective
Affiliates of Seller, FGWLA or CLAC so acquired).

     

    (d)         For
a period of two years after the Closing Date, neither Seller, FGWLA, CLAC nor
any of their Affiliates shall (i) without the prior written consent of Purchaser
hire any of the Transferred Employees who are either (A) employees designated as
exempt employees of Seller or (B) otherwise employed in the accounting,
actuarial, sales, underwriting or information services departments of the
Healthcare Division or (ii) in any manner, directly or indirectly, (A) solicit
any Transferred Employee to terminate his or her employment with Purchaser or
its Affiliates or (B) otherwise recruit or encourage any Transferred
Employee to become an employee of, or a consultant to, Seller, FGWLA, CLAC or
any of their Affiliates; provided, however, that the
restrictions set forth above in this clause (ii) shall not prohibit Seller,
FGWLA, CLAC or their Affiliates from offering employment to or employing any
Transferred Employee (1) whose employment has been terminated by Purchaser or
its Affiliates, (2) who responds to a general solicitation or advertisement that
is not specifically directed to Transferred Employees (and nothing shall
prohibit the making of such solicitation or advertisement) or (3) who is
referred to Seller, FGWLA, CLAC or any of their Affiliates by search firms,
employment agencies or other similar entities, provided that such entities have
not been specifically instructed by any of them to solicit the Transferred
Employees.

     

    (e)         The
parties to this Agreement acknowledge that the covenants set forth in this
Section 6.14 are an essential element of this Agreement and that, but for these
covenants, the parties would not have entered in to this Agreement.

     

    (f)         The
parties to this Agreement acknowledge that the type and periods of restriction
imposed in the provisions of this Section 6.14 are fair and reasonable and are
reasonably required for the protection of the parties.  If any of the
restrictions or covenants in this Section 6.14 are hereafter construed to be
invalid or unenforceable, the same shall not affect the remainder of the
covenant or covenants, which shall be given full effect, without regard to the
invalid portions.  If any of the restrictions or covenants contained
in this Section 6.14, or any portion thereof, are deemed to be unenforceable
because such covenant or restriction is held to cover a geographic area or to be
of such duration as is not permitted under applicable Law, the parties agree
that the court making such determination shall have the power to reduce the
duration and/or areas of such provision and, in its reduced form, said provision
shall then be enforceable.  The parties hereto intend to and hereby
confer jurisdiction to enforce the covenants contained in this Section 6.14 upon
the courts of any state or other jurisdiction within the geographical scope of
such covenants.  In the event that the courts of any one 

     

    
      
        
        

      

      
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    or more
of such jurisdictions shall hold such covenants wholly unenforceable by reason
of the breadth of such scope or otherwise, it is the intention of the parties
hereto that such determination not bar or in any way affect the parties’ rights
to the relief provided above in the courts of any states or jurisdictions within
the geographical scope of such covenants as to breaches of such covenants in
such other respective states or jurisdictions, the above covenants as they
relate to each such jurisdiction being, for this purpose, severable into diverse
and independent covenants.

     

    (g)         If
any party hereto or its Affiliate commits a breach, or is about to commit a
breach, of any of the provisions of this Section 6.14, the other parties hereto
shall have the right to have the provisions of this Section 6.14 specifically
enforced by any court having equity jurisdiction, it being acknowledged and
agreed that any such breach or threatened breach may cause irreparable injury to
each of the non-breaching parties and that money damages may not provide an
adequate remedy to such parties.  In addition, in connection with this
Section 6.14, each of the parties hereto may take all such other actions and
remedies available to it under law or in equity and shall be entitled to such
damages as it can show it has sustained by reason of such breach.

     

    Section
6.15     Cooperation/Integration.

     

    (a)         During
the period from the date of this Agreement until the Closing Date, Seller shall,
in accordance with mutually acceptable guidelines and procedures:  (i)
designate certain Persons acceptable to Purchaser to serve as members of one or
more transition teams with representatives of Purchaser and cause such Persons
to devote reasonable time to transition matters, including but not limited to,
periodic meetings to discuss planning and implementation of transition plans,
and (ii) reasonably cooperate with Purchaser to assist in the implementation of
comprehensive transition plans on or prior to the Closing Date, dealing with
such matters as network systems integration, employee retention, financial
reporting and regulatory compliance processes.

     

    (b)         During
the period from the date of this Agreement until the Closing Date, Purchaser
shall, in accordance with mutually acceptable guidelines and
procedures:  (i) designate certain Persons acceptable to Seller to
serve as members of one or more transition teams with representatives of Seller
and cause such Persons to devote reasonable time to transition matters,
including but not limited to, periodic meetings to discuss planning and
implementation of transition plans, and (ii) reasonably cooperate with Seller to
assist in the implementation of comprehensive transition plans on or prior to
the Closing Date, dealing with such matters as network systems integration,
employee retention, financial reporting and regulatory compliance
processes.

     

    Section
6.16     Core Administration System. 
From the date hereof through the Closing Date, Seller and its
Affiliates shall use commercially reasonable efforts to cause the core
administration system to be developed and implemented in accordance with the
business plan attached hereto as Exhibit Q in all
material respects.

     

    Section
6.17     Seller Confidentiality Agreements. 
Following the Closing, Seller and its Affiliates shall notify
Purchaser in the event they become aware of a breach 

     

    
      
        
        

      

      
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    of the
Seller Confidentiality Agreements, and, if so directed by Purchaser, shall
enforce such rights for Purchaser’s benefit, to the extent it is reasonable to
do so.  Purchaser shall promptly pay to Seller and its Affiliates all
reasonable expenses of Seller and its Affiliates, including their direct costs
for the time of their employees, as a result of such enforcement
efforts.  Prior to the Closing, Seller shall deliver to the Seller
Subsidiaries copies of all Seller Confidentiality Agreements.

     

    Section
6.18     Books and Records. 
From the date hereof through the Closing Date, subject to
compliance with applicable Law and applicable contractual obligations, the
parties shall work together in good faith and in a commercially reasonable
manner to develop and implement a plan that will result in the delivery or
transfer of the Books and Records (in the form as such Books and Records
currently exist or acceptable to the parties) to Purchaser (or a Person
designated by Purchaser) at the Closing in the manner (and in the case of
physical Books and Records at the location(s)) reasonably requested by
Purchaser.

     

    Section
6.19     Confidentiality

     

                                                  
(a)         Each
party acknowledges that the success of the transactions contemplated hereby and
under the Ancillary Agreements and of the continuing business of each such party
and its Affiliates from and after the Closing depends upon the continued
preservation of the confidentiality of certain information possessed by the
other parties and their respective Affiliates and that the preservation of the
confidentiality of certain information by the other parties and their respective
Affiliates is an essential premise of the bargain among the
parties.  Each of the parties acknowledges that each of the other
parties would be unwilling to enter into this Agreement or any of the Ancillary
Agreements in the absence of this Section 6.19 and the protections established
hereby.

     

    (b)         Accordingly,
Seller shall not, and Seller shall cause its Affiliates (including the Seller
Subsidiaries until the consummation of the Closing) and their respective
controlled agents (excluding the Producers) and representatives not to, at any
time from and after the date of this Agreement, directly or indirectly, disclose
or use any confidential or proprietary information involving or relating to the
Business; provided, however, that disclosure
and use of any such information shall be permitted (i) with the prior written
consent of Purchaser or any of its Affiliates, (ii) as, and to the extent,
expressly permitted by this Agreement or any of the Ancillary Agreements, (iii)
as, and solely to the extent, necessary or required for the performance by
Seller, FGWLA or CLAC or any of their Affiliates of any of their respective
obligations under this Agreement or any of the Ancillary Agreements, (iv) prior
to the Closing, as, and to the extent, necessary or required in the
operation of the Business in the ordinary course, (v) to the extent such
information is generally available to, or known by, the public or otherwise has
entered the public domain (other than as a result of disclosure in violation of
this Section 6.19(b) by Seller, FGWLA, CLAC or any of their Affiliates), (vi)
as, and to the extent, necessary or required by any Order, applicable Law or
Governmental Entity, subject to Section 6.19(f), and (vii) as, and to the
extent, necessary or required or reasonably appropriate in connection with the
enforcement of any right or remedy relating to this Agreement or any of the
Ancillary Agreements.

     

    
      
        
        

      

      
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    (c)         Accordingly,
Purchaser shall not, and Purchaser shall cause its Affiliates (including the
Seller Subsidiaries following the Closing) and their respective controlled
agents (excluding insurance producers) and representatives not to, at any time
from and after the date of this Agreement, directly or indirectly, disclose or
use any confidential or proprietary information involving or relating to
Seller, FGWLA, CLAC or any of their Affiliates (excluding the Seller
Subsidiaries obtained by Purchaser or any of its Affiliates in connection with
the transactions contemplated under this Agreement); provided, however, that
disclosure and use of any such information shall be permitted (i) with the prior
written consent of Seller, FGWLA, CLAC or any of their Affiliates, as
applicable, (ii) as, and to the extent, expressly permitted by this Agreement or
any of the Ancillary Agreements, (iii) as, and solely to the extent, necessary
or required for the performance by Purchaser or any of its Affiliates of any of
their respective obligations under this Agreement or any of the Ancillary
Agreements, (iv) to the extent such information is generally available to, or
known by, the public or otherwise has entered the public domain (other than as a
result of disclosure in violation of this Section 6.19(c) by Purchaser or its
Affiliates), (v) as, and to the extent, necessary or required by any Order,
applicable Law or Governmental Entity, subject to Section 6.19(f), and (vi) as,
and to the extent, necessary or required or reasonably appropriate in connection
with the enforcement of any right or remedy relating to this Agreement or any of
the Ancillary Agreements.

     

    (d)         Each
party shall produce and implement policies and procedures that are reasonably
designed to ensure compliance by each such party’s directors, officers,
employees, agents and representatives with the requirements of this Section
6.19.

     

    (e)         For
the avoidance of doubt, confidential information includes business plans,
financial information, operational information, strategic information, legal
strategies or legal analysis, formulas, production processes, lists, names,
research, marketing, sales information and any other information similar to any
of the foregoing or serving a purpose similar to any of the
foregoing.  However, the parties are not required to mark or otherwise
designate information as “confidential or proprietary information,”
“confidential” or “proprietary” in order to receive the benefits of this Section
6.19.

     

    (f)         In
the event that a party is required by Order, applicable Law or any Governmental
Entity to disclose any confidential or proprietary information of another party
hereto that is subject to the restrictions under this Section 6.19, such party
shall (i) notify such other party in writing as soon as possible, unless it is
otherwise affirmatively prohibited by such Order, applicable Law or such
Governmental Entity from notifying such other party, (ii) cooperate with such
other party to preserve the confidentiality of such confidential or proprietary
information consistent with the requirements of such Order, applicable Law or
such Governmental Entity and (iii) use its reasonable best efforts to limit
any such disclosure to the minimum disclosure necessary or required to comply
with such Order, applicable Law or such Governmental Entity, in each case, at
the cost and expense of such other party.

     

    
      
        
        

      

      
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    (g)         Nothing
in this Section 6.19 shall prohibit a party from keeping or maintaining any
copies of any records, documents or other information that may contain
information that is otherwise subject to the requirements of this Section 6.19,
subject to its compliance with this Section 6.19.

     

    (h)         Prior
to any disclosure or use by any party of any information that is subject to the
requirements of Sections 6.19(b) or (c), such party shall use its reasonable
best efforts to redact or otherwise conceal any information that is not
otherwise disclosable or useable in accordance with the requirements of this
Section 6.19.

     

    (i)         Each
party shall be responsible for any breach or violation of the requirements of
this Section 6.19, as it applies to such party, by any of its controlled agents
(to the extent specified herein) or representatives.

     

    (j)         The
parties agree that the Confidentiality Agreement shall survive the execution of
this Agreement to the extent not inconsistent with this Agreement, and shall
terminate upon the Closing Date.

     

    Section
6.20     Insurance Coverage

     

    .                                             
(a)         Until
the Closing Date, Seller, FGWLA and CLAC shall cause each of the Seller
Subsidiaries to continue to participate in an insurance program which is not
less favorable to the Seller Subsidiaries, in the aggregate, than the insurance
policies of the Seller Subsidiaries that are in effect on the date hereof, and
(iii) will permit each of the Seller Subsidiaries to submit claims (on the same
terms as the insurance policies of the Seller Subsidiaries that are in effect on
the date hereof) arising from or relating to facts, circumstances, events
or matters that occurred at or prior to the Closing (such policies, the “Continued
Policies”).  Until the Closing Date, Seller, FGWLA and CLAC
shall, and shall cause their Affiliates to, prevent any prejudice to the Seller
Subsidiaries’ rights under the Continued Policies, including by causing the (A)
Seller Subsidiaries to be charged premiums or cost allocations in a
non-discriminatory manner, (B) Seller Subsidiaries to pay or otherwise satisfy
any unpaid premiums when due with respect to any period or periods ending at or
prior to the Closing, (C) Seller Subsidiaries to provide any required notices
(including any renewal notices or if applicable, other documentation required to
continue in full force and effect the Continued Policies) to the issuers of the
Continued Policies, and (D) Seller Subsidiaries to submit and pursue claims on a
timely basis under the Continued Policies.

     

    (b)         From
and after the Closing, Seller, FGWLA and CLAC shall, and shall cause their
Affiliates to continue to pursue in the ordinary course any claims submitted at
or prior to the Closing under the Continued Policies.

     

    Section
6.21     Great-West Healthcare
Holdings, Inc

     

      .
Seller shall cause Great-West Healthcare Holdings, Inc. to own as of the Closing
Date only those Subsidiaries set forth on Schedule 6.21.

     

    
      
        
        

      

      
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    Section
6.22     Seller Subsidiaries Acquisition Agreements. 
Following the Closing, if so directed by Purchaser, Seller and
its Affiliates shall at Purchaser’s direction enforce for Purchaser’s benefit,
the rights of Seller for indemnification for breaches of representations,
warranties and covenants under the agreements relating to the acquisition of the
Seller Subsidiaries to the extent it is reasonable to do so, provided that
Purchaser shall promptly pay to Seller and its Affiliates all reasonable
expenses of Seller and its Affiliates, including their direct costs for the time
of their employees, as a result of such enforcement efforts.  For the
avoidance of doubt, nothing contained herein shall limit Seller’s ability to
pursue on its own behalf indemnification claims relating to Subsidiary
Indemnified Liabilities.

     

    Section
6.23     Supplements to Schedules. 
 From
time to time up to the Closing, Seller, FGWLA and CLAC shall promptly supplement
or amend the Schedules that they have delivered with respect to any matter that
(a) if existing or occurring at or prior to the date hereof, would have been
required to be set forth or described in the Schedules, or (b) is necessary to
correct any information in the Schedules that has been rendered inaccurate
thereby.  No supplement or amendment to any Schedule shall have any
effect for the purpose of determining satisfaction of the conditions set forth
in Article VII or the obligations of Seller, FGWLA and CLAC under Section 11.01
or Section 12.01.

     

    Section
6.24     Electronic Delivery of Computer Software. 
Seller, FGWLA, CLAC and any Seller Subsidiary shall cause any
delivery of Owned Principally Used Software and any other software for which
ownership or control is assigned in whole or substantial part to Purchaser under
this Agreement to be made exclusively by electronic means to the extent
practicable.

     

    Section
6.25     Resolution of Certain Issues. 
From the date hereof until the Closing Date, Seller, FGWLA and
CLAC shall use their respective reasonable best efforts, and Seller shall cause
the Seller Subsidiaries to use their respective reasonable best efforts, as
applicable, to bring in to compliance with applicable Law each of the issues set
forth on Schedule 6.25.  From and after the Closing Date, Seller and
Purchaser shall cooperate and use their reasonable best efforts to bring into
compliance with applicable Law and resolve any Actions or investigations with
respect to each of the issues set forth on Schedule 6.25 that have not been
brought in to compliance with applicable Law prior to the Closing
Date.  Purchaser shall use its reasonable best efforts to bring into
compliance with applicable Law each Continued Practice which it becomes aware is
in violation of applicable Law.

     

    Section
6.26     Termination of Certain
Contracts

     

                                                   (a)         No
later than January 31, 2008, Seller shall deliver to Purchaser schedules of (i)
all Assigned and Assumed Contracts as of the date thereof, (ii) all Subsidiary
Contracts in effect as of the date thereof, and (iii) all consents or approvals
required from any third party (excluding any Governmental Entity) in connection
with the execution or consummation of the transactions contemplated by this
Agreement and the Ancillary Agreements, including under such Assigned and
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    Subsidiary
Contracts, other than the consents and approvals listed in Schedule 4.05(c),
Schedule 4.09, Schedule 4.19(a) and Schedule 4.19(b).  Seller shall,
upon request of Purchaser, provide copies of any such Contracts to
Purchaser.  Such copies shall be delivered, received and handled
in accordance with applicable Law.  Seller shall update the
schedules delivered pursuant to this Section 6.26(a) with reasonable frequency
until the Closing Date.

     

    (b)         Seller,
FGWLA and CLAC shall, and Seller shall cause the Seller Subsidiaries to, use
their reasonable best efforts to cause the termination of any Assigned and
Assumed Contract or Subsidiary Contract requested by Purchaser in accordance
with the terms of such Contract as of or prior to the Closing if such
termination will not affect Seller and its Affiliates (excluding the Seller
Subsidiaries) after the Closing and is without cost or liability to Seller and
its Affiliates (including because Purchaser has agreed to reimburse Seller and
its Affiliates for any cost).  Any such termination may be conditioned
on the occurrence of the Closing.

     

    Section
6.27     Preparation for
Closing

     

    .                                              
(a)         Within
60 days after the date hereof, Purchaser and Seller shall negotiate in good
faith the form of a sublease (each, a “Sublease”) with
respect to the portion of the Leased Property utilized by the Business, as of
the date hereof, under each Subleased Lease, as set forth in Schedule
4.18(a)(ii).  The Subleases shall provide for rent and other terms so
that the economic terms of the Subleased Leases are shared in the same
proportion as the Leased Property thereunder, and other customary
terms.

     

    (b)           Prior
to the Closing Date, the parties hereto shall cooperate (i) to cause the
transfer to Purchaser of the bank accounts listed in Schedule 1.01(y) at the
Closing, and (ii) to determine and implement the appropriate method to cause the
transfer of the accounts referred to in clause (x) of the definition of
“Transferred Assets” in connection with the Closing.

     

    (c)         As
promptly as practicable following the date hereof, Purchaser and Seller shall
agree upon the form of the Replacement Retention Agreements.

     

    (d)         At
or immediately following the Closing, Seller shall cause each individual
employed by it to assign to a Person designated by Purchaser all stock of
Allegiance Life & Health Insurance Company owned by such
individual.

     

    Section
6.28     Optional Business. 
Following the date hereof, Seller shall continue to permit
Purchaser to investigate any issues regarding the treatment for Tax purposes of
the Optional Business (including the treatment for Tax purposes of the holders
and beneficiaries of Insurance Contracts included therein).  Purchaser
shall use its reasonable best efforts to complete this investigation within 90
days after the date hereof, it being understood that the amount of time
necessary for this investigation may depend on matters discovered therein and
other factors beyond Purchaser’s control.  Seller shall provide
reasonable assistance to Purchaser in such investigation.  If, prior
to the Closing, Purchaser determines that it is undesirable for Purchaser to own
the Optional Business, 

     

    
      
        
        

      

      
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    then (a)
the Optional Business and the Insurance Contracts included therein shall be
excluded from the Business; (b) the forms of Ancillary Agreements to be executed
at the Closing shall be modified to exclude the Optional Business; (c) Seller
and the Insurance Company Subsidiaries, as applicable, shall enter into new
indemnity reinsurance agreements, pursuant to which any Insurance Company
Subsidiaries which have, prior to the Closing, issued any Subsidiary Insurance
Contracts included in the Optional Business, shall cede 100% of their Insurance
Liabilities in connection with the Optional Business to Seller, on terms
substantially similar to the terms of the Seller Indemnity Reinsurance
Agreement, including the administration of such Subsidiary Insurance Contracts
by Seller, and without the payment of a ceding commission, but necessary changes
being made as appropriate; (d) the Closing Statement of Assets and Liabilities,
Closing Net Worth Statement, Proposed Statement of Assets and Liabilities,
Proposed Net Worth Statement, Final Statement of Assets and Liabilities and
Final Net Worth Statement shall be determined accordingly, which would result in
a different Net Reinsurance Premium and Adjustment Amount than if the Optional
Business were included in the Business, but no other adjustment shall be made to
the Purchase Price; (e) the Optional Business shall be excluded from Seller’s
and its Affiliates’ obligations under Section 6.14; and (f) after the Closing,
Seller shall indemnify Purchaser and its Affiliates for any Losses sustained by
them in connection with the Optional Business, including any claims by holders
or beneficiaries of Insurance Contracts arising out of the failure of any
Insurance Contract or Subsidiary Insurance Contract included in the Optional
Business to qualify for any Tax treatment intended.  If there is
insufficient time before the Closing to complete the preparations for such
transactions, then, if reasonably practicable, the Closing may occur, and such
transactions shall continue after the Closing.

     

    Section
6.29     Tax Returns. 
After the Closing Date, Seller shall cooperate with Purchaser to
obtain from the Internal Revenue Service for Purchaser any Tax Returns of or
relating solely to the Seller Subsidiaries, the Business or the Transferred
Assets requested by Purchaser.

     

    ARTICLE
VII

     

    CONDITIONS PRECEDENT TO THE
OBLIGATIONS OF PURCHASER

     

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

     

    Section
7.01     Representations and
Covenants

     

    .                                                (a)         The
representations and warranties of Seller, FGWLA and CLAC set forth in Article
IV, except those set forth in Sections 4.01, 4.02, 4.03 and 4.15, shall be true
and correct on the date hereof and as of the Closing Date as though made on and
as of the Closing Date, without regard to any materiality or Sellers Material
Adverse Effect qualifications, except for such failures of such representations
and warranties to be true and correct as would not, individually or in the
aggregate, have a Sellers Material Adverse Effect; provided, however, that, with
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    and
warranties that are given as of a particular date shall be true and correct (in
the manner set forth above), only as of such date.  The
representations and warranties of Seller, FGWLA and CLAC set forth in Sections
4.01, 4.02, 4.03 and 4.15 shall be true and correct on the date hereof and as of
the Closing Date as though made on and as of the Closing Date.

     

    (b)         Each
of Seller, FGWLA and CLAC shall have performed or complied with each obligation,
covenant, agreement and condition required to be performed by it under this
Agreement at or prior to the Closing that is qualified as to materiality and
shall have performed or complied in all material respects with each other
obligation, covenant, agreement and condition required to be performed by it
under this Agreement at or prior to the Closing.

     

    (c)         Since
the date of this Agreement there shall not have been any occurrence, development
or event that has had or would, individually or in the aggregate, reasonably be
expected to have a Sellers Material Adverse Effect.

     

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

     

    Section
7.02     Secretary’s Certificate. 
Each of Seller, FGWLA and CLAC, as well as any of their
Affiliates that are parties to any Ancillary Agreements, shall have delivered to
Purchaser a certificate of its secretary or assistant secretary, dated as of the
Closing Date, as to the resolutions of its Board of Directors authorizing the
execution, delivery and performance of the agreements to which it is a party and
as to the status and signature of each of its officers who executed and
delivered the agreements to which it is a party and any other document delivered
by it in connection with the consummation of the transactions contemplated by
this Agreement.

     

    Section
7.03     Other Agreements. 
 Each
of the Ancillary Agreements to which Seller, FGWLA, CLAC or any of their
Affiliates is a party shall have been duly executed and delivered by Seller,
FGWLA, CLAC or such Affiliates, as applicable, on the Closing Date and each of
such agreements shall be in full force and effect with respect to Seller, FGWLA
or CLAC, as applicable, on the Closing Date.

     

    Section
7.04     Governmental and Regulatory
Consents and Approvals

     

                                                   (a)         All
filings required to be made prior to the Closing Date with, and all consents,
approvals, Permits and authorizations required to be obtained prior to the
Closing Date from, Governmental Entities, including those set forth on Schedules
4.05(a)(i), 4.05(b), 5.05(a) and 5.05(b) hereto, in connection with the
execution and delivery of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby shall have been
made or obtained without the imposition of a Negative Condition.

     

    
      
        
        

      

      
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    (b)         The
waiting period prescribed by the HSR Act shall have expired or been
terminated.

     

    Section
7.05     Third Party Consents. 
(a) The
consents listed in Schedule 7.05 shall have been obtained, and (b) all other
consents or waivers of third parties to the consummation of the transactions
contemplated by this Agreement, other than those that, if not obtained, would
not have a material adverse effect on the Business taken as a whole or a
Purchaser Material Adverse Effect, shall have been obtained.

     

    Section
7.06     No Injunctions or Restraints. 
No temporary restraining order, preliminary or permanent
injunction or other order or decree shall be pending, threatened or issued by
any Governmental Entity nor shall any other legal restraint or prohibition
preventing, restricting or which is reasonably likely to prevent or restrict the
consummation of any of the transactions contemplated hereby be in effect,
pending or threatened in writing.

     

    Section
7.07     Resignation of Officers and Directors. 
Purchaser shall have received the written resignation of each
officer and director of each of the Seller Subsidiaries, effective as of the
Closing Date.

     

    ARTICLE
VIII

     

    CONDITIONS PRECEDENT TO THE
OBLIGATIONS

    OF SELLER, FGWLA AND
CLAC

     

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

     

    Section
8.01     Representations and
Covenants

     

                                                   (a)         The
representations and warranties of Purchaser set forth in Article V, except those
set forth in Sections 5.01, 5.02 and 5.06, shall be true and correct on the date
hereof and as of the Closing Date as though made on and as of the Closing Date,
without regard to any materiality or Purchaser Material Adverse Effect
qualifications, except for such failures of such representations and warranties
to be true and correct as would not, individually or in the aggregate, have a
Purchaser Material Adverse Effect; provided, however, that, with
respect to the foregoing, representations and warranties that are given as of a
particular date shall be true and correct (in the manner set forth above), only
as of such date.  The representations and warranties of Purchaser set
forth in Sections 5.01, 5.02 and 5.06 shall be true and correct on the date
hereof and as of the Closing Date as though made on and as of the Closing
Date.

     

    (b)         Purchaser
shall have performed or complied with each obligation, covenant, agreement and
condition required to be performed by it under this Agreement at or prior to the
Closing that is qualified as to materiality and shall have 

     

    
      
        
        

      

      
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    performed
or complied in all material respects with each other obligation, covenant,
agreement and condition required to be performed by it under this Agreement at
or prior to the Closing.

     

    (c)         Since
the date of this Agreement there shall not have been any occurrence, development
or event that has had or would, individually or in the aggregate, reasonably be
expected to have a Purchaser Material Adverse Effect.

     

    (d)         On
the Closing Date, Purchaser shall have delivered to Seller, FGWLA and CLAC a
certificate of Purchaser, dated as of the Closing Date and signed by an
executive officer of Purchaser, as to the matters set forth in this Section
8.01.

     

    Section
8.02     Secretary’s Certificate. 
Purchaser shall have delivered to Seller, FGWLA and CLAC a
certificate of its secretary or assistant secretary, dated as of the Closing
Date, as to the resolutions of its Board of Directors authorizing the execution,
delivery and performance of the agreements to which it is a party and as to the
status and signature of each of its officers who executed and delivered the
agreements to which it is a party and any other document delivered by it in
connection with the consummation of the transactions contemplated by this
Agreement.

     

    Section
8.03     Other Agreements. 
 Each
of the Ancillary Agreements to which Purchaser is a party shall have been duly
executed and delivered by Purchaser on the Closing Date and each of such
agreements shall be in full force and effect with respect to Purchaser on the
Closing Date.

     

    Section
8.04     Governmental and Regulatory
Consents and Approvals

     

                                                  
(a)         All
filings required to be made prior to the Closing Date with, and all consents,
approvals, Permits and authorizations required to be obtained prior to the
Closing Date from, Governmental Entities, including those set forth on Schedules
4.05(a)(i), 4.05(b), 5.05(a) and 5.05(b) hereto, in connection with the
execution and delivery of this Agreement and the Ancillary Agreements and the
consummation of the transactions contemplated hereby and thereby shall have been
made or obtained.

     

    (b)         The
waiting period prescribed by the HSR Act shall have expired or been
terminated.

     

    Section
8.05     Third Party Consents. 
(a) The
consents listed in Schedule 8.05 shall have been obtained, and (b) all other
consents or waivers of third parties to the consummation of the transactions
contemplated by this Agreement shall have been obtained, other than with respect
to (b) those that, if not obtained, would not have a material adverse effect on
the business, financial condition or results of operations of Seller or any of
its Affiliates (excluding the Seller Subsidiaries), a material adverse effect on
the ability of Seller, FGWLA or CLAC to perform their obligations under this
Agreement or any Ancillary Agreement, or a Purchaser Material Adverse
Effect.

     

    Section
8.06     No Injunctions or Restraints. 
No temporary restraining order, preliminary or permanent
injunction or other order or decree shall be pending, 

     

    
      
        
        

      

      
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    threatened
or issued by any Governmental Entity nor shall any other legal restraint or
prohibition preventing, restricting or which is reasonably likely to prevent or
restrict the consummation of any of the transactions contemplated hereby be in
effect, pending or threatened in writing.

     

    ARTICLE
IX

     

    FURTHER
AGREEMENTS

     

             Section
9.01     Access to Books and
Records

     

                                                  
(a)         Following the Closing
Date, Purchaser shall afford, and shall cause its Affiliates to afford, to
Seller, FGWLA, CLAC and any of their Affiliates, their counsel and their
accountants, during normal business hours, the right to examine and make copies
of the Books and Records to the extent that such access may be reasonably
required by Seller, FGWLA, CLAC or any of their Affiliates in connection with
(i) the preparation of financial statements, (ii) responding to regulatory
inquiries or other regulatory purposes, (iii) the preparation of tax
returns or in connection with any audit, amended return, claim for refund or any
proceeding with respect thereto, (iv) the investigation, arbitration, litigation
and final disposition of any claims which may have been or may be made against
Seller, FGWLA, CLAC or such Affiliates in connection with the Business or the
Transferred Assets (other than with respect to claims that are then the subject
of litigation) or which Seller, FGWLA, CLAC or such Affiliates may make with
respect to the Business or the Transferred Assets (other than with respect to
claims that are then the subject of litigation) or (v) any other similar,
reasonable business purpose.  Seller, FGWLA, CLAC and their Affiliates
shall have the right to duplicate all Books and Records relating to the Business
or the Transferred Assets.  Purchaser shall not, and shall cause its
Affiliates to not, dispose of, alter or destroy any such Books and Records and
other materials other than in accordance with Purchaser’s books and records
retention policy as may be in effect from time to time, but in no event will
Purchaser dispose of, alter or destroy any such Books and Records and other
materials prior to the seventh anniversary of the Closing (or such longer period
as reasonably requested by Seller with respect to open tax
examinations).

     

    (b)         Following
the Closing Date, Seller, FGWLA and CLAC shall afford, and shall cause their
Affiliates to afford, to Purchaser and any of its Affiliates, counsel and
accountants, during normal business hours, the right (subject to applicable Law
and excluding records subject to attorney client privilege that relate to Seller
Legal Proceedings) to examine and make copies of any books and records of
Seller, FGWLA or CLAC retained by Seller, FGWLA and CLAC relating to the
Business or the Transferred Assets (other than the Books and Records) to the
extent that such access may be reasonably required by Purchaser or any of its
Affiliates in connection with (i) the preparation of financial statements, (ii)
responding to regulatory inquiries or other regulatory purposes, (iii) the
preparation of tax returns or in connection with any audit, amended return,
claim for refund or any proceedings with respect thereto, (iv) the
investigation, arbitration, litigation and final disposition of any claims which
may have been or may be made against Purchaser or its Affiliates in connection
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    or the
Transferred Assets (other than with respect to claims that are then the subject
of litigation) or which Purchaser or such Affiliates may make with respect
to the Business or the Transferred Assets (other than with respect to claims
that are then the subject of litigation) or (v) any other similar reasonable
business purpose.  Purchaser and its Affiliates shall have the
right to duplicate any books and records retained by Seller, FGWLA and CLAC
relating to the Business or the Transferred Assets (other than the Books and
Records).  Seller, FGWLA, and CLAC shall not, and shall cause their
Affiliates to not, dispose of, alter or destroy any such books and records and
other materials other than in accordance with their respective books and records
retention policy as may be in effect from time to time, but in no event will
Seller, FGWLA or CLAC dispose of, alter or destroy any such books and
records and other materials prior to the seventh anniversary of the Closing (or
such longer period as reasonably requested by Purchaser with respect to open tax
examinations).

     

    Section
9.02     Cooperation.  Following the Closing Date, Purchaser shall use its reasonable
best efforts to cause employees of Purchaser or any of its Affiliates who
immediately prior to employment therewith were employed by Seller, FGWLA or any
of their Affiliates in connection with the Business to reasonably cooperate with
Seller, FGWLA, CLAC and any of their Affiliates in (i) the defense or
commencement of any litigation or arbitration arising out of any event that
occurred on or prior to the Closing Date involving the Business, (ii) connection
with any tax matter relating to the Business, (iii) the defense or prosecution,
as the case may be, of any Third Party Claim in accordance with Section
11.02(b), and (iv) such other reasonable requests as shall be made by Seller,
FGWLA or CLAC.  Seller, FGWLA or CLAC, as applicable, shall promptly
pay to Purchaser all reasonable expenses of Purchaser, including its direct cost
for the time of its employees, as a result of its obligations under this Section
9.02.

     

    Section
9.03     Actuarial Appraisal. 
 Purchaser
acknowledges that none of Seller, FGWLA, any of their Affiliates, or any
employee, officer, director, representative or advisor of any of them makes or
has made any representation or warranty to Purchaser except as specifically made
in this Agreement or any Ancillary Agreement to which it is a
party.  In particular, no such Person has made any representation or
warranty to Purchaser with respect to any financial projection or forecast
relating to the Business.

     

    Section
9.04     Use of
Names

     

    .                                              
(a)         Notwithstanding
any inference contained herein or prior course of conduct to the contrary, and
except as contemplated by Article II, the Administrative Services Agreements or
the Transition Services Agreement, in no event shall Purchaser or any of its
Affiliates have any right to use, nor shall Purchaser, or any of its Affiliates
use, any corporate name or acronym of Seller, FGWLA, CLAC or any of their
Affiliates (other than those Seller Subsidiaries listed on Schedule 9.04(a)) in
any jurisdiction, or any registered or unregistered trademark, trade name,
service mark, domain name or URL or any application or registration therefor,
owned by, licensed to or used by Seller, FGWLA or CLAC or any of their
Affiliates (other than those Seller Subsidiaries listed on Schedule 9.04(a)) or
any other name or mark that is otherwise confusing due to its similarity to any
of the foregoing.

     

    
      
        
        

      

      
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    (b)         Notwithstanding
anything contained in Section 9.04(a) to the contrary, within 30 days following
the Closing, Purchaser shall cause each of the Seller Subsidiaries listed on
Schedule 9.04(b) to make all filings necessary to change the Seller Subsidiary’s
name in its state of incorporation to a name which does not include the words
“Great West” or any derivation of the name of Seller.  Promptly after
receiving approval of such name change from the appropriate Governmental
Authority in its state of incorporation, Purchaser shall cause each such Seller
Subsidiary to make all filings necessary to change the Seller Subsidiary’s name
to the name approved in its state of incorporation in all other jurisdictions in
which the Seller Subsidiary is licensed to transact business

     

    (c)         Purchaser
acknowledges that any damage caused to Seller, FGWLA, CLAC or any of their
respective Affiliates by reason of the breach by Purchaser, or any of its
respective Affiliates of this Section 9.04 would cause irreparable harm that
could not be adequately compensated for in monetary damages alone; therefore,
Purchaser agrees that, in addition to any other remedies, at law or otherwise,
Seller, FGWLA and CLAC, and any of their respective Affiliates shall be entitled
to an injunction issued by a court of competent jurisdiction restraining and
enjoining any violation of this Section 9.04.

     

    Section
9.05     Reserves.  Notwithstanding any other provision of this Agreement to the
contrary, other than as set forth in Sections 4.06 and 4.07, Seller, FGWLA and
CLAC make no representation or warranty regarding their statutory reserves with
respect to the Insurance Contracts or Reinsured Contracts or regarding
uncollectible reinsurance with respect to the Ceded Reinsurance
Agreements.

     

    Section
9.06     Control of
Litigation

     

                                                   (a)         Seller,
FGWLA or CLAC, as appropriate, shall supervise and control the investigation,
contest, defense and/or settlement of all Sellers Extra Contractual Obligations
claims which do not also involve Insurance Liabilities and all Existing
Litigation at its own cost and expense (the “Seller Legal
Proceedings”).  Purchaser shall supervise and control the
investigation, contest, defense and/or settlement of all litigation involving
Insurance Liabilities (whether or not such litigation also involves Sellers
Extra Contractual Obligations) to the extent not subject to the provisions of
Section 11.01 (insofar as it relates to Sellers Extra Contractual Obligations)
and, to the extent they are not subject to the provisions of Section 11.01,
Other Assumed Liabilities at its own cost and expense (the “Purchaser Legal
Proceedings”).

     

     

    (b)         At
Seller’s, FGWLA’s or CLAC’s request, Purchaser shall provide a report
summarizing the nature of any Purchaser Legal Proceedings, the alleged actions
or omissions giving rise to such Purchaser Legal Proceedings and copies of any
files or other documents that Seller, FGWLA or CLAC may reasonably request in
connection with its review of these matters.  At Purchaser’s request,
Seller, FGWLA or CLAC shall provide a report summarizing the nature of any
Seller Legal Proceedings, the alleged actions or omissions giving rise to such
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    any files
or other documents that Purchaser may reasonably request in connection with its
review of such matters.

     

    (c)         Notwithstanding
anything in this Agreement to the contrary, Purchaser shall have the right to
engage in its own separate legal representation, at its own expense, and to
participate fully in the defense of any Seller Legal Proceedings involving a
Seller Subsidiary without waiving any of its rights to indemnification under
Article XI.  Seller, FGWLA, CLAC and Purchaser shall, and Purchaser
shall cause the Seller Subsidiaries to, cooperate with each other with respect
to the administration of any Seller Legal Proceeding.  In connection
therewith, Purchaser shall have the right to monitor and receive periodic
updates regarding any Seller Legal Proceedings not involving a Seller
Subsidiary.  Whether or not Purchaser shall have participated in the
defense of any Seller Legal Proceeding, none of Seller, FGWLA or CLAC shall
compromise or settle any such Seller Legal Proceeding without Purchaser’s prior
written consent (not to be unreasonably withheld or delayed), unless (i) there
is no finding or admission of any violation of law or any violation of the
rights of any Person and no effect on any other claims that may be made against
any Seller Subsidiary and (ii) the sole relief provided is monetary damages that
are paid in full by Seller, FGWLA or CLAC without any liability to Purchaser
under Article XI and a full and complete release is provided to any applicable
Seller Subsidiary.

     

    (d)         Notwithstanding
anything in this Agreement to the contrary, Seller, FGWLA or CLAC shall have the
right to engage in its own separate legal representation, at its own expense,
and to participate fully in the defense of any Purchaser Legal Proceedings
without waiving any of their rights to indemnification under Article XI or under
the Indemnity Reinsurance Agreements.  Purchaser, Seller, FGWLA and
CLAC shall cooperate with each other with respect to the administration of any
Purchaser Legal Proceeding.  Whether or not Seller, FGWLA or CLAC
shall have participated in the defense of any Purchaser Legal Proceeding,
Purchaser shall not compromise or settle any such Purchaser Legal Proceeding
without Seller’s, FGWLA’s or CLAC’s prior written consent (not to be
unreasonably withheld or delayed), unless (i) there is no finding or admission
of any violation of law or any violation of the rights of any Person and no
effect on any other claims that may be made against Seller, FGWLA or CLAC and
(ii) the sole relief provided is monetary damages that are paid in full by
Purchaser without any liability to Seller, FGWLA or CLAC under Article XI and a
full and complete release is provided to Seller, FGWLA and CLAC.

     

    (e)         Purchaser
and Seller shall cooperate in the defense or prosecution of any Action (a “Shared Action”) other
than Seller Legal Proceedings and Purchaser Legal Proceedings which involves
both (i) Excluded Liabilities, Subsidiary Indemnified Liabilities, and other
liabilities which are the ultimate responsibility of Seller and its Affiliates,
giving effect to the Assignment and Assumption Agreement, the Subsidiary
Assumption Agreement and the indemnities provided under this Article XI
(without regard for the .75% of Purchase Price limitation in Sections 11.01(a)
and 11.01(b)) (“Seller
Liabilities”) and
(ii) Assumed Liabilities, Subsidiary Liabilities, and other liabilities which
are the ultimate responsibility of Purchaser and its Affiliates (including the
Seller Subsidiaries), giving effect to the Assignment and Assumption

     

    
      
        
        

      

      
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    Agreement
and the indemnities provided under this Article XI (without regard for the .75%
of Purchase Price limitation in Section 11.01(b)) (“Purchaser
Liabilities”), but not involving Taxes.  Seller, if Seller
Liabilities predominate in a Shared Action not involving a Governmental Entity,
or Purchaser, if Purchaser Liabilities predominate in a Shared Action not
involving a Governmental Entity (such party, the “Primary Party”) shall
have the rights and obligations of the Indemnifying Party under Section
11.02(b), and the other such party (the “Other Party”) shall
have the rights and obligations of the Indemnified Party under Section 11.02(b),
except that (1) the expenses of the Other Party in cooperating with the Primary
Party shall be borne by the Other Party, and (2) the relative significance of
the Seller Liabilities and the Purchaser Liabilities shall be taken into account
appropriately by the Other Party in deciding whether to consent to a settlement,
compromise or discharge.  If neither Seller Liabilities nor Purchaser
Liabilities predominate in a Shared Action not involving a Governmental Entity,
each party shall be permitted to settle, compromise or discharge its portion of
such litigation reasonably without the consent of the other party, and the
parties shall, to the extent feasible, consider employing joint counsel for such
Shared Action, or taking steps necessary to sever such Shared Action so that
each party may defend or prosecute its portion separately.  If a
Shared Action involves a Governmental Entity, Purchaser shall have the rights
and obligations of the Indemnifying Party under Section 11.02(b) and Seller
shall have the rights and obligations of the Indemnified Party under Section
11.02(b), but the costs of the parties shall be allocated equitably in light of
the relative significance of Purchaser Liabilities and Seller
Liabilities.

     

    Section
9.07     License to Owned Generally Used Software. 
Seller hereby grants Purchaser and its Affiliates as of the
Closing Date a perpetual, non-exclusive, fully paid-up, non-transferable,
non-sublicensable (except as set forth herein), limited license to use,
reproduce, perform, display and create derivative works of the Owned Generally
Used Software.  Such a license shall be “as is” “where is” without any
representation or warranty of any kind by Seller or its Affiliates, whether
express or implied, including, without limitation, the implied warranties of
fitness for a particular purpose, completeness, title, non-infringement or
merchantability.  Notwithstanding the foregoing, nothing herein shall
be deemed to limit or expand the representations and warranties in Article IV of
this Agreement.  The Owned Generally Used Software shall be considered
confidential information under Section 6.19.  Seller shall deliver via
electronic means to the extent practicable the source code for the Owned
Generally Used Software (which source code shall be annotated to the extent
Seller possesses such annotated source code at the time of delivery) in
accordance with the migration plan set forth in Schedule 5.2 of the Transition
Services Agreement, together with a copy of all supporting documentation
therefor that is Seller's possession at the time of delivery; Seller shall be
obligated only to deliver the instance of such software then in production, with
no obligation to alter the format or content of such software so delivered or to
create any annotations to the source code or any supporting
documentation.  Purchaser and its Affiliates may not lease, loan,
resell, sublicense, give or otherwise distribute the Owned Generally Used
Software to any third party except (a) to Purchaser’s Affiliates in connection
with an internal reorganization of Purchaser; (b) in connection with the sale by
Purchaser or its Affiliates of all or substantially all of the assets pertaining
to the Business (provided such third party agrees to the conditions set forth in
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    contractors
of Purchaser and its Affiliates, provided such employees and contractors are
bound by obligations of confidentiality that are no less protective of Seller’s
rights than as set forth in this Agreement.

     

    ARTICLE
X

     

    SURVIVAL OF REPRESENTATIONS,
WARRANTIES AND COVENANTS

     

    Section
10.01     Survival of Representations,
Warranties and Covenants.

     

    .                                               (a)         All
representations and warranties contained in this Agreement shall survive the
Closing and shall terminate and expire at the close of business on the date 18
months following the Closing Date, except that (i) the representations and
warranties contained in Sections 4.21 (other than Section 4.21(r)) shall
terminate and expire (A) with respect to United States federal income Tax
matters, at the close of business on the earlier of (I) September 15, 2009, and
(II) the date on which the applicable United States federal income tax return
with respect to the first taxable period beginning after the Closing Date is
actually filed, and (B) with respect to all other Tax matters, at the close of
business on the earlier of (I) October 15, 2009, and (II) the date on which the
applicable Tax Return (other than the United States federal income tax return)
with respect to the first taxable period beginning after the Closing Date is
actually filed, (ii) the representations and warranties contained in Section
4.21(r) shall terminate 60 days after expiration of the applicable statute of
limitation (taking into account any extensions or waivers thereof) and from such
date shall have no further force or effect and (iii) the representations and
warranties contained in Sections 4.01, 4.02, 4.03, 4.15, 5.01, 5.02 and 5.06
shall survive the Closing and shall not terminate or expire.

     

     

    (b)         All
covenants and agreements made by the parties to this Agreement that contemplate
performance following the Closing Date shall survive the Closing
Date.  All other covenants and agreements shall not survive the
Closing Date and shall terminate as of the Closing.

     

    ARTICLE
XI

     

    INDEMNIFICATION

     

    Section
11.01     Obligation to
Indemnify

     

    .                                                (a)         From
and after the Closing, and subject to the limitations set forth in this Article
XI, Seller, FGWLA and CLAC (it being understood that FGWLA and CLAC shall each
only be liable under this Section 11.01(a) for matters relating specifically to
it, but that Seller shall be liable for all indemnification provided for by this
Section 11.01(a)), agree to indemnify and hold harmless Purchaser and its
directors, officers, employees, agents, representatives, and Affiliates from and
against all losses, liabilities, claims, expenses (including reasonable
attorneys’ fees and expenses) and damages but excluding lost profits or any
punitive, exemplary, consequential or similar damages (other than lost profits
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    damages
actually paid to a third party in a Third Party Claim and lost profits not paid
to a third party in a Third Party Claim to the extent set forth in Section
11.01(c)) (“Losses”) (to the
extent exceeding reserves, if any, with respect to 

    such
particular Losses reflected in the Final Statement of Assets and Liabilities and
Final Net Worth Statement) to the extent arising from or related to (i) any
breach of the representations and warranties  of Seller, FGWLA and
CLAC contained in this Agreement (determined without regard to any
qualifications as to materiality (including Sellers Material Adverse Effect)
therein), (ii) any breach of any of the covenants and agreements of Seller,
FGWLA or CLAC contained in this Agreement which covenants and agreements survive
the Closing, (iii) the Excluded Liabilities, (iv) the Subsidiary Indemnified
Liabilities or (v) Continued Practices; provided, however, that none of
Seller, FGWLA or CLAC shall have any liability under clause (i) or clause (v) of
this Section 11.01(a) or Section 12.01(a)(v) unless the aggregate of all Losses
under clause (i) or clause (v) of this Section 11.01(a) or Section 12.01(a)(v)
for which Seller, FGWLA or CLAC (taken together) would, but for this proviso, be
liable exceeds an amount equal to .75% of the Purchase Price, and then only to
the extent of any such excess.  In any event, notwithstanding anything
in this Agreement to the contrary, the maximum amount for which Seller, FGWLA
and CLAC shall be liable with respect to breaches described in clause (i) or
clause (v) above under this Section 11.01(a) or Section 12.01(a)(v) shall not
exceed in the aggregate, an amount equal to 50% of the Purchase
Price.  The obligations of Seller, FGWLA and CLAC under this Section
11.01 are in addition to their obligations under the Ancillary Agreements,
except as provided therein.  The obligation of Seller, FGWLA and CLAC
under clause (i) of this Section 11.01(a) with respect to any violation of Law
after the Closing by Purchaser or any of its Affiliates (including the Seller
Subsidiaries) that is a continuation of any policy or regular practice of
Seller, FGWLA, CLAC or a Seller Subsidiary that existed prior to the Closing and
is carried out by or under the supervision of Business Employees, Corporate
Employees or Subsidiary Employees on behalf of Purchaser or its Affiliates shall
be limited to their liability under clause (v) of this Section
11.01(a).

     

    (b)         From
and after the Closing, and subject to the limitations set forth in this Article
XI, Purchaser agrees to indemnify and hold harmless Seller, FGWLA, CLAC and
their respective directors, officers, employees, agents, representatives, and
Affiliates from and against all Losses to the extent arising from or related to
(i) any breach of the representations and warranties of Purchaser contained in
this Agreement (determined without regard to any qualifications as to
materiality (including Purchaser Material Adverse Effect) therein), (ii) any
breach of any of the covenants and agreements of Purchaser contained in this
Agreement which covenants and agreements survive the Closing or (iii) the
Assumed Liabilities; provided, however, that
Purchaser shall not have any liability under clause (i) of this Section 11.01(b)
unless the aggregate of all Losses under clause (i) of this Section 11.01(b) for
which Purchaser would, but for this proviso, be liable exceeds an amount equal
to .75% of the Purchase Price, and then only to the extent of any such
excess.  In any event, notwithstanding anything in this Agreement to
the contrary, the maximum amount for which Purchaser shall be liable with
respect to breaches described in clause (i) above under this Section 11.01(b)
shall not exceed in the aggregate, an amount equal to 50% of the Purchase
Price.  Purchaser’s obligations under this Section 11.01 are in
addition to its obligations under the Ancillary Agreements, except as provided
therein.

     

     

    
      
        
        

      

      
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    (c)         In
calculating Losses hereunder, each party shall have the right to seek to prove
that amounts for which it is indemnified by the other party should include lost
profits for the period of time from the Closing Date to the fifth anniversary of
the Closing Date; provided that (i)
with respect to indemnification claims pursuant to clause (i) of Section
11.01(a) or clause (i) of Section 11.01(b), such lost profits shall be limited
to lost profits attributable to the period starting on the Closing Date and
ending on the date of the cure of the breach giving rise to an indemnification
claim, and (ii) with respect to a Continued Practice giving rise to an
indemnification claim pursuant to clause (v) of Section 11.01(a), such lost
profits shall be limited to lost profits attributable to the period starting on
the Closing Date and ending on the date upon the earlier of (A) the date upon
which the Continued Practice is brought in to compliance with Law in accordance
with Purchaser’s obligations pursuant to Section 9.07 or (B) the 120th day
following the Closing Date; provided further that Seller,
FGWLA and CLAC shall have the right to seek to prove that any such amounts have
been mitigated, to the extent applicable, by the Post-Closing PP
Adjustment.

     

    Section
11.02     Indemnification
Procedures

     

    .                                              
(a)         In
order for a party (the “Indemnified Party”)
to be entitled to any indemnification provided for under this Agreement in
respect of, arising out of or involving a claim or demand made by, or an action,
proceeding or investigation instituted by, any Person neither a party to this
Agreement nor an Affiliate of such a party (a “Third Party Claim”),
such Indemnified Party must notify the party from which indemnity is sought (the
“Indemnifying
Party”) in writing, and in reasonable detail, of the Third Party Claim
within ten (10) Business Days after such Indemnified Party learns of the Third
Party Claim; provided, however, that failure
to give such notification shall not affect the indemnification provided
hereunder except to the extent the Indemnifying Party shall have been actually
prejudiced as a result of such failure.  Thereafter, the Indemnified
Party shall deliver to the Indemnifying Party, within five (5) Business Days
after the Indemnified Party’s receipt thereof, copies of all notices and
documents (including court papers) received by the Indemnified Party relating to
the Third Party Claim.

     

     

    (b)         If
a Third Party Claim is made against an Indemnified Party, the Indemnifying Party
will be entitled to participate in the defense thereof and, if it so chooses, to
assume the defense thereof with counsel selected by the Indemnifying
Party.  If the Indemnifying Party assumes such defense, the
Indemnified Party shall have the right to participate in the defense
thereof and to employ counsel, at its own expense, separate from the counsel
employed by the Indemnifying Party; provided, however, that the
Indemnifying Party shall bear the reasonable fees, costs and expenses of such
separate counsel if the (A) Indemnified Party shall have determined in good
faith and shall have received a written opinion of counsel to the effect that an
actual or potential conflict of interest makes representation by the same
counsel or the counsel selected by the Indemnifying Party inappropriate or
(B) Indemnifying Party shall have authorized the Indemnified Party to employ
separate counsel at the Indemnifying Party’s expense.  If the
Indemnifying Party chooses to defend or prosecute any Third Party Claim, all of
the parties hereto shall cooperate in the defense or prosecution
thereof.  Such cooperation shall include the retention and (upon the
Indemnifying Party’s request) the provision to

     

    
      
        
        

      

      
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     the
Indemnifying Party of records and information which are reasonably relevant to
such Third Party Claim, and making employees available on a mutually convenient
basis to provide additional information and explanation of any material provided
hereunder.  All reasonable costs and expenses incurred in connection
with the Indemnified Party’s cooperation shall be borne by the Indemnifying
Party.  Whether or not the Indemnifying Party shall have assumed the
defense of a Third Party Claim, the Indemnifying Party shall have no liability
with respect to any compromise or settlement of such claims effected without its
written consent (such consent not to be unreasonably withheld or delayed); the
Indemnifying Party shall not admit any liability with respect to, or settle,
compromise or discharge, such Third Party Claim without the Indemnified Party’s
prior written consent (which consent shall not be unreasonably withheld or
delayed) unless (A) there is no finding or admission of any violation of Law or
any violation of the rights of any Person and no effect on any other claims that
may be made against the Indemnified Party, and (B) the sole relief provided is
monetary damages that are paid in full by the Indemnifying Party and a full and
complete release is provided to the Indemnified Party.

     

    (c)         The
indemnities provided in this Agreement shall survive the Closing; provided, however, that the
indemnities provided under Sections 11.01(a)(i) and 11.01(b)(i) shall terminate
when the applicable representation or warranty terminates pursuant to Article X,
except as to any item as to which the Person to be indemnified shall have, prior
to the expiration date of the relevant representation and warranty, made a claim
by delivering a notice (stating in reasonable detail the basis of such claim) to
the Indemnifying Party.  Except (i) as set forth in Sections 2.03,
9.04, 12.01 and 14.05, and (ii) for claims based on fraud, the indemnity
provided in Sections 11.01(a) and 11.01(b) shall be the sole and exclusive
remedy of the Indemnified Party against the Indemnifying Party at law or equity
for any claim arising under this Agreement.

     

    ARTICLE
XII

     

    TAXES

     

    Section
12.01     Tax
Indemnity.

     

                                                  
(a)         Seller,
FGWLA and CLAC agree to indemnify and hold harmless Purchaser, its Affiliates
and the Seller Subsidiaries against the following (to the extent in excess of
the reserves and accruals established for such Loss on the Final Statement of
Assets and Liabilities):  (i) Taxes imposed on or with respect to the
Seller Subsidiaries, the Business or the Transferred Assets with respect to
taxable periods ending on or before the Closing Date; (ii) with respect to
taxable periods beginning on or before the Closing Date and ending after the
Closing Date, Taxes imposed on or with respect to the Seller Subsidiaries, the
Business or the Transferred Assets which are allocable, pursuant to Section
12.01(b), to the portion of such period ending on and including the Closing
Date; (iii) Taxes of any Person (other than any of the Seller Subsidiaries) that
are imposed on or for which any of the Seller Subsidiaries is liable pursuant to
Treasury Regulations section 1.1502-6 (or similar provision of state, local or
foreign Law), as a transferee or successor, or (other than as specifically set
forth in (A) this Agreement or (B) the Ancillary Agreements) by contract; (iv)
Taxes attributable to,

     

    
      
        
        

      

      
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    or
resulting directly or indirectly from elections under section 338(h)(10) of the
Code (and any comparable provisions of state, local or foreign Law) with respect
to the actual or deemed sale of the shares of capital stock of any of the Seller
Subsidiaries, pursuant to Section 12.07(e) of this Agreement; and (v) any
Losses (for the avoidance of doubt, for purposes of this clause (v), Losses
shall not include any Taxes (other than interest, penalties and additions
imposed with respect thereto) with respect to taxable periods beginning after
the Closing Date resulting from the failure to file a Tax Return in a
jurisdiction in which the Seller, FGWLA or CLAC (with respect to the Business or
the Transferred Assets) or any Seller Subsidiary was required to file) resulting
from the breach of a covenant, representation or warranty set forth in Sections
2.01(b), 2.01(c), 4.08(l) and 4.21 and this Article XII.  Purchaser
shall use commercially reasonable efforts to take actions in order to minimize
the amount of any Losses for which Seller is required to indemnify Purchaser
pursuant to clause (v) of this Section 12.01(a).   Purchaser
agrees to indemnify and hold harmless Seller and its Affiliates against the
following:  (i) Taxes imposed on or with respect to the Seller
Subsidiaries, the Business or the Transferred Assets with respect to taxable
periods beginning after the Closing Date; (ii) with respect to taxable periods
beginning on or before the Closing Date and ending after the Closing Date, Taxes
imposed on or with respect to the Seller Subsidiaries, the Business or the
Transferred Assets which are allocable, pursuant to Section 12.01(b), to the
portion of such period beginning the day after the Closing Date; (iii) Taxes
imposed on or with respect to the Seller Subsidiaries, the Business or the
Transferred Assets with respect to taxable periods ending on or before the
Closing Date to the extent of the reserves and accruals established for such
Taxes on the Final Statement of Assets and Liabilities; and (iv) any Losses
resulting from the breach of a covenant, representation or warranty set forth
Sections 2.01(b), 2.01(c), 4.08(l) and 4.21 and this Article
XII.  Seller shall use commercially reasonable efforts to take actions
in order to minimize the amount of any Losses for which Purchaser is required to
indemnify Seller pursuant to clause (iv) of this Section 12.01(a).

     

    (b)         In
the case of Taxes that are payable with respect to a taxable period that begins
on or before the Closing Date and ends after the Closing Date, the portion of
any such Tax that is allocable to the portion of the period ending on and
including the Closing Date shall be:

     

    (i)                 in
the case of Taxes that are either (x) based upon or related to income or
receipts, or (y) imposed in connection with any sale or other transfer or
assignment of property (real or personal, tangible or intangible) (other than
conveyances pursuant to this Agreement, which are governed by Section 2.01(b) of
this Agreement), deemed equal to the amount which would be payable if the
taxable year ended on and included the Closing Date;

     

    (ii)                 in
the case of Taxes imposed on a periodic basis with respect to the assets of the
Seller Subsidiaries, the Business or the Transferred Assets, or otherwise
measured by the level of any item, deemed to be the amount of such Taxes for the
entire period (or, in the case of such Taxes determined on an arrears basis, the
amount of such Taxes for the immediately preceding period), multiplied by a
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    the
period ending on and including the Closing Date and the denominator of which is
the number of calendar days in the entire period; and

     

    (iii)                 in
the case of Taxes based upon gross premiums deemed equal to the amount that
would be payable with respect to the premiums collected as of the Closing
Date.

     

    (c)         Notwithstanding
any provision in this Agreement to the contrary, all liabilities relating to or
arising out of any Tax matters that are specifically indemnified by Purchaser or
the Seller Subsidiaries, on the one hand, or Seller, CLAC or FGWLA on the other
hand, under any of the Ancillary Agreements shall be governed and controlled by
the terms of such other agreement and shall not be subject to the terms of this
Article XII to the extent this Article XII conflicts with such other
agreement.

     

    Section
12.02     Returns and Payments.

     

    (a)         From
the date of this Agreement through and after the Closing Date, Seller shall
prepare and file or otherwise furnish in proper form to the appropriate Tax
Authority (or cause to be prepared and filed or so furnished) in a timely
manner:  (i) all consolidated, unitary, combined or similar Tax
Returns (each a “Consolidated Tax
Return”) that include Seller, CLAC, FGWLA and the Seller Subsidiaries for
any taxable period, (ii) all Tax Returns that include Seller, FGWLA or CLAC and
(iii) all other Tax Returns that relate to or include the Seller Subsidiaries,
the Business or the Transferred Assets for tax periods ending on or before the
Closing Date.  With respect to Tax Returns described in clause (i) or
(ii) of this Section 12.02(a), such Tax Returns shall be prepared and filed in a
manner consistent with past practice to the extent that doing so solely affects
the Seller Subsidiaries, the Business or the Transferred Assets.  With
respect to Tax Returns described in clause (iii) of this Section 12.02(a), such
Tax Returns shall be prepared and filed in a manner consistent with past
practice.  With respect to any Tax Return prepared by Seller pursuant
to this Section 12.02(a) which includes the Seller Subsidiaries, Seller shall
provide to Purchaser a copy of any such Tax Return that is filed by the Seller
Subsidiaries (or in the event of a Consolidated Tax Return, a pro forma Tax
Return for each includible Seller Subsidiary) no later than 30 days prior to the
date such Tax Return is required to be filed.  Purchaser shall have
the right to comment with respect to any such Tax Return to the extent such
comment relates to a matter which is reasonably likely to result in a material
adverse affect for Purchaser or its Affiliates (determined as if Purchaser will
file an Election for each Seller Subsidiary); provided, that such comments does
not cause Seller or its Affiliates to take any positions that are either
contrary with law.  Purchaser shall prepare and file or otherwise
furnish in proper form to the appropriate Tax Authority (or cause to be prepared
and filed or so furnished) in a timely manner all other Tax Returns of or that
include the Seller Subsidiaries.  At least 15 days prior to the
Closing Date, Seller shall provide written notice to Purchaser of any Tax
Return that Purchaser is required to file (or cause to be filed) within 45 days
of the Closing Date pursuant to this Section 12.02(a).

     

    (b)         With
respect to any Tax Return required to be filed (or caused to be filed) by
Purchaser, or Seller pursuant to Section 12.02(a) (the party with the

     

    
      
        
        

      

      
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    obligation
to file a Tax Return shall hereinafter be referred to as the “Filing Party”) and as
to which an amount of Tax is allocable to the other party under Section 12.01
(the “Tax Indemnifying
Party”), the Filing Party shall provide the Tax Indemnifying Party with a
copy of such completed Tax Return or in the case of a Consolidated Tax Return, a
pro forma Tax Return for the Seller Subsidiaries (prepared on a separate company
basis) and a statement certifying and setting forth the calculation of the
amount of Tax shown on any such Tax Return that is allocable to such Tax
Indemnifying Party pursuant to Section 12.01, together with appropriate
supporting information and schedules at least 20 Business Days prior to the due
date (including any extension thereof) for the filing of such Tax
Return.  Such Tax Indemnifying Party shall have the right to review
and comment on any such Tax Return and statement prior to the filing of such Tax
Return.

     

    (c)         Subject
to Section 12.01 and except as otherwise specifically provided in an Ancillary
Agreement, Seller shall pay or cause to be paid when due and payable all Taxes
properly shown on a Tax Return that Seller is required to file (or cause to be
filed) pursuant to the terms of paragraph (a) above and Purchaser shall do the
same with respect to all Taxes properly shown on a Tax Return that Purchaser is
required to file (or cause to be filed) pursuant to the terms of paragraph (a)
above.

     

    (d)         In
any case where a Filing Party files a Tax Return on which there is properly
shown an amount of Tax that is allocable to a Tax Indemnifying Party, the Tax
Indemnifying Party shall pay the Filing Party the amount so allocated to it
pursuant to Section 12.01 in accordance with the provisions of Section
12.05.

     

    (e)         Except
as required by Law, none of Purchaser, the Seller Subsidiaries or any Affiliate
thereof shall amend, refile or otherwise modify, or cause or permit the Seller
Subsidiaries to amend, refile or otherwise modify, any Tax election or Tax
Return with respect to any Tax period (or portion of any Tax period), ending on
or prior to the Closing Date, without the prior written consent of
Seller.  To the extent allowed by Law, Purchaser and the Seller
Subsidiaries shall elect not to carry back any losses, credits or deductions of
the Seller Subsidiaries to Tax periods or portions thereof ending on or before
the Closing Date.

     

    Section
12.03     Refunds. 
Except as provided in the Ancillary Agreements, any Tax refund
(including any interest actually received with respect thereto) that is actually
received by Purchaser, the Seller Subsidiaries or any Affiliate of Purchaser, or
any credit against Taxes that is actually claimed by Purchaser, the Seller
Subsidiaries or any Affiliate of Purchaser on a Tax Return, for (a) Taxes of or
relating to any of the Seller Subsidiaries, the Business or the Transferred
Assets for any taxable period ending on or prior to the Closing Date or (b) any
Taxes for which Seller is liable pursuant to this Agreement or the Ancillary
Agreements, and in each case that is actually received or claimed by Purchaser,
the Seller Subsidiaries or any Affiliate of Purchaser, shall be the property of
Seller and shall be paid over promptly to Seller; provided, however, that any
such refund or credit which is accrued as an asset on the Final Statement of
Assets and Liabilities shall be the property of
Purchaser.  Notwithstanding the foregoing sentence, subject to Section
12.02(e), any Tax refund (or equivalent benefit to Seller or any Affiliates of
Seller through a reduction in Tax liability) for a taxable period ending on or

     

    
      
        
        

      

      
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    before
the Closing Date arising out of the carryback of a loss or credit of or with
respect to the Seller Subsidiaries, the Business or the Transferred Assets
arising in a taxable period ending after the Closing Date and that is actually
received by Seller or any Affiliates of Seller, shall be the property of
Purchaser and shall be paid over promptly to Purchaser; provided, however, that to the
extent the amount of any such refund is due to a carry back to a tax year with
respect to which the statute of limitations has, but for such carryback, expired
and such refund is reduced as a result of the assessment of any additional Taxes
for which Purchaser could bring a claim for indemnity pursuant to Section
12.1(a) but for this sentence, none of Seller, FGWLA or CLAC shall be liable or
required to indemnify Purchaser, its Affiliates or the Seller Subsidiaries for
such additional Taxes or shall be liable or required to indemnify Purchaser, its
Affiliates or the Seller Subsidiaries for the amount of any lost refund or for
the loss of any carryback item of loss or credit.  For purposes of
determining whether any refund, credit or equivalent benefit is actually
received or claimed for purposes of this Section 12.03, all such items shall be
applied in the order prescribed by applicable Tax law.

     

    Section
12.04     Contests.

     

    (a)         After
the Closing Date, Purchaser shall promptly notify Seller, or Seller, CLAC, or
FGWLA shall promptly notify Purchaser, in writing of any written notice of a
proposed assessment, audit, examination or claim in a Tax Contest of or relating
to Purchaser, Seller, the Seller Subsidiaries, the Transferred Assets or the
Business which, if determined adversely to the taxpayer, would be grounds for
indemnification under this Article XII; provided, however, that a
failure to give such notice will not affect the rights of a party to
indemnification under this Agreement except to the extent, (i) if any, that, but
for such failure, the Tax Indemnifying Party could have avoided all or a portion
of the Tax liability in question or (ii) such failure otherwise actually
materially prejudices the Tax Indemnifying Party.

     

    (b)         In
the case of a Tax Contest that (i) relates to taxable periods ending on or
before the Closing Date or (ii) relates to a liability for Taxes for which
Seller is reasonably likely to indemnify Purchaser or the Seller Subsidiaries
pursuant to this Agreement or the Ancillary Agreements, Seller shall have the
right at its expense to participate in, control the conduct of, and, subject to
Purchaser’s consent pursuant to Section 12.04(c), settle such Tax
Contest.  Purchaser shall control all other Tax Contests and have the
right to participate in all Tax Contests (including with respect to which Seller
possesses the right to control) which are reasonably likely to result in an
adverse material effect to Purchaser, any Affiliate of Purchaser or the Seller
Subsidiaries.

     

    (c)         None
of Purchaser, the Seller Subsidiaries or any Affiliate of either, nor Seller or
any Affiliate of Seller, shall enter into any compromise or agree to settle any
claim pursuant to any Tax Contest which would adversely affect the other party
for any year without the written consent of the other party, which consent may
not be unreasonably withheld, conditioned or delayed.  Purchaser and
Seller agree to reasonably cooperate, and Purchaser agrees to cause the Seller
Subsidiaries to reasonably cooperate, in the defense against or compromise of
any Tax Contest.

     

     

    
      
        
        

      

      
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    Section
12.05     Time of Payment. 
Payment by the Tax Indemnifying Party of any amounts due under
this Article XII in respect of Taxes shall be made (i) at least three Business
Days before the earlier of the due date of the payment of such Tax or the due
date of the applicable estimated or final Tax Return required to be filed by the
Filing Party on which is required to be reported Taxes for which the Tax
Indemnifying Party is responsible under Section 12.01 without regard to whether
the Tax Return shows overall net income or loss for such period, or (ii) or in
the event of a redetermination of any Taxes as a result of any settlement or
compromise of any Tax Contest, within five (5) days after delivery of written
notice of payment owing together with a computation of the amounts due; provided, however, that in the
event that the parties disagree as to the amount or calculation of any amount
described in clause (i) of this Section 12.05, the parties shall attempt in good
faith to resolve such dispute.  If such dispute is not resolved within
20 days following the commencement of the dispute, the parties shall jointly
retain a nationally recognized law or accounting firm, which firm is independent
of both parties (the “Independent Firm”),
to resolve the dispute.  The Independent Firm shall act as an
arbitrator to resolve all points of disagreement and its decision shall be final
and binding upon all parties involved, except to the extent of a redetermination
described in clause (ii) of this Section 12.05.  To the extent of a
disputed item, payments required to be made under this Agreement shall be made
within 8 days of the Independent Firm delivering its decision to the
parties.  The fees and expenses relating to the Independent Firm shall
be borne equally by the parties.  Payments pursuant to this Article
XII that are not made on or before the date prescribed herein or with respect to
a dispute, are made after the date such payments would have been made pursuant
to this paragraph but for such dispute (the “Payment Date”) shall
bear interest for the period from and including the date immediately following
the Payment Date through and including the date of payment computed at an annual
rate equal to the 90-Day Treasury Rate in effect on the Payment
Date.

     

    Section
12.06     Cooperation and Exchange of
Information.

     

    (a)         Seller,
FGWLA, CLAC and Purchaser (and all Affiliates of such entities) agree to provide
each other with such cooperation and information as either Seller or Purchaser
reasonably may request in filing any Tax Return or claim for refund, determining
a liability for Taxes or a right to a refund of Taxes, or participating in
or conducting any audit or other proceeding in respect of Taxes with respect to
the Seller Subsidiaries, the Business or the Transferred Assets.  Such
cooperation and information shall include providing copies of relevant Tax
Returns (other than Tax Returns filed by the Consolidated Group) or relevant
portions thereof, together with accompanying schedules, related work papers and
documents relating to rulings or other determinations by any Tax
Authority.  Seller, FGWLA, CLAC, Purchaser and the Seller Subsidiaries
shall each make its employees available on a basis mutually convenient to both
parties to provide explanations of any documents or information provided
hereunder.  Each of Seller, FGWLA, CLAC, the Seller Subsidiaries and
Purchaser shall retain all Tax Returns, schedules and work papers, records and
other documents in its possession relating to Tax matters of the Seller
Subsidiaries, the Business and the Transferred Assets for each taxable period
first ending after the Closing Date and for all prior taxable periods for the
time period set forth in Section 9.01(b).  Any information obtained
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    12.06
shall be kept confidential except as may be otherwise necessary in connection
with the filing of Tax Returns or claims for refund or in connection with any
Tax Contest.

     

    (b)         Notwithstanding
any provisions in this Agreement to the contrary (other than Section 12.04), the
parties agree that none of Purchaser or any Affiliates thereof will have the
right to participate in, control or consent to any matter that involves an
income Tax Return filed on a consolidated, combined, unified or group basis that
includes Seller, FGWLA, CLAC, Parent or any Affiliate of such entities, and
neither Seller nor its Affiliates will have the right to participate in,
control or consent to any matter that involves an income Tax Return filed on a
consolidated, combined, unified or group basis that includes Purchaser or any of
its Affiliates.

     

    (c)         From
the date hereof through the Closing Date Seller, FGWLA and CLAC shall cooperate
with Purchaser and provide Purchaser and its representatives with access to all
information necessary for purposes of allowing Purchaser to continue and
conclude its Tax due diligence review of the Seller Subsidiaries, the Business
and the Transferred Assets, including to the extent necessary to allow Purchaser
to determine whether it will be beneficial to file the Election.

     

    Section
12.07     Miscellaneous.

     

    (a)         Seller
and Purchaser agree to treat all payments made by either of them to or for the
benefit of the other (including any payments to the Seller Subsidiaries) under
the indemnity provisions of this Agreement and for any misrepresentations or
breaches of warranties or covenants as adjustments to the Purchase Price to the
extent required by applicable Tax Law.

     

    (b)         Notwithstanding
any provision in this Agreement to the contrary (other than Sections 10.01(a)
and 11.01(a) with respect to Section 12.01(a)(v)), the obligations of the
parties set forth in this Article XII shall be unconditional and absolute and
shall not be subject to any restrictions or limitations other than those
expressly set forth in this Article XII, and shall remain in effect until 60
days after the expiration of the applicable statute of limitations (taking into
account any extensions or waivers thereof).

     

    (c)         Notwithstanding
any other provision in this Agreement to the contrary (other than Section
11.01(a) with respect to Section 12.01(a)(v)), all matters relating to Taxes
shall be governed exclusively by Sections 2.01(b), 2.01(c), 4.08(l) and 4.21 and
this Article XII; provided, however; that all
matters relating to Taxes that are specifically identified and addressed by the
Ancillary Agreements shall be governed by the terms of such agreements to the
extent this Article XII conflicts with such other agreements.

     

    (d)         Seller,
FGWLA, CLAC and Purchaser will allocate the Purchase Price and other applicable
consideration (the “Allocable Amount”) in
accordance with the requirements of sections 1060 and 338 of the Code and the
Treasury Regulations promulgated thereunder among and between the Shares, the
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    Assets
and the Business.  As soon as practicable after the Closing Date,
Purchaser shall prepare a schedule reflecting the allocation of the Allocable
Amount and shall submit it to Seller.  Purchaser and Seller will use
reasonable efforts to agree on the amount and proper allocation of the Allocable
Amount in accordance with sections 1060 and 338 of the Code and the Treasury
Regulations promulgated thereunder.

     

    (e)         If,
and only if, requested by Purchaser, Parent and Purchaser shall jointly complete
and make elections under section 338(h)(10) of the Code and any analogous
provisions of state, local or foreign Law (the “Election”) with
respect to the actual or deemed purchase of the stock of any of the Seller
Subsidiaries.

     

    (i)                 On
or prior to the Closing Date, Purchaser shall notify Seller in writing of any
such Election.

     

    (ii)                 If
Purchaser elects to make an Election as provided in this Section 12.07(e), each
of Parent and Purchaser (and all Affiliates of such entities) shall report the
actual or deemed purchase of the stock of such Seller Subsidiary consistent with
such Election.  Each of Parent and Purchaser shall cause any and all
forms necessary to effectuate such Election to be duly executed by an authorized
person, and shall, on the Closing Date, exchange completed and duly executed
copies of Internal Revenue Service Form 8023 and any similar state, local and
foreign forms, and shall duly and timely file all such forms in accordance with
applicable Tax laws and the terms of this Agreement.

     

    (iii)                 Within
60 days after the Closing Date, Seller shall deliver to Purchaser a written
statement setting forth in reasonable detail the calculation of the tax reserves
as of the Closing Date of or relating to each Seller Subsidiary, the Business
and the Transferred Assets.

     

    (iv)                 If
Purchaser chooses to make an Election as provided in this Section 12.07(e),
within 180 days after the Closing Date, Purchaser shall provide (or shall cause
its Affiliates to provide) to Seller: (A) a proposed allocation of the “Modified
Aggregate Deemed Sales Price” and the “Adjusted Grossed Up Basis” (each, as
defined under applicable Treasury Regulations) among the assets of each
applicable Seller Subsidiary, which allocations shall be made in accordance with
section 338(b) of the Code, and (B) a complete set of IRS Forms 8883 (and any
comparable forms required to be filed under state, local or foreign Law) and any
additional data or materials required to be attached to IRS Form 8883 pursuant
to the Treasury Regulations promulgated under section 338 of the Code
(collectively, the “Proposed
Allocation”).  If Seller objects to the Proposed Allocation,
Seller will notify Purchaser of such dispute in writing (providing sufficient
detail for Purchaser to determine Seller’s objection with respect to the
disputed item) within 20 days of receipt of the Proposed
Allocation.  In the case of a dispute, Purchaser and Seller will use
reasonable efforts for a period of 60 days after receipt of the notice of such
dispute to settle such dispute.  If no objection is provided by Seller
within the time set forth above, Seller and Purchaser (and their respective
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    Allocation
for all Tax purposes, (B) prepare and file all Tax Returns in a manner
consistent with such allocations and (C) take no position inconsistent with such
allocations in any Tax Return, any proceeding before any Tax Authority or
otherwise, except to the extent required by applicable Law.

     

    (f)         Immediately
prior to the Closing Date, each of Seller and FGWLA shall deliver to Purchaser a
certificate under section 1445(b)(2) of the Code providing that it is not a
foreign person, in form and substance reasonably satisfactory to
Purchaser.

     

    (g)         On
or prior to the Closing, Parent and Seller shall terminate all Tax sharing
agreements entered into by the Seller Subsidiaries with respect to such entities
and such agreements shall have no continuing force or effect thereafter with
respect to the Seller Subsidiaries.

     

    (h)         Notwithstanding
the definition of “Net Reinsurance Premium” set forth in Section 1.01, the
“reinsurance premium” for U.S. federal income tax purposes shall be determined
by reference to the appropriate tax reserves, as required by sections 338 and
1060 of the Code and the applicable Treasury Regulations
thereunder.

     

    Section
12.08     Exclusivity.   Notwithstanding
anything to the contrary in this Agreement, this Article XII shall govern the
procedures for all contests, defenses and indemnification obligations related or
attributable to Taxes.

     

    ARTICLE
XIII

     

    TERMINATION PRIOR TO
CLOSING

     

    Section
13.01     Termination of Agreement. 
This
Agreement may be terminated at any time prior to the Closing:

     

    (a)         by
Seller, FGWLA, CLAC or Purchaser in writing, if there shall be any order,
injunction or decree of any Governmental Entity which prohibits or restrains
Seller, FGWLA, CLAC or Purchaser from consummating the transactions contemplated
hereby, and such order, injunction or decree shall have become final and
nonappealable;

     

    (b)         by
Seller, FGWLA, CLAC or Purchaser in writing, if the Closing has not occurred on
or prior to 12 months following the date hereof, unless due to the failure of
the party seeking to terminate this Agreement to perform in all material
respects each of its obligations under this Agreement required to be performed
by it on or prior to the Closing Date;

     

    (c)         by
Purchaser (i) if there has been a breach on the part of Seller, FGWLA or CLAC of
any representation or warranty of Seller, FGWLA or CLAC contained herein or in
any certificate or other instrument delivered or furnished to Purchaser pursuant
hereto (without regard to any materiality or Sellers Material Adverse Effect
qualifications) such that all such breaches would, individually or in the
aggregate, 

     

    
      
        
        

      

      
        105

        
          

        

      

      
        
        

      

    

     

    have a
Sellers Material Adverse Effect; or (ii) if there has been any failure on the
part of Seller, FGWLA or CLAC to comply with or perform any of their respective
agreements, covenants or obligations hereunder in any material respect, and such
noncompliance or nonperformance shall not have been (x) cured or eliminated by
Seller, FGWLA or CLAC within ten (10) Business Days following receipt by Seller,
FGWLA or CLAC of written notice thereof from Purchaser; or (y) waived by
Purchaser on or before the Closing Date;

     

    (d)         by
Seller, FGWLA or CLAC (i) if there has been a breach on the part of Purchaser of
any representation or warranty of Purchaser contained herein or in any
certificate or other instrument delivered or furnished to Seller, FGWLA or CLAC
pursuant hereto (without regard to any materiality or Purchaser Material Adverse
Effect qualifications) such that all such breaches would, individually or in the
aggregate, have a Purchaser Material Adverse Effect; or (ii) if there has been
any failure on the part of Purchaser to comply with or perform any of its
agreements, covenants or obligations hereunder in any material respect and such
noncompliance or nonperformance shall not have been (x) cured or eliminated by
Purchaser within ten (10) Business Days following receipt by Purchaser of
written notice thereof from Seller, FGWLA or CLAC; or (y) waived by Seller,
FGWLA and CLAC on or before the Closing Date; and

     

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

     

    Section
13.02     Survival.   If
this Agreement is terminated and the transactions contemplated hereby are not
consummated as described above, this Agreement shall become null and void and of
no further force and effect, except that (a) in the event of a termination of
this Agreement because of any breach, the breaching party shall be liable to the
other party for all actual damages resulting from such breach, including
reasonable attorneys fees, and, if Purchaser is the breaching Party, Seller’s
actual, reasonable and verifiable direct costs in connection with the
“Landlord’s Work” as defined in the forms of Headquarters Leases; (b) in the
event of a termination of this Agreement not because of any breach, Purchaser
shall reimburse Seller for one-half of Seller’s actual, reasonable and
verifiable direct costs in connection with the “Landlord’s Work” as defined in
the forms of Headquarters Leases; (c) the provisions of this Agreement relating
to the obligations of the parties hereto to keep confidential and not to use
certain information and data obtained from the other parties hereto shall remain
in full force and effect; and (d) the provisions of Section 6.09, this Section
13.02 and Article XIV shall remain in full force and effect.

     

    ARTICLE
XIV

     

    GENERAL
PROVISIONS

     

    Section
14.01     Publicity.  Except as may otherwise be required by Law or stock exchange
requirements, no press release, public announcement or general employee
communication concerning this Agreement or the transactions contemplated hereby
shall be made by any of the parties hereto without advance approval thereof by
Seller,

     

    
      
        
        

      

      
        106

        
          

        

      

      
        
        

      

    

     

     FGWLA,
CLAC and Purchaser.  The parties hereto shall cooperate with each
other in making any press release, public announcement or general employee
communication.

     

    Section
14.02     Dollar References. 
All dollar references in this Agreement are to the currency of
the United States.

     

    Section
14.03     Notices.  Any notice or other communication required or permitted hereunder
shall be in writing (including facsimile or similar writing) and shall be deemed
given if (i) delivered personally, (ii) sent by overnight courier (providing
proof of delivery) or (iii) sent by facsimile, to the parties at the following
address:

     

    
      	
              (i)

            	
              If
      to Purchaser:

            
	 	 
	 
      	
              Connecticut
      General Life Insurance Company

            
	 
      	
              Two
      Liberty Place

            
	 
      	
              1601
      Chestnut Street

            
	 
      	
              Philadelphia,
      PA  19192

            
	 
      	
              Attention:

            	
              Thomas
      A. McCarthy

            
	 
      	
              Facsimile:

            	
              (215)
      761-2387

            
	 	 
	 
      	
              With
      a concurrent copy to:

            
	 	 
	 
      	
              Connecticut
      General Life Insurance Company

            
	 
      	
              c/o
      CIGNA Corporation

            
	 
      	
              Two
      Liberty Place

            
	 
      	
              1601
      Chestnut Street

            
	 
      	
              Philadelphia,
      PA  19192

            
	 
      	
              Attention:

            	
              D.
      Timothy Tammany, Esq.

            
	 
      	
              Facsimile:

            	
              (215)
      761-5900

            
	 	 
	 
      	
              and

            
	 	 
	 
      	
              Skadden,
      Arps, Slate, Meagher & Flom LLP

            
	 
      	
              Four
      Times Square

            
	 
      	
              New
      York, NY  10036

            
	 
      	
              Attention:

            	
              Robert
      J. Sullivan, Esq.

            
	 
      	
              Facsimile:

            	
              (917)
      777-2930

            
	 	 
	
              (ii)

            	
              If
      to Seller, FGWLA or CLAC:

            
	 	 
	 
      	
              Great-West
      Life & Annuity Insurance Company

            
	 
      	
              8515
      East Orchard Road

            
	 
      	
              Greenwood
      Village, CO 80111

            
	 
      	
              Attention:

            	
              Richard
      G. Schultz, Chief Legal Officer,

            
	 
      	
               

            	Corporate
      and Secretary  
	 	 
	 	 
	 
      	
              Facsimile:

            
	 	 
	 
      	
              With
      a concurrent copy to:

            

    

     

     

    
      
        
        

      

      
        107

        
          

        

      

      
        
        

      

    

     

    
      	 
      	
              Dewey
      & LeBoeuf LLP

            
	 
      	
              125
      West 55th Street

            
	 
      	
              New
      York, New York  10019-5389

            
	 
      	
              Attention:

            	
              Donald
      B. Henderson, Jr.

            
	 
      	
              Facsimile:

            	
              (212)
      649-9405

            

    

     

    Any party
may, by notice given in accordance with this Section 14.03 to the other parties,
designate another address or person for receipt of notices hereunder; provided, that notice
of such a change shall be effective upon receipt.

     

    Section
14.04     Entire Agreement. 
This Agreement (including the Ancillary Agreements, the other
agreements contemplated hereby and thereby, the Exhibits and the Schedules
hereto) contains the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements and understandings,
written or oral, with respect thereto; provided, however, that the
Confidentiality Agreement shall remain in full force and effect in accordance
with its terms prior to the Closing.

     

    Section
14.05     Waivers and
Amendments; Non-Contractual Remedies; Preservation of
Remedies. 
This Agreement may be amended, superseded, canceled, renewed or
extended, and the terms hereof may be waived, only by a written instrument
signed by each of the parties or, in the case of a waiver, by the party waiving
compliance.  No delay on the part of any party in exercising any
right, power or privilege hereunder shall operate as a waiver thereof, nor shall
any waiver on the part of any party of any right, power or privilege, nor any
single or partial exercise of any such right, power or privilege, preclude any
further exercise thereof or the exercise of any other such right, power or
privilege.  The rights and remedies herein provided are cumulative and
are not exclusive of any rights or remedies that any party may otherwise have at
law or in equity.  The parties agree that irreparable damage would
occur in the event any provision hereof were not to be performed in accordance
with its terms and that each party shall be entitled to specific performance of
the terms hereof in addition to any other remedies at law or in
equity.

     

    Section
14.06     Governing Law.  THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE PRINCIPLES
OF CONFLICTS OF LAWS THEREOF.

     

    Section
14.07     Jurisdiction. 
  Each
party hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of any court of the United States or any state court which in
either case is located in the City of New York for any actions, suits or
proceedings arising out of or relating to this Agreement and the transactions
contemplated hereby (and each party agrees not to commence any action, suit or
proceeding relating thereto except in such courts, and further agrees that
service of any process, summons, notice or document by U.S. registered mail to
its address set forth above shall be effective service of process for any
action, suit or proceeding brought against it in any such
court).  Each party hereby irrevocably and unconditionally
waives

     

    
      
        
        

      

      
        108

        
          

        

      

      
        
        

      

    

     

     any
objection to the laying of venue of any action, suit or proceeding arising out
of this Agreement or the transactions contemplated hereby in any such court, and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.  EACH PARTY
HERETO HEREBY WAIVES TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
BROUGHT BY ANY OF THEM AGAINST ANOTHER ARISING OUT OF OR IN ANY WAY CONNECTED
WITH THIS AGREEMENT, OR ANY OTHER AGREEMENTS EXECUTED IN CONNECTION HEREWITH OR
THE ADMINISTRATION THEREOF OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREIN OR
THEREIN.

     

    Section
14.08     Binding Effect; Assignment. 
This Agreement shall be binding upon and inure to the benefit of
the parties and their respective successors, permitted assigns and legal
representatives.  Neither this Agreement, nor any of the rights,
interests or obligations hereunder, may be assigned, in whole or in part, by any
party without the prior written consent of the other parties hereto and any such
assignment that is not consented to shall be null and void; provided, however, that
Purchaser shall be permitted to assign any or all of its rights to acquire
particular Transferred Assets or Shares.  In the event of such an
assignment, Purchaser shall remain primarily liable for all of its obligations
hereunder and for all of the obligations of any Affiliate to which it assigned
the right to acquire any Transferred Assets or Shares.

     

    Section
14.09     Interpretation

     

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

     

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

     

    (c)         For
purposes of this Agreement, the words “hereof”, “herein”, “hereby” and other
words of similar import refer to this Agreement as a whole unless otherwise
indicated.  Whenever the words “include”, “includes”, or “including”
are used in this Agreement, they shall be deemed to be followed by the words
“without limitation”.  The terms “transactions contemplated by this
Agreement” and “transactions contemplated hereby” shall include the sale and
purchase of the Shares and the Transferred Assets, the reinsurance by Purchaser
of the Insurance Liabilities, the assumption by Purchaser of the Other Assumed
Liabilities, and the execution, delivery and performance by the parties thereto
of the Ancillary Agreements and any other agreements contemplated hereby or
thereby.  Whenever the singular is used herein, the 

     

    
      
        
        

      

      
        109

        
          

        

      

      
        
        

      

    

     

    same
shall include the plural, and whenever the plural is used herein, the same shall
include the singular, where appropriate.

     

    Section
14.10     No Third Party Beneficiaries. 
 Nothing
in this Agreement is intended or shall be construed to give any Person
(including, but not limited to, the employees of Seller, FGWLA, CLAC or the
Seller Subsidiaries), other than the parties hereto, their successors and
permitted assigns, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.

     

    Section
14.11     Counterparts. 
 This
Agreement may be executed by the parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all such
counterparts shall together constitute one and the same instrument.

     

    Section
14.12     Exhibits and Schedules. 
The Exhibits and the Schedules to this Agreement that are
specifically referred to herein are a part of this Agreement as if fully set
forth herein.  All references herein to Articles, Sections,
subsections, paragraphs, subparagraphs, clauses, Exhibits and Schedules shall be
deemed references to such parts of this Agreement, unless the context shall
otherwise require.

     

    Section
14.13     Headings.  The headings in this Agreement are for reference only, and shall
not affect the interpretation of this Agreement.

     

     

    (The rest
of this page is intentionally left blank)

     

    
      
        
        

      

      
        110

        
          

        

      

      
        
        

      

    

     

    

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

     

    
      	
              GREAT-WEST
      LIFE & ANNUITY INSURANCE COMPANY

            
	 
      	 
      	 
      
	
              By:

            	
              /s/ Raymond L.
      McFeetors

            
	 
      	
              Name:

            	
              Raymond
      L. McFeetors

            
	 
      	
              Title:

            	
              President
      and Chief

            
	 
      	 
      	
              Executive
      Officer

            
	 
      	 
      
	 
      	 
      
	
              By:

            	
              /s/ Richard F.
      Rivers

            
	 
      	
              Name:

            	
              Richard
      F. Rivers

            
	 
      	
              Title:

            	
              Executive
      Vice President,

            
	 
      	 
      	
              Healthcare

            

    

     

    

    
      	
              FIRST
      GREAT-WEST LIFE & ANNUITY INSURANCE COMPANY

            
	 
      	 
      	 
      
	
              By:

            	
              /s/ Raymond L.
      McFeetors

            
	 
      	
              Name:

            	
              Raymond
      L. McFeetors

            
	 
      	
              Title:

            	
              President
      and Chief

            
	 
      	 
      	
              Executive
      Officer

            
	 
      	 
      
	 
      	 
      
	
              By:

            	
              /s/ Richard F.
      Rivers

            
	 
      	
              Name:

            	
              Richard
      F. Rivers

            
	 
      	
              Title:

            	
              Executive
      Vice President

            
	 
      	 
      	
              Healthcare

            
	 
      	 
      	 
      

    

    

     

    
      
        
        

      

      
        111

        
          

        

      

      
        
        

      

    

    

    
      	
              THE
      CANADA LIFE ASSURANCE COMPANY

               

            	 
      
	 
      	 
      	 
      	 
      
	
              By:

            	
              /s/ Raymond L.
      McFeetors

            	 
      
	 
      	
              Name:

            	
              Raymond
      L. McFeetors

            	 
      
	 
      	
              Title:

            	
              President
      and Chief

            	 
      
	 
      	 
      	
              Executive
      Officer

            	 
      
	 
      	 
      	 
      
	
              By:

            	
              /s/ Richard F.
      Rivers

            	 
      
	 
      	
              Name:

            	
              Richard
      F. Rivers

            	 
      
	 
      	
              Title:

            	
              Executive
      Vice President,

            	 
      
	 
      	 
      	
              Healthcare

            	 
      

    

    
 

    
      
        
        

      

      
        112

        
          

        

      

      
        
        

      

    

     

     

    
      	
              CONNECTICUT
      GENERAL LIFE INSURANCE COMPANY

            
	 
      	 
      	 
      
	
              By:

            	
              /s/ David M.
      Cordani

            
	 
      	
              Name:

            	
              David
      M. Cordani

            
	 
      	
              Title:

            	
              Chairman
      of Executive

            
	 
      	 
      	
              Committee
      and President

            

    

    

    113ex10-1.htm

    EXHIBIT
10.1

    .

    
 

    

    Performance-Restricted
Restricted Stock

    Or Restricted Stock
Units-Performance Goals - 2008

    

    

    

    

    Number of Shares of
Restricted                                                                                    

             
Stock or Restricted
Stock Units (RSUs)

    

    

    
      	
               

               

              Performance
      Goals

            	
               

              National
      Penn Bancshares

              Directors

            	
               

              National
      Penn 

              Bank
      Directors

            
	 
      	
              Per
      Share

            	 
      	 
      
	
              Threshhold

               

            	
              $  1.20

            	
              1,400

            	
              350

            
	
              Target

               

            	
              $  1.33

            	
              1,500

            	
              375

            
	
              Optimum

               

            	
              $  1.44

            	
              1,600

            	
              400

            

    

    

    
 

    

    

    

    

    ______________________

    

    These
performance goals are consistent with the earnings per share performance
goalsestablished under the National Penn Bancshares, Inc. Executive Incentive
Plan.

    

    7

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