Document:

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                                                                   Exhibit 10.15

                                  5 March 2004

              SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION

                 CREDIT SUISSE FIRST BOSTON (HONG KONG) LIMITED

                       DEUTSCHE BANK AG, HONG KONG BRANCH

                           THE HONG KONG UNDERWRITERS
                           named in Schedule 1 hereto

               ===================================================

                             UNDERWRITING AGREEMENT

                                   relating to

                a Global Offering of 5,151,515,000 Shares of par
                              value US$0.0004 each

                                in the capital of

                    Semiconductor Manufacturing International
                 Corporation of which not less than 257,576,000
                Shares are being offered in Hong Kong at HK$2.69
               per Share payable in full on application subject to
                                     refund

               ===================================================

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                                    CONTENTS

<TABLE>
<CAPTION>
CLAUSE                                                                    PAGE
<S>                                                                       <C>
1. INTERPRETATION .......................................................    2

2. CONDITIONS ...........................................................    8

3. THE HONG KONG PUBLIC OFFER ...........................................    9

4. THE HONG KONG OFFERING DOCUMENTS .....................................   12

5. ISSUE OF HONG KONG OFFER SHARES ......................................   12

6. UNDERWRITING .........................................................   13

7. PAYMENT UNDER THE PUBLIC OFFER .......................................   15

8. COMMISSION AND EXPENSES ..............................................   16

9. STABILISATION, UNDERTAKINGS AND AUTHORITY RELATING TO THE HONG KONG
   UNDERWRITERS .........................................................   16

10. REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS ........................   17

11. FURTHER UNDERTAKINGS ................................................   18

12. TERMINATION .........................................................   20

13. INDEMNITY ...........................................................   22

14. REMEDIES, WAIVERS AND RELEASE .......................................   23

15. ASSIGNMENT ..........................................................   23

16. FURTHER ASSURANCE ...................................................   24

17. ENTIRE AGREEMENT ....................................................   24

18. NOTICES .............................................................   24

19. ANNOUNCEMENTS .......................................................   25

20. TIME OF ESSENCE .....................................................   26

21. INVALIDITY ..........................................................   26

22. GOVERNING LAW .......................................................   26

23. DISPUTE RESOLUTION ..................................................   26

24. IMMUNITY ............................................................   27

25. JUDGMENT CURRENCY INDEMNITY .........................................   27

26. COUNTERPARTS ........................................................   28

SCHEDULE 1 HONG KONG UNDERWRITERS .......................................   29

SCHEDULE 2 THE CONDITIONS PRECEDENT DOCUMENTS ...........................   30

  Part A ................................................................   30

   1. Legal Documents ...................................................   30
</TABLE>

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<TABLE>
<S>                                                                         <C>
   2. Documents relating to the Public Offer ............................   30

   3. Legal Opinions ....................................................   31

   4. Other Documents ...................................................   31

  Part B ................................................................   32

SCHEDULE 3 THE WARRANTIES ...............................................   33

SCHEDULE 4 HONG KONG UNDERWRITERS' SET OFF ARRANGEMENTS .................   43

SCHEDULE 5 ADVERTISING ARRANGEMENTS .....................................   44
</TABLE>

                                                                         Page II

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THIS AGREEMENT is made on 5 March 2004

BETWEEN:

(1)  SEMICONDUCTOR MANUFACTURING INTERNATIONAL CORPORATION, a company
     incorporated in the Cayman Islands whose registered office is at PO Box 309
     GT, Ugland House, George Town, Grand Cayman, Cayman Islands (the Company);

(2)  CREDIT SUISSE FIRST BOSTON (HONG KONG) LIMITED, a company incorporated in
     Hong Kong whose place of business in Hong Kong is at 45/F, Two Exchange
     Square, Central, Hong Kong (CSFB);

(3)  DEUTSCHE BANK AG, HONG KONG BRANCH, whose place of business in Hong Kong is
     at 55/F Cheung Kong Center, 2 Queen's Road Central, Hong Kong (Deutsche
     Bank);

(4)  THE HONG KONG UNDERWRITERS whose respective names and addresses are set out
     in Schedule 1 (together, the Hong Kong Underwriters and individually, a
     Hong Kong Underwriter).

WHEREAS:

(A)  The Company was incorporated in the Cayman Islands on 3 April 2000, with
     the registration number CR-98964.

(B)  The Company submitted a valid application (together with all necessary
     supporting documents) to the Registrar of Companies in Hong Kong to be
     registered as an oversea company in Hong Kong under Part XI of the
     Companies Ordinance and has been registered accordingly on 26 February
     2004.

(C)  Upon closing of the Global Offering, the Company will have an authorised
     share capital of US$22,000,000 divided into 50,000,000,000 Shares of
     US$0.0004 each and 5,000,000,000 undesignated preference shares of
     US$0.0004 each, and an issued share capital of US$7,290,000 divided into
     18,224,352,150 Shares of US$0.0004 each on the basis of the assumptions set
     out in the section headed "Share Capital" in the Hong Kong Prospectus.

(D)  At a meeting of the board of Directors held on 4 March 2004, resolutions
     were passed pursuant to which, inter alia, Directors were authorized to
     agree and sign on behalf of the Company this Agreement and all the other
     relevant documents in connection with the Global Offering.

(E)  Pursuant to the Prospectuses, the Company has agreed to offer for
     subscription and the Selling Shareholders have agreed to offer for sale the
     Offer Shares pursuant to the Global Offering, with the Hong Kong Offer
     Shares being offered pursuant to the Hong Kong Public Offering, the
     International Offer Shares being offered pursuant to the International
     Offering and the US Offer Shares being offered pursuant to the US Offering.

(F)  The Selling Shareholders are expected to grant to the Joint Bookrunners for
     and on behalf of the International Underwriters and US Underwriters an
     over-allotment option to require the Selling Shareholders to sell up to an
     aggregate of 772,727,000 additional Shares to cover over-allocations in
     connection with the International Offering and US Offering.

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(G)  The Company has appointed CSFB and Deutsche Bank to act as joint sponsors
     to the Company in relation to the application to the Hong Kong Stock
     Exchange for the listing of and granting of permission to deal in the Offer
     Shares on the Main Board of the Hong Kong Stock Exchange.

(H)  The Company has agreed to give the representations, warranties and
     undertakings hereinafter mentioned.

NOW IT IS AGREED as follows:

1.   Interpretation

1.1  In this Agreement (including the recitals and the Schedules), the following
expressions shall, unless the context otherwise requires, have the following
meanings:

Acceptance Date means 11 March 2004 being the date on which the application
lists for the Hong Kong Offer Shares will close as stated in the section headed
"How to Apply for Hong Kong Offer Shares" in the Hong Kong Prospectus (or such
other later date as such application lists may close as provided in the
Prospectus and the Application Forms);

Accounts Date means 31 December 2003;

ADRs means American Depositary Receipts to be issued pursuant to the Deposit
Agreement;

ADSs means American Depositary Shares;

affiliate means in relation to a particular company, any company or other entity
which is its holding company or subsidiary, or any subsidiary of its holding
company or which directly, or indirectly through one or more intermediaries,
controls or is controlled by, or is under common control with, the company
specified. For the purposes of this definition the term "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 a person, whether through the ownership of voting
securities, by contract, or otherwise;

Agreement Among Hong Kong Underwriters means the agreement to be entered into
between the Hong Kong Underwriters and the Sponsors at the date hereof;

Application Forms means the white and yellow application forms for the Hong Kong
Offer Shares each in the agreed form to be issued by the Company with the Hong
Kong Prospectus;

Approval means any consent, approval, authorisation, sanction, permission,
order, franchise, registration, filing, clearance, qualification, licence,
permit, certificate or declaration;

Brokerage means brokerage at the rate of 1 per cent. of the Offer Price in
respect of the Hong Kong Offer Shares, payable to members of the Hong Kong Stock
Exchange and the Hong Kong Underwriters (as the case may be) pursuant to the
Hong Kong Public Offering;

Business Day means any day (including a Saturday) on which licensed banks
generally are open for business in Hong Kong;

CCASS means the Central Clearing and Settlement System established and operated
by Hongkong Clearing;

Claw Back Shares means the International Offer Shares or US Offer Shares
withdrawn from the International Offering or the US Offering, as the case may
be, and made available as an

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additional part of the Hong Kong Offer Shares for subscription pursuant to the
Hong Kong Public Offering pursuant to clause 3.5 or 3.7;

Closing means the time when, or as soon as possible after which, payment is to
be made under clause 7, that is the time when the Conditions have been fulfilled
or waived in accordance with this Agreement, which is 8:00 a.m. on 18 March 2004
or otherwise as agreed between the Company and the Sponsors (on behalf of the
Hong Kong Underwriters);

Companies Ordinance means the Companies Ordinance (Chapter 32 of the Laws of
Hong Kong);

Company Accounts means the audited results of the Group for each of the
financial years ended 31st December 2001, 2002 and 2003;

Conditions means the conditions set out in clause 2.1;

Deposit Agreement means the deposit agreement expected to be entered into
between the Company, the Depositary and all holders from time to time of the
ADRs;

Depositary means JPMorgan Chase Bank;

Director(s) means the director(s) of the Company;

Final Offering Circular means the final offering circular to be issued by the
Company in connection with the International Offering;

Formal Notice means the formal notice substantially in the agreed form required
under Rule 12.02, Chapter 12 of the Hong Kong Listing Rules to be published in
connection with the Hong Kong Public Offering in the newspapers and on the dates
specified in Schedule 5 ;

Global Coordinator means CSFB;

Global Offering means the Hong Kong Public Offering, the International Offering
and the US Offering;

Governmental Authorisation means an Approval from an applicable Governmental
Authority;

Governmental Authority means any public, regulatory or governmental agency or
authority (including, without limitation, the Hong Kong Stock Exchange), other
authority and any court at the national, provincial, municipal or local level;

Group means the Company, the Subsidiaries and any of its subsidiaries from time
to time;

HK dollars and HK$ means Hong Kong dollars, the lawful currency of Hong Kong;

holding company has the meaning ascribed thereto in section 2 of the Companies
Ordinance;

Hongkong Clearing means Hong Kong Securities Clearing Company Limited;

Hong Kong means Hong Kong Special Administrative Region of the PRC;

Hong Kong Listing Rules means The Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited;

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Hong Kong Offer Shares means the Initial Public Offer Shares (i) together with,
where applicable, the Claw Back Shares, or (ii) as may be adjusted pursuant to
clause 6.7;

Hong Kong Offering Documents means the Hong Kong Prospectus and the Application
Forms;

Hong Kong Prospectus means the prospectus to be issued by the Company in
connection with the Hong Kong Public Offering substantially in the agreed form;

Hong Kong Public Offering means the offer for subscription of the Hong Kong
Offer Shares in Hong Kong on and subject to the terms and conditions set out in
the Hong Kong Offering Documents;

Hong Kong Stock Exchange means The Stock Exchange of Hong Kong Limited;

Hong Kong Underwriters means the underwriters listed in Schedule 1;

Initial Public Offer Shares means the 257,576,000 Shares initially offered for
subscription by the Company pursuant to the Hong Kong Public Offering and
excluding any Claw Back Shares or any adjustment made pursuant to clause 6.7;

International Offer Shares means the Shares initially offered by the Company and
the Selling Shareholders pursuant to the International Offering subject to the
provisions of clauses 3.5, 3.7 and 6.7 and the Over-Allotment Option;

International Offering means the offering of Shares to professional and
institutional investors (including to professional and institutional investors
within Hong Kong) pursuant to the International Offering Circular;

International Offering Circular means the Preliminary Offering Circular and the
Final Offering Circular;

International Underwriting Agreement means the underwriting agreement relating
to the US Offering and the International Offering expected to be entered into
between the Company, the Selling Shareholders, the International Underwriters
and the US Underwriters on or following the Price Determination Date;

International Underwriters means the group of underwriters of the International
Offering, led by CSFB and Deutsche Bank, who are expected to enter into the
International Underwriting Agreement;

Intersyndicate Agreement means the agreement to be entered into between the Hong
Kong Underwriters, the International Underwriters and the US Underwriters;

Joint Bookrunners means CSFB and Deutsche Bank;

Law means any law, rule, regulation, guideline, opinion, notice, circular,
order, judgment, decree or ruling of any Governmental Authority;

Listing Committee means the Listing Committee of the Hong Kong Stock Exchange;

Multiple Applications Letter means the letter from the Company to the Share
Registrar substantially in the agreed form relating to identification of
multiple applications in relation to the Hong Kong Offer Shares;

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Nominee means HSBC Nominees (Hong Kong) Limited, in whose name the application
monies are to be held by the Receiving Bankers under the Receiving Bankers'
Agreement;

Non-PRC Subsidiary means a Subsidiary incorporated in any jurisdiction other
than the PRC;

Offer Shares means the 3,030,303,000 Shares and 2,121,212,000 Shares
respectively being initially offered for subscription (by the Company) and sale
(by the Selling Shareholders) pursuant to the Global Offering together with any
further Shares sold pursuant to the exercise of the Over-Allotment Option;

Offer Price means the price per Share for the Hong Kong Offer Shares as fixed in
accordance with the provisions of clause 3.6;

Over-Allotment Option means the option expected to be granted by the Selling
Shareholders to the International Underwriters and the US Underwriters
exercisable by the Joint Bookrunners on behalf of the International Underwriters
and the US Underwriters under the International Underwriting Agreement to
require the Selling Shareholders to sell up to an aggregate of 772,727,000
additional Shares solely to cover over-allocation in connection with the
International Offering and the US Offering;

Over-Allotment Shares means up to 772,727,000 Shares which the Selling
Shareholders may be required to sell at the Offer Price pursuant to the
Over-Allotment Option;

PRC means the People's Republic of China, which, for the purpose of this
Agreement, excludes Hong Kong, the Macau Special Administrative Region of the
PRC and Taiwan;

PRC Subsidiary means a Subsidiary incorporated in the PRC;

Preliminary Offering Circular means the preliminary offering circular issued by
the Company in connection with the International Offering (dated 25 February
2004);

Price Determination Agreement means the letter agreement to be entered into
between the Sponsors (on behalf of the Underwriters), and the Company
immediately following the determination of the Offer Price in accordance with
clause 3.6 to record the price so determined;

Price Determination Date means the date on which the Offer Price is determined
in accordance with the provisions of clause 3.6, which is expected to be on or
about 11 March 2004 and in any event shall not be later than 17 March 2004;

Proceedings means any suit, action or proceeding arising out of or in connection
with this Agreement;

Prospectuses means the Hong Kong Prospectus, the US Prospectus and the
International Offering Circular;

Prospectus Date means 8 March 2004;

Receiving Bankers means The Hongkong and Shanghai Banking Corporation, Standard
Chartered Bank and Bank of China (Hong Kong) Limited, being the banks appointed
to hold the application monies received in connection with the Hong Kong Public
Offering pursuant to the Receiving Bankers' Agreement;

Receiving Bankers' Agreement means the agreement appointing the Receiving
Bankers in the agreed form;

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Registrar's Agreement means the agreement between the Share Registrar and the
Company in the agreed form;

Reporting Accountants means Deloitte Touche Tohmatsu;

Schedules means schedules to this Agreement;

Securities Act means the US Securities Act of 1933, as amended;

Selling Shareholders means certain shareholders of the Company offering for sale
Offer Shares in the Global Offering, as set out in Schedule B to the
International Underwriting Agreement;

SFO means the Securities and Futures Ordinance (Cap. 571 of the Laws of Hong
Kong);

Share Registrar means Computershare Hong Kong Investor Services Limited;

Shares means ordinary shares of par value US$0.0004 each in the share capital of
the Company for which applications have been made for the grant of the listing,
and permission to deal, on the Hong Kong Stock Exchange;

Sponsors means CSFB and Deutsche Bank;

Subsidiaries means the subsidiaries of the Company as listed in the Accountants'
Report set out in Appendix I to the Prospectus, and Subsidiary means any of
them;

subsidiary has the meaning ascribed to it in the Companies Ordinance;

Taxation means all forms of taxation whether in Hong Kong or elsewhere in the
world wherever imposed and all statutory, governmental, state, provincial, local
governmental or municipal impositions, duties and levies and all penalties,
charges, costs and interest relating thereto;

transaction means any transaction, act, event, omission or circumstance existing
of whatever nature;

Transaction Levy means the transaction levy charged by the Hong Kong Stock
Exchange on the Company and the subscribers for the Hong Kong Offer Shares;

Underwriters means the Hong Kong Underwriters, the International Underwriters
and the US Underwriters;

US and United States means the United States of America, its territories, its
possessions, any State of the United States of America and the District of
Columbia;

US dollar and US$ means United States dollar, the lawful currency of the United
States;

US Offer Shares means the Shares initially offered by the Company and the
Selling Shareholders pursuant to the US Offering, subject to the provisions of
clauses 3.5, 3.7 and 6.7 and the Over-Allotment Option;

US Offering means the offering of Shares in the United States and Canada as
defined and described in the Hong Kong Prospectus;

US Prospectus means the prospectus to be issued by the Company in connection
with the US Offering;

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<PAGE>

US Underwriters means the group of underwriters of the US Offering led by Credit
Suisse First Boston LLC and Deutsche Bank Securities Inc. who are expected to
enter into the International Underwriting Agreement;

Valid Applications means applications under the Hong Kong Public Offering from
persons made before the closing of the application lists by (a) giving
electronic application instructions to Hongkong Clearing (i) which have been
duly submitted and are otherwise in accordance with the terms and conditions of
the Hong Kong Offering Documents and (ii) in respect of which the debit from
such person's Designated Bank Account (as defined in the General Rules of CCASS)
to effect such instructions has been accepted by the relevant bank when first
requested (or, and without prejudice to the provisions of clauses 6.1 and 6.5,
if practicable in the circumstances and requested by the Sponsors (for
themselves and on behalf of the other Hong Kong Underwriters) or the Company, on
further request) or (b) on Application Forms which (i) have been duly completed
and submitted and are otherwise in accordance with the terms and conditions of
the Hong Kong Offering Documents and (ii) are accompanied by cheques or banker's
cashier orders for the full amount payable on application which are honoured on
first presentation (or, and without prejudice to the provisions of clauses 6.1
and 6.5, if practicable in the circumstances and requested by the Sponsors (for
themselves and on behalf of the other Hong Kong Underwriters) or the Company, on
further presentation) and subject to the provisions of clauses 3.4 and 3.5;

Verification Notes means the verification notes in respect of the Hong Kong
Prospectus prepared by Freshfields Bruckhaus Deringer dated 5 March 2004 (signed
copies of which have been or will be delivered to the Sponsors); and

Warranties means the representations, warranties and undertakings in Schedule 3
and given or made, or deemed to be given or made, pursuant to clause 10 and
Warranty shall be construed accordingly.

1.2  In this Agreement, unless otherwise specified:

(a)  references to recitals, clauses, sub-clauses, paragraphs and Schedules are
     to recitals, clauses, sub-clauses, paragraphs of, and schedules to, this
     Agreement;

(b)  a reference to any statute or statutory provision shall be construed as a
     reference to the same as it may have been, or may from time to time be,
     amended, modified or re-enacted;

(c)  references to a "company" shall be construed so as to include any company,
     corporation or other body corporate, whenever and however incorporated or
     established;

(d)  references to a "person" shall be construed so as to include any
     individual, firm, company, government, state or agency of a state or any
     joint venture, association or partnership (whether or not having separate
     legal personality);

(e)  references to writing shall include any mode of reproducing words in a
     legible and non-transitory form;

(f)  references to times of the day are, unless otherwise specified, to Hong
     Kong time;

(g)  all headings to clauses, sections and Schedules are for convenience only
     and do not affect the interpretation of this Agreement;

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(h)  references to the "closing of the application lists" shall be to 12:00 noon
     on the Acceptance Date;

(i)  the Schedules form part of this Agreement and shall have the same force and
     effect as if expressly set out in the body of this Agreement, and any
     reference to this Agreement shall include the Schedules; and

(j)  a reference to a document being "in the agreed form" means such document in
     a form agreed and initialled for the purposes of identification by
     Freshfields Bruckhaus Deringer and Slaughter and May.

2.   Conditions

2.1  Obligations Conditional: The obligations of the Hong Kong Underwriters
under this Agreement are conditional upon:

(a)  Documents: the Sponsors, on behalf of the Hong Kong Underwriters, receiving
     the documents listed in Schedule 2 , Part A not later than 5:00 p.m. on the
     Business Day prior to the Prospectus Date and the documents listed in
     Schedule 2 , Part B not later than 5:00 p.m. on the Business Day prior to
     the Closing, in each case in form and content satisfactory to the Sponsors;

(b)  Prospectus Authorisation: the lodging of the Hong Kong Prospectus (and
     other required documents) with the Hong Kong Stock Exchange on the Business
     Day prior to the Prospectus Date, and the Hong Kong Stock Exchange issuing
     a certificate pursuant to section 342C(5) of the Companies Ordinance
     certifying that it authorises registration of the Hong Kong Prospectus
     prior to the Prospectus Date;

(c)  Prospectus Registration: the registration of one copy of the Hong Kong
     Prospectus duly certified by two Directors (or by their agents duly
     authorised in writing) as having been approved by the resolutions of the
     board of Directors and having all the documents required pursuant to the
     provisions of section 342C of the Companies Ordinance to be endorsed
     thereon or attached thereto by the Registrar of Companies in Hong Kong
     before the Prospectus Date;

(d)  Listing: listing of and permission to deal in all the Offer Shares being
     granted (subject only to allotment) by the Listing Committee in principle
     on or before the Price Determination Date and dealings in the Offer Shares
     being allowed by the Hong Kong Stock Exchange to commence on the Hong Kong
     Stock Exchange on or before 18 March 2004 (or such later date as the
     Company and the Sponsors on behalf of the Hong Kong Underwriters may agree)
     (and such listing and permission not subsequently being revoked prior to
     the time and date detailed in clause 12.1);

(e)  International Underwriting Agreement:

          (i)  the execution and delivery of the International Underwriting
               Agreement and the Price Determination Agreement on or around the
               Price Determination Date; and

          (ii) the International Underwriting Agreement becoming unconditional
               in accordance with its terms (other than any condition for this
               Agreement to become unconditional) and not having been terminated
               in accordance with its terms or otherwise, prior to 8:00 a.m. on
               the morning on which dealing is scheduled to commence in the
               Offer Shares on the Hong Kong Stock Exchange; and

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<PAGE>

(f)  Offer Price: the Offer Price having been fixed on the Price Determination
     Date in accordance with the provisions of clause 3.6.

2.2  Undertakings: The Company undertakes to use its reasonable best endeavours
to procure the fulfilment of the conditions set out in clause 2.1 above and in
particular shall furnish such information, supply such documents, pay such fees,
give such undertakings and do all such acts and things as may be reasonably
required by the Sponsors (on behalf of the Hong Kong Underwriters), the Hong
Kong Stock Exchange and the Registrar of Companies in Hong Kong in connection
with the application for the listing of and permission to deal in the Offer
Shares and the fulfilment of such conditions.

2.3  Waiver: The Sponsors, for themselves and on behalf of the Hong Kong
Underwriters, may, at any time, waive any or all of the Conditions or extend the
deadline for the fulfilment of such Conditions by such number of days or in such
manner as they may in their absolute discretion determine.

2.4  Termination: In the event that any of the Conditions is not fulfilled or
waived, or in the event that the Price Determination Date shall not occur, on or
prior to 7 April 2004, this Agreement shall terminate with immediate effect and
the provisions of clause 12.2 shall apply.

3.   The Hong Kong Public Offering

3.1  Hong Kong Public Offering: The Company will, subject to the determination
of the Offer Price in accordance with clause 3.6, offer the Hong Kong Offer
Shares for subscription by the public in Hong Kong at the Offer Price, payable
in full on application in HK dollars together with brokerage of 1 per cent., SFC
transaction levy of 0.005 per cent., investor compensation levy of 0.002 per
cent. and Hong Kong Stock Exchange trading fee of 0.005 per cent. on and subject
to the terms and conditions set out in the Hong Kong Offering Documents and this
Agreement.

3.2  Appointment: The Company hereby appoints, to the exclusion of all others:

(a)  CSFB to act as global coordinator of the Global Offering;

(b)  CSFB and Deutsche Bank to act as joint sponsors for the Company in relation
     to the application to the Hong Kong Stock Exchange for the grant of listing
     of the Offer Shares;

(c)  CSFB and Deutsche Bank to act as joint bookrunners of the Global Offering;
     and

(d)  the Hong Kong Underwriters as underwriters for the Hong Kong Public
     Offering; and

relying on the representations, warranties and undertakings herein contained and
subject as hereafter mentioned, CSFB, Deutsche Bank and each Hong Kong
Underwriter respectively and severally accept such appointments.

The Company hereby confirms that the foregoing appointments confer on CSFB,
Deutsche Bank and each Hong Kong Underwriter, respectively, all powers,
authorities and discretion on behalf of the Company which are reasonably
necessary for, or reasonably incidental to, the lawful making of the Hong Kong
Public Offering.

Each such appointment is made on the basis, and on terms, that each appointee
may, as far as it relates to the Hong Kong Public Offering, at the option of
such appointee, delegate all or any of its relevant rights, duties, powers and
discretions in such manner and on such terms as

                                                                          Page 9

<PAGE>

it thinks fit (with or without formality and without prior notice of any such
delegation being required to be given to the Company) to any one or more of its
affiliates; provided, however, that no such delegation shall in any way release
any appointee from, or otherwise reduce, the duties and responsibilities of such
appointee hereunder.

3.3  Formal Notice: The Company and the Sponsors will, subject to registration
of the Hong Kong Prospectus in accordance with clause 2.1(c), cause the Formal
Notice to be published in such newspapers and on such date(s) as set out in
Schedule 5, or as the Company and the Sponsors may otherwise agree in writing.
The Company will cause such number of copies of the Hong Kong Prospectus
together with Application Forms as the Sponsors (on behalf of the Hong Kong
Underwriters) may reasonably request to be delivered to the Sponsors or as the
Sponsors (on behalf of the Hong Kong Underwriters) may direct for the purpose of
issuing the same generally.

3.4  Application Lists: The application lists for the Hong Kong Offer Shares
will, subject as mentioned below, open at 11:45 a.m. on the Acceptance Date and
will close at 12:00 noon on the same day. In the event of a tropical cyclone
warning signal No. 8 or above or a "black" rainstorm warning signal (in any such
case, a signal) being in force in Hong Kong at any time between 8:00 a.m. and
12:00 noon on the Acceptance Date then the application lists will open at 11:45
a.m. and close at 12:00 noon on the next Business Day on which no signal remains
in force at any time between 8:00 a.m. and 12:00 noon and all references in this
Agreement to the closing of the application lists shall be construed
accordingly.

3.5  Basis of Allocation: The Company agrees that the Joint Bookrunners shall
have the sole and exclusive right in their absolute discretion, and on behalf of
the Company, on and subject to the terms and conditions set out in the Hong Kong
Offering Documents, this Agreement and the Receiving Bankers' Agreement, to
accept or reject (in whole or in part) any applications for Hong Kong Offer
Shares (including, where the number of Hong Kong Offer Shares being. applied for
exceeds the total number of the Hong Kong Offer Shares, the right to determine
the basis of allocation of the Hong Kong Offer Shares) and the Joint
Bookrunners, without prejudice to clause 3.7 below, may, but shall not be
obliged to, withdraw Offer Shares from the International Offering or US Offering
and, on behalf of the Company, make available such Offer Shares as additional
Hong Kong Offer Shares to satisfy Valid Applications.

3.6  Price Determination: The Offer Price shall be fixed by agreement (if
agreement can be reached) between the Company and the Sponsors (on behalf of the
Hong Kong Underwriters) in HK dollars after the demand for the International
Offering has been determined, which price (not including brokerage, Stock
Exchange trading fee, SFC transaction levy and investor compensation levy) shall
not exceed HK$2.69 per Share and is expected to be not lower than HK$2.39 per
Share. The Offer Price will be determined on the Price Determination Date and
shall upon its determination be recorded in the Price Determination Agreement to
be executed at such time.

3.7  Clawback: The aggregate number of Initial Public Offer Shares shall be
increased in the following manner in the event of a Hong Kong Public Offering
over-subscription:

(a)  if the number of Shares which are the subject of Valid Applications
     represents 15 times or more but less than 50 times the number of Initial
     Public Offer Shares, then Shares will be reallocated to the Hong Kong
     Public Offering from the International Offering and US Offering so that the
     total number of Shares available under the Hong Kong Public Offering will
     be increased to 386,364,000 Shares representing approximately 7.5 per cent.
     of the total number of Shares initially available in the Global Offering
     (without any exercise of the Over-Allotment Option);

                                                                         Page 10

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(b)  if the number of Shares which are the subject of Valid Applications
     represents 50 times or more but less than 100 times the number of Initial
     Public Offer Shares, then Shares will be reallocated to the Hong Kong
     Public Offering from the International Offering and US Offering so that the
     total number of Shares available under the Hong Kong Public Offering will
     be increased to 643,939,000 Shares representing approximately 12.5 per
     cent. of the total number of Shares initially available in the Global
     Offering (without any exercise of the Over-Allotment Option); and

(c)  if the number of Shares which are the subject of Valid Applications
     represents 100 times or more the number of Initial Public Offer Shares,
     then Shares will be reallocated to the Hong Kong Public Offering from the
     International Offering and US Offering so that the total number of Shares
     available under the Hong Kong Public Offering will be increased to
     1,030,303,000 Shares representing approximately 20 per cent. of the total
     number of Shares initially available in the Global Offering (without any
     exercise of the Over-Allotment Option).

The relevant number of International Offer Shares and US Offer Shares shall be
withdrawn from the International Offering and US Offering and made available as
additional Hong Kong Offer Shares offered for subscription pursuant to the Hong
Kong Public Offering. Any such reallocation shall have no effect on the
Company's obligations to pay the commission due to the Hong Kong Underwriters
which shall be determined pursuant to clause 8.

3.8  Pools: The total number of Hong Kong Offer Shares shall be divided equally
into two pools for allocation purposes: pool A and pool B. The Shares in pool A
will be allocated by the Sponsors in their discretion (with prior consultation
with the Company) on an equitable basis to applicants who have applied for
Shares with an aggregate subscription price of HK$5 million (excluding the
brokerage and the Hong Kong Stock Exchange trading fee, SFC transaction levy and
investor compensation levy payable) or less per applicant. The Shares in pool B
will be allocated by the Sponsors in their discretion (with prior consultation
with the Company) on an equitable basis to applicants who have applied for
Shares with an aggregate subscription price of more than HK$5 million (excluding
the brokerage and the Hong Kong Stock Exchange trading fee, SFC transaction levy
and investor compensation levy payable) per applicant. The Sponsors shall
determine, after consultation with the Company, the allocation ratio for the two
pools described above subject to the provisions relevant thereto set out in the
section headed "Structure of the Global Offering" in the Hong Kong Prospectus.
Any Shares which are reallocated from the International Offering or US Offering
to the Hong Kong Public Offering pursuant to clause 3.7 shall, subject to the
provisions of this clause and the Hong Kong Offering Documents, be allocated in
such manner as the Sponsors may in their absolute discretion determine, after
consultation with the Company.

3.9  Changes to Price Range and Initial Public Offer Shares: The Sponsors on
behalf of the Hong Kong Underwriters may, where considered appropriate, based on
the level of interest expressed by prospective investors during the
book-building process, with the prior written consent of the Company, change the
indicative Offer Price range or the number of Initial Public Offer Shares as
stated in the Hong Kong Prospectus. In any such case, the Company shall, as soon
as practicable following the decision to make such change and in any event not
later than the morning of the Acceptance Date, cause to be published in the
South China Morning Post and the Hong Kong Economic Times notices of the change
in the indicative Offer Price range or the number of the Initial Public Offer
Shares.

3.10  Receiving Bankers: The Company will prior to the Prospectus Date appoint
the Receiving Bankers to act as receiving bankers in connection with the
receiving of completed applications for Hong Kong Public Offer Shares and the
Nominee in connection with the receiving and holding of application moneys and
any interest accruing thereon, in both cases, on and subject to the terms and
conditions of the Receiving Bankers' Agreement.

                                                                         Page 11

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3.11  Share Registrar: The Company will prior to the Prospectus Date appoint the
Share Registrar to provide services in connection with the processing of
applications under the Hong Kong Public Offering on and subject to the terms and
conditions of the Registrar's Agreement and the Multiple Applications Letter.

3.12  Undertakings to Hong Kong Underwriters: Without prejudice to the foregoing
obligations, the Company undertakes with the Hong Kong Underwriters that it will
use all reasonable best endeavours to do all such other acts and things, pay all
fees and execute all documents as may be reasonably required by the Sponsors for
the purpose of the Global Offering and obtaining listing of and permission to
deal in the Offer Shares on the Hong Kong Stock Exchange (including in
particular effecting all necessary registrations and filings with the Hong Kong
Stock Exchange and the Registrar of Companies in Hong Kong and taking all
reasonable steps to ensure that each of the Directors will sign or cause to be
duly signed on their behalf all documents (including the Verification Notes)
required to be signed by them as directors of the Company for the purposes of or
in connection with any such registrations and filings and the obtaining of
listing of and permission to deal in the Offer Shares on the Hong Kong Stock
Exchange) so as to enable the listing of and permission to deal in the Offer
Shares to commence on 18 March 2004 to be granted by the Listing Committee and
become effective.

3.13  Underwriting Waiver: No Hong Kong Underwriter shall be responsible for any
loss or damage (except for any loss or damage arising primarily out of any gross
negligence, wilful default or fraud on the part of that Hong Kong Underwriter)
to any persons arising from any transaction lawfully and properly carried out by
it pursuant to this Agreement or to the Company for any alleged insufficiency of
the Offer Price.

4.    The Hong Kong Offering Documents

4.1   Issue: Subject to the Hong Kong Prospectus having been registered by the
Registrar of Companies in Hong Kong, the Company will, on the Prospectus Date,
issue the Hong Kong Offering Documents and will cause such number of Hong Kong
Offering Documents as the Sponsors may specify to be delivered to the Sponsors
or as the Sponsors direct for the purpose of issuing the same generally.

4.2   Other Documents: Except for the Hong Kong Offering Documents or except as
otherwise provided pursuant to the provisions of this Agreement or as required
by the Hong Kong Stock Exchange, the Company undertakes not to, before Closing,
without the prior written approval of the Sponsors, issue, publish, distribute
or otherwise make publicly available any document (including any prospectus),
material or information in connection with the Hong Kong Public Offering.

5.    Issue of Hong Kong Offer Shares

5.1   Allocations: Upon receipt by the Share Registrar of the Application Forms
for the Valid Applications, the Company shall, subject to the terms and
conditions of this Agreement:

(a)   at Closing, allot and issue the Initial Public Offer Shares in accordance
      with the relevant sections of the Hong Kong Offering Documents and this
      Agreement to the applicants and in the numbers specified by the Sponsors
      on terms that they rank pari passu in all respects with the existing
      issued Shares, including the right to rank in full for all distributions
      thereafter declared, paid or made by the Company, and that they will rank
      pari passu in all respects with the International Offer Shares;

                                                                         Page 12

<PAGE>

(b)  at Closing, procure that the names of the successful applicants (or, where
     appropriate, HKSCC Nominees Limited) shall be entered in the register of
     members of the Company accordingly (without payment of any registration
     fee); and

(c)  as soon as practicable, and in any event by no later than the fourth
     Business Day after the Acceptance Date, procure that share certificates in
     respect thereof (each in a form complying with the Hong Kong Listing Rules)
     shall be issued and dispatched, or delivered to Hong Kong Clearing for
     immediate credit to such CCASS stock accounts as shall be notified by the
     Sponsors to the Company for such purpose, or made available for collection
     (as applicable) as provided for in the Hong Kong Offering Documents and
     this Agreement.

6.   Underwriting

6.1  Several Underwriting Commitments: On and subject to the terms and
conditions of this Agreement and in reliance upon the Warranties, if and to the
extent that, by 12:00 noon on the Acceptance Date, there shall remain any
Initial Public Offer Shares for which Valid Applications, as subsequently
calculated, have not been received (an Under-Subscription), the Hong Kong
Underwriters shall, subject to clause 6.7, apply or procure applications for the
Hong Kong Offer Shares representing the shortfall at the Offer Price in
accordance with the terms and conditions set out in the Hong Kong Offering
Documents (other than as to the deadline for making the application and save as
provided in this clause) and shall pay or procure to be paid, in accordance with
clause 6.6(b) the full amount payable on application PROVIDED THAT the
obligations of the Hong Kong Underwriters in respect of Hong Kong Offer Shares
under this sub-clause shall be several (and not joint and several) on the basis
that each Hong Kong Underwriter shall apply or procure applications for the
number of Hong Kong Offer Shares to which this sub-clause applies in the
proportions set out against its name in the column headed "Percentage of Hong
Kong Public Offering Underwritten" in Schedule 1.

6.2  Rights and Liabilities: None of the Hong Kong Underwriters will be liable
for any failure on the part of any of the other Hong Kong Underwriters to
perform its obligations under this clause. Notwithstanding the foregoing, each
of the Hong Kong Underwriters shall be entitled to enforce any or all of its
rights under this Agreement either alone or jointly with the other Hong Kong
Underwriters.

6.3  Acceptance of Applications: The Company agrees with the Hong Kong
Underwriters that all Valid Applications received prior to the closing of the
application lists and accepted by the Sponsors, either in whole or in part, will
be accepted by the Company before calling upon the Hong Kong Underwriters or any
of them to perform the obligations imposed on them by this clause.

6.4  Calculation of Hong Kong Offer Shares Applied For: Following the closing of
the application lists, the Company will, in conjunction with the Receiving
Bankers and the Share Registrar, calculate and notify the Sponsors of the number
of Hong Kong Offer Shares for which Valid Applications have been received and
not rejected and will use its reasonable endeavours to procure that the
applications will be processed, and such calculation and notification made, as
soon as practicable and in any event not later than 32 hours following the
closing of the application lists.

6.5  Notification to Sponsors: In the event of an Under-Subscription such that
the Hong Kong Underwriters are obliged, subject to clause 6.7, to apply for or
procure applicants pursuant to clause 6.1 for the Hong Kong Offer Shares
representing the shortfall, the Company will use its reasonable endeavours to
procure that the Share Registrar and/or the Receiving Bankers will as soon as
possible and in any event not later than 5:00 p.m. on the

                                                                         Page 13

<PAGE>

Acceptance Date notify the Sponsors on behalf of the Hong Kong Underwriters of
the number of Hong Kong Offer Shares falling to be taken up pursuant to clause
6.1.

6.6  Hong Kong Underwriters' Subscription Obligations: Subject to clause 6.7,
each of the Hong Kong Underwriters will:

(a)  as soon as practicable, and in any event not later than 2:00 p.m. or (on a
     Saturday) 12 noon on the third Business Day immediately after the date on
     which any notification is made under clause 6.5 and subject to the
     Conditions having been fulfilled or waived by the Sponsors (on behalf of
     the Hong Kong Underwriters), severally, in the proportions set out in
     Schedule 1, deliver to the Company duly completed Application Form(s) for
     such number of Hong Kong Offer Shares as fall to be taken up by them
     pursuant to clause 6.1, and subject to the proviso in clause 6.1,
     specifying the name(s) and address(es) of the applicant(s) and the number
     of Hong Kong Offer Shares to be allocated to each such applicant; and

(b)  at Closing, upon the Company duly allotting, issuing and delivering such
     Hong Kong Offer Shares to the Sponsors through the facilities of Hongkong
     Clearing for credit to the CCASS participants' accounts of the said
     applicants, severally pay, or procure to be paid, to the Company the
     aggregate amount of the Offer Price for the Hong Kong Offer Shares as fall
     to be taken up by such Hong Kong Underwriters pursuant to clause 6.1 and in
     the proportions set out in Schedule 1 (subject to the sub-paragraphs below)
     provided that while such payments may be made through the Sponsors on
     behalf of the Hong Kong Underwriters at their discretion and without
     obligation, the Sponsors shall not be responsible for the failure by any
     Hong Kong Underwriter (apart from itself in its capacity as a Hong Kong
     Underwriter) to make such payment. The net purchase price payable by the
     Hong Kong Underwriters for the Hong Kong Offer Shares as fall to be taken
     up by them above shall be paid to the Company after deducting:

          (i)   the underwriting commission of 2.75 per cent. payable pursuant
                to clause 8.1;

          (ii)  the aggregate SFC transaction levy and investor compensation
                levy (at the rate of 0.014 per cent. of the Offer Price) and the
                aggregate Hong Kong Stock Exchange trading fee (at the rate of
                0.01 per cent. of the Offer Price) payable by the Company and
                the applicants to the Hong Kong Stock Exchange in respect of
                such Hong Kong Offer Shares, which will be arranged to be paid
                to the Hong Kong Stock Exchange by the Sponsors on behalf of the
                Company and the applicants; and

          (iii) brokerage at the rate of 1 per cent. of the Offer Price which
                may be retained by the Hong Kong Underwriters.

6.7  Reallocation to International Offering or US Offering: If an
Under-Subscription shall occur, the Sponsors shall have the right (but are not
obliged) to apply for (subject to and in accordance with this Agreement) or to
reallocate to the International Offering or US Offering (in such proportion as
the Sponsors consider appropriate) all or any of the Hong Kong Offer Shares
which any Hong Kong Underwriter is required to apply for pursuant to clause 6.1.
Any application submitted or procured to be submitted by the Sponsors or any
allocation to the International Offering pursuant to this sub-clause and duly
subscribed for or purchased by the International Underwriters and/or US
Underwriters and/or subscribers or purchasers procured by any one or more of
them shall satisfy pro tanto the obligation of the Hong Kong Underwriters under
this clause and, as between the Hong Kong Underwriters, on a pro-rata basis and
no underwriting commission will be payable to the Hong Kong Underwriters
regarding such reallocated Shares.

                                                                         Page 14

<PAGE>

6.8  Cessation of Hong Kong Underwriters' Obligations: All obligations and
liabilities of the Hong Kong Underwriters under this Agreement to subscribe or
procure subscribers for Hong Kong Offer Shares will cease following due payment
in full by or on behalf of the respective Hong Kong Underwriters in accordance
with clause 6.6(b) or on the Sponsors being notified pursuant to clause 6.4 that
the Hong Kong Public Offering is fully subscribed or over subscribed by Valid
Applications.

6.9  Reduction of Hong Kong Underwriters' Obligation: The obligation of each
Hong Kong Underwriter pursuant to this clause shall be reduced to the extent
that valid Underwriters' Applications (as defined in Schedule 4 ) are made or
procured by such Hong Kong Underwriter to be made in accordance with the
arrangements set out in Schedule 4 .

6.10 Acknowledgement: Nothing in this Agreement shall be deemed to give the
Global Coordinator, Joint Sponsors or any Hong Kong Underwriter any authority to
make any written disclosure, representation or warranty or supply any written
information stating that such disclosure, representation or information is made
on behalf of the Company in connection with the Hong Kong Public Offering unless
the same is contained in the Hong Kong Offering Documents, this Agreement or
otherwise authorised or approved by or on behalf of the Company.

7.   Payment Under the Hong Kong Public Offering

7.1  Payment to the Company: At Closing or as soon as possible thereafter, the
application moneys with interest thereon held by the Nominee will, in accordance
with the provisions of the Receiving Bankers' Agreement and subject to clause
7.2 below, be paid over to the Company after the share certificates for the Hong
Kong Offer Shares have been despatched or delivered by or on behalf of the
Company to the successful applicants under the Hong Kong Public Offering through
the facilities of Hongkong Clearing for credit to CCASS participants accounts or
made available to such applicants, as the case may be. The Company covenants and
agrees that it will in accordance with the provisions of the Receiving Bankers'
Agreement, pay or cause to be paid:

(a)  the underwriting commission (such payment to be made by way of deduction
     from the above application moneys held by the Receiving Bankers in
     accordance with the terms of the Receiving Bankers' Agreement) and the
     expenses payable pursuant to clause 8; and

(b)  such sums as are required to satisfy the payments referred to in clause
     7.2.

7.2  Brokerage and Levy: The Sponsors on behalf of the Hong Kong Underwriters
will arrange for the payment by the Nominee on behalf of the Company and
successful applicants under the Hong Kong Public Offering:

(a)  to members of the Hong Kong Stock Exchange and the Hong Kong Underwriters
     (as the case may be) of brokerage at the rate of 1 per cent. of the Offer
     Price;

(b)  to the Hong Kong Stock Exchange of the SFC transaction levy and investor
     compensation levy at the aggregate rate of 0.014 per cent. of the Offer
     Price; and

(c)  to the Hong Kong Stock Exchange of the trading fee at the rate of 0.01 per
     cent. of the Offer Price,

in respect of Valid Applications for the Hong Kong Offer Shares, such amounts to
be paid out of the application moneys.

                                                                         Page 15

<PAGE>

7.3  Global Coordinator's and Sponsors' responsibilities: Subject to any other
provision of this Agreement (including but not limited to clause 8.3), the
Global Coordinator and Sponsors shall not be responsible for the payment (by
deduction from the gross proceeds or otherwise) of any fees, costs, charges and
expenses of or incurred by the Company which are agreed to be paid by the
Company pursuant to the provisions of this Agreement (including but not limited
to clause 8.3).

8.   Commission and Expenses

8.1  Underwriting commissions: In consideration of the services of the Hong Kong
Underwriters under this Agreement, the Company will pay to the Sponsors, for
themselves and on behalf of the other Hong Kong Underwriters, an underwriting
commission calculated at the rate of 2.75 per cent. of the Offer Price
multiplied by the number of Initial Public Offer Shares, ignoring for this
purpose any Claw Back Shares and any Shares reallocated under clause 6.7. For
the avoidance of doubt, the Hong Kong Underwriters shall not be entitled to any
underwriting commissions in respect of the Claw Back Shares or the Shares
reallocated under clause 6.7 as the relevant underwriting discounts and
commissions relating to such Shares will be payable to the relevant
International Underwriters and/or US Underwriters in accordance with the
International Underwriting Agreement and deducted from the subscription moneys
payable under the International Underwriting Agreement.

8.2  Allocation of underwriting commissions: The allocation and distribution of
the underwriting commissions referred to in clause 8.1 above among the Hong Kong
Underwriters shall be separately dealt with in the Agreement Among Hong Kong
Underwriters. Payment of the underwriting commissions by the Company to the
Sponsors in accordance with this Agreement shall constitute good, full and final
discharge of the Company's obligations under this Agreement to the Hong Kong
Underwriters to make payment of such underwriting commissions. The Company shall
not be concerned as to or bear any liability in respect of the allocation or
distribution of such underwriting commissions by the Sponsors to any one or more
of the Hong Kong Underwriters.

8.3  Expenses: The Company shall pay to the Joint Bookrunners all such fees and
expenses incurred in connection with or incidental to this Agreement or the
Global Offering as set out in the International Underwriting Agreement.

8.4  Saving: In the event that this Agreement is terminated after the
International Underwriting Agreement has been entered into, clause 12.2(c) shall
apply with regards to the payment of the aforementioned costs, fees and
expenses.

9.   Stabilisation and Liability

9.1  Stabilisation: The Sponsors and their affiliates may, in connection with
the Global Offering, for their own account as principal or on behalf of any Hong
Kong Underwriter, but not as agent for the Company, to the extent permitted by
and in compliance with applicable laws and regulatory requirements of Hong Kong
or elsewhere, over-allocate or effect transactions in the market or otherwise,
only with a view to stabilising or maintaining the market price of the Offer
Shares, at such prices, in such amounts and in such manner as the Sponsors
and/or their relevant affiliates may determine and at levels other than those
which might otherwise prevail in the open market. Such stabilising, if
commenced, may be discontinued at any time. Any expenses and losses resulting
from such over-allocation and stabilisation or other transactions effected
pursuant to this clause shall be debited, and any profit arising from them shall
be beneficially credited to a stabilisation account the arrangements regarding
which shall be a matter exclusively for the Sponsors and their affiliates, the
Hong Kong Underwriters, the International Underwriters and the US

                                                                         Page 16

<PAGE>

Underwriters governed by the Intersyndicate Agreement, or otherwise as agreed
between them.

9.2  Liability: For the avoidance of doubt, neither of the Sponsors shall be
responsible or liable to the Company for any breach of the provisions in this
Agreement by any Hong Kong Underwriter (other than itself in its capacity as a
Hong Kong Underwriter or as a sponsor).

10.  Representations, Warranties and Undertakings

10.1 The Company: The Company represents, warrants and undertakes to the
Sponsors and the Hong Kong Underwriters and each of them in the terms set out in
Schedule 3 . The Company accepts that each of the Sponsors and the Hong Kong
Underwriters is entering into this Agreement in reliance upon each such
representation, warranty and undertaking.

10.2 Separate Warranties: Each Warranty shall be construed separately and shall
not be limited or restricted by reference to or inference from the terms of any
other of the Warranties or any other term of this Agreement.

10.3 Duration:  The Warranties shall remain in full force and effect
notwithstanding completion of the Hong Kong Public Offering.

10.4 Repetition: The Warranties are given on and as at the date of this
Agreement with respect to the facts and circumstances subsisting at the date of
this Agreement. In addition, the Warranties shall be deemed to be repeated on
and as at:

(a)  the date on which the Hong Kong Prospectus is registered by the Registrar
     of Companies in Hong Kong as required by section 342C of the Companies
     Ordinance;

(b)  the Acceptance Date; and

(c)  the Closing,

in each case, by reference to the facts and circumstances then existing.

10.5 Notice: The Company undertakes to give notice to the Sponsors and each of
the Hong Kong Underwriters forthwith of any matter or event coming to its
attention prior to the dates on which the Warranties are deemed to be given
pursuant to the provisions of clause 10.4 which shows any of the Warranties to
be or to have been untrue, inaccurate or misleading or breached.

10.6 Action to be Taken: If at any time during the period of three months after
the date hereof, by reference to the facts and circumstances then existing,
prior to the last of the dates on which the Warranties are deemed to be repeated
pursuant to the provisions of clause 10.4, any matter or event comes to the
attention of the Company or any of the Hong Kong Underwriters as a result of
which any of the Warranties, if repeated immediately after the occurrence of
such matter or event, would be untrue, inaccurate or misleading or which would
or might render untrue, inaccurate or misleading any statement, whether of fact
or opinion, contained in any of the Hong Kong Offering Documents or the Formal
Notice if the same were issued immediately after the occurrence of such matter
or event, the Company or such Hong Kong Underwriter (as the case may be) shall
forthwith notify each of the other parties hereto and, without prejudice to any
other rights of any party, the Company and the Sponsors on behalf of the Hong
Kong Underwriters shall forthwith consult with a view to agreeing, if the Hong
Kong Prospectus has already been registered with the Registrar of Companies in
Hong Kong or distributed (as the case may be), what announcement or circular or
document, if any, should be issued, published, distributed or made available or
what other

                                                                         Page 17

<PAGE>

act or thing should be done. The Company agrees not to issue, publish,
distribute or make publicly available any such announcement, circular or
document without the prior written consent of the Sponsors (for themselves and
on behalf of the Hong Kong Underwriters).

10.7 Further Obligations: The Company will not, and will procure that none of
its affiliates will:

(a)  do or omit to do anything which may cause any of the representations or
     warranties given pursuant to clause 10 to be untrue in any material respect
     at any time immediately prior to the commencement of dealings in the Offer
     Shares on the Hong Kong Stock Exchange (assuming such representations or
     warranties to be repeated at the relevant time by reference to the facts
     and circumstances then subsisting); or

(b)  at any time immediately prior to the commencement of dealings in the Offer
     Shares on the Hong Kong Stock Exchange enter into any contract or
     commitment of an unusual or onerous nature, whether or not that contract,
     if entered into prior to the date hereof, would constitute a material
     contract for the purpose of the Hong Kong Prospectus.

10.8 Waiver: No claim shall be made against the Global Coordinator, Sponsors or
the Hong Kong Underwriters or any of them or against any other Indemnified
Person as defined in clause 13 by the Company or any of its affiliates to
recover any damage, cost, charge or expense which the Company, the Directors or
any of the affiliates of the Company may suffer or incur by reason of or arising
out of the carrying out by the Global Coordinator or Sponsors or Hong Kong
Underwriters or any of them of the work to be done by the Global Coordinator or
Sponsors or Hong Kong Underwriters or any of them pursuant hereto or the
performance of their respective obligations hereunder or otherwise in connection
with the Hong Kong Offering Documents, the Global Offering and any associated
transactions (whether in performance of its duties as underwriter or financial
adviser or otherwise) PROVIDED THAT the aforesaid shall not apply to any damage,
cost, charge or expense by reason of or to the extent arising out of any gross
negligence, wilful default, or wilful and material breach of any of the
obligations hereunder, or fraud, on the part of such Global Coordinator, Sponsor
or Hong Kong Underwriter.

11.  Further Undertakings

11.1 The Company: The Company undertakes to each of the Global Coordinator,
Sponsors and Hong Kong Underwriters that:

(a)  the Company will comply in all respects with the terms and conditions of
     the Hong Kong Public Offering and, in particular, without limitation to
     comply with applicable obligations imposed upon it by the Companies
     Ordinance and the Hong Kong Listing Rules in respect of or by reason of the
     matters contemplated by this Agreement including, but without limitation,
     the making of all necessary filings with the Registrar of Companies in Hong
     Kong and the Hong Kong Stock Exchange and the making available for
     inspection in Hong Kong of the documents and in the manner referred to in
     Appendix VI to the Hong Kong Prospectus during the period specified in that
     section;

(b)  the Company will require that the Share Registrar and the Receiving Bankers
     comply with the terms of their respective appointments set out in the
     Registrar's Agreement, the Multiple Applications Letter and the Receiving
     Bankers' Agreement. None of the terms of the appointments of the Share
     Registrar and the Receiving Bankers shall be amended without the prior
     written consent of the Sponsors (on behalf of the Hong Kong Underwriters);

                                                                         Page 18

<PAGE>

(c)  the Company will procure that there shall be delivered to the Hong Kong
     Stock Exchange the declaration in the form set out in Appendix 5, Form F of
     the Hong Kong Listing Rules;

(d)  the Company will use the net proceeds received by it pursuant to the Global
     Offering in the manner specified in the Prospectus under the heading "Use
     of proceeds". In the event and to the extent that any such net proceeds is
     placed on deposits with banks due to their not immediately being used for
     the specific purposes as described in the Prospectus, it shall place such
     proceeds on short-term bank deposits;

(e)  the Company will pay any tax, duty, levy, fee or other charge or expense
     (if any) which may be payable in the Cayman Islands, the PRC and Hong Kong,
     whether pursuant to the requirement of any law, rule or regulation or
     otherwise, in connection with the creation, allotment and issue of the
     Offer Shares, the Global Offering, the execution and delivery of, and the
     performance of any of the provisions under, this Agreement;

(f)  the Company will maintain a listing for the Shares on the Hong Kong Stock
     Exchange for at least one year after the Conditions have been fulfilled
     except following a withdrawal of such listing which has been approved by
     the relevant shareholders of the Company in accordance with the Hong Kong
     Listing Rules or following an offer (within the meaning of the Hong Kong
     Code on Takeovers and Mergers) for the Company becoming unconditional;

(g)  the Company will procure that the audited accounts of the Company for the
     financial years ending 31 December 2004 and 31 December 2005 will be
     prepared on a basis consistent in all material respects with the accounting
     policies adopted for the purposes of the financial statements contained in
     the report of the Reporting Accountants set out in Appendix I to the Hong
     Kong Prospectus;

(h)  the Company will not without the prior written approval of the Sponsors,
     which shall not be unreasonably withheld, within the first year from the
     Acceptance Date issue, publish, distribute or otherwise make available to
     the public any document, material or information in connection with the
     Global Offering (except for the Hong Kong Offering Documents, the Final
     Offering Circular, the US Prospectus and except as otherwise provided under
     this Agreement); and

(i)  the Company will not, at any time after the date of this Agreement up to
     and including the date on which all of the Conditions are fulfilled (or
     waived) in accordance with this Agreement, amend or agree to amend its
     Memorandum and Articles of Association save as requested by the Hong Kong
     Stock Exchange.

11.2 Restrictions on Allotment etc.: The Company undertakes to each of the
Global Coordinator, Sponsors and Hong Kong Underwriters that except for
issuances pursuant to (i) the Global Offering, (ii) the exercise of employee
stock options outstanding on the date of the Hong Kong Prospectus, (iii) the
conversion of the outstanding convertible preference shares referred to in the
section headed "Share Capital - Preference Shares" in the Hong Kong Prospectus,
(iv) the exercise of outstanding warrants to purchase Series B convertible
preference shares, (v) the closing of our pending technology transaction with
one of our technology partners, (vi) the subscription of shares by Beida
Microelectronics Investment Ltd. upon its receipt of requisite government
approval to remit the U.S. dollar subscription price and (vii) the 2004 Stock
Option Plan, the 2004 Equity Incentive Plan and the 2004 Employee Stock Purchase
Plan, for a period of 180 days after the date of the US Prospectus, the Company
will not without the Sponsors' prior written consent and unless in compliance
with the requirements of the Hong Kong Listing Rules:

                                                                         Page 19

<PAGE>

(a)  offer, sell, contract to sell, pledge, sell any option or contract to
     purchase, purchase any option or contract to sell, grant or agree to grant
     any option, right or warrant to purchase, lend or otherwise transfer or
     dispose of, either directly or indirectly, or repurchase, any of its ADSs
     or Shares or securities convertible into or exchangeable or exercisable
     for, or that represent the right to receive, ADSs or Shares; or

(b)  enter into any swap, hedge or other arrangement that transfers to another,
     in whole or in part, any of the economic consequences of ownership of ADSs
     or Shares,

whether any of the transactions described in (a) or (b) above is to be settled
by delivery of ADSs, Shares such other securities, in cash or otherwise.

11.3 Effect of Undertakings: The undertakings in this clause 11 shall remain in
full force and effect notwithstanding the completion of the Global Offering and
all matters contemplated in this Agreement.

12.  Termination

12.1 Termination by Sponsors: If, at any time prior to 8:00 a.m. on the day that
trading in the Offer Shares commences on the Hong Kong Stock Exchange:

(a)  there shall develop, occur, exist or come into effect:

            (i)   any new law or regulation or any change in existing laws or
                  regulations or any change in the interpretation or application
                  thereof by any court or other competent authority of the
                  Cayman Islands, Hong Kong, the PRC, Japan or the US; or

            (ii)  any change or development involving a prospective change in,
                  or any event or series of events involving any change in,
                  local, national or international financial, political,
                  military, industrial, economic or market conditions (including
                  but not limited to a change in the system under which the
                  value of the Hong Kong currency is linked to that of the
                  currency of the US or a devaluation of the Renminbi against
                  any foreign currencies) in the Cayman Islands, Hong Kong, the
                  PRC, the US or Japan;

            (iii) any suspension or material limitation in trading in shares or
                  securities generally on the New York Stock Exchange or the
                  Hong Kong Stock Exchange, or minimum or maximum prices for
                  trading having been fixed, or maximum ranges for prices having
                  been required, by any of the said exchanges or by such system
                  or by order of any regulatory or governmental authority, or a
                  disruption has occurred in securities settlement or clearance
                  services or procedures in the US, Hong Kong, the PRC, Japan or
                  the Cayman Islands; or

            (iv)  a change or development occurs involving a prospective change
                  in taxation or exchange control (or the implementation of any
                  exchange control) or currency exchange rates in Hong Kong, the
                  PRC, the US, Japan or elsewhere; or

            (v)   any change or prospective change in the condition, financial
                  or otherwise, or in the earnings, business affairs, business
                  prospects or trading position of the Company or any member of
                  the Group; or

                                                                         Page 20

<PAGE>

            (vi)  any general moratorium on commercial banking activities in
                  Hong Kong (imposed by the Financial Secretary and/or the Hong
                  Kong Monetary Authority or other competent authority), New
                  York (imposed at Federal or New York State level or other
                  competent authority), the PRC, the Cayman Islands or Japan; or

            (vii) any outbreak or escalation of hostilities (whether or not war
                  is or has been declared) involving the US, the PRC, Hong Kong,
                  the Cayman Islands or Japan or any escalation thereof, or the
                  declaration by the US, the PRC, Hong Kong, the Cayman Islands
                  or Japan of a national emergency or war,

            which, in the sole judgment of the Sponsors (for themselves and on
            behalf of the Hong Kong Underwriters):

                  (A)  has or is likely to have a material adverse effect on
                       the business, financial or other condition or prospects
                       of the Group or, in the case of sub-clause (iv) above, to
                       any present or prospective shareholder of the Company in
                       his/its capacity as such; or

                  (B)  has or is likely to have a material adverse effect on the
                       successful completion of the Global Offering; or

                  (C)  makes it inadvisable or impracticable to proceed with the
                       Global Offering or the delivery of the Offer Shares on
                       the terms and in the manner contemplated by the
                       Prospectuses; or

(b)  there comes to the notice of the Sponsors any matter or event showing any
     of the Warranties given by the Company in this Agreement to be untrue or
     misleading; or

(c)  there comes to the notice of the Sponsors any breach on the part of the
     Company of any of the provisions of this Agreement or the International
     Underwriting Agreement,

then the Sponsors may in their absolute discretion, upon giving notice in
writing to the Company and to the Hong Kong Underwriters, terminate this
Agreement with immediate effect.

12.2 Consequences of Termination: Upon the termination of this Agreement
pursuant to the provisions of clause 2.4 or clause 12.1:

(a)  each of the parties hereto shall cease to have any rights or obligations
     under this Agreement, save in respect of the provisions of this clause 12.2
     and clauses 13, 19, 22 to 25 (inclusive) and any rights or obligations
     which may have accrued under this Agreement prior to such termination;

(b)  with respect to the Hong Kong Public Offering, all payments made by the
     Hong Kong Underwriters or any of them pursuant to clause 6.6 and/or by
     successful applicants under Valid Applications shall be refunded forthwith
     (in the latter case the Company shall procure that the Share Registrar and
     the Nominee despatch refund cheques to all applicants under the Hong Kong
     Public Offering in accordance with the Registrar's Agreement and the
     Receiving Bankers' Agreement); and

(c)  the Hong Kong Underwriters shall not be entitled to the underwriting
     commissions referred to in clause 8.1, but the provisions of clause 8.3
     relating to expenses shall apply.

                                                                         Page 21

<PAGE>

13.  Indemnity

13.1 The Company: The Company undertakes to indemnify and keep indemnified (on
an after-tax basis) and hold harmless each of the Global Coordinator, the
Sponsors and the Hong Kong Underwriters (for itself and on trust for its
directors, officers, employees, agents, assignees and affiliates (the Related
Parties)) (each an Indemnified Person) from and against (i) all and any actions,
claims (whether or not any such claim involves or results in any actions or
proceedings), demands, investigations and proceedings from time to time made or
brought or threatened to be made or brought against such Indemnified Person
(together the Actions), and (ii) all losses, damages, liabilities, payments,
costs or expenses including legal fees and taxes (including stamp duty and any
penalties and/or interest arising in respect of any taxes) (including, without
limitation, all payments, costs or expenses made or incurred arising out of or
in connection with the settlement of any Actions or in investigating, disputing
or defending the same or the enforcement of any such settlement or any judgment
obtained in respect of any Actions) (together the Losses) which may be suffered,
made or incurred by an Indemnified Person (with such amount of indemnity to be
paid to each of the Global Coordinator, the Sponsors and the Hong Kong
Underwriters to cover all the Actions against and Losses incurred by such party
and its Related Parties) arising out of or in connection with:

(a)  the proper performance by any of the Global Coordinator, the Sponsors, the
     Hong Kong Underwriters or any of them of its or their obligations under
     this Agreement; or

(b)  the issue, publication, distribution or making available of any of the Hong
     Kong Offering Documents or the International Offering Circular or the US
     Prospectus (including any amendment thereof or supplement thereto) and/or
     any announcement whatsoever in connection with the Global Offering (whether
     or not approved by the Sponsors pursuant to clause 19); or

(c)  the allotment and issue of the Offer Shares; or

(d)  any act or omission resulting in a breach or alleged breach on the part of
     the Company of any of the provisions of this Agreement; or

(e)  any of the Warranties being untrue, inaccurate or misleading or otherwise
     breached or being alleged by any third party to be untrue, inaccurate or
     misleading or otherwise breached; or

(f)  any breach or alleged breach by the Company of the laws, rules or
     regulations of any country or territory resulting from the distribution of
     the Hong Kong Offering Documents or the International Offering Circular, or
     the US Prospectus and/or any offer, sale or distribution of the Shares
     otherwise than in accordance with and on the terms of those documents and
     this Agreement; or

(g)  the settlement of any investigation or proceeding by any governmental
     agency or body, commenced or threatened,

PROVIDED THAT (i) the indemnity in respect of any Action or Loss shall not be
available to any Indemnified Person to the extent that such Action or Loss is
finally judicially determined to have been caused primarily by the gross
negligence, wilful default or misconduct, fraud or material breach of this
Agreement on the part of such Indemnified Person; and (ii) any settlement or
compromise of any Action or Loss by any of the Global Coordinator, Sponsors and
Hong Kong Underwriters or any other Indemnified Person shall be made without
prejudice to any claim, action or demand which any of the other Global

                                                                         Page 22

<PAGE>

Coordinator, Sponsors and Hong Kong Underwriters or any other Indemnified Person
may have or make against the Company under this clause or otherwise under this
Agreement.

13.2 Proceedings: In case any proceeding (including any governmental
investigation) shall be instituted involving any Indemnified Person, such
Indemnified Person shall promptly notify the Company in writing and the Company
shall pay the fees and disbursements of counsel related to such proceeding. Such
Indemnified Person shall, subject to any requirement imposed by any insurer of
the Indemnified Person, consult with the Company and the Sponsors and keep them
informed in relation to such proceeding. Any failure by an Indemnified Person to
notify or consult the Company shall not in any way relieve or reduce the
obligations of the Company to indemnify each and every Indemnified Person under
this clause 13.

13.3 Legal Counsel: Legal counsel to the Indemnified Persons shall be selected
by the Sponsors. The Company may participate at its own expense in the defence
of any such action; provided, however, that counsel to the Company shall not
(except with the consent of the Indemnified Person) also be counsel to the
Indemnified Person. The Company shall not, without the prior written consent of
the Indemnified Person, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this clause (whether or not the Indemnified Persons are actual or
potential parties thereto), unless such settlement, compromise or judgment: (i)
includes an unconditional release of each Indemnified Person from all
liabilities arising out of such litigation, investigation, proceeding or claim;
and (ii) does not include a statement as to the admission of fault by or on
behalf of any Indemnified Person.

14.  Remedies, Waivers and Release

14.1 Delay or Omission: No delay or omission on the part of any party hereto in
exercising any right, power or remedy under this Agreement shall:

(a)  impair such right, power or remedy; or

(b)  operate as a waiver thereof.

14.2 Single or Partial Exercise: The single or partial exercise of any right,
power or remedy under this Agreement shall not preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.

14.3 Cumulative and Not Exclusive: The rights, powers and remedies provided in
this Agreement are cumulative and not exclusive of any rights, powers and
remedies provided by law.

14.4 Release or Compromise: Each party hereto may expressly release or
compromise the liability of any other party hereto or grant time or other
indulgence to any party hereto in any way without releasing or reducing or
compromising the liability of such party or any other party hereto in any other
way.

15.  Assignment

15.1 This Agreement shall be binding on, and enure for the benefit of, the
parties hereto and their respective successors, personal representatives and
permitted assigns.

                                                                         Page 23

<PAGE>

15.2 The Global Coordinator, Sponsors and Hong Kong Underwriters or any of them
may assign to any affiliate the benefits of and interests and rights in or
arising under this Agreement. Save as aforesaid, no other party hereto shall
assign or transfer all or any part of any benefit of, or interest or right in,
this Agreement, or any benefit, interest, right or obligation arising under this
Agreement.

16.  Further Assurance

The Company shall from time to time, on being required to do so by the Sponsors
now or at any time in the future do or procure the doing of such acts and/or
execute or procure the execution of such documents as the Sponsors may consider
necessary to give full effect to this Agreement and securing to the Global
Coordinator, the Sponsors and the Hong Kong Underwriters or any of them the full
benefit of the rights, powers and remedies conferred upon them or any of them in
this Agreement.

17.  Entire Agreement

17.1 This Agreement and any other documents referred to in this Agreement
constitute the whole and only agreement between the Company, the Global
Coordinator, the Sponsors and the Hong Kong Underwriters relating to the
underwriting of the Hong Kong Public Offering and supersedes and extinguishes
any other prior drafts, agreements, undertakings, representations, warranties
and arrangements of any nature whatsoever, whether or not in writing, relating
thereto made or given by any other party or any other person, whether or not in
writing, at any time prior to the execution of this Agreement (Pre-contractual
Statements).

17.2 Each party hereto acknowledges that in entering into this Agreement on the
terms set out in this Agreement it is not relying upon any Pre-contractual
Statement which is not expressly set out herein or the documents referred to
herein.

17.3 No party shall have any right of action (except in the case of fraud)
against any other party to this Agreement arising out of or in connection with
any Pre-contractual Statement except to the extent that such Pre-contractual
Statement is repeated in this Agreement or the documents referred to herein.

17.4 This Agreement may only be varied in writing signed by each of the parties
hereto.

18.  Notices

18.1 Form: Any notice or other communication given or made under this Agreement
shall be in writing (other than writing on the screen of a visual display unit
or other similar device which shall not be treated as writing for the purpose of
this clause) and shall, unless otherwise specified, be in English.

18.2 Delivery: Any such notice or other communication shall be addressed as
provided in clause 18.3 and, if so addressed, shall be deemed to have been duly
given or made as follows:

(a)  if sent by personal delivery, upon delivery at the address of the relevant
     party;

(b)  if sent by post, five Business Days after the date of posting; and

(c)  if sent by facsimile, upon despatch to the facsimile number of the
     recipient, with the production of a transmission report by the machine from
     which the facsimile was sent which indicates that the facsimile was sent in
     its entirety to the facsimile number of the recipient and provided that a
     confirmation copy of such notice or communication

                                                                         Page 24

<PAGE>

     shall be sent by post to the addressee concerned not later than the
     Business Day immediately following the date of despatch of the facsimile.

18.3 Addresses: The relevant addressee, address and facsimile number of the
Company for the purposes of this Agreement, subject to clause 18.4, is set out
below. The relevant addressee, address and facsimile number of CSFB, Deutsche
Bank and the other Hong Kong Underwriters are set out in Schedule 1.

Name of Party            Address                        Facsimile No.
-------------            -------                        -------------

The Company              18 Zhangjiang Road             +86 21 5080 3070
                         Pudong New Area
                         Shanghai 201203
                         PRC

Attention:               Thomas Yih

Copy to:                 Company Secretary

18.4 Change of Details: A party may notify the other parties to this Agreement
of a change to its relevant addressee, address or facsimile number for the
purposes of clause 18.3 provided that such notification shall only be effective
on:

(a)  the date specified in the notification as the date on which the change is
     to take place; or

(b)  if no date is specified or the date specified is earlier than the date on
     which a notice is deemed under clause 18.2 above to have been duly given,
     the date on which such notice is so deemed to have been duly given.

19.  Announcements

19.1 No Announcement: Subject to clause 19.2, no announcement concerning the
Hong Kong Public Offering or any ancillary matter shall be made by any of the
parties hereto without the prior written approval of the Sponsors, such approval
not to be unreasonably withheld or delayed.

19.2 Permitted Announcement: Any party hereto may make an announcement
concerning the Hong Kong Public Offering or any ancillary matter if and to the
extent:

(a)  required by law or by an order of a court of competent jurisdiction;

(b)  required by any securities exchange or regulatory or governmental body to
     which such party is subject or submits, wherever situated, including,
     without limitation, the Hong Kong Stock Exchange, whether or not the
     requirement has the force of law; or

(c)  the Sponsors have given prior written approval to the making of the
     announcement,

PROVIDED THAT in relation to paragraphs (a) and (b) above any such announcement
shall be made only after consultation (where reasonably practicable) with the
Sponsors.

19.3 Period: The restrictions contained in this clause shall continue to apply
for a period of one year after the execution of this Agreement. The Company
shall procure compliance by its subsidiaries with the provisions of this clause.

                                                                         Page 25

<PAGE>

20.  Time of Essence

Any time, date or period referred to in this Agreement may be extended by mutual
agreement between the Company and the Sponsors (for themselves and for and on
behalf of the other Hong Kong Underwriters). Save as otherwise expressly
provided, as regards any date or period originally fixed or any date or period
so extended as aforesaid, time is of the essence of this Agreement.

21.  Invalidity

If at any time any provision of this Agreement is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, that shall not
affect or impair:

(a)  the legality, validity or enforceability in that jurisdiction of any other
     provision of this Agreement; or

(b)  the legality, validity or enforceability under the law of any other
     jurisdiction of that or any other provision of this Agreement.

22.  Governing Law

This Agreement shall be governed by and construed in accordance with Hong Kong
law.

23.  Dispute Resolution

23.1 Arbitration: Subject to the option in favour of each of the Global
Coordinator, Sponsors and Hong Kong Underwriters (as set out in clause 23.2
below), any dispute, controversy or claim arising out of or relating to this
Agreement, or the breach, termination or invalidity thereof, shall be referred
to and finally resolved by arbitration in accordance with the UNCITRAL
Arbitration Rules (the Rules) as in force from time to time and as may be
amended by the rest of this clause.

There shall be three arbitrators. The appointing authority shall be the Hong
Kong International Arbitration Centre (HKIAC).

Where there are multiple parties, whether as Claimant or as Respondent, the
multiple Claimants, jointly, shall appoint a Claimants-appointed arbitrator, and
the multiple Respondents, jointly, shall appoint a Respondents-appointed
arbitrator for the purpose of Article 7(1) of the Rules. The Claimants-appointed
arbitrator and the Respondents-appointed arbitrator shall then choose the third
arbitrator who will act as presiding arbitrator of the tribunal.

The place of arbitration shall be Hong Kong, and the arbitration shall be
administered by HKIAC.

The governing law of the arbitration proceedings shall be the laws of Hong Kong.

The language to be used in the arbitral proceedings shall be English.

By agreeing to arbitration pursuant to this clause, the parties waive
irrevocably their right to any form of appeal, review or recourse to any state
court or other judicial authority, insofar as such waiver may be validly made.

The award is given by a majority decision. If there be no majority, the award
shall be made by the Chairman of the arbitral tribunal alone.

                                                                         Page 26

<PAGE>

23.2 Option: Notwithstanding clause 23.1 above, the Company agrees for the
benefit of each of the Global Coordinator, the Sponsors and the Hong Kong
Underwriters that each of the Global Coordinator, the Sponsors and the Hong Kong
Underwriters shall have the sole right to commence proceedings in the courts of
Hong Kong (and any other court having jurisdiction) to settle any disputes
(including claims for set-off and counterclaims) and enforce any rights which
may arise in connection with the validity, effect, interpretation or performance
of, or the legal relationships established by, this Agreement or otherwise
arising in connection with this Agreement.

23.3 Waiver: The Company irrevocably waives (and irrevocably agrees not to
raise) any objection which it may now or hereafter have to the laying of the
venue of any proceedings in any court of competent jurisdiction and any claim of
forum non conveniens and further irrevocably agrees that a judgment in any
proceedings brought in any court referred to in this clause shall be conclusive
and binding upon it and may be enforced in the courts of any other jurisdiction.

23.4 Agents for Service: The Company hereby irrevocably authorises and appoints
Ms Anne Wai Yui Chen of 904, Tower B, Queen's Garden, 9 Old Peak Road, Hong Kong
(or such persons, being resident in Hong Kong, as the Company may from time to
time appoint as the Company's agents for service pursuant to the requirements of
Part XI of the Companies Ordinance) to accept service of all legal process,
including service of a notice of arbitration under the Rules, arising out of or
connected with this Agreement and service on such persons shall be deemed to be
service on the Company.

23.5 Commencement in Other Jurisdiction: Should court proceedings be commenced
by the Global Coordinator, either of the Sponsors or a Hong Kong Underwriter in
any jurisdiction other than Hong Kong pursuant to clause 23.2, upon being given
notice of such proceedings in writing, the party against whom such proceedings
have been brought shall immediately appoint an agent to accept service of
process in that jurisdiction and shall give notice to the relevant Global
Coordinator, Sponsor or Hong Kong Underwriter of the details and address for
service of such agent.

24.  Immunity

To the extent that any party hereto may in any court proceedings arising out of
or in connection with this Agreement or in any proceedings taken for the
enforcement of any determination, decision, order or award made in such court
proceedings claim for itself or its assets immunity from suit or other legal
process or to the extent that in any such court or enforcement proceedings there
may be attributed to itself or its assets such immunity (whether or not
claimed), such party hereby irrevocably waives such immunity and consents, in
respect of any such court or enforcement proceedings, to the giving of any
relief or the issue of any process including, without limitation, the making,
enforcement or execution against property whatsoever (irrespective of its use or
intended use) to the full extent permitted by applicable laws.

25.  Judgment Currency Indemnity

25.1 Conversion into Another Currency: If for the purposes of obtaining judgment
in any court by the Company or the Global Coordinator or either of the Sponsors
or a Hong Kong Underwriter as the case may be (for the purposes of this clause,
the Claiming Party) it is necessary to convert a sum due hereunder into any
currency other than HK dollars, the parties hereto agree, to the fullest extent
that they may effectively do so, that the rate of exchange used shall be the
rate at which in accordance with normal banking procedures such Claiming Party
could purchase HK dollars with such other currency in Hong Kong on the Business
Day preceding that on which final judgment is given.

                                                                         Page 27

<PAGE>

25.2 Discharge of Obligation: The obligation of any party hereto in respect of
any sum due from such party (for the purposes of this clause, the Obligor) to
any Claiming Party shall, notwithstanding any judgment in a currency other than
HK dollars, not be discharged until the first Business Day following receipt by
such Claiming Party of any sum adjudged to be so due in such other currency, on
which (and only to the extent that) such Claiming Party may in accordance with
normal banking procedures purchase HK dollars with such other currency.

25.3 Obligor's Indemnity: If the HK dollars purchased pursuant to this clause
are less than the sum originally due to the Claiming Party, such Obligor agrees,
as a separate obligation and notwithstanding any such judgment, to indemnify the
Claiming Party against such loss.

25.4 Claiming Party's Obligation: If the HK dollars purchased pursuant to this
clause are greater than the sum originally due to the Claiming Party, the
Claiming Party agrees, as a separate obligation and notwithstanding any such
judgment, to repay to the Obligor an amount equal to the excess of the HK
dollars so purchased over the sum originally due hereunder to the Claiming
Party.

26.  Counterparts

26.1 This Agreement may be executed in any number of counterparts, and by the
parties on separate counterparts, but shall not be effective until each party
has executed at least one counterpart.

26.2 Each counterpart shall constitute an original of this Agreement, but all
the counterparts shall together constitute but one and the same instrument.

IN WITNESS whereof this Agreement has been executed under hand by or on behalf
of the parties hereto the day and year first above written.

                                                                         Page 28

<PAGE>

                                   SCHEDULE 1

                             HONG KONG UNDERWRITERS

<TABLE>
<CAPTION>
Name                                Address                      Percentage of Hong   Number of Hong
----                                -------                      -------------------  --------------
                                                                 Kong Public          Kong Offer Shares
                                                                 ------------         -----------------
                                                                 Offering             Underwritten
                                                                 ---------            ------------
                                                                 Underwritten
                                                                 ------------
<S>                                 <C>                          <C>                  <C>
Credit Suisse First Boston          45/th/ Floor                 38.5%                99,168,000
                                    Two Exchange Square
                                    Central, Hong Kong

Deutsche Bank AG, Hong Kong Branch  55/th/ Floor                 31.5%                81,136,000
                                    Cheung Kong Center
                                    2 Queen's Road Central
                                    Hong Kong

BOCI Asia Limited                   35/th/ Floor, Bank of China  5%                   12,879,000
                                    Tower
                                    1 Garden Road
                                    Central, Hong Kong

The Hongkong and Shanghai Banking   Level 15                     5%                   12,879,000
Corporation Limited                 1 Queen's Road Central
                                    Hong Kong

SinoPac Securities (Asia) Limited   23/F Two International       5%                   12,879,000
                                    Finance Centre
                                    8 Finance Street
                                    Central, Hong Kong

CSC Securities (HK) Limited         Unit 3204-09, Cosco Tower    3%                   7,727,000
                                    183 Queen's Road Central
                                    Hong Kong

DBS Asia Capital Limited            16/th/ Floor                 3%                   7,727,000
                                    Man Yee Building
                                    68 Des Voeux Road
                                    Central, Hong Kong

First Shanghai Securities Ltd       19/th/ Floor                 3%                   7,727,000
                                    Wing On House
                                    71 Des Voeux Road
                                    Central, Hong Kong

Kingston Securities Ltd.            2801 One International       3%                   7,727,000
                                    Finance Centre
                                    1 Harbour View Street
                                    Central, Hong Kong

South China Securities Ltd.         28/F Bank of China Tower     3%                   7,727,000
                                    1 Garden Road
                                    Central, Hong Kong
</TABLE>

                                                                         Page 29

<PAGE>

                                   SCHEDULE 2

                       THE CONDITIONS PRECEDENT DOCUMENTS

                                     Part A

1.   Legal Documents

1.1  A certified copy of the resolutions of the shareholders of the Company
referred to in the sections headed "1. Further Information About the Company -
c. Resolutions of the Shareholders of the Company", "2. Repurchase of Our Shares
- a. Relevant Legal and Regulatory Requirements - (i) Shareholders Approval" "7.
Share Option Schemes - Stock Option Plan" and "7. Share Option Schemes -
Employee Stock Purchase Plan", in Appendix V to the Prospectus.

1.2  A certified copy of the resolutions of the Directors:

(a)  considering the Prospectus and the Verification Notes in detail;

(b)  approving and authorizing the execution on behalf of the Company of this
     Agreement together with all other agreements and documents necessary for or
     to give effect to the Global Offering and implementing the listing of the
     Shares;

(c)  approving the Global Offering;

(d)  approving and authorising the issue and the registration with the Registrar
     of Companies in Hong Kong of the Hong Kong Offering Documents.

1.3  Two signed originals of the Receiving Bankers' Agreement.

1.4  Two certified copies of the Registrar's Agreement.

1.5  Two certified copies of the Multiple Applications Letter duly signed by the
parties thereto.

2.   Documents Relating to the Hong Kong Public Offering

2.1  Seven printed copies of each of the Hong Kong Prospectus and the
Application Forms, each duly signed by the Directors or their respective duly
authorised attorneys and, if signed by their respective duly authorised
attorneys, certified copies of the relevant power of attorney or authorisation
document.

2.2  An original copy or copies of the Verification Notes signed by or on behalf
of each person to whom responsibility is therein assigned.

2.3  Two signed original copies of the accountants' report dated the Prospectus
Date issued by the Reporting Accountants, the text of which is contained in
Appendix I to the Hong Kong Prospectus.

2.4  Two original letters dated the Prospectus Date from the Reporting
Accountants addressed to the Hong Kong Underwriters confirming, inter alia, the
indebtedness statement

                                                                         Page 30

<PAGE>

contained in the Hong Kong Prospectus and commenting on the statement contained
in the Hong Kong Prospectus as to the sufficiency of working capital and on the
other financial information set out in the Hong Kong Prospectus, such letter to
be in the form previously approved by the Sponsors on behalf of the Hong Kong
Underwriters.

2.5  An original comfort letter dated the date of this Agreement from the
Reporting Accountants addressed to the Hong Kong Underwriters.

2.6  Two signed original copies of the letter, summary of values and valuation
certificate dated the Prospectus Date issued by Chesterton Petty Ltd., the text
of which is contained in Appendix III to the Hong Kong Prospectus.

2.7  Two signed originals of the letter from Maples and Calder Asia referred to
in Appendix IV to the Hong Kong Prospectus.

2.8  A certified copy of each of the letters referred to in the section headed
"8. Other Information - i. Consents" in Appendix V to the Hong Kong Prospectus
containing consents to the issue of the Prospectus with the inclusion of
references to the respective parties' names, and where relevant their reports,
letters and valuation certificates in the form and context in which they are
included.

2.9  One certified copy of a letter from the Registrar of Companies Hong Kong
confirming that the Hong Kong Prospectus has been registered pursuant to section
342C of the Companies Ordinance.

2.10 A letter or facsimile to the Sponsors (for themselves and on behalf of the
Hong Kong Underwriters) from Slaughter and May confirming that the documents
referred to in the paragraph headed "Documents delivered to the Registrar of
Companies" in Appendix VI to the Hong Kong Prospectus have been delivered to the
Registrar of Companies in Hong Kong as required by section 342C of the Companies
Ordinance.

2.11 A certified copy of each of the material contracts referred to in the
section headed "3. Further Information About Our Business - a. Summary of
material contracts" in Appendix V to the Hong Kong Prospectus (other than this
Agreement).

2.12 Certificates as to the accuracy of the Chinese translation of the Hong Kong
Offering Documents given by the relevant translator thereof together with a
certificate issued by the Sponsors as to the competency of such translator in
respect of the Hong Kong Offering Documents.

2.13 A certified copy of the listing agreement executed by the Company and
delivered to the Hong Kong Stock Exchange.

3.   Legal Opinions

A facsimile copy (with two original signed copies to follow as soon as possible)
of each of: (i) the legal opinion from Jingtian & Gongcheng in respect of
properties owned and leased by the Group; and (ii) the legal opinions from
Jingtian & Gongcheng in respect of the PRC Subsidiaries and various contracts
and operation arrangements of the Group governed under PRC laws, each in forms
satisfactory to the Sponsors.

4.   Other Documents

4.1  A certified copy of an original confirmation letter from each Director of
the Company to the Sponsors confirming that he has, and an original confirmation
letter from the Company

                                                                         Page 31

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to the Sponsors confirming that the Directors have, read and understood the
memorandum entitled "Memorandum for the Directors Summarising their Duties in
respect of the Proposed Offering of Ordinary Shares and Listing on the Stock
Exchange of Hong Kong Limited" prepared by Slaughter and May and that Slaughter
and May has explained the contents of the relevant memorandum to him.

4.2  Two certified copies of each of the following:

(a)  the responsibility letters, powers of attorney and statements of interests
     signed by each Director;

(b)  the Form B signed by each Director.

4.3  One certified copy of each of the following:

(a)  the certificate of incorporation of the Company;

(b)  the business licence of each of the PRC Subsidiaries;

(c)  the certificate of registration of the Company under Part XI of the
     Companies Ordinance.

                                     Part B

1.   Two original bringdown comfort letters addressed to the Hong Kong
Underwriters from the Reporting Accountants dated as of the date of the Closing
in form and substance satisfactory to the Sponsors.

2.   Two signed originals of the legal opinion from each of Jingtian & Gongcheng
and Haiwen & Partners concerning such matters as the Sponsors may reasonably
require.

3.   Two signed originals of the legal opinion from Maples and Calder concerning
such matters as the Sponsors may reasonably require.

4.   Two signed originals of the Hong Kong legal opinions from each of Slaughter
and May and Freshfields Bruckhaus Deringer concerning such matters as the
Sponsors may reasonably require.

5.   Two signed originals of the legal opinion from each of Shearman & Sterling
LLP and Skadden, Arps, Slate, Meagher and Flom LLP concerning such matters as
the Sponsors may reasonably require.

6.   A certified copy/copies of the resolutions of the board committee of the
Company relating to the Global Offering approving, among other things, the basis
of allotment and allotment of Shares to allottees.

                                                                         Page 32

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                                   SCHEDULE 3

                                 THE WARRANTIES

1.  The Hong Kong Prospectus, the Formal Notice, the Application Forms and the
documents required to be filed with the Hong Kong Stock Exchange pursuant to
rule 9.11 and 9.12 of the Hong Kong Listing Rules contain all information
required by the applicable requirements of the Companies Ordinance, the SFO, any
other applicable Hong Kong government regulations or legislation, the Companies
Law (2003 Revision) of the Cayman Islands, the Hong Kong Listing Rules, and all
other rules and regulations of the Hong Kong Stock Exchange. The Hong Kong
Prospectus contains all such information which are necessary to enable investors
to make an informed assessment of the assets and liabilities, financial
position, profits and losses, and prospects of the Company and its subsidiaries
and the rights attaching to the Offer Shares. In addition, the Hong Kong
Prospectus, as of the date thereof and as of the date hereof did not and does
not contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in the circumstances under which they were made, not
misleading in any material respect, except that this representation and warranty
shall not apply to any statements or omission made in reliance upon and in
conformity with information furnished to the Company by the Global Coordinator,
the Joint Sponsors or the Hong Kong Underwriters.

2.  The Company has been duly incorporated and is a validly existing company
limited by shares in good standing under the laws of the Cayman Islands, with
power and authority (corporate and other) to own its properties and conduct its
business in a manner presently conducted and as described in the Prospectuses;
and the Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would not
individually or in the aggregate have a material adverse effect on the condition
(financial or other), business, properties, business prospects or results of
operations of the Company and its subsidiaries taken as a whole (Material
Adverse Effect).

3.  The Company's Articles of Association comply with the requirements of the
Hong Kong Listing Rules and applicable laws of the Cayman Islands, including the
Companies Law (2003 Revision), and are in full force and effect. Neither the
Company nor any of its Subsidiaries is (A) in violation of its Memorandum of
Association or Articles of Association (or other constitutive documents) or (B)
in default of the performance or observance of any material obligation,
agreement, covenant or condition contained in any contract, indenture, mortgage,
deed or trust, loan or credit agreement, note, license, lease or other agreement
or instrument to which it is a party or by which it may be bound, or to which
any of its properties or assets may be subject (and no event has occurred which,
with the giving of notices or lapse of time or both, would constitute such
default). Neither the Company nor any of its subsidiaries has taken any action
nor have any steps been taken or legal, legislative, or administrative
proceedings been started or threatened (x) to wind up, dissolve, or eliminate
the Company or any of its subsidiaries or (y) to withdraw, revoke or cancel the
Company's or any of its subsidiaries' licenses, other than the withdrawal of the
Company's license to do business in the State of California, US.

4.  The section headed "1. Further Information About Our Company - e. Our
subsidiaries" in Appendix V to the Hong Kong Prospectus correctly identifies
each of the

                                                                         Page 33

<PAGE>

PRC Subsidiaries. Each PRC Subsidiary is a wholly owned subsidiary of the
Company, duly incorporated and is validly existing under the laws of the PRC
with full legal right, power and authority (corporate or other) to own, use,
lease and operate its properties, conduct its business in the manner presently
conducted and, if such manner is described in the Prospectuses, as described in
the Prospectuses, and is duly qualified to conduct business in each jurisdiction
in which it conducts business and, except as disclosed in the Prospectuses, is
duly qualified to own, use, lease and operate its properties in each
jurisdiction in which it owns or leases properties and such qualification is
required, or is and will be subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction. Each PRC
Subsidiary has been duly established as a wholly foreign-owned enterprise with
limited liability legal person status under the laws and regulations of the PRC
and: (i) all approvals, permits, licenses, registrations and qualifications
required by the laws and regulations of the PRC for establishing a wholly
foreign-owned enterprise have been duly obtained from appropriate government
authorities of the PRC in connection with the establishment of each PRC
subsidiary and all such approvals, permits, licenses, registrations and
qualifications are subsisting with no charge, amendment or limitation which is
reasonably likely to have a Material Adverse Effect; (ii) with respect to
Semiconductor Manufacturing International (Shanghai) Corporation (SMIC
Shanghai), the entire amount of registered capital as stated in its articles of
association and business license as amended from time to time has been fully and
timely contributed by the Company, verified by qualified independent accounting
firms confirming the Company's contribution of the entire amount of registered
capital of SMIC Shanghai, and filed and registered with relevant PRC
registration authorities. The Company's equity interest in SMIC Shanghai is free
and clear of any security interest, mortgage, pledge, lien, encumbrance, claim
or equity in favor of any third party. With respect to Semiconductor
Manufacturing International (Beijing) Corporation (SMIC Beijing), the Company
has contributed the first instalment payment to the registered capital of SMIC
Beijing, which instalment has been verified by a qualified independent
accounting firm, and filed and registered with relevant PRC registration
authorities. The Company's equity interest in SMIC Beijing is free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or equity in
favor of any third party. The balance is required to be paid up prior to July
24, 2004. In connection with Semiconductor Manufacturing International (Tianjin)
Corporation (SMIC Tianjin), a monetary portion of the first instalment of its
registered capital has been fully paid up and verified by a qualified
independent accounting firms confirming the Company's contribution of same, and
the second instalments are required to be contributed by the Company prior to
December 31, 2005. Except as disclosed in the Prospectuses, the Company's
interest in SMIC Tianjin is free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity in favor of any third party; (iii)
the articles of association of each PRC Subsidiary comply with all applicable
laws and regulations of the PRC and have been approved by relevant PRC
governmental authorities and are in full force and effect; (iv) SMIC Tianjin is
under no regulatory requirement for an annual review due to its recent
establishment. SMIC Shanghai has passed its 2001 annual examination 2002 annual
examination due to the registration authorities' issuance of a new business
license reflecting its increase in registered capital. SMIC Beijing has passed
2002 annual examination by governmental authorities. Neither SMIC Shanghai nor
SMIC Beijing has been found to have any deficiency or default under PRC laws and
regulations, and both SMIC Shanghai and SMIC Beijing have timely received all
requisite certifications from each applicable governmental authority in respect
of such annual examinations; (v) SMIC Shanghai is duly accredited as an
integrated circuit production enterprise under the laws and regulations of the
PRC, and is entitled to preferential industrial and taxation policies
promulgated by the State Council of the PRC as described in the Prospectuses.
SMIC Beijing and SMIC Tianjin have not yet received accreditation as integrated
circuit production enterprises, and the Company expects SMIC Beijing and SMIC
Tianjin to timely receive, their respective accreditation as integrated circuit
production enterprise.

                                                                       Page   34

<PAGE>

5.  The section headed "1. Further Information About Our Company - e. Our
subsidiaries" in Appendix V to the Hong Kong Prospectus correctly identifies
each Non-PRC Subsidiary. Each Non-PRC Subsidiary of the Company has been duly
incorporated or established and is an existing corporation in good standing
under the laws of the jurisdiction of its incorporation or establishment, with
power and authority (corporate and other) to own its properties and conduct its
business as described in the Prospectuses; and each Non-PRC Subsidiary of the
Company is duly qualified to do business as a foreign corporation or entity in
good standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification, except
where the failure to be so qualified or be in good standing would not have a
Material Adverse Effect; all of the issued and outstanding capital stock of each
Non-PRC Subsidiary of the Company has been duly authorized and validly issued
and is fully paid and nonassessable; and the capital stock of each Non-PRC
Subsidiary owned by the Company, directly or through subsidiaries, is owned free
from and clear of all liens, charges, encumbrances and defects.

6.  The authorized and issued share capital of the Company as of the dates
indicated is correctly set forth in the sections headed "Share capital" and
"Financial Information - Capitalization" in the Hong Kong Prospectus. The shares
of outstanding capital stock of the Company have been issued in compliance with
all applicable securities laws. Except as disclosed in the Prospectuses, there
are no outstanding options to purchase, or any preemptive rights or other rights
to subscribe for or to purchase, any securities or obligations convertible into,
or any contracts or commitments to issue or sell, shares of the Company's
capital stock or any such options, rights, convertible securities or
obligations. The Offer Shares, and all other outstanding shares of capital stock
of the Company have been duly authorized; all outstanding shares of capital
stock of the Company are, and, when the International Offer Shares and US Offer
Shares have been delivered and paid for in accordance with the International
Underwriting Agreement on each Closing Date (as defined therein) and when the
Hong Kong Offer Shares have been delivered and paid in accordance with this
Agreement and on the terms of the Hong Kong Prospectus, the Offer Shares will
have been validly issued, fully paid and nonassessable and will conform to the
description thereof contained in the Prospectuses; the holders of the Offer
Shares, (including the Depositary, which will hold Shares on behalf of holders
from time to time of American depositary receipts which evidence ADSs), against
payment of the purchase price in accordance with the International Underwriting
Agreement on each Closing Date (as defined therein) and this Agreement, will be,
except subject to the terms and provisions of the Deposit Agreement, entitled to
all the rights of a shareholder conferred by the Memorandum of Association and
Articles of Association of the Company and the Companies Ordinance and Cayman
Islands law; there are no restrictions on transfers of the Offer Shares, except
as disclosed in the Prospectuses; the Shares may be freely deposited by the
Company with the Depositary against issuance of ADRs as contemplated in the
Deposit Agreement; and the Offer Shares are freely issuable and transferable by
or on behalf of the Company to or for the account of the several Underwriters.

7.  The statements contained in the Prospectus:

(a) under the heading "Working Capital" in the section headed "Financial
    Information"; and

(b) under the heading "Use of Proceeds and Future Plans and Prospects",

represent the true and honest belief of the Directors arrived at after due,
proper and careful consideration and enquiry.

                                                                         Page 35

<PAGE>

8.  In respect of the connected transactions (as defined under the Hong Kong
Listing Rules) between the Company and any connected person (as defined under
the Hong Kong Listing Rules) (the Connected Transactions):

(a) the statements contained in the Prospectus relating to the Connected
    Transactions are true and accurate in all material respects and there are
    no other facts known to the Directors the omission of which would make any
    such statements misleading in all material respects, and there are no other
    Connected Transactions which have not been disclosed or reflected in the
    Prospectus;

(b) all information (including but not limited to historical figures) and
    documentation provided by the Company to the Sponsors and the Hong Kong
    Underwriters and their professional advisers are true and accurate and
    there is no other information or document which have not been provided the
    result of which would make the information and documents so received
    misleading in any material respect;

(c) the Company (insofar as it is a party to any Connected Transactions) has
    complied with and will continue to comply with the Hong Kong Listing Rules
    in relation to Connected Transactions including ensuring that the terms of
    such Connected Transactions are fair and reasonable so far as the
    shareholders of the Company are concerned;

(d) the Company has complied with and undertakes to continue to comply with the
    terms of the Connected Transactions disclosed in the Prospectus so long as
    the agreement relating thereto is in effect and shall inform the Joint
    Sponsors should there by any breach of any such terms either before or
    after the listing of Shares on the Hong Kong Stock Exchange; and

(e) each of the Connected Transactions and the Connected Transaction agreements
    as disclosed in the Prospectus constitutes a legal, valid and binding
    agreement, enforceable in accordance with its terms by the relevant member
    of the Group against the other party.

9.  Save as described in the section headed "Connected Transactions and other
Related Party Transactions" in the Prospectus, there are no other connected
transactions (as defined in the Hong Kong Listing Rules) which the Company
and/or any of the Subsidiaries has entered into.

10. All material contracts to which any member of the Group is a party which are
required to be filed with the Hong Kong Registrar of Companies will be filed.

11. There are no contracts, agreements or understandings between the Company and
any person that would give rise to a valid claim against the Company or any
Underwriter for a brokerage commission, finder's fee or other like payment in
connection with the Global Offering.

12. The Hong Kong Offer Shares have (as at the date of this Agreement) been
approved in principle for listing, will (as at the Closing) be approved for
listing subject to allotment and issue of Shares, and will (immediately prior to
commencement of dealings in the Offer Shares on the Hong Kong Stock Exchange)
have been formally approved for listing.

13. No consent, approval, authorization, or order of, clearance by, or
registration or filing with, any governmental agency or body or any court or any
stock exchange is required to be obtained or made by the Company for the
consummation of the transactions contemplated by

                                                                         Page 36

<PAGE>

this Agreement, the Receiving Bankers Agreement or the Registrars Agreement in
connection with the issuance of the Offer Shares by the Company, including the
deposit of any Securities represented by the ADSs with the Depositary and the
issuance of the ADRs evidencing the ADSs, the listing of all of the Company's
Shares (including the Offer Shares) in ordinary form on the Hong Kong Stock
Exchange and the listing of the ADSs on the New York Stock Exchange, the offer
of the Hong Kong Offer Shares, except such consents, approvals, authorizations,
orders, clearances, registrations or filings as have been obtained or made and
are in full force and effect under the Securities Act, the Japanese Rules and
Regulations (as defined herein) and such as may be required under applicable
state securities laws, blue sky laws in the United States, Hong Kong, the Cayman
Islands and the Foreign Exchange and Foreign Trade Law of Japan and the rules of
the National Association of Securities Dealers, Inc. (NASD).

14. Except as disclosed in the Prospectuses, under current laws and regulations
of the Cayman Islands and any political subdivision thereof, all dividends and
other distributions declared and payable on the Offer Shares, including those
represented by the ADSs, may be paid by the Company to the holder thereof in
United States dollars or Hong Kong dollars and all such payments made to holders
thereof who are non-residents of the Cayman Islands will not be subject to
income, withholding or other taxes under laws and regulations of the Cayman
Islands or any political subdivision or taxing authority thereof or therein and
will otherwise be free and clear of any other tax, duty, withholding or
deduction in the Cayman Islands or any political subdivision or taxing authority
thereof or therein and without the necessity of obtaining any governmental
authorization in the Cayman Islands or any political subdivision or taxing
authority thereof or therein.

15. The execution, delivery and performance of this Agreement, the Receiving
Bankers' Agreement, the Registrar's Agreement and the International Underwriting
Agreement, and the consummation of the transactions contemplated in each of
them, and the issuance and sale of the Offer Shares, including the deposit of
any Securities represented by the ADSs with the Depositary and the issuance of
the ADRs evidencing the ADSs, the offering of the Hong Kong Offer Shares and the
listing of all of the Company's Shares (including the Offer Shares) in ordinary
form on the Hong Kong Stock Exchange and the listing of the ADSs on the New York
Stock Exchange, do not and will not result in a breach or violation of any of
the terms and provisions of, or constitute a default or require any consent
under, (i) any statute, rule, regulation or order of any governmental agency or
body or any court, domestic or foreign, having jurisdiction over the Company or
any subsidiary of the Company or any of their properties, (ii) any agreement or
instrument to which the Company or any such subsidiary is a party or by which
the Company or any such subsidiary is bound or to which any of the properties of
the Company or any such subsidiary is subject except for any breach, violation
or default which would not have a Material Adverse Effect, or (iii) the
Memorandum of Association or Articles of Association or any other constituent
document of the Company or any such subsidiary.

16. Each of this Agreement, the Receiving Bankers' Agreement, the Registrar's
Agreement and the International Underwriting Agreement (and the other agreements
contemplated herein and therein) has been or will be duly authorized, executed
and delivered by the Company and constitutes a legal, valid and binding
agreement of the Company.

17. The sixth amended and restated registration rights agreement, dated February
23, 2004 by and among the Shareholders of the Company listed in Annex A through
D thereof and the Company (the Registration Rights Agreement) has been duly
authorized, executed and delivered by or on behalf of the Company and
constitutes a legal, valid and binding agreement of the Company, enforceable in
accordance with its terms against the Company except as enforcement thereof may
be limited by bankruptcy, insolvency, fraudulent transfer,

                                                                         Page 37

<PAGE>

reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general principles of equity.

18. Except as disclosed in the Prospectuses, each of the Company and its
Subsidiaries has good and marketable title to all real properties and all other
properties and assets owned by them which is, in each case, material to their
business or operations, in each case free from and clear of all liens,
encumbrances, charges, defects, claims, options or restrictions that would
materially affect the value thereof or materially interfere with the use made or
to be made thereof by them; and except as disclosed in the Prospectuses, the
Company and its Subsidiaries hold all material leased real or personal property
under valid and enforceable leases with no exceptions that would materially
interfere with the use made or to be made thereof by them, except that pursuant
to the Land Use Right Transfer Contract (the Beijing Land Contract) entered into
between SMIC Beijing and the Building & Land Administration Department of
Beijing Economy and Technology Development Area on December 31, 2002, use of the
land stipulated in the Beijing Land Contract is confined to construction of
micro-electronic factories; if products manufactured by SMIC Beijing are not
micro-electronics, SMIC Beijing is required to pay additional land premium based
on the then standard land price announced by Beijing Economic and Technological
Development Area; if SMIC Beijing transfers or leases the land use right to a
third party or SMIC Beijing carries out other business activities, SMIC Beijing
is required to pay additional land premium based on the then standard land price
announced by Beijing Economic and Technological Development Area; if SMIC
Beijing mortgages the land use right and a mortgagee forecloses the mortgaged
property, the mortgagee has to deduct the land premium which will be the then
standard land use price announced by Beijing Economic and Technological Area,
from the sale proceeds and then pay the land premium to the Building and Land
Administration Bureau of Beijing Economic and Technological Development Area;
and except as disclosed in the Prospectuses, the Company and its subsidiaries
hold all leased real or personal property under valid and enforceable leases
with no exceptions that would materially interfere with the use made or to be
made thereof by them. SMIC Shanghai and SMIC Beijing have obtained their
respective land-use rights required to conduct its business, including land-use
rights validly granted and/or transferred to them and held in their respective
names relating to land on which their facilities are located respectively in
Shanghai and Beijing. SMIC Beijing has fully paid the land-use right transfer
fee, free and clear of all encumbrances and defects, except that it has not paid
relevant stamp tax in connection therewith. However, the above failure to pay
such stamp tax does not affect the validity of SMIC Beijing's title to the land
use rights. SMIC Tianjin is in the process of amending the land use right
certificate currently held in the name of Motorola (China) Electronics Limited,
relating to land on which its facilities are located, whereas its investor, the
Company, has already issued to Motorola (China) Electronics Limited certain
shares and warrants to purchase additional shares, as consideration for assets
including the above land use right it purchased from the latter.

19. Except as disclosed in the Prospectuses, the Company and its Subsidiaries
possess adequate certificates, authorities or permits issued by appropriate
governmental agencies or bodies necessary to conduct the business now operated
by them and have not received any notice of proceedings relating to the
revocation or modification of any such certificate, authority or permit that, if
determined adversely to the Company or any of its Subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.

20. No labor dispute between the Company or any Subsidiary and their respective
employees exists or, to the knowledge of the Company, is imminent that would
reasonably be expected to have a Material Adverse Effect.

21. Each of the Company and its Subsidiaries owns or possesses the right to use
all patents and other rights to inventions, trademarks, trademark registrations,
service marks, service mark registrations, trade names, copyrights, trades
secrets, know-how, licenses, and

                                                                         Page 38

<PAGE>

other intellectual property (collectively, intellectual property rights)
necessary to conduct the business now operated by it or presently employed by
them, and if such business is described in the Prospectuses, as described in the
Prospectuses, except where such failure to own or possess rights to use which
would not have a Material Adverse Effect. To the knowledge of the Company (after
due and careful enquiry) and except as described in the Prospectuses, there is
no reasonable basis to allege that the Company or any of its subsidiaries has
infringed or violated, is infringing or violating, or will infringe or violate
any intellectual property rights of others. Except as described in the
Prospectuses, the Company has not received any notice or communication alleging
that the Company or any of its subsidiaries infringes any intellectual property
rights of others that, if determined adversely to the Company or any of its
subsidiaries would, individually or in the aggregate have a Material Adverse
Effect.

22. Except as disclosed in the Prospectus, no stamp or other issuance or
transfer taxes or duties and no capital gains, income, withholding or other
taxes are payable by or on behalf of the International Underwriters, the US
Underwriters or the Hong Kong Underwriters to Hong Kong, the United States, the
PRC or the Cayman Islands or any political subdivision or taxing authority
thereof or therein in connection with (A) the issuance, offer, sale and delivery
by the Company of the Offer Shares, (B) the deposit by the Company of any
Securities represented by the ADSs with the Depositary and the issuance of the
ADRs evidencing the ADSs, (C) the sale and delivery of the Offer Shares by the
Underwriters as part of the Underwriters' distribution of the Offer Shares as
contemplated hereunder; and (D) the delivery of the Securities to be sold by the
Selling Shareholders in the manner contemplated by the International
Underwriting Agreement.

23. No holder of any of the Offer Shares after completion of the Global Offering
is or will be subject to any liability of the Company by virtue only of his
holding of any such Offer Shares. Except as disclosed in the Prospectuses, there
are no limitations on the rights of holders of the Offer Shares to hold, vote or
transfer their Offer Shares.

24. Each of the Company and its Subsidiaries has filed on a timely basis all
necessary tax returns, reports and filings, and all such returns, reports or
filings are true, correct and complete in all material respects, and are not the
subject of any disputes with revenue or other authorities other than these
disputes which if determined adversely to the Company, would not have a Material
Adverse Effect; and, to the knowledge of the Company after due investigation,
there are no circumstances giving rise to such disputes. The Company and each of
its subsidiaries, has paid all material taxes required to be paid by them and
has no knowledge of any tax deficiency which might be assessed, except as would
not have a Material Adverse Effect.

25. Except as disclosed in the Prospectuses, neither the Company nor any of its
subsidiaries is in violation of any statute, any rule, regulation, decision or
order of any governmental agency or body or any court, domestic or foreign,
relating to the use, disposal or release of hazardous or toxic substances or
relating to the protection or restoration of the environment or human exposure
to hazardous or toxic substances (collectively, environmental laws), owns or
operates any real property contaminated with any substance that is subject to
any environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating to any
environmental laws, which violation, contamination, liability or claim would
individually or in the aggregate have a Material Adverse Effect; and the Company
is not aware of any pending investigation which might lead to such a claim.

26. The Company and its subsidiaries maintain insurance in such amounts and
covering such risks as the Company reasonably considers adequate for the conduct
of its business and as is customary for similarly-sized companies engaged in
similar businesses in similar industries and in similar locations, all of which
insurance is in full force and effect, except

                                                                         Page 39

<PAGE>

where the failure to maintain such insurance could not reasonably be expected to
have a Material Adverse Effect. There are no material claims by the Company or
any of its subsidiaries under any such policy or instrument as to which any
insurance company is denying liability or defending under a reservation of
rights clause. The Company has no reason to believe that it will not be able to
renew its existing insurance as and when such coverage expires or will be able
to obtain replacement insurance adequate for the conduct of the business and the
value of its properties at a cost that could not reasonably be expected to have
a Material Adverse Effect.

27. None of the Company, its Subsidiaries or any of their officers or directors
(whether or not pursuant to the Directed Share Program) has paid, promised or
authorized the payment, directly or indirectly, of any monies or any thing of
value, in each case to the extent that such payment, promise or authorization
constitutes bribery in breach of applicable laws of the Cayman Islands, Hong
Kong or the PRC, to any government official or employee of any political party
for the purpose of influencing any act or decision of such official or of the
government to obtain or retain business, or direct business to the Company or
any of its subsidiaries, made any unlawful contribution or gift to any political
or governmental organization, party or individual to any candidate for
government office, or failed to disclose fully any contribution in violation of
law or made any payment to any federal or state governmental officer or
official, or other person charged with similar public or quasi-public duties,
other than payments required by the laws of the United States or any
jurisdiction thereof or permitted by all such applicable laws (any such act, a
Prohibited Payment). A Prohibited Payment does not include the payment of
reasonable and bona fide expenditures, such as travel and lodging expenses,
which are directly related to the promotion, demonstration or explanation of
products or services, or the execution or performance of a contract with a
government authority or agency thereof; provided that such payments are
permissible under applicable laws.

28. Except as disclosed in the Prospectuses, there are no pending actions, suits
or proceedings against or affecting the Company, any of its subsidiaries or any
of their respective properties (including, to the knowledge of the Company, any
actions, suits or proceedings alleging that the Company or any of its
subsidiaries has infringed or violated, is infringing or violating or will
infringe or violate any intellectual property rights of others, any actions,
suits or proceedings against current or former employees of the Company or any
of its subsidiaries) that, if determined adversely to the Company or any of its
subsidiaries, would individually or in the aggregate have a Material Adverse
Effect, or would materially and adversely affect the ability of the Company to
perform its obligations under this Agreement; and, to the knowledge of the
Company, no such actions, suits or proceedings are threatened or contemplated.

29. The Reporting Accountants who prepared the accountants' report contained in
the Hong Kong Prospectus are independent auditors complying with the guidelines
on independence issued by the Hong Kong Society of Accountants.

30. The financial statements and data included in the Prospectuses present
fairly the financial position of the Company and its consolidated subsidiaries
as of the dates shown and their results of operations and cash flows for the
periods shown, and such financial data have been prepared in conformity with the
generally accepted accounting principles in the United States applied on a
consistent basis; and the notes included in each Prospectus present fairly the
information required to be stated therein; and the assumptions used in preparing
the pro forma financial statements included in the Prospectuses provide a
reasonable basis for presenting the significant effects directly attributable to
the transactions or events described therein, the related pro forma adjustments
give appropriate effect to those assumptions, and the pro forma columns therein
reflect the proper application of those adjustments to the corresponding
historical financial statement amounts.

                                                                         Page 40

<PAGE>

31. Except as disclosed in the Prospectuses, since the date of the latest
audited financial statements included in the Prospectuses, neither the Company
nor its subsidiaries has (i) entered into or assumed any material contract, (ii)
incurred, assumed or acquired any material liability (including contingent
liability) or other obligation, (iii) acquired or disposed of or agreed to
acquire or dispose of any business or any other asset material to the Company
and its subsidiaries taken as a whole or (iv) entered into a letter of intent or
memorandum of understanding (or announced an intention to do so) relating to any
matter identified in clauses (i) through (iii) above, nor has the Company or its
subsidiaries sustained any material loss or interference with its business from
fire, explosion or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, and since
the respective dates as of which information is given in the Prospectus, nor has
there been any change in the capital stock (including registered capital) or
long-term debt of the Company or its subsidiaries or any material adverse change
in or affecting the financial position, business prospects, shareholders' equity
or results of operations of the Company or its subsidiaries.

32. No material information was withheld from the Reporting Accountants for the
purpose of their preparation of their report in the Prospectus including for the
purpose of the Reporting Accountants' review of the Company's financial
reporting procedures and all information given to the Reporting Accountants for
such purposes was given in good faith, the factual contents of such report are
true, accurate and complete in all material respects and no material fact or
matter has been omitted.

33. The Company and each of its subsidiaries have devised and maintain a system
of internal accounting and other controls sufficient to provide reasonable
assurance that (A) transactions are executed in accordance with the management's
general or specific authorizations; (B) transactions are recorded as necessary
to permit preparation of financial statements in conformity with United States
generally accepted accounting principles and to maintain accountability for
assets; (C) access to assets is permitted only in accordance with management's
general or specific authorization; and (D) the recorded accountability for
assets is compared with existing assets at reasonable intervals and appropriate
action is taken with respect to any differences. The Company and its
subsidiaries maintain and keep books, records and accounts which, in reasonable
detail, accurately and fairly reflect their transactions and dispositions of
assets.

34. The Company is not and, after giving effect to the offering and sale of the
Offer Shares and the application of the proceeds thereof as described in the
Prospectuses, will not be an "investment company" as defined in the US
Investment Company Act of 1940, as amended.

35. The Company does not expect to be a passive foreign investment company
(PFIC) within the meaning of Section 1297 of the United States Internal Revenue
Code of 1986, as amended, for the tax year ending December 31, 2004, and does
not expect to become a PFIC in the future. The Company has no plan or intention
to take any action that would result in the Company becoming a PFIC in the
future.

36. Neither the Company nor any of its Subsidiaries nor any of their respective
officers, directors or affiliates (within the meaning of the Securities Act and
the regulations thereunder) has taken, nor will any of them take, directly or
indirectly, any action which constitutes or is designed to cause or result in,
or which could reasonably be expected to constitute, cause or result, under the
Exchange Act, the SFO and rules and regulations thereunder, the rules and
regulations of the Hong Kong Stock Exchange or the Hong Kong Listing Rules, in
the stabilization or manipulation of the price of any security of the Company or
its Subsidiaries to facilitate the sale or resale of the Offer Shares.

                                                                         Page 41

<PAGE>

37. Except as disclosed in the Prospectuses, (A) no indebtedness (actual or
contingent) and no contract or arrangement is outstanding between the Company or
any of its subsidiaries and (B) no indebtedness (actual or contingent) and no
material contract or arrangement is outstanding between the Company, or any of
its subsidiaries and any director of the Company or any connected person of the
Company or any of their associates (each within the meaning of the Hong Kong
Listing Rules). To the knowledge of the Company (after making all reasonable
inquiries), except as disclosed in the Prospectuses, none of the directors or
substantial shareholders of the Company or any of their respective associates
(as defined in the Hong Kong Listing Rules) is engaged in any business similar
to or in competition with the business of the Company or any of its subsidiaries
nor are any of the directors of the Company interested, directly or indirectly,
in any assets which have since the date two years immediately proceeding the
date of the Hong Kong Prospectus been acquired or disposed of by or leased to or
by the Company or any of its subsidiaries.

38. The Company is in compliance with all applicable provisions of the
Sarbanes-Oxley Act and will ensure that it is in compliance with all of the
other applicable provisions of the Sarbanes-Oxley Act upon the subsequent
release by the US SEC of rules and regulations promulgated under the
Sarbanes-Oxley Act.

39. The section entitled "Financial Information - Management's Discussion and
Analysis of Financial Condition and Results of Operation - Critical Accounting
Policies" in the Hong Kong Prospectus accurately and fully describes (A)
accounting policies which the Company believes are the most important in the
portrayal of the financial condition and results of operations of the Company
and its consolidated subsidiaries and which require management's most difficult,
subjective or complex judgments ("critical accounting policies"); (B) judgments
and uncertainties affecting the application of critical accounting policies; and
(C) explanation of the likelihood that materially different amounts would be
reported under different conditions or using different assumptions. The
Company's board of directors, senior management and audit committee have
reviewed and agreed with the selection, application and disclosure of critical
accounting policies. The section entitled "Financial Information - Management's
Discussion and Analysis of Financial Condition and Results of Operations -
Liquidity and Capital Resources" in the Hong Kong Prospectus accurately and
fully describes (x) all material trends, demands, commitments, events,
uncertainties and risks, and the potential effects thereof, that the Company
believes would materially affect liquidity and are reasonably likely to occur;
and (y) all off-balance sheet arrangements that have or are reasonably likely to
have a current or future effect on the financial condition, changes in financial
condition, revenues or expenses, results of operations, liquidity, capital
expenditures or capital resources of the Company and its subsidiaries taken as a
whole. Except as disclosed in the Prospectuses, there are no outstanding
guarantees or other contingent obligations of the Company or any subsidiary that
could reasonably be expected to have a Material Adverse Effect.

                                                                         Page 42

<PAGE>

                                   SCHEDULE 4

                  HONG KONG UNDERWRITERS' SET OFF ARRANGEMENTS

1. This Schedule sets out the arrangements and terms pursuant to which the
obligations of each Hong Kong Underwriter under clause 6 of this Agreement will
be reduced to the extent that it makes (or procures to be made) one or more
Valid Applications which is or are accepted (hereafter referred to as
Underwriters' Applications). These arrangements mean that in no circumstances
will any Hong Kong Underwriter have any further liability as a Hong Kong
Underwriter if one or more Underwriters' Applications, duly made by it or
procured by it to be made, are validly made and accepted for not less than the
number of the Hong Kong Offer Shares noted against its name in Schedule 1.

2. In order to qualify as Underwriters' Applications, such applications must be
made on one or more Application Forms and delivered, together with a cheque or
cheques or banker's cashier order or orders for the amounts payable on
application (including brokerage and transaction levy and Hong Kong Stock
Exchange trading fee), to the Sponsors by not later than 10:00 a.m. on the
Acceptance Date. Each such application must bear the stamp of the Hong Kong
Underwriter or the Hong Kong Underwriter's broker or nominee by whom or on whose
behalf the application is made or, if made by the Hong Kong Underwriter's
sub-underwriter, marked to identify the relevant Hong Kong Underwriter and there
must be clearly marked on the Application Form(s) "SMIC - Underwriter's
Application". These applications will subsequently be notified and delivered by
the Sponsors to the Receiving Bankers by 12:00 noon on the Acceptance Date.

3. If all of the Hong Kong Offer Shares shall not have been validly both applied
and paid for in the manner referred to in this Agreement, each Hong Kong
Underwriter will, subject to the provisions of this Agreement, be obliged to
take up the proportion of the shortfall that (a) its net underwriting
participation (that is its underwriting participation pursuant to clause 6 less
the aggregate number of Hong Kong Offer Shares for which Underwriters'
Applications have been made by it or procured to be made by into the extent that
they have been accepted and up to the limit of its underwriting participation),
bears to (b) the aggregate of the underwriting participation of all the Hong
Kong Underwriters including itself less the aggregate number of Hong Kong Offer
Shares for which Underwriters' Applications have been made (including by
itself).

4. The obligations of Hong Kong Underwriters determined pursuant to paragraph 3
above may be rounded, as determined by the Sponsors in their sole discretion, to
avoid fractions. The determination of the Sponsors shall be final and
conclusive.

5. No preferential consideration will be given in respect of Underwriters'
Applications.

                                                                         Page 43

<PAGE>

                                   SCHEDULE 5

                            ADVERTISING ARRANGEMENTS

Newspapers                               Dates

South China Morning Post                 8 March 2004
                                         9 March 2004
                                         10 March 2004
                                         11 March 2004

Hong Kong Economic Times                 8 March 2004
                                         9 March 2004
                                         10 March 2004
                                         11 March 2004

                                                                         Page 44

<PAGE>

SIGNED by                            )
for and on behalf of                 )
SEMICONDUCTOR MANUFACTURING          )
INTERNATIONAL CORPORATION            )
in the presence of:                  )

SIGNED by                            )
for and on behalf of                 )
CREDIT SUISSE FIRST                  )
BOSTON (HONG KONG) LIMITED           )
in the presence of:                  )

SIGNED by                            )
and                                  )
for and on behalf of                 )
DEUTSCHE BANK AG,                    )
HONG KONG BRANCH                     )
in the presence of:                  )

                                                                         Page 45

<PAGE>

SIGNED by                            )
for and on behalf of                 )
                                     )
as duly authorized attorney for      )
BOCI ASIA LIMITED,                   )
CSC SECURITIES (HK) LIMITED,         )
DBS ASIA CAPITAL LIMITED,            )
FIRST SHANGHAI SECURITIES LTD.,      )
THE HONGKONG AND SHANGHAI            )
BANKING CORPORATION LIMITED,         )
KINGSTON SECURITIES LTD.,            )
SINOPAC SECURITIES (ASIA) LIMITED,   )
SOUTH CHINA SECURITIES LTD.          )
in the presence of:                  )

                                                                         Page 46Stock Purchase and Asset Transfer Agreement

 Exhibit 10.21 
  
 CONFORMED COPY 
  
 STOCK PURCHASE AND ASSET TRANSFER AGREEMENT 
  
 by and among 
  
 CIGNA CORPORATION, 
  
 CONNECTICUT GENERAL LIFE INSURANCE COMPANY, 
  
 CONNECTICUT GENERAL CORPORATION, 
  
 CIGNA HOLDINGS, INC.

  
 and 
  
 PRUDENTIAL FINANCIAL, INC., 
  
 dated as of 
  
 November 17, 2003 

 Table of Contents 
  

					
	 	  	 	  	Page

	 ARTICLE I INTERPRETATION
	  	1
			
	 Section 1.1
	  	 Definitions
	  	1
	 Section 1.2
	  	 Interpretation
	  	27
		
	 ARTICLE II CLOSING
	  	28
			
	 Section 2.1
	  	 Transfer of Assets to CIGNA Life
	  	28
	 Section 2.2
	  	 Assumption of Liabilities
	  	28
	 Section 2.3
	  	 Coinsurance Transactions
	  	29
	 Section 2.4
	  	 Dividend of Stock of CIGNA Life to Connecticut General
	  	30
	 Section 2.5
	  	 Purchase and Sale of the Acquired Stock
	  	30
	 Section 2.6
	  	 Consideration
	  	31
	 Section 2.7
	  	 Closing
	  	31
	 Section 2.8
	  	 Purchase Price Allocation
	  	32
	 Section 2.9
	  	 Statements of Net Settlement
	  	32
	 Section 2.10
	  	 Third Party Accountant
	  	34
	 Section 2.11
	  	 Post-Closing Adjustment
	  	36
		
	 ARTICLE III REPRESENTATIONS AND WARRANTIES OF SELLERS
	  	40
			
	 Section 3.1
	  	 Organization, Standing and Corporate Power
	  	40
	 Section 3.2
	  	 Authority; Binding Effect
	  	40
	 Section 3.3
	  	 Noncontravention
	  	41
	 Section 3.4
	  	 Governmental Approvals
	  	42
	 Section 3.5
	  	 Capitalization
	  	42
	 Section 3.6
	  	 Financial Statements
	  	43
	 Section 3.7
	  	 Seller Permits, Regulatory Agreements and Compliance with Applicable Laws
	  	44
	 Section 3.8
	  	 Litigation
	  	45
	 Section 3.9
	  	 Absence of Changes
	  	46

  

 -i- 

					
	 Section 3.10
	  	 Employee Benefits
	  	49
	 Section 3.11
	  	 Taxes
	  	50
	 Section 3.12
	  	 Intellectual Property and IT Assets
	  	52
	 Section 3.13
	  	 Material Business Contracts
	  	54
	 Section 3.14
	  	 Real Property
	  	56
	 Section 3.15
	  	 Affiliate Transactions
	  	56
	 Section 3.16
	  	 Labor Matters
	  	57
	 Section 3.17
	  	 Brokers and Finders
	  	57
	 Section 3.18
	  	 Sufficiency of Assets
	  	57
	 Section 3.19
	  	 Undisclosed Liabilities
	  	58
	 Section 3.20
	  	 Title to Assets
	  	58
	 Section 3.21
	  	 Product Administration and Compliance
	  	58
	 Section 3.22
	  	 Producers
	  	61
	 Section 3.23
	  	 Subject Contract Claims
	  	61
	 Section 3.24
	  	 Actuarial Reports Provided to Buyer
	  	62
	 Section 3.25
	  	 Reinsurance Agreements
	  	62
	 Section 3.26
	  	 Policy Forms
	  	62
	 Section 3.27
	  	 Company Separate Accounts and Underlying Funds
	  	62
	 Section 3.28
	  	 Broker-Dealer
	  	64
	 Section 3.29
	  	 Investment Advisers Act
	  	65
	 Section 3.30
	  	 CIGNA Bank
	  	66
	 Section 3.31
	  	 Environmental
	  	66
	 Section 3.32
	  	 Corrupt Practices
	  	67
		
	 ARTICLE IV REPRESENTATIONS AND WARRANTIES OF BUYER
	  	67
			
	 Section 4.1
	  	 Organization, Standing and Corporate Power
	  	67
	 Section 4.2
	  	 Authority; Binding Effect
	  	67
	 Section 4.3
	  	 Noncontravention
	  	68
	 Section 4.4
	  	 Governmental Approvals
	  	68
	 Section 4.5
	  	 Financial Statements
	  	69
	 Section 4.6
	  	 Litigation
	  	69

  

 -ii- 

					
	 Section 4.7
	  	 Financing
	  	69
	 Section 4.8
	  	 Absence of Changes
	  	69
	 Section 4.9
	  	 Brokers and Finders
	  	70
		
	 ARTICLE V COVENANTS
	  	70
			
	 Section 5.1
	  	 Conduct of Business in Ordinary Course
	  	70
	 Section 5.2
	  	 Non-Competition
	  	73
	 Section 5.3
	  	 Non-Solicitation; Non-Hire
	  	75
	 Section 5.4
	  	 Reinsurance Credit Covenants
	  	76
	 Section 5.5
	  	 Affected Employees
	  	76
	 Section 5.6
	  	 Cooperation Regarding Governmental Entities
	  	84
	 Section 5.7
	  	 Cooperation Regarding Other Third Parties
	  	85
	 Section 5.8
	  	 Exclusivity
	  	86
	 Section 5.9
	  	 Investigation; Maintenance of Marketplace Relationships
	  	87
	 Section 5.10
	  	 Post-Closing Access
	  	88
	 Section 5.11
	  	 Further Assurances
	  	89
	 Section 5.12
	  	 Expenses
	  	90
	 Section 5.13
	  	 Transfer Taxes; Expenses of Transfer
	  	90
	 Section 5.14
	  	 Public Announcement
	  	90
	 Section 5.15
	  	 Waiver of Claims
	  	90
	 Section 5.16
	  	 Trademark/Trade Name Licenses Agreement
	  	91
	 Section 5.17
	  	 Intercompany Agreements
	  	91
	 Section 5.18
	  	 Ancillary Agreements
	  	92
	 Section 5.19
	  	 Tax Matters
	  	93
	 Section 5.20
	  	 New York Certificate of Authority; Rate and Form Filings
	  	100
	 Section 5.21
	  	 Post-Closing Business Liabilities; Ancillary Agreements
	  	100
	 Section 5.22
	  	 Seed Money; Mutual Funds
	  	100
	 Section 5.23
	  	 Advisory Clients
	  	101
	 Section 5.24
	  	 Mutual Fund Distribution Agreements
	  	101
	 Section 5.25
	  	 Rejected Intellectual Property Contracts
	  	101
	 Section 5.26
	  	 License Under Certain Intellectual Property
	  	102

  

 -iii- 

					
	 Section 5.27
	  	 Confidentiality
	  	103
	 Section 5.28
	  	 Additional Assigned and Assumed Contracts
	  	104
	 Section 5.29
	  	 Post-Restructuring Services
	  	105
	 Section 5.30
	  	 Data Required for Sarbanes-Oxley Certification: IMR
	  	105
	 Section 5.31
	  	 Transfer of Canadian Business
	  	106
	 Section 5.32
	  	 DC Hedge
	  	106
	 Section 5.33
	  	 Releases of Insurance-Related Liabilities
	  	106
	 Section 5.34
	  	 Assignment of Right to Act as Collateral Manager
	  	107
		
	 ARTICLE VI CONDITIONS PRECEDENT
	  	107
			
	 Section 6.1
	  	 Conditions to Obligation of All Parties
	  	107
	 Section 6.2
	  	 Additional Conditions to Obligation of Buyer
	  	108
	 Section 6.3
	  	 Additional Conditions to Obligation of Sellers
	  	109
		
	 ARTICLE VII INDEMNIFICATION
	  	110
			
	 Section 7.1
	  	 Exclusions from Representations and Warranties
	  	110
	 Section 7.2
	  	 Survival of Representations and Warranties
	  	111
	 Section 7.3
	  	 Obligation to Indemnify
	  	112
	 Section 7.4
	  	 Claims Notice
	  	115
	 Section 7.5
	  	 Right to Contest Claims of Third Parties
	  	115
	 Section 7.6
	  	 Nonduplication
	  	118
	 Section 7.7
	  	 Exclusivity; Investigation
	  	119
		
	 ARTICLE VIII TERMINATION
	  	120
			
	 Section 8.1
	  	 Termination Prior to Closing
	  	120
	 Section 8.2
	  	 Effect of Termination
	  	120
		
	 ARTICLE IX MISCELLANEOUS PROVISIONS
	  	121
			
	 Section 9.1
	  	 Setoff
	  	121
	 Section 9.2
	  	 Disclosure Schedules
	  	121
	 Section 9.3
	  	 Amendment
	  	122
	 Section 9.4
	  	 Entire Agreement
	  	122

  

 -iv- 

					
	 Section 9.5
	  	 Notices
	  	122
	 Section 9.6
	  	 Choice of Law
	  	123
	 Section 9.7
	  	 Paragraph Headings
	  	123
	 Section 9.8
	  	 Specific Performance
	  	123
	 Section 9.9
	  	 Severability
	  	124
	 Section 9.10
	  	 Third Party Beneficiaries
	  	124
	 Section 9.11
	  	 Counterparts
	  	124
	 Section 9.12
	  	 Consent to Jurisdiction
	  	124
	 Section 9.13
	  	 Waiver of Jury Trial
	  	125
	 Section 9.14
	  	 Assignment; Binding Agreement
	  	125

  

 -v- 

 INDEX OF EXHIBITS 
  

			
	 Exhibit A
	  	 Administrative Services Agreement

	 Exhibit B
	  	 Assignment and Assumption Agreement

	 Exhibit C
	  	 Bank Merger Agreement

	 Exhibit D
	  	 Bill of Sale

	 Exhibit E
	  	 Coinsurance Agreement

	 Exhibit F
	  	 Excluded Business Administrative Services Agreement

	 Exhibit G
	  	 Excluded Business Coinsurance Agreement

	 Exhibit H
	  	 Facilities Sharing Agreement Term Sheet

	 Exhibit I
	  	 LINA Administrative Services Agreement

	 Exhibit J
	  	 LINA Modco Agreement

	 Exhibit K
	  	 INTENTIONALLY LEFT BLANK

	 Exhibit L
	  	 Master Assignment of Derivatives Agreement

	 Exhibit M
	  	 Master Assignment of Securities Agreement

	 Exhibit N
	  	 Participation Agreement

	 Exhibit O-1
	  	 Guaranteed Cost Administrative Services Agreement

	 Exhibit O-2
	  	 Guaranteed Cost Coinsurance Agreement

	 Exhibit O-3
	  	 CGLIC Guaranteed Cost Management Agreement

	 Exhibit O-4
	  	 Guaranteed Cost Business Trust Agreement

	 Exhibit O-5
	  	 CIGNA Life Guaranteed Cost Management Agreement

	 Exhibit P-1
	  	 Registered Products Administrative Services Agreement

	 Exhibit P-2
	  	 Registered Products Modified Coinsurance Agreement

	 Exhibit Q
	  	 Investment Management Agreement (Non Manager of Managers Program)

	 Exhibit R
	  	 Investment Management Agreement (Manager of Managers Program)

	 Exhibit S
	  	 Substitution and Indemnification Agreement

	 Exhibit T
	  	 Trademark/Trade Name Licenses Agreement

	 Exhibit U
	  	 Transition Services Agreement

	 Exhibit V-1
	  	 Legal Opinion to Buyer

	 Exhibit V-2
	  	 Legal Opinion to Buyer

	 Exhibit V-3
	  	 Legal Opinion to Buyer

	 Exhibit W
	  	 Legal Opinion to Sellers

	 Exhibit X
	  	 Investment Subadvisory Agreement

	 Exhibit Y
	  	 LINA Separate Account Management Agreement

	 Exhibit Z
	  	 Real Estate Separate Account Administrative Services Agreement

	 Exhibit AA
	  	 Real Estate Separate Account Coinsurance Agreement

	 Exhibit BB
	  	 TimesSquare Letter Agreement

	 Exhibit CC
	  	 Transitional Subadvisory Agreement

	 Exhibit DD
	  	 Transitional Subadvisory Agreement II

	 Exhibit EE
	  	 Transitional Subadvisory Agreement (Prudential Bank)

	 Exhibit FF
	  	 Transitional Subadvisory Agreement (Trust)

  

 -vi- 

 INDEX OF SCHEDULES 
  

			
	 1.1(a)
	  	 Acquired Companies

	 1.1(b)
	  	 Acquired Companies Financial Statements

	 1.1(c)
	  	 Acquired Companies Liabilities

	 1.1(d)
	  	 Business

	 1.1(e)
	  	 Excluded Assets

	 1.1(f)
	  	 Excluded Liabilities

	 1.1(g)
	  	 Expert Panel Selection Procedures

	 1.1(h)
	  	 Investment Asset Identification Protocol

	 1.1(i)
	  	 Sellers Persons with Knowledge

	 1.1(j)
	  	 Buyer Persons with Knowledge

	 1.1(l)
	  	 Experience Rated Assets

	 1.1(m)
	  	 Person with Knowledge of Non-Experience Rated Assets

	 2.2
	  	 Assumed Liabilities

	 2.9(a)(i)
	  	 Form of Statement of Net Settlement

	 2.9(a)(ii)
	  	 Pro Forma Statement of Net Settlement

	 2.9(a)(iii)
	  	 Statement of Net Settlement Methods

	 3.3
	  	 Non-Contravention

	 3.4
	  	 Seller Required Government Approvals

	 3.5
	  	 Capitalization of Acquired Companies

	 3.6(a)
	  	 Business Financial Statements

	 3.6(b)
	  	 Differences between Statutory Financial Statements and Statement of Net Settlement Methods

	 3.6(c)
	  	 Statutory Financial Statements

	 3.7(a)
	  	 Exceptions to Seller Permits Representation

	 3.7(b)
	  	 Seller Regulatory Agreements

	 3.7(c)
	  	 Exceptions to CIGNA Bank Representations

	 3.7(e)
	  	 Exceptions to Fiduciary Status Representations

	 3.8
	  	 Certain Actions

	 3.9
	  	 Seller Exceptions to Absence of Changes

	 3.10(a)(i)
	  	 Employee Benefit Plans

	 3.10(a)(ii)
	  	 Employment Agreements

	 3.10(a)(iii)
	  	 Consulting Agreements

	 3.10(d)
	  	 Employment Claims

	 3.10(f)
	  	 Exceptions to Plans and Agreements Retained

	 3.10(g)
	  	 Orders Regarding Seller Employees or Employment Practices

	 3.11
	  	 Exceptions to Tax Representations

	 3.11(m)
	  	 Nonqualified Separate Accounts

	 3.12(a)(i)
	  	 Transferred IP Assets

	 3.12(a)(ii)
	  	 Transferred IT Hardware

	 3.12(a)(iii)
	  	 Intellectual Property Contracts

	 3.12(a)(iv)
	  	 IT Hardware Leases

  

 -vii- 

			
	 3.12(a)(v)
	  	 Excluded IP Assets

	 3.12(a)(vi)
	  	 Claims of Infringement of Intellectual Property

	 3.12(b)
	  	 Sufficiency of Intellectual Property Exception

	 3.12(c)
	  	 Exceptions to Business Intellectual Property

	 3.13
	  	 Material Business Contracts

	 3.14(a)
	  	 Owned Real Property

	 3.14(b)
	  	 Real Property Leases

	 3.14(c)
	  	 Field Locations

	 3.15(a)
	  	 Intercompany Agreements

	 3.15(b)
	  	 Affiliate Agreements

	 3.16
	  	 Exceptions to Labor Representation

	 3.18
	  	 Sufficiency of Assets Exceptions

	 3.19
	  	 Undisclosed Liabilities

	 3.20(a)
	  	 Liens

	 3.20(b)(i)
	  	 Investment Assets by Portfolio

	 3.20(b)(ii)
	  	 Transferred Investment Assets General Account

	 3.21
	  	 Product Administration and Compliance Exceptions

	 3.21(g)
	  	 Guaranteed Investment Contracts Scheduled Payments

	 3.22(a)(i)
	  	 Forms of Producer Agreements

	 3.22(a)(ii)
	  	 Producer Agreements Forms Exceptions

	 3.22(b)
	  	 Exceptions to Producer Representations

	 3.22(c)
	  	 Producer Licensing Exceptions

	 3.24
	  	 Actuarial Reports

	 3.25
	  	 Reinsurance Agreements

	 3.26(a)
	  	 Policy Forms Compliance

	 3.26(b)
	  	 Exceptions to Policy Forms

	 3.27
	  	 Company Separate Account Exceptions

	 3.28(a)
	  	 Broker-Dealer Business

	 3.29(a)
	  	 Advisory Entity Representations

	 3.29(b)
	  	 Investment Advisory Contracts

	 4.4
	  	 Buyer Government Approvals

	 4.6
	  	 Buyer Actions

	 4.8
	  	 Buyer Absence of Change

	 5.1
	  	 Exceptions to Conduct of Business Covenant

	 5.1(u)
	  	 Certain Prohibited Actions

	 5.2
	  	 Non-Competition Exceptions

	 5.5(j)(3)
	  	 Retention Awards

	 5.9(a)
	  	 Communications Protocols

	 5.16
	  	 Trademarks and Tradenames

	 5.17(a)(i)
	  	 Terminated Intercompany Agreements

	 5.17(a)(ii)
	  	 Continuing Intercompany Agreements

	 5.17(c)(i)
	  	 Waiver Exceptions

	 5.17(c)(ii)
	  	 Corporate Insurance Programs

	 5.18(e)
	  	 Summary of Alternatives for Separate Account R

  

 -viii- 

			
	 5.19(p)(i)
	  	 Section 338(h)(10) Elections

	 5.19(p)(ii)
	  	 Section 338(g) Elections

	 5.22(a)(i)
	  	 LINA Investments Separate Accounts

	 5.22(a)(ii)
	  	 LINA Investments in Mutual Funds

	 5.24
	  	 Mutual Fund Distributions

	 6.1(b)
	  	 Governmental Approvals Required for Closing

	 6.1(c)
	  	 Novation Approvals Required for Closing

	 6.1(d)
	  	 Other Third Party Approvals

	 6.2(j)
	  	 Non-Governmental Approvals

	 7.5(e)
	  	 Approved Counsel for Defense of Certain Matters

	 7.5(f)
	  	 Arbitration Provisions

  

 -ix- 

 STOCK PURCHASE AND ASSET TRANSFER AGREEMENT, dated as of November 17, 2003 (together with the
Schedules hereto, the “Agreement”), by and among CIGNA Holdings, Inc., a Delaware corporation (“CIGNA Holdings”), Connecticut General Corporation, a Connecticut corporation and a wholly owned subsidiary of CIGNA Holdings
(“Connecticut General”), Connecticut General Life Insurance Company, a specially-chartered Connecticut corporation and a wholly owned subsidiary of Connecticut General (“CGLIC”) and CIGNA Corporation, a Delaware corporation
(“CIGNA” and, together with Connecticut General, CIGNA Holdings and CGLIC, “Sellers”) and Prudential Financial, Inc., a New Jersey corporation (“Buyer”). 
  
 W I T N E S S E T H 
  
 WHEREAS, Sellers and certain of their Affiliates, including the Acquired
Companies (as defined below), conduct the Business (as defined below); and 
  
 WHEREAS, Sellers and certain of their Affiliates (other than the Acquired Companies) intend to convey the Transferred Assets (as defined below) and Assumed Liabilities (as defined below) used or held by them in
connection with the Business to CIGNA Life Insurance Company, a Connecticut life insurance company (“CIGNA Life”); and 
  
 WHEREAS, Sellers desire to sell, and Buyer desires to purchase, all of the issued and outstanding shares of capital stock of CIGNA Life and the other
Acquired Companies owned directly or indirectly by Sellers, in order to convey to Buyer direct or indirect ownership of each of the Acquired Companies which conduct the Business; and 
  
 WHEREAS, the Boards of Directors of each Seller and of Buyer have approved this Agreement and the transactions contemplated
hereby, and has determined that this Agreement and such transactions are in the best interests of their respective stockholders. 
  
 NOW, THEREFORE, in consideration of the foregoing premises and the mutual promises and covenants set forth herein, and in reliance upon the
representations, warranties, conditions and covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, do hereby agree as
follows: 
  
 ARTICLE I 
 INTERPRETATION 
  
 Section 1.1 Definitions. 
  
 For purposes of this Agreement, the following terms shall have the following meanings: 

 “Acquired Companies” means the operating companies listed in Schedule 1.1(a).

  
 “Acquired Companies Balance Sheet” means the
unaudited consolidated GAAP balance sheets and income statements of the Acquired Companies (other than CIGNA Life) as of and for the twelve months ending December 31, 2002 and the six months ending June 30, 2003 attached hereto as Schedule 1.1(b).

  
 “Acquired Companies Liabilities” means the
following Liabilities of the Acquired Companies (other than CIGNA Life): (i) all Liabilities to the extent recorded on the Acquired Companies Balance Sheet, (ii) all Liabilities set forth on Schedule 1.1(c) and (iii) all Liabilities incurred or
accrued in the ordinary course since June 30, 2003 to the extent relating to the Business that would be reflected on a balance sheet prepared as of the Closing Date in a manner consistent with the preparation of the Acquired Companies Balance Sheet.

  
 “Acquired Stock” means all of the issued and
outstanding shares of stock of CIGNA Life, Global Portfolio Strategies, Inc., CIGNA Financial Services, Inc. and CIGNA Bank. 
  
 “Action” means any action, suit, litigation, investigation or proceeding. 
  
 “Adjustment Amount” shall have the meaning set forth in Section 2.11(d)(ii). 
  
 “Administrative Services Agreement” means the Administrative
Services Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit A. 
  
 “Advisory Client” means any Person for which an Advisory Entity provides investment management, investment advisory or subadvisory
services. 
  
 “Advisory Entities” shall have the
meaning set forth in Section 3.29(a). 
  
 “Affected
Employees” shall have the meaning set forth in Section 5.5(b). 
  
 “Affiliate” of any Person means another Person that directly or indirectly controls, is controlled by, or is under common control with, such first Person, where “control” means the possession, directly or
indirectly, of the power to direct or cause the direction of the management policies of a Person, whether through the ownership of voting securities, by contract, as trustee or executor, or otherwise. 
  
 “Affiliate Agreements” shall have the meaning set forth in
Section 3.15(b). 
  

 -2- 

 “Affiliate Owned Intellectual Property” means the Intellectual Property owned by Sellers
or Affiliates of Sellers (other than the Acquired Companies) primarily used in the conduct of the Business. 
  
 “Affiliate Owned IT Hardware” means the IT Hardware owned by Sellers or Affiliates of Sellers (other than the Acquired Companies)
primarily used in the conduct of the Business. 
  
 “Agreement” shall have the meaning set forth in the preamble. 
  
 “Allocable Amount” shall have the meaning set forth in Section 2.8(a). 
  
 “Amending Party” shall have the meaning set forth in Section 5.19(n). 
  
 “Ancillary Agreements” means the Administrative Services Agreement, the Assignment and Assumption
Agreement, the Bank Merger Agreement, the Bill of Sale, the Ceded Business Trust Agreement, the CGLIC Separate Account Management Agreements, the CGLIC Guaranteed Cost Management Agreement, CIGNA Life Guaranteed Cost Management Agreement, the
Coinsurance Agreement, the Excluded Business Administrative Services Agreement, the Excluded Business Coinsurance Agreement, the Facilities Sharing Agreement Term Sheet, the Guaranteed Cost Administrative Services Agreement, the Guaranteed Cost
Coinsurance Agreement, Guaranteed Cost Business Trust Agreement, the Investment Subadvisory Agreement, the LINA Administrative Services Agreement, the LINA Modco Agreement, the LINA Separate Account Management Agreement, the Master Assignment of
Derivatives Agreement, the Master Assignment of Securities Agreement, the Participation Agreement, the Real Estate Separate Account Administrative Services Agreement, the Real Estate Separate Account Coinsurance Agreement, the Registered Products
Administrative Services Agreement, the Registered Products Modified Coinsurance Agreement, the Substitution and Indemnification Agreement, the TimesSquare Letter Agreement, Transitional Subadvisory Agreement, Transitional Subadvisory Agreement II,
Transitional Subadvisory Agreement (Prudential Bank), Transitional Subadvisory Agreement (Trust), the Trademark/Trade Name Licenses Agreement and the Transition Services Agreement and any other agreement that specifies that it is to be an Ancillary
Agreement. 
  
 “Antitrust Division” means the
antitrust division of the United States Department of Justice. 
  
 “Applicable Law” means all laws, common laws, rules, regulations, codes, statutes, judgments, injunctions, orders, decrees, policies and other requirements of all Governmental Entities applicable to the Person, place and
situation in question. 
  
 “Applicable
Percentage” shall mean, with respect to any Eligible Liability, 20% of any Eligible Liability Identified in the first two years after Closing, 40% of any 
  

 -3- 

 Eligible Liability Identified after the second anniversary of the Closing but on or prior to the third anniversary of the
Closing, 50% of any Eligible Liability Identified after the third anniversary of the Closing but on or prior to the fourth anniversary of the Closing and 100% of any Eligible Liability Identified after the fourth anniversary of the Closing.

  
 “Asserted Liability” shall have the meaning
set forth in Section 7.5(a). 
  
 “Assignment and
Assumption Agreement” means the Assignment and Assumption Agreement among Sellers, Buyer and CIGNA Life substantially in the form attached hereto as Exhibit B. 
  
 “Assigned and Assumed Contracts” means the Contracts described on Schedule A to the Assignment and
Assumption Agreement and any Contracts added to such Schedule pursuant to Section 5.28. 
  
 “Assumed Liabilities” means the following Liabilities of Sellers and their Affiliates: (i) all Insurance-Related Liabilities relating to the Business of the type reflected on the Final Statement of
Net Settlement; (ii) all Non-Insurance-Related Liabilities relating to the Business to the extent recorded on the Final Statement of Net Settlement; (iii) all Liabilities constituting Reinsured Liabilities; (iv) the Assumed Portion of the Eligible
Liabilities; and (v) (a) all Liabilities arising in connection with or out of the Actions, written claims or written demands set forth on Schedule 2.2, (b) all Liabilities arising out of the ownership, operation or management of Transferred
Investment Assets to the extent such Transferred Investment Assets are allocated to the portfolios of the Business set forth on Schedule 1.1(l) (“Experience Rated Assets”), except to the extent any such Liabilities would not, consistent
with the Subject Contracts or past practice of the Business, be borne by the holders or beneficiaries of the Subject Contracts and (c) all Liabilities arising in connection with or out of Transferred Investment Assets that are not Experience Rated
Assets, except to the extent any such Liabilities (w) relate to facts, circumstances or events occurring or existing prior to the Closing which are actually known by any of the Persons listed on Schedule 1.1(m) as of the Closing, (x) relate to acts
or omissions before the Closing by Sellers or any of their Affiliates or any of their employees or authorized representatives constituting a fiduciary duty breach, malfeasance, tortious interference, improper lender behavior, negligence constituting
more than ordinary negligence or similar malfeasance, (y) relate to Transferred Investment Assets that are real property or to partnerships or limited liability entities whose sole property is real property as a result of the ownership, operation or
management of such real property or interest in real property prior to the Closing, except for Liabilities assumed by Buyer, its Affiliates or CIGNA Life pursuant to assignment or conveyance instruments relating to the Transferred Investment Assets
or (z) relate to Actions, written claims or written demands made, filed or asserted prior to the Closing but not set forth on Schedule 2.2. 
  
 “Assumed Portion of the Eligible Liabilities” means an amount equal to the Applicable Percentage applicable to any Eligible Liability
multiplied by the amount 
  

 -4- 

 of such Eligible Liability; provided, that in no event shall the aggregate Assumed Portion of the Eligible
Liabilities arising out of all Specified Common Interest Matters Identified on or prior to the fourth anniversary of the Closing exceed $100 million, and provided, further, that in no event shall the aggregate Assumed Portion of the
Eligible Liabilities arising out of Eligible Liabilities Identified on or prior to the fourth anniversary of the Closing exceed $200 million. 
  
 “AVR” means asset valuation reserves required to be maintained by CGLIC or CIGNA Life, as applicable, determined in accordance with
applicable Connecticut insurance laws and regulations, consistently applied. 
  
 “Bank Merger” shall have the meaning set forth in Section 2.5. 
  
 “Bank Merger Agreement” means an agreement substantially in the form of Exhibit C. 
  
 “Bill of Sale” means an agreement substantially in the form
of Exhibit D. 
  
 “Books and Records” means the
originals or copies of all customer lists, policies, policy information, policyholder information, insurance contract forms, administrative and pricing manuals, medical procedure code lists, claim records, sales records, underwriting records,
financial records, corporate and accounting and other records (including the books of account, minute books, stock record books and other records), compliance records prepared for or filed with regulators of the Business, Tax records and any other
agreements, instruments, information, data, files or records, each in the possession or control of Sellers or any of their Affiliates and related to the Business, the Acquired Companies, the Transferred Assets, the Transferred Investment Assets, the
Assigned and Assumed Contracts, the Assumed Liabilities or the Subject Contracts, whether or not stored in hardcopy form or on magnetic or optical media (to the extent not subject to licensing restrictions), but excluding (i) any such lists,
information and records that are subject to the attorney-client and work product privileges or prohibited from being disclosed or transferred by Applicable Law or regulatory requirements and (ii) any such information that is part of any
consolidated, combined, unitary or similar Tax Return except to the extent solely related to the Business. 
  
 “Broker-Dealer Subsidiary” shall have the meaning set forth in Section 3.28(a). 
  
 “Business” has the meaning set forth on Schedule 1.1(d)
hereto. 
  
 “Business Coinsurance Agreements”
means the Coinsurance Agreement, the LINA Modco Agreement, the Real Estate Separate Account Coinsurance Agreement, the Registered Products Modified Coinsurance Agreement and the Guaranteed Cost Coinsurance Agreement. 
  

 -5- 

 “Business Day” means a Monday, Tuesday, Wednesday, Thursday or Friday on which banking
institutions in the State of Connecticut or the State of New York are not authorized or obligated by Applicable Law to close. 
  
 “Business Employees” shall have the meaning set forth in Section 5.5(a). 
  
 “Business Financial Statements” shall have the meaning set forth in Section 3.6(a). 
  
 “Buyer” shall have the meaning set forth in the preamble.

  
 “Buyer Financial Statements” shall have the
meaning set forth in Section 4.5. 
  
 “Buyer
Indemnitees” shall have the meaning set forth in Section 7.3(a). 
  
 “Buyer MAE” any event or development that has had a material adverse effect on the business reputation of Buyer or the “Prudential” brand in a manner that has materially and adversely
affected the willingness of a material portion of clients to become and remain customers of Buyer and its subsidiaries; provided, however, that the following shall be excluded from the definition of “Buyer MAE” and from any
determination as to whether such Buyer MAE has occurred or may occur: (i) the effects of changes that are generally applicable to (A) the insurance, investment management, securities and annuity industries (provided that such effect is not
disproportionately more adverse with respect to Buyer or its subsidiaries, taken as a whole, than the effect on comparable businesses generally, except that, if such effect is disproportionately more adverse with respect to Buyer and its
subsidiaries, taken as a whole, any assessment of whether there is, or has been, a Buyer MAE shall only take into account the incremental impact of such adverse effect on Buyer and its subsidiaries, taken as a whole, over the impact of such effect
on the insurance, investment management, securities and annuity business generally) or (B) the financial, banking, currency or capital markets (either in the United States or any international market); (ii) the effects of any facts or circumstances
relating to the Business, including the effects of any facts or circumstances arising out of or relating to market conduct or other business practices of the Business; (iii) the effects of any breach of any provision of this Agreement by Sellers;
(iv) the execution of this Agreement or the Ancillary Agreements; and (v) the announcement of this Agreement, the Ancillary Agreements, or the transactions contemplated hereby or thereby, other than matters relating to (A) the Business which are
covered by clause (ii) above and (B) the Sellers which are covered by clause (iii) above. 
  
 “Buyer Material Adverse Effect” means an effect which materially impairs or delays Buyer’s ability to perform its obligations under this Agreement and the Ancillary Agreements, taken as a whole.

  

 -6- 

 “Buyer Negative Condition” means a material adverse effect on the business, financial
condition, operations or results of operations of Buyer and its Subsidiaries, taken as a whole. 
  
 “Buyer Practice” means any Relevant Practice which is substantially the same as a practice, method or policy employed by Buyer or its
Affiliates at the Closing. 
  
 “Buyer’s Severance
Plans” mean the Prudential Severance Plan, the Prudential Severance Plan for Executives, and the Prudential Severance Plan for Senior Executives. 
  
 “Capital” means the capital stock component of statutory surplus, determined in accordance with applicable Connecticut insurance laws and
regulations, consistently applied. 
  
 “Capitalization
Amount” shall have the meaning set forth in Section 2.1(b). 
  
 “Ceded Business Trust” shall have the meaning set forth in the Coinsurance Agreement. 
  
 “Ceded Business Trust Agreement” shall have the meaning set forth in the Coinsurance Agreement. 
  
 “CFS” shall have the meaning set forth in Section 3.28(a).

  
 “CGLIC” shall have the meaning set forth in
the preamble. 
  
 “CGLIC Guaranteed Cost Management
Agreement” means the investment management agreement among CGLIC, CIGNA Life and             , as trustee, substantially in the form of Exhibit O-3. 
  
 “CGLIC Separate Account Management Agreements” means the
Investment Management Agreement (Non Manager of Managers Program) between CGLIC and PIM substantially in the form attached hereto as Exhibit Q, and the Investment Management Agreement (Manager of Managers Program) between CGLIC and PRICOA
substantially in the form attached hereto as Exhibit R. 
  
 “CIGNA” means CIGNA Corporation, a Delaware corporation and the ultimate parent entity of Sellers. 
  
 “CIGNA Above-Market Options” shall have the meaning set forth in Section 5.5(j)(1)(b). 
  
 “CIGNA Above-Market Remaining Value” shall have the meaning
set forth in Section 5.5(j)(1)(b). 
  
  

 -7- 

 “CIGNA Above-Market Replacement Value” shall have the meaning set forth in Section
5.5(j)(1)(b). 
  
 “CIGNA Bank” means CIGNA Bank
& Trust Company, FSB, a wholly owned subsidiary of Connecticut General. 
  
 “CIGNA Below-Market Options” shall have the meaning set forth in Section 5.5(j)(1)(a). 
  
 “CIGNA Below-Market Replacement Value” shall have the meaning set forth in Section 5.5(j)(1)(a). 
  
 “CIGNA Holdings” shall have the meaning set forth in the
preamble. 
  
 “CIGNA Intellectual Property Holding
Company” means CIGNA Intellectual Property, Inc. 
  
 “CIGNA Intrinsic Value” shall have the meaning set forth in Section 5.5(j)(1)(b). 
  
 “CIGNA Life” shall have the meaning set forth in the Recitals. 
  
 “CIGNA Life Guaranteed Cost Management Agreement” means the investment management agreement among CGLIC,
CIGNA Life and             , as trustee, substantially in the form of Exhibit O-5. 
  
 “CIGNA LTIP” shall have the meaning set forth in Section 5.5(j)(1)(a). 
  
 “CIGNA Restricted Stock” shall have the meaning set forth in Section 5.5(j)(1)(c). 
  
 “CIGNA Stock Plan” shall have the meaning set forth in
Section 5.5(j)(1)(a). 
  
 “CIGNA Stock Plans”
shall have the meaning set forth in Section 5.5(j)(1)(a). 
  
 “CII” means CIGNA Investment, Inc. 
  
 “Claims Notice” shall have the meaning set forth in Section 7.4. 
  
 “Closing” shall have the meaning set forth in Section 2.7(a). 
  
 “Closing Date” shall have the meaning set forth in Section 2.7(a). 
  

 -8- 

 “Closing Statement of Net Settlement” shall have the meaning set forth in Section
2.9(c). 
  
 “Code” means the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations promulgated thereunder. 
  
 “Coinsurance Agreement” means the Coinsurance and Assumption Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit E. 
  
 “Commissions” means any and all commissions, expense
allowances, and other fees and compensation payable to producers of the Business. 
  
 “Company Separate Account” shall have the meaning set forth in Section 3.27. 
  
 “Competing Business” shall have the meaning set forth in Section 5.2(a). 
  
 “Computer Software” means all computer software and databases (including without limitation source code,
object code, and all related documentation). 
  
 “Confidentiality Agreement” shall mean the Confidentiality Agreement, dated as of June 20, 2003, between CIGNA and Buyer. 
  
 “Connecticut General” shall have the meaning set forth in the preamble. 
  
 “Connecticut SAP” shall have the meaning set forth in Section 3.6. 
  
 “Consulting Agreement” shall have the meaning set forth in
Section 3.10(a). 
  
 “Continued Practice” means
any Relevant Practice which is continued in substantially the same manner by Buyer or any of its Affiliates, including the Acquired Companies, for at least eighteen (18) months following the Closing, other than conduct that is inconsistent with
established policies of Buyer or its Affiliates. 
  
 “Contract” means any loan or credit agreement, note, bond, mortgage, indenture, Lease, Lien or other agreement, legally binding obligation or instrument; provided, however, for purposes of this definition in
no event shall a “Subject Contract” constitute a Contract. 
  
 “Controlling Party” shall have the meaning set forth in Section 5.19(k)(ii). 
  
 “Data Input Inaccuracy” shall have the meaning set forth in Section 2.11(d)(i). 
  

 -9- 

 “Deductible” shall have the meaning set forth in Section 7.3(c). 
  
 “Department of Labor” means the United States Department of
Labor. 
  
 “Derivative” means any rate swaps,
basis swaps, forward rate transactions, commodity swaps, commodity options, equity or equity index swaps, equity or equity index options, bond options, credit swaps, options or options on swaps or other credit derivatives, interest rate options,
foreign exchange transactions, cap transactions, floor transactions, collar transactions, forward transactions, currency swap transactions, cross currency rate swap transactions, currency options or any other similar transaction (including any
option with respect to any of these transactions) or any combination thereof, whether linked to one or more interest rates, foreign currencies, commodity prices, equity prices or other financial measures. 
  
 “Determined Practice” means any accounting, sales or other
business practice, method or policy which is determined by an Expert Panel to be a Relevant Practice which is consistent with the practices, methods or policies of roughly half, or more, of the participants in the relevant business segment (measured
by volume of business or otherwise), taking into account the product, the method of distribution and all other relevant criteria relating to the practice in question at the time in question; provided, however, that (i) in making
such determination, the members of the Expert Panel shall be entitled to rely upon their own experience, knowledge and understanding of the industry rather than only the evidence presented by the parties, it being agreed and acknowledged that such
determination is not intended to be a strict formulaic calculation, calculation based on specific percentages or other mathematical exercise; (ii) the Expert Panel shall have no power to award any relief other than determining whether a practice (or
portion of a practice) is a Determined Practice; and (iii) the Expert Panel shall not make any determination contrary to the explicit terms hereof or of the Purchase Agreement. 
  
 “Eligible Liability” means any Liability arising out of any Industry Practice or Specified Common Interest
Matters to the extent related to the conduct of the Business prior to the Closing. Each Eligible Liability shall be treated in the same manner as a claim for indemnification under Section 7.5 of the Agreement and, subject to Section 7.5(e), Buyer
shall be treated for procedural purposes only as the Indemnifying Party with regard to such matter. For the avoidance of doubt, in no event shall Section 7.3(c) be deemed to apply to any such indemnification. 
  
 “Employment Agreement” shall have the meaning set forth in
Section 3.10(a). 
  
 “Environmental Law” means
any law, regulation, order, decree or agency requirement relating to pollution, contamination, hazardous wastes, hazardous substances, noise, odor, lead, polychlorinated biphenyls, asbestos, black mold or the protection of the environment or to
occupational, health and safety. 
  

 -10- 

 “Equity Interest” means any capital stock, partner interests, member interests,
beneficial interests or any other equity or ownership interests, any instruments convertible or exchangeable for any such interests, or any other rights, warrants, options, agreements, commitments, arrangements or understandings of any kind,
contingently or otherwise, to acquire or dispose of any of the foregoing. 
  
 “ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and all rules and regulations of the Department of Labor thereunder. 
  
 “ERISA Affiliate” shall have the meaning set forth in
Section 3.10(a). 
  
 “Estimated Statement of Net
Settlement” shall have the meaning set forth in Section 2.9(b). 
  
 “Exchange Act” means the Securities Exchange Act of 1934, as amended, and all rules and regulations of the SEC thereunder. 
  
 “Excluded Assets” means those assets listed on Schedule 1.1(e), the Excluded IP Assets, the Contracts which
are not Assigned and Assumed Contracts and the Investment Assets other than the Transferred Investment Assets. 
  
 “Excluded Business” means the business of CIGNA Life which is to be coinsured and administered by CGLIC pursuant to the Excluded Business
Coinsurance Agreement and Excluded Business Administrative Services Agreement, respectively. 
  
 “Excluded Business Administrative Services Agreement” means the Administrative Services Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit F. 
  
 “Excluded Business Coinsurance Agreement” means the
Indemnity Coinsurance Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit G, pursuant to which all liabilities of CIGNA Life unrelated to the Business will be coinsured by CGLIC. 
  
 “Excluded Employees” shall have the meaning set forth in
Section 5.3(b). 
  
 “Excluded Investment Employees
List” shall have the meaning set forth in Section 5.5(d). 
  
 “Excluded IP Assets” means those assets listed on Schedule 3.12(a)(v). 
  
 “Excluded Liabilities” means (i) the Retained ECOs (as defined in the Business Coinsurance Agreements); (ii) all Liabilities of Sellers,
the Acquired Companies or any other Affiliate of Sellers other than the Assumed Liabilities and the Acquired Companies Liabilities; and (iii) the Liabilities listed on Schedule 1.1(f). 
  

 -11- 

 “Excluded Retirement Services Employees List” shall have the meaning set forth in
Section 5.5(d). 
  
 “Experience Rated Assets”
shall have the meaning set forth in the definition of Assumed Liabilities. 
  
 “Expert Panel” means a panel selected in accordance with the procedures set forth on Schedule 1.1(g). 
  
 “Facilities Sharing Agreements” shall have the meaning set forth in Section 5.18(b). 
  
 “Facilities Sharing Agreement Term Sheet” means the term
sheet attached hereto as Exhibit H. 
  
 “Field
Locations shall have the meaning set forth in Section 3.14. 
  
 “Final Settlement Date” shall have the meaning set forth in Annex 2 to Schedule 1.1(h). 
  
 “Final Statement of Net Settlement” shall have the meaning set forth in Sections 2.9(d) and 2.10(a). 
  
 “FRB” shall have the meaning set forth in Section 3.30(a).

  
 “GAAP” means generally accepted accounting
principles in effect in the United States of America at the time of determination, consistently applied. 
  
 “General Account” means the assets of an insurance company, other than Separate Account Assets and associated Reserves held in the
Separate Accounts (in each case whether or not for variable life insurance). 
  
 “General Account Policy Reserves” shall have the meaning set forth in the Coinsurance Agreement. 
  
 “General Account Reinsurance Premium” means General Account Reinsurance Premium Assets with an aggregate statutory carrying value
determined in accordance with the Statement of Net Settlement Methods equal to one-hundred percent (100%) of the amount set forth on the line item “Net Settlement Liability due to CIGNA Life” reflected on the applicable Statement of Net
Settlement. 
  
 “General Account Reinsurance Premium
Assets” means investment portfolios held in CGLIC’s General Account and selected in accordance with the Investment Asset Identification Protocol. 
  

 -12- 

 “General Account Subject Contracts” means the “General Account Subject
Contracts,” as such term is defined in the Coinsurance Agreement. 
  
 “Governing Advisory Authorities” shall have the meaning set forth in Section 3.29(a)(ii)(A). 
  
 “Governmental Approvals” shall have the meaning set forth in Section 6.1(b). 
  
 “Governmental Entity” shall have the meaning set forth in
Section 3.4. 
  
 “GPS” shall have the meaning set
forth in Section 3.29(a). 
  
 “Guaranteed Cost
Administrative Services Agreement” means the Guaranteed Cost Business Administrative Services Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit O-1. 
  
 “Guaranteed Cost Business Trust” shall have the meaning set
forth in the Guaranteed Cost Coinsurance Agreement. 
  
 “Guaranteed Cost Business Trust Agreement “ means the Trust Agreement between CGLIC, CIGNA Life and             , as trustee, substantially in the form
attached hereto as Exhibit O-4. 
  
 “Guaranteed Cost
Coinsurance Agreement” means the Guaranteed Cost Coinsurance and Assumption Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit O-2. 
  
 “Guaranteed Cost Reinsurance Premium” means General Account Reinsurance Premium Assets with an aggregate
statutory carrying value determined in accordance with the Statement of Net Settlement Methods equal to one-hundred percent (100%) of the amount set forth on the line item “Guaranteed Cost Net Settlement Liability due to Modco Account”
reflected on the applicable Statement of Net Settlement. 
  
 “HSR Act” shall have the meaning set forth in Section 3.4. 
  
 “Identified”, when used with respect to any Eligible Liability, means that any third party, including any Governmental Entity, has either (i) communicated in writing an intention to seek any recovery
for any Industry Practice or Specified Common Interest Matter from any of Sellers or their Affiliates, CIGNA Life or Buyer or its Affiliates or (ii) instituted, or communicated in writing an intention to institute, any Action against Sellers or
their Affiliates, CIGNA Life or Buyer or its Affiliates for any Industry Practice or Specified Common Interest Matter. Each of Seller and Buyer agrees to notify the other promptly in the event any such written communications are received by it or
its Affiliates. 
  

 -13- 

 “IMR” means interest maintenance reserves required to be maintained by CGLIC or CIGNA
Life, as applicable, determined in accordance with applicable Connecticut insurance laws and regulations, consistently applied. 
  
 “IMR Adjustment” means an amount equal to the excess, if any, of (i) $90,461,830 over (ii) the actual IMR for the Business as of June 30,
2003 as recalculated by Sellers in accordance with Connecticut SAP and verified by CIGNA’s independent, external auditors after eliminating any changes between (i) and (ii) resulting from changes in the IMR of Separate Accounts of the Business,
other than the Business’ guaranteed investment contracts Separate Accounts. 
  
 “Inactive Employees” shall have the meaning set forth in Section 5.5(b). 
  
 “Included Agreement” means any Ancillary Agreement that is not a Transfer Agreement. 
  
 “Indemnified Party” shall have the meaning set forth in
Section 7.4. 
  
 “Indemnifying Party” shall have
the meaning set forth in Section 7.4. 
  
 “Industry
Practice” means any accounting, sales or other business practice, method or policy which is a Buyer Practice, a Continued Practice or a Determined Practice. 
  
 “Insurance-Related Liabilities” means those Liabilities of a type or kind identified as
“Insurance-Related Liabilities” on the Final Statement of Net Settlement which correlate to the line items for “Insurance-Related Liabilities” on the Pro-Forma Statement of Net Settlement. 
  
 “Intellectual Property” means, collectively, all United
States and foreign registered, unregistered and pending (i) Trademarks, (ii) Computer Software, (iii) copyrights (including those in Computer Software, and all registrations and applications therefor), (iv) Patents, (v) Trade Secrets, (vi) all moral
rights, rights of publicity, rights of privacy, and (vii) all other intellectual property rights and rights of a similar nature. 
  
 “Intellectual Property Contracts” means all license, assignment, distribution, Computer Software (including maintenance), trademark
consent, trademark coexistence, non-assertion or other Contracts relating to Intellectual Property to which (i) the Acquired Companies are a party (or under which they otherwise derive or grant Intellectual Property rights), or (ii) Sellers or
Affiliates of Sellers (other than the Acquired Companies) are a party (or under which they otherwise derive or grant Intellectual Property rights) primarily used in the Business. 
  

 -14- 

 “Intellectual Property Office” shall have the meaning set forth in Section 3.12(a).

  
 “Intercompany Agreements” shall have the
meaning set forth in Section 3.15(a). 
  
 “Investment
Advisers Act” means the Investment Advisers Act of 1940 and all rules and regulations of the SEC thereunder. 
  
 “Investment Advisory Contract” means any Contract pursuant to which an Advisory Entity provides investment management, investment
advisory or subadvisory services. 
  
 “Investment Asset
Identification Protocol” means the guidelines attached hereto as Schedule 1.1(h) for identifying Investment Assets to be transferred (or maintained in Modco Accounts) pursuant to Section 2.1(b), 2.3 or 2.11. 
  
 “Investment Assets” means any interest in bonds, notes,
debentures, mortgage loans, real estate, collateral loans and all other instruments of indebtedness, stocks, partnership or joint venture interests and all other equity interests, certificates issued by or interests in trusts, Derivatives or other
assets acquired for investment purposes. 
  
 “Investment
Company Act” means the Investment Company Act of 1940 and all rules and regulations of the SEC thereunder. 
  
 “Investment Employees” shall have the meaning set forth in Section 5.5(a). 
  
 “Investment Employees List” shall have the meaning set forth in Section 5.5(a). 
  
 “Investment Subadvisory Agreement” means the Investment
Subadvisory Agreement between PIM and TimesSquare substantially in the form attached hereto as Exhibit X. 
  
 “IT Assets” means computers, Computer Software, firmware, middleware, servers, workstations, routers, hubs, switches, data communications
lines, and all other information technology equipment, and all associated documentation. 
  
 “IT Hardware” means IT Assets which are not Computer Software. 
  
 “IT Hardware Lease” means a Contract pursuant to which (i) the Acquired Companies are a party (or under which they otherwise derive
rights relating to IT Hardware) and use, lease or otherwise have access to IT Hardware, or (ii) Sellers or Affiliates of Sellers (other than Acquired Companies) are a party (or under which they otherwise derive rights relating to IT Hardware) and
use, lease or otherwise have access to IT Hardware primarily used in the conduct of the Business. 
  

 -15- 

 “Knowledge” of a Person means: (a) in the case of Sellers, or any of them, the actual
knowledge of any Person listed on Schedule 1.1(i), subject to the subject matter limitations set forth on such schedule, or (b) in the case of Buyer, the actual knowledge of any Person listed on Schedule 1.1(j), subject to the subject matter
limitations set forth on such schedule. 
  
 “Leases” shall have the meaning set forth in Section 3.14. 
  
 “Liability” means, with respect to any Person, any liability or obligation of such Person of any kind, character or description, whether known or unknown, absolute or contingent, accrued or unaccrued,
disputed or undisputed, liquidated or unliquidated, secured or unsecured, joint or several, due or to become due, vested or unvested, executory, determined, determinable or otherwise. 
  
 “Lien” means any and all liens, charges, security interests, claims, judgments, mortgages, pledges, voting
trusts or agreements, obligations, understandings or arrangements restricting title or transfer of any nature whatsoever. 
  
 “LINA” means Life Insurance Company of North America, a Pennsylvania life insurance company. 
  
 “LINA Administrative Services Agreement” means the
Administrative Services Agreement between LINA and CIGNA Life substantially in the form attached hereto as Exhibit I. 
  
 “LINA Modco Account” shall mean the Modco Account as defined in the LINA Modco Agreement. 
  
 “LINA Modco Agreement” means the LINA Separate Account
Modified Coinsurance Agreement between LINA and CIGNA Life substantially in the form attached hereto as Exhibit J. 
  
 “LINA Modco Reserves” shall mean the Separate Account Policy Reserves, as defined in the LINA Modco Agreement. 
  
 “LINA Separate Account Management Agreement” means the LINA
Separate Account Management Agreement between LINA and PIM substantially in the form attached hereto as Exhibit Y. 
  
 “Loss” shall have the meaning set forth in Section 7.3(a). 
  
 “Master Assignment of Derivatives Agreement” means an agreement substantially in the form of Exhibit L.

  

 -16- 

 “Master Assignment of Securities Agreement” means an agreement substantially in the form
of Exhibit M. 
  
 “Material Business Contracts”
shall have the meaning set forth in Section 3.13. 
  
 “Material Negative Condition” shall have the meaning set forth in Section 5.6. 
  
 “Modco Accounts” means the “Modco Accounts,” as such term is defined in the Coinsurance Agreement, the Guaranteed Cost
Coinsurance Agreement, the LINA Modco Agreement and the Excluded Business Coinsurance Agreement. 
  
 “Moody’s” means Moody’s Investors Service. 
  
 “NASD” means NASD, Inc. 
  
 “Net Data Adjustment Amount” shall have the meaning set forth in Section 2.11(d)(iii). 
  
 “Net Reserve Release Amount” means the net amount in
Insurance-Related Liabilities due to the STAT items identified on Attachment 1 to Schedule 3.9 (aggregating $53.133 million on a pre-tax basis) or similar special adjustments which are recorded in the SAP statements of CGLIC or CIGNA Life after June
30, 2003 through the Closing Date or the effect of which is reflected on the Final Statement of Net Settlement. 
  
 “Non-Amending Party” shall have the meaning set forth in Section 5.19(n). 
  
 “Non-Insurance-Related Liabilities” means those Liabilities of a type or kind identified as
“Non-Insurance-Related Liabilities” on the Final Statement of Net Settlement which correlate to the line items for Non-Insurance-Related Liabilities on the Pro-Forma Statement of Net Settlement. 
  
 “Notice of Demand” shall have the meaning set forth in
Section 2.11(d)(viii). 
  
 “Novation Approvals”
means the approval of the relevant state insurance departments for the novation of the Subject Contracts by CIGNA Life. 
  
 “OFAC” shall have the meaning set forth in Section 3.32. 
  
 “Offsetting Data Input Inaccuracies Amount” shall have the meaning set forth in Section 2.11(d)(iv).

  

 -17- 

 “Omnibus Plan” shall have the meaning set forth in Section 5.5(j)(1). 
  
 “Optional Retirement Services Employees” shall have the
meaning set forth in Section 5.5(e). 
  
 “Order”
means any award, decision, injunction, judgment, charge, decree, settlement, order, subpoena or verdict (whether temporary, preliminary or permanent) entered, issued, made or rendered by any Governmental Entity. 
  
 “Organizational Documents” shall have the meaning set forth
in Section 3.1 
  
 “OTS” shall have the meaning
set forth in Section 3.7(c). 
  
 “Owned Intellectual
Property” means all Intellectual Property owned by the Acquired Companies. 
  
 “Owned IT Hardware” means all IT Hardware owned by the Acquired Companies. 
  
 “Participate Fully” shall have the meaning set forth in Section 7.5(c). 
  
 “Participating Party” shall have the meaning set forth in Section 7.5(c). 
  
 “Participation Agreement” means the Master Loan Sale,
Participation and Servicing Agreement substantially in the form attached hereto as Exhibit N. 
  
 “Patents” means all utility and design patents, registered designs and invention disclosures (including, without limitation, those relating to Computer Software), and all grants, registrations and
applications therefor. 
  
 “PBGC” shall have the
meaning set forth in Section 3.10(c). 
  
 “Permitted
Factors” shall have the meaning set forth in Section 2.9(d). 
  
 “Permitted Liens” means the following of the Business: (a) Liens for Taxes or assessments or charges or levies by Governmental Entities, including those arising by operation of law, which are not yet due or delinquent or
which are being contested in good faith and subject to the establishment of appropriate reserves therefor; (b) statutory deposits; (c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business and securing obligations that are not due or which are being contested in good faith and subject to the establishment of appropriate reserves therefor; (d) pledges and deposits made in the ordinary course
of business in compliance with workers’ compensation, unemployment insurance and other social security laws or regulations; and (e) zoning restrictions, easements, rights of way, restrictions on use of real property, other similar encumbrances

  

 -18- 

 and other Liens which, in the aggregate, are not substantial in amount and except in immaterial respects do not detract
from the value of the property as used by the Business subject thereto or interfere with the ordinary conduct of the Business as currently conducted. 
  
 “Person” means an individual, corporation, partnership, joint venture, association, limited liability company, trust, unincorporated
organization, Governmental Entity or other entity. 
  
 “PIM” means Prudential Investment Management, Inc. 
  
 “Plans” shall have the meaning set forth in Section 3.10(a). 
  
 “Positive Data Input Inaccuracies Amount” shall have the meaning set forth in Section 2.11(a)(v). 
  
 “Post-Closing Business Liabilities” mean all (i) Liabilities
to the extent arising out of the conduct of Business on or after the Closing, (ii) Liabilities assumed by Buyer or its Affiliates (including the Acquired Companies) to pay or perform obligations pursuant to any Ancillary Agreement and (iii)
Liabilities to the extent arising pursuant to the Assigned and Assumed Contracts and the Transferred Assets on or after the Closing. 
  
 “Post-Closing Period” shall have the meaning set forth in Section 5.19(b). 
  
 “Pre-Closing Period” shall have the meaning set forth in Section 5.19(a). 
  
 “Preliminary Remaining Gain” shall have the meaning set
forth in Annex 2 to Schedule 1.1(h). 
  
 “Preparer” shall have the meaning set forth in Section 5.19(c). 
  
 “PRICOA” means The Prudential Insurance Company of America, a wholly owned subsidiary of Buyer. 
  
 “Pro-Forma Statement of Net Settlement” shall have the meaning set forth in Section 2.9(a). 
  
 “Producer” shall have the meaning set forth in Section
3.22(a). 
  
 “Producer Agreements” shall have the
meaning set forth in Section 3.22(a). 
  
 “Prudential
Bank” means The Prudential Savings Bank, FSB. 
  
 “Prudential Options” shall have the meaning set forth in Section 5.5(j)(1)(a). 
  
  

 -19- 

 “Prudential Restricted Stock” shall have the meaning set forth in Section 5.5(j)(1)(c).

  
 “PTCE 84-14” shall have the meaning set forth
in Section 3.7(d). 
  
 “Purchase Price” shall
have the meaning set forth in Section 2.6. 
  
 “Ratings
Event” means a reduction in the financial strength rating of CGLIC to (i) BBB+ or below by Standard & Poor’s or (ii) Baa1 or below by Moody’s. 
  
 “Real Estate Separate Account Administrative Services Agreement” means the Real Estate Separate Account
Administrative Services Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit Z. 
  
 “Real Estate Separate Account Coinsurance Agreement” means the Real Estate Separate Account Coinsurance Agreement between CGLIC and CIGNA
Life substantially in the form attached hereto as Exhibit AA. 
  
 “Registered Products Administrative Services Agreement” means the Registered Products Administrative Services Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit P-1. 
  
 “Registered Products Modified Coinsurance Agreement” means
the Registered Products Modified Coinsurance Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit P-2. 
  
 “Regulatory Agreement” shall have the meaning set forth in Section 3.7(b). 
  
 “Reinsured Liabilities” shall mean all of the “Reinsured Liabilities,” as such term is defined in
each of the Business Coinsurance Agreements. 
  
 “Relevant
Practice” means any accounting, sales or other business practice, method or policy that is particularly applicable to the retirement services business, rather than a practice applicable to businesses generally. 
  
 “Remaining Gain Adjustment Amount” shall have the meaning
set forth in Annex 2 to Schedule 1.1(h). 
  
 “Reserve
Adjustment” means an amount equal to 0.65 times the greater of (A)(i) the Net Reserve Release Amount minus (ii) $53 million and (B) $0. 
  
 “Reserves” shall mean reserves, funds or provisions for losses, claims, premiums, policy benefits, costs and expenses in respect of (a)
insurance obligations (including life benefit reserves, life claim reserves, IMR, unearned premium reserves, premium deposit fund liabilities or otherwise) or (b) reinsurance collectibles. 
  
  

 -20- 

 “Restructuring” shall have the meaning set forth in Section 2.7(b). 
  
 “Retention Awards” shall have the meaning set forth in
Section 5.5(j)(3). 
  
 “Retirement Services
Employees” shall have the meaning set forth in Section 5.5(a). 
  
 “Retirement Services Employees List” shall have the meaning set forth in Section 5.5(a). 
  
 “Reviewer” shall have the meaning set forth in Section 5.19(c). 
  
 “SAP” means, with respect to any Person, the statutory accounting principles and practices prescribed or
permitted by the domiciliary state of such Person at the time of determination, consistently applied. 
  
 “SAP Disallowance” shall have the meaning set forth in Section 5.32. 
  
 “Schedules” means the disclosure schedules hereto prepared and delivered simultaneously with the execution
hereof. 
  
 “SEC” shall have meaning set forth in
Section 3.28(a). 
  
 “Section 338(h)(10)
Election” shall have the meaning set forth in Section 5.19(p). 
  
 “Securities Act” means the Securities Act of 1933, as amended. 
  
 “Seller Indemnitees” shall have the meaning set forth in Section 7.3(b). 
  
 “Seller-Licensed Intellectual Property” shall have the meaning set forth in Section 5.26(a). 
  
 “Seller Material Adverse Effect” means a material adverse
effect on the business, financial condition, operations or results of operations of the Business, the Acquired Companies, the Transferred Assets, the Transferred Investment Assets and the Subject Contracts, taken as a whole; provided,
however, that the following shall be excluded from the definition of “Seller Material Adverse Effect” and from any determination as to whether such Seller Material Adverse Effect has occurred or may occur: (i) the effects of changes
that are generally applicable to (A) the insurance or annuity industries (provided that such effect is not disproportionately more adverse with respect to the Business, taken as a whole, than the effect on comparable insurance and annuity businesses
generally, except that, if such effect is disproportionately more adverse with respect to the Business, any assessment of whether there is, or has been, a Seller Material Adverse Effect shall only take into account the incremental impact of such
adverse effect on the Business, taken as a whole, over the impact of such effect on 
  

 -21- 

 the insurance and annuity business generally) or (B) the financial, banking, currency or capital markets (either in the
United States or any international market); (ii) the effects of any facts or circumstances relating to Buyer or its existing or former Affiliates, including the effects of any facts or circumstances arising out of or relating to market conduct or
other business practices of the Buyer or its former or existing Affiliates; (iii) the effects of any breach of any provision of this Agreement by Buyer; (iv) the rating of any of CGLIC’s Affiliates other than CIGNA Life, provided that if CIGNA
Life’s Moody’s rating is “A3” or higher and its Standard & Poor’s financial strength rating is “A-” or higher than CIGNA Life’s rating, any change in CIGNA Life’s rating and the effects of such
ratings or change in ratings shall also be excluded pursuant to this clause (iv); (v) the execution of this Agreement or the Ancillary Agreements; (vi) the identity of the Buyer; (vii) the announcement of this Agreement, the Ancillary Agreements, or
the transactions contemplated hereby or thereby, other than matters relating to Buyer which are covered by clauses (ii) and (iii) above; (viii) if CGLIC’s Moody’s rating is at least “Baa1” and Standard & Poor’s financial
strength rating is at least “BBB+”, CGLIC’s rating, any change in CGLIC’s rating and the effects of such ratings or change in ratings shall also be excluded pursuant to this clause (viii); and (ix) the effects of any facts or
circumstances relating to the absence for CIGNA Life of either (A) an A.M. Best, Standard & Poor’s or Moody’s rating or (B) a rating by Standard & Poor’s, Moody’s or another rating agency which is separate from the rating
of CGLIC, provided, in the case of this clause (B), that CGLIC’s Moody’s rating is at least “Baa1” and Standard & Poor’s financial strength rating is at least “BBB+”. Notwithstanding anything to the contrary
set forth in the foregoing, in the event of the occurrence after the date of this Agreement of a Buyer MAE, it is understood and agreed that Buyer shall have the burden of proof in establishing that any such adverse effect did not result from and
was not caused by the matters covered by clauses (ii), (v), (vi) and (vii). 
  
 “Seller Permits” shall have the meaning set forth in Section 3.7(a). 
  
 “Sellers” shall have the meaning set forth in the preamble. 
  
 “Separate Account” means a separate account established and maintained pursuant to Section 38a-433 or
Section 38a-459 of the Connecticut General Statutes, including any such separate account to the extent guaranteed by CGLLC’s General Account. 
  
 “Separate Account Assets” means investment portfolios held in CGLIC’s Separate Accounts and identified in accordance with the
Investment Asset Identification Protocol. 
  
 “Separate
Account Subject Contracts” shall mean all of the “Separate Account Subject Contracts” as such term is defined in each of the Business Coinsurance Agreements. 
  

 -22- 

 “Services” shall have the meaning set forth in Section 1.2(b) of the Transition Services
Agreement 
  
 “60-Day Treasury Rate” means the
annual yield rate, on the date to which the 60-Day Treasury Rate relates, of actively traded U.S. Treasury securities having a remaining term to maturity of two months, as such rate is published under “Treasury Constant Maturities” in
Federal Reserve Statistical Release H.15(519). 
  
 “Specified Common Interest Matter” means those matters described in writing by CIGNA to Buyer prior to the date of this Agreement and as to which the parties have agreed they have a common interest. 
  
 “Specified Data Input Factors” shall have the meaning set
forth in Section 2.11(d)(vi). 
  
 “Specified Data Input
Factors Amount” shall have the meaning set forth in Section 2.11(d)(vii). 
  
 “Specified Judgment” shall have the meaning set forth in Section 2.9(d). 
  
 “SPU” shall have the meaning set forth in Section 5.5(j)(2). 
  
 “Standard & Poor’s” means Standard & Poor’s Ratings Services, Inc., a division of the
McGraw-Hill Companies, Inc. 
  
 “Statement of Net
Settlement” shall have the meaning set forth in Section 2.9(a). 
  
 “Statement of Net Settlement Methods” means the methodologies, procedures, judgments, assumptions and estimates described in Schedule 2.9(a)(iii). 
  
 “Statutory Financial Statements” shall have the meaning set
forth in Section 3.6(c). 
  
 “Straddle Period”
shall have the meaning set forth in Section 5.19(b). 
  
 “Subject Contracts” means the “Subject Contracts,” as such term is defined in the Business Coinsurance Agreements. 
  
 “Substitution and Indemnification Agreement” means the Substitution and Indemnification Agreement substantially in the form attached
hereto as Exhibit S. 
  
 “Summary Plan
Description” means, with respect to any Plan that is subject to the requirements of ERISA, any document or documents that satisfy the requirements of Department of Labor Regulations Section 2520.104b-2. 
  

 -23- 

 “Surplus” means total statutory surplus less Capital, adjusted for the par value of any
treasury stock, determined in accordance with applicable Connecticut insurance laws and regulations, consistently applied. 
  
 “Tax Audit” shall have the meaning set forth in Section 5.19(k)(i). 
  
 “Tax Authority” means any domestic, foreign, federal, national, state, county or municipal or other local
government, any subdivision, agency, commission or authority thereof, or any quasi-governmental body exercising regulatory authority with respect to Taxes. 
  
 “Tax Return” shall mean any report, return, document, declaration or other filing required to be supplied to any Tax Authority or
jurisdiction with respect to Taxes. 
  
 “Taxes”
means any and all taxes, charges, fees, levies or other assessments, including, without limitation, income, gross receipts, excise, real or personal property, sales, withholding, social security, insurance premium, retaliatory, occupation, use,
service, service use, value added, license, net worth, payroll, franchise, transfer and recording taxes, fees and charges, imposed by the United States Internal Revenue Service or any Tax Authority, whether computed on a separate, consolidated,
unitary, combined or any other basis, and any and all entries in accounts maintained in respect of such amounts; and such term shall include any interest, penalties or additional amounts attributable to, or imposed upon, or with respect to, any such
taxes, charges, fees, levies or other assessments. 
  
 “Termination Date” shall have the meaning set forth in Section 8.1(b). 
  
 “Third Party Accountant” means an independent accounting firm which is mutually acceptable to Sellers and Buyer, or, if Sellers and Buyer
cannot agree on such an accounting firm, an independent accounting firm selected pursuant to the provisions of Article XIII of the Coinsurance Agreement. 
  
 “Third Party Accountant Report” shall have the meaning set forth in Section 2.10(a). 
  
 “Third Party Actuary” shall have the meaning set forth in
Section 2.11(d)(xi). 
  
 “Third Party Claimant”
shall have the meaning set forth in Section 7.5(a). 
  
 “TimesSquare” means TimesSquare Capital Management, Inc. 
  
 “TimesSquare Letter Agreement” means the Letter Agreement from TimesSquare to CGLIC, CIGNA Life and PRICOA substantially in the form attached hereto as Exhibit BB. 
  
  

 -24- 

 “Trade Secrets” means all trade secrets, inventions, processes, formulae, know how, and
other proprietary and confidential business information and data, concepts, ideas, research and development, designs, business plans, strategies, marketing and customer lists. 
  
 “Trademarks” means all trade names, trade dress, trademarks, service marks, assumed names, business names
and logos, slogans, internet domain names, and all registrations and applications therefor, together with all goodwill symbolized thereby. 
  
 “Trademark/Trade Name Licenses Agreement” means the Trademark/Trade Name Licenses Agreement between CIGNA Intellectual Property Inc. and
CIGNA Life substantially in the form attached hereto as Exhibit T. 
  
 “Transfer Agreements” means the Master Assignment of Derivatives Agreement, the Master Assignment of Securities Agreement, the Participation Agreement or other conveyance documents required by Annex IV to the Investment
Asset Identification Protocol or Section 5.18(e) and any conveyancing documents executed and delivered pursuant to any of the foregoing. 
  
 “Transaction” means the transactions contemplated by this Agreement. 
  
 “Transfer Taxes” shall have the meaning set forth in Section 5.13. 
  
 “Transferred Assets” means all assets, properties and
rights, real, personal or mixed, tangible and intangible, of every kind and description, wherever located, other than the Acquired Stock, used or held for use by Sellers or any of their Affiliates (other than the Acquired Companies) primarily in the
Business, including the Books and Records, the Transferred IP Assets, the Transferred IT Hardware, the Assigned and Assumed Contracts, the Intellectual Property Contracts and the IT Hardware Leases, but not including any of the Transferred
Investment Assets, Reserves relating to the Subject Contracts or the Excluded Assets. 
  
 “Transferred Investment Assets” means all Investment Assets which are transferred to CIGNA Life, Buyer, any of its Affiliates or any Ceded Business Trust (or held in the Modco Accounts or any Separate
Account relating to the Business) pursuant to the Investment Asset Identification Protocol, but excluding Transferred Assets. 
  
 “Transferred IP Assets” means all Owned Intellectual Property and Affiliate Owned Intellectual Property. 
  
 “Transferred IT Hardware” means all Owned IT Hardware and
Affiliate Owned IT Hardware. 
  
  

 -25- 

 “Transferred IT Items” means all Transferred IT Hardware, Transferred IP Assets which
are Computer Software, and Computer Software which is the subject of the Intellectual Property Contracts and the IT Hardware Leases. 
  
 “Transition Services” shall have the meaning set forth in the Transition Services Agreement. 
  
 “Transition Services Agreement” means the Transition
Services Agreement between CGLIC and CIGNA Life substantially in the form attached hereto as Exhibit U including its Schedule 1 to be supplemented in accordance with Sections 5.9(b) and 5.18. 
  
 “Transitional Subadvisory Agreement” means the Transitional
Subadvisory Agreement between PIM and TimesSquare substantially in the form attached hereto as Exhibit CC. 
  
 “Transitional Subadvisory Agreement II” means the Transitional Subadvisory Agreement between PIM and CII substantially in the form
attached hereto as Exhibit DD. 
  
 “Transitional
Subadvisory Agreement (Prudential Bank)” means the Transitional Subadvisory Agreement between PIM and CII substantially in the form attached hereto as Exhibit EE. 
  
 “Transitional Subadvisory Agreement (Trust)” means the Transitional Subadvisory Agreement between PIM and
CII substantially in the form attached hereto as Exhibit FF. 
  
 “Treasury Regulations” means the Treasury Regulations, including temporary regulations, promulgated under the Code. 
  
 “20-Day CIGNA Average” shall have the meaning set forth in Section 5.5(j)(1)(a). 
  
 “20-Day Prudential Average” shall have the meaning set forth
in Section 5.5(j)(1)(a). 
  
 “Unassigned Funds”
shall have the meaning set forth in Section 3.6(c). 
  
 “Unaudited Interim Buyer Financial Statements” shall have the meaning set forth in Section 4.5. 
  
 “Withheld Capital Loss Amount” means an amount equal to 0.65 multiplied by the sum of: (I) (W)(a) $26 million, minus (b)
the greater of: (i) the amount as of the Closing of the Withheld Capital Loss Balance attributable to the Defined Benefit portion of the Business and (ii) zero; minus (X) the portion of any difference between 
  

 -26- 

 (W)(a) and (W)(b) above that has been transferred since June 30, 2003 to the IMR of CGLIC and/or CIGNA Life, determined
in accordance with Connecticut SAP; plus (II) (Y)(a) $46 million, minus (b) the greater of (i) the amount as of the Closing of the Withheld Capital Loss Balance attributable to the Defined Contribution Non-Pooled portion of the
Business and (ii) zero; minus (Z) the portion of any difference between (Y)(a) and (Y)(b) above that has been transferred since June 30, 2003 to the IMR of CGLIC and/or CIGNA Life, determined in accordance with Connecticut SAP;
provided, that in no event may the sum of (I) and (II) above be less than zero. 
  
 “Withheld Capital Loss Balance” means the balance of net realized capital losses recorded on the books of account as a charge to contract-holder liabilities, determined in accordance with CIGNA’s
accounting practice, consistently applied with the Business Financial Statements. 
  
 Section 1.2 Interpretation. 
  
 (a) The headings contained in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement. 
  
 (b) When a reference is made in this Agreement to a section or article, such reference shall be to a section or article of
this Agreement unless otherwise clearly indicated to the contrary. 
  
 (c) Whenever the words “include,” “includes” or “including” are used in this Agreement they shall be deemed to be followed by the words “without limitation.” 
  
 (d) The words “hereof,” “herein” and “herewith”
and words of similar import shall, unless otherwise stated, be construed to refer to this Agreement as a whole and not to any particular provision of this Agreement, and article, section, paragraph, Exhibit and schedule references are to the
articles, sections, paragraphs, exhibits and schedules of this Agreement unless otherwise specified. 
  
 (e) The meaning assigned to each term defined herein shall be equally applicable to both the singular and the plural forms of such term, and words
denoting any gender shall include all genders. Where a word or phrase is defined herein, each of its other grammatical forms shall have a corresponding meaning. 
  

(f) A reference to any party to this Agreement or any other agreement or document shall include such party’s successors and permitted assigns.

  
 (g) The parties have participated jointly in the negotiation
and drafting of this Agreement. In the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as if drafted jointly by the parties, and no presumption or burden of proof shall arise favoring or
disfavoring any party by virtue of the authorship of any provisions of this Agreement. 
  

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 ARTICLE II 
 CLOSING 
  
 Section 2.1
Transfer of Assets to CIGNA Life. 
  
 (a) Upon the terms
and subject to the conditions set forth in this Agreement, at the Closing Sellers shall convey, transfer and deliver, and shall cause their Affiliates (other than the Acquired Companies) to convey, transfer and deliver, to CIGNA Life, and CIGNA Life
shall accept all of Sellers’ and their Affiliates’ right, title and interest in, to and under the Transferred Assets, free and clear of all Liens, except Permitted Liens, pursuant to the Assignment and Assumption Agreement and the Bill of
Sale. 
  
 (b) At the Closing, Connecticut General shall contribute
an amount equal to approximately (i) $840,000,000 (Eight Hundred and Forty Million Dollars) plus (ii) the Withheld Capital Loss Amount, plus (iii) the Reserve Adjustment, plus (iv) the IMR Adjustment, plus (v) the Preliminary
Remaining Gain if it is a positive number, minus (vi) the absolute value of the Preliminary Remaining Gain if it is a negative number, minus (vii) CIGNA Life’s surplus, valued in accordance with the Statement of Net Settlement
Methods, without giving effect to the transactions contemplated by this Article II, minus (viii) CIGNA Life’s AVR as of immediately prior to giving effect to the transactions contemplated by this Article II, (the aggregate of (i) through
(viii), the “Capitalization Amount”). The Capitalization Amount shall be contributed in cash and/or Investment Assets in accordance with the Investment Asset Identification Protocol to CIGNA Life and valued in accordance with the Statement
of Net Settlement Methods. For purposes of this Section 2.1(b)(iv), “surplus” shall have its ordinary insurance meaning but asset and liability values to determine such surplus shall be determined in accordance with the Statement of Net
Settlement Methods (provided, that deferred tax assets shall be valued at $4 million). 
  
 (c) On the Final Settlement Date, CIGNA Life shall pay to Sellers the Remaining Gain Adjustment Amount (if such amount is a negative number) or Sellers shall pay to CIGNA Life the Remaining Gain Adjustment Amount (if
such amount is a positive number). The Remaining Gain Adjustment Amount shall be paid in cash and/or Investment Assets in accordance with the Investment Asset Identification Protocol and valued in accordance with the Statement of Net Settlement
Methods. 
  
 Section 2.2 Assumption of Liabilities.

  
 At the Closing, immediately following the consummation of the
transactions set forth in Section 2.1, CIGNA Life shall assume from Sellers and their Affiliates (other than the Acquired Companies) all of the Assumed Liabilities, pursuant to 
  

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 the Assignment and Assumption Agreement. At the Closing, Sellers, CIGNA Life and Buyer shall execute and deliver, and
Sellers shall cause their Affiliates to execute and deliver, the Assignment and Assumption Agreement and the Bill of Sale and such other documents and instruments as may be necessary in order to effect the conveyance of the Transferred Assets and
the assumption of the Assumed Liabilities. 
  
 Section 2.3
Coinsurance Transactions. 
  
 (a) Upon the terms and
subject to the conditions set forth in this Agreement, at the Closing and simultaneously with the consummation of the transactions set forth in Sections 2.1 and 2.2, CGLIC, as ceding company, and CIGNA Life, as coinsurer and administrator, will
enter into the Coinsurance Agreement, the Administrative Services Agreement, the Ceded Business Trust Agreement and the Separate Account Management Agreement, and LINA, as ceding company, and CIGNA Life, as coinsurer and administrator, will enter
into the LINA Modco Agreement, the LINA Administrative Services Agreement and the LINA Separate Account Management Agreement. 
  
 (b) At the Closing in accordance with Section 4.1 of the Coinsurance Agreement, CGLIC (on behalf of CIGNA Life, the grantor of the Ceded Business Trust
established pursuant to the Ceded Business Trust Agreement) shall transfer to such Ceded Business Trust the General Account Reinsurance Premium due to CIGNA Life reflected on the Estimated Statement of Net Settlement (as defined in Section 2.9(b)).

  
 (c) At the Closing, in accordance with Section 5.1 of the
Coinsurance Agreement, CGLIC shall maintain the Separate Account Assets relating to Separate Account Subject Contracts in Modco Accounts. 
  
 (d) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing and simultaneously with the consummation of the transactions
set forth in Sections 2.1 and 2.2, CIGNA Life, as ceding company, and CGLIC, as coinsurer and administrator, will enter into the Excluded Business Coinsurance Agreement and the Excluded Business Administrative Services Agreement. 
  
 (e) At the Closing, in accordance with Section 4.1 of the LINA Modco
Agreement, CGLIC shall maintain the Separate Account Assets relating to Separate Account Subject Contracts in the LINA Modco Account. 
  
 (f) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing and simultaneously with the consummation of the transactions
set forth in Sections 2.1 and 2.2, CGLIC, as ceding company, and CIGNA Life, as coinsurer and administrator, will enter into the Guaranteed Cost Coinsurance Agreement, the Guaranteed Cost Administrative Services Agreement, the Guaranteed Cost
Business Trust Agreement and the CGLIC Guaranteed Cost Management Agreement. 
  

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 (g) At the Closing in accordance with Section 4.1 of the Guaranteed Cost Coinsurance Agreement, CGLIC,
the grantor of the Guaranteed Cost Business Trust established pursuant to the Guaranteed Cost Business Trust Agreement, shall transfer to such Guaranteed Cost Business Trust the Guaranteed Cost Reinsurance Premium (to be retained therein pursuant to
the modified coinsurance arrangement under the Guaranteed Cost Coinsurance Agreement) reflected on the Estimated Statement of Net Settlement (as defined in Section 2.9(b)). 
  
 (h) Upon the terms and subject to the conditions set forth in this Agreement, at the Closing and simultaneously with the
consummation of the transactions set forth in Sections 2.1 and 2.2, CGLIC, as ceding company, and CIGNA Life, as coinsurer and administrator, will enter into the Registered Products Modified Coinsurance Agreement and the Registered Products
Administrative Services Agreement. 
  
 (i) At the Closing, in
accordance with Section 4.1 of the Registered Products Modified Coinsurance Agreement, CGLIC shall maintain the Separate Account Assets relating to Separate Account Subject Contracts in the Modco Account established under the Registered Products
Modified Coinsurance Agreement. 
  
 (j) Upon the terms and subject
to the conditions set forth in this Agreement, at the Closing and simultaneously with the consummation of the transactions set forth in Sections 2.1 and 2.2, CGLIC, as ceding company, and CIGNA Life, as coinsurer and administrator, will enter into
the Real Estate Separate Account Coinsurance Agreement and the Real Estate Separate Account Administrative Services Agreement. 
  
 Section 2.4 Dividend of Stock of CIGNA Life to Connecticut General. 
  
 At least three (3) Business Days prior to the consummation of the transactions set forth in Sections 2.1, 2.2 and 2.3, CGLIC
shall dividend to Connecticut General all of the issued and outstanding shares of stock of CIGNA Life. 
  
 Section 2.5 Purchase and Sale of the Acquired Stock. 
  
 Upon the terms and subject to the conditions set forth in this Agreement, at the Closing and prior to the transactions set forth in clause (b) below, (a)
CIGNA Bank shall be merged with and into Prudential Bank, with Prudential Bank being the surviving entity in such merger, pursuant to the Bank Merger Agreement (the “Bank Merger”) and (b) Sellers shall convey, transfer and deliver to
Buyer, and Buyer shall acquire and accept from Sellers, all of their right, title and interest in, to and under the Acquired Stock (other than CIGNA Bank), free and clear of all Liens, except for transfer restrictions arising under the Securities
Act and similar Applicable Laws. Sellers shall deliver to Buyer all of the Acquired Stock (other than CIGNA Bank) free and clear of any Lien, duly assigned to Buyer and duly endorsed in blank or accompanied by stock powers duly executed. 

 

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 Section 2.6 Consideration. 
  
 (a) The consideration (the “Purchase Price”) for the Transferred Assets, the Acquired Stock (other than CIGNA
Bank) and the Bank Merger shall be a cash amount equal to (i) $2,100,000,000 (Two Billion One Hundred Million Dollars) minus (ii) only if a Ratings Event shall have occurred, $250,000,000. The Purchase Price shall be paid by Buyer to Sellers
at the Closing by wire transfer of immediately available funds to an account or accounts designated in writing by Sellers no less than five (5) Business Days prior to the Closing Date. 
  
 (b) Any dispute over the amount or value of cash and/or Investment Assets paid pursuant to Section 2.1(b) shall be
determined by the Third Party Accountant at the same time and, to the extent applicable in the same manner as provided in Sections 2.10 and 2.11 with respect to the Final Statement of Net Settlement, provided that (i) any amount contributed
to CIGNA Life pursuant to Section 2.1(b) in excess of the Capitalization Amount shall be payable by CIGNA Life to Connecticut General in cash and/or Investment Assets in accordance with the Investment Asset Identification Protocol to CIGNA Life and
valued in accordance with the Statement of Net Settlement Methods, together with interest on such amount from and including the Closing Date up to but not including the date of payment accrued at the 60-Day Treasury Rate, and (ii) in the event that
the amount contributed to CIGNA Life pursuant to Section 2.1(b) is less than the Capitalization Amount, such amount shall be payable by Connecticut General to CIGNA Life in cash and/or Investment Assets in accordance with the Investment Asset
Identification Protocol, together with interest on such amount from and including the Closing Date up to but not including the date of payment accrued at the 60-Day Treasury Rate. In the event of any dispute over the Withheld Capital Loss Amount or
the Reserve Adjustment, such dispute shall be determined by the Third Party Accountant at the same time as provided in Sections 2.10 and 2.11 but determining the appropriate Withheld Capital Loss Amount in accordance with the terms of this Agreement
under GAAP applied on a basis consistent with the Business Financial Statements as of June 30, 2003. 
  
 Section 2.7 Closing. 
  
 (a) The closing of the Transaction (the “Closing”) will take place at 10:00 A.M., New York time, on the last day of the month in which the last
unfulfilled and unwaived condition to be satisfied prior to the Closing set forth in Article VI hereof shall be fulfilled or waived in accordance with the terms of this Agreement; provided, that if Sellers notify Buyer on or before February
1, 2004 that Sellers determine that they cannot accurately prepare the necessary financial and other information for Closing as of a month end that is not a quarter end, the Closing shall take place on the last day of the calendar quarter on which
such condition is satisfied (such time, the “Closing Date”) at the offices of Skadden, Arps, Slate, Meagher & Flom LLP, 4 Times Square, New York, NY 10036, or such other place as the parties may agree. Closing shall be effective as of
12:01 a.m. on the next day. 
  

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 (b) Notwithstanding anything in this Agreement or any Ancillary Agreement to the contrary, Sellers may
implement the transactions contemplated by Sections 2.4 and 2.1, 2.2, or 2.3 hereof (the “Restructuring”) as of any month end that is reasonably expected to be more than thirty-one (31) days prior to the Closing Date, provided, that (i)
Buyer shall be permitted to participate fully with Sellers in all communications with Governmental Entities relating to the Restructuring unless Sellers conclude in their reasonable judgment that (A) there is a substantial risk that the Transaction
will not be completed and (B) as to a particular communication, the full participation of Buyer in such communication would reveal either sensitive confidential information about Sellers’ business plans in the event the Transaction is not
completed or information about Sellers proposed response to the risk of the Transaction not being completed and (ii) Sellers shall consult and confer with Buyers regarding developments relating to the implementation of the Restructuring and keep
Buyer fully informed of any proposals made to and any conditions discussed with, requested by or imposed by Governmental Entities in connection with implementation of the Restructuring, and such Restructuring is effected on terms and conditions that
would not, individually or in the aggregate, reasonably be expected to have a Material Negative Condition; and provided further, that if the Restructuring is implemented prior to the Closing, Sellers, jointly and severally, agree to indemnify,
defend and hold harmless Buyer Indemnitees from any Losses by any Buyer Indemnitees that would not have been incurred had such implementation occurred at Closing (taking into account any economic concessions by Sellers in connection with such
implementation). Buyer Indemnitees shall exercise the indemnification rights provided in this Section 2.7(b) as if such rights were exercised pursuant to Section 7.3(a)(i), provided that such indemnification shall not be subject to the third
sentence of Section 7.3(c). Notwithstanding the foregoing and without limitation to Section 5.6, if the Restructuring is to be implemented as of or immediately prior to the Closing Date, Sellers shall consult and confer with Buyer regarding any
aspects of the implementation of the Restructuring differing from those provided for by the Ancillary Agreements and obtain the approval of Buyer for any such aspect, such approval not to be unreasonably withheld, conditioned or delayed. Sellers
agree that in implementing the Restructuring they shall cooperate with Buyer and endeavor to avoid any negative effect upon the Unassigned Funds. 
  
 Section 2.8 Purchase Price Allocation. 
  
 Sellers and Buyer 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 for all Tax purposes. As soon as practicable after the Closing Date, Buyer shall prepare a schedule reflecting the allocation of the Allocable Amount and shall submit it to Sellers. 
  
 Section 2.9 Statements of Net Settlement. 
  
 (a) Attached hereto as (i) Schedule 2.9(a) (i) is a form of statement of the
Liabilities of the Business, including the Reinsured Liabilities and Assumed 
  

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 Liabilities but excluding the Excluded Liabilities, and related Separate Account Assets and General Account Reinsurance
Premium Assets (the “Statement of Net Settlement”) and (ii) as Schedule 2.9(a)(ii) is a pro-forma Statement of Net Settlement as of June 30, 2003 (the “Pro-Forma Statement of Net Settlement”). 
  
 (b) CGLIC shall cause to be prepared and delivered to Buyer at least five (5)
days prior to the Closing Date a proposed Statement of Net Settlement estimated as of the Closing Date in accordance with the Statement of Net Settlement Methods. Buyer shall be given an opportunity to review and comment on the proposed Statement of
Net Settlement and Sellers shall provide Buyer with access to such information and personnel as Buyer may reasonably request in connection with such review and comment. Buyer shall provide any comments on the proposed Statement of Net Settlement at
least one (1) day prior to the Closing Date and Buyer and CGLIC shall negotiate in good faith a resolution of any differences in the amounts stated on the proposal. The Statement of Net Settlement prepared by CGLIC, as revised to reflect any
revisions thereto agreed to by CGLIC and Buyer, shall be the “Estimated Statement of Net Settlement”; provided, however, that if any differences between CGLIC and Buyer as to such Statement of Net Settlement are not resolved
by the Closing Date, the Statement of Net Settlement estimated as of the Closing Date and prepared by CGLIC and revised by CGLIC to reflect any revisions thereto agreed to by CGLIC and Buyer, but not any of Buyer’s comments not agreed to by
CGLIC, shall be the “Estimated Statement of Net Settlement”. 
  
 (c) Within ninety (90) days following the Closing Date, CGLIC shall prepare and deliver to Buyer a Statement of Net Settlement as of the Closing Date (the “Closing Statement of Net Settlement”) in accordance with the Statement of
Net Settlement Methods. 
  
 (d) Buyer, on behalf of itself and
CIGNA Life, shall review the Closing Statement of Net Settlement solely to determine whether in the preparation of the Closing Statement of Net Settlement (i) CGLIC appropriately utilized the Statement of Net Settlement Methods, (ii) CGLIC has not
committed any arithmetic error in the calculation of any of the line items on the Closing Statement of Net Settlement, (iii) Data Input Inaccuracies affected one or more line items in the Closing Statement of Net Settlement, (iv) if the manner of
making any judgment involved in the calculation of any line item in the Closing Statement of Net Settlement is not provided for by the Statement of Net Settlement Methods, such judgment is made consistently with either (x) CGLIC’s historical
practices used in preparing the Pro-Forma Statement of Net Settlement or (y) if it cannot be made consistently with such historical practices, with SAP consistently applied with the Statutory Financial Statements or (z) if not made consistently with
SAP or such historical practices, with sound industry practices (each of (x), (y) and (z), a “Specified Judgment”) (clauses (i) through (iv) being the “Permitted Factors”), and Buyer shall not consider any other matter, including
the valuation of any Investment Assets reflected in the Closing Statement of Net Settlement. If Buyer and CGLIC are able to agree within one-hundred twenty (120) days of Buyer’s receipt of the Closing Statement 
  

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 of Net Settlement, or earlier as mutually agreed to, that (A) the methodologies, procedures, judgments, assumptions and
estimates used in the preparation of the Closing Statement of Net Settlement conform to the Statement of Net Settlement Methods, (B) CGLIC has not committed any arithmetic error in the calculation of any of the numerical data underlying the line
items on the Closing Statement of Net Settlement, (C) Data Input Inaccuracies did not affect any line items of the Closing Statement of Net Settlement and (D) if any judgment involved in the calculation of any line item in the Closing Statement of
Net Settlement is not addressed by the Statement of Net Settlement Methods, that such judgment is in accordance with the applicable Specified Judgment, then the Closing Statement of Net Settlement shall be deemed to be the “Final Statement of
Net Settlement” for purposes of Section 2.11. 
  
 (e) If the
parties are not able to agree to the matters set forth in the previous paragraph within one-hundred twenty (120) days of Buyer’s receipt of the Closing Statement of Net Settlement, then the Closing Statement of Net Settlement shall be promptly
submitted for resolution to the Third Party Accountant pursuant to Section 2.10. 
  
 (f) Buyer, on behalf of itself and CIGNA Life, agrees that following the Closing Date CGLIC shall have such access to CIGNA Life’s books and records, including internal accounting records relating to the
Business, and employees involved with the Business and the Subject Contracts as CGLIC may reasonably request for the preparation of the Closing Statement of Net Settlement or Buyer’s objections thereto. CIGNA, on behalf of itself and the other
Sellers, agrees that following the Closing Date CIGNA Life and Buyer shall have such access to the books and records, including internal accounting records relating to the Business, and employees involved with the Business and Subject Contracts as
Buyer or CIGNA Life may reasonably request for the review of the Closing Statement of Net Settlement or Buyer’s objections thereto. 
  
 (g) Transfer Taxes incurred in connection with the conveyance of the Subject Contracts shall be paid in accordance with Section 5.13 hereof and shall not
be reflected as an asset or a liability on any Statement of Net Settlement Liability. 
  
 Section 2.10 Third Party Accountant. 
  
 (a) Within forty-five (45) days after the delivery of the Closing Statement of Net Settlement to the Third Party Accountant pursuant to Section 2.9(e), the Third Party Accountant shall review the Closing Statement of
Net Settlement and render a written report thereon to Buyer, CIGNA Life and CGLIC (the “Third Party Accountant Report”). The parties hereto acknowledge and agree that such review by the Third Party Accountant and the Third Party Accountant
Report shall be limited to, and only to, a determination by the Third Party Accountant as to the Permitted Factors. In conducting its review, the Third Party Accountant shall take into consideration submissions made by Buyer and CGLIC with regard to
the Permitted Factors, and the basis for the parties’ respective views. The Third Party Accountant Report shall include a reasonably detailed 
  

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 description of any change to the Closing Statement of Net Settlement that results from the Third Party Accountant’s
review of the Closing Statement of Net Settlement and a restatement by the Third Party Accountant of the Closing Statement of Net Settlement which reflects any changes made by the Third Party Accountant (such statement to be deemed the “Final
Statement of Net Settlement” for purposes of Section 2.11), provided, however, that each individual adjustment reflected on the Final Statement of Net Settlement, if there are any, must be based solely upon a finding by the Third
Party Accountant that (A) CGLIC utilized methodologies, procedures, judgments, assumptions and estimates that were not provided for in the Statement of Net Settlement Methods, (B) CGLIC committed any arithmetic error in the calculation of any line
item on the Closing Statement of Net Settlement, (C) Data Input Inaccuracies affected one or more line items in the Closing Statement of Net Settlement, or (D) if any judgment involved in the calculation of any line item in the Closing Statement of
Net Settlement is not provided for by the Statement of Net Settlement Methods, such judgment is not in accordance with the applicable Specified Judgment. The dollar amount of each such individual adjustment to the total liabilities as shown on the
Closing Statement of Net Settlement shall not be greater than the dollar amount which corresponds to the underlying finding set forth in the foregoing clauses (A), (B), (C) or (D) which the Third Party Accountant used to justify such adjustment. The
fees, costs and expenses of the Third Party Accountant shall be shared equally by CGLIC and CIGNA Life. 
  
 (b) Notwithstanding anything to the contrary contained in this Agreement or in any of the Ancillary Agreements, each of the parties hereto acknowledges
and agrees that (i) the Third Party Accountant shall not be authorized to make any adjustments to the Closing Statement of Net Settlement which are not based solely upon the Permitted Factors and (ii) the Third Party Accountant shall not review or
make any adjustment (A) to a line item on or other matter involving the Closing Statement of Net Settlement not challenged pursuant to Section 2.9(e) or (B) based on the valuation of any Transferred Investment Assets reflected in the Closing
Statement of Net Settlement. 
  
 (c) Following the Closing Date,
the Third Party Accountant shall have access to any of Sellers’, CIGNA Life’s, Buyer’s and their respective Affiliates’ accounting records relating to the Business and Subject Contracts and employees involved with the Business
and Subject Contracts, including with respect to the preparation by CGLIC, and the review by Buyer of the Estimated Statement of Net Settlement, and the preparation by CGLIC, and the review by CIGNA Life, of the Closing Statement of Net Settlement.

  
 (d) Any (i) determination made by the Third Party Accountant
pursuant to this Section 2.10 or (ii) agreement by the parties pursuant to the last sentence of Section 2.9(d) shall be final and binding on Buyer, CIGNA Life and Sellers. For purposes hereof, “final and binding” shall mean that the
aforesaid determination or agreement, as the case may be, shall have the same preclusive effect for all purposes as a determination embodied in a final judgment, no longer subject to appeal and entered by a court of competent jurisdiction after full
and fair litigation on the merits. 
  

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 Section 2.11 Post-Closing Adjustment. 
  
 (a) In the event that (i) the General Account Reinsurance Premium determined
by reference to the Final Statement of Net Settlement exceeds the General Account Reinsurance Premium determined by reference to the Estimated Statement of Net Settlement, then Sellers shall transfer to the Ceded Business Trust assets (selected in
accordance with Investment Asset Identification Protocol) with an aggregate statutory carrying value determined in accordance with the Statement of Net Settlement Methods equal to such excess within five (5) Business Days of the delivery of the
Final Statement of Net Settlement, plus interest on such amount from and including the Closing Date up to but not including the date of payment accrued at the 60-Day Treasury Rate, or (ii) the General Account Reinsurance Premium determined by
reference to the Final Statement of Net Settlement is less than the General Account Reinsurance Premium determined by reference to the Estimated Statement of Net Settlement, then CIGNA Life, directly or from the Ceded Business Trust, as determined
in accordance with the Coinsurance Agreement and the Ceded Business Trust Agreement, shall return to CGLIC assets (selected in accordance with the Investment Asset Identification Protocol) previously transferred by CGLIC to the Ceded Business Trust
with an aggregate statutory carrying value determined in accordance with the Statement of Net Settlement Methods equal to such shortfall within five (5) Business Days of the delivery to the Buyer of the Final Statement of Net Settlement, plus
interest on such amount from and including the Closing Date up to but not including the date of payment accrued at the 60-Day Treasury Rate. The foregoing shall apply to the Guaranteed Cost Reinsurance Premium, provided that any adjustment to the
Guaranteed Cost Reinsurance Premium shall be transferred to the Guaranteed Cost Business Trust by CGLIC or from the Guaranteed Cost Business Trust by the trustee thereof to CGLIC, as the case may be. 
  
 (b) On the Closing Date all Separate Account Assets as of such date shall be
retained in the corresponding Modco Account. In the event any Separate Account Assets are not retained in the appropriate Modco Account at Closing, Sellers shall cause such assets to be transferred thereto promptly after discovery thereof, together
with any interest, dividends or other earnings after the Closing Date in respect of such assets. 
  
 (c) Notwithstanding any other provision of this Agreement to the contrary, in the event CGLIC (i) fails to transfer to CIGNA Life or to the Ceded Business
Trust, as the case may be, an asset reflected on either the Estimated Statement of Net Settlement or the Final Statement of Net Settlement, or (ii) erroneously transfers an Investment Asset to CIGNA Life which was not reflected on either the
Estimated Statement of Net Settlement or the Final Statement of Net Settlement (and which was not to be transferred pursuant to this Agreement or any Ancillary Agreement), the parties agree to correct such error by effectuating a transfer or return,
as the case may be, of the 
  

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 assets in question (or cash equal to the fair market value of such asset) promptly upon receipt of a written notice from
the other party describing the error. All written notice of any such error shall be provided on or before the second anniversary of the Closing Date. 
  
 (d) (i) In the event that (A) there are inaccuracies or omissions in the factual data inputs utilized in the calculation of Insurance-Related Liabilities
or the value of Transferred Investment Assets not addressed by Section 2.11(c) (such as inputting the wrong CUSIP number or interest rate), including data (and the omission of data) relating to the inventory of policies in force, the terms of such
policies, the relevant information related to the holders or annuitants of such policies and activities related thereto, CUSIP numbers, interest rates, principal amounts, the terms of loan documents and organizational documents, the terms of leases,
lease abstracts and rent rolls, or such factual data inputs are coded, compiled or aggregated inaccurately, other than omissions in the factual data inputs utilized in the calculation of the Insurance-Related Liabilities resulting from reasonable
judgments by an actuary or other financial professional as to the scope of factual data inputs (or omissions of factual data inputs) (a “Data Input Inaccuracy”); (B) such Data Input Inaccuracy has resulted in a demonstrable error in the
aggregate Insurance-Related Liabilities reflected on the Final Statement of Net Settlement or in the aggregate statutory carrying value (determined in accordance with the Statement of Net Settlement Methods) of the Transferred Investment Assets, and
(C) Buyer has transmitted to Sellers a Notice of Demand (as defined below) with respect to such Data Input Inaccuracy prior to the second anniversary of the Closing Date, then the requirements of this Section 2.11(d) shall be applicable. 

 
 (ii) “Adjustment Amount” shall be any amount, positive or
negative, equal to (A)(x) 0.5 multiplied by (y) the Specified Data Input Factors Amount; provided that such amount, when cumulated with all prior amounts pursuant to this Section 2.11(d)(ii), shall not be greater than an aggregate
amount of $100 million or be less than an aggregate amount of negative $100 million; provided further that if such amount is positive the Adjustment Amount shall be increased by the amount, if any, that the aggregate Losses
incurred by Buyer Indemnities pursuant to Section 7.3(a)(i) hereof and this Section 2.11(d) (treating any positive amount under this Section 2.11(d)(ii) as Losses solely for purposes of the third sentence of Section 7.3(c)) are less than the
Deductible, but only to the extent of the product of (A)(x) multiplied by A(y). 
  
 (iii) “Net Data Adjustment Amount” shall be the amount, positive or negative, equal to the Positive Data Input Inaccuracies Amount minus the Offsetting Data Input Inaccuracies Amount minus the Adjustment
Amount. 
  
 (iv) “Offsetting Data Input Inaccuracies
Amount” means the absolute value of the amount of the aggregate decrease in Insurance-Related Liabilities reflected on the Final Statement of Net Settlement plus the amount of the aggregate increase in the statutory carrying value (determined
in accordance with the Statement of Net Settlement Methods) of the Transferred Investment Assets resulting from Data Input Inaccuracies (excluding any excess in the Transferred Investment Assets resulting from the decrease in the Insurance-Related
Liabilities). 
  

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 (v) “Positive Data Input Inaccuracies Amount” means the amount of the aggregate increase in
Insurance-Related Liabilities reflected on the Final Statement of Net Settlement plus the absolute value of the amount of the aggregate decrease in the statutory carrying value (determined in accordance with the Statement of Net Settlement Methods)
of the Transferred Investment Assets resulting from Data Input Inaccuracies (excluding any shortfall in the Transferred Investment Assets resulting from the increase in the Insurance-Related Liabilities). 
  
 (vi) “Specified Data Input Factors” means (A) errors and omissions
in any information provided by the holder of, or annuitant under, Subject Contracts or by any Person who is not an Affiliate or employee of Sellers and (B) the design features and functioning of, and defects in, any software or hardware. 

 
 (vii) “Specified Data Input Factors Amount” shall be an amount,
positive or negative, equal to (A) the portion of Positive Data Input Inaccuracies Amount resulting from Specified Data Input Factors minus (B) the portion of Offsetting Data Input Inaccuracies Amount resulting from Specified Data Input Factors.

  
 (viii) At any time prior to the second anniversary of the
Closing Date, Buyer may transmit to Sellers a written notice stating that one or more Data Input Inaccuracies have resulted in a demonstrable error in the aggregate Insurance-Related Liabilities reflected on the Final Statement of Net Settlement or
in the aggregate statutory carrying value (determined in accordance with the Statement of Net Settlement Methods) of all the Transferred Investment Assets, which identifies with reasonable specificity the (A) relevant Data Input Inaccuracy or Data
Input Inaccuracies, (B) the effect of such Data Input Inaccuracy or Data Input Inaccuracies on the aggregate Insurance-Related Liabilities reflected on the Final Statement of Net Settlement or the aggregate statutory carrying value (determined in
accordance with the Statement of Net Settlement Methods) of the Transferred Investment Assets, and (C) the Positive Data Input Inaccuracies Amount and, if any, the Offsetting Data Input Inaccuracies Amount and Adjustment Amount (a “Notice of
Demand”). 
  
 (ix) In the event that Buyer transmits a Notice
of Demand to Sellers pursuant to Section 2.11(d)(viii), as a condition precedent to any payment under Section 2.11(d)(xii) Sellers shall have access for a reasonable period of time not to exceed nine (9) months to CIGNA Life’s, Buyer’s and
its Affiliates’ books and records, including internal accounting records, and employees as Sellers may reasonably request, for purposes of verifying the information provided to Sellers in the Notice of Demand and identifying any Offsetting Data
Input Inaccuracies. Any information provided to Sellers pursuant to the previous sentence shall be kept confidential by Sellers. Any verification, examination or interview by or on behalf of Sellers or access pursuant to this Section 2.11(d)(ix)
shall be conducted or occur at reasonable times, during regular business 
  

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 hours, upon reasonable prior written notice and in a manner that does not unreasonably interferes with the Business or
operations of Buyer or its Affiliates (or their successors). Buyer and its Affiliates and employees shall cooperate fully and in good faith in providing Sellers such access and information. 
  
 (x) Buyer and Sellers shall endeavor to agree as to the correct Offsetting
Data Input Inaccuracies Amount, Adjustment Amount and Positive Data Input Inaccuracies Amount and the effects of any Specified Data Input Factors. 
  
 (xi) In the event of any dispute between the parties relating to the matters set forth in this Section 2.11(d), once Sellers have completed their review
of the Buyer’s Notice of Demand and any Offsetting Data Input Inaccuracies, Sellers and Buyer shall retain an independent actuarial firm mutually acceptable to Sellers and Buyer or, if they are unable to agree, designated by The American
Arbitration Association (“Third Party Actuary”) who shall review the Buyer’s Notice of Demand, together with any supporting information thereto provided by the Buyer, together with Seller’s response to the Buyer’s Notice of
Demand, together with any supporting information thereto provided by the Sellers. The parties hereto acknowledge and agree that such review by the Third Party Actuary shall be limited to, and only to, a determination by the Third Party Actuary as to
the correct Net Data Adjustments Amount, Positive Data Input Inaccuracies Amount, Offsetting Data Input Inaccuracies Amount, Specified Data Input Factors Amount and Adjustment Amount in accordance with Section 2.11(d). In conducting its review, the
Third Party Actuary shall take into consideration submissions made by Sellers and Buyer and the basis for the parties’ respective views. Any determination made by the Third Party Actuary pursuant to this Section 2.11(d)(xi) shall be final and
binding (as such term is defined in Section 2.10(d) of this Agreement) on Sellers and Buyer. 
  
 (xii) Within ten (10) days following either agreement by the parties as to the matters set forth in paragraph (x) or the determination of the Third Party Actuary pursuant to paragraph (xi), Sellers shall pay to Buyer
any positive Net Data Adjustment Amount or Buyer shall pay to Sellers the absolute value of any negative Net Data Adjustment Amount. Payment shall be made by payment of cash or cash equivalents in immediately available funds. In the event of
multiple adjustments pursuant to this Section 2.11(d) as a result of the issuance of more than one Notice of Demand, the aggregate Positive Data Input Inaccuracies Amounts, Offsetting Data Input Inaccuracies Amounts and Adjustment Amounts and net
amounts paid pursuant to this Section 2.11(d) shall be cumulated so that any settlement pursuant to this paragraph takes into account all such Net Data Adjustment Amounts, Positive Data Input Inaccuracies Amounts, Offsetting Data Input Inaccuracies
Amounts, Specified Data Input Factors Amounts, Adjustment Amounts and the net amounts previously paid.  
  
 (xiii) In no event shall any of the provisions of this Section 2.11(d) apply to the Insurance Related Liabilities associated with the Guaranteed Cost
Coinsurance Agreement, the Subject Contracts thereunder or the Transferred Investment Assets supporting such Insurance-Related Liabilities. 
  
  

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 ARTICLE III 
 REPRESENTATIONS AND WARRANTIES OF SELLERS 
  
 Subject to Section 7.1, and except as set forth on the Schedules, Sellers hereby represent and warrant to Buyer on the date of this Agreement and the Closing Date (or if another date is specified in the representation
or warranty, on such date) as follows: 
  
 Section 3.1
Organization, Standing and Corporate Power. 
  
 (a) Each
Seller and each Affiliate of a Seller engaged in the Business is a corporation or other legal entity duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the requisite corporate or
other power, as the case may be, and authority to carry on its business as now being conducted. Each Seller and each Affiliate of a Seller engaged in the Business is duly qualified or licensed to do business and is in all material respects in good
standing in each jurisdiction in which the nature of its business or the ownership, leasing or operation of its properties makes such qualification or licensing necessary. Each Seller and each Affiliate of a Seller engaged in the Business has full
corporate power and authority and necessary to carry on the businesses in which it is engaged and to own and use the properties owned and used by it, except as such matters may be otherwise addressed in Section 3.7. 
  
 (b) Sellers have made available to Buyer prior to the execution of this
Agreement true 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 Acquired Companies (each as amended to date).
None of Sellers or the Acquired Companies is in material default under or in material violation of any provision of its Organizational Documents and the Organizational Documents for each of the Acquired Companies as made available to Buyer 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), the stock certificate books, and the stock record books of each Seller and each
Affiliate of a Seller engaged in the Business are correct and complete in all material respects. 
  
 Section 3.2 Authority; Binding Effect. 
  
 Each Seller has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated hereby. Each Seller and its
Affiliates which are parties hereto or to an Ancillary Agreement have all requisite power and authority to execute and deliver this Agreement, the Ancillary Agreements and the other agreements, documents and instruments to be executed and delivered
in connection 
  

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 with this Agreement or the Ancillary Agreements and to consummate the transactions contemplated hereby and thereby. The
execution and delivery of this Agreement by Sellers and the consummation by Sellers of the transactions contemplated hereby, and the execution and delivery of 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 Sellers and their Affiliates which are parties thereto and the consummation of the transactions contemplated thereby, have been duly authorized by all necessary
action on the part of each such Person. This Agreement has been duly executed and delivered by Sellers and, assuming the due authorization, execution and delivery of this Agreement by Buyer, constitutes a legal, valid and binding obligation of
Sellers, enforceable against Sellers in accordance with its terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, equitable subordination and similar laws of general applicability affecting creditors’
rights generally and to general principles of equity. The Ancillary Agreements and the other agreements, documents and instruments to be executed and delivered in connection with this Agreement or the Ancillary Agreements, when duly executed and
delivered by Sellers and their Affiliates which are a party thereto, assuming the due authorization, execution and delivery of such other agreements, documents and instruments by each of the other parties thereto, constitute legal, valid and binding
obligations of Sellers and their Affiliates which are parties thereto, enforceable against each such Person in accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, equitable subordination
and similar laws of general applicability affecting creditors’ rights generally and to general principles of equity. 
  
 Section 3.3 Noncontravention. 
  
 Except as set forth in Schedule 3.3, the execution and delivery of this Agreement does not and the Ancillary Agreements will not, and the consummation of
the transactions contemplated by this Agreement and the Ancillary Agreements will not (a) result in the creation of any Lien upon (i) any of the Acquired Stock or (ii) any of the Transferred Assets, or any properties or assets of any of the Acquired
Companies, (b) violate, contravene or conflict with the Organizational Documents of any Seller or any Affiliate of a Seller engaged in the Business or with any resolutions adopted by the board of directors of any Seller, any Acquired Company or any
of their Affiliates, (c) conflict with, or result in the breach, violation, right of termination, or prepayment of, or constitute a default under (whether with notice or lapse of time or both), or accelerate or permit the acceleration of the
performance required by, or alter any rights or obligations under, or require the giving of notice under, any (x) Contract, (y) Subject Contract or (z) award, decision, injunction, judgment, charge, decree, settlement, order, process, ruling,
subpoena or verdict (whether temporary, preliminary or permanent) entered, issued, made or rendered by any Governmental Entity (as defined below) (any of the items enumerated in this clause (y), an “Order”), in each case relating to the
Business, (d) subject to the governmental filings and other matters referred to in Section 3.4, contravene, conflict with, or constitute or result in a breach or violation of, or a default 
  

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 under, any provision of, or give any Governmental Entity the right to revoke, withdraw, suspend, cancel, terminate or
modify, any Seller Permit (as defined in Section 3.7(a)) issued, granted, given or otherwise made available by or under the authority of any Governmental Entity or pursuant to any Applicable Law that is held by any Seller, any Affiliate of a Seller
engaged in the Business or that otherwise relates to the Business or (e) subject to the governmental filings and other matters referred to in Section 3.4, constitute a violation of any Applicable Law, other than, in the case of clause (a)(ii), (c)
or (d) of this Section 3.3 as would not, individually result in a Loss to the Business in excess of $50,000. 
  
 Section 3.4 Governmental Approvals. 
  
 Except as set forth in Schedule 3.4, no consent, approval, order, authorization or licensing of, action by or in respect of, or registration, declaration,
notice, report, filing or expiry of any waiting period with, any federal, state, local or foreign government, any court, administrative, regulatory or other governmental agency, commission or authority or any non-governmental United States or
foreign self-regulatory agency, commission or authority or any arbitral tribunal (each, a “Governmental Entity”) is required by any Seller, any Acquired Company or any of their Affiliates in connection with the execution and delivery of
this Agreement by Sellers or the execution and delivery of the Ancillary Agreements by Sellers or their Affiliates which are a party thereto or the consummation by Sellers and such Affiliates of the transactions contemplated hereby or thereby,
except for such filings with Governmental Entities to satisfy the applicable requirements of state securities or “blue sky” laws or similar foreign laws and approval under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended (the “HSR Act”). 
  
 Section 3.5
Capitalization. 
  
 Schedule 3.5 accurately sets forth,
with respect to each Acquired Company (i) the number of and designation of all authorized Equity Interests and (ii) the number of issued and outstanding Equity Interests, the names of the holders thereof and the number of Equity Interests held by
each such holder. All such Equity Interests have been 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. One or more of the Sellers
or an Acquired Company are and shall be on the Closing Date the sole record and beneficial owners and holders of good and valid title to each of the outstanding Equity Interests of the Acquired Companies, free and clear of all Liens. Except as
listed on Schedule 3.5, no legend or other reference to any purported encumbrance appears on any certificate representing Equity Interests of any Acquired Company. Except as listed in Schedule 3.5, none of the Acquired Companies owns any Equity
Interests in any Person, except for Equity Interests owned as investments in the ordinary course of business and consistent with past practice. There are no outstanding options, warrants, calls, preemptive or similar rights, commitments or
agreements of any kind to which Sellers or any of their subsidiaries or any of the Acquired Companies is a 
  

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 party, or by which any of Sellers, any of their subsidiaries or any of the Acquired Companies is bound, relating to the
sale, issuance or voting of, or the granting of rights to acquire, all or a portion of the Equity Interests of any of the Acquired Companies, or any securities convertible or exchangeable into or evidencing the right to purchase all or a portion of
the Equity Interests in any of the Acquired Companies. There are no outstanding stock appreciation, phantom stock, profit participation, or similar rights with respect to any Acquired Company. There are no voting trusts or other agreements or
understandings to which Sellers, any of their subsidiaries, or any of the Acquired Companies is a party with respect to the voting of the Equity Interests of any of the Acquired Companies. There are no outstanding bonds, debentures, notes or other
obligations the holders of which have the right to vote (or convertible into or exercisable for securities having the right to vote) with the holders of Equity Interests of the Acquired Companies on any matter. 
  
 Section 3.6 Financial Statements. 
  
 (a) Attached hereto as Schedule 3.6(a) are copies of the unaudited pro-forma
GAAP balance sheets and income statements of the Business as of and for the twelve months ending December 31, 2002 and the six months ending June 30, 2003 (such financial statements, together with the notes thereto, being hereinafter collectively
referred to as the “Business Financial Statements”). Except as set forth in the notes to the Business Financial Statements, the Business Financial Statements (i) were prepared in accordance with GAAP applied on a consistent basis with the
audited consolidated financial statements of CIGNA and its subsidiaries for the year ended as of December 31, 2002, and the unaudited consolidated financial statements of CIGNA and its subsidiaries for the six months ended June 30, 2003,
respectively, (ii) were prepared using the Books and Records of CGLIC and its Affiliates, (iii) were prepared using the same data with respect to the Business as was used in preparing the audited consolidated financial statements of CIGNA and its
subsidiaries for the year ended as of December 31, 2002, and the unaudited consolidated financial statements of CIGNA and its subsidiaries for the six months ended June 30, 2003, respectively, and (iv) fairly present in all material respects the
combined financial position and the results of operations of the Business for the periods indicated. 
  
 (b) Except as set forth in Schedule 3.6(b), the Pro-Forma Statement of Net Settlement was prepared in all material respects in accordance with the
Statement of Net Settlement Methods. Except as set forth in Schedule 3.6(b), the Statement of Net Settlement Methods is consistent in all material respects with the methodologies and procedures utilized by Sellers to prepare the Statutory Financial
Statements. 
  
 (c) Attached hereto as Schedule 3.6(c) are copies
of the unaudited pro-forma statutory statements for the portion of the Business contained in CGLIC as of and for the twelve months ending December 31, 2002 and the six months ending June 30, 2003 (such statutory statements, together with the notes
thereto, being hereinafter collectively referred to as the “Statutory Financial Statements”). Except as set forth in the 
  

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 notes to the Statutory Financial Statements, the Statutory Financial Statements (i) were prepared in accordance with
statutory accounting principles prescribed or permitted by the Connecticut Insurance Department (“Connecticut SAP”) applied on a consistent basis with the statutory financial statements of CGLIC for the year ended as of December 31, 2002
and the six month period ended June 30, 2003, (ii) were prepared using the Books and Records of CGLIC and (iii) fairly present in all material respects the statutory results of operations and financial condition of the portion of the Business
contained in CGLIC for the periods indicated; provided, that this representation and warranty shall not be breached with respect to the IMR amount if the IMR of the Business as of June 30, 2003 is within $50 million of the $55 million current
estimate of the recalculated IMR Amount. As of the date of this Agreement the unassigned funds of CIGNA Life calculated in accordance with Connecticut SAP (the “Unassigned Funds”) is greater than zero. 
  
 Section 3.7 Seller Permits, Regulatory Agreements and Compliance with
Applicable Laws. 
  
 (a) Except as set forth in Schedule
3.7(a), (i) each of Sellers and Affiliates of Sellers (in each case, to the extent relating to the Business) hold and maintain in full force and effect all permits, licenses, variances, exemptions, orders, registrations and approvals of all
Governmental Entities which are material for the operation of the Business as currently conducted (collectively, the “Seller Permits”), (ii) each of Sellers and Affiliates of Sellers (in each case, to the extent relating to the Business)
are, and at all times have been, in compliance in all material respects with the terms of the Seller Permits and all Applicable Laws, (iii) none of Sellers nor any Affiliate of Sellers (in each case, to the extent relating to the Business) has
received, at any time since January 1, 2002, any written notice or other written communication from any Governmental Entity regarding (A) any actual or alleged violation of, or failure on the part of any Seller or Affiliate of any Seller to comply
in any material respect with, any Applicable Law (in the case of any Seller or Affiliate of any Seller, to the extent relating to the Business) or any term or requirement of any Seller Permit or (B) any actual or potential revocation, withdrawal,
suspension, cancellation, termination of, or material modification to, any Seller Permit, and (iv) all applications required to have been filed for the renewal of each such Seller Permit have been duly filed on a timely basis with the appropriate
Governmental Entity, or the Seller Permit nevertheless has been renewed, re-issued or otherwise resolved without material negative consequence to the Business, and all other material filings required to have been made with respect to each such
Seller Permit have been duly made on a timely basis with the appropriate Governmental Entity, or if not filed on a timely basis, the lapse did not cause a material negative consequence to the Business. 
  
 (b) Except as set forth in Schedule 3.7(b), none of Sellers or Affiliates of
any Seller (in each case, to the extent relating to the Business), or any of the Transferred Assets, the Transferred Investment Assets or assets of the Acquired Companies is subject to any outstanding Order or is a party to any written agreement,

  

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 consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to,
or is subject to any order or directive by, or is a recipient of any supervisory letter from or has adopted any resolutions at the request of any Governmental Entity that by its terms restricts in any material respect the conduct of, or that
otherwise relates to, the Business (each, a “Regulatory Agreement”), nor has any Seller or Affiliates of any Seller (in each case, to the extent relating to the Business) been advised since January 1, 2002 by any Governmental Entity that
it is considering issuing or requesting any such Regulatory Agreement. 
  
 (c) CIGNA Bank has filed all material reports, registrations and statements, together with any amendments required to be made with respect thereto, that they were required to file since December 31, 2000 with or pursuant to the requirements
of (i) the Federal Reserve Board, (ii) the Federal Deposit Insurance Corporation, (iii) the Office of Thrift Supervision (“OTS”), and (iv) any other Governmental Entity, and has paid all fees and assessments due and payable in connection
therewith. Except for examinations conducted by a Governmental Entity in the regular course of the business of CIGNA Bank, and except as set forth in Schedule 3.7(c), no Governmental Entity has initiated any proceeding or, to the Knowledge of
Sellers, investigation into the business or operations of the CIGNA Bank since December 31, 2000. Except as set forth in Schedule 3.7(c), there is no unresolved material violation or material criticism asserted or made by any Governmental Entity
contained in any report or statement relating to any examination of CIGNA Bank. 
  
 (d) To the extent any Seller or Affiliate of a Seller has relied on ERISA Prohibited Transaction Class Exemption 84-14 (“PTCE 84-14”), it has not, to the Knowledge of Sellers, failed to satisfy, or taken any
action or failed to take any action which could cause an impending or potential failure in any material respect to satisfy, all of the relevant requirements for the maintenance of its status as a “qualified professional asset manager”
under PTCE 84-14, including, but not limited to, the conviction or impending conviction of any Affiliate of any Seller, or any of the Affected Business Employees who are officers of any Seller or any of the Affiliates of any Seller and are
responsible for the Business, or any offense enumerated under Section 411 of ERISA or the relevant provisions of PTCE 84-14. 
  
 (e) Except as set forth in Schedule 3.7(e), neither Sellers nor any of their Affiliates accept, under the terms of any contracts related to the Business,
the status of, or responsibility as, a “fiduciary” (as such term is defined under ERISA Section 3(21)(A) or the parallel provisions of the Code) with respect to the Business. 
  
 Section 3.8 Litigation. 
  
 Except as set forth on Schedule 3.8, as of the date of this Agreement no material Action by any Governmental Entity or other Person is pending, or, to the
Knowledge of Sellers, threatened against or with respect to any of Sellers or their Affiliates (in each case, to the extent relating to the Business), the Acquired Companies, 
  

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 the Business, the Transferred Assets or the Subject Contracts. As of the date of this Agreement, no Action, written claim
or written demand by any Governmental Entity or other Person is pending or, to the Knowledge of Sellers, threatened that seeks to enjoin, or would reasonably be expected to have the effect of preventing, delaying, making illegal or otherwise
interfering with, any of the transactions contemplated by this Agreement or the Ancillary Agreements. Except as set forth in Schedule 3.8, as of the date of this Agreement, no Person or Governmental Entity has brought or, to the Knowledge of
Sellers, threatened any material Action against the Sellers or any of the Acquired Companies pertaining to the Business Employees arising out of any law governing labor, employment, employment practices or employment discrimination. 
  
 Section 3.9 Absence of Changes. 
  
 Except as set forth in Schedule 3.9, as contemplated by Section 2.7(b) or as
required by this Agreement or by any Ancillary Agreement, (a) from June 30, 2003 to the date of this Agreement, Sellers have conducted the Business in all material respects only in the usual and ordinary course consistent with past practice, and (b)
since June 30, 2003, there has not been any event that individually or in the aggregate with all other events has had, or could reasonably be expected to have, a Seller Material Adverse Effect. Without limiting the generality of the foregoing,
except as set forth in Schedule 3.9, from June 30, 2003 to the date of this Agreement, none of the Sellers or the Acquired Companies has: 
  
 (i) entered into, amended in any material respect or extended any Material Business Contract or other Contract that would have been a
Material Business Contract had it been entered into, amended or extended, in each case, outside the ordinary course of business consistent with past practice; 
  

(ii) other than Investment Assets and other than acquisitions, dispositions or transfers in the ordinary course of business consistent
with past practice, acquired, disposed of or transferred any asset relating to the Business or that presently does or would constitute part of the Transferred Assets, in each case, with a value in excess of $1,000,000 per such asset or $5,000,000 in
the aggregate; 
  
 (iii) paid, discharged or
satisfied any material claim or Liability relating to the Business other than the payment, discharge or satisfaction of claims and Liabilities reserved against in the Business Financial Statements, subject to reimbursement by insurance or indemnity,
or accrued in the ordinary course of business consistent with past practice since the date of the Business Financial Statements; 
  
 (iv) declared, set aside, made or paid any dividend or other distribution in respect of any Equity Interests of any Acquired Company or
otherwise purchased or redeemed, directly or indirectly, any Equity Interests of any Acquired Company; 
  

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 (v) other than in connection with the management of Investment Assets associated with the
Business or in the ordinary course of business consistent with past practice, (A) incurred indebtedness for borrowed money or guaranteed such indebtedness of another Person in excess of $1,000,000, (B) made any loans or advances of borrowed money or
capital contributions to, or equity investments in, any other Person or group of related loans, and advances or contributions in excess of $1,000,000 or (C) issued or sold any debt securities, in each case, with respect to the Business; 

 
 (vi) issued, sold, granted, conferred, awarded, pledged,
or otherwise encumbered any Equity Interests of any Acquired Company; 
  
 (vii) other than in connection with the management of Investment Assets acquired (by merger, consolidation, acquisition of stock or assets or otherwise) any Person or assets comprising a business in connection with
the Business or made in connection with the Business any material investment, either by purchase of any Equity Interests, or contribution to capital, in or of any other Person in an amount, in cash or property, in excess of $5,000,000; 

 
 (viii) promised, granted or agreed to grant any bonus or
increased the contributions to benefit plans, the compensation or benefits of any Business Employee, other than in the ordinary course of business consistent with past practice and other than as required by Applicable Law; 
  
 (ix) (A) made any material change with respect to the
Business in any (1) accounting or financial reporting principles, practices, methods or policies, except as may be required by Applicable Law, GAAP or SAP or (2) method of calculating any bad debt contingency or other reserve for accounting,
financial reporting or Tax purposes, except, in each case, as may be appropriate to conform to Applicable Law, GAAP or SAP, or (B) except in the ordinary course of business consistent with past practice, made any change with respect to the Business
in any pricing, employment, practices, methods or policies; 
  
 (x) made or determined to make any material addition to or material release from Reserves for future insurance policy or reinsurance Contract benefits, or other insurance policy claims and benefits related to the
Business, other than (i) as a result of new business produced, (ii) in the ordinary course of business consistent with past practice or (iii) as is otherwise consistent with the Statement of Net Settlement Methods; 
  

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 (xi) made any material change in the actuarial, investment (including allocation of
investments among segments of CGLIC’s general account and derivatives transactions), reserving, hedging, underwriting or claims administration policies, practices or principles with respect to the Business, except as may be appropriate to
conform to Applicable Law, GAAP or SAP; 
  
 (xii)
made any material changes, other than in the ordinary course of business consistent with past practice, in the terms or policies with respect to, the appointment of Producers or the payment of commissions to any Producer, to the extent related to
the Business; 
  
 (xiii) disposed of or failed to
keep in effect any material rights in, to, or for the use of any of the Intellectual Property except for rights which expire or terminate in accordance with their terms; 
  
 (xiv) made or authorized with respect to the Business any single capital expenditure in excess of $1,000,000
or capital expenditures in excess of $5,000,000 in the aggregate; 
  
 (xv) other than in the ordinary course of business consistent with past practice or in an amount in excess of $1,000,000, with respect to the Business, forgiven, cancelled, compromised, waived or released any debts,
claims or rights; 
  
 (xvi) amended the
Organizational Documents of any Acquired Company, or adopted or entered into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Acquired Company; 

 
 (xvii) undertaken any write down in the book value of (A)
any Investment Assets by an amount in excess of $1,000,000 or (B) any other Transferred Assets by an amount in excess of $1,000,000, except in each case as is otherwise consistent with the Statement of Net Settlement Methods; 
  
 (xviii) agreed to any material change in the schedule of
fees charged to customers pursuant to outstanding Separate Account Subject Contracts; 
  
 (xix) terminated, assigned or attempted to assign any Investment Advisory Contracts; or 
  
 (xx) agreed in writing or otherwise taken any of the actions
described above in clauses (i) through (xix) of this Section 3.9. 
  

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 Section 3.10 Employee Benefits. 
  
 (a) Schedule 3.10(a)(i) contains a true and correct list, as of the date of this Agreement, of: each deferred compensation
plan, incentive compensation plan, bonus compensation plan, profit sharing plan, stock option or other equity compensation plan, “employee welfare benefit plan,” fund or program (within the meaning of Section 3(1) of ERISA); each
“employee pension benefit plan,” fund or program (within the meaning of Section 3(2) of ERISA); each employment, termination, retention, change of control or severance plan, program or policy; and each other employee benefit plan, fund,
program, or arrangement, in each case, in which any two or more employees or former employees of the Business participate and is sponsored, maintained or contributed to or required to be contributed to by any of the Sellers or any of their
Affiliates or by any trade or business, whether or not incorporated (an “ERISA Affiliate”), that together with Sellers or any of their Affiliates would be deemed a “single employer” within the meaning of Section 4001(b) of ERISA,
or to which any of the Sellers or any of their Affiliates or any ERISA Affiliate is party, for the benefit of any employee or former employee of the Business (the “Plans”). Schedule 3.10(a)(ii) contains a true and correct list, as of the
date of this Agreement, of each individual employment, termination, retention, change of control or severance agreement, in each case, to which any current employee of the Business or any of the Acquired Companies are parties (collectively the
“Employment Agreements”). Schedule 3.10(a)(iii) contains a true and correct list, as of the Closing Date, of (A) each individual consultant or independent contractor who provides services to the Business and (B) each person employed by an
entity that provides technology consulting services with respect to the Business, (collectively the “Consulting Agreements”). Schedule 3.10(a)(iii) does not include agreements with third party vendors to provide non-technology services or
temporary employee services, or agreements that may be terminated upon no more than 30 days advance notice. 
  
 (b) With respect to each Plan and Employment Agreement, Sellers have heretofore made available to Buyer true, correct and complete copies of each of the
following documents, to the extent applicable: a copy of each Plan, Employment Agreement and any amendments thereto; and a copy of the most recent Summary Plan Description to the extent required under ERISA. Sellers shall make available to Buyer
true, correct and complete copies of each Consulting Agreement and any amendments thereto no later than 45 days after the date of this Agreement. 
  
 (c) No Liability under Section 412 of the Code or Section 302 or Title IV of ERISA has been incurred by Sellers or any of their ERISA Affiliates that has
not been satisfied in full, other than Liability for premiums due the Pension Benefit Guaranty Corporation (the “PBGC”) which premiums have been paid when due and neither Sellers nor any of their ERISA Affiliates is the subject of any
outstanding funding waiver. The PBGC has not instituted proceedings to terminate any Plan that is subject to Section 302 or Title IV of ERISA. 
  

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 (d) Each of the Plans, Employment Agreements and Consulting Agreements have been operated and
administered in all material respects in compliance with its terms and all Applicable Laws. Except as set forth in Schedule 3.10(d), there are no material pending or, to the Knowledge of Sellers, threatened claims by or on behalf of any employee or
beneficiary under any Plan, Employment Agreement or Consulting Agreement, or otherwise involving any such Plan, Employment Agreement or Consulting Agreement, or the assets of any Plan (other than routine claims for benefits). 
  
 (e) Neither the execution of this Agreement nor the transactions contemplated
hereby will (i) entitle any employee of the Sellers or any of their Affiliates to severance pay or any increase in severance pay upon any termination of employment after the date hereof or (ii) accelerate the time of payment or vesting or result in
any payment or funding of compensation or benefits under, increase the amount payable or result in any other material obligation pursuant to, any of the Plans. 
  

(f) Unless specifically provided for in Schedule 3.10 (f) or under the terms of Section 5.5, the Sellers shall retain all Plans, Employment Agreements
and Consulting Agreements, and the Buyers shall not be liable for any claims for benefits or other Liabilities, financial or otherwise (whether or not arising out of litigation or arbitration) arising under or with respect to such Plans, Employment
Agreements or Consulting Agreements and Buyer shall not assume, shall not be obligated to continue, and shall not be responsible or liable for, any Seller severance practice (whether written or unwritten) with respect to such Affected Employees.

  
 (g) Schedule 3.10(g) sets forth any outstanding Order or
directive, any written agreement, consent agreement or memorandum of understanding, any commitment letter or similar undertaking, any supervisory letter from any Governmental Entity and any resolutions adopted at the request of any Governmental
Entity, in each case, related to the Business Employees or the Business’ employment practices. 
  
 Section 3.11 Taxes. 
  
 Except as set forth in Schedule 3.11: 
  
 (a) Each of the Acquired Companies and, to the extent it relates, in whole or in part, to the Business, each of Sellers has (i) timely filed or caused to
be filed all material Tax Returns required to be filed by them, and all such Tax Returns were true and correct in all material respects when filed and (ii) paid or accrued (in accordance with generally accepted accounting principles consistently
applied) all Taxes shown to be due on such Tax Returns. All material Taxes required to be withheld by or on behalf of the Acquired Companies and, to the extent it relates, in whole or in part, to the Business, by or on behalf of the Sellers have
been timely paid to the proper Tax Authority or properly set aside in accounts for such purpose. 
  

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 (b) No material federal, foreign, state or local audits or other administrative proceedings have formally
commenced or are presently pending with regard to any Taxes or Tax Returns of the Acquired Companies, and, to the extent relating, in whole or in part, to the Business, Sellers, and no notification has been received in writing that such an audit or
other proceeding is pending or threatened with respect to any Taxes. 
  
 (c) There are no outstanding written requests, agreements, consents or waivers to extend the statutory period of limitations applicable to any Tax Returns of the Acquired Companies or, to the extent relating, in whole or in part, to the
Business, Sellers. 
  
 (d) There are no Liens for Taxes (other
than Permitted Liens) upon the assets of any of the Acquired Companies and, to the extent relating, in whole or in part, to the Business, Sellers. 
  
 (e) None of the Acquired Companies or, to the extent relating, in whole or in part, to the Business, Sellers, is a party to or has any obligations or
liabilities arising pursuant to any Tax sharing, funding, allocation, indemnification or similar Tax agreement. 
  
 (f) No claim has been asserted in writing by any Tax Authority that any of the Acquired Companies or, to the extent relating, in whole or in part, to the
Business, Sellers, is liable for any Taxes based on Section 482 of the Code or comparable provisions of other Applicable Law. 
  
 (g) Books and Records in respect of the Business and the Acquired Companies have been maintained in all material respects in accordance with Revenue
Procedure 98-25. 
  
 (h) To the best Knowledge of Sellers, no
closing agreements, private letter rulings, technical advice memoranda or similar agreements or rulings (other than local, negotiated economic incentive zone rulings) have been entered into with or issued by any Tax Authority with respect to any of
the Acquired Companies or, to the extent relating, in whole or in part, to the Business, Sellers (i) within the past ten (10) years or (ii) that would reasonably be expected to have a material effect on any Taxes for which Buyer is liable pursuant
to this Agreement. 
  
 (i) Each Acquired Company is a member of
the affiliated group (within the meaning of Section 1504(a)(1) of the Code) for which CIGNA Corporation files a consolidated return as the common parent. 
  

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 (j) The Buyer will not be required to deduct and withhold any amount pursuant to Section 1445 of the Code
in connection with the transactions contemplated by this Agreement. 
  
 (k) None of the Acquired Companies is, or has been, a passive foreign investment company within the meaning of Section 1297 of the Code. 
  
 (l) None of the Acquired Companies, or to the extent it relates, in whole or in part, to the Business, Sellers has “participated in” (as
described in Treasury Regulation Section 1.6011-4(c)(3)(i)(A)) a transaction that either constitutes a “listed transaction” (as described in Treasury Regulation Section 1.6011-4(b)(2)) or would have constituted a listed transaction if
current law had been in effect at the time of such participation except, in either case, to the extent that the statute of limitations period for the final Tax Return reflecting the transaction (as described in Treasury Regulation Section
1.6011-4(e)(2)(i)) has already expired. 
  
 (m) Each Separate
Account, to the extent it relates in whole or in part to the Business, has at all times been organized, operated and reported so that it qualifies as a segregated asset account for purposes of Subchapter L of the Code, excluding those Separate
Accounts listed on Schedule 3.11(m) that are not subject to Code Sections 817 or 817A. 
  
 (n) None of the Acquired Companies is subject to Tax outside its country of incorporation. 
  
 Section 3.12 Intellectual Property and IT Assets. 
  
 (a) Schedule 3.12(a) sets forth a true and complete list of all (i) Transferred IP Assets that are any of the following: (A) material Computer Software;
(B) Trademarks which are the names of products and services; and (C) the subject of an application or registration with the United States Patent and Trademark Office, the United States Copyright Office or any other authority in the United States, or
an Internet register (each, an “Intellectual Property Office”), identifying each as a Patent, Trademark, Copyright, Computer Software, or otherwise, and specifying for each its title or subject matter, application or registration number,
filing date, issue date, owner, but for Internet domain names specifying for each its registrant and administrative contact names, addresses and other contact information, the administering register, registration date, expiration date, and whether
it is active (i.e., hosting a website); (ii) Transferred IT Hardware (identifying each item’s purpose and owner); (iii) Intellectual Property Contracts (identifying for each its title, the parties and date, provided that no breach shall
be deemed to have occurred for inadvertent failure prior to the date of this Agreement to list any immaterial Intellectual Property Contract after having made reasonable efforts to do so notwithstanding any obligation to list pursuant to Section
3.13(l); (iv) IT Hardware Leases (identifying for each its title, the parties and date,); and (v) Excluded IP Assets (identifying for each the information for an asset or Contract, as applicable, consistent 
  

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 with the requirements set forth above in this Section 3.12(a)). Except as otherwise specifically identified in Schedule
3.12(a) or as the direct result of an Intellectual Property Office’s negligence, no item required to be listed on Schedule 3.12(a)(i) has lapsed, expired or been abandoned or cancelled, or is subject to any pending, or to the Knowledge of
Sellers threatened, opposition, cancellation, interference, Intellectual Property Office public protest, domain name dispute or other proceeding before an Intellectual Property Office, and no item required to be identified on Schedule 3.12(a)(i)(C)
requires that any maintenance fee be paid, affidavit of use be filed, or any other action required to maintain such item be taken within six (6) months immediately following the date of this Agreement. Except as otherwise specifically identified in
Schedule 3.12(a)(vi), there is no claim asserted, or to the Knowledge of Sellers threatened in writing, against any Seller or any Affiliate of any Seller concerning the ownership, validity, registrability, enforceability, infringement, use or
licensed right to use any Transferred IP Asset, or the infringement, use or licensed right to use any Intellectual Property in connection with the Business. All Transferred IP Assets are valid, subsisting, enforceable and not subject to any
outstanding order adversely affecting the use thereof or rights thereto. 
  
 (b) (i) Except as otherwise specifically identified in Schedule 3.12(b), the Sellers and their Affiliates own all Transferred IP Assets and all Transferred IT Hardware, which are freely transferable to the Buyer
(directly or indirectly) and will be transferred to Buyer (directly or indirectly) and will survive unchanged upon the consummation of the transactions contemplated by this Agreement, and have the valid right to use all Transferred IP Assets and
rights under Intellectual Property Contracts as used in the Business as currently conducted. Except as otherwise specifically identified in Schedule 3.12(b), to the Knowledge of Sellers, the conduct of the Business as currently conducted and for the
three (3) year period immediately preceding the date of this Agreement does not and did not infringe or otherwise violate the Intellectual Property rights of any third Person. 
  
 (ii) Except as otherwise specifically identified in Schedule 3.12(b), to the Knowledge of Sellers, no third Person infringes
or otherwise violates any Seller’s or any Affiliate of any Seller’s rights in the Transferred IP Assets or their exclusive rights (if any) under the Intellectual Property Contracts. 
  
 (iii) Except as otherwise specifically identified in Schedule 3.12(b), there
are no claims asserted or threatened by Sellers or Affiliates of Sellers, or decided by any Sellers or Affiliates of Sellers to be asserted or threatened, that (A) a third Person infringes or otherwise violates or for the three (3) year period
immediately preceding the date of this Agreement has infringed or otherwise violated, any of Seller’s or any Affiliate of any Seller’s rights in the Transferred IP Assets or their exclusive rights (if any) under the Intellectual Property
Contracts; or (B) a third Person’s owned or claimed Intellectual Property interferes with, infringes, dilutes or otherwise harms any Seller’s or any Affiliate of any Seller’s rights in the Transferred IP Assets or their exclusive
rights (if any) under the Intellectual Property Contracts. 
  

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 (c) Except as otherwise specifically identified in Schedule 3.12(c) or as set forth in the respective
Intellectual Property Contracts and IT Hardware Leases, each such Intellectual Property Contract and IT Hardware Lease is free of Liens and will be transferred to Buyer (directly or indirectly) upon the consummation of the transactions contemplated
by this Agreement. To the Knowledge of Sellers, all exclusive Intellectual Property rights licensed pursuant to an Intellectual Property Contract are valid, subsisting and enforceable. Seller and Affiliates of Seller have not been informed in
writing that any Intellectual Property rights licensed pursuant to an Intellectual Property Contract are subject to any outstanding order adversely affecting use thereof or rights thereto. 
  
 (d) The Sellers and their Affiliates have taken reasonable measures to
protect the secrecy and confidentiality of all Trade Secrets that are part of the Transferred IP Assets or that are provided pursuant to Intellectual Property Contracts or IT Hardware Leases. To the Knowledge of Sellers, such Trade Secrets which are
material have not been used or disclosed by any person except pursuant to valid and appropriate non-disclosure and/or license agreements which have not been breached. All Sellers and Affiliates of Sellers have on or about March 2000 implemented the
“CIGNA Information Protection Policy” (a copy of which Seller has provided to Buyer for review), have provided notice to their employees of such policy and have reasonably enforced such policy. 
  
 (e) Sellers and Affiliates of Sellers have all rights necessary to grant the
licenses granted to Buyer and the Acquired Companies pursuant to the transactions contemplated by this Agreement (including without limitation the Transition Services Agreement and the Trademark/Trade Name Licenses Agreement). 
  
 (f) The Transferred IT Items operate and perform in all material respects in
accordance with their operation and performance prior to the date of this Agreement. Seller and Affiliates of Seller have implemented reasonable controls to prevent the introduction into and use of any devices that (A) enable or assist any person to
access without authorization the Transferred IT Items, or (B) otherwise significantly adversely affect such Transferred IT Items’ functionality. To the Knowledge of Sellers, no Person has gained unauthorized access to the Transferred IT Items.

  
 Section 3.13 Material Business Contracts. 

 
 Other than Subject Contracts, reinsurance Contracts and Investment
Assets, Schedule 3.13 sets forth, as of the date of this Agreement, each (a) noncompetition or nonsolicitation Contract which by its terms expressly restricts the right of any Seller or any Affiliate of any Seller (in each case, to the extent
relating to the Business) or any Acquired Company to compete with other entities, engage in any line of business or solicit employees; (b) Contract constituting a Transferred Asset, asset of any Acquired Company, Assumed Liability or Acquired
Company Liability which evidences indebtedness for borrowed money in excess of $1 million or pursuant to which any Seller, Affiliate of a Seller or Acquired Company has guaranteed (including guarantees 
  

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 by way of acting as surety, co-signer, endorser, co-maker, indemnitor or otherwise) any obligation in excess of $1
million of any other Person; (c) Contract providing for the acquisition or disposition of any portion of the Business or Transferred Assets or assets of the Acquired Companies having a book value in excess of $1 million; (d) Contract providing for
an irrevocable power of attorney on behalf of any Seller or any Affiliate of any Seller (in each case, to the extent related to the Business) or any Acquired Company; (e) investment management and sub-advisor Contract relating to the Manager of
Managers Program; (f) Contract with mutual fund complexes whose shares are held in Separate Accounts; (g) Contract that is a partnership agreement, joint venture agreement or similar agreement to which any Seller or any Affiliate of any Seller (in
each case, to the extent relating to the Business) or any Acquired Company is a party; (h) Contract that contains a guarantee over a period of greater than 30 months of the rates charged by any Seller or any Affiliate of any Seller (in each case, to
the extent relating to the Business) or any Acquired Company to any customer; (i) Contract for capital expenditures in excess of $1 million to be made after the date of this Agreement by any Seller or any Affiliate of any Seller (in each case, to
the extent relating to the Business) or any Acquired Company, which Contract constitutes a Transferred Asset, assets of any Acquired Company, Assumed Liability or Acquired Company Liability, other than Contracts which are terminable on less than
sixty (60) days’ prior notice without payment of any penalty; (j) lease or sublease (other than a Lease constituting a Transferred Asset, asset of any Acquired Company, Assumed Liability or Acquired Company Liability) having annual payments in
excess of $500,000; (k) collective bargaining agreements to which any Seller or any Affiliate of any Seller (in each case, to the extent relating to the Business) or any Acquired Company is a party; (l) Intellectual Property Contract or IT Hardware
Lease; (m) Contract with any Governmental Entity (other than Contracts under which such Governmental Entity is a customer of any Seller, Affiliate of any Seller or any Acquired Company); (n) Investment Advisory Contract or any other Contract
relating to investment management, investment advisory or subadvisory services to which any Seller or Affiliate of any Seller (in each case, to the extent related to the Business) or any Acquired Company is a party, as service provider; (o)
amendment, supplement and modification (whether oral or written) in respect of the foregoing; and (p) other Contract pursuant to which the Business receives or is reasonably expected to receive payments, or makes or is reasonably expected to make
payments, of at least $1 million per calendar year or $5 million over any five-year period (clauses (a) through (p), collectively, the “Material Business Contracts”). With respect to each Material Business Contract, assuming the due
authorization, execution and delivery thereof by the other party or parties thereto, (i) each Material Business Contract is valid, binding and enforceable in accordance with its terms and is in full force and effect, (ii) Sellers, Affiliates of
Sellers and the Acquired Companies are not and, to the Knowledge of Sellers, no other party thereto is, in default in the performance, observance or fulfillment of any obligation, covenant or condition contained in each of the Material Business
Contracts, and (iii) no Seller, Affiliate of any Seller or Acquired Company has given to or received from any other Person, at any time since January 1, 2002, any notice or other communication (whether written or oral) regarding any actual or
potential material violation or breach of, 
  

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 or material default under, any Material Business Contract, other than, in the case of clauses (i), (ii) and (iii) with
respect to any particular Material Business Contract, where any such failure to be valid and binding and in full force and effect and defaults would not individually result in a Loss to the Business in excess of $50,000. 
  
 Section 3.14 Real Property. 
  
 (a) None of the Acquired Companies owns or has ever owned any real property.
Except for Investment Assets and as set forth on Schedule 3.14(a), none of Sellers nor any Affiliate of any Seller owns any real property which is used in the conduct of the Business. 
  
 (b) Schedule 3.14(b) sets forth a true and correct list, as of the date of this Agreement, of all leases, subleases and
occupancy agreements for real property which are primarily used in the conduct of the Business (such leases, subleases and occupancy agreements being hereinafter collectively referred to as “Leases”), and setting forth the address, the
name of landlord, the name of the tenant and whether the real property is used exclusively by the Business or is shared with other businesses operated by any Seller or any Affiliates of any Seller for each Lease. 
  
 (c) Schedule 3.14 (c) sets forth a true and correct list, as of the date of
this Agreement, of all leased properties (other than the properties covered by the Leases) used in the Business (the “Field Locations”). Sellers have delivered to Buyer correct and complete copies of the Leases (as amended or
supplemented). As of the date of this Agreement, there are no security deposits held in connection with the Leases nor are there any subleases except as provided on Schedule 3.14(b). To the Knowledge of Sellers: (i) each Lease is legal, valid,
binding, in full force and effect and enforceable in accordance with its respective terms against the parties thereto; (ii) there does not exist under any Lease any material default, violation or breach by the parties thereto; (iii) no event has
occurred and is continuing that constitutes or, with notice or the passage of time or both, would constitute a material default, violation or breach under any Lease; and (iv) the tenant in each Lease has a valid leasehold interest under its
respective Leases free and clear of any Liens, other than as provided under such Lease and Permitted Liens. Each tenant enjoys peaceful and undisturbed possession under its respective Leases for the use of such property in the conduct of the
Business. 
  
 Section 3.15 Affiliate Transactions.

  
 (a) Schedule 3.15(a) contains a complete and correct list of
all Contracts, transfers of assets or Liabilities, provision of goods or services or other commitments or transactions (whether or not reduced to writing) (i) between any Acquired Company, on the one hand, and any Seller or any Affiliate of any
Seller (other than any Acquired Company), on the other hand, and (ii) between any Seller or any Affiliate of any Seller, on the one hand, and any Seller or any Affiliate of any Seller, on the other hand, relating to the Business (collectively,
“Intercompany Agreements”). 
  

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 (b) Schedule 3.15(b) contains a complete and correct list of all Contracts (i) between any Acquired
Company, on the one hand, and any officer, director, employee or consultant (in each case, who is not a Business Employee) of any Seller or any Affiliate of any Seller (other than any Acquired Company), or any Person related by blood or marriage to
such natural Person, on the other hand, and (ii) any Seller or any Affiliate of any Seller (other than any Acquired Company), on the one hand, and any Business Employee, on the other hand, (collectively, “Affiliate Agreements”).

  
 Section 3.16 Labor Matters. 
  
 The Business Employees are not, and during the last five years have not
been, members of a bargaining unit covered by a collective bargaining agreement or similar agreement with any labor organization to which any Seller or any of their Affiliates is a party. Except as set forth in Schedule 3.16, none of Sellers or any
of their Affiliates (in each case to the extent relating to the Business) are, or during the last five years have been, the subject of any union organizing effort, representation petition, strike, slowdown, stoppage or lockout or other labor dispute
or problem involving the Business Employees. None of the Business Employees are the subject of any representation petition before the National Labor Relations Board. 
  
 Section 3.17 Brokers and Finders. 
  
 Except for Goldman, Sachs & Co., whose fees and expenses shall be paid by Sellers in accordance with Sellers’
agreement with such firm, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or similar fee or commission in connection with the transactions contemplated by this
Agreement based upon arrangements made by or on behalf of Sellers. 
  
 Section 3.18 Sufficiency of Assets. 
  
 Except
(i) as set forth in Schedule 3.18 and except for (ii) (A) those assets listed on Schedule 1.1(e), (B) the Excluded IP Assets, (C) each Contract which Buyer elects not to have treated as an Assigned and Assumed Contract (in each case, as of the
applicable date on which such election is made), (D) the Intercompany Agreements listed on Schedule 5.17(a)(i), (E) the Investment Assets other than the Transferred Investment Assets, (F) CGLIC’s Capital, Surplus and AVR (other than the
Capitalization Amount transferred to CIGNA Life pursuant to Article II hereof) and (G) the Excluded Services (as defined in the Transition Services Agreement), and each other service which Buyer elects not to be a Transition Service (in each case,
as of the applicable date on which such election is made) (and related assets to be utilized in providing any such services), the properties, assets and rights owned by the Acquired Companies, the Transferred Assets, the Transferred Investment
Assets, the Assigned and Assumed Contracts (in each case, as of the applicable date on which such Contract is designated as an Assigned and Assumed Contract), the Intercompany Agreements set forth on Schedule 5.17(a)(ii), the rights licensed to
Buyer pursuant to the Trademark/Trade Name Licenses Agreement, the rights 
  

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 licensed to Buyer pursuant to Section 5.26 and the Transition Services (in each case, as of the applicable date on which
such service is designated as a Transition Service) constitute all of the properties, assets and rights material to the Business which are owned by Sellers and their Affiliates and used to conduct the Business as it is currently conducted by the
Sellers and their Affiliates, and such properties, assets and rights are sufficient for Buyer, as of the Closing, to conduct the Business in all material respects as currently conducted by the Sellers and their Affiliates. 
  
 Section 3.19 Undisclosed Liabilities. 
  
 Except for (i) Liabilities set forth in Schedule 3.19, (ii) Retained ECOs
(iii) Assumed Liabilities and (iv) Post-Closing Business Liabilities, to the Knowledge of Sellers, as of the date of this Agreement, there are no material Liabilities of the Business which are of a type which would be reasonably likely to recur
following the Closing Date. 
  
 Section 3.20 Title to
Assets. 
  
 (a) The Sellers and the Acquired Companies are in
possession of and have good and marketable title to, or valid leasehold interests in or valid rights under Contract to use, all tangible personal property used or held for use in the conduct of the Business, including all tangible personal property
reflected on the Business Financial Statements and all tangible personal property acquired since the date of the Business Financial Statements (other than tangible personal property disposed of in the ordinary course of business consistent with past
practice and custom since the date of the Business Financial Statements) and all tangible personal property reflected in the Final Statement of Net Settlement. All such tangible personal property is free and clear of all Liens, except for Permitted
Liens and as set forth on Schedule 3.20(a). 
  
 (b) Schedule
3.20(b)(i) sets forth a true and complete list of all Investment Assets of the Business, by portfolio, as of the date of the Statutory Financial Statements, with information included therein as to the statutory carrying value thereof as of the date
of the Statutory Financial Statements. Schedule 3.20(b)(ii) sets forth as of the date of this Agreement, by sub-account of the General Account and Separate Account, the following information relating to the Transferred Investment Assets supporting
Insurance-Related Liabilities to become Assumed Liabilities under this Agreement: (i) sub-account name, (ii) statutory carrying value of assets by asset class. 
  

Section 3.21 Product Administration and Compliance. 
  
 Except as set forth in Schedule 3.21: 
  
 (a) There are no nonexempt prohibited transactions within the meaning of Section 4975 of the Code or Section 406 of ERISA or violations of Section 404 of
ERISA with respect to such Subject Contracts. 
  

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 (b) All Subject Contracts, employee benefit plan documents sold or provided by the business and products
and services relating to employee benefit plans that are sold, issued or administered by the Acquired Companies or the Sellers (in each case, to the extent relating to the Business) are materially in compliance with and to the extent administered by
the Acquired Companies or the Sellers are substantially administered within the terms of such Subject Contracts, products and services, and Applicable Law. 
  
 (c) As it relates to the Business, Sellers have provided to Buyer full and complete copies of Sellers’ logs of customer complaints received through
state insurance departments or by CIGNA Financial Services, Inc. or summaries or copies of such complaints received from January 1, 2001 to December 31, 2002. 
  

(d) Sellers have submitted to Buyer all requested written tax operational policies and procedures with respect to Subject Contract administration and
such tax operational policies and procedures are consistent in all material respects with the manner in which the Subject Contracts, policies and plans have been administered. All system tax testing results, including screen prints, submitted by
Sellers are true and unaltered results from the test scenarios submitted by Buyer. All results were obtained from the administration systems without manual intervention, unless otherwise noted in writing in the test scenarios or written comments
provided to Buyer, and represent the current workflow of the administrative systems. 
  
 (e) Sellers and their Affiliates (in each case, to the extent relating to the Business) make available to certain of their customers a payroll deduction Section 529 program known as the CollegeBoundfund Employee
Payroll Direct Deposit Program. 
  
 (f) Other than guaranteed
investment contracts referred to in Section 3.21 (g) below, the minimum guaranteed crediting rate of all Subject Contracts which have a minimum guaranteed crediting rate specified therein is 0%; provided, that with respect to Subject
Contracts sold to plans or programs organized pursuant to Sections 403( b) or 408 of the Code, or Subject Contracts that are intended to be sold in connection with nonqualified plans that are not subject to the requirements of Section 401(a) of Code
(x) such Subject Contracts have outstanding reserves as of June 30, 2003 not in excess of $1,200,000,000 and (y) such Subject Contracts have a provision specifying a minimum guaranteed crediting rate and no such Subject Contract has a minimum
guaranteed crediting rate exceeding 4%. 
  
 (g) Schedule 3.21(g)
sets forth the scheduled payments required to be made under Subject Contracts that are guaranteed investment contracts. 
  
 (h) No Separate Account Subject Contract that is guaranteed by investment portfolios held in CGLIC’s General Account has been issued for delivery in
California or Minnesota unless it was issued in compliance with Applicable Law. 
  

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 (i) Sellers and their Affiliates (in each case, to the extent related to the Business) and the relevant
Acquired Companies have materially complied with all applicable reporting, withholding and disclosure requirements under the Code, ERISA and similar state laws with respect to Subject Contracts issued, entered into, sold, or administered by the
Sellers and their Affiliates (in each case, to the extent related to the Business) and the relevant Acquired Companies. 
  
 (j) There are no “hold harmless,” Tax sharing or indemnification agreements respecting the Tax qualification or treatment of any product,
contract, or employee benefit plan document issued, sold, or administered by any of the Sellers or their Affiliates (in each case, to the extent related to the Business) or the relevant Acquired Companies. 
  
 (k) There are no currently pending federal, state, local or foreign audits or
other administrative or judicial proceedings in which either the Sellers or any of their Affiliates (in each case, to the extent related to the Business) or any of the relevant Acquired Companies is a party in which the Tax treatment of any Subject
Contract issued, sold, or administered by any of the Sellers or their Affiliates (in each case, to the extent related to the Business) or the relevant Acquired Companies is at issue. 
  
 (l) Sellers and their Affiliate (in each case, to the extent relating to the Business) are treated, for federal Tax
purposes, as the owner of the assets underlying the Subject Contract issued, entered into or sold by such company (whether developed by, administered by or reinsured with any unrelated third party) which is provided under or connected with either
(1) a plan described in Section 401, 403, 408 or 457 or any similar provision of the Code; (2) any employee benefit plan within the meaning of ERISA; or (3) any Subject Contract subject to Section 817 of the Code. 
  
 (m) For the avoidance of doubt, the Tax provisions set forth in Section 3.11
and Section 5.19 shall not apply to any of the products or matters referred to in this Section 3.21; provided, however, if there is a failure of any representation or warranty set forth in this Section 3.21 and the subject matter of such failure
becomes the subject matter of a contest, claim, audit or similar proceeding initiated by a Tax Authority against the Buyer or any of its Affiliates (including the Acquired Companies), then such proceeding and Sellers’ indemnification
obligations, if any, with respect thereto shall be governed in all respects by the provisions of Section 5.19, and, to the extent governed by Section 5.19, for purposes of the survival periods of the representations and warranties set forth in
Section 7.2, such representation or warranty shall be treated as a representation or warranty set forth in Section 3.11. 
  
 (n) None of the Subject Contracts are governed by Code Sections 7702 or 7702(A). 
  

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 Section 3.22 Producers. 
  
 (a) Schedule 3.22(a)(i) sets forth the standard forms of agreements (collectively, the “Producer Agreements”)
being utilized, as of the date of this Agreement, by Sellers or their Affiliates (in each case, to the extent relating to the Business) or any Acquired Company with respect to their respective producers, third-party administrators, agents, brokers
and broker-dealers (each, a “Producer”). Except as set forth in Schedule 3.22(a)(ii), all of the Contracts in effect between Sellers or their Affiliates (in each case, to the extent relating to the Business) or any Acquired Company and the
Producers are in all material respects in the form of one of the Producer Agreements. 
  
 (b) Except as set forth in Schedule 3.22(b), no such Producer has binding authority on behalf of any Seller or any Affiliates of any Seller (in each case, to the extent relating to the Business) or any Acquired
Company. Each of the Contracts between any of Sellers or any Affiliates of any Seller (in each case, to the extent relating to the Business) or any Acquired Company and their respective Producers, is valid, binding and in full force and effect in
accordance with its terms. Except as set forth in Schedule 3.22(b), none of Sellers or their Affiliates (in each case, to the extent relating to the Business), nor any Acquired Company, nor, to the Knowledge of Sellers, any other party to any such
Contract, is in default in any material respect with respect to any such Contract. 
  
 (c) To the Sellers’ Knowledge, (i) except as set forth on Schedule 3.22(c), each insurance Producer at the time such Producer marketed, wrote, sold, produced, administered or managed business for any Seller or
any Affiliate of any Seller (in each case, to the extent relating to the Business), was duly licensed and appointed (for the type of business marketed, written, sold, produced, administered or managed by such Producer) in the particular jurisdiction
in which such Producer marketed, wrote, sold, produced or managed such business for such Seller or Affiliate of any Seller; (ii) all compensation paid to each such Producer was paid in accordance with Applicable Law, Seller Appointments and Seller
Permits; and (iii) no such Producer violated (or with or without notice or lapse of time or both would have violated) any term or provision of any Applicable Law or Order applicable to any aspect (including, but not limited to, the marketing,
writing, sale, production, administration or management) of the business of such Seller or Affiliate of any Seller (in each case, to the extent relating to the Business). 
  
 Section 3.23 Subject Contract Claims. 
  
 All benefits claimed by any Person under any Subject Contract issued by any Seller or any Affiliate of any Seller (in each
case, to the extent relating to the Business) have in all material respects been paid (or provision for payment thereof has been made) in accordance with the terms of the Subject Contracts under which they arose, such payments were not materially
delinquent and were paid (or will be paid) 
  

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 without fines or penalties (and with interest as required by contract or Applicable Law), except for any such claim for
benefits for which the affected company reasonably believes or believed that there is a reasonable basis to contest payment. 
  
 Section 3.24 Actuarial Reports Provided to Buyer. 
  
 The Sellers have delivered to Buyer a complete and accurate copy of the actuarial reports listed on Schedule 3.24 prepared in connection with CGLIC’s
statutory annual filings relating to the Business since December 31, 2001, and all attachments, addenda, supplements and modifications thereto. 
  
 Section 3.25 Reinsurance Agreements. 
  
 Schedule 3.25 contains, as of the date of this Agreement, a true and complete list of all reinsurance or coinsurance treaties or agreements, including
retrocessional agreements, to which any of Sellers or their Affiliates (in each case, to the extent relating to the Business) is a party or under which any of Sellers or their Affiliates has any existing rights, obligations or liabilities related to
the Business. Except as set forth in Schedule 3.25, all such treaties or agreements as set forth in such Schedule 3.25 are in full force and effect. Except as set forth in Schedule 3.25, none of Sellers or their Affiliates, nor, to the Knowledge of
Seller, any other party to any such reinsurance or coinsurance treaty or agreement, is in default as to any material provision thereof. 
  
 Section 3.26 Policy Forms. 
  
 Except as set forth on Schedule 3.26, to the extent required under Applicable Law, (a) all policy forms, and certificates used in the Business as of the
date of this Agreement, all policy forms and certificates on which Subject Contracts in force on the date of this Agreement were written and all amendments, endorsements and riders thereto (collectively, “Policy Forms”) and (b) 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. All Policy Forms currently being issued, and all Policy Forms on which Subject Contracts in force on the date of this Agreement which comprise any material portion of the Business were written, have been provided
previously to Buyer. Except as set forth on Schedule 3.26, each Subject Contract in force on the date of this Agreement conforms in all material respects to one of the Policy Forms. 
  
 Section 3.27 Company Separate Accounts and Underlying Funds. 
  
 (a) Except as set forth in Schedule 3.27, (i) each segregated asset account
of Sellers or their Affiliates that is included in the Business (each, a “Company Separate Account”) is duly and validly established and maintained in all material respects under the Applicable Laws and that portion of the assets of each
Company Separate 
  

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 Account equal to the Reserves and other contract liabilities with respect to each such Company Separate Account is not
chargeable with Liabilities arising out of any other business that such company establishing the separate account may conduct; (ii) each Company Separate Account at all times has been operated and is currently operating in compliance in all material
respects with Applicable Law and Seller Permits; (iii) each private placement memorandum, offering document, sales brochure, sales literature, or advertising material, as amended or supplemented, relating to any Company Separate Account, as of their
respective mailing dates or dates of use (A) contained no untrue statement of material fact and did not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (B) complied in all material respects with Applicable Law including but not limited to federal and state securities laws and state insurance laws; (iv) to the Knowledge of Sellers, no examinations,
investigations, inspections, and formal or informal inquiries, including, without limitation, periodic regulatory examinations of the Company Separate Accounts’ affairs and condition, civil investigative demands and market conduct examinations,
by any Governmental Entity have been conducted since January 1, 2001 or are being conducted; and (v) no notice has been received from and no investigation, inquiry or review is pending or threatened by any Governmental Entity which has jurisdiction
over the Company Separate Accounts (A) with respect to any alleged violation by Sellers or their Affiliates (in each case, to the extent relating to the Business) of any Applicable Law which, if proven, could reasonably be expected to have a
material adverse effect on the Business, or (B) with respect to any alleged failure to have, or any threatened revocation of, any Seller Permits required in connection with the operation of the business of the Company Separate Accounts. 

 
 (b) (i) Each Company Separate Account that is required to be registered
with the SEC as an investment company under the Investment Company Act is so registered and each such registration is in full force and effect; (ii) each registered Company Separate Account has been operated and is currently operating in compliance
in all material respects with the Investment Company Act and with applicable regulations, rules, releases and orders of the SEC; (iii) interests in each registered Company Separate Account or the variable contracts through which such interests are
issued have been sold pursuant to an effective registration statement filed under the Securities Act and any applicable state securities laws; (iv) such registration statements, at the time that each became effective, contained no untrue statement
of a material fact, and did not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading; (v) each prospectus,
statement of additional information, or private placement memorandum, as amended or supplemented, relating to any registered Company Separate Account and all supplemental advertising material relating to any registered Company Separate Account, as
of their respective mailing dates or dates of use (A) contained no untrue statement of material fact and did not omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading, and (B) 
  

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 complied in all material respects with Applicable Law including but not limited to, federal and state securities laws and
state insurance laws, rules of the NASD, the Securities Act and the Investment Company Act; and (vi) all advertising or marketing materials relating to each registered Company Separate Account that were required to be filed with any other
Governmental Entity have been timely filed therewith. 
  
 Section
3.28 Broker-Dealer. 
  
 (a) CIGNA Financial Services, Inc.
(“CFS”) is the only Acquired Company that conducts activities of a broker or dealer, as such terms are defined in Section 3(a) of the Exchange Act and required to be registered under Section 15 of the Exchange Act (the “Broker-Dealer
Subsidiary”). Schedule 3.28(a) lists a description of the nature of its business and, as of the date of this Agreement, a listing of all Seller Permits it possesses, and all registration statements it has filed with the United States Securities
and Exchange Commission or any successor agency (the “SEC”) or any other Governmental Entity since January 1, 2001. 
  
 (b) The Broker-Dealer Subsidiary is registered as a broker-dealer with the SEC and with each other Governmental Entity with which it is required to
register in order to conduct its business as currently conducted, and has been so registered since January 1, 2001 or, if later, the date when the conduct of its business required it to be so registered except where failure to do so would not result
in a Seller Material Adverse Effect. Set forth in Schedule 3.28(b) is a true and complete list of such registrations as of the date of this Agreement. 
  
 (c) The Broker-Dealer Subsidiary is a member organization of the NASD and such other organizations in which its membership is required in order to conduct
its business as now conducted, and has been a member of NASD and each such other organization since January 1, 2001 or, if later, the date when the conduct of its business first required it to become a member. 
  
 (d) The Broker-Dealer Subsidiary is and has been since January 1, 2001 in
compliance with all Applicable Laws (including the Blue Sky laws and the rules of each self-regulatory organization of which it is a member) except where failure to do so would not result in a Seller Material Adverse Effect. 
  
 (e) The Broker-Dealer Subsidiary is not, nor is any “associated
person” of it, subject to a “statutory disqualification” (as such terms are defined in the Exchange Act) or subject to a disqualification that would be a basis for censure, limitations on the activities, functions or operations of, or
suspension or revocation of the registration of the Broker-Dealer Subsidiary as broker dealer, municipal securities dealer, government securities broker or government securities dealer under Section 15, Section 15B or Section 15C of the Exchange Act
and, to the Knowledge of Sellers, as of the date of this Agreement there are no material proceedings or investigations pending by any Governmental Entity that is reasonably expected to result in any such censure, limitations, suspension or
revocations. 
  

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 Section 3.29 Investment Advisers Act. 
  
 (a) (i) Global Portfolio Strategies, Inc. (“GPS”) and CFS
(collectively, the “Advisory Entities”) are the only Acquired Companies that are registered as investment advisers under the Investment Advisers Act. No Advisory Entity provides investment advice to any vehicle for collective investment
(in whatever form of organization, including in the form of a corporation, company, limited liability company, partnership (limited or general), association, trust or other entity and including each separate portfolio of any of the foregoing),
whether or not required to be registered under the Investment Company Act. Schedule 3.29(a) sets forth a description of the business of each of the Advisory Entities and a listing of all Seller Permits each possesses, and all registration statements
each has filed with the SEC or any other Governmental Entity since January 1, 2001. No other Acquired Company is required to be registered under the Investment Advisers Act. 
  
 (ii) (A) Each Advisory Entity has provided investment advisory services to all accounts for which its acts
as investment adviser in compliance in all material respects with the terms of the governing documents, prospectuses or other offering or disclosure documents, instructions of clients and Applicable Law (“Governing Advisory Authorities”);
(B) none of Sellers or Affiliates of any Seller or the Acquired Companies nor, to the Knowledge of Sellers, any of their respective directors, officers, members, managers, partners or employees, has committed any material breach of any Governing
Advisory Authority with respect to any account for which such Advisory Entity acts as investment adviser; (C) each Advisory Entity has adopted a written code of ethics, complete and accurate copies of which have been made available to Buyer; (D)
true and complete copies of each of the registration statements set forth on Schedule 3.29(a) have been made available to Buyer; and (E) neither of the Advisory Entities nor, to the Knowledge of Sellers, any Affiliate or “associated
person” (within the meaning of the Investment Advisers Act) of either of them, is ineligible pursuant to Section 203(e) of the Investment Advisers Act to serve as a registered investment adviser or as an associated person of a registered
investment adviser. 
  
 (b) The Advisory Entities are, to the
Knowledge of Sellers, in compliance in all material respects with the terms of each Investment Advisory Contract to which each is a party, and are not currently in default in any material respect under any of the terms of any such Investment
Advisory Contract, a true and complete list of which, as of the date of this Agreement, is set forth on Schedule 3.29(b). 
  

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 (c) The accounts of each Advisory Client that are subject to ERISA have been managed in compliance in all
material respects with all applicable requirements of ERISA. 
  
 Section 3.30 CIGNA Bank. 
  
 (a) CIGNA Bank is
“well capitalized” as defined in 12 C.F.R. § 565.4(b)(1) and is “well managed” as defined in 12 U.S.C. § 1841(o)(9). CIGNA Bank received a rating of “satisfactory” or better under its most recent examination
by the OTS pursuant to the Community Reinvestment Act of 1977 and Sellers are not aware of any facts or circumstances likely to affect adversely such rating. In transactions with its Affiliates, CIGNA Bank has complied in all material respects with
Section 23A and Section 23B of the Federal Reserve Act, and Regulation W promulgated thereunder by the Board of Governors of the Federal Reserve System (the “FRB”), all as administered by the OTS or the FRB. 
  
 (b) CIGNA Bank has not and will not make any dividends or distributions on
its outstanding stock: (i) without receiving appropriate permission of the OTS, if required, to make the proposed distribution, and (ii) that would result in CIGNA Bank not being “well capitalized” as defined in 12 C.F.R. §
565.4(b)(1) or result in CIGNA Bank not meeting any other capital adequacy requirements specifically imposed or suggested by the OTS, whichever capital standards are higher. 
  
 (c) In making investments on behalf of its clients and customers (as trustee, fiduciary, advisor or otherwise), CIGNA Bank
has complied in all material respects with all Applicable Laws, including laws related to the exercise of fiduciary powers. 
  
 (d) CIGNA Bank does not conduct a lending business. CIGNA Bank has no loans outstanding to, or guaranties outstanding on behalf of, any of its Affiliates.

  
 Section 3.31 Environmental. 
  
 Except with respect to Investment Assets, each of Sellers and their
Affiliates (in each case, to the extent related to the Business)has complied in all material respects since December 31, 1999 with all Environmental Laws and have not: (i) to Seller’s Knowledge, violated or incurred any material Liability under
any Environmental Law; (ii) to Seller’s Knowledge, owned, occupied, leased or operated property which could reasonably be expected to require investigation or remediation under any Environmental Law; or (iii) received any written claims or
notices alleging Liability relating to any Environmental Laws. Except with respect to Investment Assets, no existing Environmental Law requires any material expenditures with respect to the Transferred Assets or the assets of the Acquired Companies
to comply with such Law. 
  

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 Section 3.32 Corrupt Practices. 
  
 None of Sellers or any of their Affiliates (in each case, to the extent relating to the Business) has, directly or
indirectly, (i) entered into any transaction that violates any anti-money laundering Applicable Law, and there has been no action by any Person, or any internal investigation, relating thereto, (ii) made political contributions or expenditure except
in accordance with Applicable Law, or (iii) offered or provided any unlawful remuneration, entertainment or gifts to any Person, including any official of any Governmental Entity. Each of Sellers and their Affiliates (in each case, to the extent
related to the Business) has complied in all material respects with all applicable “know-your-customer” rules. No plan sponsor is listed on any published list of blocked Persons maintained by the Office of Foreign Assets Control of the
U.S. Department of Treasury (“OFAC”). Each of Sellers and their Affiliates (in each case, to the extent related to the Business) have taken commercially reasonable steps to insure that no plan participant in or annuitant of any
account is listed on any published list of blocked Persons maintained by OFAC. 
  
 ARTICLE IV 
 REPRESENTATIONS AND WARRANTIES OF BUYER 
  
 Except as set forth on the Schedules, Buyer hereby represents and warrants to
Sellers on the date of this Agreement and the Closing Date (or if another date is specified in the representation or warranty, on such date) as follows: 
  
 Section 4.1 Organization, Standing and Corporate Power. 
  

Buyer is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized and has the
requisite corporate power and authority to carry on its business as now being conducted. Buyer is duly qualified or licensed to do business and is in good standing in each jurisdiction in which the nature of its business or the ownership, leasing or
operation of its properties makes such qualification or licensing necessary, except for those jurisdictions where the failure to be so qualified or licensed or to be in good standing individually or in the aggregate would not result in a Buyer
Material Adverse Effect. Buyer has made available to Sellers prior to the execution of this Agreement true and correct copies of the certificate of incorporation and by-laws of Buyer. 
  
 Section 4.2 Authority; Binding Effect. 
  
 Buyer has all requisite power and authority to enter into this Agreement and to consummate the transactions contemplated
hereby. Buyer and each of its Affiliates which are a party hereto or to an Ancillary Agreement have all requisite power and authority to execute and deliver 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 and to consummate the transactions 
  

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 contemplated thereby. The execution and delivery of this Agreement by Buyer and the consummation by Buyer of the
transactions contemplated hereby, and the execution and delivery of 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 Buyer and
its Affiliates which are a party thereto and the consummation of the transactions contemplated thereby, have been duly authorized by all necessary action on the part of each such Person. This Agreement has been duly executed and delivered by Buyer
and, assuming the due authorization, execution and delivery of this Agreement by Sellers, constitutes a legal, valid and binding obligation of Buyer, enforceable against Buyer in accordance with its terms, subject to bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance, equitable subordination and similar laws of general applicability affecting creditors’ rights generally and to general principles of equity. The Ancillary Agreements and the other agreements,
documents and instruments to be executed and delivered in connection with this Agreement or the Ancillary Agreements when duly executed and delivered by Buyer and its Affiliates which are a party thereto, assuming the due authorization, execution
and delivery of such other agreements, documents and instruments by each of the other parties thereto, constitute legal, valid and binding obligations of Buyer and its Affiliates which are a party thereto, enforceable against each such Person in
accordance with their terms, subject to bankruptcy, insolvency, reorganization, moratorium, fraudulent conveyance, equitable subordination and similar laws of general applicability affecting creditors’ rights generally and to general principles
of equity. 
  
 Section 4.3 Noncontravention. 
  
 The execution and delivery of this Agreement and the Ancillary Agreements do
not, and the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements will not, conflict with, or result in any violation of, or default (with or without notice or lapse of time, or both) under, or 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 upon any of the properties or assets of Buyer or its subsidiaries under, (a) Organizational Documents of Buyer or,
(b) subject to the governmental filings and other matters referred to in Section 4.4, any Applicable Law, other than, in the case of clause (b), any such conflicts, violations, defaults, rights, losses or Liens that individually or in the aggregate
would not result in a Buyer Material Adverse Effect. 
  
 Section
4.4 Governmental Approvals. 
  
 Except as set forth in
Schedule 4.4, no consent, approval, order, authorization or licensing of, action by or in respect of, or registration, declaration, notice, report, filing or the expiry of any waiting period with, any Governmental Entity is required by Buyer or any
of its Affiliates in connection with the execution and delivery of this Agreement by Buyer or the execution and delivery of the Ancillary Agreements by Buyer and its Affiliates which are a party thereto or the consummation by Buyer and such

  

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 Affiliates of the transactions contemplated hereby or thereby, except for such filings with Governmental Entities to
satisfy the applicable requirements of state securities or “blue sky” laws or similar foreign laws and approval under the HSR Act. 
  
 Section 4.5 Financial Statements. 
  
 On or prior to the date of this Agreement, Buyer has made available to Sellers true and correct copies of its audited financial statements for the year
ending December 31, 2002 and its unaudited interim consolidated financial statements for the six months ended June 30, 2003 (the “Unaudited Interim Buyer Financial Statements” and together with the December 31, 2002 financial statements,
the “Buyer Financial Statements”). The Buyer Financial Statements have been prepared in accordance with GAAP (subject, in the case of the Unaudited Interim Buyer Financial Statements, to year-end adjustments), and fairly present in all
material respects the consolidated financial position and results of operations of Buyer as of the dates and for the periods indicated therein, with such exceptions that individually or in the aggregate would not reasonably be expected to result in
a Buyer Material Adverse Effect. 
  
 Section 4.6
Litigation. 
  
 Except as set forth in Schedule 4.6, as of
the date of this Agreement, no Action by any Governmental Entity or other Person is pending or, to the Knowledge of Buyer, threatened that seeks to enjoin, or would reasonably be expected to have the effect of preventing, delaying, making illegal or
otherwise interfering with, any of the transactions contemplated by this Agreement or the Ancillary Agreements, except as would not, individually or in the aggregate, reasonably be expected to result in a Buyer Material Adverse Effect. 

 
 Section 4.7 Financing. 
  
 Buyer has, or will at Closing have, sufficient surplus and funds available
(through existing credit arrangements or otherwise) to pay the Purchase Price, satisfy its obligations under Section 2.4(c), and pay all fees, expenses and amounts related to the transactions contemplated by this Agreement and the Ancillary
Agreements. Notwithstanding anything to the contrary in this Agreement or in any of the Ancillary Agreements, Buyer acknowledges and agrees that its obligation to effect the transactions contemplated by this Agreement and the other Ancillary
Agreements is not subject to the availability to Buyer or any of its Affiliates of any debt or equity or other financing in any amount whatsoever. 
  
 Section 4.8 Absence of Changes. 
  
 Except as set forth in Schedule 4.8, from June 30, 2003 to the date of this Agreement, there has not been any event that individually or in the aggregate
with all other events has had, or could reasonably be expected to have, a Buyer Material Adverse Effect. 
  

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 Section 4.9 Brokers and Finders. 
  
 Except for Lehman Brothers Inc., whose fees and expenses shall be paid by Buyer in accordance with Buyer’s agreement
with such firm, no broker, investment banker, financial advisor or other Person is entitled to any broker’s, finder’s, financial advisor’s or similar fee or commission in connection with the transactions contemplated by this Agreement
based upon arrangements made by or on behalf of Buyer. 
  
 ARTICLE
V 
 COVENANTS 
  
 Section 5.1 Conduct of Business in Ordinary Course. 
  
 Except (i) as set forth on Schedule 5.1, (ii) as expressly required by this Agreement or any Ancillary Agreement, or (iii) with the prior written consent
of Buyer, which consent will not be unreasonably withheld or delayed, during the period from the date of this Agreement to the Closing Date, Sellers shall, and shall cause their Affiliates to, conduct the Business in all material respects in the
ordinary course of business consistent with past practice. Without limiting the generality of the immediately preceding sentence and except as set forth on Schedule 5.1 or as contemplated by the Investment Asset Identification Protocol, to the
extent relating to the Business during the period from the date of this Agreement to the Closing Date, Sellers shall not, and shall cause their Affiliates not to, (except with the prior written consent of Buyer, which consent will not be
unreasonably withheld or delayed): 
  
 (a) enter into, amend in
any material respect or extend any Material Business Contract or other Contract that would have been a Material Business Contract had it been entered into, amended or extended, prior to the date of this Agreement except to the extent Sellers or
their Affiliates reasonably and in good faith conclude that such action is necessary to comply with Applicable Law; 
  
 (b) other than Investment Assets and other than acquisitions, dispositions or transfers in the ordinary course of business consistent with past practice,
acquire, dispose of or transfer any asset relating to the Business or that presently does or would at the Closing constitute part of the Transferred Assets, in each case, with a value in excess of $1,000,000 per such asset or $5,000,000 in the
aggregate; 
  
 (c) pay, discharge or satisfy any material claims
or Liabilities associated with the Business, other than the payment, discharge or satisfaction of claims or Liabilities reserved against in the Business Financial Statements subject to reimbursement by insurance or indemnity or incurred in the
ordinary course of business consistent with past practice since the date of the Business Financial Statements; 
  

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 (d) declare, set aside, make or pay any dividend or other distribution in respect of any Equity Interests
of any Acquired Company or otherwise purchase or redeem, directly or indirectly, any Equity Interests of any Acquired Company; 
  
 (e) other than in connection with the management of Investment Assets associated with the Business or in the ordinary course of business consistent with
past practice, (i) incur any indebtedness for borrowed money or guarantee such indebtedness of another Person in excess of $1,000,000, (ii) make any loans or advances of borrowed money or capital contributions to, or equity investments in, any other
Person or group of related loans, advances or contributions in excess of $1,000,000 or (iii) issue or sell any debt securities, in each case, with respect to the Business; 
  
 (f) issue, sell, grant, confer, award, pledge or otherwise encumber, any Equity Interests of any Acquired Company;

  
 (g) other than in connection with the management of Investment
Assets, acquire (by merger, consolidation, acquisition of stock or assets or otherwise) any Person or assets comprising a business in connection with the Business or make in connection with the Business any material investment, either by purchase of
any Equity Interests, or contribution to capital, in or of any other Person in an amount, in cash or property, in excess of $5,000,000; 
  
 (h) with respect to the Business (i) enter into any employment or severance agreement, other than for new Business Employees in the ordinary course of
business consistent with past practice, (ii) enter into or increase the benefits payable under severance, change of control, retention or termination pay policies or agreements in effect on the date of this Agreement, other than as required by
Applicable Law, (iii) adopt any new or amend any existing Plan or other bonus, profit sharing, compensation, stock option, pension, retirement, deferred compensation, employment or other employee benefit plan or agreement for the benefit or welfare
of any director, officer or employee, other than for changes to any Plan or for the benefit of any new employees in the ordinary course of business consistent with past practice and other than as required by Applicable Law, or (iv) promise, grant or
agree to grant any bonus or increase the compensation or benefits of any employee, other than in the ordinary course of business consistent with past practice and other than as required by Applicable Law; provided, however, that CGLIC and any of the
Acquired Companies or their Affiliates may enter into, adopt or amend any of the foregoing prohibited agreements or take any of the foregoing prohibited actions which, in the good faith judgment of Sellers after disclosure to and approval by Buyer
(such approval being required in the event the cost of such actions after the Closing are to be borne directly or indirectly by Buyer), are necessary to conduct or maintain the Business in the ordinary course consistent with past practice;

  
 (i) (A) make any material change with respect to the Business
in any (1) accounting or financial reporting principles, practices, methods or policies or (2) method of calculating any bad debt contingency or other reserve for accounting, financial 
  

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 reporting or Tax purposes, except, in each case, as may be required by Applicable Law, GAAP or SAP, (B) except in the
ordinary course of business consistent with past practice, make any change with respect to the Business in any pricing, selling, employment, credit or allowance principles, practices, methods or policies or (C) make any change with respect to the
Business in the fiscal year, except as may be required by Applicable Law, GAAP or SAP; 
  
 (j) make or determine to make any material addition to or material release from Reserves for future insurance policy or reinsurance contract benefits or other insurance policy claims and benefits related to the
Business other than (i) as a result of new business produced, (ii) in the ordinary course of business consistent with past practice or (iii) as is otherwise consistent with the Statement of Net Settlement Methods; 
  
 (k) make any material change in the actuarial, investment (including
allocation of investments among segments of CGLIC’s general account and derivatives transactions), reserving, hedging, underwriting or claims administration policies, practices or principles with respect to the Business, except as may be
appropriate to conform to changes in Applicable Law, SAP or GAAP; 
  
 (l) make any changes, other than in the ordinary course of business consistent with past practice, in the terms or policies with respect to, the appointment of Producers or the payment of commissions to any Producer; 
  
 (m) dispose of or fail to keep in effect any material rights in, to, or for
the use of any of the Intellectual Property, except for rights which expire or terminate in accordance with their terms; 
  
 (n) make or authorize with respect to the Business any single capital expenditure in excess of $1,000,000 or capital expenditures in excess of $5,000,000
in the aggregate; 
  
 (o) other than in the ordinary course of
business consistent with past practice or in an amount in excess of $1,000,000, with respect to the Business, forgive, cancel, compromise, waive or release any debts, claims or rights; 
  
 (p) permit or suffer any Liens on any Transferred Assets, on any of the Transferred Investment Assets or on any of the
assets (tangible or intangible) or properties of any Acquired Company, other than Liens incurred in the ordinary course of business consistent with past practice or Permitted Liens; 
  
 (q) amend the Organizational Documents of any Acquired Company, or adopt or enter into a plan of complete or partial
liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of any Acquired Company, other than with respect to CIGNA Life and as required by this Agreement or any of the Ancillary Agreements; 

 

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 (r) terminate or permit to expire any insurance (excluding reinsurance) coverage related to the Business,
except to the extent that such insurance policies are replaced with policies that offer substantially similar coverage; 
  
 (s) undertake any write down in the book value of (x) any investment security of any obligor by an amount in excess of $1,000,000 or (y) any other
Transferred Assets or Transferred Investment Assets by an amount in excess of $1,000,000, except as is otherwise consistent with the Statement of Net Settlement Methods; 
  
 (t) terminate, assign or attempt to assign any Investment Advisory Contracts other than in the discharge of fiduciary
duties; 
  
 (u) with respect to Transferred Investment Assets,
take any prohibited action identified on Schedule 5.1(u); 
  
 (v)
close out any open hedge positions in the DC Hedge Program, except in the ordinary course of business; or 
  
 (w) agree in writing or otherwise to take any of the actions described above in clauses (a) through (v) of this Section 5.1; 
  
 provided, however, that, without the consent of Buyer, Sellers shall be
permitted to cause CIGNA Bank, CIGNA Financial Services, Inc., Global Portfolio Strategies, Inc. and CIGNA Financial Partners, Inc. to pay net dividends in an aggregate amount of up to $5,000,000 plus, if the Closing Date occurs after January 1,
2004, a fraction, the numerator of which shall be $10,000,000 multiplied by the number of days by which the Closing Date follows January 1, 2004, and the denominator of which shall be 366. 
  
 Section 5.2 Non-Competition. 
  
 (a) Except as contemplated by this Agreement, and except as set forth in
Schedule 5.2, for a period of two-and-a-half (2.5) years from the Closing Date, none of the Sellers nor any of their Affiliates shall directly or indirectly engage in any business in the United States that competes with the Business (such business
competing with the Business being referred to herein as “Competing Business”). Notwithstanding the foregoing, Sellers and their Affiliates shall not be prohibited from: 
  
 (i) making investments in the ordinary course of business, including in a general or separate account of an
insurance company, in Persons engaging in a Competing Business, provided that each such investment is a passive investment where neither any Seller nor any of their Affiliates (i) intends to or has the right to influence or direct the
operation or management of any such entity or (ii) is a participant with any other Person in any group with such intention or right; 
  

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 (ii) selling any of its assets or businesses to a Person engaged in lines of business
that compete with the Business; 
  
 (iii)
managing investment funds for third persons, which funds make investments in Persons engaging in a Competing Business, so long as such investments are not for the purpose of acquiring control of such Person; 
  
 (iv) selling and/or underwriting insurance as well as all
services and products relating thereto, other than insurance products and services comprising the Business; 
  
 (v) providing investment management and similar services to Sellers or Affiliates of Sellers; or 
  
 (vi) acquiring any business that includes operations the
conduct of which by Sellers would, but for this Section 5.2(a)(vi), otherwise violate the restrictions of this Section 5.2(a), if the primary purpose of such acquisition is not to acquire any Competing Business and the Competing Business comprises
less than 15% of the assets, earnings and cash flow of the acquired business. 
  
 (b) For a period of two and a half (2.5) years from the Closing Date, Sellers shall refrain from taking any action which, as regards the Business, is reasonably likely to materially and negatively affect Buyer’s
or CIGNA Life’s relationships in the aggregate with policyholders, reinsurers or annuityholders associated with the Business; provided, however, that if Sellers or their Affiliates are engaged in any business or selling any
product not in violation of Section 5.2(a) then such conduct and any consequences thereof shall not be deemed a breach of this Section 5.2(b). 
  
 (c) The parties to this Agreement acknowledge that the covenants set forth in this Section 5.2 are an essential element of this Agreement and that, but
for these covenants, the parties would not have entered into this Agreement. The parties to this Agreement acknowledge that this Section 5.2 constitutes an independent covenant and shall not be affected by performance or nonperformance of any other
provision of this Agreement or any Ancillary Agreement by the parties. 
  
 (d) The parties to this Agreement acknowledge that the type and periods of restriction imposed in the provisions of this Section 5.2 are fair and reasonable and are reasonably required for the protection of the parties. If any of the
restrictions or covenants in this Section 5.2 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 5.2, 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 
  

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 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 5.2
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 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. 
  
 (e) If any party hereto commits a breach, or is about to commit a breach, of
any of the provisions of this Section 5.2, the other parties hereto shall have the right to have the provisions of this Section 5.2 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 5.2, 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 5.3 Non-Solicitation; Non-Hire. 
  
 (a) Until the second anniversary of the Closing Date, without the prior written consent of Buyer, no Seller or Affiliate of
any Seller shall, whether directly or indirectly, solicit, attempt to employ or employ as an employee or retain as a consultant or independent contractor any Affected Employee; provided, however, that nothing in this Section 5.3(a)
shall prohibit any Seller or any Affiliate of Seller from soliciting or employing any Affected Employee who has been terminated by Buyer or its Affiliates following the Closing. The restrictions on soliciting or attempting to employ as an employee
or retain as a consultant or independent contractor set forth in this Section 5.3(a) shall not be deemed violated by virtue of general advertisements, searches or other broad-based hiring methods not specifically targeted or directed to Affected
Employees. 
  
 (b) Until the second anniversary of the Closing
Date, without the prior written consent of CGLIC, Buyer and its Affiliates (including all of the Acquired Companies conveyed to Buyer) shall not, whether directly or indirectly, solicit, attempt to employ or employ as an employee or retain as a
consultant or independent contractor any Excluded Retirement Services Employee, any Excluded Investment Employee or any Optional Retirement Services Employee retained by Seller on the Closing Date (collectively referred to as “Excluded
Employees”); provided, however, that nothing in 
  

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 this Section 5.3(b) shall prohibit Buyer or its Affiliates from employing any Excluded Employee who has been terminated
by a Seller or Affiliate of a Seller. The restrictions on soliciting or attempting to employ as an employee or retain as a consultant or independent contractor set forth in this Section 5.3(b) shall not be deemed violated by virtue of general
advertisements, searches or other broad-based hiring methods not specifically targeted or directed to Excluded Employees, but the prohibition on hiring shall be violated by any hiring in response to such methods. 
  
 Section 5.4 Reinsurance Credit Covenants. 
  
 Buyer shall cause CIGNA Life to comply with its covenants in Article XVIII
of the Coinsurance Agreement and in the Ceded Business Trust Agreement as if such covenants were direct obligations of Buyer set forth herein. CIGNA shall cause CGLIC to comply with its covenants in Article XVIII of the Excluded Business Coinsurance
Agreement as if such covenants were direct obligations of CIGNA set forth herein. 
  
 Section 5.5 Affected Employees. 
  
 (a) Prior to the execution of this Agreement, Sellers have provided Buyer true, correct and complete lists of each Person who supports the Retirement Services Business or is exclusively or principally employed in the conduct of the
Retirement Services Business (the employees shall be referred to as the “Retirement Services Employees” and the list shall be referred to as the “Retirement Services Employees List”). Prior to the execution of this Agreement,
Sellers have provided Buyer true, correct and complete lists of each Person who supports the Investment Business or is exclusively or principally employed in the conduct of the Investment Business (the employees shall be referred to as the
“Investment Employees” and the list shall be referred to as the “Investment Employees List”). The Retirement Services Employees and the Investment Employees shall be referred to herein collectively as the “Business
Employees”. Sellers shall provide Buyers with updated versions of these lists prior to the Closing Date, but any additions to or deletions from the lists that are not made in the ordinary course shall be made with the consent of Buyer, such
consent not to be unreasonably withheld. 
  
 (b) Effective on the
Closing Date, Buyer shall employ or shall cause the Acquired Companies to employ all of the Retirement Services Employees, except those Inactive Employees on the Closing Date as described below, and those Optional Retirement Services Employees
described in Section 5.5(e) below, who do not receive or accept offers from Buyer. Except as provided in Section 5.5(d) below with respect to anyone on the Excluded Investment Employee List, Buyer may make offers of employment effective on the
Closing Date to any of the Investment Employees on the Investment Employee List. Those Retirement Services Employees who are thereafter employed by the Buyer, and those Investment Employees and Optional Retirement Services Employees who accept
offers of employment with the Buyer shall be referred to 
  

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 as “Affected Employees.” Any Affected Employee who is on a leave of absence on the Closing Date because of
short-term disability, family medical leave, military leave, or workers’ compensation (hereinafter “Inactive Employees”) shall remain employed by one of Sellers or an Affiliate of Sellers and shall continue to receive compensation and
benefits in accordance with the Plans and policies of Sellers. Any Inactive Employee returning from short-term disability, family medical, or workers’ compensation leave of absence within 12 weeks of the Closing Date shall have employment
rights, if any, with Buyer, and if employed by Buyer, they shall be covered under the terms of Section 5.5 of this Agreement. Inactive Employees returning from military leave after the Closing Date shall have employment rights, if any, with Buyer,
according to the Uniformed Services Employment and Reemployment Rights Act of 1994. If any Affected Employee becomes eligible to receive long-term disability benefits under the Seller’s long-term disability program, such benefits shall be paid
pursuant to the terms of the Seller’s long-term disability program and Buyer shall have no obligation to employ such employee at that time or at any future time. Any such Inactive Employee that Buyer employs pursuant to the preceding provision
shall be an Affected Employee from and after the date of hire. If, as of the Closing Date and despite reasonably diligent efforts, Buyer is not yet able to move the Affected Employees to its payroll and/or employee benefit administration systems,
Seller and Buyer agree, consistent with Section 5.18(a) of this Agreement, to enter into an employee leasing arrangement for a period of up to sixty (60) days from and after the Closing Date. Under this arrangement Sellers will continue to employ,
pay and provide employee benefits to the Affected Employees, and Buyer will reimburse Sellers for all their out of pocket costs related to such continued employment (including any additional costs Sellers incur because any Affected Employee earns
credit for an additional year of service under Seller’s pension and or 401(k) plans during the term of such leasing arrangement). 
  
 (c) Effective as of the Closing Date, the Buyer shall provide or cause the Acquired Companies to provide employment to the Affected Employees: (i) in the
same or comparable positions; (ii) in the same locations; (iii) at the same or better base salary rate, all as were provided to such Affected Employees by Sellers or the Acquired Companies immediately prior to the Closing Date. Effective as of the
Closing, Buyer shall provide or shall cause the Acquired Companies to provide the Affected Employees with the opportunity to participate in Buyer’s compensation and bonus plans on the same terms as those provided to similarly situated employees
of Buyer and with the same employee benefits as provided to such similarly situated employees. 
  
 (d) Seller has heretofore provided Buyer a list of Retirement Services Employees who shall not be employed by Buyer (the “Excluded Retirement Services Employees List”). Seller may amend the Excluded
Retirement Services Employees List prior to the Closing Date with the consent of Buyer, such consent not to be unreasonably withheld. No later than ten (10) days after the date of this Agreement, Seller shall provide Buyer a list of Investment
Employees who shall not be employed by Buyer (the “Excluded Investment Employees List”). Buyer may request that any Investment Employee be removed from the Excluded Investment Employees List, and Seller may grant or deny Buyer’s
request at Seller’s discretion. 
  

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 (e) Prior to the execution of this Agreement, Seller has provided to Buyer a list of Retirement Services
Employees whom Seller intends to retain after Closing (these employees shall be referred to as the “Optional Retirement Services Employees”). Buyer shall have the right, but not the obligation, to make employment offers, effective on the
Closing Date, to the Optional Retirement Services Employees, and will employ only those Optional Retirement Services Employees who accept employment offers from Buyer. Any Optional Retirement Services Employee (i) who does not receive an offer of
employment from Buyer, or (ii) who receives and rejects an offer of employment from Buyer, shall remain an employee of Seller or its Affiliates (other than the Acquired Companies) after the Closing, and Buyer shall have no further obligation or
liability with respect to such person. 
  
 (f) At any time prior
to the Closing Date, Buyer may designate any Investment Advisory Services Employee (as that term is defined in the Transition Services Agreement) (other than an Excluded Investment Employee) as a “Retained Employee.” Any Investment
Advisory Services Employee designated as a Retained Employee shall not be offered employment by Buyer, but Seller shall not terminate the employment of such Retained Employee without Buyer’s written consent prior to ninety (90) days after the
Closing Date, such consent not to be unreasonably withheld. Buyer may provide any Retained Employee with a retention bonus, the terms of which shall be determined solely by Buyer, and Buyer shall be responsible for and liable for any such retention
bonus payment. Retained Employees shall initially be identified by Buyer on the “Retained Employee List” to be provided to Seller within forty five (45) days after the date of this Agreement. The Retained Employee List shall be updated
periodically prior to the Closing Date to reflect additional Retained Employees as identified by Buyer. 
  
 (g) Except to the extent necessary to avoid the duplication of benefits, Buyer shall give, or cause the Acquired Companies to give, the Affected Employees
full credit, for purposes of eligibility and vesting under any employee benefit plans, programs or arrangements maintained by Buyer or any of its Affiliates, for the Affected Employees’ service with Sellers and their Affiliates to the same
extent recognized by Sellers and their Affiliates immediately prior to the Closing Date. Buyer shall, or shall cause the Acquired Companies to waive all limitations as to preexisting conditions exclusions and waiting periods with respect to
participation and coverage requirements applicable to the Affected Employees under any welfare benefit plans that such employees may be eligible to participate in after the Closing Date. 
  
 (h) Affected Employees shall be eligible to participate in Buyer’s Severance Plans from and after the Closing Date on
the same basis as similarly situated employees of the Buyer, and Buyer shall treat service with Sellers and the Acquired Companies as service with Buyer for purposes of administering Buyer’s Severance Plans. Any changes Buyer makes to the
schedule of severance pay under its Severance Plans shall apply equally to Affected Employees and similarly situated Buyer employees. 
  

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 (i) (1) Notwithstanding anything to the contrary contained in this Agreement, Buyer and the Acquired
Companies shall be jointly and severally liable for and shall indemnify and hold Sellers, their officers, directors, employees, advisers, agents, representatives and Affiliates harmless from any and all Liabilities, damages, losses, claims,
judgments, settlements, costs and expenses (including the enforcement of their rights under this paragraph) associated with the employment or termination of the employment of an Affected Employee in respect of any period on or following the Closing
Date, including any claim by an Affected Employee which arises under federal, state or local statute (including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of
1990, the Equal Pay Act, the Americans with Disabilities Act of 1990, ERISA and all other statutes regulating the terms and conditions of employment), regulation or ordinance, under the common law or in equity (including any claims for wrongful
discharge or otherwise), or under any benefit plans or under any policy, agreement, understanding or promise, written, oral or implied, formal or informal, between a Buyer or Affiliate thereof and such Affected Employee. 
  
 (2) Notwithstanding anything to the contrary contained in this Agreement,
CIGNA and Sellers shall be jointly and severally liable for and shall indemnify and hold Buyer, the Acquired Companies, their officers, directors, employees, advisers, agents, representatives and Affiliates harmless from any and all Liabilities,
damages, losses, claims, judgments, settlements, costs and expenses (including the enforcement of their rights under this paragraph) associated with the employment or termination of the employment of an Affected Employee in respect of any period
preceding the Closing Date, including any claim by an Affected Employee which arises under federal, state or local statute (including, without limitation, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the Age
Discrimination in Employment Act of 1990, the Equal Pay Act, the Americans with Disabilities Act of 1990, ERISA and all other statutes regulating the terms and conditions of employment), regulation or ordinance, under the common law or in equity
(including any claims for wrongful discharge or otherwise), or under any benefit plans or under any policy, agreement, understanding or promise, written, oral or implied, formal or informal, between the Sellers or an Affiliates thereof and such
Affected Employee. Seller shall be liable for any payments under any of its Plans or Employment Agreements that would not be deductible under Code sections 162(m) or 280G or the Treasury Regulations pertaining to such sections. 
  

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 (j) (1) Replacement of Stock Options and Restricted Stock Grants: Buyer shall grant, or shall
cause to be granted, under the terms of the Prudential Financial, Inc. Omnibus Incentive Plan (the “Omnibus Plan”), the following equity compensation to each Affected Employee, as follows: 
  
 a. Replacement of CIGNA Below-Market Options with Prudential Options:
For each Affected Employee with an outstanding award of nonqualified stock options made under the terms of the CIGNA Corporation Stock Plan (the “CIGNA Stock Plan”) or the CIGNA Long-Term Incentive Plan (“CIGNA LTIP”)
(collectively, the “CIGNA Stock Plans”) as of the Closing Date, where such options are: (i) either (v) unvested as of the Closing Date (and would therefore be forfeited on the Closing Date by reason of the Affected Employee’s
termination of employment with Sellers on the Closing under the CIGNA Stock Plans) or (w) vested as of the Closing Date, and, (ii) in either case, have an exercise price on the Closing Date greater than the twenty-business day trading average of
CIGNA Corporation Common Stock on the New York Stock Exchange 14 days prior to the Closing Date (the “20-Day CIGNA Average”) (such stock options referred to herein as the “CIGNA Below-Market Options”), such CIGNA Below-Market
Options shall be forfeited as of the Closing Date and Buyer will thereafter grant nonqualified stock options under the Omnibus Plan (the “Prudential Options”) to replace such forfeited CIGNA Below-Market Options. 
  
 The number of Prudential Options granted to each such Affected Employee to
replace the forfeited CIGNA Below-Market Options shall be determined as follows. First, the replacement value of the CIGNA Below-Market Options will be calculated by Buyer under a Black-Scholes valuation methodology, generally using the factors set
forth in CIGNA’s 2003 Notice of Annual Meeting and Proxy Statement to value such option grants in fiscal year 2002 with certain adjustments as determined by Buyer (the “CIGNA Below-Market Replacement Value”). Second, the number of
Prudential Options granted to each Affected Employee will be calculated under the same methodology used by Buyer to award option grant to Buyer’s employees under the Omnibus Plan — that is, the number of Prudential Options per Affected
Employee will be determined by dividing the CIGNA Below-Market Replacement Value by one-third (1/3) of the twenty (20) business day trading average of Prudential Financial, Inc. Common Stock on the New York Stock Exchange 14 days prior to the date
the Closing Date occurs (the “20-Day Prudential Average”). 
  
 Buyer will provide that: (x) each such Prudential Option will be granted at the “Fair Market Value” (as such term is defined under the Omnibus Plan) of Prudential Financial, Inc. Common Stock on the date of grant; (y) that the
Prudential Options will have a term of ten (10) years and a three (3) year vesting schedule (with one-third (1/3) of such grant vesting annually) from the date of grant; and (z) to the degree applicable, the Prudential Options will otherwise be
subject to the ordinary terms and conditions of any nonqualified stock option grant made under the Omnibus Plan. 
  

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 b. Replacement of CIGNA Above-Market Options with Prudential Options and Prudential Restricted
Stock: For each Affected Employee with an outstanding award of nonqualified stock options made under the terms of the CIGNA Stock Plans as of the Closing Date where such options are (i) unvested as of the Closing Date (and would therefore be
forfeited by reason of the Affected Employee’s termination of employment with Sellers on the Closing Date under the terms of the CIGNA Stock Plans) and (ii) have an exercise price on the Closing Date less than the 20-Day CIGNA Average (the
“CIGNA Above-Market Options”), such CIGNA Above-Market Options shall be forfeited as of the Closing Date and Buyer will thereafter grant a number of shares of Prudential Financial, Inc. restricted stock and nonqualified stock options under
the Omnibus Plan (the “Prudential Restricted Stock”) to replace such forfeited CIGNA Above-Market Options. 
  
 The number of shares of restricted stock and stock options granted to each such Affected Employee to replace the CIGNA Above-Market Options shall be
determined as follows. First, the replacement value of the CIGNA Above-Market Options will be calculated by Buyer under a Black-Scholes valuation methodology, generally using the factors set forth in CIGNA’s 2003 Notice of Annual Meeting and
Proxy Statement to value such option grants in fiscal year 2002 with certain adjustments as determined by Buyer (the “CIGNA Above-Market Replacement Value”). Second, the Buyer will determine for each Affected Employee the sum of the
difference between the 20-Day CIGNA Average and the exercise price of all such Above-Market Options (the “CIGNA Intrinsic Value”). Third, the CIGNA Intrinsic Value will be divided by the 20-day Prudential Average to determine the number of
shares of Prudential Financial, Inc. restricted stock to be granted to the Affected Employee. Each award of Prudential Restricted Stock will be subject to the usual terms and conditions of any restricted stock grant made under the Omnibus Plan
(including, but not limited to, the standard three-year “cliff” vesting schedule on such awards from the date of grant). 
  
 The number of Prudential Options granted in recognition of the CIGNA Above-Market Options will be determined as follows. First, the difference between the
CIGNA Above-Market Replacement Value and the CIGNA Intrinsic Value (the “CIGNA Above-Market Remaining Value”) will be determined for each Affected Employee. Second, this value will be divided by one-third (1/3) of the 20-Day Prudential
Average to determine the number of Prudential Options to be granted. Buyer will provide that: (x) each such Prudential Option will be granted at the “Fair Market Value” (as such term is defined under the Omnibus Plan) of Prudential
Financial, Inc. Common Stock on the date of grant; (y) that the Prudential Options 
  

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 will have a term of ten (10) years and a three (3) year vesting schedule (with one-third (1/3) of such
grant vesting annually) from the date of grant; and (z) to the degree applicable, the Prudential Options will otherwise be subject to the ordinary terms and conditions of any nonqualified stock option grant made under the Omnibus Plan. 

 
 c. Replacement of CIGNA Restricted Stock Already Granted under the
CIGNA Stock Plans: 
  
 For each Affected Employee with an
outstanding award (as of the Closing Date) of restricted stock (the “CIGNA Restricted Stock”) granted under the CIGNA Stock Plans, the Affected Employees shall forfeit such CIGNA Restricted Stock shares under the terms of the CIGNA Stock
Plans and Buyer will thereafter grant to such Affected Employees restricted stock under the Omnibus Plan (the “Prudential Restricted Stock”). 
  
 The number of shares of Prudential Restricted Stock granted to each Affected Employee under the terms of this subsection will be determined as follows.
First, the number of outstanding shares of CIGNA Restricted Stock will be multiplied by the 20-Day CIGNA Average to determine the value of the forfeited Restricted Stock (the “CIGNA Restricted Stock Forfeited Value”). Second, this
forfeited value will be divided by the 20-Day Prudential Average to determine the number of shares of Prudential restricted stock to be granted to such Affected Employee. 
  
 Generally, each such award of Prudential Restricted Stock will be subject to the ordinary terms and conditions of any other
restricted stock award made under the Omnibus Plan. However, with respect to any shares of Prudential Restricted Stock intended to replace CIGNA Restricted Stock, the Buyer shall apply the vesting schedule(s) of such CIGNA Restricted Stock awards
that were in effect for each such award as of the day prior to the Closing Date. 
  
 (2) Treatment of SPUs under CIGNA LTIP. With respect to any outstanding “strategic performance unit” (“SPU”) awards for Affected Employees under the CIGNA LTIP that have not been paid out on
or prior to the Closing Date: (a) Seller shall pro-rate for each Affected Employee the number of outstanding SPU awards based on the number of months of the performance period attributable to such awards up to the Closing Date and Seller thereafter
make cash payments with respect to such pro-rated awards in the ordinary course to such Affected Employees at the same time and at the same manner as other Plan participants after the completion or termination of the respective performance cycles to
which such awards are attributable, but only if such Affected Employee remains employed by the Buyer or an Affiliate on the date of such payment; and (b) Buyer shall 
  

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 thereafter grant to each Affected Employee an award of Prudential Restricted Stock with a value equal to the value of the
difference between the number of SPUs awarded to such Affected Employee and pro-rated portion for which Seller is to make a cash payment under sub-Section (2)(a) above. In calculating the value of the SPU awards, Buyer shall use the unit value of
each SPU award Seller uses for expense accrual purposes in the Seller’s financial statements for the quarter immediately prior to the Closing Date. Seller shall provide the Buyer a letter stating the accrued unit values of each outstanding SPU
award as soon as practical following the close of the quarter preceding the Closing Date. Generally, each such award of Prudential Restricted Stock will be subject to the ordinary terms and conditions of any other restricted stock award made under
the Omnibus Plan. However, with respect to any shares of Prudential Restricted Stock intended to replace CIGNA LTIP awards, the Buyer shall apply the payout schedule of such CIGNA LTIP awards as the vesting schedule for each such Prudential
Restricted Stock award. 
  
 (3) Retention Awards: With
respect to any payment due or owing under the terms of the various retention bonus program agreements set forth in Schedule 5.5(j)(3) to be made in the form of cash or CIGNA restricted stock units on or after the Closing Date (the “Retention
Awards”), the provisions of this Section 5.5(j) with respect to the replacement of such awards shall not apply, and Seller shall be responsible for, and liable for, all such payments under the Retention Awards. Schedule 5.5(j)(3) shall not
include retention bonuses described in Section 5.5(f) or retention bonuses provided for under the Transition Services Agreement. 
  
 (k) Nothing in this Agreement is intended to constitute or create a contract of employment between Buyers or its Affiliates and any Affected Employee.
Nothing in this Agreement shall cause Buyer or its Affiliates to have any obligation to continue the employment of any Affected Employee for any particular period of time nor shall anything in this Agreement limit Buyer’s or its
Affiliates’ right to terminate the employment of any Affected Employee. 
  
 (l) Sellers shall be responsible for providing or discharging any and all notifications, benefits and liabilities to employees and Governmental Entities required by the Seller’s policy or practice, the Workers
Adjustment and Retraining Notification Act of 1988 or under any other applicable Law relating to plant closings or employee separations or severance pay that are required to be provided before the Closing as a result of transactions contemplated in
this Agreement. Notwithstanding the foregoing, Buyer shall have sole responsibility for such notifications, benefits and liabilities with respect to any Affected Employees whose employment is terminated by the Buyer at or after the Closing.

  
 (m) Sellers shall retain liability, and shall be responsible,
for the payment of bonuses earned or accrued, consistent with past practice, as of the Closing Date, by Affected Employees. Sellers shall also retain liability, and shall be responsible, for the payment of accrued but unused vacation pay as of the
Closing Date for Affected Employees. 
  

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 (n) Seller or an Affiliate of Seller shall withhold and pay all payroll, Social Security, and withholding
Taxes due upon the exercise, vesting or forfeiture by Affected Employees of (1) restricted shares of CIGNA stock and (2) any options to purchase CIGNA stock. Seller shall promptly provide to Buyer information concerning the amount of all such
payroll, Social Security, and withholding Taxes and the amount of gross wages reportable to any Taxing Authority in respect of such restricted stock and options. 
  
 Section 5.6 Cooperation Regarding Governmental Entities. 
  
 The parties hereto shall (a) cooperate and use their reasonable best efforts
to obtain all the consents, approvals, licenses, authorizations and agreements of any Governmental Entities necessary to authorize, approve or permit the consummation of the transactions contemplated by this Agreement and the Ancillary Agreements;
(b) as promptly as practicable, file, or cause to be filed or submitted to Governmental Entities all notices, applications, documents and other materials necessary in connection with the consummation of such transactions, including amendments of
disclosure documents applicable to the Subject Contracts to the extent required in connection with the transactions contemplated by this Agreement and the Ancillary Agreements, such amendments to be mutually agreed upon by the parties and (c) use
their respective reasonable best efforts to respond as promptly as practicable to all inquiries received from all Governmental Entities for additional information or documentation in connection with such transactions; provided,
however, that no party shall be obligated to take or refrain from taking or to agree to take or refrain from taking 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 (i) a Buyer Negative Condition, (ii) in the case of Buyer, a material negative effect on the Business, taken as a whole, or (iii) in the case of either party, a material
negative effect on the benefits, taken as a whole, which such party could otherwise reasonably expect to derive from consummation of the Transaction had such party not been obligated to take or refrain from taking or to agree to take or refrain from
taking such action or suffer to exist such restriction or requirement (each of the foregoing clauses (i), (ii) or (iii), excluding the effects of any conditions, restrictions or requirements (1) to the extent such party reasonably should expect as
of the date of this Agreement that such conditions, restrictions or other requirements would be reasonably likely to be imposed by a Governmental Entity, and (2) that are, individually and in the aggregate with all other such conditions,
restrictions and other requirements under (1), not material in their impact on the cash flow and expected returns of the Business to such Party (other than any such impact arising from the restrictions set forth in § 38a-136(i)(2) of the
Connecticut General Statutes) (relating to temporary post-change in control limitations on certain actions), a “Material Negative Condition”). Sellers shall commence filing for regulatory approval for the assumption and novation of the
Subject Contracts contemplated under Article VIII of the Coinsurance Agreement as soon as reasonably practicable following the date of this Agreement and otherwise take such action as it reasonably requested by 
  

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 Buyer to facilitate the novation of the Subject Contracts (in accordance with the applicable provisions of the Business
Coinsurance Agreements) as soon as reasonably practicable. Sellers and Buyer shall furnish to each other such necessary information and reasonable assistance as the other may reasonably request in connection with its preparation of all necessary
filings or submissions to any Governmental Entity. Subject to Section 2.7(b), (i) Sellers and Buyer shall provide each other with draft copies and as-filed copies of all filings and submissions with Governmental Entities and shall provide the other
with a reasonable opportunity to comment upon all such draft copies and (ii) Sellers and Buyer agree that, to the extent feasible and subject to Section 2.7(b), all substantive meetings with any Governmental Entity (whether in person, by telephone
or other means of instantaneous communication) regarding the transactions contemplated hereby or by the Ancillary Agreements shall include representatives of Sellers and Buyer unless such parties jointly decide otherwise. 
  
 Section 5.7 Cooperation Regarding Other Third Parties. 
  
 (a) From and after the Closing Date, the parties hereto shall cooperate and
use their reasonable best efforts to obtain the requisite contractholder, certificate holder and sponsor consents for the novation of General Account Subject Contracts and Separate Account Subject Contracts. Each party hereto shall bear its
respective costs and expenses with respect to such efforts. 
  
 (b) From the date of this Agreement, the parties hereto shall cooperate and use their reasonable best efforts to obtain all other approvals, consents and waivers of non-governmental Persons to the transactions contemplated hereby and by the
Ancillary Agreements (other than the consents referred to in Section 5.7(a)). In the event and to the extent that the parties hereto are unable to obtain prior to the Closing Date any such required approval, consent or waiver in connection with the
transactions contemplated by this Agreement or the Ancillary Agreements of a non-governmental Person that is a party to any agreement, lease, sublease (to or by Sellers) or license to which an Acquired Company is a party or which otherwise
constitutes part of the Transferred Assets (but which are not treated as Excluded Assets pursuant to Sections 5.25 or 5.28), (i) Sellers shall use commercially reasonable efforts in cooperation with Buyer to (x) provide or cause to be provided to
Buyer the benefits of any such agreement, lease, sublease (to or by Sellers) or license, (y) cooperate in any arrangement, reasonable and lawful, designed to provide such benefits to Buyer and (z) enforce for the account of Buyer any rights of the
Acquired Companies or the Business arising from such agreements, leases, subleases (to or by Sellers) and licenses which Buyer directs in writing to be taken and for which Buyer fully indemnifies Sellers and (ii) Buyer shall use commercially
reasonable efforts to perform the obligations of the Acquired Companies or the Business arising under such agreements, leases, subleases (to or by Sellers) and licenses, to the extent that, by reason of the consummation of the transactions
contemplated pursuant to this Agreement, Buyer or its subsidiaries has control over the resources necessary to perform such obligations. If and when any such approval or consent shall be obtained subsequent to the Closing Date or such agreement,
lease, sublease (to or by Sellers) or license shall otherwise 
  

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 become assignable subsequent to the Closing Date, Sellers and their Affiliates shall promptly assign all of their rights
and obligations thereunder which relate to the Acquired Companies or the Business to Buyer or, at Buyer’s direction, an Affiliate of Buyer without the payment of further consideration and Buyer shall, without the payment of any further
consideration therefor, assume such rights and obligations and Sellers and their Affiliates shall be relieved of any and all obligations and future Liabilities hereunder and thereunder accruing from and after the date of the assignment and
assumption, other than Excluded Liabilities. Without limiting the foregoing, in the event an approval, consent or waiver has not been obtained by the Closing Date, then, at Buyer’s sole option, Sellers and their Affiliates will provide Buyer
and its Affiliates with rights and/or access to the benefits provided under any such Contract for which an approval, consent or waiver has not been obtained or substantially equivalent rights and/or access in all material respects as a Transition
Service pursuant to the Transition Services Agreement. 
  
 (c) The
costs of obtaining any such approvals, consents and waivers described in Section 5.7(b) (including attorneys’ fees, but, for the avoidance of doubt, not including service and licensing fees, incremental charges, revised terms or similar costs
relating to the services to be provided, in each case to the extent arising in the ordinary course of business and to the extent not reasonably construed to have been requested in exchange for obtaining such approvals, consents and waivers which
costs shall be the sole responsibility of Buyer and its Affiliates) shall be shared equally by Sellers, on the one hand, and Buyer, on the other hand; provided, however, that the portion of the costs borne by Buyer pursuant to this Section 5.7(c),
the portion of the Transfer Taxes and costs borne by Buyer pursuant to Section 5.13, the portion of the costs and penalties borne by Buyer pursuant to Section 5.25 and 5.28 and the portion of the costs borne by Buyer pursuant to Section 1.3(h) of
the Transition Services Agreement shall in the aggregate not exceed $9 million, and Sellers shall reimburse Buyer for any such costs incurred by Buyer in excess of $9 million. 
  
 (d) Notwithstanding anything herein or in any Ancillary Agreement to the contrary in the event that any party to a Lease
(other than Sellers or their Affiliates) requires any guarantee or similar covenant, instrument or agreement relating to future performance or payment in connection with the assignment of any Lease to CIGNA Life, Buyer or any of its Affiliates
contemplated hereby or by any Ancillary Agreement, Sellers and their Affiliates shall be under no obligation to provide such guarantee or similar covenant, instrument or agreement, and Buyer or its Affiliates shall provide any such guarantee or
similar covenant or agreement. 
  
 Section 5.8 Exclusivity.

  
 (a) From the date of this Agreement through the Closing,
Sellers will not, and shall cause their respective officers, employees, representatives, advisers, agents and Affiliates not to, directly or indirectly, solicit, encourage, facilitate or initiate any inquiries or the making of any proposals or
offers from, engage in negotiations or discussions with, or provide any information or data to, or otherwise cooperate in any 
  

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 manner with, any Person or group of Persons (other than Buyer and its Affiliates) concerning any direct or indirect sale
or other disposition of, or merger, consolidation, business combination or similar transaction involving, all or any portion of the Business, the Acquired Companies, the Transferred Assets, the Assumed Liabilities or the Subject Contracts. Sellers
shall, and shall cause their respective officers, employees, representatives, advisers, agents and Affiliates to, immediately cease and cause to be terminated any existing activities, discussions or negotiations with any parties conducted heretofore
with respect to any of the foregoing. Sellers shall promptly notify Buyer if any such inquiries, proposals or offers are received by, any such information is requested from, or any such negotiations or discussions are sought to be initiated or
continued with or about the Business, the Acquired Companies, the Transferred Assets, the Assumed Liabilities or the Subject Contracts and shall promptly request each Person who has heretofore executed a confidentiality agreement in connection with
its consideration of acquiring the Business, the Acquired Companies, the Transferred Assets, the Assumed Liabilities or the Subject Contracts to return or destroy in accordance with the applicable confidentiality agreement, all confidential
information heretofore furnished to such person by or on behalf of the Sellers. 
  
 (b) From the date of this Agreement until the Closing, neither Buyer nor its Affiliates will take, or agree or commit to take, any action for the purpose of impeding the ability of Buyer to consummate the transactions
contemplated by this Agreement or any Ancillary Agreement. 
  
 Section 5.9 Investigation; Maintenance of Marketplace Relationships. 
  
 (a) From the date of this Agreement, Sellers shall give to Buyer and its employees and representatives reasonable access to the Books and Records and the facilities, systems and employees of or relating to the
Business, the Acquired Companies, CGLIC, the Transferred Assets, the Transferred Investment Assets, the Assigned and Assumed Contracts, the Assumed Liabilities and the Subject Contracts, shall make available to Buyer and its employees and
representatives for copying and duplication purposes all Books and Records as they shall reasonably request, and shall cooperate with Buyer and its employees and representatives in their making such further investigation of the assets, Liabilities,
business operations, facilities, systems, employees and representatives and business plans of the Business, the Acquired Companies, CGLIC, the Transferred Assets, the Transferred Investment Assets, the Assigned and Assumed Contracts, the Assumed
Liabilities and the Subject Contracts. Subject to the requirements of Applicable Law, Sellers shall give to Buyer and its employees and representatives access to representatives, customers, clients, producers and consultants of the Business, the
Acquired Companies and CGLIC (to the extent relating to the Business), including written, telephonic and in-person communications for the purpose of facilitating the retention of such persons by the Business; provided, however, that
(i) all such written communications, meetings and telephonic communications that include a representative of the Business shall be subject to the prior consent (obtained in accordance with the protocols set forth on Schedule 5.9(a)) of Sellers (such
consent not to 
  

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 be unreasonably withheld or delayed) and (ii) all such meetings and telephonic communications that do not include a
representative of the Business shall be subject to the prior written consent (obtained in accordance with the protocols set forth on Schedule 5.9(a)) of Sellers. Any investigation, examination or interview by Buyer of employees or representatives or
access pursuant to any of the provisions of this Section 5.9(a) shall be conducted or occur at reasonable times during regular business hours upon reasonable prior written notice in a manner which does not unreasonably interfere with the business or
operations of Sellers or their Affiliates (or any of their successors). Each of the parties hereto and its employees, representatives and advisers, including, without limitation, counsel, investment bankers and independent public accountants, shall
cooperate with the other’s employees, representatives and advisers, as the case may be, in connection with such review and examination. Any such investigation, examination or interview shall be subject to the terms and conditions of the
Confidentiality Agreement. No investigation made pursuant to this Section 5.9 or otherwise, whether made before or after the date of this Agreement, shall affect or be deemed to modify or waive any specific representation or warranty made by either
party pursuant to this Agreement or any rights of the parties under Article VII. 
  
 (b) From the date of this Agreement until the Closing Date, (i) Sellers shall, and shall cause their Affiliates to, use commercially reasonable efforts to keep available the services of its and their current officers
and employees, and to preserve its relationships with customers, clients, producers and consultants and others having material business dealings with any of Sellers, their Affiliates or the Acquired Companies relating to the Business, (ii) Buyer
shall, and shall cause its Affiliates to, cooperate with Sellers and their Affiliates regarding the foregoing; and (iii) Sellers and Buyers shall, and shall cause their respective Affiliates to outline, refine, plan for and commence the transition
processes contemplated by the Transition Services Agreement as reasonably practicable, including, without limitation, by supplementing TSA Schedule 1 with additional qualifying services identified by Sellers or Buyer and desired by Buyer to be
received pursuant to the Transition Services Agreement, and by identifying services and their associated costs with specificity sufficient to disclose how such costs will be prorated in the event that Buyer does not use, or terminates, services or
portions thereof. 
  
 Section 5.10 Post-Closing Access.

  
 (a) Following the Closing Date, Sellers and their Affiliates
shall (i) allow the employees, representatives and advisers of Buyer and its Affiliates, upon reasonable prior notice and during regular business hours, the right, at Buyer’s expense, to examine and make copies of any Books and Records
(including any items within the definition of Books and Records developed by Sellers following the Closing Date to extent relating to the Business) which were retained by Sellers or any of their Affiliates and to have access to the employees, their
respective businesses or of Sellers or any of their Affiliates for any reasonable purpose relating to the Business, including, without limitation, disputes under this Agreement or any Ancillary Agreement, the preparation or examination of
Buyer’s Tax Returns, review and diligence of Data Input Inaccuracies, 
  

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 regulatory filings and financial statements and the conduct of any litigation (as opposed to any other form of dispute
resolution) with a third party (whether or not the subject of an indemnification claim by a Buyer Indemnitee or a Seller Indemnitee) or regulatory dispute (whether or not the subject of an indemnification claim by a Buyer Indemnitee or a Seller
Indemnitee), whether pending or threatened, concerning the conduct of the Business prior to the Closing Date, and (ii) maintain such Books and Records (including any items within the definition of Books and Records developed by Sellers following the
Closing Date to extent relating to the Business) for Buyer’s examination and copying for a period of not less than eight years following the Closing Date. Access to such Books and Records (including any items within the definition of Books and
Records developed by Sellers following the Closing Date to extent relating to the Business) and employees shall be at Buyer’s expense and may not unreasonably interfere with Sellers’ or any of their Affiliates’ (or any of their
successors’) business operations. 
  
 (b) Following the
Closing Date, Buyer and its Affiliates shall (i) allow the employees, representatives and advisers of Sellers and their Affiliates, upon reasonable prior notice and during regular business hours, the right, at Sellers’ expense, to examine and
make copies of the Books and Records (including any items within the definition of Books and Records developed by Buyer, CIGNA Life and their Affiliates following the Closing Date to extent relating to the Business) and to have access to the
employees of Buyer or any of its Affiliates for any reasonable business purpose relating to the Business or to the provisions of this Agreement or any Ancillary Agreement, including, without limitation, disputes under this Agreement or any Ancillary
Agreement the preparation or examination of Tax Returns, review and diligence of Data Input Inaccuracies, regulatory filings and financial statements or the conduct of any litigation (as opposed to any other form of dispute resolution) with a third
party (whether or not the subject of an indemnification claim by a Buyer Indemnitee or a Seller Indemnitee) or regulatory dispute (whether or not the subject of an indemnification claim by a Buyer Indemnitee or a Seller Indemnitee), whether pending
or threatened, and (ii) maintain such Books and Records (including any items within the definition of Books and Records developed by Buyer, CIGNA Life and their Affiliates following the Closing Date to extent relating to the Business) for
examination and copying by Sellers and their Affiliates for a period of not less than eight years following the Closing Date. Access to such Books and Records (including any items within the definition of Books and Records developed by Buyer, CIGNA
Life and their Affiliates following the Closing Date to extent relating to the Business) and employees, shall be at Sellers’ expense and may not unreasonably interfere with Buyer’s or any of its Affiliates’ (or any of their
successors’) business operations. 
  
 Section 5.11 Further
Assurances. 
  
 Subject to the terms and conditions herein
provided, including Section 5.6 and Section 5.7, from and after the date of this Agreement, each of the parties hereto shall use reasonable best efforts to take, or cause to be taken, all actions or do, or cause to be done, all things or execute and
deliver any documents reasonably necessary, proper or advisable under Applicable Laws to consummate and make effective the transactions contemplated by this Agreement and the Ancillary Agreements. 
  

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 Section 5.12 Expenses. 
  
 Except as otherwise specifically provided in this Agreement or any Ancillary Agreement, the parties hereto and to the
Ancillary Agreements shall bear their respective costs and expenses incurred in connection with the preparation, execution and performance of this Agreement and the Ancillary Agreements and the transactions contemplated hereby and thereby,
including, without limitation, all fees and expenses of investment bankers, counsel, actuaries, accountants, and other agents and representatives. Sellers shall pay on behalf of the Acquired Companies all legal, accounting, banking and other fees
and expenses, incurred through the Closing by the Acquired Companies in connection with the negotiation and execution of this Agreement and the Ancillary Agreements. 
  
 Section 5.13 Transfer Taxes; Expenses of Transfer. 
  
 Subject to the proviso contained in Section 5.7(c), all (i) sales, use, transfer, realty transfer, recording, ad valorem,
privilege, documentary, gross receipts, registration, conveyance, excise, license, stamp, duties or similar Taxes and fees (collectively, the “Transfer Taxes”) arising out of, in connection with, attributable to or in preparation for the
transactions effected pursuant to this Agreement or any of the Ancillary Agreements and (ii) all costs incurred in connection with effecting the transfer and assignment of the Transferred Investment Assets pursuant to this Agreement or any of the
Ancillary Agreements, including the Transfer Agreements, shall be shared equally by Sellers and Buyer. The party which has primary legal responsibility for the payment of any particular Transfer Tax shall prepare and timely file all relevant Tax
Returns required to be filed in respect of such Transfer Tax. 
  
 Section 5.14 Public Announcement. 
  
 Until the
Closing or the date this Agreement is terminated pursuant to Article VIII, the parties hereto shall not make any public announcement concerning the transactions contemplated by this Agreement or the Ancillary Agreements without first consulting with
the other parties hereto. 
  
 Section 5.15 Waiver of
Claims. 
  
 (a) Buyer, on behalf of the Acquired Companies,
hereby waives at and after the Closing any and all Actions, claims and demands by the Acquired Companies based on actual or alleged breach of any fiduciary duty to any Acquired Company by Sellers or any of their Affiliates, or their respective
officers, directors, employees, advisors, representatives or agents in connection with, or arising out of, any act or omission of any such Person, in such capacity, at or prior to the Closing, as the case may 
  

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 be. In the event that any Action, claim or demand waived hereby is pursued by Buyer or any of its subsidiaries or
Affiliates (including the Acquired Companies to the extent any such entity is an Affiliate of Buyer at such time) following the Closing, Buyer shall indemnify and hold harmless Sellers and their Affiliates, and their respective officers, directors,
employees, advisors, representatives and agents for any Losses resulting therefrom. 
  
 (b) Sellers, on behalf of themselves and their Affiliates, hereby waive at and after the Closing any and all Actions, claims and demands by them and their Affiliates based on actual or alleged breach of any fiduciary
duty to Sellers or their Affiliates by Buyers or any of their Affiliates (including the Acquired Companies), or their respective officers, directors, employees, advisors, representatives or agents in connection with, or arising out of, any act or
omission of any such Person, in such capacity, at or prior to the Closing, as the case may be. In the event that any Action, claim or demand waived hereby is pursued by Sellers or any of their subsidiaries or Affiliates following the Closing,
Sellers shall indemnify and hold harmless Buyer and its Affiliates, and their respective officers, directors, employees, advisors, representatives and agents for any Losses resulting therefrom. 
  
 Section 5.16 Trademark/Trade Name Licenses Agreement. 
  
 The parties hereto agree that Buyer is not purchasing, acquiring or
otherwise obtaining any right, title or interest in and to any Trademarks owned by Sellers, including the names “CIGNA,” “Connecticut General,” “Connecticut General Life,” “A Business of Caring”, the CIGNA
Tree Logo, or any other identifying logos or service marks, which are not primarily used in the Business. Notwithstanding the foregoing, the parties agree that on the Closing Date, CGLIC, CIGNA Life and Buyer shall enter into the Trademark/Trade
Name Licenses Agreement regarding the use of Sellers’ Trademarks set forth on Schedule 5.16 by the Acquired Companies and their Affiliates. 
  
 Section 5.17 Intercompany Agreements. 
  
 (a) All of the Intercompany Agreements which are set forth on Schedule 5.17(a)(i) hereof shall be terminated and discharged without any further liability
or obligation thereunder and deemed to be void and of no further force and effect, effective at the Closing. All of the Intercompany Agreements which are set forth on Schedule 5.17(a)(ii) hereof shall not be terminated and discharged at the Closing
but rather shall remain in full force and effect from and after the Closing in accordance with their respective terms, or shall be amended as specified on Schedule 5.17(a)(ii). 
  
 (b) From and after the Closing, none of Buyer and its Affiliates (including the Acquired Companies), on the one hand, and
Sellers and their Affiliates, on the other hand, shall be subject to any further Liability to the other, with respect to any Intercompany Amount or any Intercompany Agreement which is set forth on Schedule 5.17(a)(i) hereof. 
  

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 (c) Except as set forth on Schedule 5.17(c)(i), Buyer, on behalf of the Acquired Companies, hereby waives
at and after the Closing any and all Actions, claims and demands by the Acquired Companies and the Business seeking to collect insurance coverage under the corporate insurance programs covering Sellers and their Affiliates set forth on Schedule
5.17(c)(ii), including any claims incurred but not paid prior to the Closing. The parties shall take all steps necessary to terminate coverage of the Acquired Companies and the Business under such programs. Buyer and the Acquired Companies shall not
pursue or collect any Action, claim or demand waived hereby. 
  
 Section 5.18 Ancillary Agreements. 
  
 (a)
Promptly following the execution of this Agreement and prior to Closing, the parties hereto shall jointly negotiate in good faith and finalize the definitive terms of (i) Schedule 1 to the Transition Services Agreement (“TSA Schedule 1”)
and (ii) Exhibit B to the Investment Management Agreement (Non Manager of Managers Program). In the event that the parties hereto are unable to so finalize the terms of TSA Schedule 1 prior to the Closing, CIGNA shall provide the Transition Services
to CIGNA Life pursuant to the Transition Services Agreement and in accordance with TSA Schedule 1 (in the form attached to the Transition Services Agreement as of the date of this Agreement, as updated and mutually agreed in writing by the parties)
until such time as the parties hereto finalize the terms of TSA Schedule 1 (in which case CIGNA shall provide the Transition Services to CIGNA Life pursuant to the Transition Services Agreement in accordance with such finalized TSA Schedule 1) or as
otherwise provided in the Transition Services Agreement for the entire Transition Period (as defined in the Transition Services Agreement). 
  
 (b) Promptly following the execution of this Agreement and prior to the Closing, the parties hereto shall jointly prepare and negotiate in good faith the
definitive terms of mutually acceptable agreements which, together, conform to the terms set forth in the Facilities Sharing Agreement Term Sheet (the “Facilities Sharing Agreements”). 
  
 (c) If the conditions set forth in Article VI are satisfied, each Seller
shall, and shall cause its Affiliates to, execute and deliver at the Closing each of the Ancillary Agreements to which it is a party and each other agreement, document or instrument which is necessary or desirable to effect the transactions
contemplated by this Agreement or the Ancillary Agreements. 
  
 (d) If the conditions set forth in Article VI are satisfied, Buyer shall, and shall cause its Affiliates to, execute and deliver at the Closing each of the Ancillary Agreements to which it is a party and each other agreement, document or
instrument which is necessary or desirable to effect the transactions contemplated by this Agreement or the Ancillary Agreements. 
  

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 (e) From and after the date of this Agreement the parties hereto agree to implement the actions set forth
on Schedule 5.18(e). The parties also agree to cooperate with each other to agree to changes, reasonably requested by the other parties, to Ancillary Agreements that transfer Transferred Assets or Transferred Investment Assets in order to make the
transfer of assets into and out of the trusts more efficient. 
  
 Section 5.19 Tax Matters. 
  
 (a) Sellers shall
timely prepare and file (or cause to be filed) when due (including extensions) (i) all Tax Returns that are required to be filed by the Acquired Companies for taxable years or periods ending on or before the Closing Date (“Pre-Closing
Period”), and (ii) all consolidated, combined, unitary, and similar Tax Returns that include one or more of the Acquired Companies and any of Sellers or their Affiliates (other than the Acquired Companies). To the extent permitted under
Applicable Law, Buyer and Sellers shall cause each Acquired Company to treat the Closing Date as the last day of such entity’s taxable year. 
  
 (b) Except as otherwise provided in Section 5.19(a), Buyer shall timely prepare and file (or cause to be filed) when due all Tax Returns that are required
to be filed by the Acquired Companies for taxable years or periods beginning after the Closing Date (“Post-Closing Period”) and any taxable period that includes (but does not end on) the Closing Date (a “Straddle Period”).

  
 (c) Buyer shall make available to Sellers for inspection any
Tax Returns required to be prepared by Buyer for any taxable year or period that includes a Straddle Period and Sellers shall make available to Buyer for inspection any Tax Returns required to be prepared by Sellers pursuant to Section 5.19(a);
provided, however, any inspection by Buyer or Sellers shall be permitted only for the portion of, and to the extent that, the Tax Returns relate to the Business. Each party (the “Preparer”) shall, if reasonably practicable, make such Tax
Returns available to such other party, or parties, (the “Reviewer”) a reasonable amount of time prior to the due date (including extensions) for filing such Tax Returns and if any such Tax Return is not provided to Reviewer in a reasonable
amount of time prior to the due date for filing that Tax Return, a draft of such Tax Return shall be provided. If a draft of a Tax Return has been provided pursuant to the preceding sentence, then the Preparer shall provide the Reviewer with the
final Tax Return as soon as is practicable, together with a schedule indicating any changes from the draft Tax Return. If the Reviewer has any dispute regarding any such Tax Return as presented by the Preparer, then such Tax Return shall be filed as
prepared by the Preparer, and the Reviewer shall be entitled to initiate a dispute under Section 5.19(q) hereof. A Reviewer can, at any time, waive its rights, as described herein, to inspect all, or any portion of, any Tax Return. Any such waiver
will have no effect on the parties’ indemnification obligations pursuant to this Section 5.19. 
  
 (d) Except as otherwise provided in this Agreement, Sellers shall pay or cause to be paid (including, in the case of amounts paid prior to the Closing
Date, 
  

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 payments by the Acquired Companies), on a timely basis, all Taxes due with respect to the Tax liability of the Acquired
Companies for Pre-Closing Periods and the portion of any Straddle Period ending on the Closing Date. Sellers shall pay directly to or at the direction of Buyer, at least three (3) days prior to the date payment thereof is due, the portion of such
Taxes for that portion of any Straddle Period which ends on the Closing Date (calculated pursuant to Section 5.19(e)). Buyer shall pay or cause to be paid (including payments by the Acquired Companies), on a timely basis, all Taxes due with respect
to the Tax liability of the Acquired Companies for Post-Closing Periods and the portion of any Straddle Period beginning on the day after the Closing Date. 
  
 (e) In the case of any Straddle Period: 
  
 (i) The periodic Taxes of the Acquired Companies that are not based in whole or in part on income or receipts (e.g., property Taxes) for
the portion of any Straddle Period which ends on the Closing Date shall be computed based on the ratio of the number of days in such portion of the Straddle Period and the number of days in the entire taxable period, and the periodic Taxes of the
Acquired Companies that are not based in whole or in part on income or receipts for the portion of any Straddle Period beginning on the day after the Closing Date shall be computed based on the ratio of the number of days in such portion of the
Straddle Period and the number of days in the entire taxable period. 
  
 (ii) The Taxes of the Acquired Companies for that portion of any Straddle Period ending on the Closing Date (other than Taxes described in Section 5.19(e)(i)), shall be computed as if such taxable period ended as of
the close of business on the Closing Date, and the Taxes of the Acquired Companies for that portion of any Straddle Period beginning after the Closing Date (other than Taxes described in Section 5.19(e)(i)), shall be computed as if such taxable
period began on the day after the Closing Date, provided that, for purposes of this clause (ii), if the total Tax for any Straddle Period does not equal the sum of the positive amounts of Tax in respect of such portions thereof, then the
parties shall adjust such amounts in a fair and reasonable manner. 
  
 (f) Any Tax refund (including any interest in respect thereof) received by Buyer or any of its Affiliates, and any amounts credited against Tax to which Buyer or any of its Affiliates becomes entitled (including by way of any amended Tax
Returns or any carryback filing), that relate to any taxable period, or portion thereof, for which any Seller is liable pursuant to Section 5.19(d), except to the extent that such refund or use of such credit against Tax relates to Taxes for which
the liability is assumed by Buyer, shall be for the account of Sellers, and Buyer shall pay over to Sellers any such refund or the amount of any such credit within ten (10) days after receipt of such refund or use of such credit. Buyer shall pay
Sellers interest at the rate prescribed under section 6621(a)(1) of the Code, compounded daily, on any amount not paid when due under this Section 5.19(f). 
  

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 (g) Any Tax refund (including any interest in respect thereof) received by Sellers or any of their
Affiliates, and any amounts credited against Tax to which Sellers or any of their Affiliates becomes entitled (including by way of any amended Tax Returns or any carryback filing), that relate to any taxable period, or portion thereof, for which
Buyer is liable pursuant to Section 5.19(d), or that relate to any Tax for which the liability is assumed by Buyer, shall be for the account of Buyer, and Sellers shall pay over to Buyer any such refund or the amount of any such credit within ten
(10) days after receipt of such refund or use of such credit. Sellers shall pay Buyer interest at the rate prescribed under section 6621(a)(1) of the Code, compounded daily, on any amount not paid when due under this Section 5.19(g). 
  
 (h) Each Seller and Buyer shall cooperate, and cause each of its Affiliates
to cooperate, to the extent not harmed, in obtaining any Tax refund that the other party reasonably believes should be available, including through filing appropriate forms with the applicable Tax Authority. 
  
 (i) For each “reportable transaction” (as described in Treasury
Regulation Section 1.6011-4(b)), if any, that any of the Acquired Companies, or to the extent it relates, in whole or in part, to the Business, Sellers has “participated in” (as described in Treasury Regulation Section 1.6011-4(c)(3)) and
filed an Internal Revenue Service Form 8886 (or any successor form), Sellers will provide as soon as reasonably practicable a true and complete copy of each such form as such form was filed. 
  
 (j) Except as otherwise provided in the Transition Services Agreement, after
the Closing Date, each Seller and Buyer shall use reasonable efforts in the ordinary course of its business (and shall cause its respective Affiliates to do the same) to (i) assist the other party in preparing any Tax Returns which such other party
is responsible for preparing and filing in accordance with Section 5.19(a) or Section 5.19(b), and (ii) cooperate fully in preparing for any audits of, or disputes with, any Tax Authority regarding any Tax Returns of the Acquired Companies or, to
the extent it relates, in whole or in part, to the Business, Sellers. In connection therewith, Buyer shall not dispose of any Tax Books or Records of the Acquired Companies or, to the extent it relates, in whole or in part, to the Business, Sellers
during the eight-year period following the Closing Date, and thereafter shall give Sellers reasonable written notice, and the opportunity to make copies of any such items, before disposing of such items. Notwithstanding the foregoing, in the event
of any inconsistencies between the provisions of this section 5.19(j) and any provision in the Transition Services Agreement, the Transition Services Agreement shall control. 
  

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 (k) Contests. 
  

(i) After the Closing Date, Buyer and Sellers each shall notify the other party in writing within ten (10) days of notice of (or, if
there is no such notice, the commencement of) any Tax audit or administrative or judicial proceeding affecting the Taxes of the Acquired Companies, Sellers, Buyer or their respective Affiliates (a “Tax Audit”) the resolution of which would
reasonably be expected to result in a material increase in Tax liability for which the other party would be liable under the terms of this Agreement. Such notice shall contain factual information describing any asserted Tax liabilities in reasonable
detail and shall include copies of any notice or other document received from any Tax Authority in respect of any such asserted Tax liabilities. 
  
 (ii) In the case of any Tax Audit (or, if separable, any portion thereof) solely involving Taxes for which one party is liable under the
terms of this Agreement or otherwise, such party (the “Controlling Party”) shall have the right, at its expense, to control the conduct of such Tax Audit (or, if separable, any portion thereof); provided, however, that the
other party (the “Participating Party”) shall have the right, at its expense, to participate in any such Tax Audit (or portion thereof) to the extent that its resolution would reasonably be expected to result in an increase in Tax
liability for which the Participating Party is liable under the terms of this Agreement or otherwise. In the event that either party exercises its right to participate in any Tax Audit (or portion thereof), as described above, the Controlling Party
shall not settle such Tax Audit (or portion thereof) without the prior written consent of the Participating Party, which consent shall not be unreasonably withheld, provided, however, that the Controlling Party shall be entitled to
settle any portion of such Tax Audit so long as (a) such portion is separable from the remainder of the Tax Audit and (b) such resolution would not reasonably be expected to result in an increase in Tax liability for which the Participating Party is
liable under the terms of this Agreement or otherwise. 
  
 (iii) In the case of any Tax Audit (or portion thereof) not described in clause (ii), the party in whose name, or in the name of whose Affiliate(s), such Tax Audit is being contested shall have the right, at its expense, to control the
conduct of such Tax Audit (or portion thereof); provided, however, that such party shall not settle such Tax Audit (or portion thereof) without the prior written consent of the other party, which consent shall not be unreasonably
withheld. 
  

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 (l) Tax Indemnity. 
  
 (i) Notwithstanding any other provision of this Agreement, Sellers shall indemnify, defend and hold harmless
Buyer and its Affiliates from and against any and all (A) Taxes imposed on, or required to be withheld by, the Acquired Companies, Sellers or their Affiliates with respect to any Pre-Closing Period; (B) Taxes imposed on, or required to be withheld
by, the Acquired Companies, Sellers or their Affiliates with respect to the portion of any Straddle Period ending at the end of the day on the Closing Date; and (C) Taxes, expenses or other losses incurred as a result of any breach or inaccuracy of
any representation or warranty set forth in Section 3.11 (in each case, determined without regard to any qualifications or references to “material” or any other materiality qualifications or references contained in any specific
representation or warranty, except for such qualifications or references in Section 3.11(g)), or arising out of the failure of Sellers or their Affiliates, to perform any of the agreements they are required to perform under this Section 5.19 or
Section 5.13. Sellers shall pay to Buyer any Tax indemnity required to be paid pursuant to the preceding sentence within ten (10) days of Sellers’ receipt of a written request therefor from Buyer describing in reasonable detail the indemnified
Taxes which are the subject of and basis for such Tax indemnity and the computation of the amount so payable; provided, that if indemnified Taxes are being contested in accordance with Section 5.19(k), Sellers shall pay any required Tax indemnity to
Buyer within ten (10) days of final resolution of such contest. 
  
 (ii) Notwithstanding any other provision of this Agreement, Buyer shall indemnify, defend and hold harmless Sellers and their Affiliates from and against any and all (A) Taxes imposed on, or required to be withheld
by, the Acquired Companies, Buyer or its Affiliates, with respect to any Post-Closing Period; (B) Taxes imposed on, or required to be withheld by, the Acquired Companies, Buyer or its Affiliates, with respect to the portion of any Straddle Period
beginning the day after the Closing Date; and (C) Taxes, expenses or other losses arising out of the failure of Buyer or its Affiliates to perform any of the agreements they are required to perform under this Section 5.19 or Section 5.13. Buyer
shall pay to Sellers any Tax indemnity required to be paid pursuant to the preceding sentence within ten (10) days of Buyer’s receipt of a written request therefor from Sellers describing in reasonable detail the indemnified Taxes which are the
subject of and basis for such Tax indemnity and the computation of the amount so payable; provided, that if indemnified Taxes are being contested in accordance with Section 5.19(k), Buyer shall pay any required Tax indemnity to Sellers within ten
days of final resolution of such contest. 
  

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 (m) Buyer shall not take, or cause or permit the Acquired Companies to take, any action, with respect to
the taxable year or period of Buyer, the Acquired Companies, or any of their Affiliates, as applicable, which includes the Closing Date, which would be reasonably likely to increase Sellers’ or any of their Affiliates’ liability for Taxes
(including any liability of Sellers to indemnify Buyer for Taxes pursuant to this Agreement) including, for example, any action (including the making of any elections) that would be reasonably likely to result in, or change the character of, any
income or gain that any Seller or Affiliate of a Seller must report on any Tax Return. 
  
 (n) Neither Buyer, on the one hand, nor any of the Sellers, on the other hand, (in any event, the “Amending Party”) shall (or shall cause or permit any of its respective Affiliates, including the Acquired
Companies to) amend, refile or otherwise modify any Tax Return that would reasonably be expected to result in a material increase in Tax liability for which any party to this Agreement that is not an Affiliate of the Amending Party (the
“Non-Amending Party”) is liable under the terms of this Agreement relating in whole or in part to the Acquired Companies with respect to any taxable year or period ending on or before the Closing Date (or with respect to any Straddle
Period) without the prior written consent of such Non-Amending Party, which consent may be withheld in its sole discretion; provided, however, that no consent shall be required if the Amending Party agrees to indemnify the Non-Amending Party for any
resulting increase in its liability for Taxes under the terms of this Agreement or otherwise. 
  
 (o) Except to the extent otherwise required by Applicable Law, none of Buyer or any Affiliate of Buyer shall (or shall cause or permit the Acquired Companies to) carry back for federal, state, local or foreign tax
purposes to any taxable period, or portion thereof, of the Acquired Companies, ending on or before, or which includes, the Closing Date any net operating losses, capital losses, tax credits or similar items arising in, resulting from, or generated
in connection with a taxable year of Buyer or any Affiliate of Buyer, or portion thereof, ending after the Closing Date. 
  
 (p) Sellers agree to join with Buyer in making timely and irrevocable joint elections under section 338(h)(10) of the Code and any corresponding elections
under state or local tax law, with respect to the purchase and sale of the stock of the Acquired Companies identified in Schedule 5.19(p)(i) (collectively, the “Section 338(h)(10) Election”). Sellers further agree and understand that Buyer
intends to make timely elections under section 338(g) of the Code and any corresponding elections under state or local tax law, with respect to the purchase and sale of the stock of the Acquired Companies identified in Schedule 5.19(p)(ii).

  
 (q) Any claim, controversy or dispute arising out of or
relating to Section 5.19 or otherwise relating to Taxes, on which an amicable understanding cannot be reached, shall be submitted to and resolved by arbitration. Such arbitration shall be conducted expeditiously and confidentially. In such
arbitration, the arbitrators may not award any consequential, punitive or exemplary damages or any damages other than compensatory damages. To initiate arbitration, a party shall notify the other party in 
  

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 writing of its desire to arbitrate, stating the nature of its dispute and the remedy sought. The receiving party shall
acknowledge receipt of the notice in writing within five days of such receipt, and thereafter the parties shall attempt in good faith to resolve the dispute within thirty (30) days of the date of such acknowledgment. If the dispute cannot be
resolved within such thirty (30) day period, any party may send a written demand for arbitration to the other party. Within thirty (30) days of delivery of such demand for arbitration, the parties shall appoint by mutual agreement an arbitrator who
is a nationally-recognized Tax lawyer at a nationally recognized accounting firm or law firm; provided, however, if the parties cannot mutually agree on an arbitrator, the parties’ independent accounting firms will appoint a neutral
nationally-recognized Tax lawyer at a nationally recognized accounting firm or law firm as arbitrator. Any award rendered by the arbitrator shall be accompanied by a written opinion setting forth the findings of fact and conclusions of law relied
upon in reaching the decision. The award rendered by the arbitrator shall be final, binding and non-appealable, and judgment upon such award may be entered by any court having jurisdiction thereof. The parties agree that the existence, conduct and
content of any such arbitration shall be kept confidential and no party shall disclose to any Person any information about such arbitration, except as may be required by Applicable Law or for financial reporting purposes in each party’s
financial statements. The costs, fees and expenses of arbitration shall be borne by the party that does not prevail in substantial part as determined by the arbitrator. Notwithstanding the foregoing, all time periods in this Section 5.19(q) shall,
to the maximum extent practicable, be reduced or eliminated and the parties shall attempt in good faith to resolve any dispute, or allow for arbitration on an accelerated basis in respect of such dispute, if and to the extent that the dispute
relates to a Tax Return that (i) has not yet been filed and (ii) the due date (including extensions) for which would be likely to otherwise prevent such resolution’s being reflected on the Tax Return as, and when, initially filed. 

 
 (r) Notwithstanding anything in this Agreement to the contrary, the
provisions of Section 5.19 shall survive for ninety (90) days after the expiration of all applicable statutes of limitation (giving effect to any waivers, mitigations or extensions thereof). 
  
 (s) Notwithstanding anything in this Agreement to the contrary,
indemnification claims with regard to Taxes (including with respect to any breach of or inaccuracy in any representation or warranty contained in Section 3.11, but not including those contained in Section 3.21) or otherwise brought pursuant to this
Section 5.19 shall be governed exclusively by this Section 5.19; provided, however, if there is a failure of any representation or warranty set forth in Section 3.21 and the subject matter of such failure becomes the subject matter of
a contest, claim, audit or similar proceeding initiated by a Tax Authority against the Buyer or any of its Affiliates (including the Acquired Companies), then such proceeding and Sellers’ indemnification obligations, if any, with respect
thereto shall be governed in all respects by the provisions of this Section 5.19, and, to the extent governed by this Section 5.19, for purposes of the survival periods of the representations and warranties set forth in Section 7.2, such
representation or warranty shall be treated as a representation or warranty set forth in Section 3.11. 
  

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 (t) In the event of any inconsistencies between the provisions of this Section 5.19 and any other
provision in this Agreement, this Section 5.19 shall control. 
  
 Section 5.20 New York Certificate of Authority; Rate and Form Filings. 
  
 CGLIC shall cause CIGNA Life to (a) make all rate and form filings and applications to establish Separate Accounts necessary for CIGNA Life to engage in the Business following the Closing Date, (b) apply to the New
York Insurance Department for a Certificate of Authority in order to conduct the Business in the State of New York and (c) apply to any other regulatory authority for such licenses or authorizations as may be required in order to conduct the
Business in each jurisdiction in which it is currently conducted. 
  
 Section 5.21 Post-Closing Business Liabilities; Ancillary Agreements. 
  
 Buyer agrees to perform and discharge, or cause its Affiliates to perform and discharge, Post-Closing Business Liabilities. Sellers agree to perform, or cause its Affiliates party thereto to perform, their obligations
to the extent arising pursuant to any Ancillary Agreement. 
  
 Section 5.22 Seed Money; Mutual Funds. 
  
 (a)
Sellers agree to (i) cause LINA not to withdraw its investments in the Separate Accounts listed on Schedule 5.22(a)(i) and (ii) not recommend to the trustees of the mutual funds listed on Schedule 5.22(a)(ii) to change the basis of operations of
such mutual funds, in each case until the earlier of the mutual written agreement of Buyer and Sellers to permit such withdrawal and the end of the ninth month following the Closing Date. With respect to the mutual funds listed on Schedule
5.22(a)(ii), following the Closing, if requested by Buyer, Sellers will consider recommending to the trustees of such mutual funds the transfer to an Affiliate of Buyer management of such mutual funds. 
  
 (b) Notwithstanding any provision to the contrary in this Agreement or the
Administrative Services Agreement, within five (5) days of the end of the ninth month following the Closing Date, or at such earlier time as the parties may mutually agree or Applicable Law may require, LINA will have an unconditional right to (i)
withdraw its entire interest in the Separate Accounts listed on Schedule 5.22(a)(i) and (ii) redeem its shares of the mutual funds listed on Schedule 5.22(a)(ii). 
  

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 Section 5.23 Advisory Clients. 
  
 As promptly as reasonably practicable, each Advisory Entity shall notify each of its Advisory Clients of the transactions
contemplated by the Transaction and with the Buyer, use commercially reasonable efforts to obtain, prior to the Closing Date, any necessary consent of each Advisory Client to the “assignment” (as such term is used in the Investment Company
Act) of its Investment Advisory Contract resulting from each completion of the transactions contemplated by the Transaction. Buyer agrees that the Advisory Entity may obtain such consent by (a) requesting written consent as aforesaid, (b) informing
such Advisory Client at least forty-five (45) days prior to the Closing Date of (i) such Advisory Entity’s intention to “assign” such Investment Advisory Contract by completing the Transaction, (ii) such Advisory Entity’s
intention to continue the advisory services provided pursuant to the existing Investment Advisory Contract with such Advisory Client after the Closing Date if such Advisory Client does not terminate such Investment Advisory Contract prior to the
Closing Date and (iii) that the consent of such Advisory Client will be implied if such client continues to accept such advisory services for at least thirty (30) days after receipt of such notice without termination and (c) not receiving from such
Advisory Client prior to the Closing Date an oral or written indication of an intent to terminate such Investment Advisory Contract or otherwise withhold consent. Each of the Advisory Entities and Buyer shall cooperate and consult with each other
regarding all written communications concerning the obtaining of such consents and all such communications shall be subject to the review and consent of Buyer, such consent not to be unreasonably withheld. Sellers and Buyers shall each bear fifty
percent (50%) of the cost of all such notices. 
  
 Section 5.24
Mutual Fund Distribution Agreements. 
  
 Buyer hereby
covenants and agrees to cause CFS at the Closing to enter into a distribution agreement with each of the entities set forth on Schedule 5.24 in substantially the form of the distribution agreement between CFS and such entity in effect as of the date
of this Agreement. 
  
 Section 5.25 Rejected Intellectual
Property Contracts.  
  
 At any time prior to assuming
an Intellectual Property Contract or a Contract concerning IT Assets, Buyer and its Affiliates shall have the option, at their sole discretion, to treat such Contract as an Excluded Asset and all Liabilities related thereto as Excluded Liabilities,
in which case Buyer shall, subject to the proviso contained in Section 5.7(c), reimburse Sellers for one-half of all out-of-pocket costs and penalties which Sellers actually do pay in accordance with the terms of such Contract, provided that
Buyer shall bear no cost or penalties if the aggregate financial obligations of Sellers that remain outstanding under such Contract equals or exceeds $75,000.00. Sellers and their Affiliates shall take such actions, execute such instruments and
otherwise cooperate with Buyer to the extent reasonably necessary to give effect to any such election by Buyer and its Affiliates. At Buyer’s sole option, Sellers and their Affiliates will provide 
  

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 Buyer and its Affiliates with rights and/or access to the benefits provided under any such Contract or substantially
equivalent rights and/or access in all material respects as a Transition Service pursuant to the Transition Services Agreement. 
  
 Section 5.26 License Under Certain Intellectual Property. 
  

(a) Subject to the limitations of Sections 5.26(b) and 5.26(c), effective upon the Closing Date, Sellers, on behalf of themselves and their Affiliates,
hereby grant to Buyer a non-exclusive, irrevocable, perpetual, royalty-free license to reproduce, create derivative works based on, modify, enhance, display, disassemble, decompile, reverse engineer and otherwise use, solely in support of the
Business, all (or any portion(s) of) Intellectual Property owned by Sellers and their Affiliates used in the Business prior to the Closing (but excluding Trademarks, which are treated exclusively in Section 5.16 and in the Trademark/Trade Name
Licenses Agreement) (the “Seller-Licensed Intellectual Property”). 
  
 (b) Seller-Licensed Intellectual Property (including desktop, call center, distributed datacenter or other software applications) shall be included within the scope of the license grant set forth in this Section 5.26
only if and to the extent that: (i) such Seller-Licensed Intellectual Property is necessary to support directly or indirectly the customer, supplier or other similar transactions of the Business (including without limitation operations, systems
management, optimization, troubleshooting and diagnostics), and (ii) Buyer does not itself own and cannot license from a third Person (which Person shall not in any event derive its rights (directly or indirectly) from Sellers or their Affiliates)
on commercially reasonable terms a generally commercially available, substantially equal substitute without the need for material customization. Without limitation, a software application automatically shall be deemed “necessary” for
purposes of this Section 5.26 if Buyer must pay more than $150,000 to acquire such substantially equal substitute or if Buyer has paid $700,000 in the aggregate to acquire such substantially equal substitutes. 
  
 (c) On or before the end of the Transition Period (as defined in the
Transition Services Agreement), the Sellers must deliver to Buyer the Seller-Licensed Intellectual Property (including without limitation fully commented source code, data structures and user manuals if and as available) in the form or format in
which they are available. Buyer at its option may choose the form and format if multiple forms and formats are available. Buyer expressly acknowledges and agrees that the Sellers will not provide training, support or maintenance services of any kind
in connection with the Seller’s Intellectual Property (other than to the extent such services otherwise are required pursuant to this Agreement or the Ancillary Agreements). 
  
 (d) Buyer may assign, transfer or sublicense all or any portion of the rights licensed pursuant to this Section 5.26 to any
successor(s) of all or substantially all of the assets of the Business, or portion or portions of the Business, including without limitation for purposes of providing transition services to such successor(s). Buyer also 
  

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 may sublicense all or any portion of the rights licensed to Buyer pursuant to this Section 5.26 to Buyer’s and its
Affiliates’ (i) customers, clients and other end-users in the ordinary course of Business (except that computer software source code may not be provided to such end-users); and (ii) subcontractors and consultants, provided that to the extent
that Seller-Licensed Intellectual Property which is Confidential Information (as defined in the Confidentiality Agreement) will be shared, it will only be shared with those subcontractors and consultants who reasonably require access to assist Buyer
and its Affiliates in using their rights licensed pursuant to this Section 5.26 and who have agreed to be bound by non-disclosure and confidentiality agreements at least substantially as protective as Buyer’s analogous obligations under the
Confidentiality Agreement. 
  
 (e) EXCEPT AS OTHERWISE PROVIDED IN
THIS AGREEMENT OR THE ANCILLARY AGREEMENTS, THE SELLER-LICENSED INTELLECTUAL PROPERTY IS PROVIDED ON AN “AS IS” BASIS, WITHOUT WARRANTY OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, NON-INFRINGEMENT, PROPER COOPERATION OR INTERFACING WITH THIRD PARTY INFORMATION TECHNOLOGY OR OTHER WARRANTIES, CONDITIONS, GUARANTEES OR REPRESENTATIONS, WHETHER EXPRESS OR IMPLIED, AND THE PARTIES EXPRESSLY WAIVE ANY AND
ALL RIGHTS THEY MAY HAVE UNDER THE UNIFORM COMMERCIAL CODE AS CONCERNS THE SELLER-LICENSED INTELLECTUAL PROPERTY. 
  
 (f) Except as permitted in this Section 5.26, or by other prior written permission of Sellers, Buyer and its Affiliates shall not, and shall not allow any
third party, to: (i) create any derivative work of the Seller-Licensed Intellectual Property or any portion thereof; (ii) sublicense, transfer, or assign the Seller-Licensed Intellectual Property or any right with respect thereto, including without
limitation for the purpose of engaging in the business of providing computer-based services to any party, whether on a time sharing basis or otherwise; (iii) rent, lease or distribute the Seller-Licensed Intellectual Property or use the
Seller-Licensed Intellectual Property for the benefit of any third party or for the benefit of any entity other than the Business; (iv) copy all or any portion of the Seller-Licensed Intellectual Property; or (v) disassemble, decompile or otherwise
reverse engineer all or any portion of the Seller-Licensed Intellectual Property. 
  
 Section 5.27 Confidentiality. 
  
 Sellers shall, and shall cause their Affiliates and representatives to, maintain in confidence and not use to the detriment of Buyer or its Affiliates any written, oral or other confidential information relating to the Business or any
confidential information obtained from Buyer, its Affiliates or any of its representatives in connection with this Agreement or the Transaction, except to the extent (i) any such information ceases to be confidential information, other than because
of a disclosure by Sellers or their Affiliates or representatives, (ii) any such information is required to be disclosed by 
  

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 any Governmental Entity or (iii) that use of such information is necessary or appropriate in making any filing or
obtaining any consent required for the consummation of the Transaction, and Sellers shall instruct their representatives having access to such information of such obligation of confidentiality. Notwithstanding anything to the contrary contained in
this Agreement, in any of the Ancillary Agreements or in any other written or oral understanding or agreement to which the Sellers and Buyer (or their respective Affiliates) are parties or by which they are bound, each of the Sellers and Buyer (and
their respective Affiliates) authorizes each other (and the employees, representatives and other agents of each of the Sellers, Buyer and of their respective Affiliates) to disclose to any Person, without limitation of any kind, the “tax
treatment” and “tax structure” (within the meaning of Treasury Regulations Section 1.6011-4) of the Transaction or of any transaction contemplated in or by any other document related to the Transaction, and all materials of any kind
related thereto (including tax opinions and other tax analyses) provided by the Sellers or Buyer (or their respective Affiliates) to each other in connection thereto. 
  
 Section 5.28 Additional Assigned and Assumed Contracts. 
  
 For those contracts listed on Schedule A to the Assignment and Assumption
Agreement as of the date of this Agreement, Buyer shall be responsible for all costs and penalties which Sellers actually pay in accordance with the terms of such Contract upon termination or cancellation of such Contract. If at any time following
the execution of this Agreement, whether before, at or following the Closing, Sellers shall become aware of any Contract which relates primarily to the Business and which is not set forth on Schedule A to the Assignment and Assumption Agreement,
Sellers shall promptly notify Buyer in writing of the existence of such Contract and Buyer and its Affiliates shall have the option, in their sole discretion, either to (a) supplement Schedule A to the Assignment and Assumption Agreement to include
such Contract as an Assigned and Assumed Contract as though any such Contract had originally been set forth on Schedule A to the Assignment and Assumption Agreement or (b) (i) treat any such Contract as an Excluded Asset and all Liabilities related
thereto as Excluded Liabilities and (ii) subject to the proviso contained in Section 5.7(c), and solely with respect to Contracts for which Buyer receives notice from Seller not later than ten (10) Business Days prior to the Closing Date, reimburse
Seller for one-half of all out-of-pocket costs and penalties which Sellers actually pay in accordance with the terms of such Contract upon termination or cancellation of such Contract times, if the Contract does not relate exclusively to the
Business, a fraction representing the proportion of the Contract relating to the Business; provided, however, if Buyer, CIGNA Life or any of its Affiliates have derived any benefit under a Contract or utilized any service under a
Contract between the Closing and the date Buyer elects to treat such Contract as an Assigned and Assumed Contract or elects not to treat such Contract as an Assigned and Assumed Contract, any Liability incurred pursuant to such Contract for the
receipt of the benefit derived between the Closing and the date of such election shall be borne by Buyer. The foregoing proviso shall not apply to any Contract or service under a Contract 
  

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 to the extent that the benefit of such Contract or service is provided directly or indirectly to Buyer, CIGNA Life or any
of its Affiliates pursuant to the Transition Services Agreement. Buyer shall have the right to exercise the option referred to in the second sentence of this Section 5.28 within ten (10) Business Days of Buyer’s receipt of Seller’s
notification and shall exercise such option by notifying Sellers in writing as to whether Buyer shall treat such Contract pursuant to clause (a) or clause (b) of the second sentence of this Section 5.28. Any such Contract for which Buyer fails to
notify Sellers in accordance with the previous sentence shall be treated as an Excluded Asset and all Liabilities related thereto as Excluded Liabilities. Sellers and their Affiliates shall take such actions, execute such instruments and otherwise
cooperate with Buyer to the extent reasonably necessary to give effect to any such election by Buyer and its Affiliates. 
  
 Section 5.29 Post-Restructuring Services. 
  
 In connection with the consummation of the Restructuring, Sellers shall describe to Buyer in writing each service or arrangement previously provided
within a Seller which following the Restructuring would need to be provided by a Seller to CIGNA Life or an Acquired Company in order for the Business as conducted by CIGNA Life and the Acquired Companies to receive following the Restructuring a
comparable level of services and support from the Sellers as was provided by Sellers to the Business prior to the Restructuring. Buyer shall be entitled (i) (A) to elect to have the applicable Seller, on the one hand, and CIGNA Life or an Acquired
Company, on the other hand, enter into a written Contract providing for the provision of such service or arrangement on the same terms as provided within the applicable Seller prior to the Restructuring, (B) to treat such Contract as an Assigned and
Assumed Contract, (C) to deem such Contract as added to Schedule 3.15(a) or 3.15(b), as applicable, with effect as of the date of this Agreement and (D) to deem such Contract as added to Schedule 5.17(a)(ii) with effect as of the date of this
Agreement, (ii) (A) to reject the election contemplated by clause (i)(A) above, (B) to reject the treatment contemplated by clause (i)(B) above, (C) to deem such service or arrangement as added to Schedule 3.15(a) or 3.15(b), as applicable, with
effect as of the date of this Agreement and (D) to deem such service or arrangement as added to Schedule 5.17(a)(i) with effect as of the date of this Agreement or (iii) (A) to reject the election contemplated by clause (i)(A) above, (B) to reject
the treatment contemplated by clause (i)(B) above, (C) to deem such service or arrangement as added to Schedule 3.15(a) or 3.15(b), as applicable, with effect as of the date of this Agreement, (D) to deem such service or arrangement as added to
Schedule 5.17(a)(i) with effect as of the date of this Agreement and (E) to elect to treat such service or arrangement as an Omitted Service as defined under and for purposes of the Transition Services Agreement with effect as of the date of such
election. 
  
 Section 5.30 Data Required for Sarbanes-Oxley
Certification: IMR. 
  
 (a) From and after the date of this
Agreement Sellers will use reasonable best efforts to comply with Buyer’s requests for information available to Sellers relating to the Business to the extent Buyer requires such information to facilitate 
  

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 post-Closing compliance with the certification requirements under Section 13(a) of the Exchange Act, and, except to the
extent required under Applicable Law, Buyer shall preserve the confidentiality of such data. 
  
 (b) Sellers agree to cause CGLIC to prepare and have verified by CIGNA’s independent, external auditors revised calculations of IMR for the Business for purposes of calculating the IMR Adjustment, which
calculation and verification shall be completed no later than January 31, 2004. 
  
 Section 5.31 Transfer of Canadian Business. 
  
 The Canadian portion of the Business will be transferred to CIGNA Life or PRICOA in a manner to be agreed between Buyer and Sellers between the date of this Agreement and Closing; provided that no transfers shall be
effected in any manner that require CIGNA Life or Buyer or any Affiliate of Buyer to effect or maintain any licensure or registration in Canada or any jurisdiction within Canada. 
  
 Section 5.32 DC Hedge. 
  
 (a) In the event that all or part of the incremental contra-liability related to the close-out and revaluation to fair value for SAP purposes of open
positions as of or immediately prior to the Closing Date in the DC Hedge Program (as identified in the Statement of Net Settlement Methods), is disallowed by the Connecticut Insurance Department or otherwise not available (the “SAP
Disallowance”) and such SAP Disallowance results in a reduction of CIGNA Life’s Surplus, then the Sellers shall pay to CIGNA Life an amount equal to 13.4% multiplied by the amount by which CIGNA Life’s Surplus is reduced as a direct
result of the SAP Disallowance. 
  
 (b) Any payment required to be
made by the Sellers to CIGNA Life pursuant to subsection (a) of this Section 5.32 shall be made within 30 days after Buyer notifies Sellers that CIGNA Life’s SAP financial statements will reflect a SAP Disallowance to the extent of such SAP
Disallowance. 
  
 (c) Buyer shall use reasonable efforts to
preserve the availability of the contra-liability referred to in Section 5.32(a). Buyer shall keep the Sellers apprised of any discussions which the Buyer or any of its Affiliates, including CIGNA Life, may have with the Connecticut Insurance
Department relative to the DC Hedge Program as well as any SAP Disallowance and the Buyers and Sellers agree that the last sentence of Section 5.6 of this Agreement shall apply to any discussions with the Connecticut Insurance Department relating to
any SAP Disallowance. 
  
 Section 5.33 Releases of
Insurance-Related Liabilities. 
  
 From June 30, 2003 through
the Closing Date, CGLIC and CIGNA Life have not released and shall not record a Net Reserve Release Amount on its SAP 
  

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 statements without the appropriate concurrence by PricewaterhouseCoopers LLP. Sellers will promptly notify Buyer in
writing of any such release that is reflected in its SAP statements or the effect of which will be reflected in the Final Statement of Net Settlement. 
  
 Section 5.34 Assignment of Right to Act as Collateral Manager. From and after the date of this Agreement, Sellers shall use their reasonable best
efforts to obtain the consent of the non-Seller loan participants to the Assignment from CGLIC or any of its Affiliates to Prudential Investment Management of the right to act as collateral manager in connection with the following three (3)
collateralized bank loan obligation transactions: TimesSquare Serves, Trumbull and TimesSquare Loan Trust. 
  
 ARTICLE VI 
 CONDITIONS PRECEDENT 
  
 Section 6.1 Conditions to Obligation of All Parties. 
  
 The respective obligations of Buyer and Sellers to effect the Closing is
subject to the satisfaction or explicit written waiver at or prior to the Closing of the following conditions: 
  
 (a) any waiting period applicable to the consummation of the Closing under the HSR Act shall have terminated or expired; 
  
 (b) all other applicable waiting periods have expired and all other
approvals, licenses, authorizations, filings, registrations, applications, notifications, consents, waivers, releases and orders required to be made or filed with or obtained from any Governmental Entity in connection with this Agreement and the
Ancillary Agreements and the consummation of the transactions contemplated hereby and thereby set forth on Schedule 6.1(b) (collectively, “Governmental Approvals”) shall have been made or obtained, shall be in full force and effect and
shall not include any term or condition requiring any party to take or refrain from taking or to agree to take or refrain from taking any action or to suffer to exist any restriction or requirement which would, individually or together with all
other such terms and conditions of Governmental Approvals, be reasonably expected to result in a Material Negative Condition; 
  
 (c) the Novation Approvals with respect to policies subject to the laws of the jurisdictions set forth on Schedule 6.1(c) shall have been made or obtained
and be in full force and effect without any term or condition that would reasonably be expected to result in a Material Negative Condition; 
  
 (d) the approvals, notifications, consents, waivers and releases from third parties other than Governmental Entities set forth on Schedule 6.1(d) shall
have been made or obtained; and 
  

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 (e) no provision of any Applicable Law shall prohibit Buyer from consummating or performing the
transactions contemplated by this Agreement or the Ancillary Agreements, except if such prohibition would not reasonably be expected to result in a Material Negative Condition, and there shall not be instituted by any Governmental Entity any Action
which seeks to enjoin or otherwise prevent consummation of the transactions contemplated by this Agreement or the Ancillary Agreements. 
  
 Section 6.2 Additional Conditions to Obligation of Buyer. 
  

The obligation of Buyer to effect the Closing is further subject to the satisfaction (or explicit written waiver by Buyer) at or prior to the Closing
of the following conditions: 
  
 (a) The representations and
warranties of Sellers contained in (i) Sections 3.2 and 3.5 shall be true and correct in all material respects, (ii) clause (b) in the first paragraph of Section 3.9 shall be true and correct in all respects and (iii) Article III of this Agreement
(other than those referenced in clause (i) and (ii) above) shall be true and correct (but without regard to any qualifications or references to “Seller Material Adverse Effect”, “material” or any other materiality qualifications
or references contained in any specific representation or warranty), in each case of clause (i), (ii) and (iii) above at the date of this Agreement and on and as of the Closing Date (after giving effect to the Restructuring) as though made on and as
of the Closing Date (except for representations and warranties made as of a specified date, the accuracy of which will be determined as of the specified date), except in the case of clause (iii) above where any such failure of the representations
and warranties in the aggregate to be true and correct would not reasonably be expected to have a Seller Material Adverse Effect, and Buyer shall have received a certificate signed on behalf of Sellers by the Chief Financial Officer of CIGNA to the
effect that such Chief Financial Officer has read this Section 6.2(a) and that to the best of his Knowledge the conditions set forth in this Section 6.2(a) have been satisfied (which certificate shall not impose any personal liability on such
officer); 
  
 (b) Sellers shall have performed and complied in all
material respects with each obligation, covenant, agreement and condition required by this Agreement to be performed or complied with by Sellers at or prior to the Closing, and Buyer shall have received a certificate signed on behalf of Sellers by
the Chief Financial Officer of CIGNA to the effect that such Chief Financial Officer has read this Section 6.2(b) and that to the best of his Knowledge the conditions set forth in this Section 6.2(b) have been satisfied (which certificate shall not
impose any personal liability on such officer); 
  
 (c)
CGLIC’s financial strength rating by Standard & Poor’s has not been reduced to BBB or below; 
  
 (d) CGLIC’s financial strength rating by Moody’s has not been reduced to Baa2 or below; 
  

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 (e) Buyer shall have received one or more opinions of Counsel to Sellers, dated the Closing Date,
substantially in the forms attached as Exhibit V-1, Exhibit V-2, and Exhibit V-3; 
  
 (f) Buyer shall have received from Sellers certificates obtained from the Connecticut Department of Insurance evidencing the continued existence and licensure of CIGNA Life as an insurance company, dated as of the
date not earlier than five days prior to the Closing; 
  
 (g)
Buyer shall have received from Sellers certificates as to the good standing or comparable status of the Acquired Companies from the respective jurisdictions of their incorporation or domicile, dated as of a date not earlier than two (2) days prior
to the Closing Date; 
  
 (h) Buyer shall have received copies of
the Ancillary Agreements duly executed by each party thereto that is not an Affiliate of Buyer; 
  
 (i) Buyer shall have received copies of the resignations of each director of the Acquired Companies on or prior to the Closing Date; and 
  
 (j) the approvals, notifications, consents, waivers and releases from third
parties other than Governmental Entities set forth on Schedule 6.2(j) shall have been made or obtained. 
  
 Section 6.3 Additional Conditions to Obligation of Sellers. 
  
 The obligation of Sellers to effect the Closing is further subject to the satisfaction (or explicit written waiver by
Sellers) at or prior to the Closing of the following conditions: 
  
 (a) the representations and warranties of Buyer contained in Article IV of this Agreement shall be true and correct (but without regard to any qualifications or references to “Buyer Material Adverse Effect”, “material”
or any other materiality qualifications or references contained in any specific representation or warranty) at the date of this Agreement and on and as of the Closing Date as though made on and as of the Closing Date (except for representations and
warranties made as of a specified date, the accuracy of which will be determined as of the specified date), except where any such failure of the representations and warranties in the aggregate to be true and correct would not reasonably be expected
to have a Buyer Material Adverse Effect, and Sellers shall have received a certificate signed on behalf of Buyer by the Chief Financial Officer of Buyer to the effect that such Chief Financial Officer has read this Section 6.3(a) and that to the
best of his knowledge the conditions set forth in this Section 6.3(a) have been satisfied (which certificate shall not impose any personal liability on such officer; 
  

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 (b) Buyer shall have performed and complied in all material respects with each obligation, covenant,
agreement and condition required by this Agreement to be performed or complied with by Buyer at or prior to the Closing, and Sellers shall have received a certificate signed on behalf of Buyer by the Chief Financial Officer of Buyer to the effect
that such Chief Financial Officer has read this Section 6.3(b) and that to the best of his knowledge the conditions set forth in this Section 6.3(b) have been satisfied (which certificate shall not impose any personal liability on such officer);

  
 (c) Sellers shall have received one or more opinions of
Counsel to Buyer, dated the Closing Date, substantially in the form attached as Exhibit W; and 
  
 (d) Sellers shall have received copies of the Ancillary Agreements duly executed by each party thereto that is not a Seller or an Affiliate of any Seller. 
  
 ARTICLE VII 
 INDEMNIFICATION 
  
 Section 7.1 Exclusions from
Representations and Warranties. 
  
 (a) Notwithstanding
anything to the contrary in this Agreement or the Ancillary Agreements and subject to Section 7.1(b), Buyer acknowledges and agrees that (i) Sellers make no representation or warranty, and nothing contained in this Agreement, the Ancillary
Agreements, or in any other agreement, document or instrument to be delivered in connection with the transactions contemplated hereby or thereby is intended or shall be construed to be a representation or warranty (express or implied) of Sellers,
for any purpose of this Agreement, the Ancillary Agreements, or any other agreement, document or instrument to be delivered in connection with the transactions contemplated hereby or thereby, with respect to (A) the adequacy or sufficiency of any of
its Insurance-Related Liabilities, (B) whether or not Insurance-Related Liabilities were determined in accordance with any actuarial, statutory or other standard, (C) the effect of the adequacy or sufficiency of Insurance-Related Liabilities on any
“line item” or asset, liability or equity amount, or (D) the valuation or value of any Investment Asset, and (ii) the adequacy or sufficiency of Insurance-Related Liabilities and the valuation or value of any Investment Asset may not be
used to demonstrate or support the breach of any representation or warranty contained in this Agreement, the Ancillary Agreements, or any other agreement, document or instrument to be delivered in connection with the transactions contemplated hereby
and thereby. 
  
 (b) The exclusions set forth in Section 7.1(a) do
not apply to (i) the breach of Section 3.25, (ii) any breach of the representation in Section 3.6(b) to the extent that such breach results from any failure of the preparation of the income statements included in the Business Financial Statements to
be consistent in all material respects with the portions of the Statement of Net Settlement Methods relating to Insurance-Related 
  

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 Liabilities and Investment Assets, (iii) any breaches of representations and warranties that result in the imposition of
any fine by a Governmental Entity or other out-of-pocket Losses that are not Insurance-Related Liabilities or (iv) any breaches of representation and warranties set forth in the Transfer Agreements. 
  
 Section 7.2 Survival of Representations and Warranties. 
  
 All representations and warranties of the parties hereto contained in this Agreement (except
as otherwise provided below) shall survive the Closing Date until twenty-one (21) months following the Closing Date and expire on such date, but shall not survive any termination of this Agreement; provided, however, the
representations and warranties set forth in Sections 3.10, 3.11 (including those representations and warranties set forth in Section 3.21 to the extent that the same are treated as representations or warranties set forth in Section 3.11 pursuant to
the last sentence of Section 3.21, Section 5.19(s), or Section 7.3(g)), 3.21(a), 3.21(d) and 3.21(e) shall survive until sixty (60) days after the expiration of the statute of limitations including extensions thereof under the Applicable Law,
including ERISA and the Code, and the representations and warranties set forth in Sections 3.1(a), 3.2, 3.5, and 3.17 and, unless otherwise expressly provided in any Included Agreement, all representations and warranties in such Included Agreements
shall survive indefinitely; provided, further, however, that the representations and warranties set forth in Section 3.6(b) hereof shall survive until the later of (A) the date following agreement upon the Final Statement of Net Settlement pursuant
to Section 2.9(d) hereof and (B) the date following delivery of the Third Party Account Report pursuant to Section 2.10(a) hereof, but, notwithstanding anything in this Agreement or any Ancillary Agreement to the contrary, following the expiration
of the representations and warranties set forth in Section 3.6(b), no claim may be made for indemnification that could not have been made without the existence of the representations and warranties set forth in Section 3.6(b), and no such actual or
alleged breach of the representations and warranties set forth in Section 3.6(b) after the expiration date thereof may be used to demonstrate or support the breach of any other representation or warranty contained in this Agreement, the Ancillary
Agreements, or any other agreement, document or instrument to be delivered in connection with the transactions contemplated hereby and thereby; and provided, further, that if a claim for indemnification which has been timely and
properly made pursuant hereto has not been finally resolved before the expiration of the applicable period referred to in this Section 7.2, such claim shall continue to survive until the final resolution thereof. The parties agree that, except as
expressly provided in this Article VII, with respect to Sellers and Buyer, no claims or causes of action may be brought against any of the parties hereto, or any of their respective directors, officers, employees, Affiliates, successors, permitted
assigns, advisors, agents, or representatives based upon any of the representations or warranties contained in this Agreement following the Closing Date or any termination of this Agreement. This Section 7.2 shall not limit (i) any covenant or
agreement of the parties in this Agreement or any Ancillary Agreement to the extent that such covenant or agreement contemplates or requires performance after the Closing or any representation 
  

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 or warranty in any Ancillary Agreement or (ii) the parties’ indemnity obligations under Section 5.19, which shall
survive for ninety (90) days after the expiration of all applicable statutes of limitation (giving effect to any waivers, mitigations or extensions thereof), or (iii) Sections 7.3(a)(ii), (a)(iii), (b)(ii) and (b)(iii), which indemnity obligations
shall survive indefinitely. 
  
 Section 7.3 Obligation to
Indemnify. 
  
 (a) Subject to the limitations set forth in
this Article VII and in the Ancillary Agreements with respect to such agreements, Sellers, jointly and severally, agree to indemnify, defend and hold harmless Buyer, the Acquired Companies and their respective directors, officers, employees,
Affiliates, successors, permitted assigns, agents and representatives (collectively, the “Buyer Indemnitees”) following the Closing from and against all Losses (as hereinafter defined), arising out of or resulting from: (i) the failure of
any representations and warranties contained in Article III hereof to be true and correct as of the date of this Agreement or the Closing Date (after giving effect to the Restructuring) (except with respect to such representations or warranties
which are made expressly as of a specified date or period, as to which indemnification hereunder shall be made only to the extent of the failure of such representations and warranties to be true and correct as of such specified date or period),
determined without regard to any qualifications or references to “Seller Material Adverse Effect” contained in any specific representation or warranty (other than the representation contained in clause (b) of the first paragraph of Section
3.9), (ii) any breach, violation or non-fulfillment of any of the covenants and agreements of Sellers contained in this Agreement, the Bill of Sale or the Assignment and Assumption Agreement and (iii) all of the Excluded Liabilities. As used in this
Article VII, “Loss” and “Losses” mean all losses, liabilities, damages, judgments, settlements, costs and expenses (including out-of-pocket costs of investigation and defense and reasonable attorneys’, consultants’ and
experts’ fees and expenses and costs and expenses relating to corrective or remedial actions), subject to the reduction specified in Section 7.3(d). Without limiting the generality of the foregoing, the parties acknowledge and agree that (A)
indemnification for consequential damages and diminution in value is permitted under this Section 7.3 and that the party defending any claim for such damages is permitted to contest the appropriateness of such damages on any specific claim and (B)
the Indemnifying Party shall indemnify the Indemnified Party for punitive or exemplary damages for which a valid indemnification claim is made hereunder only to the extent paid to a Third Party Claimant or Governmental Entity. Notwithstanding
anything herein to the contrary, (x) Buyer Indemnitees shall not be entitled to indemnification for any Loss arising out of or resulting from breach of a representation or warranty to the extent Buyer Indemnitees would be entitled to indemnification
for such Loss under clause (iii) of the first sentence of Section 7.3(a) and there is no impediment to collection; and (y) Buyer Indemnitees shall not be entitled to indemnification for any Loss constituting the Assumed Portion of the Eligible
Liabilities. 
  
 (b) Subject to the limitations set forth in this
Article VII, Buyer agrees to indemnify, defend and hold harmless Sellers and their respective directors, officers, 
  

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 employees, Affiliates, successors, permitted assigns, advisors, agents and representatives (collectively, the
“Seller Indemnitees”) following the Closing from and against all Losses arising out of or resulting from: (i) the failure of any representations and warranties contained in Article III hereof to be true and correct as of the date of this
Agreement or the Closing Date (except with respect to such representations or warranties which are made expressly as of a specified date or period, as to which indemnification hereunder shall be made only to the extent of the failure of such
representations and warranties to be true and correct as of such specified date or period), determined without regard to any qualifications or references to “Buyer Material Adverse Effect” contained in any specific representation or
warranty; (ii) any breach, violation or non-fulfillment of any of the covenants and agreements of Buyer, or the Acquired Companies (with respect to post-Closing matters), contained in this Agreement, the Bill of Sale or the Assignment and Assumption
Agreement; (iii) all of the Assumed Liabilities and Acquired Companies Liabilities; and (iv) Post-Closing Business Liabilities. 
  
 (c) The aggregate amount for which Sellers shall be liable under Section 7.3(a)(i) hereof shall in no event exceed seventy-five percent (75%) of the
Purchase Price. The aggregate amount for which Buyer shall be liable under Section 7.3(b)(i) hereof shall in no event exceed seventy-five percent (75%) of the Purchase Price. Sellers shall be required to indemnify Buyer Indemnitees pursuant to
Section 7.3(a)(i) hereof only if aggregate Losses incurred by Buyer Indemnitees in connection with Section 7.3(a)(i) plus the amount of any Adjustment Amount determined pursuant to Section 2.11(d) exceed $25,000,000 (provided that such limitation on
Sellers’ duty to indemnify Buyer Indemnities shall not apply to Losses related to any of Section 3.1(a), Section 3.2, Section 3.5, Section 3.6(b) or Section 3.17), and, in such event, indemnification shall be made by Sellers with respect to all
such Losses plus the amount of any Adjustment Amount determined pursuant Section 2.11(d) to the extent such Losses exceed $12,500,000 (the “Deductible”). Buyer shall be required to indemnify Seller Indemnitees pursuant to Section 7.3(b)(i)
when and only if aggregate Losses incurred by Seller Indemnitees in connection with such clauses exceeds $25,000,000 and, in such event, indemnification shall be made by Buyer with respect to all such Losses to the extent such Losses exceed
$12,500,000. 
  
 (d) The amount of any Losses sustained by the
Indemnified Party (as defined in Section 7.4) shall be reduced by any amount actually received by the Indemnified Party with respect thereto under any insurance coverage or from any other parties alleged to be responsible therefor. The Indemnified
Party shall use its reasonable efforts to collect any amounts available under such insurance coverage and from such other parties. If the Indemnified Party receives an amount under insurance coverage or from such other parties alleged to have
responsibility with respect to Losses sustained at any time subsequent to any indemnification provided pursuant to this Section 7.3, then such Indemnified Party shall promptly reimburse the applicable Indemnifying Party (as defined in Section 7.4)
for any payment made or expense incurred by such Indemnifying Party in connection with providing such indemnification up to such amount received by 
  

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 the Indemnified Party, as applicable, after deducting therefrom the full amount of any expenses incurred by it in
procuring such recovery. Notwithstanding anything herein or in any Ancillary Agreement to the contrary, the amount of any Losses shall also be reduced to the extent that the Indemnified Party is compensated for such Losses by a third party (not
acting on behalf of Sellers) and other than pursuant to this Article VII. 
  
 (e) The Indemnifying Party shall be obligated to indemnify the Indemnified Party only for those claims involving Losses under Section 7.3(a)(i) or Section 7.3(b)(i) as to which the Indemnified Party has given the
Indemnifying Party written notice prior to sixty (60) days following the expiration date of the relevant representation and warranty as set forth in Section 7.2. 
  
 (f) (i) For claims involving Excluded Liabilities, Sellers, as the Indemnifying Party, will upon making any indemnification
payment and to the extent of such payment, be subrogated to all rights of the Indemnified Party against any third party (excluding Buyer Indemnitees’ corporate insurance carriers) in respect of the Loss to which the payment relates, provided
that Sellers or any of the Acquired Companies would have had the right to assert the claim prior to the Closing had such claim arisen prior to the Closing. Sellers’ decisions relative to whether to pursue a particular subrogation right shall be
made consistent with decisions they made when they owned the Business (or, with respect to matters of first impression, consistent with the decisions they would make in a commercially reasonable manner if they continued to own the Business). Buyer,
at its option and at its own expense, may participate in any Action, claim or demand subject to this paragraph (ii) through representatives and additional counsel of its own choosing. 
  
 (ii) For claims involving Assumed Liabilities, Buyer, as the Indemnifying Party, will upon making any indemnification
payment and to the extent of such payment, be subrogated to all rights of the Indemnified Party against any third party (except with respect to Sellers’ self-insurance programs) in respect of the Loss to which the payment relates. Sellers, at
their option and at their own expense, may participate in any Action, claim or demand subject to this paragraph (ii) through representatives and additional counsel of their own choosing. 
  
 (g) The provisions of this Article VII shall not apply to Taxes relating to the Business (including the representations and
warranties contained in Section 3.11, but not those contained in Section 3.21), which shall be governed by Section 5.19: provided, however, if there is a failure of any representation or warranty set forth in Section 3.21 and the subject matter of
such failure becomes the subject matter of a contest, claim, audit or similar proceeding initiated by a Tax Authority against the Buyer or any of its Affiliates (including the Acquired Companies), then such proceeding and Sellers’
indemnification obligations, if any, with respect thereto shall be governed in all respects by the provisions of Section 5.19, and, to the extent governed by Section 5.19, for purposes of the survival periods of the representations and warranties
set forth in Section 7.2, such representation or warranty shall be treated as a representation or warranty set forth in Section 3.11. 
  

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 Section 7.4 Claims Notice. 
  
 In the event that either a Buyer Indemnitee or a Seller Indemnitee wishes to assert a claim for indemnification hereunder
(other than a Claim based on an Asserted Liability), such party seeking indemnification (the “Indemnified Party”) shall, as promptly as is reasonably practicable after becoming aware of the claim and entitlement to assert indemnification
therefor, deliver written notice (such notice or the notice described in Section 7.5, a “Claims Notice”) to the party from whom indemnification is claimed (the “Indemnifying Party”), specifying in reasonable detail the facts
constituting the basis for and the amount of the claim asserted. Failure to deliver a Claims Notice with respect to a claim in a timely manner as specified in the preceding sentence shall not be deemed a waiver of the Indemnified Party’s right
to indemnification hereunder for Losses in connection with such claim, but the amount of reimbursement to which the Indemnified Party is entitled shall be reduced by the amount, if any, by which the Indemnified Party’s Losses would have been
less had such Claims Notice been timely delivered. 
  
 Section 7.5
Right to Contest Claims of Third Parties. 
  
 (a) If an
Indemnified Party asserts a claim for indemnification hereunder because of a claim or demand made, or an action, proceeding or investigation instituted, by any Person not a party to this Agreement (a “Third Party Claimant”) that may result
in a Loss with respect to which the Indemnified Party would be entitled to indemnification pursuant to this Article VII (an “Asserted Liability”), the Indemnified Party shall deliver to the Indemnifying Party a Claims Notice with respect
thereto, which Claims Notice shall be delivered as promptly as is reasonably practicable after such Asserted Liability is actually known to the Indemnified Party. Failure to deliver a Claims Notice with respect to a claim in a timely manner as
specified in the preceding sentence shall not be deemed a waiver of the Indemnified Party’s right to indemnification hereunder for Losses in connection with such claim, but the amount of reimbursement to which the Indemnified Party is entitled
shall be reduced by the amount, if any, by which the Indemnified Party’s Losses would have been less had such Claims Notice been timely delivered. 
  
 (b) Subject to Sections 7.5(e), (f) and (g) below, the Indemnifying Party shall have the right, upon written notice to the Indemnified Party, through
representatives and counsel of its own choosing, which counsel shall be reasonably acceptable to the Indemnified Party, to investigate, contest, defend or settle any Asserted Liability that may result in a Loss with respect to which the Indemnifying
Party has irrevocably acknowledged to the Indemnified Party in writing its indemnification obligation pursuant to this Article VII; provided that the Indemnified Party may, at its option and at its own expense, Participate Fully (as defined
below) in the investigation, 
  

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 contesting, defense and settlement of any such Asserted Liability through representatives and counsel of its own
choosing. The Indemnifying Party shall not settle any Asserted Liability unless: (i) the terms of such settlement call only for a payment by the Indemnifying Party; and do not involve any admission or finding of any violation of Applicable Law by
the Indemnified Party or its Affiliates, or the imposition of equitable remedies on the Indemnified Party or its Affiliates, or the imposition of any other obligation or limitation on the Indemnified Party or its Affiliates; or (ii) the Indemnified
Party shall have consented to the terms of such settlement, which consent shall not unreasonably be withheld. If requested by the Indemnifying Party, the Indemnified Party will, at the sole cost and expense of the Indemnifying Party, cooperate with
the Indemnifying Party and its counsel in contesting any Asserted Liability or, if appropriate and related to the Asserted Liability in question, in making any reasonable counterclaim against the Third Party Claimant, or any cross complaint against
any Person (other than the Indemnified Party or its Affiliates). Unless and until the Indemnifying Party elects to defend the Asserted Liability, the Indemnified Party shall have the right, at its option and at the Indemnifying Party’s expense,
to do so in such manner as it deems appropriate and the Indemnifying Party shall be bound by any final, unappealable determination made with respect to such Asserted Liability; provided, however, that unless otherwise expressly
permitted hereunder, the Indemnified Party shall not settle or compromise any Asserted Liability for which it seeks indemnification hereunder without the prior written consent of the Indemnifying Party, which shall not be unreasonably withheld.

  
 (c) The Indemnifying Party shall be entitled to Participate
Fully in (but not to control) the defense of any Asserted Liability which it has not elected to defend with its own counsel and at its own expense. As used in this Agreement, “Participate Fully” shall entitle the participating party (the
“Participating Party”) to participate fully in the defense of such claim with internal counsel or with outside counsel reasonably acceptable to the controlling party, and the controlling party shall permit counsel for the Participating
Party to attend all significant internal meetings, all meetings with representatives of plaintiffs, hearings and the like, except that the controlling party may, in its business discretion, determine the participants for meetings with
representatives of Governmental Entities with respect to governmental Actions, claims and demands under clause (g) below, in each case subject to such guidelines for participation as the controlling party shall reasonably establish. Counsel for a
Participating Party also shall be given a reasonable opportunity to comment upon all memoranda of law, pleadings and briefs and other documents relating to the Third Party Claim, and the controlling party and its counsel shall give reasonable
consideration to the comments of counsel for the Participating Party. If the Indemnified Party participates in the defense of a Third Party Claim for which it is not the controlling party, the expenses of the counsel for the Indemnified Party shall
be paid by the Indemnified Party. The Indemnified Party shall cooperate fully with the Indemnifying Party in the defense or settlement of Third Party Claims for which the Indemnified Party is not the controlling party, and the Indemnifying Party
shall reimburse the Indemnified Party for all its reasonable out of pocket expenses incurred in connection with the cooperation requested by the Indemnifying Party. 
  

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 (d) The parties hereto shall make mutually available to each other all relevant information in their
possession relating to any Asserted Liability (except to the extent that such action would result in a loss of attorney-client privilege as to any material matter) and shall cooperate with each other in the defense thereof. 
  
 (e) With respect to any Asserted Liability by a Third Party Claimant
constituting the Assumed Portion of any Eligible Liabilities or the portion of any Eligible Liabilities that are Excluded Liabilities and as to which Buyer’s Applicable Percentage is 20%, Sellers shall have the option to control the defense and
settlement of any Action relating to such Eligible Liability as if, for purposes of paragraphs (b), (c) and (d) of Section 7.5, Sellers were the Indemnifying Party rather than the Indemnified Party; provided, however, that Sellers shall select as
counsel in any such defense attorneys from the firms identified on Schedule 7.5(e) or other counsel mutually acceptable to the parties and that Buyer, at its option and at its own expense, may Participate Fully in the investigation, contesting,
defense and settlement of any such Eligible Liability. With respect to any Asserted Liability by a Third Party Claimant constituting the Assumed Portion of any Eligible Liabilities or the portion of any Eligible Liabilities that are Excluded
Liabilities and as to which Buyer’s Applicable Percentage is more than 20%, Buyer shall have the option to control the defense and settlement of such Action as if, for purposes of paragraphs (b), (c) and (d) of Section 7.5, Buyer were the
Indemnifying Party rather than the Indemnified Party, provided, however, that as to any Action where Buyer’s Applicable Percentage is 80% or less, Buyer shall select as counsel in such defense attorneys from the firms identified in Schedule
7.5(e) or other counsel mutually acceptable to the parties and Sellers, at their option and own expense, may Participate Fully in the investigation, contesting, defense and settlement of any such Eligible Liability. 
  
 (f) If a Third Party Claimant (other than a Governmental Entity) institutes
an Action, claim or demand involving both Excluded Liabilities and Assumed Liabilities (other than Assumed Portion of the Eligible Liabilities), (i) Sellers shall have the option to control the defense and settlement of such Action, claim or demand
as if, for purposes of paragraphs (b), (c) and (d) of Section 7.5, Sellers were the Indemnifying Party, if the aggregate Losses as a result of such Action, claim or demand are predominantly attributable to Excluded Liabilities and (ii) Buyer shall
have the option to control the defense and settlement of such Action, claim or demand as if, for purposed of paragraphs (b), (c) and (d) of Section 7.5, Buyer were the Indemnifying Party, if the aggregate Losses as a result of such Action, claim or
demand are predominantly attributable to Assumed Liabilities; provided, however, that the controlling party shall select as counsel in any such defense attorneys from the firms identified on Schedule 7.5(e) or other counsel mutually
acceptable to the parties and that the non-controlling party, at its own option and its own expense, may Participate Fully in the investigation, contesting, defense or settlement of any such Action, claim or demand. In the event that the Buyer and
Sellers are unable to agree as to whether such aggregate Losses are predominantly attributable to Excluded Liabilities or Assumed Liabilities, 
  

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 such dispute shall be resolved promptly by arbitration in accordance with the procedures set forth on Schedule 7.5(f).
Each party hereto shall cooperate in good faith to facilitate prompt resolution of any dispute submitted to arbitration pursuant to this Section 7.5(e). 
  
 (g) If a Third Party Claimant which is a Governmental Entity institutes an Action involving both Excluded Liabilities and Assumed Liabilities, Buyer shall
have the option to control the defense and settlement of any such Action as if, for purposes of paragraphs (b), (c) and (d) of Section 7.5, Buyer were the Indemnifying Party; provided, however, that Buyer shall select as counsel in any
such defense attorneys from the firms identified on Schedule 7.5(e) or other counsel mutually acceptable to the parties and that Sellers, at their option and at their own expense, may Participate Fully in the investigation, contesting, defense or
settlement of any such Action and provided, further, that if any of Sellers are parties to such Action, CIGNA shall have the option by written notice to Buyer to jointly control such Action. In the event of joint control of any Action,
each of Buyer and CIGNA shall cooperate with other in the defense and settlement of such Action, with each free to settle without the consent of the other. 
  
 (h) Sellers and their Affiliates will have reasonable access, during normal business hours and without undue disruption of Buyer’s and its
Affiliates’ business, to the books and records of Buyer and its Affiliates to the extent relating to Excluded Liabilities and to the personnel of Buyer engaged in the Business. Buyer and its Affiliates will have reasonable access, during normal
business hours and without undue disruption of Sellers’ and their Affiliates’ business, to the books and records of Sellers and their Affiliates to the extent relating to Assumed Liabilities and to the personnel of Sellers who have been
engaged in the Business. 
  
 Section 7.6 Nonduplication.

  
 (a) Any liability for indemnification under the Agreement
shall be determined without duplication of recovery by reason of the state of facts giving rise to such liability constituting a breach of more than one representation, warranty, covenant or agreement. 
  
 (b) Subject to Section 7.1(b) and Section 7.6(a), the adequacy or sufficiency
of Insurance-Related Liabilities and the amount thereof are determined solely as set forth in Article II and shall not be the subject of indemnification claims for breach of a representation or warranty or as an Excluded Liability. Buyer agrees that
if it challenges any amount set forth on the Closing Statement of Net Settlement which is designated as a Non-Insurance-Related Liability pursuant to Section 2.10, then to the extent Buyer is unsuccessful in such challenge Buyer may not assert a
claim for a breach of representation and warranty under this Article VII as to the same matter challenged before the Third Party Accountant except to the extent Buyer obtains additional relevant information after the submission of the challenge to
support such claim. 
  

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 Section 7.7 Exclusivity; Investigation. 
  
 (a) Except with respect to claims alleging fraud, the indemnities provided
for in this Article VII shall be the exclusive remedies of the parties hereto and their respective officers, directors, employees, Affiliates, agents, representatives, successors and assigns for any breach of or inaccuracy in any representation or
warranty or any breach, nonfulfillment or default in the performance of any of the covenants or agreements contained in this Agreement and the parties shall not be entitled to a rescission of this Agreement or to any further indemnification or other
rights or claims of any nature whatsoever in respect thereof, all of which the parties hereto hereby waive. 
  
 (b) Buyer has conducted its own independent review and analysis of the business, operations, technology, assets, liabilities, results of operations,
financial condition and prospects of the Business, the Liabilities, the Business Financial Statements, the Statements of Net Settlement delivered pursuant to Article II and any other financial statements relating to the Business, the Liabilities,
the Transferred Assets, the Acquired Companies or Sellers. In entering into this Agreement and each of the Ancillary Agreements, Buyer and its Affiliates have relied upon its own investigation and analysis, and Buyer acknowledges and agrees (i)
that, except for the specific representations and warranties of Sellers contained in Article III hereof or any Ancillary Agreement, none of Sellers or their Affiliates nor any of their respective directors, officers, employees, affiliates,
controlling persons, agents or representatives, makes or has made any representation or warranty, either express or implied, as to the accuracy or completeness of any of the information (including the Business Financial Statements, the Statements of
Net Settlement delivered pursuant to Article II, and any other financial statements relating to the Business, the Liabilities, the Transferred Assets, the Acquired Companies or Sellers and any projections, estimates or other forward-looking
information) provided (including in any management presentations, information memorandum, supplemental information or other materials or information with respect to any of the above) or otherwise made available to Buyer or any of its directors,
officers, employees, affiliates, controlling persons, agents or representatives, and (ii) that, to the fullest extent permitted by Applicable Law and except for fraud, Sellers and their Affiliates and their respective directors, officers, employees,
subsidiaries, controlling persons, agents or representatives shall not have any liability or responsibility whatsoever to Buyer or its Affiliates or any of their respective directors, officers, employees, subsidiaries, controlling persons, agents or
representatives on any basis (including in contract or tort, under federal or state securities laws or otherwise) based upon any information provided or made available, or statements made (or any omissions therefrom), to Buyer or it’s
Affiliates or any of their respective directors, officers, employees, subsidiaries, controlling persons, agents or representatives, including in respect of the specific representations and warranties of Sellers set forth in Article III of this
Agreement or any Ancillary Agreement, except as and only to the extent expressly set forth in Article III hereof or any Ancillary Agreement with respect to such representations and warranties and subject to the limitations and restrictions contained
in this Agreement. 
  

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 ARTICLE VIII 
 TERMINATION 
  
 Section 8.1
Termination Prior to Closing. 
  
 This Agreement may be
terminated at any time prior to closing: 
  
 (a) by the mutual
written consent of Sellers and Buyer; 
  
 (b) by either Sellers or
Buyer if the Closing shall not have been consummated on or before July 1, 2004 (the “Termination Date”); and provided, that if on the Termination Date the conditions to Closing set forth in Section 6.1(b) or 6.1(c) shall not have
been fulfilled, but all other conditions to Closing shall have been fulfilled or shall be capable of being fulfilled, then the Termination Date shall automatically be extended to October 1, 2004; provided, further however, that
neither Buyer nor Sellers may terminate this Agreement pursuant to this Section 8.1(b) if the Closing shall not have been consummated by such date by reason of the failure of such party to perform in all material respects any of its covenants or
agreements contained in this Agreement; 
  
 (c) by either Sellers
or Buyer, upon written notice given to the other if any Governmental Entity will have issued a final, unappealable order, enjoining or otherwise prohibiting a transaction contemplated hereby; 
  
 (d) by Buyer if any of the conditions set forth in Sections 6.1 or 6.2 is or
becomes incapable of satisfaction (other than by reason of the failure of Buyer to perform in all material respects any of its covenants or agreements contained in this Agreement); or 
  
 (e) by Sellers if any of the conditions set forth in Sections 6.1 or 6.3 is or becomes incapable of satisfaction (other than
by reason of the failure of Sellers to perform in all material respects any of their covenants or agreements contained in this Agreement). 
  
 Section 8.2 Effect of Termination. 
  
 In the event of the termination of this Agreement as provided in Section 8.1, this Agreement shall become null and void and of no further force or effect,
and there shall be no Liability or obligation hereunder on the part of Sellers or Buyer, or any of their respective directors, officers, employees, Affiliates, advisors, agents, representatives, successors or assigns except (i) that one or more of
Sellers or Buyer, as the case may be, may have any Liability to one or more of Sellers or Buyer, as the case may be, if the basis of the termination is a willful, material breach by one or more of 
  

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 Sellers or Buyer, as the case may be, of one or more of the provisions of this Agreement, (ii) Sections 5.12 (Expenses),
8.2 (Effect of Termination), 9.6 (Choice of Law), 9.12 (Consent to Jurisdiction), and 9.13 (Waiver of Jury Trial) shall survive the termination of this Agreement and (iii) the Confidentiality Agreement shall survive the termination of this Agreement
for a period of two years following such termination. 
  
 ARTICLE
IX 
 MISCELLANEOUS PROVISIONS 
  
 Section 9.1 Setoff. 
  
 Each of the parties hereto acknowledges and agrees (on their own behalf and on behalf of its Affiliates) that it and its Affiliates shall have no right
hereunder or pursuant to Applicable Law to offset any amounts due and owing (or to become due and owing) under this Agreement or, except as expressly provided therein, under any Ancillary Agreement, to any other party hereto or thereto or such
party’s Affiliates against any amounts due and owing from such other party or such other party’s Affiliates under this Agreement, any Ancillary Agreement or any other agreement, contract or understanding. 
  
 Section 9.2 Disclosure Schedules. 
  
 (a) Buyer or Sellers may at any time, or from time to time after the date of
this Agreement, but not later than five (5) Business Days prior to the Closing Date, supplement or amend any Schedule delivered by Buyer or of Sellers, as the case may be, with respect to any matter. No supplement or amendment to a Schedule shall
have any effect for the purpose of determining the satisfaction of the conditions to the obligation of the other parties under Article VI, the truth or accuracy of Sellers’ representations and warranties under Article III or Sellers’
indemnification obligations under Article VII or Section 5.19. A party to whom a disclosure is made prior to the Closing of a matter shall not, by proceeding with the Closing, be deemed to have waived the breach of this Agreement, or any of its
other rights hereunder, including rights to indemnity, resulting from such failure to disclose. 
  
 (b) The parties hereto acknowledge and agree that any information set forth (directly or by cross-reference) in any Section or Subsection of Sellers’
or Buyer’s Schedules is considered disclosed only with respect to the corresponding Section or Subsection of this Agreement. Any disclosure in any Schedule of any contract, document, Liability, default, breach, violation, limitation, impediment
or other matter, although the provision for such disclosure may require such disclosure only if such contract, document, Liability, default, breach, violation, limitation, impediment or other matter be “material,” shall not be construed
against any party to this Agreement, as an assertion by such party, that any such contract, document, Liability, default, breach, violation, limitation, impediment or other matter is, in fact, material. 
  

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 Section 9.3 Amendment. 
  
 This Agreement may not be amended, modified or waived except by an instrument or instruments in writing signed and delivered
on behalf of each of the parties hereto. Any consent of Sellers may be given on behalf of all Sellers by any of them. 
  
 Section 9.4 Entire Agreement. 
  
 This Agreement (which includes the Schedules, Exhibits hereto, Ancillary Agreements, and the other agreements, documents and instruments delivered
pursuant hereto) constitutes the entire agreement among the parties with respect to the subject matter hereof and supersedes all other prior agreements and understandings (other than the Confidentiality Agreement), both written and verbal, among the
parties or any of them with respect to the subject matter hereof. 
  
 Section 9.5 Notices. 
  
 All notices, requests,
claims, demands and other communications hereunder shall be in writing and shall be given (and shall be deemed to have been duly given upon receipt) by delivery in Person, by telecopy (which is confirmed), or by registered or certified mail (postage
prepaid, return receipt requested) to the respective parties as follows: 
  
 If to Sellers: 
  
 CIGNA Corporation 
 Two Liberty Place 
 1601 Chestnut Street 
 Philadelphia, Pennsylvania 19192 
 Attention: Thomas A. McCarthy 
 Telephone No.: (215) 761-6246 
 Fax No.: (215) 761-2387 
  
 with a copy (which shall not constitute notice) to: 
  
 Paul T. Schnell, Esq. 
 Robert J. Sullivan, Esq. 
 Skadden, Arps, Slate, Meagher & Flom LLP 
 4 Times Square 
 New York, New York 10036 
 Telephone No.: (212) 735-3000 
 Fax No.: (212) 735-2000 
  

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 If to Buyer: 
  
 Prudential Financial, Inc. 
 751 Broad Street, 4th Floor 
 Newark, New Jersey 07102 
 Attention: Anthony F. Torre 
 Telephone No.: (973) 802-8689 
 Fax No.: (973) 367-8105 
  
 with a copy (which shall not constitute notice) to: 
  
 Joseph B. Frumkin, Esq. 
 Stephen M. Kotran, Esq. 
 Sullivan & Cromwell LLP 
 125 Broad Street 
 New York, New York 10004 
 Telephone No.: (212) 558-4000 
 Fax No.: (212) 558-3588 
  
 or to such other
address as the Person to whom notice is given may have previously furnished to the others in writing in the manner set forth above. In no event shall the provision of notice pursuant to this Section 9.5 constitute notice for service of any writ,
process or summons in any Action. 
  
 Section 9.6 Choice of
Law. 
  
 This Agreement shall be governed by the laws of the
State of New York applicable to contracts formed and to be performed entirely within the State of New York, without regard to choice of law principles. 
  
 Section 9.7 Paragraph Headings. 
  
 The headings of articles and sections hereof, and of attachments hereto, were inserted solely for convenience of reference and shall not affect the
interpretation hereof. 
  
 Section 9.8 Specific
Performance. 
  
 The parties recognize and agree that if for
any reason any of the provisions of this Agreement are not performed in accordance with their specific terms or are otherwise breached, immediate and irreparable harm or injury would be caused for which money damages would not be an adequate remedy.
Accordingly, each party agrees that, in addition to any other available remedies, each other party shall be entitled to an injunction restraining any violation or threatened violation of the provisions of this Agreement without the necessity of
posting a bond or other form of security. In the event 
  

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 that any action should be brought in equity to enforce the provisions of this Agreement, no party will allege, and each
party hereby waives the defense, that there is an adequate remedy at law. 
  
 Section 9.9 Severability.  
  
 Any term or provision of this Agreement which is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction, be ineffective to the extent of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions of this Agreement or affecting the validity or enforceability of any of the terms or provisions of this Agreement in any other jurisdiction. If any provision of this Agreement is so broad
as to be unenforceable, the provision shall be interpreted to be only so broad as would be enforceable. 
  
 Section 9.10 Third Party Beneficiaries. 
  
 Except in the case of indemnification of Buyer Indemnitees or Seller Indemnitees pursuant to Section 7.3, nothing in this Agreement, express or implied,
is intended to or shall confer upon any Person, other than the parties hereto, any rights, benefits or remedies of any nature whatsoever under or by reason of this Agreement. 
  
 Section 9.11 Counterparts. 
  

This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and
the same agreement. 
  
 Section 9.12 Consent to
Jurisdiction. 
  
 Each of the parties hereto irrevocably and
unconditionally submits to the exclusive jurisdiction of the United States District Court for the Southern District of New York or, if such court does not have jurisdiction, the New York State Supreme Court in the borough of Manhattan, for purposes
of enforcing this Agreement. The parties shall take such actions as are within their control to cause any matter contemplated hereby to be assigned to the Commercial Division of the Supreme Court. In any such action, suit or other proceeding, each
of the parties hereto irrevocably and unconditionally waives and agrees not to assert by way of motion, as a defense or otherwise any claims that it is not subject to the jurisdiction of the above court, that such action or suit is brought in an
inconvenient forum or that the venue of such action, suit or other proceeding is improper. Each of the parties hereto also agrees that any final and unappealable judgment against a party hereto in connection with any action, suit or other proceeding
shall be conclusive and binding on such party and that such award or judgment may be enforced in any court of competent jurisdiction, either within or outside of the United States. A certified or exemplified copy of such award or judgment shall be
conclusive evidence of the fact and amount of such award or judgment. 
  

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 Section 9.13 Waiver of Jury Trial. 
  
 Each of the parties hereto irrevocably waives any and all right to trial by jury in any legal proceeding arising out of or
related to this Agreement or the transactions contemplated hereby. 
  
 Section 9.14 Assignment; Binding Agreement. 
  
 This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective permitted successors and permitted assigns. Neither this Agreement, nor any rights, interests or obligations hereunder, may be directly
or indirectly assigned, delegated, sublicensed or transferred by any party to this Agreement, in whole or in part, to any other Person (including any bankruptcy trustee) by operation of law or otherwise, whether voluntarily or involuntarily, without
the prior written consent of the other parties hereto; provided, however, that (i) subject to applicable regulatory approvals, Buyer may assign (whether by operation of law or otherwise) to one or more of its direct or indirect wholly
owned subsidiaries all or a portion of its rights and obligations under this Agreement, provided that (1) no such assignment shall relieve Buyer of its obligations under this Agreement and (2) each wholly owned subsidiary of Buyer to which
such rights or obligations have been assigned shall not further assign, sublicense or transfer (directly or indirectly, by operation of law or otherwise) such rights or obligations to any Person other than another direct or indirect wholly owned
subsidiary of Buyer, and (ii) each of Sellers may, subject to compliance with Applicable Law, freely assign (whether by operation of law or otherwise) all or a portion of their rights (but not their obligations) under this Agreement. 
  

 -125- 

 IN WITNESS WHEREOF, this Agreement has been duly executed and delivered by the duly authorized officers
of Sellers and of Buyer as of the date first above written. 
  

					
	 CIGNA CORPORATION

		
	 By:
	 	 /s/ Michael W. Bell

	 	 	 Name:
	 	 Michael W. Bell

	 	 	 Title:
	 	Executive Vice President and
Chief Financial Officer
	
	CONNECTICUT GENERAL LIFE INSURANCE COMPANY
		
	 By:
	 	 /s/ David M. Cordani

	 	 	 Name:
	 	 David M. Cordani

	 	 	 Title:
	 	Senior Vice President and
Chief Financial Officer
	
	 CONNECTICUT GENERAL CORPORATION

		
	 By:
	 	 /s/ James Yablecki

	 	 	 Name:
	 	 James Yablecki

	 	 	 Title:
	 	 President

	
	 CIGNA HOLDINGS, INC.

		
	 By:
	 	 /s/ Joanne L. Dorak

	 	 	 Name:
	 	 Joanne L. Dorak

	 	 	 Title:
	 	 President

	
	 PRUDENTIAL FINANCIAL, INC.

		
	 By:
	 	 /s/ Doug Gregory

	 	 	 Name:
	 	 
	 	 	 Title:
	 	 

  

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