EXHIBIT 10.18

ASSET TRANSFER AND ACQUISITION AGREEMENT

BY AND AMONG

PROVIDENT COMPANIES, INC.,
PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY,
PROVIDENT NATIONAL ASSURANCE COMPANY,
THE PAUL REVERE LIFE INSURANCE COMPANY,
THE PAUL REVERE VARIABLE ANNUITY INSURANCE COMPANY,
THE PAUL REVERE PROTECTIVE LIFE INSURANCE COMPANY

AND

AMERICAN GENERAL CORPORATION,
WESTERN NATIONAL LIFE INSURANCE COMPANY,
THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

Dated as of December 8, 1997

TABLE OF CONTENTS

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ARTICLE 1 - TRANSFER AND ACQUISITION OF ASSETS..............................................................     1
         1.1      Closing...................................................................................     1
         1.2      Acquisition of Transferred Assets and Assumption of Assumed Liabilities...................     2
         1.3      Determination of Investment Assets and Cash Payments......................................     3
         1.4      Post-Closing Adjustments..................................................................     5
         1.5      Ceding Commission.........................................................................     6
         1.6      Closing Deliveries........................................................................     7
ARTICLE 2 - REPRESENTATIONS AND WARRANTIES OF PROVIDENT AND SELLERS.........................................     9
         2.1      Organization, Standing and Authority of Provident and Each Seller.........................     9
         2.2      Authorization.............................................................................     9
         2.3      Actions and Proceedings...................................................................    10
         2.4      No Conflict or Violation..................................................................    10
         2.5      Governmental Consents and Approvals.......................................................    10
         2.6      Compliance With Laws......................................................................    10
         2.7      Permits, Licenses and Franchises..........................................................    11
         2.8      Insurance Contracts.......................................................................    11
         2.9      Regulatory Filings........................................................................    13
         2.10     Reinsurance...............................................................................    13
         2.11     Seller Separate Accounts..................................................................    13
         2.12     Transferred Assets........................................................................    13
         2.13     Assigned and Assumed Contracts............................................................    13
         2.14     Tax Matters...............................................................................    14
         2.15     GAAP Financial Statements.................................................................    14
         2.16     Statutory Statements......................................................................    15
         2.17     Certain Additional Financial Information..................................................    15
         2.18     Actuarial Appraisal.......................................................................    15
         2.19     Conduct of Business.......................................................................    15
         2.20     Absence of Certain Changes................................................................    15
         2.21     Other Sale Arrangements...................................................................    16
         2.22     Brokerage and Financial Advisers..........................................................    16
ARTICLE 3 - REPRESENTATIONS AND WARRANTIES OF PARENT AND PURCHASERS.........................................    16
         3.1      Organization and Standing.................................................................    16
         3.2      Authorization.............................................................................    16
         3.3      Actions and Proceedings...................................................................    16
         3.4      No Conflict or Violation..................................................................    17
         3.5      Governmental Consents and Approvals.......................................................    17
         3.6      Compliance With Laws......................................................................    17
         3.7      Permits, Licenses and Franchises..........................................................    17
         3.8      Absence of Certain Changes................................................................    18

         3.9      Brokerage and Financial Advisers..........................................................     18
         3.10     Qualified Institutional Buyer.............................................................     18
         3.11     Sufficient Funds..........................................................................     18
         3.12     WNC Acquisition...........................................................................     18
ARTICLE 4 - COVENANTS.......................................................................................     18
         4.1      Conduct of Business.......................................................................     18
         4.2      Certain Transactions......................................................................     20
         4.3      Investigations; Pre-Closing Access........................................................     20
         4.4      Post-Closing Access.......................................................................     21
         4.5      Confidentiality...........................................................................     21
         4.6      HSR Act Filings...........................................................................     22
         4.7      Consents and Reasonable Efforts...........................................................     22
         4.8      Representations and Warranties............................................................     23
         4.9      Expenses..................................................................................     23
         4.10     Marketing Agreements......................................................................     23
         4.11     Bank Accounts and Lockboxes...............................................................     23
         4.12     Allocation of Purchase Price and Assumed Liabilities......................................     24
         4.13     Further Assurances........................................................................     25
         4.14     Western National Corporation Acquisition..................................................     26
         4.15     Transition to Purchasers Policy Forms.....................................................     26
         4.16     Crediting Rates...........................................................................     26
         4.17     Disposition of PNAC and PRV...............................................................     26
         4.18     Certain Other Matters.....................................................................     26
ARTICLE 5 - CONDITIONS PRECEDENT TO THE OBLIGATION OF PURCHASERS TO CLOSE...................................     26
         5.1      Representations and Warranties; Compliance With Covenants.................................     26
         5.2      Other Agreements..........................................................................     27
         5.3      Governmental and Regulatory Consents and Approvals........................................     27
         5.4      Possession of Assets; Instruments of Conveyance...........................................     27
         5.5      Injunction................................................................................     27
         5.6      WNC Acquisition...........................................................................     27
ARTICLE 6 - CONDITIONS PRECEDENT TO THE OBLIGATION OF SELLERS TO CLOSE......................................     27
         6.1      Representations and Warranties; Compliance With Covenants.................................     28
         6.2      Other Agreements..........................................................................     28
         6.3      Governmental and Regulatory Consents and Approvals........................................     28
         6.4      Injunction................................................................................     28
ARTICLE 7 - SURVIVAL AND INDEMNIFICATION....................................................................     28
         7.1      Survival of Representations and Warranties................................................     28
         7.2      Obligation to Indemnify...................................................................     29
         7.3      Claims Notice.............................................................................     29
         7.4      Right to Contest Claims of Third Parties..................................................     30
         7.5      Tax Effect and Insurance..................................................................     32
         7.6      Indemnification Payments..................................................................     32
         7.7      Exclusivity...............................................................................     32

         7.8      Arbitration...............................................................................     33
ARTICLE 8 - TERMINATION PRIOR TO CLOSING....................................................................     33
         8.1      Termination of Agreement..................................................................     33
         8.2      Survival..................................................................................     34
ARTICLE 9 - MISCELLANEOUS...................................................................................     34
         9.1      Definitions...............................................................................     34
         9.2      Expenses..................................................................................     45
         9.3      Substitute Purchaser......................................................................     46
         9.4      Publicity.................................................................................     46
         9.5      Confidentiality...........................................................................     46
         9.6      Notices...................................................................................     46
         9.7      Entire Agreement..........................................................................     47
         9.8      Waivers and Amendments; Non-Contractual Remedies; Preservation of Remedies................     48
         9.9      Governing Law.............................................................................     48
         9.10     Binding Effect; Assignment................................................................     48
         9.11     Interpretation............................................................................     48
         9.12     No Third Party Beneficiaries..............................................................     49
         9.13     Counterparts..............................................................................     49
         9.14     Other Agreements, Exhibits and Schedules..................................................     49
         9.15     Headings..................................................................................     49

Exhibit 1   Form of Reinsurance Agreement
Exhibit 2   Form of Bill of Sale
Exhibit 3   Form of General Assignment and Assumption Agreement
Exhibit 4   Terms of Marketing Agreements
Exhibit 5   State Regulatory Approvals
Exhibit 6   Subadvisory Agreement

ASSET TRANSFER AND ACQUISITION AGREEMENT

THIS ASSET TRANSFER AND ACQUISITION AGREEMENT (this "Agreement"), dated as of December 8, 1997, is entered into by and among Provident Companies, Inc., a Delaware corporation ("Provident"), Provident Life and Accident Insurance Company, a Tennessee stock life insurance company and a wholly owned subsidiary of Provident ("PLA"), Provident National Assurance Company, a Tennessee stock life insurance company and a wholly owned subsidiary of Provident ("PNAC"), The Paul Revere Life Insurance Company, a Massachusetts stock life insurance company and a wholly owned indirect subsidiary of Provident ("PRL"), The Paul Revere Variable Annuity Insurance Company, a Massachusetts stock life insurance company and a wholly owned indirect subsidiary of Provident ("PRV") and The Paul Revere Protective Life Insurance Company, a Delaware stock life insurance company and a wholly owned indirect subsidiary of Provident ("PRPL"; each of PLA, PNAC, PRL, PRV and PRPL being referred to individually as a "Seller" and together as the "Sellers"), American General Corporation, a Texas corporation ("Parent"), Western National Life Insurance Company ("WNL"), a Texas stock life insurance company (which as of the Closing Date will be a wholly owned indirect subsidiary of Parent), and The Variable Annuity Life Insurance Company ("VALIC"), a Texas stock life insurance company and a wholly owned indirect subsidiary of Parent (each of WNL and VALIC being referred to individually as a "Purchaser" and together as the "Purchasers").

Upon the terms and subject to the conditions of this Agreement, Sellers wish to sell, and Purchasers wish to acquire, certain of the annuity business of Sellers, and certain other assets of Sellers, and Provident, Sellers, Parent and Purchasers desire to enter into one or more strategic marketing agreements, all as described below.

Contemporaneously with the signing of this Agreement, Provident Investment Management, LLC has entered into a Subadvisory Agreement in substantially the form of Exhibit 6 with Parent (the "Subadvisory Agreement").

Certain terms used in this Agreement are defined in Section 9.1.

NOW, THEREFORE, in consideration of the mutual promises and covenants set forth herein, and in reliance upon the representations, warranties, conditions and covenants contained herein, and intending to be legally bound hereby, the parties hereto do hereby agree as follows:

following the satisfaction or waiver of all conditions set forth in Articles 5 and 6 concerning the parties' respective obligations to consummate the transactions contemplated herein shall be deemed to have been consummated and become effective for all purposes as of 11:59 p.m. on the Closing Date.

(a) Subject to the terms and conditions set forth herein, at the Closing, the Sellers shall sell, assign, transfer, convey and deliver to Purchasers, and Purchasers shall purchase and accept from the Sellers, all of the Sellers' right, title and interest in and to the Transferred Assets; provided, however, that the amount of cash and Investment Assets to be transferred shall be determined in accordance with the provisions of Section 1.3 and adjusted as required by Section 1.4.

(b) On the Closing Date, delivery of the Investment Assets shall be made by transfer to the accounts designated by Purchasers at least two business days prior to the Closing Date. The cash portion of the Transferred Assets shall be transferred to Purchasers by wire transfer of immediately available funds. All other assets included among the Investment Assets shall be transferred by such instruments of transfer or book entry transfer, as appropriate, as are reasonably acceptable to Provident and Purchasers. All sales, assignments and transfers of the Transferred Assets other than cash and Investment Assets shall be effected by the Bills of Sale and the General Assignment and Assumption Agreements. Notwithstanding anything in this Agreement to the contrary, but subject to the provisions of Section 4.4, Sellers shall be entitled to keep and maintain copies of all Books and Records from and after the Closing, and to have access to the originals of the Books and Records in accordance with the terms hereof.

(c) Upon the terms and subject to the conditions of this Agreement, on the Closing Date, WNL shall assume: (i) pursuant to the Reinsurance Agreements, as between WNL and each Seller, any and all Adjusted Statutory Reserves and Other Statutory Liabilities of such Seller arising out of or with respect to each WNL Contract, and (ii) pursuant to the General Assignment and Assumption Agreements, all Assumed Liabilities other than the Retained Liabilities.

(d) Upon the terms and subject to the conditions of this Agreement, on the Closing Date, VALIC shall assume: (i) pursuant to the Reinsurance Agreements, as between VALIC and each Seller, any and all Adjusted Statutory Reserves and Other Statutory Liabilities of such Seller arising out of or with respect to each VALIC Contract, and (ii) pursuant to the Separate Account Transfer Agreements, any and all Separate Account Liabilities of Sellers arising out of or with respect to each Insurance Contract, other than Retained Liabilities.

(e) The liabilities assumed by Purchasers hereunder and under the Ancillary Agreements, less the Ceding Commission, shall be allocated among the Transferred Assets as provided in Section 4.12.

(a) Attached as Schedule 1.3(A) is a listing of investment assets (the "Preliminary Investment Assets") which the parties have agreed may be included in the Initial Portfolio (as defined herein), together with an estimate of the Initial Cash Position (as defined herein) (such estimate, the "Estimated Initial Cash Position"). Provident and the Sellers have appointed Morgan Stanley, Dean Witter, Discover & Co. and Parent and Purchasers have appointed Bear, Stearns & Co., Inc.. and the parties have jointly appointed Credit Suisse First Boston Corporation (each of Morgan Stanley, Dean Witter, Discover & Co., Bear, Stearns & Co., Inc. and Credit Suisse First Boston Corporation being referred to individually as a "Valuer" and together as the "Valuers"). Provident and Parent shall each be responsible for the cost, if any, of the preparation of the Valuations produced by their respective Valuers and shall be jointly responsible for the cost, if any, of the Valuation prepared by Credit Suisse First Boston Corporation. Each Valuer shall produce a valuation of the Preliminary Investment Assets, based on the midpoint of the bid-ask spread, as of 4:00 p.m., New York City time, on December 8, 1997 (each such valuation referred to as a "Valuation" and together as the "Valuations"). The "Agreed Value" of each Preliminary Investment Asset shall be (i) the middle Valuation thereof plus (ii) the amount of investment income accrued on such Preliminary Investment Asset as of November 30, 1997.

(b) As soon as practicable after the date of this Agreement, Provident and the Sellers shall deliver to Parent a statement ("Transferred Reserves Statement") setting forth their determination of the amount of Adjusted Statutory Reserves and Other Statutory Liabilities attributable to the Insurance Contracts in force as of November 30, 1997 (the "Transferred Reserves"), which amounts shall be determined in accordance with Applicable SAP consistently applied. Parent shall have the opportunity to review the Transferred Reserves Statement and Provident and Sellers shall make available their personnel and relevant work papers as reasonably requested by Parent in connection with such review, for a period not to exceed 15 Business Days following delivery of the Transferred Reserves Statement. Any changes in the Transferred Reserves Statement that are agreed to by Parent and Provident within such 15-Business-Day period shall be incorporated into a final Transferred Reserves Statement (the "Final Transferred Reserves Statement"). If Parent and Provident are unable to agree with respect to the amount of the Transferred Reserves included in the Final Transferred Reserves Statement, they shall submit the dispute to an independent actuarial firm jointly selected by them (or selected by their respective actuarial advisors) (the "Independent Actuary"), whose determination of the amount of the Transferred Reserves shall be final and binding and reflected in the Final Transferred Reserves Statement; provided, that such amount shall be within the range of dollar amounts proposed by Parent and Provident, respectively.

account receivables with respect to the Business as of November 30,1997 (such sum, the "Net Asset Value"). In the event the parties are unable to produce an Initial Portfolio having an aggregate Agreed Value equal to the Net Asset Value without subdivision of individual assets, the Initial Portfolio shall consist of whole assets and the difference between the Net Asset Value and the aggregate Agreed Value of the assets composing the Initial Portfolio (whether such difference is a positive or a negative number) shall constitute the "Initial Cash Position." The difference, if any, between the Initial Cash Position and the Estimated Initial Cash Position shall be referred to as the "Initial Cash Position Difference." Provident and the Sellers shall segregate the assets constituting the Initial Portfolio on their books and records (the "Pool") and shall maintain records of all transactions in assets included in the Pool from time to time through the Closing Date. Pursuant to the Subadvisory Agreement, Parent shall serve as subadvisor in respect of the Pool and pursuant to such authority shall have the authority to direct the disposition of investment securities included in the Pool and to direct the purchase of investment securities for inclusion in the Pool (such purchases to be funded from Net Cash From the Business (as defined herein) then available, which shall include on December 8, 1997, an amount equal to the Estimated Initial Cash Position, together with interest thereon from November 30, 1997 to, but not including, December 8, 1997, computed at an Annual Rate equal to the 90- day Treasury Rate in effect on November 30, 1997). On each Business Day Provident will produce and deliver to Parent a good faith estimate of the Net Cash From the Business the close of business on the preceding Business Day, which estimate will be prepared on a basis consistent with Provident's existing internal reporting systems and procedures. The parties agree that (i) the Estimated Initial Cash Position shall be available for investment by the sub- advisor under the Subadvisory Agreement as of 4:00 p.m., New York City time on December 8, 1997, (ii) the Initial Cash Position Difference (if a positive number) shall be available for investment by such subadvisor on the Business Day following its determination, and (iii) Net Cash From the Business reflected in the daily good faith estimates thereof shall be available for investment by such subadvisor on the Business Day following delivery of such estimate.

(e) In addition, prior to the Closing Date, Provident and Sellers shall deliver to Parent and Purchasers an estimated reconciliation of Net Cash From the Business through the Closing Date (the "Preliminary Reconciliation") and a certification of the treasurer of Provident that all items on the Preliminary Reconciliation were estimated in good faith by Sellers and were based upon the books and records of Sellers. If (i) the Net Cash From the Business reflected on the Preliminary Reconciliation is a positive number, Sellers will pay to Purchasers cash in an amount equal to such amount; and (ii) if the Net Cash From the Business reflected on the Preliminary Reconciliation is a negative number, Purchasers will pay to Sellers at Closing cash in such amount.

(a) Provident shall, on or before the date that is 60 days after the Closing Date, prepare a proposed reconciliation of Net Cash From the Business through the Closing Date (the "Reconciliation") and a certification of the treasurer of Provident that all items on the Reconciliation were determined in good faith by Sellers and were based upon the books and records of Sellers. Promptly after its preparation, Provident shall deliver copies of the Reconciliation to Parent. Parent shall have the right to review the Reconciliation and comment thereon for a period of 45 days after receipt thereof. Provident and Sellers agree that Parent and its accountants may have access to the accounting records of Provident and Sellers relating to the preparation of the Reconciliation for the purpose of conducting their review. Any changes in the Reconciliation that are agreed to by Parent and Provident within such 45-day-period shall be incorporated into a final reconciliation of Net Cash From the Business through the Closing Date (the "Final Reconciliation"). In the event that Purchasers and Provident are unable to agree on the manner in which any item or items should be treated in the preparation of the Final

Reconciliation within such 45-day period, separate written reports of such item or items shall be made in concise form and shall be referred to such independent accounting firm as Parent and Provident shall mutually designate (the firm making such determination is referred to herein as the "Third Party Accountant"). The Third Party Accountant shall determine as promptly as practicable the manner in which such item or items shall be treated on the Final Reconciliation; provided, however, that the dollar amount of each item in dispute shall be determined within the range of dollar amounts proposed by Provident and Parent, respectively. The determinations by the Third Party Accountant as to the items in dispute shall be in writing and shall be binding and conclusive on the parties and shall be so reflected in the Final Reconciliation. The fees, costs and expenses of retaining the Third Party Accountant shall be shared equally by the parties. Following the resolution of all disputed items (or, if there is no dispute, promptly after the parties reach agreement on the Final Reconciliation), Provident shall prepare the Final Reconciliation and shall deliver copies of such Reconciliation and such calculation to Parent.

(b) In the event the amount of Net Cash From the Business reflected on the Final Reconciliation exceeds the amount of Net Cash From the Business reflected on the Preliminary Reconciliation, Sellers shall transfer to Purchasers additional cash equal to the amount of such difference. In the event the amount of Net Cash From the Business reflected on the Preliminary Reconciliation exceeds the amount of Net Cash From the Business reflected on the Final Reconciliation, Sellers shall transfer to Purchasers additional cash equal to the amount of such difference. Any transfer of cash required under this
Section 1.4 shall be made within ten Business Days of the date of the delivery of the Final Reconciliation to Purchasers, together with interest thereon from and including the Closing Date to but not including the date of such transfer, computed at an Annual Rate equal to the 90-day Treasury Rate in effect on the Closing Date.

(a) The ceding commission is $58,000,000 (the "Ceding Commission").

(b) Not later than March 31, 1999, Parent shall deliver to Provident a written statement (the "Reserves Statement") setting forth the amount of General Account Reserves relating to the individual annuity Business as of November 30, 1998 (the "Final Annuity Reserves"), which Final Annuity Reserves shall be determined in accordance with Applicable SAP applied consistently with, and using the methodologies used in determining, the General Account Reserves of the individual annuity Business included in the Transferred Reserves (the "Transferred Annuity Reserves"). Provident shall have the opportunity to review the Reserves Statement and Parent shall make available its personnel and relevant work papers as reasonably requested by Provident in connection with such review, for a period not to exceed 15 Business Days following delivery of the Reserves Statement. Any changes in the Reserves Statement that are agreed to by Parent and Provident within such 15-Business-Day period shall be incorporated into a final Reserves Statement (the "Final Reserves Statement"). If Parent and Provident are unable to agree with respect to the amount of Final Annuity Reserves included in the Final Reserves Statement, they shall submit the dispute to the Independent Actuary, whose determination of the amount of Final Annuity Reserves shall be final and binding and reflected in the Final Reserves Statement;

provided, that such amount shall be within the range of dollar amounts proposed by Parent and Provident, respectively.

(c) If (i) the amount of Final Annuity Reserves shown on the Final Reserves Statement exceeds 97.45% of the amount of Transferred Annuity Reserves, Parent shall pay to Provident an amount in cash equal to the percentage increase in such reserves multiplied by the Ceding Commission, and if (ii) the amount of Final Annuity Reserves shown on the Final Reserves Statement is less than 97.45% of the amount of Transferred Annuity Reserves, Provident shall pay to Parent an amount in cash equal to the percentage decrease in such reserves multiplied by the Ceding Commission. In no event shall the payment required by the preceding sentence exceed 20% of the Ceding Commission. Any such payment shall be made within ten Business Days of the date of resolution of all disputed items (or, if there is no dispute, after the parties reach agreement on the amount of Final Annuity Reserves included in the Final Reserves Statement). Any transfer of cash required under this Section 1.5 shall be made within ten Business Days of the date of the delivery of the Final Reconciliation to Purchasers, together with interest thereon from and including November 30, 1997 to but not including the date of such transfer, computed at an Annual Rate equal to the 90-day Treasury Rate in effect on November 30, 1997.

(d) Notwithstanding the foregoing, no payment shall be made to the extent that increases or decreases in the Final Annuity Reserves as shown on the Final Reserves Statement are directly attributable to (i) Insurance Contracts not transferred to Purchasers pursuant to this Agreement, (ii) Insurance Contracts where the customer has lapsed but has replaced its policy or contract with another comparable policy or contract issued by a Purchaser or an Affiliate of a Purchaser, (iii) Insurance Contracts issued after November 30, 1997, or
(iv) Insurance Contracts that are not individual annuity Insurance Contracts.

(a) At the Closing, Sellers shall execute (where appropriate) and deliver to Purchasers the following:

(i) the Reinsurance Agreements;

(ii) the Administrative Services Agreements;

(iii) the General Assignment and Assumption Agreements;

(iv) the Bills of Sale;

(v) evidence of compliance with the requirements of the HSR Act;

(vi) evidence of receipt of the Permits described on Exhibit 5 from the Insurance Departments of the States of Tennessee, Delaware, New York and California and the Commonwealth of Massachusetts; and

(vii) evidence of compliance with any state pre-acquisition notification acts from which no exemption is available.

(b) At the Closing, PNAC and PRV shall execute and deliver to VALIC the Separate Account Transfer Agreements and the Separate Account Administration Agreements.

(c) At the Closing, Provident and Sellers shall execute and deliver to Purchasers the following:

(i) the Transition Services Agreement;

(ii) the License Agreement;

(iii) the Marketing Agreements; and

(iv) a certificate of an executive officer of Provident, dated the Closing Date, representing and warranting to the effect that (A) the person signing such certificate is familiar with the provisions of this Agreement and (B) the conditions specified in Article 5 have been satisfied.

(d) At the Closing, Purchasers shall execute (where appropriate) and deliver to Sellers the following:

(i) the Reinsurance Agreements;

(ii) the Administrative Services Agreements;

(iii) the General Assignment and Assumption Agreements;

(iv) evidence of compliance with the requirements of the HSR Act; and

(v) evidence of compliance with any state pre-acquisition notification requirements from which no exemption is available.

(e) At the Closing, VALIC shall execute and deliver to PNAC and PRV the Separate Account Transfer Agreements and the Separate Account Administration Agreements.

(f) At the Closing, Purchasers shall execute and deliver to Provident and Sellers the following:

(i) the Transition Services Agreement;

(ii) the License Agreement;

(iii) the Marketing Agreements; and

(iv) a certificate of an executive officer of each Purchaser, dated the Closing Date, representing and warranting to the effect that (A) the person signing such certificate is familiar with the provisions of this Agreement and (B) the conditions specified in Article 6 have been satisfied.

Provident and each Seller hereby represent and warrant to Purchasers as follows (it being understood that each Seller hereby makes only those representations and warranties that specifically relate to it):

violation is being alleged and (ii) without limiting the generality of the foregoing, in connection with Sellers' most recently completed or any ongoing quinquennial or triennial examination, no Seller has, to the knowledge of Sellers, received any notice, nor, to the knowledge of Sellers, is any Seller aware of the intention to send any notice, from any state regulatory authority alleging any violation of any such Law or Order or directing any Seller to take any remedial action with respect to such Law or Order, in either case relating to the Business.

(a) The forms of Insurance Contracts available for issuance, and the states in which such forms are authorized for issuance, on the date hereof are listed on Schedule 9.1(C) and are specifically identified on such Schedule. All Insurance Contracts as now in force are in all respects, to the extent required under applicable Law, on forms approved by applicable insurance regulatory authorities or which have been filed and not objected to by such authorities within the period provided for objection, and such forms comply in all material respects with the insurance statutes, regulations and rules applicable thereto, except where the failure to have such approval or non-objection or the failure to so comply would not, individually or in the aggregate, have a Seller Material Adverse Effect. At the time any Seller paid commissions to any broker or agent within the past 36 months in connection with the sale of Insurance Contracts, each such broker or agent was duly licensed as an insurance broker (for the type of business sold by such broker) or agent in the particular jurisdiction in which such broker or agent sold such business for Seller, and no such broker or agent violated (or with or without notice or lapse of time or both would have violated) any federal, state, local or foreign law, ordinance or regulation or any other requirement of any governmental or regulatory body, court or arbitrator applicable to the Business, except where the failure to be so licensed or any such violation would not, individually or in the aggregate, have a Seller Material Adverse Effect. Neither the manner in which any Seller compensates any Person involved in the sale or servicing of Insurance Contracts that is not registered as a broker-dealer or insurance agent, as applicable, nor, to the knowledge of Sellers, the conduct of any such Person, renders such Person a broker-dealer or insurance agent under any applicable federal or state law, and the manner in which any Seller compensates each Person involved in the sale or servicing of Insurance Contracts is in compliance with all applicable federal or state laws except where such manner of compensation or conduct having such effect or the

failure to be so in compliance would not, individually or in the aggregate, have a Seller Material Adverse Effect.

(b) Each Seller and Provident (with respect to the Business) has implemented procedures and programs which are reasonably designed to provide assurance that its respective agents and employees are in material compliance with all Laws, including without limitation, advertising, licensing and sales practices laws, regulations, directives, bulletins and opinions of governmental authorities, except for non-compliances that, individually or in the aggregate, have not had and would not have a Seller Material Adverse Effect. Each Seller and Provident (with respect to the Business) has previously made available to Purchaser a true, complete and correct copy of its compliance program and procedures referred to in the preceding sentence, and, except as previously disclosed in this Agreement or any Schedule to this Agreement, neither Provident nor any Seller has knowledge of any noncompliance therewith, except for instances of noncompliance which, individually or in the aggregate, have not had and would not have a Seller Material Adverse Effect.

(c) Each Seller has at all times since January 1, 1987, maintained records which in all material respects accurately reflect transactions in reasonable detail, and accounting controls, policies and procedures sufficient to ensure in all material respects that such transactions are recorded in a manner which permits the preparation of financial statements in accordance with applicable statutory accounting requirements.

(d) Except as set forth on Schedule 2.8(A), to the knowledge of Sellers:

(i) to the extent that by operation of law or written agreement or otherwise any Seller is legally responsible therefor, (A) the terms of each Qualified Contract and the administration and operation thereof and of any plan or arrangement funded in whole or in part through any such Qualified Contract comply, and at all relevant times have complied, in all material respects with the applicable provisions of the Code and ERISA and (to the extent such plan is intended by the Contract holder to limit fiduciary responsibility in accordance with section 404(c) of ERISA) comply, and at all relevant times have complied, in all material respects with all applicable requirements for limiting fiduciary responsibility under section 404(c) of ERISA; (B) contributions or payments to each such Qualified Contract which are intended to be nontaxable are not taxable; and (C) plan or contract loans made under such Qualified Contracts were neither prohibited transactions nor taxable when made or at any time thereafter, except with respect to taxable defaults in repayment of such plan or contracts loans; and

(ii) neither any Seller nor any of their Affiliates is legally responsible, by operation of law, written agreement or otherwise, for testing, determining or otherwise ensuring compliance under sections 401(a),
403(a), 403(b), 408 and 457 of the Code or otherwise administering or providing administrative services of any nature to any plan or arrangement funded in whole or in part through any such Qualified Contract.

except for any such default that would not, individually or in the aggregate, have a Seller Material Adverse Effect. To the knowledge of Sellers, there are no contracts, agreements, commitments or arrangements to which any Seller or Provident is a party, or which is binding upon any Seller or Provident, that restrict the right of any Seller or Provident to change the crediting rates and other non-guaranteed elements under the Insurance Contracts, other than pursuant to the terms of the Insurance Contracts.

(a) The assets of the Seller Separate Accounts are and have been adequately diversified at all times within the meaning of section 817(h) of the Code;

(b) Each Insurance Contract complies with the requirements of section 72 of the Code;

(c) To the knowledge of Sellers, there are no "hold harmless," tax sharing, indemnification, or similar arrangements regarding the Tax qualification or treatment of any Insurance Contracts;

(d) Each Seller is or is treated for all federal income Tax purposes as the owner of the assets underlying each variable Insurance Contract issued, entered into, or sold by Seller; and

(e) Each Seller has complied in all material respects with all applicable reporting, withholding and disclosure requirements under the Code, ERISA and other applicable law, including those regarding distributions, with respect to the Insurance Contracts and has reported the distributions under such contracts in accordance with section 72 of the Code in all material respects.

respects the consolidated financial position and results of operations of Provident and its Subsidiaries as of the date and for the period indicated therein.

business similar to the Business and that, individually or in the aggregate, is likely to have a Seller Material Adverse Effect.

Parent and each Purchaser hereby represent and warrant to Provident and each Seller as follows:

knowledge of Purchasers, threatened against either Purchaser, at law or in equity, or before or by any governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, or before any arbitrator of any kind which, if adversely determined, would, individually or in the aggregate, have a Purchaser Material Adverse Effect.

each Purchaser is authorized to transact in each such jurisdiction. Except as listed on Schedule 3.7, each Purchaser has all Permits necessary to conduct the Business in the manner and in the jurisdictions in which the Business is presently being conducted, and all such Permits are valid and in full force and effect, except where the failure to have such a Permit would not, individually or in the aggregate, have a Purchaser Material Adverse Effect. Except as listed on Schedule 3.7, neither Purchaser has engaged in any activity which would cause revocation or suspension of any such Permit and no action or proceeding looking to or contemplating the revocation or suspension of any such Permit is pending or threatened.

(a) Prior to the earlier of the Closing or termination of this Agreement, except as expressly provided in this Agreement, without the prior written consent of Parent, each Seller shall (i) in all material respects operate the Business as presently operated and only in the ordinary

course and consistent with past practice (including but not limited to past underwriting standards), (ii) use commercially reasonable best efforts to preserve the value of the Business and (iii) use commercially reasonable best efforts to preserve their relationships with and the goodwill of their agents, brokers, customers, suppliers, employees and other Persons having business dealings with any Seller.

(b) Without limiting the generality of Section 4.1(a), and except as otherwise expressly provided in this Agreement, prior to the earlier of the Closing or termination of this Agreement, no Seller will, without the prior written consent of Parent:

(i) enter into any contract that would constitute an Assigned and Assumed Contract, other than in the ordinary course of business consistent with past practice;

(ii) acquire or dispose of any asset that would constitute a Transferred Asset if owned by any Seller at Closing, other than acquisitions or dispositions in the ordinary course of the Business;

(iii) change any of the accounting principles, practices, methods or policies (including but not limited to any reserving methods, practices or policies) employed with respect to the Business, except as may be required as a result of a change in law, SAP or guidelines issued by the Commission or its accounting staff;

(iv) change the method of determining the SAP reserves with respect to the Business for any guaranty fund assessment, special insurance assessment or similar assessment or tax;

(v) pay, discharge or satisfy any material claims, liabilities or obligations associated with the Business (absolute, asserted or unasserted, contingent or otherwise) other than the payment, discharge or satisfaction in the ordinary course of the Business consistent with past practice;

(vi) enter into any reinsurance contract relating to the Business, other than in the ordinary course of business consistent with past practice;

(vii) take or cause to be taken any action that would result in such Seller's Seller Separate Accounts to be managed other than in the ordinary course consistent with past practice in all material respects; or

(viii) agree in writing or otherwise to take any of the actions described above in this Section 4.1(b).

(c) Prior to Closing, each Seller shall notify Parent as promptly as practicable of any event or transaction having a Seller Material Adverse Effect.

(a) Prior to the Closing Date, Parent and Purchasers shall be entitled, through their employees and representatives, to make such investigation of the assets, liabilities, business and operations of the Business, and such examination of the Books and Records, as Parent and Purchasers may reasonably request. Any investigation, examination or interview by Parent or Purchasers of Sellers' employees and agents or access pursuant to any of the provisions of this Section 4.3(a) shall be conducted or occur at reasonable times upon reasonable prior notice; and each of the parties hereto and its employees and representatives, including counsel, investment bankers, and independent public accountants, shall cooperate with the other's employees and representatives, as the case may be, in connection with such review and examination.

(b) In addition, prior to the Closing Date, Provident and each Seller shall provide Parent and Purchasers with full and complete access to every aspect of the Business, subject only to any applicable legal limitations. Without limiting the generality of the foregoing, Provident and each Seller shall (i) provide Parent and Purchasers with access to individuals reasonably specified by Parent or Purchasers to plan the transition of the Business to Purchasers, (ii) designate certain individuals (subject to Parent's reasonable approval) to serve as members of a Provident/Parent transition team and cause such individuals to devote reasonable time to transition matters, (iii) devote reasonable resources to transition matters (such resources to include office accommodations and related facilities for a substantial and continuing presence of Parent's transition team members on Sellers' premises), (iv) cooperate with Parent and Purchasers in connection with their filing of policy and contract forms to enable Purchasers to issue policies and contracts substantially similar to those included in the Business, (v) consult with Parent and Purchasers regarding Seller's development work pertaining to systems, products, distribution and customer and producer services, and (vi) cooperate with Parent and Purchasers in their development work pertaining to systems, products, distribution and customer and producer services.

(c) Prior to the Closing Date, Provident and each Seller shall be entitled, through its employees and representatives, to make such investigation of the assets, liabilities, business and operations of Purchasers as Provident or such Seller may reasonably request. Any such investigation or examination shall be conducted at reasonable times upon reasonable prior notice; and each of the parties hereto and its employees and representatives, including counsel, investment bankers, and independent public accountants, shall cooperate with the other's employees and representatives, as the case may be, in connection with such review and examination.

(d) Notwithstanding any other provisions of this Section 4.3, Purchasers and Provident shall cooperate in implementing the provisions of this
Section 4.3 so as not to prevent or interfere with Sellers' compliance with
Section 4.1.

(a) Following the Closing Date, Provident and each Seller shall (i) allow Purchasers, upon reasonable prior notice and during regular business hours, through their employees and representatives, the right, at Purchasers expense, to examine and make copies of any books and records retained by Sellers, to the extent they relate to the Business, for any reasonable business purpose, including the preparation or examination of Purchasers Tax returns, regulatory filings and financial statements and the conduct of any litigation or regulatory dispute resolution, whether pending or threatened, concerning the conduct of the Business prior to the Closing Date and (ii) maintain such books and records for Purchasers examination and copying, subject to Provident's or such Seller's general document retention policies, which have been described to Purchasers. Access to such books and records shall be at Purchasers expense and may not unreasonably interfere with Seller's or any successor company's business operations.

(b) Following the Closing Date, Purchasers shall (i) allow Provident and each Seller, upon reasonable prior notice and during regular business hours, through its employees and representatives, the right, at Provident's or such Seller's expense, as applicable, to examine and make copies of the Books and Records transferred to Purchasers, respectively, at the Closing for any reasonable business purpose, including the preparation or examination of Tax returns, regulatory filings and financial statements and the conduct of any litigation or the conduct of any regulatory, contract holder, participant or other dispute resolution whether pending or threatened, and (ii) maintain such Books and Records for Seller's examination and copying, subject to Purchasers general document retention policies, which have been described to Provident. Access to such Books and Records shall be at Provident's or such Seller's expense, as applicable, and may not unreasonably interfere with Purchasers' or any successor company's business operations.

that such source is under an obligation to another party hereto to keep such documents and information confidential; provided that following the Closing the foregoing restrictions will not apply to Parent's or Purchasers use of documents and information concerning the Business furnished by Provident or a Seller hereunder. In the event the transactions contemplated hereby are not consummated, upon the request of the other party, each party hereto will, and will cause its Affiliates and their respective representatives to, promptly redeliver or cause to be redelivered all copies of confidential documents and information furnished by the other party in connection with this Agreement or the transactions contemplated hereby and destroy or cause to be destroyed all notes, memoranda, summaries, analyses, compilations and other writings related thereto or based thereon prepared by the party furnished such documents and information or its representatives.

(a) Provident, each Seller and each Purchaser agree to allocate the Ceding Commission, the liabilities assumed by Purchasers hereunder and under the Ancillary Agreements, and all other capitalizable costs incurred in connection with the transactions described herein (collectively, the "Allocable Amount") among the Transferred Assets in accordance with this Section 4.12 for all purposes, including Tax and financial accounting purposes (giving effect to appropriate differences between tax and SAP reserves and appropriate allocation of the Ceding Commission).

(b) For purposes of section 1060 of the Code, each Seller and Purchasers shall (i) make the allocation described in Section 4.12(a) in the manner described in Income Tax Regulations section 1.1060-1T, and (ii) file asset acquisition statements on Form 8594 (or any replacement or successor form) reflecting such allocation at the time, in the manner, and under the procedures described in such provision of the Income Tax Regulations.

(c) As soon as practicable after the Closing Date, each Purchaser shall prepare a schedule reflecting the allocation of the Allocable Amount under
Section 4.12(b) in the manner described in Income Tax Regulations section 1.1060-1T and shall submit it to Provident. If, within 30 days of Provident's receipt of such schedule, Provident shall not have objected in writing to the determination of the Allocable Amount or to such allocation, the allocation shall be used by each Seller and Purchasers for purposes of Form 8594 (and any replacement or successor form) and all other federal income Tax purposes. If, within 15 days of any objection in writing to the determination of the Allocable Amount or to such allocation, Provident and Purchasers shall not have agreed in writing to the allocation under Section 4.12(b), any disputed aspects of the determination of the Allocable Amount or to such allocation shall be resolved by the Third Party Accountant within 30 days of the submission of the dispute to the Third Party Accountant by Provident or Purchasers. The decision of the Third Party Accountant shall be final, and the costs, expenses, and fees of the Third Party Accountant shall be borne equally by Provident and Purchasers.

(d) Neither Provident, any Seller, Parent nor any Purchaser shall take any position before any Taxing Authority or otherwise (including in any Tax return) inconsistent with this Section 4.12 unless and to the extent required to do so pursuant to a determination (as defined in section 1313(a) of the Code or any similar provision of state, local or foreign law).

(e) Sellers and Parent will comply with the following concerning the capitalization of certain policy expenses, pursuant to section 848 of the Code and Income Tax Regulations sections 1.848-1 and 1.848-2:

(i) As used in this Section 4.12(e), the following terms shall have the following meanings:

(A) The term "party" will refer either to each Seller or to Purchasers, as appropriate. The term "parties" will refer to Sellers and Purchasers.

(B) The term "Agreement" will refer to the Reinsurance Agreement between each Seller and each Purchaser.

(C) Other terms used in this Section 4.12 are defined by reference to section 848 of the Code and Income Tax Regulation sections 1.848-1 and 1.848-2 as in effect on the Closing Date.

(ii) Pursuant to the joint election set forth in section 1.848- 2(g)(8) of the Income Tax Regulations, the party with net positive consideration for each taxable year will capitalize specified policy acquisition expenses with respect to the Agreement without regard to the general deductions limitation of section 848(c)(1) of the Code. The first taxable year for which the joint election will be effective is the tax year ending December 31, 1998. Both parties shall attach a joint schedule to their 1998 Federal income Tax Returns which identifies the Agreement for which the joint election has been made.

(iii) Both parties shall exchange information pertaining to the amount of net consideration under the Agreement each year to ensure consistency or as otherwise required by the Internal Revenue Service. Such exchange of information will be made according to the following procedure:
By May 15 of each year, each Seller will submit to Parent a schedule of its calculation of the net consideration under the Agreement for the preceding calendar year. That schedule will be accompanied by a statement signed by an officer of such Seller disclosing the amount of net consideration such Seller will report with respect to the Agreement in its Federal income Tax Return for the preceding calendar year. To ensure consistency, Parent will utilize that information in determining its net consideration with respect to the Agreement for its preceding taxable year. Parent will advise Sellers if they disagree with the calculations provided and the parties agree to act in good faith to resolve such differences amicably.

(a) Upon the terms and subject to the conditions herein provided, on and prior to the Closing Date each Purchaser and each Seller shall use all commercially reasonable best efforts to take, or cause to be taken, all action or do, or cause to be done, all things or execute any documents necessary, proper or advisable under applicable laws and regulations to consummate and make effective the transactions contemplated by this Agreement, the Ancillary Agreements and the other agreements contemplated hereby and thereby.

(b) On and after the Closing Date, each Seller (as reasonably requested from time to time by any Purchaser) and Purchasers (as reasonably requested from time to time by any Seller) shall take all reasonably appropriate action and execute any additional documents, instruments or conveyances of any kind (not containing additional representations and warranties) which may be reasonably necessary to carry out any of the provisions hereof, including putting each of Purchasers in full possession and operating control of the Transferred Assets and the Business,

and giving effect to the assumption of liabilities by Purchasers as contemplated hereby and thereby.

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

representations and warranties had been made on and as of the Closing, except that any such representations and warranties that are given as of a specified date and relate solely to a specified date or period shall be true and correct in all material respects or all respects, as the case may be, only as of such date or period. Provident and each Seller shall have performed and complied with all covenants and agreements required to be performed or complied with by Provident or such Seller under this Agreement prior to or concurrently with the Closing in all material respects.

(a) All Permits and authorizations required by each Seller and Purchasers from governmental and regulatory bodies listed on Exhibit 5 shall have been obtained and shall be in full force and effect and without conditions or limitations which would have a material adverse effect on the Business as operated by Purchasers after the Closing Date and are unacceptable to Purchasers in the exercise of its reasonable business judgment, and Purchasers shall have been furnished with appropriate evidence, reasonably satisfactory to it and its counsel, of the granting of such Permits.

(b) The applicable waiting period under the HSR Act, including all extensions thereof, shall have expired or been terminated and Purchasers shall have been furnished with appropriate evidence, reasonably satisfactory to it, of such expiration or termination.

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

(a) All Permits required by each Seller and Purchasers from governmental and regulatory bodies listed on Exhibit 5 shall have been obtained and shall be in full force and effect and without conditions or limitations which would have a material adverse effect on the business of such Seller and are unacceptable to Provident in the exercise of its reasonable business judgment, and Provident shall have been furnished with appropriate evidence, reasonably satisfactory to it and its counsel, of the granting of such Permits.

(b) The applicable waiting period under the HSR Act, including all extensions thereof, shall have expired or been terminated and Provident shall have been furnished with appropriate evidence, reasonably satisfactory to it, of such expiration or termination.

which representations shall continue with respect to such matters until such matters have been finally decided, settled or adjudicated. The representations contained in Sections 2.1 and 2.2 shall survive until the expiration of all applicable statutes of limitations.

(a) Subject to the limitations set forth in this Article 7, from and after the Closing Date, each Seller (other than PNAC, PRV and PRPL) agrees to indemnify, defend and hold harmless Parent and Purchasers (and their respective directors, officers, employees, Affiliates, successors and permitted assigns) (collectively, the "Purchaser Indemnitees") from and against all Losses based upon: (i) any breach of or inaccuracy in the representations and warranties contained in Article 2 or in any certificate delivered by any Seller to Purchasers pursuant to this Agreement on or after the date of execution of this Agreement; (ii) any breach, nonfulfillment or default in the performance of any of the covenants and agreements of Provident or any Seller contained in this Agreement or in any Ancillary Agreement; or (iii) all Retained Liabilities.

(b) Subject to the limitations set forth in this Article 7, from and after the Closing Date, Purchasers agree to indemnify, defend and hold harmless Provident and each Seller (and their respective directors, officers, employees, Affiliates, successors and permitted assigns) (collectively, the "Seller Indemnitees") from and against all Losses, based upon: (i) any breach of or inaccuracy in the representations and warranties of Parent and Purchasers contained in Article 3 or in any certificate delivered by any Purchaser to Provident or Sellers pursuant to this Agreement on or after the date of execution of this Agreement; (ii) any breach, nonfulfillment or default in the performance of any of the covenants and agreements of Parent or Purchasers contained in this Agreement or in any Ancillary Agreement; or (iii) all Assumed Liabilities.

(c) For the avoidance of doubt, the Purchaser Indemnitees shall not be entitled to the benefit of the indemnity in Section 7.2(a) in respect of any amounts which are taken into account in calculating the amounts to be paid pursuant to Section 1.5(c).

(d) The aggregate amount for which the Sellers shall be liable under
Section 7.2(a)(i) and (ii) shall be $20,000,000. The aggregate amount for which Purchasers shall be liable under Section 7.2(b)(i) and (ii) shall be $20,000,000. Except as set forth in the following sentence, the Sellers shall be required to indemnify the Purchaser Indemnitees pursuant to Section 7.2(a)(i) and (ii) only to the extent that the sum of Losses incurred by the Purchaser Indemnitees in connection with such clauses exceeds $300,000 in the aggregate (the "Deductible"), and then only for the amount of such excess. Notwithstanding the foregoing, no Loss resulting from a breach by any Seller of the covenant set forth in Section 4.16 shall be subject to the Deductible. Purchasers shall be required to indemnify the Seller Indemnitees pursuant to
Section 7.2(b)(i) and (ii) only to the extent that the sum of Losses incurred by the Seller Indemnitees in connection with such clauses exceeds the Deductible, and then only for the amount of such excess.

indemnification is sought (the "Indemnifying Party") no later than ten (10) Business Days after such claim becomes known to the Indemnified Party, specifying the facts constituting the basis for, and the amount (if known) of the claim asserted. Failure to deliver a Claims Notice with respect to a claim (other than a claim based on a Third Party 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.

(a) If an Indemnified Party asserts, or may in the future seek to assert, 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 7 (a "Third Party Claim"), the Indemnified Party shall deliver to the Indemnifying Party a Claims Notice with respect thereto, which Claims Notice shall, in accordance with the provisions of Section 7.3, be delivered as promptly as practicable and in any event no later than ten (10) Business Days after such Third Party Claim 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; provided, that the failure to deliver a Claims Notice with respect to a Third Party Claim within twenty (20) Business Days of the Indemnified Party's receipt of written notice of such Third Party Claim shall be deemed to be a waiver of the Indemnified Party's right to indemnification hereunder for Losses in connection with such Third Party Claim.

(b) (i) The Indemnifying Party shall have the right, upon written notice to the Indemnified Party, to investigate, contest, defend or settle any Third Party Claim that may result in a Loss with respect to which the Indemnified Party is entitled to indemnification pursuant to this Article 7; provided, that the Indemnified Party may, at its option and at its own expense, participate in the investigation, contesting, defense or settlement of any such Third Party Claim through representatives and counsel of its own choosing; and, provided further, that the Indemnifying Party shall not settle any Third Party Claim unless (i) such settlement is on exclusively monetary terms or (ii) the Indemnified Party shall have consented to the terms of such settlement, which consent shall not unreasonably be withheld. 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 Third Party Claim or, if appropriate and related to the Third Party Claim in question, in making any counterclaim against the Third Party Claimant, or any cross-complaint against any Person (other than the Indemnified Party or its Affiliates). The failure of the Indemnifying Party to provide the above-mentioned written notice to the Indemnified Party within ten (10) Business Days after receipt of a Claims

Notice with respect to a Third Party Claim shall be deemed an election not to defend the same. Unless and until the Indemnifying Party elects to defend the Third Party Claim, the Indemnified Party shall have the right, at its option and at the Indemnifying Party's expense to the extent that the applicable Deductible has been exhausted, to do so in such manner as it deems appropriate; provided, however, that the Indemnified Party shall not settle or compromise any Third Party Claim for which it seeks indemnification hereunder without the prior written consent of the Indemnifying Party (which shall not be unreasonably withheld) during the ten (10) Business Day period referred to above after the receipt of a Claims Notice, or thereafter in a manner that would cause any applicable Deductible to be exhausted.

(ii) Notwithstanding Section 7.4(b)(i), the Indemnified Party shall have the right to investigate, contest, defend or settle any Third Party Claim falling under Section 7.2(a)(i) or (b)(i), as the case may be, so long as the Losses that could reasonably be expected to result from such Third Party Claim, together with all Losses under any other Third Party Claim falling under such Sections over which the Indemnified Party has retained control pursuant to this
Section 7.4(b)(ii), would not exceed the Deductible. In the event that an Indemnified Party retains control over any Third Party Claim pursuant to this
Section 7.4(b)(ii): (A) the Indemnifying Party shall have the right to participate in (but not control) the defense of such Third Party Claim; (B) the Indemnified Party shall not settle or compromise such Third Party Claim without the prior written consent of the Indemnifying Party (which shall not be unreasonably withheld); and (C) the Indemnified Party shall not be entitled to any indemnification for any amounts by which the actual Losses resulting from such Asserted Claims exceeds, in the aggregate, the Deductible.

(c) The Indemnifying Party shall be entitled to participate in (but not to control) the defense of any Third Party Claim which it has elected, or is deemed to have elected, not to defend, or as to which it does not have the right to defend under Section 7.4(b), with its own counsel and at its own expense.

(d) Except as provided in the first sentence of Section 7.4(b), the Indemnifying Party shall bear all costs of defending any Third Party Claim and shall indemnify and hold the Indemnified Party harmless against and from all costs, fees and expenses incurred in connection with defending such Third Party Claim.

(e) Purchasers and the Sellers shall make mutually available to each other (or to Provident or Parent, as applicable) all relevant information in their possession relating to any Third Party Claim (except to the extent that such action would result in a loss of attorney-client privilege) and shall cooperate with each other in the defense thereof.

(f) In the event that any party, or any Affiliate thereof, becomes aware of, or any Person brings, or threatens to bring, an action, proceeding or investigation with respect to, any defect affecting a plan in which a Qualified Contract is held (a "Plan Defect"), the parties shall cooperate in identifying actions that may be necessary or desirable in order to cure or otherwise address such Plan Defect, including, without limitation, the modification, amendment or replacement of such plan, and Sellers shall have the right to take such necessary corrective actions

relating thereto as such Sellers shall identify; provided that Sellers shall not take any action to which Purchasers reasonably object on the grounds that the proposed action would adversely affect the ability of such plan to continue investing in such Qualified Contract, would require changes to such Qualified Contract adverse to Purchasers, or otherwise adversely affect Purchasers' relationship with the sponsor of such plan, without the prior written consent of Purchasers, which consent shall not be unreasonably withheld or delayed. Provident and Sellers shall use commercially reasonable efforts to determine, as soon as practicable after the date of this Agreement, and in any event prior to Closing, whether any Plan Defects exist and shall keep Parent reasonably apprised of the results of their investigation; provided that Provident and Sellers shall not be required to disclose any information subject to the attorney-client privilege. Parent and Purchasers shall not seek to replace any plan under which any Qualified Contracts are presently held until such time as Provident or any Seller shall notify Parent or any Purchaser that it has determined that such plan does not contain a Plan Defect, or that any such Plan Defect has been cured or otherwise addressed.

(a) Any dispute arising out of or relating to the interpretation, performance or breach of this Agreement, including the formation or validity thereof, shall be submitted for decision to a panel of three arbitrators. Notice requesting arbitration must be in writing and sent certified or registered mail, return receipt requested.

(b) One arbitrator shall be chosen by each party and the two arbitrators shall, before instituting the hearing, choose an impartial third arbitrator (the "Umpire") who shall preside at the hearing. If either party fails to appoint its arbitrator within 30 days after being requested to do so by the other party, the latter, after ten days notice by certified or registered mail of its intention to do so, may appoint the second arbitrator. If the two arbitrators are unable to agree upon the selection of the Umpire within 30 days of their appointment, then each arbitrator shall submit to the other a list of three Umpire candidates. Each arbitrator shall strike the names of two candidates from the other arbitrator's list, and the Umpire shall be selected from the two remaining candidates by a lot drawing procedure determined by the two arbitrators.

(c) Unless the parties otherwise agree all arbitrators shall be disinterested active or former officers of insurance or reinsurance companies.

(d) Within 30 days after notice of appointment of all arbitrators, the panel shall meet and determine a schedule for the conduct of the arbitration, including hearings. The panel shall be relieved of all judicial formality and shall not be bound by the strict rules of procedure and evidence. The panel shall determine where the arbitration shall take place. To the extent and only to the extent that the provisions of this Agreement are ambiguous or unclear, the panel shall make its decision considering the custom and practice of the applicable insurance and reinsurance business. Insofar as the arbitration panel looks to substantive Law, the Law of Tennessee shall govern. The decision of any two arbitrators when rendered in writing shall be final and binding. The panel is empowered to grant interim relief as it may deem appropriate.

(e) The panel shall render its decision, which shall be in writing and state the reasons therefor, within 60 days following the termination of hearings. Judgment upon the award may be entered in any court having jurisdiction thereof. Each party shall bear the expense of its own arbitrator and shall jointly and equally bear with the other party the cost of the Umpire. The remaining costs of the arbitration shall be allocated by the panel. The panel may, at its discretion, award such further costs and expenses as it considers appropriate, including but not limited to interest (determined at the panel's discretion) and attorneys' fees, to the extent permitted by Law. The panel shall not award punitive damages under any circumstances.

(a) by mutual written consent of Provident and Parent.

(b) by Provident or Parent in writing, if there shall be any Order of any court or governmental or regulatory agency binding on Parent or any Purchasers and/or Provident or any Seller, which prohibits or restrains Parent or any Purchasers and/or Provident or any Seller from consummating the transactions contemplated hereby; provided, that Parent or such Purchasers and/or Provident or such Sellers, as the case may be, shall have used its commercially reasonable best efforts to have any such Order lifted and the same shall not have been lifted by April 1, 1998;

(c) by Parent in writing if there has been a material breach by Provident or any Seller of any of the representations, warranties, agreements or covenants of Provident and the Sellers set forth herein which is not subject to cure prior to the Closing, or a failure of any other condition not subject to cure prior to the Closing to which the obligations of Purchasers are subject;

(d) by Provident in writing if there has been a material breach by Parent or Purchasers of any of the representations, warranties, agreements or covenants of Parent and Purchasers set forth herein which is not subject to cure prior to the Closing, or a failure of any other condition not subject to cure prior to the Closing to which the obligations of Provident and the Sellers are subject; and

(e) by either of Provident or Parent in writing, if the Closing has not occurred on or prior to April 1, 1998, unless the failure of the Closing to occur shall be due to the failure of the party seeking to terminate this Agreement to materially perform each of its obligations under this Agreement required to be performed by it on or prior to the Closing Date.

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

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

"ADJUSTED STATUTORY RESERVES AND OTHER STATUTORY LIABILITIES" at any time means statutory reserves and other statutory liabilities of the Business appropriately includable in line items 1 through 25, except lines 11.4 and 24.1, of the Liabilities, Surplus and Other Funds page of the NAIC Annual Statement Blank (1996 format), but excluding from such statutory reserves and other statutory liabilities the statutory liabilities included within Retained Liabilities.

"ADMINISTRATIVE SERVICES AGREEMENTS" means the Administrative Services Agreements between each Seller and Purchaser, in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which such Purchaser shall provide certain administrative services to such Seller with respect to the Reinsured Contracts, and (ii) the consideration to be paid therefor.

"ADVERTISEMENT" means any material designed to create public interest in insurance policies, annuity contracts and variable annuity contracts or in an insurer, or in an insurance producer, or to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain such a policy or contract.

"AFFILIATE" means, with respect to any Person, at the time in question, any other Person controlling, controlled by or under common control with such Person.

"AGREED VALUE" shall have the meaning set forth in Section 1.3(a).

"ALLOCABLE AMOUNT" shall have the meaning set forth in Section 4.12(a).

"ANCILLARY AGREEMENTS" means the Reinsurance Agreements, the Separate Account Transfer Agreements, the Administrative Services Agreements, the Separate Account Administration Agreements, the General Assignment and Assumption Agreements, the Bills of Sale, the Transition Services Agreement, the Marketing Agreements, and the License Agreement.

"ANNUAL RATE" means the value of "r" in the expression (1 + r)n/365 - 1, where "n" is equal to the number of days for which interest is to be computed and the result of the expression is the interest factor for computing the applicable interest amounts.

"ANTITRUST DIVISION" shall have the meaning set forth in Section 4.6.

"APPLICABLE SAP" means Tennessee SAP, in the case of PLA and PNAC, Massachusetts SAP, in the case of PRL and PRV and Delaware SAP, in the case of PRPL.

"ASSIGNED AND ASSUMED CONTRACTS" means those contracts and other agreements material to the operation of the Business identified on Schedule 9.1(A).

"ASSUMED LIABILITIES" shall mean all (i) liabilities and obligations first to be paid or performed after the Closing Date under or pursuant to the Assigned and Assumed Contracts, if any, (ii) liabilities for amounts payable after November 30, 1997 for returns or refunds of Premiums in respect of Insurance Contracts intended to be reinsured by Purchasers, and (iii) liabilities for guaranty fund assessments and similar charges imposed with respect to the Insurance Contracts based on dates of insolvency after November 30, 1997.

"BILL OF SALE" means the Bill of Sale which is substantially in the form of Exhibit 2.

"BOOKS AND RECORDS" means the originals or copies of all customer lists, policy information, Insurance Contract forms and rating plans, disclosure and other documents and filings required under applicable securities laws, claim records, sales records, underwriting records, financial records, tax records and compliance records in the possession or control of Sellers and relating principally to the operation of the Business, including any database, magnetic or optical media (to the extent not subject to licensing restrictions) and any other form of recorded, computer generated or stored information or process, but excluding any such records that are subject to the attorney-client privilege.

"BUSINESS DAY" means any day other than a Saturday, Sunday, a day on which banking institutions in the State of New York are permitted or obligated by law to be closed or a day on which the New York Stock Exchange is closed for trading.

"BUSINESS" means the business of administering the Insurance Contracts, as currently conducted by Sellers.

"CEDING COMMISSION" shall have the meaning provided in Section 1.5.

"CLAIMS NOTICE" shall have the meaning set forth in Section 7.3.

"CLOSING DATE" means (i) if the last of the conditions to Closing set forth in this Agreement is satisfied or waived in writing prior to the 15th day of a given month, then the Closing Date shall be the first day of the month following the month in which the last of the conditions was so satisfied or waived in writing, or (ii) if such satisfaction or waiver in writing occurs or is granted after the 15th day of any given month, then the Closing Date shall be the first day of the second month following the month in which the last of the closing conditions is so satisfied or waived; provided, however, that if such date is not a Business Day, the Closing Date shall be the immediately succeeding Business Day; and provided further, that the Closing may occur on such other date as the parties may agree to in writing, provided however, that the Closing Date shall not be later than the date specified in
Section 8.1(e).

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

"CODE" means the Internal Revenue Code of 1986, as amended. Any citation to a provision of the Code includes a citation to any successor provision.

"COMMISSION" means the United States Securities and Exchange Commission.

"CONSENT" shall mean any consent, approval, authorization, clearance, exemption, waiver, or similar affirmation by any Person pursuant to any contract or any applicable Law, Order, or Permit.

"DELAWARE SAP" means the statutory accounting principles and practices prescribed or permitted by the Insurance Department of the State of Delaware as applied on a basis consistent with those utilized in the preparation of 1996 Annual Statement of PRPL.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and all final and temporary regulations and interpretive Bulletins and other rulings of general applicability thereunder.

"ESTIMATED INITIAL CASH POSITION" shall have the meaning set forth in
Section 1.3(a).

"FINAL ANNUITY RESERVES" shall have the meaning set forth in Section 1.5(b).

"FINAL RECONCILIATION" shall have the meaning set forth in Section 1.4(a).

"FINAL RESERVES STATEMENT" shall have the meaning set forth in Section 1.5(b).

"FINAL TRANSFERRED RESERVES STATEMENT" shall have the meaning set forth in
Section 1.3(b).

"FTC" shall have the meaning set forth in Section 4.6.

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

"GENERAL ACCOUNT RESERVES" means the general account statutory reserves of Seller (without regard to the transactions contemplated by the Reinsurance Agreements) with respect to the Insurance Contracts determined pursuant to Applicable SAP, as such reserves would have been included in lines 1, 2, 3, 4.1, 4.2, 5, 6, 7.1, 7.2, 7.3, 8, 9, 10.1, 10.2, 10.3, 11.1, 11.2 and 11.3 of the Liabilities, Surplus and Other Funds page of the NAIC Annual Statement Blank (1996 format), excluding, however, any general account statutory reserve adjustments in relation to Separate Account Liabilities.

"GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT" means the General Assignment and Assumption Agreement between each Seller and Purchasers which is substantially in the form of Exhibit 3.

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

"INCOME TAX REGULATIONS" means the temporary or final regulations issued under the Code. Any citation to a provision of the Income Tax Regulations includes a reference to any successor regulatory provision.

"INDEMNIFIED PARTY" shall have the meaning set forth in Section 7.3.

"INDEMNIFYING PARTY" shall have the meaning set forth in Section 7.3.

"INDEPENDENT ACTUARY" shall have the meaning set forth in Section 1.3(b).

"INITIAL CASH POSITION" shall have the meaning set forth in Section 1.3(c).

"INITIAL CASH POSITION DIFFERENCE" shall have the meaning set forth in
Section 1.3(c).

"INITIAL PORTFOLIO" shall have the meaning set forth in Section 1.3(c).

"INSURANCE CONTRACTS" means those contracts of insurance and annuities, and riders thereto and renewals, exchanges and extensions thereof, of Sellers described on Schedule 9.1(C) and new policies of like type issued after the date of this Agreement but before the Closing Date.

"INVESTMENT ASSETS" shall have the meaning set forth in Section 1.3(d).

"IRS" means the United States Internal Revenue Service.

"KNOWLEDGE" shall be interpreted for the purposes of this Agreement as follows: (i) a matter will be deemed to be within the "knowledge of Sellers" if (A) such matter is as of the date of the execution of this Agreement actually known to any of the Seller Key People, or (B) in light of the positions held by the Seller Key People, but taking into account that the due diligence undertaken by the Seller Key People prior to the execution of this Agreement was limited to reviewing materials accessible to the Seller Key People without informing other individuals of the transactions contemplated by this Agreement, the matter would reasonably be expected to be known by the Seller Key People; and (ii) a matter will be deemed to be within the "knowledge of Purchasers" if it is actually known to any of the Purchaser Key People as of the date of the execution of this Agreement after reasonable inquiry.

"LAW" means any domestic or foreign federal, state or local code, law, statute, ordinance, regulation, rule, reporting or licensing requirement, policy, guideline, administrative interpretation or other requirement (including those of the Commission, NASD, NAIC and any state) applicable to the parties hereto, or any of their respective Affiliates, properties, assets, officers, directors, employees or agents, as the case may be.

"LICENSE AGREEMENT" means the software license agreement to be entered into on or prior to the Closing Date among Sellers and Purchasers, in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which

Sellers will grant a license to use the software described in Schedule 9.1(B), and (ii) the consideration to be paid therefor.

"LOSS" and "LOSSES" shall mean actions, claims, losses, liabilities, damages, deficiencies, costs, expenses (including reasonable attorneys' fees and expenses), interest, taxes and penalties.

"MARKETING AGREEMENTS" means the marketing agreements to be entered into by Parent, each Purchaser, Provident and each Seller pursuant to Section 4.10.

"MASSACHUSETTS SAP" means the statutory accounting principles and practices prescribed or permitted by the Insurance Department of the Commonwealth of Massachusetts as applied on a basis consistent with those utilized in the preparation of 1996 Annual Statements of PRL and PRV.

"MATERIAL" shall have the following meaning: A matter will be deemed to be "material" in connection with any provision of this Agreement if such matter would be considered significant by a reasonable acquiror of the Business in the context of the particular provision in which the word "material" appears.

"NAIC" means the National Association of Insurance Commissioners.

"NASD" shall mean the National Association of Securities Dealers, Inc., including its Subsidiary, NASD Regulation, Inc.

"NET ASSET VALUE" shall have the meaning set forth in Section 1.3(c).

"NET CASH FROM THE BUSINESS" shall have the meaning set forth in Section 1.3(f).

"ORDER" shall mean any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling, or writ of any federal, state, local or foreign or other court, arbitrator, mediator, tribunal, or other governmental or regulatory agency or authority.

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

"PERMITS" means all licenses, permits, orders, approvals, registrations, authorizations, qualifications and filings with and under all federal, state, local or foreign laws or governmental or regulatory bodies.

"PERSON" means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental, judicial or regulatory body, business unit (including, but not limited to, the Business), division or other entity.

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

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

"POOL ASSET ADDITIONS" shall have the meaning set forth in Section 1.3(d).

"POOL ASSET REDUCTIONS" shall have the meaning set forth in Section 1.3(d).

"POOL" shall have the meaning set forth in Section 1.3(c).

"POST-CLOSING CONTRACTS" shall have the meaning set forth in Section 4.15.

"PRELIMINARY INVESTMENT ASSETS" shall have the meaning set forth in Section 1.3(a).

"PRELIMINARY RECONCILIATION" shall have the meaning set forth in Section 1.3(e).

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

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

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

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

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

"PURCHASER INDEMNITEES" shall have the meaning set forth in Section 7.2(a).

"PURCHASER KEY PEOPLE" means the individuals set forth in Schedule 9.1(D).

"PURCHASER MATERIAL ADVERSE EFFECT" shall mean an event, change or occurrence which, individually or together with any other event, change or occurrence, has a material adverse impact on the ability of Parent or either Purchaser to perform its obligations under this Agreement or any Ancillary Agreement or to consummate the transactions contemplated hereby and thereby.

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

"QUALIFIED CONTRACT" means an Insurance Contract issued in connection with a plan intended to qualify for tax treatment under section 401(a), 403(a),
403(b), 408 or 457 of the Code.

"RECONCILIATION" shall have the meaning set forth in Section 1.4(a).

"REINSURANCE AGREEMENTS" means the Reinsurance Agreements between each Seller and each Purchaser, substantially in the form of Exhibit 1, which set forth (i) the terms and conditions upon which certain Adjusted Statutory Reserves and Other Statutory Liabilities of such Seller will be reinsured by Purchasers, and (ii) the consideration to be paid therefor.

"REPLACEMENT TRANSACTION" means a transaction in which a new annuity contract or variable annuity contract is to be purchased by a prospective insured and the proposing producer should know that one or more existing annuity contracts or variable annuity contracts is to be lapsed, forfeited, surrendered, reduced in value or pledged as collateral for greater than 25% of the loan value set forth in the policy.

"RESERVES STATEMENT" shall have the meaning set forth in Section 1.5(b).

"RETAINED LIABILITIES" means the following:

(i) all liabilities of the Business (other than the Adjusted Statutory Reserves and Other Statutory Liabilities and obligations under contracts and agreements) that have, as of November 30, 1997, either (without duplication) (x) been accrued by a Seller on such Seller's books prepared in accordance with Applicable SAP (to the extent of the amount of such accrual) or (y) been asserted by a third party claimant in a writing received by a Seller or any of its Affiliates prior to November 30, 1997;

(ii) notwithstanding anything to the contrary contained in this Agreement, any liability for compensatory, consequential, exemplary, punitive or similar damages or other loss, or any fines or other statutory penalties, which results from (i) any claim, or (ii) any action relating to (x) any alleged or actual act, error or omission by any Seller or any of their Affiliates, agents or representatives, prior to the Closing Date, whether intentional or otherwise, or (y) any reckless conduct or bad faith by any Seller or any of their Affiliates, agents or representatives, in connection with the handling of any claim under any of the Insurance Contracts (including, but not limited to, liability arising from failure by the Seller or any of its Affiliates, agents or representatives, to settle within the limit of any policy, or by reason of alleged or actual negligence or bad faith of the Seller or any of its Affiliates, agents or representatives, in rejecting an offer of settlement or in the preparation of defense or in the trial of any action against an owner, insured or beneficiary of the Seller or any of its Affiliates, agents or representatives, or in the preparation or prosecution of an appeal consequent upon such action) or in connection with the marketing, sale, issuance, delivery, cancellation or administration of any of the Insurance Contracts (including, but not limited to, (s) failure to comply with applicable laws regulating Advertisements, requiring mandatory disclosure of policy information, requiring employment of standards to determine if the purchase of a policy or contract is suitable for an applicant, prohibiting the use of unfair methods of competition and deceptive acts or practices and regulating replacement transactions, and (t) liability arising from claims relating to Advertisements, errors or omissions relating to policy information disclosure, failure to employ standards to determine if the purchase of a policy or contract is suitable for an applicant, engaging in unfair methods of competition or deceptive acts or practices and Replacement Transactions (other than obligations to pay benefits or other amounts or to take any other actions specifically provided for under such Insurance Contracts as originally issued and subsequently amended or supplemented prior to November 30, 1997)). For the avoidance of doubt, the foregoing would include any

claims related to "market conduct" or other sales practices of any Seller, Provident, or any of their Affiliates, employees, advisers or agents;

(iii) any liability or loss incurred or suffered as a result of any claim by any present or former employee, agent or broker of a Seller or any of its Affiliates who performed or performs services in the Business, that (x) relates to the employment, agency or brokerage relationship of such present or former employee, agent or broker with such Seller or any of its Affiliates, and (y) arose out of actions, events or omissions that occurred (or, in the case of omissions, failed to occur) prior to the Closing Date;

(iv) Adjusted Statutory Reserves and Other Statutory Liabilities and Separate Account Liabilities (subject to the obligations of Purchasers under the Reinsurance Agreements and the Separate Account Transfer Agreements);

(v) pension and other post-employment liabilities for retired employees;

(vi) liabilities for Taxes of Seller;

(vii) obligations under contracts of a Seller not assigned to a Purchaser;

(viii) any liability secured by a security interest in any asset not transferred to a Purchaser;

(ix) liabilities for amounts payable prior to November 30, 1997 for returns or refunds of Premiums;

(x) liabilities for commission payments or other fees or compensation (including, without limitation, persistency bonuses), payable with respect to the Insurance Contracts to or for the benefit of brokers and service providers;

(xi) liabilities for guaranty fund assessments and similar charges imposed with respect to the Insurance Contracts based on dates of insolvency prior to November 30, 1997;

(xii) liability for reinsurance in unauthorized companies; and

(xiii) liabilities specifically excluded in this Agreement from those being assumed by Purchasers.

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

"SELLER INDEMNITEES" shall have the meaning set forth in Section 7.2(b).

"SELLER KEY PEOPLE" means the individuals set forth in Schedule 9.1(E).

"SELLER MATERIAL ADVERSE EFFECT" shall mean an event, change or occurrence which, individually or together with any other event, change or occurrence, has a material adverse impact on (i) the Business or the Transferred Assets (taken as a whole) or (ii) the ability of Provident or any Seller to perform their respective obligations under this Agreement or any Ancillary Agreement or to consummate the transactions contemplated hereby and thereby.

"SELLER PARTIES" means Provident and Sellers.

"SELLER SEPARATE ACCOUNTS" means the separate accounts of PNAC and the separate accounts of PRV, in each case identified on Schedule 9.1(F).

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

"SEPARATE ACCOUNT ADMINISTRATION AGREEMENTS" means the Separate Account Administration Agreements to be entered into between Purchasers and each of PNAC and PRV, in form and substance reasonably acceptable to the parties, which shall set forth (i) the administrative and other services, including investment management services, to be provided pending transfer of the Seller Separate Accounts to Purchasers, and (ii) the consideration to be paid therefor.

"SEPARATE ACCOUNT LIABILITIES" means those liabilities that are reflected in the Seller Separate Accounts.

"SEPARATE ACCOUNT TRANSFER AGREEMENTS" means the Transfer and Assumption Reinsurance Agreements to be entered into between Purchasers and each of PNAC and PRV, in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which certain Separate Account Liabilities of such Seller will be assumed by a Purchaser, include the receipt of all necessary governmental and Seller Separate Account contract holder approvals for the transfer of the Seller Separate Accounts to such Purchaser, the election of new members of the Seller Separate Accounts' Boards of Managers, and the approval of new Seller Separate Account investment advisory agreements, and (ii) the consideration to be paid therefor.

"SUBSIDIARY" means, with respect to any Person on a given date (i) any other Person of which a majority of the voting power of the equity securities or equity interests is owned directly or indirectly by such Person and (ii) any other Person the accounts of which, by virtue of an ownership interest in it by such Person would be consolidated, in accordance with GAAP, with those of such Person in its financial statements as of the applicable date.

"TAXES" (or "TAX" as the context may require) means (i) any tax, however denominated, imposed by any federal, state, local, municipal, territorial, provincial or foreign government or any agency or political subdivision of any such government (a "TAXING AUTHORITY"), including any tax imposed under Subtitle A of the Code and any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, gains, goods and services, production, documentary, recording, social security, unemployment,

disability, workers' compensation, estimated, ad valorem, value added, transfer, franchise, profits, license, withholding on amounts paid to or by any Seller or its Affiliates, payroll, employment, excise, severance, stamp, capital stock, occupation, personal or real property, environmental or windfall profit tax, premium, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Taxing Authority relating thereto, (ii) liability of Provident or any of its Affiliates for the payment of any amounts of the type described in (i) as a result of being a member of an affiliated, consolidated, combined or unitary group with any other corporation at any time on or prior to the Closing Date, and (iii) liability of Provident or any of its Affiliates for the payment of any amounts as a result of being a party to any Tax Sharing Agreement or with respect to the payment of any amounts of the type described in (i) or (ii) as a result of any express or implied obligation to indemnify any other Person.

"TAXING AUTHORITY" has the meaning set forth in the definition of "Taxes."

"TENNESSEE SAP" means the statutory accounting principles and practices prescribed or permitted by the Insurance Department of the State of Tennessee as applied on a basis consistent with those utilized in the preparation of 1996 Annual Statements of PLA and PNAC.

"THIRD PARTY ACCOUNTANT" shall have the meaning set forth in Section 1.4(a).

"THIRD PARTY CLAIM" shall have the meaning set forth in Section 7.4(a).

"THIRD PARTY CLAIMANT" shall have the meaning set forth in Section 7.4(a).

"TRANSFERRED ANNUITY RESERVES" shall have the meaning set forth in Section 1.5(b).

"TRANSFERRED ASSETS" means:

(i) Net Cash From the Business (if any);

(ii) Investment Assets;

(iii) all of Sellers' rights and interests under the Insurance Contracts to receive principal and interest paid on policy or contract loans on or after the Closing Date;

(iv) a receivable equal to the index option component of reserves for the contracts described in Schedule 4.18;

(v) the Books and Records; and

(vi) the Transferred Contracts,

but excluding those assets (A) specifically identified on Schedule 9.1(G), (B) described on Schedule 2.1 to the Transition Services Agreement as being made available by Sellers,

(C) the Insurance Contracts, the Seller Separate Accounts, and the policies and contracts funded by the Seller Separate Accounts, (D) reinsurance treaties and agreements, (E) cash and Investment Assets other than the Net Cash From the Business and Investment Assets specified in clauses (i) and
(ii) above, and (F) that cannot be transferred to Purchasers because of any Seller's inability to obtain the Consent of a third party required for such transfer to be effective.

"TRANSFERRED CONTRACTS" means the Assigned and Assumed Contracts, and all other contracts, assigned pursuant to the General Assignment and Assumption Agreement.

"TRANSFERRED RESERVES" shall have the meaning set forth in Section 1.3(b).

"TRANSFERRED RESERVES STATEMENT" shall have the meaning set forth in
Section 1.3(b).

"TRANSITION SERVICES AGREEMENT" means the Transition Services Agreement among Provident, each Seller and Purchasers in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which Provident and Sellers shall provide certain services and assets for a transitional period to Purchasers, and (ii) the consideration to be paid therefor.

"UMPIRE" shall have the meaning set forth in Section 7.8.

"VALIC CONTRACTS" means the Insurance Contracts written in the States of New York, New Hampshire and Vermont.

"VALUATION" shall have the meaning set forth in Section 1.3(a).

"VALUER" shall have the meaning set forth in Section 1.3(a).

"WNL CONTRACTS" means all of the Insurance Contracts other than the VALIC Contracts.

(a) Except as otherwise provided in this Agreement and this Section 9.2, each of Parent and Provident shall bear and pay all direct costs and expenses incurred by them, or on their behalf, in connection with the transactions contemplated hereunder.

(b) Notwithstanding the foregoing, if this Agreement is terminated (i) by Provident pursuant to Section 8.1(d) or (ii) by either party pursuant to
Section 8.1(e) and the failure of the Closing to occur by the date specified in
Section 8.1(e) resulted principally from the failure to satisfy any one or more of the conditions set forth in Sections 6.1, 6.2 or 5.6, then Parent shall promptly pay Provident the sum of all the reasonable out-of-pocket costs and expenses of Provident and the Sellers, including costs of counsel, investment bankers, actuaries and accountants associated with this Agreement and the transactions contemplated hereby, provided however, that such sum shall not exceed $1,200,000.

(c) Notwithstanding the foregoing, if this Agreement is terminated (i) by Parent pursuant to Section 8.1(c) or (ii) by either party pursuant to Section 8.1(e) and the failure of the Closing to occur by the date specified in Section 8.1(e) resulted principally from the failure to satisfy any one or more of the conditions set forth in Sections 5.1, 5.2 or 5.4, then Provident shall promptly pay Parent the sum of all the reasonable out-of-pocket costs and expenses of Parent and the Purchasers, including costs of counsel, investment bankers, actuaries and accountants associated with this Agreement and the transactions contemplated hereby, provided however, that such sum shall not exceed $1,200,000.

(d) Any dispute between the parties arising out of this Section 9.2 shall be referred for arbitration pursuant to Section 7.8.

(e) The parties acknowledge that the loss to any party resulting from breach of this Agreement by any other party or other failure of the transactions contemplated hereby to be consummated is not susceptible of ready measurement and, therefore, that the payments provided in this Section 9.2 are intended by the parties to constitute liquidated damages for any breach by a party of the terms of this Agreement, and not a penalty.

requested, or by express mail. Any such notice shall be deemed given when so delivered personally, telegraphed, telexed or sent by facsimile transmission, as follows:

(i) if to Parent or Purchasers:

American General Corporation 2929 Allen Parkway
Houston, Texas 77019
Attention: Mark S. Berg, Esq Telecopier No.: (713) 831-1266

With a concurrent copy to:

Skadden, Arps, Slate, Meagher & Flom LLP 919 Third Avenue
New York, New York 10022
Attention: Morris Kramer, Esq Telecopier No.: (212) 735-2000

(ii) If to Provident or any Seller:

Provident Companies, Inc.
1 Fountain Square
Chattanooga, Tennessee 37402 Attention: F. Dean Copeland Telecopier No.: (423) 755-2590

With a concurrent copy to:

Alston & Bird LLP
One Atlantic Center
1201 West Peachtree Street
Atlanta, Georgia 30309-3424 Attention: David E. Brown, Jr.

Telecopier No.: (404) 881-4777

Any party may, by notice given in accordance with this Section 9.4 to the other parties, designate another address or person for receipt of notices hereunder provided that notice of such a change shall be effective upon receipt.

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

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

(c) For purposes of this Agreement, the words "hereof," "herein," "hereby" and other words of similar import refer to this Agreement as a whole unless otherwise indicated. Whenever the singular is used herein, the same shall include the plural, and whenever the plural is used herein, the same shall include the singular, where appropriate. All dollar references in this Agreement are to the currency of the United States.

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

PROVIDENT COMPANIES, INC.

BY: /s/ Thomas R. Watjen
   ---------------------------------

PROVIDENT LIFE AND ACCIDENT INSURANCE COMPANY

BY: /s/ Thomas R. Watjen
   ---------------------------------

PROVIDENT NATIONAL ASSURANCE COMPANY

BY: /s/ Thomas R. Watjen
   ---------------------------------

THE PAUL REVERE LIFE INSURANCE COMPANY

BY: /s/ Thomas R. Watjen
   -----------------------------------

THE PAUL REVERE VARIABLE ANNUITY INSURANCE COMPANY

BY: /s/ Thomas R. Watjen
   -----------------------------------

THE PAUL REVERE PROTECTIVE LIFE INSURANCE COMPANY

BY: /s/ Thomas R. Watjen
   -----------------------------------

AMERICAN GENERAL CORPORATION

BY: /s/ Jon P. Newton
   -----------------------------------

WESTERN NATIONAL LIFE INSURANCE COMPANY

BY: /s/ Michael J. Akers
   ----------------------------------

THE VARIABLE ANNUITY LIFE INSURANCE COMPANY

BY: /s/ Jon P. Newton
   -----------------------------------

March 24, 1998

This letter agreement confirms and documents the agreement among the undersigned as to certain modifications to the Asset Transfer and Acquisition Agreement, dated as of December 8, 1997 (the "Agreement"), entered into by and among Provident Companies, Inc., Provident Life and Accident Insurance Company, Provident National Assurance Company, The Paul Revere Life Insurance Company, The Paul Revere Variable Annuity Insurance Company, The Paul Revere Protective Life Insurance Company, and American General Corporation, American General Annuity Insurance Company (formerly Western National Life Insurance Company), and The Variable Annuity Life Insurance Company. Capitalized terms used but not otherwise defined herein are intended to have the meanings assigned to them in the Agreement.

IN WITNESS WHEREOF, the undersigned have executed this letter agreement as of the date above.

PROVIDENT COMPANIES, INC.

 /s/ F. Dean Copeland
-----------------------
Name:  F. Dean Copeland
Title: Executive Vice President

PROVIDENT LIFE AND ACCIDENT
INSURANCE COMPANY

 /s/ F. Dean Copeland
-----------------------
Name:  F. Dean Copeland
Title: Executive Vice President

PROVIDENT NATIONAL ASSURANCE
COMPANY

 /s/ F. Dean Copeland
-----------------------
Name:  F. Dean Copeland
Title: Executive Vice President

THE PAUL REVERE LIFE
INSURANCE COMPANY

 /s/ F. Dean Copeland
-----------------------
Name:  F. Dean Copeland
Title: Executive Vice President

THE PAUL REVERE VARIABLE ANNUITY
INSURANCE COMPANY

 /s/ F. Dean Copeland
-----------------------
Name:  F. Dean Copeland
Title: Executive Vice President

THE PAUL REVERE PROTECTIVE LIFE
INSURANCE COMPANY

 /s/ F. Dean Copeland
-------------------------------
Name:  F. Dean Copeland
Title: Executive Vice President

AMERICAN GENERAL CORPORATION

/s/ Nicholas R. Rasmussen
-------------------------------
Name:  Nicholas R.Rasmussen
Title: Senior Vice President-
       Corporate Development

AMERICAN GENERAL ANNUITY
INSURANCE COMPANY (formerly Western
National Life Insurance Company)

/s/ Michael J. Akers
--------------------------------
Name:  Michael J. Akers
Title: Executive Vice President
       and Chief Financial Officer

THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY

/s/ Craig R. Rodby
---------------------------------
Name:  Craig R. Rodby
Title: Vice Chairman

May 15, 1998

This letter agreement confirms and documents the agreement among the undersigned as to certain modifications to the Asset Transfer and Acquisition Agreement, dated as of December 8, 1997 (as amended hereby and by the letter agreement dated March 24, 1998 (the "March Amendment"), the "Agreement"), entered into by and among Provident Companies, Inc., Provident Life and Accident Insurance Company, Provident National Assurance Company, The Paul Revere Life Insurance Company, The Paul Revere Variable Annuity Insurance Company, The Paul Revere Protective Life Insurance Company, and American General Corporation, American General Annuity Insurance Company (formerly Western National Life Insurance Company), and The Variable Annuity Life Insurance Company. Capitalized terms used but not otherwise defined herein are intended to have the meanings assigned to them in the Agreement.

WHEREAS, in the course of its pre-closing investigation of the business and operations of Sellers pursuant to Section 4.3 of the Agreement, Parent and Purchasers have become aware of certain material inaccuracies in the representations of Provident and Sellers contained in Section 2.08(d) and
Section 2.14 of the Agreement; and

WHEREAS, Parent and Purchasers have requested that Provident and Sellers take, and Provident and Sellers have agreed to take, remedial actions including, without limitation, the actions described in Paragraph 1 hereof; and

WHEREAS, the parties desire to bifurcate the Closing contemplated by the Agreement, as described in Paragraph 2 hereof, and clarify certain closing matters; and

WHEREAS, certain modifications to the Agreement are necessary or desirable in order to obtain the approval of the state insurance departments, as described in Paragraphs 3 and 4 hereof;

NOW, THEREFORE, in consideration of the foregoing, the parties hereto do hereby agree as follows:

any Modified Loan Procedures or distribution of a related Loan Notice, shall constitute Retained Liabilities.

(ii) In the event that the remedial actions set forth herein and agreed to by the parties is not sufficient to cure any inaccuracies in the representations of Provident and Sellers with respect to
Section 2.8(d) and Section 2.14 of the Agreement, Provident and Sellers hereby agree to execute and deliver all other documents and instruments and take all other remedial action as may be necessary to effect the cure of such inaccuracies.

(iii) Nothing herein is intended to limit the indemnification or other rights of Parent or Purchasers under the terms of the Agreement, which shall remain in full force and effect, as supplemented by this letter agreement.

(b) The reference to May 31, 1998 in Paragraph 1 of the letter agreement dated March 24, 1998, executed by the parties hereto, is hereby replaced with a reference to "June 30, 1998."

(c) With respect to the AGAIC Closing, the term "Closing Date" shall mean the date on which the Investment Assets applicable to the WNL Contracts are authorized for transfer to AGAIC. With respect to the VALIC Closing, the term "Closing Date" shall mean the date on which the Investment Assets applicable to the VALIC Contracts are authorized for transfer to VALIC.

(d) The parties acknowledge that the Transferred Assets for the AGAIC Closing and the VALIC Closing will not include any (i) Books and Records, (ii) Transferred Contracts, or (iii) lockboxes and bank accounts. Therefore, the parties agree that the Bills of Sale and

the General Assignment and Assumption Agreements are hereby waived as closing conditions pursuant to Sections 1.6, 5.1, 6.1 and 9.8 of the Agreement.

(e) With respect to the AGAIC Closing and the VALIC Closing, the term "Insurance Contracts" shall include the contracts issued by Sellers on or before November 15, 1998, on applications dated on or before May 15, 1998.

(g) At the AGAIC Closing, Provident and Sellers shall deliver to Parent and Purchasers the Preliminary Reconciliation contemplated by Section 1.3(e) of the Agreement with respect to the portion of the Business represented by the WNL Contracts (provided that such Preliminary Reconciliation shall cover the period through March 31, 1998), and the parties shall make the payments contemplated by the second sentence of Section 1.3(e) of the Agreement based upon the amounts reflected therein. If the VALIC Closing occurs prior to the delivery of the Reconciliation contemplated by Paragraph 2(h) hereof, Provident and Sellers shall deliver to Parent and Purchasers, at the VALIC Closing, the Preliminary Reconciliation contemplated by Section 1.3(e) of the Agreement with respect to the portion of the Business represented by the VALIC Contracts (provided that such Preliminary Reconciliation shall cover the period through March 31, 1998), and the parties shall make the payments contemplated by the second sentence of Section 1.3(e) of the Agreement based upon the amounts reflected therein. If the VALIC Closing occurs at or after the delivery of the Reconciliation contemplated by Paragraph 2(h) hereof, and on or before June 30, 1998, the Reconciliation so delivered will include, in lieu of a separate Preliminary Reconciliation with respect to the VALIC Contracts, a separate computation of such cash payment as may be required to be made at the VALIC Closing, and the parties shall make the payments contemplated by the second sentence of Section 1.3(e) of the Agreement based upon the amounts reflected therein.

(h) Provident shall, on or before June 30, 1998, prepare the Reconciliation contemplated by Section 1.4(a) of the Agreement with respect to the portion of the Business represented by the WNL Contracts and the portion of the Business represented by the VALIC Contracts, reflecting a proposed reconciliation of Net Cash From the Business through April 30, 1998. Such Reconciliation shall separately reflect a reconciliation of the Net Cash From the Business attributable to the WNL Contracts. The parties shall utilize the

procedures set forth in Section 1.4 of the Agreement to determine the amount of cash or securities, if any, to be transferred from one party to the other by reason of any difference between the Preliminary Reconciliation payments made pursuant to Paragraph 2(g) hereof and the Final Reconciliation determined pursuant to Section 1.4 of the Agreement.

(b) In the event the amount of Net Cash From the Business reflected on the Final Reconciliation exceeds the amount of Net Cash From the Business reflected on the Preliminary Reconciliation, Sellers shall transfer to Purchasers additional cash equal to the amount of such difference. In the event the amount of Net Cash From the Business reflected on the Preliminary Reconciliation exceeds the amount of Net Cash From the Business reflected on the Final Reconciliation, Purchasers shall transfer to Sellers additional cash or securities held in the Pool equal to the amount of such difference. Any transfer of cash required under this Section 1.4 shall be made within ten Business Days of the date of the delivery of the Final Reconciliation to Purchasers, together with interest thereon from and including the Closing Date to but not including the date of such transfer, computed at an Annual Rate equal to the 90-day Treasury Rate in effect on the Closing Date.

IN WITNESS WHEREOF, the undersigned have executed this letter agreement as of the date above.

PROVIDENT COMPANIES, INC.

 /s/ Henry T. Hardin III
------------------------------------------
Name:  Henry T. Hardin III
Title: Vice President and Senior Counsel

PROVIDENT LIFE AND ACCIDENT
INSURANCE COMPANY

 /s/ Henry T. Hardin III
------------------------------------------
Name:  Henry T. Hardin III
Title: Vice President and Senior Counsel

PROVIDENT NATIONAL ASSURANCE
COMPANY

 /s/ Henry T. Hardin III
------------------------------------------
Name:  Henry T. Hardin III
Title: Vice President and Senior Counsel

THE PAUL REVERE LIFE INSURANCE
COMPANY

 /s/ Henry T. Hardin III
------------------------------------------
Name:  Henry T. Hardin III
Title: Vice President and Senior Counsel

THE PAUL REVERE VARIABLE ANNUITY
INSURANCE COMPANY

 /s/ Henry T. Hardin III
------------------------------------------
Name:  Henry T. Hardin III
Title: Vice President and Senior Counsel

THE PAUL REVERE PROTECTIVE LIFE
INSURANCE COMPANY

 /s/ Henry T. Hardin III
------------------------------------------
Name:  Henry T. Hardin III
Title: Vice President and Senior Counsel

AMERICAN GENERAL CORPORATION

/s/ Nicholas R. Rasmussen
------------------------------------------
Name:  Nicholas R. Rasmussen
Title: Senior Vice President--
       Corporate Development

AMERICAN GENERAL ANNUITY INSURANCE
COMPANY (formerly Western National Life
Insurance Company)

 /s/ Michael J. Akers
------------------------------------------
Name:  Michael J. Akers
Title: Executive Vice President

THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY

 /s/ Craig R. Rodby
------------------------------------------
Name:  Craig R. Rodby
Title: Vice Chairman

EXHIBIT A

ENDORSEMENTS

Group Annuity Contract/Certificate Amendment

The tax qualification of the Tax-Sheltered Annuity (TSA) Contract and Certificates thereto require that:

1. The Tax-Sheltered Annuity (TSA) Contract is established for the exclusive benefit of the Participants and their Beneficiaries. Each Participant's interest is nonforfeitable. A Participant's interest in the Contract is not transferable.

2. Purchase Payments are flexible. Purchase Payments in any taxable year may not exceed the limits described in Sections 403(b), 415(c), or 402(g) of the Internal Revenue Code of 1986, as amended ("Code"), as applicable to the type of contribution being made, and taking into account such other contributions as are required to be aggregated with the Purchase payments in applying these limits. The preceding limits shall not apply to a rollover contribution or a direct transfer permitted under the Code. Purchase Payments must be in cash only.

3. "Includible Compensation" means, in the case of any employee, the amount of compensation which is received from the employer described in Code Section
403(b)(1)(A), and which is includible in gross income (computed without regard to Code Section 911) for the most recent period (ending not later than the close of the taxable year) which under Code Section 403(b)(4) may be counted as one year of service. Such term does not include any amount contributed by the employer for any annuity contact to which Code Section 403(b) applies or any other employee pre-tax salary reductions, except to the extent permitted under Code Section 403(b).

4. Except to the extent of any amounts which have been held in 403(b) annuity contract or custodial account since December 31, 1986, the entire interest of the Participant Account must commence to be distributed to him not later than April 1 immediately following the calendar year in which he attains age 70 1/2, or retires, whichever is later. The distribution may be made to the individual either in a lump sum or in amounts to be paid over (a) the life of the Participant, or the lives of the Participant and his beneficiary, or (b) a period certain not extending beyond the life expectancy of the Participant, or the life expectancies of the Participant and his beneficiary. The entire interest of the Participant Account shall also be subject to the appropriate incidental benefit requirements of Code Sections 403(b)(10) and 401(a)(9). The life expectancy of the Participant and of a beneficiary that is the Participant's spouse shall be recalculated each year unless the Participant otherwise elects. Life expectancies shall be determined as provided in Code Section 401(a)(9). Required distributions from a TSA are not eligible for tax-free rollovers.

5. To qualify as a contract which can defer compensation under an Internal Revenue Code Section 403(b) annuity contract, the withdrawal restrictions under Internal Revenue Code Section 403(b)(11) must be met.

To the extent required under Code Section 403(b)(11), withdrawals of contributions to an annuity contract which were made pursuant to a salary reduction agreement, and of earnings attributable to such contributions, may be paid only upon or after attainment of age 59 1/2, separation from service, death, total or permanent disability (as defined in Internal Revenue Code Section 72(m)(7)) or in the case of hardship (as defined in the Treasury Regulations). The hardship exception applies only to the salary reduction contributions and not to any income attributed to such contributions. The same or similar restrictions shall apply to all amounts transferred from a Code Section 403(b)(7) custodial account.

There is an additional tax on early distributions from your TSA before you reach age 59 1/2. Except as otherwise provided in the Code, the tax is 10% of the taxable portion of the distribution. Exceptions to the additional tax, which are subject to legislative revisions, generally include distributions: (1) to an employee who has separated from service, if those distributions are part of a scheduled series of substantially equal periodic payments for the life of the Participant (or the joint lives of the Participant and the Participant's beneficiary) or the life expectancy of the Participant (or the joint life expectancies of the Participant and the Participant's beneficiary); (2) to an employee who has separated from service after attaining age 55; (3) a distribution which is used to pay medical expenses to the extent the expenses are deductible under Sec. 213 (determined without regard to whether the taxpayer itemizes deductions);
(4) distributions after the death of the employee; (5) distributions after the disability of the employee.

6. Upon the death of the Participant, the following distribution provisions shall take effect:

(a) If the Participant dies after distribution of his interest has commenced, the remaining portion of such interest will continue to be distributed at least as rapidly as under the method of distribution being used prior to the Participant's death.

(b) If the Participant dies before distribution of his interest commences, the Participant's entire interest will be distributed no later than 5 years after the Participant's death. If any portion of the Participant's interest is payable to a designated Beneficiary, distributions may be made in equal installments over the life expectancy of the designated Beneficiary, commencing no later than 1 year after the Participant's death.

If the designated Beneficiary is the Participant's Surviving Spouse, the Surviving Spouse may elect to treat the contract as his or her own to the extent permitted under the Code.

(c) Where the survivor payee is a person other than the Participant's Spouse, an election under Option III - Joint and Survivor Life Annuity, can be made only if the present value of the Annuity payments to be paid to the Participant exceeds 50 percent of the present value of the Annuity payments to be paid to the Participant and his or her survivor.

7. The Participant will, at all times, be 100% vested in the value of the Participant Account.

8. If any benefit payable to the Participant under this Contract or Certificate constitutes an "eligible rollover distribution" within the meaning of Section 402 of the Code, the Participant may elect to have such distribution paid directly to an "eligible retirement plan" in a transaction designated under the Code as a "direct rollover." Before any eligible rollover distribution is made, the Participant will be provided a written explanation of his or her rights to make a direct rollover and the consequences of not making a direct rollover. No surrender, withdrawal, or other benefit distribution that constitutes an eligible rollover distribution will be made to the Participant under the Contract or Certificate unless the Code's requirements applicable to eligible rollover distribution have been satisfied.

9. Separate records will be maintained for the interest of each Participant.

10. The Company, as issuer of a Tax-Sheltered Annuity (TSA), shall furnish annual calendar year reports concerning the status of such Annuity.

All provisions of the Contract and Certificate stay the same except where changed by this Endorsement. The Date of Issue of this Endorsement is the same as that of the Contract or the Certificate, as applicable.

Signed for the Company at Worcester, Massachusetts.

[Insert Company Name]

Secretary

Individual Annuity Amendment

The tax qualification of the Tax-Sheltered Annuity (TSA) Contract and Certificates thereto require that:

1. The Tax-Sheltered Annuity (TSA) Contract is established for the exclusive benefit of the Participants and their Beneficiaries. Each Participant's interest is nonforfeitable. A Participant's interest in the Contract is not transferable.

2. Purchase Payments are flexible. Purchase Payments in any taxable year may not exceed the limits described in Sections 403(b), 415(c), or 402(g) of the Internal Revenue Code of 1986, as amended ("Code"), as applicable to the type of contribution being made, and taking into account such other contributions as are required to be aggregated with the Purchase payments in applying these limits. The preceding limits shall not apply to a rollover contribution or a direct transfer permitted under the Code. Purchase Payments must be in cash only.

3. "Includible Compensation" means, in the case of any employee, the amount of compensation which is received from the employer described in Code Section
403(b)(1)(A), and which is includible in gross income (computed without regard to Code Section 911) for the most recent period (ending not later than the close of the taxable year) which under Code Section 403(b)(4) may be counted as one year of service. Such term does not include any amount contributed by the employer for any annuity contact to which Code Section 403(b) applies or any other employee pre-tax salary reductions, except to the extent permitted under Code Section 403(b).

4. Except to the extent of any amounts which have been held in a 403(b) annuity contract or custodial account since December 31, 1986, the entire interest of the Participant Account must commence to be distributed to him not later than April 1 immediately following the calendar year in which he attains age 70 1/2, or retires, whichever is later. The distribution may be made to the individual either in a lump sum or in amounts to be paid over
(a) the life of the Participant, or the lives of the Participant and his beneficiary, or (b) a period certain not extending beyond the life expectancy of the Participant, or the life expectancies of the Participant and his beneficiary. The entire interest of the Participant Account shall also be subject to the appropriate incidental benefit requirements of Code Sections 403(b)(10) and 401(a)(9). The life expectancy of the Participant and of a beneficiary that is the Participant's spouse shall be recalculated each year unless the Participant otherwise elects. Life expectancies shall be determined as provided in Code Section 401(a)(9). Required distributions from a TSA are not eligible for tax-free rollovers.

5. To qualify as a contract which can defer compensation under an Internal Revenue Code Section 403(b) annuity contract, the withdrawal restrictions under Internal Revenue Code Section 403(b)(11) must be met.

To the extent required under Code Section 403(b)(11), withdrawals of contributions to an annuity contract which were made pursuant to a salary reduction agreement, and of earnings attributable to such contributions, may be paid only upon or after attainment of age 59 1/2, separation from service, death, total or permanent disability (as defined in Internal Revenue Code Section 72(m)(7)) or in the case of hardship (as defined in the Treasury Regulations). The hardship exception applies only to the salary reduction contributions and not to any income attributed to such contributions. The same or similar restrictions shall apply to all amounts transferred from a Code Section 403(b)(7) custodial account.

There is an additional tax on early distributions from your TSA before you reach age 59 1/2. Except as otherwise provided in the Code, the tax is 10% of the taxable portion of the distribution. Exceptions to the additional tax, which are subject to legislative revisions, generally include distributions: (1) to an employee who has separated from service, if those distributions are part of a scheduled series of substantially equal periodic payments for the life of the Participant (or the joint lives of the Participant and the Participant's beneficiary) or the life expectancy of the Participant (or the joint life expectancies of the Participant and the Participant's beneficiary); (2) to an employee who has separated from service after attaining age 55; (3) a distribution which is used to pay medical expenses to the extent the expenses are deductible under Sec. 213 (determined without regard to whether the taxpayer itemizes deductions); (4) distributions after the death of the employee; (5) distributions after the disability of the employee.

6. Upon the death of the Participant, the following distribution provisions shall take effect:
(a) If the Participant dies after distribution of his interest has commenced, the remaining portion of such interest will continue to be distributed at least as rapidly as under the method of distribution being used prior to the Participant's death.

(b) If the Participant dies before distribution of his interest commences, the Participant's entire interest will be distributed no later than 5 years after the Participant's death. If any portion of the Participant's interest is payable to a designated Beneficiary, distributions may be made in equal installments over the life expectancy of the designated Beneficiary, commencing no later than 1 year after the Participant's death.

If the designated Beneficiary is the Participant's Surviving Spouse, the Surviving Spouse may elect to treat the contract as his or her own to the extent permitted under the Code.

(c) Where the survivor payee is a person other than the Participant's Spouse, an election under Option III - Joint and Survivor Life Annuity, can be made only if the present value of the Annuity payments to be paid to the Participant exceeds 50 percent of the present value of the Annuity payments to be paid to the Participant and his or her survivor.

7. The Participant will, at all times, be 100% vested in the value of the Participant Account.

8. If any benefit payable to the Participant under this Contract or Certificate constitutes an "eligible rollover distribution" within the meaning of Section 402 of the Code, the Participant may elect to have such distribution paid directly to an "eligible retirement plan" in a transaction designated under the Code as a "direct rollover." Before any eligible rollover distribution is made, the Participant will be provided a written explanation of his or her rights to make a direct rollover and the consequences of not making a direct rollover. No surrender, withdrawal, or other benefit distribution that constitutes an eligible rollover distribution will be made to the Participant under the Contract or Certificate unless the Code's requirements applicable to eligible rollover distributions have been satisfied.

9. Separate records will be maintained for the interest of each Participant.

10. The Company, as issuer of a Tax-Sheltered Annuity (TSA), shall furnish annual calendar year reports concerning the status of such Annuity.

All provisions of the Contract and Certificate stay the same except where changed by this Endorsement. The Date of Issue of this Endorsement is the same as that of the Contract or the Certificate, as applicable.

Signed for the Company at Worcester, Massachusetts.

[Insert Company Name]

Secretary

EXHIBIT B

EXCLUDED INVESTMENT ASSETS

June 29, 1998

This letter agreement confirms and documents the agreement among the undersigned as to certain modifications to the Asset Transfer and Acquisition Agreement, dated as of December 8, 1997 (as supplemented hereby and by the letter agreements dated March 24, 1998, and May 15, 1998, the "Agreement"), entered into by and among Provident Companies, Inc., Provident Life and Accident Insurance Company, Provident National Assurance Company, The Paul Revere Life Insurance Company, The Paul Revere Variable Annuity Insurance Company, The Paul Revere Protective Life Insurance Company, and American General Corporation, American General Annuity Insurance Company (formerly Western National Life Insurance Company) ("AGAIC"), and The Variable Annuity Life Insurance Company ("VALIC"). Capitalized terms used but not otherwise defined herein are intended to have the meanings assigned to them in the Agreement.

Notwithstanding anything herein to the contrary, the parties acknowledge and agree that no transaction among the insurance companies shall predate January 1, 1998.

(a) Schedule 1.3(A) shall be prepared as a listing of investment assets (the "Initial Seller Portfolio") included in the pool (the "Pool"), together with their market values as of January 1, 1998, as agreed to by the parties. Sellers shall segregate the assets constituting the Pool on their books and records and shall maintain records of all transactions in assets included in the Pool from time to time through the Closing Date. Pursuant to the Subadvisory Agreement, Parent shall serve as subadvisor in respect of the Pool and pursuant to such authority shall have the authority to direct the disposition of investment securities included in the Pool and to direct the purchase of investment securities for inclusion in the Pool (such purchases to be funded from Net Cash From the Business (as defined herein) then available). On each Business Day Provident will produce and deliver to Parent a good faith estimate of the Net Cash From the Business through the close of business on the preceding Business Day, which estimate will be prepared on a basis consistent with Provident's existing internal reporting systems and procedures. Provident and Parent agree that Net Cash From the Business reflected in the daily good faith estimates thereof shall be available for investment by such subadvisor on the Business Day following delivery of such estimate.

(c) In addition, prior to the Closing Date, Provident and Sellers shall deliver to Parent and Purchasers an estimated reconciliation of Net Cash From the Business through the Closing Date (the "Preliminary Reconciliation") and a certification of the treasurer of Provident that all items on the Preliminary Reconciliation were estimated in good faith by Sellers and were based upon the books and records of Sellers. If (i) the Net Cash From the Business reflected on the Preliminary Reconciliation is a positive number, Sellers will pay to Purchasers cash in an amount equal to such amount; and (ii) if the Net Cash From the Business reflected on the Preliminary Reconciliation is a negative number, Purchasers will pay to Sellers at Closing cash in such amount.

Cross-references to the subparagraphs of Section 1.3 of the Agreement shall be changed, as appropriate, to reflect the foregoing restatement.

"(a) The ceding commission is $38.6 million (the "Ceding Commission")."

The parties agree that Section 1.5(c) of the Agreement shall be deleted in its entirety, and the following substituted in its place:

"(c) If (i) the amount of Final Annuity Reserves shown on the Final Reserves Statement exceeds 97.45% of the amount of Transferred Annuity Reserves, Parent shall pay to Provident an amount in cash equal to the percentage increase in such reserves multiplied by $58 million, and if (ii) the amount of Final Annuity Reserves shown on the Final Reserves Statement is less than 97.45% of the amount of Transferred Annuity Reserves, Provident shall pay to Parent an amount in cash equal to the percentage decrease in such reserves multiplied by $58 million. In no event shall the payment required by the preceding sentence exceed $11.6 million. Any such payment shall be made within ten Business Days of the date of resolution of all disputed items (or, if there is no dispute, after the parties reach agreement on the amount of Final Annuity Reserves included in the Final Reserves Statement). Any transfer of cash required under this Section 1.5 shall be made within ten Business Days of the date of the delivery of the Final Reconciliation to Purchasers, together with interest thereon from and including November 30, 1997 to but not including the date of such transfer, computed at an Annual Rate equal to the 90-day Treasury Rate in effect on November 30, 1997."

(a) Schedule 1.7(A) shall be prepared as a listing of investment assets (the "Preliminary Investment Assets") which Provident and Parent have agreed may be included in the Initial Holding Company Portfolio (as defined herein), together with an estimate of the Initial Cash Position (as defined herein) (such estimate, the "Estimated Initial Cash Position"). Provident has appointed Morgan Stanley, Dean Witter, Discover & Co. and Parent has appointed Bear, Stearns & Co., Inc.. and the parties have jointly appointed Credit Suisse First Boston Corporation (each of Morgan Stanley, Dean Witter, Discover & Co., Bear, Stearns & Co., Inc. and Credit Suisse First Boston Corporation being referred to individually as a "Valuer" and together as the "Valuers"). Provident and Parent shall each be responsible for the cost, if any, of the preparation of the Valuations produced by their respective Valuers and shall be jointly responsible for the cost, if any, of the Valuation prepared by Credit Suisse First Boston Corporation. Each Valuer shall produce a valuation of the Preliminary Investment Assets, based on the midpoint of the bid-ask spread, as of 4:00 p.m., New York City time, on December 8, 1997 (each such

valuation referred to as a "Valuation" and together as the "Valuations"). The "Agreed Value" of each Preliminary Investment Asset shall be (i) the middle Valuation thereof plus (ii) the amount of investment income accrued on such Preliminary Investment Asset as of November 30, 1997.

(b) As soon as practicable after the date of this Agreement, Provident shall deliver to Parent a statement ("Transferred Reserves Statement") setting forth the determination of the amount of Adjusted Statutory Reserves and Other Statutory Liabilities attributable to the Insurance Contracts in force as of November 30, 1997 (the "Transferred Reserves"), which amounts shall be determined in accordance with Applicable SAP consistently applied. Parent shall have the opportunity to review the Transferred Reserves Statement and Provident shall make available its personnel and relevant work papers as reasonably requested by Parent in connection with such review, for a period not to exceed 15 Business Days following delivery of the Transferred Reserves Statement. Any changes in the Transferred Reserves Statement that are agreed to by Parent and Provident within such 15-Business-Day period shall be incorporated into a final Transferred Reserves Statement (the "Final Transferred Reserves Statement"). If Parent and Provident are unable to agree with respect to the amount of the Transferred Reserves included in the Final Transferred Reserves Statement, they shall submit the dispute to an independent actuarial firm jointly selected by them (or selected by their respective actuarial advisors) (the "Independent Actuary"), whose determination of the amount of the Transferred Reserves shall be final and binding and reflected in the Final Transferred Reserves Statement; provided, that such amount shall be within the range of dollar amounts proposed by Parent and Provident, respectively.

Company Pool and to direct the purchase of investment securities for inclusion in the Holding Company Pool (such purchases to be funded from Net Cash Balance (as defined herein) then available, which shall include on December 8, 1997, an amount equal to the Estimated Initial Cash Position, together with interest thereon from November 30, 1997 to, but not including, December 8, 1997, computed at an Annual Rate equal to the 90-day Treasury Rate in effect on November 30, 1997). On each Business Day Provident will produce and deliver to Parent a good faith estimate of the Net Cash Balance through the close of business on the preceding Business Day, which estimate will be prepared on a basis consistent with Provident's existing internal reporting systems and procedures. Provident and Parent agree that (i) the Estimated Initial Cash Position shall be available for investment by the sub-advisor under the Subadvisory Agreement as of 4:00 p.m., New York City time, on December 8, 1997, (ii) the Initial Cash Position Difference (if a positive number) shall be available for investment by such subadvisor on the Business Day following its determination, and (iii) Net Cash Balance reflected in the daily good faith estimates thereof shall be available for investment by such subadvisor on the Business Day following delivery of such estimate.

(e) Provident shall, on or before the date that is 60 days after the Closing Date, prepare a proposed reconciliation (the "Holding Company Reconciliation") of the Net Cash Balance and the unrealized gains in the Holding Company Portfolio as of December 31, 1997 (the "Unrealized Gains") and a certification of the treasurer of Provident that all items on the Holding Company Reconciliation were determined in good faith by Provident and were based upon the books and records of Provident. Promptly after its preparation, Provident shall deliver copies of the Holding Company Reconciliation to Parent. Parent shall have the right to review the Holding Company Reconciliation and comment thereon for a period of 45 days after receipt thereof. Provident agrees that Parent and its accountants may have access to the accounting records of Provident relating to the preparation of the Holding Company Reconciliation for the purpose of conducting their review. Any changes in the Holding Company Reconciliation that are agreed to by Parent and Provident within such 45-day-period shall be incorporated into a final reconciliation of Net Cash Balance (the "Final Holding Company Reconciliation"). In the event that Purchasers and Provident are unable to agree on the manner in which any item or items should be treated in the preparation of the Final Holding Company Reconciliation within such 45-day period, separate written reports of such item or items shall be made in concise form and shall be referred to such independent accounting firm as Parent and Provident shall mutually designate (the firm making such determination is referred to herein as the "Third Party Accountant"). The Third Party Accountant shall determine as promptly as practicable the manner in which such item or items shall be treated on the Final Holding Company Reconciliation; provided, however, that the dollar amount of each item in dispute shall be determined within the range of dollar amounts proposed by Provident and Parent, respectively. The determinations by the Third Party Accountant as to the items in dispute shall be in writing and shall be binding and conclusive on the parties and shall be so reflected in the Final Holding Company Reconciliation. The fees, costs and expenses of retaining the Third Party Accountant shall be shared equally by the parties. Following the resolution of all disputed items (or, if there is no dispute, promptly after the parties reach agreement on the Final Holding Company Reconciliation), Provident shall prepare the Final Holding Company Reconciliation and shall deliver copies of such Final Holding Company Reconciliation and such calculation to Parent.

be made within ten Business Days of the date of the delivery of the Final Holding Company Reconciliation to Parent, together with interest thereon from and including the Closing Date to but not including the date of such transfer, computed at an Annual Rate equal to the 90-day Treasury Rate in effect on the Closing Date."

"Purchasers acknowledge that Sellers do not guaranty the profitability of the Reinsured Contracts."

"Notwithstanding the foregoing, with respect to the VALIC Contracts to which PNAC and PRL are parties, Sellers shall set all non-guaranteed elements of the Reinsured Contracts from and after the Effective Time (as defined in the respective Reinsurance Agreements), taking into account the recommendations of the Purchasers with respect thereto."

[Signatures on Following Pages]

IN WITNESS WHEREOF, the undersigned have executed this letter agreement as of the date above.

PROVIDENT COMPANIES, INC.

/s/ Henry T. Hardin III
--------------------------
Henry T. Hardin III
Vice President and
Assistant General Counsel

PROVIDENT LIFE AND ACCIDENT
INSURANCE COMPANY

/s/ Henry T. Hardin III
--------------------------
Henry T. Hardin III
Vice President and
Assistant General Counsel

PROVIDENT NATIONAL ASSURANCE
COMPANY

/s/ Henry T. Hardin III
--------------------------
Henry T. Hardin III
Vice President and
Assistant General Counsel

THE PAUL REVERE LIFE INSURANCE
COMPANY

/s/ Henry T. Hardin III
--------------------------
Henry T. Hardin III
Vice President and
Assistant General Counsel

THE PAUL REVERE VARIABLE ANNUITY
INSURANCE COMPANY

 /s/ Henry T. Hardin III
--------------------------
 Henry T. Hardin III
 Vice President and
 Assistant General Counsel

THE PAUL REVERE PROTECTIVE LIFE
INSURANCE COMPANY

/s/ Henry T. Hardin III
--------------------------
Henry T. Hardin III
Vice President and
Assistant General Counsel

AMERICAN GENERAL CORPORATION

/s/ Nicholas R. Rasmussen
----------------------------
Name:  Nicholas R. Rasmussen
Title: Senior Vice President-Corporate Development

AMERICAN GENERAL ANNUITY INSURANCE
COMPANY (formerly Western National Life
Insurance Company)

/s/ Michael J. Akers
-----------------------
Name:  Michael J. Akers
Title: Executive Vice President

THE VARIABLE ANNUITY LIFE INSURANCE
COMPANY

/s/ Craig R. Rodby
---------------------
Name:  Craig R. Rodby
Title: Vice Chairman

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

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

"ADJUSTED STATUTORY RESERVES AND OTHER STATUTORY LIABILITIES" at any time means statutory reserves and other statutory liabilities of the Business appropriately includable in line items 1 through 25, except lines 11.4 and 24.1, of the Liabilities, Surplus and Other Funds page of the NAIC Annual Statement Blank (1996 format), but excluding from such statutory reserves and other statutory liabilities the statutory liabilities included within Retained Liabilities.

"ADMINISTRATIVE SERVICES AGREEMENTS" means the Administrative Services Agreements between each Seller and Purchaser, in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which such Purchaser shall provide certain administrative services to such Seller with respect to the Reinsured Contracts, and (ii) the consideration to be paid therefor.

"ADVERTISEMENT" means any material designed to create public interest in insurance policies, annuity contracts and variable annuity contracts or in an insurer, or in an insurance producer, or to induce the public to purchase, increase, modify, reinstate, borrow on, surrender, replace or retain such a policy or contract.

"AFFILIATE" means, with respect to any Person, at the time in question, any other Person controlling, controlled by or under common control with such Person.

"AGREED VALUE" shall have the meaning set forth in Section 1.7(a).

"ALLOCABLE AMOUNT" shall have the meaning set forth in Section 4.12(a).

"ANCILLARY AGREEMENTS" means the Reinsurance Agreements, the Separate Account Transfer Agreements, the Administrative Services Agreements, the Separate Account Administration Agreements, the General Assignment and Assumption Agreements, the Bills of Sale, the Transition Services Agreement, the Marketing Agreements, and the License Agreement.

"ANNUAL RATE" means the value of "r" in the expression (1 + r)n/365 - 1, where "n" is equal to the number of days for which interest is to be computed and the result of the expression is the interest factor for computing the applicable interest amounts.

"ANTITRUST DIVISION" shall have the meaning set forth in Section 4.6.

"APPLICABLE SAP" means Tennessee SAP, in the case of PLA and PNAC, Massachusetts SAP, in the case of PRL and PRV and Delaware SAP, in the case of PRPL.

"ASSIGNED AND ASSUMED CONTRACTS" means those contracts and other agreements material to the operation of the Business identified on Schedule 9.1(A).

"ASSUMED LIABILITIES" shall mean all (i) liabilities and obligations first to be paid or performed after the Closing Date under or pursuant to the Assigned and Assumed Contracts, if any, (ii) liabilities for amounts payable after November 30, 1997 for returns or refunds of Premiums in respect of Insurance Contracts intended to be reinsured by Purchasers, and (iii) liabilities for guaranty fund assessments and similar charges imposed with respect to the Insurance Contracts based on dates of insolvency after November 30, 1997.

"BILL OF SALE" means the Bill of Sale which is substantially in the form of Exhibit 2.

"BOOKS AND RECORDS" means the originals or copies of all customer lists, policy information, Insurance Contract forms and rating plans, disclosure and other documents and filings required under applicable securities laws, claim records, sales records, underwriting records, financial records, tax records and compliance records in the possession or control of Sellers and relating principally to the operation of the Business, including any database, magnetic or optical media (to the extent not subject to licensing restrictions) and any other form of recorded, computer generated or stored information or process, but excluding any such records that are subject to the attorney-client privilege.

"BUSINESS DAY" means any day other than a Saturday, Sunday, a day on which banking institutions in the State of New York are permitted or obligated by law to be closed or a day on which the New York Stock Exchange is closed for trading.

"BUSINESS" means the business of administering the Insurance Contracts, as currently conducted by Sellers.

"CEDING COMMISSION" shall have the meaning provided in Section 1.5(a).

"CLAIMS NOTICE" shall have the meaning set forth in Section 7.3.

"CLOSING DATE" means (i) if the last of the conditions to Closing set forth in this Agreement is satisfied or waived in writing prior to the 15th day of a given month, then the Closing Date shall be the first day of the month following the month in which the last of the conditions was so satisfied or waived in writing, or (ii) if such satisfaction or waiver in writing occurs or is granted after the 15th day of any given month, then the Closing Date shall be the first day of the second month following the month in which the last of the closing conditions is so satisfied or waived; provided, however, that if such date is not a Business Day, the Closing Date shall be the immediately succeeding Business Day; and provided further, that the Closing may occur on such other date as the parties may agree to in writing, provided however, that the Closing Date shall not be later than the date specified in
Section 8.1(e).

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

"CODE" means the Internal Revenue Code of 1986, as amended. Any citation to a provision of the Code includes a citation to any successor provision.

"COMMISSION" means the United States Securities and Exchange Commission.

"CONSENT" shall mean any consent, approval, authorization, clearance, exemption, waiver, or similar affirmation by any Person pursuant to any contract or any applicable Law, Order, or Permit.

"DELAWARE SAP" means the statutory accounting principles and practices prescribed or permitted by the Insurance Department of the State of Delaware as applied on a basis consistent with those utilized in the preparation of 1996 Annual Statement of PRPL.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and all final and temporary regulations and interpretive Bulletins and other rulings of general applicability thereunder.

"ESTIMATED INITIAL CASH POSITION" shall have the meaning set forth in
Section 1.7(a).

"FINAL ANNUITY RESERVES" shall have the meaning set forth in Section 1.5(b).

"FINAL HOLDING COMPANY RECONCILIATION" shall have the meaning set forth in
Section 1.7(e).

"FINAL RECONCILIATION" shall have the meaning set forth in Section 1.4(a).

"FINAL RESERVES STATEMENT" shall have the meaning set forth in Section 1.5(b).

"FINAL TRANSFERRED RESERVES STATEMENT" shall have the meaning set forth in
Section 1.7(b).

"FTC" shall have the meaning set forth in Section 4.6.

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

"GENERAL ACCOUNT RESERVES" means the general account statutory reserves of Seller (without regard to the transactions contemplated by the Reinsurance Agreements) with respect to the Insurance Contracts determined pursuant to Applicable SAP, as such reserves would have been included in lines 1, 2, 3, 4.1, 4.2, 5, 6, 7.1, 7.2, 7.3, 8, 9, 10.1, 10.2, 10.3, 11.1, 11.2 and 11.3 of the Liabilities, Surplus and Other Funds page of the NAIC Annual Statement Blank (1996 format), excluding, however, any general account statutory reserve adjustments in relation to Separate Account Liabilities.

"GENERAL ASSIGNMENT AND ASSUMPTION AGREEMENT" means the General Assignment and Assumption Agreement between each Seller and Purchasers which is substantially in the form of Exhibit 3.

"HOLDING COMPANY POOL" shall have the meaning set forth in Section 1.7(c).

"HOLDING COMPANY POOL ASSET ADDITIONS" shall have the meaning set forth in
Section 1.7(d).

"HOLDING COMPANY POOL ASSET REDUCTIONS" shall have the meaning set forth in
Section 1.7(d).

"HOLDING COMPANY RECONCILIATION" shall have the meaning set forth in
Section 1.7(e).

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

"INCOME TAX REGULATIONS" means the temporary or final regulations issued under the Code. Any citation to a provision of the Income Tax Regulations includes a reference to any successor regulatory provision.

"INDEMNIFIED PARTY" shall have the meaning set forth in Section 7.3.

"INDEMNIFYING PARTY" shall have the meaning set forth in Section 7.3.

"INDEPENDENT ACTUARY" shall have the meaning set forth in Section 1.7(b).

"INITIAL CASH BALANCE" shall have the meaning set forth in Section 1.3(d).

"INITIAL CASH POSITION" shall have the meaning set forth in Section 1.7(c).

"INITIAL CASH POSITION DIFFERENCE" shall have the meaning set forth in
Section 1.7(c).

"INITIAL HOLDING COMPANY PORTFOLIO" shall have the meaning set forth in
Section 1.7(c).

"INITIAL SELLER PORTFOLIO" shall have the meaning set forth in Section 1.3(a).

"INSURANCE CONTRACTS" means those contracts of insurance and annuities, and riders thereto and renewals, exchanges and extensions thereof, of Sellers described on Schedule 9.1(C) and new policies of like type issued after the date of this Agreement but before the Closing Date.

"INVESTMENT ASSETS" shall have the meaning set forth in Section 1.3(b).

"IRS" means the United States Internal Revenue Service.

"KNOWLEDGE" shall be interpreted for the purposes of this Agreement as follows: (i) a matter will be deemed to be within the "knowledge of Sellers" if (A) such matter is as of the date of the execution of this Agreement actually known to any of the Seller Key People, or (B) in light of the positions held by the Seller Key People, but taking into account that the due diligence undertaken by the Seller Key People prior to the execution of this Agreement was limited to reviewing materials accessible to the Seller Key People without informing other individuals of the transactions contemplated by this Agreement, the matter would reasonably be expected to be known by the Seller Key People; and (ii) a matter will be

deemed to be within the "knowledge of Purchasers" if it is actually known to any of the Purchaser Key People as of the date of the execution of this Agreement after reasonable inquiry.

"LAW" means any domestic or foreign federal, state or local code, law, statute, ordinance, regulation, rule, reporting or licensing requirement, policy, guideline, administrative interpretation or other requirement (including those of the Commission, NASD, NAIC and any state) applicable to the parties hereto, or any of their respective Affiliates, properties, assets, officers, directors, employees or agents, as the case may be.

"LICENSE AGREEMENT" means the software license agreement to be entered into on or prior to the Closing Date among Sellers and Purchasers, in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which Sellers will grant a license to use the software described in Schedule 9.1(B), and (ii) the consideration to be paid therefor.

"LOSS" and "LOSSES" shall mean actions, claims, losses, liabilities, damages, deficiencies, costs, expenses (including reasonable attorneys' fees and expenses), interest, taxes and penalties.

"MARKETING AGREEMENTS" means the marketing agreements to be entered into by Parent, each Purchaser, Provident and each Seller pursuant to Section 4.10.

"MASSACHUSETTS SAP" means the statutory accounting principles and practices prescribed or permitted by the Insurance Department of the Commonwealth of Massachusetts as applied on a basis consistent with those utilized in the preparation of 1996 Annual Statements of PRL and PRV.

"MATERIAL" shall have the following meaning: A matter will be deemed to be "material" in connection with any provision of this Agreement if such matter would be considered significant by a reasonable acquiror of the Business in the context of the particular provision in which the word "material" appears.

"NAIC" means the National Association of Insurance Commissioners.

"NASD" shall mean the National Association of Securities Dealers, Inc., including its Subsidiary, NASD Regulation, Inc.

"NET ASSET VALUE" shall have the meaning set forth in Section 1.7(c).

"NET CASH BALANCE" shall have the meaning set forth in Section 1.7(d).

"NET CASH FROM THE BUSINESS" shall have the meaning set forth in Section 1.3(e).

"ORDER" shall mean any administrative decision or award, decree, injunction, judgment, order, quasi-judicial decision or award, ruling, or writ of any federal, state, local or foreign or other court, arbitrator, mediator, tribunal, or other governmental or regulatory agency or authority.

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

"PERMITS" means all licenses, permits, orders, approvals, registrations, authorizations, qualifications and filings with and under all federal, state, local or foreign laws or governmental or regulatory bodies.

"PERSON" means any individual, corporation, partnership, firm, joint venture, association, joint-stock company, trust, unincorporated organization, governmental, judicial or regulatory body, business unit (including, but not limited to, the Business), division or other entity.

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

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

"POOL ASSET ADDITIONS" shall have the meaning set forth in Section 1.3(b).

"POOL ASSET REDUCTIONS" shall have the meaning set forth in Section 1.3(b).

"POOL" shall have the meaning set forth in Section 1.3(a).

"POST-CLOSING CONTRACTS" shall have the meaning set forth in Section 4.15.

"PRELIMINARY INVESTMENT ASSETS" shall have the meaning set forth in Section 1.7(a).

"PRELIMINARY RECONCILIATION" shall have the meaning set forth in Section 1.3(c).

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

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

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

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

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

"PURCHASER INDEMNITEES" shall have the meaning set forth in Section 7.2(a).

"PURCHASER KEY PEOPLE" means the individuals set forth in Schedule 9.1(D).

"PURCHASER MATERIAL ADVERSE EFFECT" shall mean an event, change or occurrence which, individually or together with any other event, change or occurrence, has a material adverse impact on the ability of Parent or either Purchaser to perform its obligations under this Agreement or any Ancillary Agreement or to consummate the transactions contemplated hereby and thereby.

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

"QUALIFIED CONTRACT" means an Insurance Contract issued in connection with a plan intended to qualify for tax treatment under section 401(a), 403(a),
403(b), 408 or 457 of the Code.

"RECONCILIATION" shall have the meaning set forth in Section 1.4(a).

"REINSURANCE AGREEMENTS" means the Reinsurance Agreements between each Seller and each Purchaser, substantially in the form of Exhibit 1, which set forth (i) the terms and conditions upon which certain Adjusted Statutory Reserves and Other Statutory Liabilities of such Seller will be reinsured by Purchasers, and (ii) the consideration to be paid therefor.

"REPLACEMENT TRANSACTION" means a transaction in which a new annuity contract or variable annuity contract is to be purchased by a prospective insured and the proposing producer should know that one or more existing annuity contracts or variable annuity contracts is to be lapsed, forfeited, surrendered, reduced in value or pledged as collateral for greater than 25% of the loan value set forth in the policy.

"RESERVES STATEMENT" shall have the meaning set forth in Section 1.5(b).

"RETAINED LIABILITIES" means the following:

(i) all liabilities of the Business (other than the Adjusted Statutory Reserves and Other Statutory Liabilities and obligations under contracts and agreements) that have, as of November 30, 1997, either (without duplication) (x) been accrued by a Seller on such Seller's books prepared in accordance with Applicable SAP (to the extent of the amount of such accrual) or (y) been asserted by a third party claimant in a writing received by a Seller or any of its Affiliates prior to November 30, 1997;

(ii) notwithstanding anything to the contrary contained in this Agreement, any liability for compensatory, consequential, exemplary, punitive or similar damages or other loss, or any fines or other statutory penalties, which results from (i) any claim, or (ii) any action relating to (x) any alleged or actual act, error or omission by any Seller or any of their Affiliates, agents or representatives, prior to the Closing Date, whether intentional or otherwise, or (y) any reckless conduct or bad faith by any Seller or any of their Affiliates, agents or representatives, in connection with the handling of any claim under any of the Insurance Contracts (including, but not limited to, liability arising from failure by the Seller or any of its Affiliates, agents or representatives, to settle within the limit of any policy, or by reason of alleged or actual negligence or bad faith of the Seller or any of its Affiliates, agents or representatives, in rejecting an offer of settlement or in the preparation of defense or in the trial of any action against an owner, insured or beneficiary of the Seller or any of its Affiliates, agents or representatives, or in the preparation or prosecution of an appeal consequent upon such action) or in connection with the marketing, sale, issuance, delivery, cancellation or administration of any of the Insurance Contracts (including, but not limited to, (s) failure to comply with applicable laws regulating Advertisements, requiring mandatory disclosure of policy information, requiring employment of standards to determine if the purchase of a policy or contract is suitable for an applicant, prohibiting the use of unfair methods of competition and deceptive acts or practices and regulating

replacement transactions, and (t) liability arising from claims relating to Advertisements, errors or omissions relating to policy information disclosure, failure to employ standards to determine if the purchase of a policy or contract is suitable for an applicant, engaging in unfair methods of competition or deceptive acts or practices and Replacement Transactions (other than obligations to pay benefits or other amounts or to take any other actions specifically provided for under such Insurance Contracts as originally issued and subsequently amended or supplemented prior to November 30, 1997)). For the avoidance of doubt, the foregoing would include any claims related to "market conduct" or other sales practices of any Seller, Provident, or any of their Affiliates, employees, advisers or agents;

(iii) any liability or loss incurred or suffered as a result of any claim by any present or former employee, agent or broker of a Seller or any of its Affiliates who performed or performs services in the Business, that (x) relates to the employment, agency or brokerage relationship of such present or former employee, agent or broker with such Seller or any of its Affiliates, and (y) arose out of actions, events or omissions that occurred (or, in the case of omissions, failed to occur) prior to the Closing Date;

(iv) Adjusted Statutory Reserves and Other Statutory Liabilities and Separate Account Liabilities (subject to the obligations of Purchasers under the Reinsurance Agreements and the Separate Account Transfer Agreements);

(v) pension and other post-employment liabilities for retired employees;

(vi) liabilities for Taxes of Seller;

(vii) obligations under contracts of a Seller not assigned to a Purchaser;

(viii) any liability secured by a security interest in any asset not transferred to a Purchaser;

(ix) liabilities for amounts payable prior to November 30, 1997 for returns or refunds of Premiums;

(x) liabilities for commission payments or other fees or compensation (including, without limitation, persistency bonuses), payable with respect to the Insurance Contracts to or for the benefit of brokers and service providers;

(xi) liabilities for guaranty fund assessments and similar charges imposed with respect to the Insurance Contracts based on dates of insolvency prior to November 30, 1997;

(xii) liability for reinsurance in unauthorized companies; and

(xiii) liabilities specifically excluded in this Agreement from those being assumed by Purchasers.

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

"SELLER INDEMNITEES" shall have the meaning set forth in Section 7.2(b).

"SELLER KEY PEOPLE" means the individuals set forth in Schedule 9.1(E).

"SELLER MATERIAL ADVERSE EFFECT" shall mean an event, change or occurrence which, individually or together with any other event, change or occurrence, has a material adverse impact on (i) the Business or the Transferred Assets (taken as a whole) or (ii) the ability of Provident or any Seller to perform their respective obligations under this Agreement or any Ancillary Agreement or to consummate the transactions contemplated hereby and thereby.

"SELLER PARTIES" means Provident and Sellers.

"SELLER SEPARATE ACCOUNTS" means the separate accounts of PNAC and the separate accounts of PRV, in each case identified on Schedule 9.1(F).

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

"SEPARATE ACCOUNT ADMINISTRATION AGREEMENTS" means the Separate Account Administration Agreements to be entered into between Purchasers and each of PNAC and PRV, in form and substance reasonably acceptable to the parties, which shall set forth (i) the administrative and other services, including investment management services, to be provided pending transfer of the Seller Separate Accounts to Purchasers, and (ii) the consideration to be paid therefor.

"SEPARATE ACCOUNT LIABILITIES" means those liabilities that are reflected in the Seller Separate Accounts.

"SEPARATE ACCOUNT TRANSFER AGREEMENTS" means the Transfer and Assumption Reinsurance Agreements to be entered into between Purchasers and each of PNAC and PRV, in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which certain Separate Account Liabilities of such Seller will be assumed by a Purchaser, include the receipt of all necessary governmental and Seller Separate Account contract holder approvals for the transfer of the Seller Separate Accounts to such Purchaser, the election of new members of the Seller Separate Accounts' Boards of Managers, and the approval of new Seller Separate Account investment advisory agreements, and (ii) the consideration to be paid therefor.

"SUBSIDIARY" means, with respect to any Person on a given date (i) any other Person of which a majority of the voting power of the equity securities or equity interests is owned directly or indirectly by such Person and (ii) any other Person the accounts of which, by virtue of an ownership interest in it by such Person would be consolidated, in accordance with GAAP, with those of such Person in its financial statements as of the applicable date.

"TAXES" (or "TAX" as the context may require) means (i) any tax, however denominated, imposed by any federal, state, local, municipal, territorial, provincial or foreign government

or any agency or political subdivision of any such government (a "TAXING AUTHORITY"), including any tax imposed under Subtitle A of the Code and any net income, alternative or add-on minimum tax, gross income, gross receipts, sales, use, gains, goods and services, production, documentary, recording, social security, unemployment, disability, workers' compensation, estimated, ad valorem, value added, transfer, franchise, profits, license, withholding on amounts paid to or by any Seller or its Affiliates, payroll, employment, excise, severance, stamp, capital stock, occupation, personal or real property, environmental or windfall profit tax, premium, custom, duty or other tax, governmental fee or other like assessment or charge of any kind whatsoever, together with any interest, penalty, addition to tax or additional amount imposed by any Taxing Authority relating thereto, (ii) liability of Provident or any of its Affiliates for the payment of any amounts of the type described in (i) as a result of being a member of an affiliated, consolidated, combined or unitary group with any other corporation at any time on or prior to the Closing Date, and (iii) liability of Provident or any of its Affiliates for the payment of any amounts as a result of being a party to any Tax Sharing Agreement or with respect to the payment of any amounts of the type described in (i) or (ii) as a result of any express or implied obligation to indemnify any other Person.

"TAXING AUTHORITY" has the meaning set forth in the definition of "Taxes."

"TENNESSEE SAP" means the statutory accounting principles and practices prescribed or permitted by the Insurance Department of the State of Tennessee as applied on a basis consistent with those utilized in the preparation of 1996 Annual Statements of PLA and PNAC.

"THIRD PARTY ACCOUNTANT" shall have the meaning set forth in Section 1.7(e).

"THIRD PARTY CLAIM" shall have the meaning set forth in Section 7.4(a).

"THIRD PARTY CLAIMANT" shall have the meaning set forth in Section 7.4(a).

"TRANSFERRED ANNUITY RESERVES" shall have the meaning set forth in Section 1.5(b).

"TRANSFERRED ASSETS" means:

(i) Net Cash From the Business (if any);

(ii) Investment Assets;

(iii) all of Sellers' rights and interests under the Insurance Contracts to receive principal and interest paid on policy or contract loans on or after the Closing Date;

(iv) a receivable equal to the index option component of reserves for the contracts described in Schedule 4.18;

(v) the Books and Records; and

(vi) the Transferred Contracts,

but excluding those assets (A) specifically identified on Schedule 9.1(G), (B) described on Schedule 2.1 to the Transition Services Agreement as being made available by Sellers, (C) the Insurance Contracts, the Seller Separate Accounts, and the policies and contracts funded by the Seller Separate Accounts, (D) reinsurance treaties and agreements, (E) cash and Investment Assets other than the Net Cash From the Business and Investment Assets specified in clauses (i) and (ii) above, and (F) that cannot be transferred to Purchasers because of any Seller's inability to obtain the Consent of a third party required for such transfer to be effective.

"TRANSFERRED CONTRACTS" means the Assigned and Assumed Contracts, and all other contracts, assigned pursuant to the General Assignment and Assumption Agreement.

"TRANSFERRED RESERVES" shall have the meaning set forth in Section 1.7(b).

"TRANSFERRED RESERVES STATEMENT" shall have the meaning set forth in
Section 1.7(b).

"TRANSITION SERVICES AGREEMENT" means the Transition Services Agreement among Provident, each Seller and Purchasers in form and substance reasonably acceptable to the parties, which shall set forth (i) the terms and conditions upon which Provident and Sellers shall provide certain services and assets for a transitional period to Purchasers, and (ii) the consideration to be paid therefor.

"UNREALIZED GAINS" shall have the meaning set forth in Section 1.7(e).

"UMPIRE" shall have the meaning set forth in Section 7.8.

"VALIC CONTRACTS" means the Insurance Contracts written in the States of New Hampshire and Vermont and the Insurance Contracts written by PNAC and PRL.

"VALUATION" shall have the meaning set forth in Section 1.7(a).

"VALUER" shall have the meaning set forth in Section 1.7(a).

"WNL CONTRACTS" means all of the Insurance Contracts other than the VALIC Contracts.