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EXHIBIT 10.13

NEITHER THIS SECURITY NOR THE SECURITIES FOR WHICH THIS SECURITY IS EXERCISABLE HAVE BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE COMMISSION OR THE SECURITIES COMMISSION OF ANY STATE IN RELIANCE UPON AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”), AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT OR PURSUANT TO AN AVAILABLE EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AND IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AS EVIDENCED BY, BUT ONLY IF REQUESTED BY THE COMPANY, A LEGAL OPINION OF COUNSEL TO THE TRANSFEROR TO SUCH EFFECT, THE SUBSTANCE OF WHICH SHALL BE REASONABLY ACCEPTABLE TO THE COMPANY. THIS SECURITY AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS SECURITY MAY BE PLEDGED IN CONNECTION WITH A BONA FIDE MARGIN ACCOUNT OR OTHER LOAN SECURED BY SUCH SECURITIES.

COMMON STOCK PURCHASE WARRANT

LED LIGHTING COMPANY

		
	Warrant Shares: 1,255,295

	Effective Date: July 1, 2014

THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that, for value received, Andrew Molasky, an individual (the “Holder”), is entitled, upon the terms and subject to the limitations on exercise and the conditions hereinafter set forth, at any time on or after the date specified above (the “Effective Date”) and on or prior to the close of business on the three (3) year anniversary of the Effective Date (the “Termination Date”) but not thereafter, to subscribe for and purchase from LED Lighting Company, a Delaware corporation (the “Company”), up to One Million Two Hundred Fifty-Five Thousand Two Hundred Ninety-Five (1,255,295) shares (the “Warrant Shares”) of the Company’s common stock (the “Common Stock”). The purchase price of one share of Common Stock under this Warrant shall be equal to the Exercise Price, as defined in Section 2(b).

Section 1.

Consulting Agreement. This Warrant is being issued pursuant to the terms of the letter agreement dated as of the Effective Date between the Company and the Holder regarding the Holder’s provision of certain business consulting services to the Company (the “Consulting Agreement”).

Section 2.

Exercise.

a)

Exercise of Warrant. The Holder’s exercise of the purchase rights represented by this Warrant may be made, in whole or in part, at any time or times on or after the Effective Date and on or before the Termination Date, by delivery to the Company (or such other office or agency of the Company as it may designate by notice in writing to the registered Holder in accordance with Section 5(h)) of a copy of a notice of exercise substantially in the form attached hereto and duly executed by the Holder (the “Notice of Exercise”); and, within three (3) Business Days (as defined in Section 5(c)) after the date said Notice of Exercise is delivered to the Company, the Company shall have received payment of the aggregate Exercise Price of the Warrant Shares being purchased pursuant to said Notice of Exercise by wire transfer or cashier’s check drawn on a United States bank. Notwithstanding anything herein to the contrary, the Holder shall not be required to physically surrender his original of this Warrant to the Company until the Holder has purchased all of the Warrant Shares available hereunder and the Warrant has been exercised in full, in which case, the Holder shall surrender his original of this Warrant to the Company for cancellation within three (3) Business Days after the date the final Notice of Exercise is delivered to the Company. Partial exercises of this Warrant resulting in purchases of a portion of the total number of Warrant Shares available hereunder shall have the effect of lowering the outstanding number of Warrant Shares purchasable hereunder in an amount equal to the applicable number of Warrant Shares purchased. The Holder and the Company shall each maintain records showing the number of Warrant Shares purchased and the date(s) of such purchases. The Company shall deliver to the Holder any material objection to any Notice of Exercise within two (2) Business Days after receipt of such notice; any such objection not timely delivered to the Holder shall automatically be deemed waived by the Company. In the event of any timely, material objection regarding a Notice of Exercise, the records of the Holder shall be controlling and determinative in the absence of manifest error. The Holder and any assignee, by acceptance of this Warrant, acknowledge and agree that, by reason of the provisions of this paragraph, following the purchase of a portion of the Warrant Shares hereunder, the number of Warrant Shares available for purchase hereunder at any given time will be less than the number stated on the face hereof.

b)

Exercise Price. The exercise price per share of the Common Stock under this Warrant shall be One Dollar ($1.00), subject to adjustment hereunder (the “Exercise Price”).

c)

Intentionally Deleted. 

d)

Mechanics of Exercise. 

i.

Delivery of Certificates Upon Exercise. Certificates for Warrant Shares purchased hereunder shall be transmitted by the Company’s transfer agent to the Holder (A) by crediting the account of the Holder’s broker with the Depository Trust Company through its Deposit Withdrawal Agent Commission (“DWAC”) system if the Company is then a participant in such system and either (x) there is an effective registration statement permitting the resale of the Warrant Shares by the Holder or (y) the shares are eligible for resale without volume or manner-of-sale limitations pursuant to Rule 144, and (B) otherwise by physical delivery to the address specified by the Holder in the Notice of Exercise, in either event within ten (10) Business Days after the delivery to the Company of the Notice of Exercise, surrender of this Warrant (if required under Section 2(a)), and payment of the aggregate Exercise Price as set forth above (the “Warrant Share Delivery Date”). With respect to any exercise of this Warrant, such exercise shall be deemed to have occurred, the Warrant Shares applicable to such exercise shall be deemed to have been issued, and Holder or any other person or entity so designated to be named therein shall be deemed to have become a holder of record of such shares for all purposes as of the date the aggregate Exercise Price of such Warrant Shares specified in the applicable Notice of Exercise is received by the Company and all taxes required to be paid by the Holder, if any, pursuant to Section 2(e)(v) prior to the issuance of such shares, have been paid. 

ii.

Delivery of New Warrants Upon Exercise. If this Warrant shall have been exercised in part, the Company shall, at the request of the Holder and upon the Holder’s surrender of his original of this Warrant, at the time of delivery of the certificate representing the applicable Warrant Shares, deliver to Holder a new original Warrant evidencing the rights of Holder to purchase the unpurchased Warrant Shares called for by this Warrant, which new Warrant shall in all other respects be identical with this Warrant.

iii.

Rescission Rights. If the Company fails to cause the Company’s transfer agent to transmit to the Holder a certificate representing the Warrant Shares applicable to the Holder’s Notice of Exercise, whether in whole or in part, pursuant to Section 2(d)(i) by the applicable Warrant Share Delivery Date, then, the Holder will have, in addition to any other rights and remedies available to him at law or in equity, the right to rescind such Notice of Exercise, in which case the Company will immediately refund to the Holder the aggregate Exercise Price, together with any other amounts, paid to the Company in connection with such Notice of Exercise.

iv.

No Fractional Shares or Scrip. No fractional shares or scrip representing fractional shares shall be issued upon the exercise of this Warrant. As to any fraction of a share which Holder would otherwise be entitled to purchase upon such exercise, the Company shall pay a cash adjustment in respect of such final fraction in an amount equal to such fraction rounded up to the next whole share.

v.

Charges, Taxes and Expenses. Issuance of certificates for Warrant Shares shall be made without charge to the Holder for any issue or transfer tax or other incidental expense in respect of the issuance of such certificate, all of which taxes and expenses shall be paid by the Company, and such certificates shall be issued in the name of the Holder or in such name or names as may be directed by the Holder; provided, however, that in the event certificates for Warrant Shares are to be issued in a name other than the name of the Holder, this Warrant, when surrendered for exercise, shall be accompanied by a notice of assignment substantially in the form attached hereto and duly executed by the Holder, and such other documentation as the Company may require regarding the investor status of the assignee, as a condition thereto, the payment of a sum sufficient to reimburse it for any transfer tax incidental thereto.

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vi.

Closing of Books. The Company will not close its stockholder books or records in any manner which prevents the timely exercise of this Warrant pursuant to the terms hereof.

Section 3.

Certain Adjustments.

a)

Stock Dividends and Splits. If the Company, at any time while this Warrant is outstanding: (i) pays a stock dividend or otherwise make a distribution or distributions on shares of its Common Stock or any other equity or equity equivalent securities payable in shares of Common Stock (which, for avoidance of doubt, shall not include any shares of Common Stock issued by the Company upon exercise of this Warrant), (ii) subdivides outstanding shares of Common Stock into a larger number of shares, (iii) combines (including by way of reverse stock split) outstanding shares of Common Stock into a smaller number of shares or (iv) issues by reclassification of shares of the Common Stock any shares of capital stock of the Company, then in each case the then current Exercise Price shall be adjusted by multiplying said Exercise Price by a fraction of which the numerator shall be the number of shares of Common Stock (excluding treasury shares, if any) outstanding immediately before such event and of which the denominator shall be the number of shares of Common Stock outstanding (excluding treasury shares, if any) immediately after such event, and the number of Warrant Shares issuable upon exercise of this Warrant shall be proportionately adjusted such that the aggregate Exercise Price of this Warrant shall remain unchanged. Any adjustment made pursuant to this Section 3(a) shall become effective immediately after the (x) record date for the determination of stockholders entitled to receive a dividend or distribution or (y) effective date of a subdivision, combination or re-classification, whichever is applicable.

b)

Calculations. All calculations under this Section 3 shall be made to the nearest cent or the nearest 1/100th of a share, as the case may be. For purposes of this Section 3, the number of shares of Common Stock deemed to be issued and outstanding as of a given date shall be the sum of the number of shares of Common Stock (excluding treasury shares, if any) issued and outstanding.

c)

Notice to Holder.

i.

Adjustment to Exercise Price or Warrant Shares. Whenever the Exercise Price or Warrant Shares are adjusted pursuant to any provision of this Section 3, the Company shall give to the Holder within three (3) Business Days after such adjustment becoming effective a notice setting forth the Exercise Price and Warrant Shares after such adjustment and setting forth a brief statement of the facts requiring such adjustment. 

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ii.

Notice to Allow Exercise by Holder. If (A) the Company shall declare a dividend (or any other distribution in whatever form) on the Common Stock, (B) the Company shall declare a redemption of the Common Stock, (C) the Company shall authorize the granting to all holders of the Common Stock rights or warrants to subscribe for or purchase any shares of the Company’s capital stock of any class or of any rights, (D) the approval of any stockholders of the Company shall be required in connection with any reclassification of the Common Stock, any consolidation or merger to which the Company is a party, any sale or transfer of all or substantially all of the assets of the Company, of any compulsory share exchange whereby the Common Stock is converted into other securities, cash or property, or (E) the Company shall authorize the voluntary or involuntary dissolution, liquidation or winding up of the affairs of the Company, then, in each case, the Company shall cause to be given to the Holder at its last address as it shall appear upon the Warrant Register (as defined in Section 4(c)) of the Company, at least twenty (20) calendar days prior to the applicable record or effective date hereinafter specified, a notice stating (x) the date on which a record is to be taken for the purpose of such dividend, distribution, redemption, rights or warrants, or if a record is not to be taken, the date as of which the holders of the Common Stock of record entitled to such dividend, distributions, redemption, rights or warrants are to be determined or (y) the date on which such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation, or winding up is expected to become effective or close, and the date as of which it is expected that holders of the Common Stock of record shall be entitled to exchange their shares of the Common Stock for securities, cash or other property deliverable upon such reclassification, consolidation, merger, sale, transfer, share exchange, dissolution, liquidation, or winding up; provided that the failure to give such notice or any defect therein or in the giving thereof shall not affect the validity of the corporate action required to be specified in such notice but shall permit the Holder to pursue any rights and remedies available to him at law or in equity as a result thereof. In the event of a dissolution, liquidation, or winding up of the Company or should the separate existence of the Company otherwise cease (e.g., as a non-surviving party to a merger), then notwithstanding anything herein to the contrary, the Termination Date shall be deemed to be the effective date of such dissolution, liquidation, winding up, or other ceasing of corporate existence. Notwithstanding anything to the contrary in this Section 3(c)(ii), the notice required to be given by this Section 3(c)(ii) is in addition to, and not in lieu of, any other notices, including, without limitation, dissenter’s notices, that may be required to be given by the Company to the Holder in connection with the event triggering the notice required to be given by this Section 3(c)(ii) under applicable law and/or the Company’s organizational documents.

Section 4.

Transfer of Warrant.

a)

Transferability. Subject to compliance with any applicable securities laws and the reasonable documentation required by the Company regarding the transferee’s investor status, this Warrant and all rights hereunder (including, without limitation, any registration rights) are transferable, in whole or in part, upon surrender of this Warrant at the principal office of the Company or its designated agent, together with a written assignment of this Warrant substantially in the form attached hereto duly executed by the Holder or its agent or attorney and funds sufficient to pay any transfer taxes payable upon the making of such transfer. Upon such surrender and, if required, such payment, the Company shall execute and deliver a new Warrant or Warrants in the name of the assignee or assignees, as applicable, and in the denomination or denominations specified in such instrument of assignment, and shall issue to the assignor a new Warrant evidencing the portion of this Warrant not so assigned, and this Warrant shall promptly be cancelled. The Warrant, if properly assigned, may be exercised by a new holder for the purchase of Warrant Shares without having a new Warrant issued. 

b)

New Warrants. This Warrant may be divided or combined with other Warrants upon presentation hereof at the aforesaid office of the Company, together with a written notice specifying the names and denominations in which new Warrants are to be issued, signed by the Holder or its agent or attorney. Subject to compliance with Section 4(a), as to any transfer which may be involved in such division or combination, the Company shall execute and deliver a new Warrant or Warrants in exchange for the Warrant or Warrants to be divided or combined in accordance with such notice. All Warrants issued on transfers or exchanges shall be dated as of the Effective Date and shall be identical with this Warrant except as to the number of Warrant Shares issuable pursuant thereto. 

c)

Warrant Register. The Company shall register this Warrant, upon records to be maintained by the Company for that purpose (the “Warrant Register”), in the name of the record Holder hereof from time to time. The Company may deem and treat the registered Holder of this Warrant as the absolute owner hereof for the purpose of any exercise hereof or any distribution to the Holder, and for all other purposes, absent actual notice to the contrary.

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Section 5.

Miscellaneous.

a)

No Rights as Stockholder Until Exercise. This Warrant does not entitle the Holder to any voting rights or other rights as a stockholder of the Company prior to the exercise hereof as set forth in Section 2(a). 

b)

Loss, Theft, Destruction or Mutilation of Warrant. The Company covenants that upon receipt by the Company of evidence reasonably satisfactory to it of the loss, theft, destruction or mutilation of this Warrant or any stock certificate relating to the Warrant Shares, and in case of loss, theft or destruction, of indemnity or security reasonably satisfactory to it (which, in the case of the Warrant, shall not include the posting of any bond), and upon surrender and cancellation of such Warrant or stock certificate, if mutilated, the Company will make and deliver a new Warrant or stock certificate of like tenor and dated as of such cancellation, in lieu of such Warrant or stock certificate.

c)

Saturdays, Sundays, Holidays, etc. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then, such action may be taken or such right may be exercised on the next succeeding Business Day. As used in this Warrant, a “Business Day” shall mean any day other than a Saturday, Sunday, or other day on which banks in the State of Nevada or California are authorized or required to close.

d)

Authorized Shares. 

The Company covenants that, during the period the Warrant is outstanding, it will reserve from its authorized and unissued Common Stock a sufficient number of shares to provide for the issuance of the Warrant Shares upon the exercise of any purchase rights under this Warrant. The Company further covenants that its issuance of this Warrant shall constitute full authority to its officers who are charged with the duty of executing stock certificates to execute and issue the necessary certificates for the Warrant Shares upon the exercise of the purchase rights under this Warrant. The Company will take all such reasonable action as may be necessary to assure that such Warrant Shares may be issued as provided herein without violation of any applicable law or regulation, or of any requirements of the trading market upon which the Common Stock may be listed. The Company covenants that all Warrant Shares which may be issued upon the exercise of the purchase rights represented by this Warrant will, upon exercise of the purchase rights represented by this Warrant, be duly authorized, validly issued, fully paid and nonassessable and free from all taxes, encumbrances, liens and charges created by the Company in respect of the issue thereof (other than taxes in respect of any transfer occurring contemporaneously with such issue). The Company represents and warrants to the Holder that there are, as of the Effective Date, One Hundred Million (100,000,000) authorized shares of the Common Stock, Eight Million Three Hundred Sixty-Eight Thousand Six Hundred Twenty-Eight (8,368,628) issued and outstanding shares of the Common Stock, including, without limitation, the One Million Two Hundred Fifty-Five Thousand Two Hundred Ninety-Five (1,255,295) shares of the Common Stock issued to the Holder pursuant to the Consulting Agreement, Twenty Million (20,000,000) authorized shares of the Company’s preferred stock (the “Preferred Stock”), and no issued and outstanding shares of the Preferred Stock. Within five (5) Business Days of receiving a written request from Holder, the Company shall deliver to the Holder a written notice (each, a “Certification Notice”) certifying, as of the date of such Certification Notice, the number of (i) authorized shares of the Common Stock, (ii) authorized shares of the Preferred Stock, (iii) issued and outstanding shares of the Common Stock, and (iv) issued and outstanding shares of the Preferred Stock. The Holder may request no more than one (1) Certification Notice per calendar month. If the Holder gives a Notice of Exercise to the Company and one or more numbers certified by the Company in the most recent Certification Notice given to the Holder will no longer be accurate on the date that the Warrant Shares relating to such Notice of Exercise will be issued to the Holder, then the Company shall promptly notify the Holder of such inaccuracy and the Holder will have the right to rescind such Notice of Exercise and receive an immediate refund from the Company of the aggregate Exercise Price, together with any other amounts, already paid to the Company in connection with such Notice of Exercise.

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Except and to the extent as waived or consented to by the Holder in writing, the Company shall not by any action, including, without limitation, amending its certificate of incorporation or through any reorganization, transfer of assets, consolidation, merger, dissolution, issue or sale of securities or any other voluntary action, avoid or seek to avoid the observance or performance of any of the terms of this Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate to protect the rights of Holder as set forth in this Warrant against impairment. Without limiting the generality of the foregoing, the Company will (i) not increase the par value of any Warrant Shares above the amount payable therefor upon such exercise immediately prior to such increase in par value, (ii) take all such action as may be necessary or appropriate in order that the Company may validly and legally issue fully paid and nonassessable Warrant Shares upon the exercise of this Warrant and (iii) use commercially reasonable efforts to obtain all such authorizations, exemptions or consents from any public regulatory body having jurisdiction thereof, as may be, necessary to enable the Company to perform its obligations under this Warrant.

Before taking any action which would result in an adjustment in the number of Warrant Shares for which this Warrant is exercisable or in the Exercise Price, the Company shall obtain all such authorizations or exemptions thereof, or consents thereto, as may be necessary from any public regulatory body or bodies having jurisdiction thereof.

e)

Jurisdiction. The construction, validity, enforcement and interpretation of this Warrant shall be determined in accordance with the laws of the State of Delaware without regard to its conflict of laws provisions.

f)

Restrictions; Piggyback Registration Rights. The Holder acknowledges that the Warrant Shares acquired upon the exercise of this Warrant, if not registered, will have restrictions upon resale imposed by state and federal securities laws. At any time the Holder owns any of the Warrant Shares, if the Company shall determine to prepare and file with the Securities and Exchange Commission a registration statement relating to an offering for its own account or the account of others under the Securities Act of any of its equity securities, other than on Form S-4 or Form S-8 (each as promulgated under the Securities Act) or their then equivalents relating to equity securities to be issued solely in connection with any acquisition of any entity or business or equity securities issuable in connection with stock option or other employee benefit plans, then the Company shall deliver to the Holder a written notice of the Company’s determination to file the registration statement and, if within fifteen days after the date of the delivery of such notice, the Holder shall so elect in writing to the Company, then the Company shall include in such registration statement all or any part of the Warrant Shares held by the Holder which the Holder elects to be included in the registration statement, subject to customary underwriter cutbacks applicable to all holders of registration rights and the Holder’s execution of customary documentation as required by the Company and legal counsel. This Section 5(f) shall survive any full or partial exercise of this Warrant and any expiration or earlier termination of this Warrant.

g)

Nonwaiver and Expenses. No course of dealing or any delay or failure to exercise any right hereunder on the part of Holder shall operate as a waiver of such right or otherwise prejudice Holder’s rights, powers or remedies, notwithstanding the fact that all rights hereunder terminate on the Termination Date. If the Company willfully and knowingly fails to comply with any provision of this Warrant, which results in any material damages to the Holder, the Company shall pay to Holder such amounts as shall be sufficient to cover any costs and expenses including, but not limited to, reasonable attorneys’ fees, including those of appellate proceedings, incurred by Holder in collecting any amounts due pursuant hereto or in otherwise enforcing any of its rights, powers or remedies hereunder.

h)

Notices. Any notice, request or other document required or permitted to be given or delivered hereunder by the Holder or the Company to the other shall be validly given or delivered only if in writing and sent by (i) United States mail, certified or registered, postage prepaid, return receipt requested, (ii) Federal Express or other nationally recognized courier service keeping records of deliveries and attempted deliveries, or (iii) facsimile transmission. Service by mail or courier shall be conclusively deemed given or delivered on the first Business Day delivery is attempted. Facsimile transmissions received by 5 P.M. Pacific Time on a Business Day shall be deemed given and delivered on such Business Day. Facsimile transmissions received at any other time shall be deemed given and delivered on the next Business Day. Either the Holder or the Company may change his or its address for the purpose of receiving notices and other correspondence as herein provided by a written notice given in the manner aforesaid to the other, which notice of change of address shall not become effective, however, until the actual receipt thereof by the other.

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Notices and other correspondence shall be addressed as follows:

Holder:

Andrew Molasky

100 N. City Parkway, Suite 1700

Las Vegas, Nevada 89106

Facsimile: (702) 737-7025

With a copy to:

Christopher Walther

Lionel Sawyer & Collins

300 S. 4th St., Suite 1700

Las Vegas, Nevada 89101

Facsimile: (702) 383-8845

Company:

LED Lighting Company

Attention: Chief Executive Officer

737 Southpoint Blvd., Suite E

Petaluma, California

Facsimile: (709) 829-7912

With a copy to:

Steven J. Davis

Steven James Davis, A Professional Corporation

1042 N. El Camino Real, B-261

Encinitas, California 92024-1322

Facsimile: (858) 367-8138

i)

Limitation of Liability. No provision hereof, in the absence of any affirmative action by Holder to exercise this Warrant to purchase Warrant Shares, and no enumeration herein of the rights or privileges of Holder, shall give rise to any liability of Holder for the purchase price of any Common Stock or as a stockholder of the Company, whether such liability is asserted by the Company or by creditors of the Company.

j)

Remedies. The Holder, in addition to being entitled to exercise all rights granted by law, including recovery of damages, will be entitled to specific performance of its rights under this Warrant. The Company agrees that monetary damages would not be adequate compensation for any loss incurred by reason of a breach by it of the provisions of this Warrant and hereby agrees to waive and not to assert the defense in any action for specific performance that a remedy at law would be adequate.

k)

Successors and Assigns. Subject to applicable securities laws, this Warrant and the rights and obligations evidenced hereby shall inure to the benefit of and be binding upon the successors of the Company and the successors and permitted assigns of Holder. The provisions of this Warrant are intended to be for the benefit of all holders from time to time of this Warrant and shall be enforceable by the Holder or holder of Warrant Shares.

l)

Amendment. This Warrant may only be modified or amended or the provisions hereof waived with the written consent of the Company and the Holder.

m)

Severability. Wherever possible, each provision of this Warrant shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Warrant shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provisions or the remaining provisions of this Warrant.

n)

Further Assurances. The Company and the Holder agree to execute such further documents and instruments and to take such further actions as may be reasonably necessary to carry out the purposes and intent of this Warrant.

o)

Headings. The headings used in this Warrant are for the convenience of reference only and shall not, for any purpose, be deemed a part of this Warrant.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

7

IN WITNESS WHEREOF, the Company has caused this Warrant to be executed by its officer thereunto duly authorized as of the Effective Date.

		
	LED LIGHTING COMPANY

	By: 

Title:

Name: 

	/s/ Kevin Kearney 

Chief Executive Officer

Kevin Kearney

COMMON STOCK PURCHASE WARRANT

SIGNATURE PAGE

NOTICE OF EXERCISE

TO:

LED LIGHTING COMPANY

(1)

The undersigned hereby elects to purchase ________ Warrant Shares of LED Lighting Company, a Delaware corporation (the “Company”), pursuant to the terms of the Common Stock Purchase Warrant dated as of ___________, 2014, by the Company to Andrew Molasky, an individual (the “Warrant”) (attach original Warrant only if exercised in full), and tenders herewith payment of the Exercise Price of ________________ Dollars ($______) in full, together with all applicable transfer taxes, if any. Capitalized terms used but not defined in this Notice of Exercise shall have the meanings set forth in the Warrant.

(2)

Payment of the Exercise Price shall take the form of lawful money of the United States.

(3)

Please issue a certificate representing said Warrant Shares in the name of the undersigned or in such other name as is specified below:

_______________________________

The Warrant Shares shall be delivered to the following DWAC Account Number or by physical delivery of a certificate to:

_______________________________

_______________________________

_______________________________

(4) Accredited Investor. The undersigned is an “accredited investor” as defined in Regulation D promulgated under the Securities Act of 1933, as amended.

[SIGNATURE OF HOLDER]

Name of Investing Entity: ________________________________________________________________________

Signature of Authorized Signatory of Investing Entity: _________________________________________________

Name of Authorized Signatory: ___________________________________________________________________

Title of Authorized Signatory: ____________________________________________________________________

Date: ________________________________________________________________________________________

NOTICE OF ASSIGNMENT

FOR VALUE RECEIVED, and in accordance with the Common Stock Purchase Warrant dated as of ___________, 2014, by LED Lighting Company, a Delaware corporation (the “Company”), to Andrew Molasky, an individual (“Holder”), that is attached to this Notice of Assignment (the “Warrant”), all of Holder’s right, title, and interest under the Warrant in and to [[all of the] or [_______]] Warrant Shares and all rights evidenced thereby are hereby assigned to

_______________________________________________ whose address is

_______________________________________________________________.

_______________________________________________________________

Dated: ______________, _______

Holder’s Signature:

_____________________________

Holder’s Address:

_____________________________

_____________________________

Signature Guaranteed: ___________________________________________

NOTE: The signature to this Notice of Assignment must correspond with the name as it appears on the face of the Warrant, without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank or trust company. Officers of corporations and those acting in a fiduciary or other representative capacity should file proper evidence of authority to assign the foregoing Warrant.Exhibit 4.(a)

 

	

Protective   Life Insurance Company
    	
P. O. Box 2606; Birmingham, Alabama 35202

1-800-866-9933
    
	
A   Stock Company

www.protective.com
    	
State of Domicile - Tennessee

State Insurance Department - (###) ###-####
    

 

VARIABLE LIFE INSURANCE POLICY

 

INSURED:

 

POLICY NUMBER:

 

This is a legal contract (the “Policy”) between the Owner (also referred to as “you” or “your”) and Protective Life Insurance Company (also referred to as “the Company”, “we”, “us”, or “our”).  Please read it carefully.

 

This is an Individual Flexible Premium Variable Life Insurance Policy (“Policy”). This Policy provides a Death Benefit.

 

THE OWNER HAS THE RIGHT TO RETURN THIS POLICY. The Owner may cancel this Policy after receipt by returning the Policy to the Company’s Home Office, or to any Agent of the Company, with a written request for cancellation within thirty (30) days after receipt.  Return of this Policy by mail is effective on actual receipt by the Company. The returned Policy will be treated as if it had never been issued. The Company will promptly refund an amount equal to the greater of: (a) all the premiums paid or (b) the sum of the value of the amounts allocated to the Fixed Account, including any interest credited, accumulated to the date that this Policy is returned to the Company, and the value of the amounts allocated to the Sub-Accounts, adjusted to reflect their net investment experience to the end of the valuation period in which the Policy is returned to the Company.

 

	

    	
 
    	

    
	
John D. Johns
    	
 
    	
Deborah J. Long
    
	
President
    	
 
    	
Secretary
    

 

THE POLICY VALUES, THE AMOUNT OF THE DEATH BENEFIT PROVIDED IN THIS CONTRACT, OR THE DURATION OF THE INSURANCE COVERAGE, MAY BE FIXED OR VARIABLE WHEN BASED ON THE INVESTMENT EXPERIENCE OF THE VARIABLE ACCOUNT, MAY INCREASE OR DECREASE IN ACCORDANCE WITH THE FLUCTUATIONS IN THE NET INVESTMENT FACTOR, AND ARE NOT GUARANTEED AS TO DOLLAR AMOUNTS. THERE IS NO GUARANTEED MINIMUM FOR THE PORTION OF THE POLICY VALUE IN THE SUB-ACCOUNTS. PLEASE REFER TO THE VARIABLE ACCOUNT SECTION OF THIS POLICY FOR MORE INFORMATION REGARDING THE VARIABLE ACCOUNT. PLEASE REFER TO THE DEATH BENEFIT SECTION OF THIS POLICY FOR A DESCRIPTION OF THE DEATH BENEFIT.

 

READ THE CONTRACT CAREFULLY

THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ADJUSTABLE LIFE INSURANCE POLICY NON-PARTICIPATING - DOES NOT PAY DIVIDENDS

 

ICC14-V13

 

 

TABLE OF CONTENTS

 

	
POLICY SCHEDULE - GENERAL INFORMATION
    	
S1
    
	
 
    	
 
    
	
TERMS USED IN THIS POLICY
    	
1
    
	
 
    	
 
    
	
GENERAL PROVISIONS
    	
3
    
	
 
    	
 
    
	
PREMIUMS
    	
5
    
	
 
    	
 
    
	
DETERMINING FIXED ACCOUNT VALUES
    	
7
    
	
 
    	
 
    
	
DETERMINING VARIABLE ACCOUNT VALUES
    	
8
    
	
 
    	
 
    
	
ADDITIONAL PROVISIONS FOR DETERMINING VALUES
    	
10
    
	
 
    	
 
    
	
ACCESSING POLICY VALUES
    	
12
    
	
 
    	
 
    
	
DEATH BENEFIT
    	
14
    
	
 
    	
 
    
	
CHANGING THE POLICY
    	
15
    

 

 

POLICY SCHEDULE

 

	
POLICY   NUMBER: [SPECIMEN]
    	
POLICY   EFFECTIVE DATE:
    
	
INSURED:
    	
 
    
	
POLICY   ISSUE DATE:
    	
AGE:
    
	
INITIAL   FACE AMOUNT:
    	
SEX:
    
	
INITIAL   PREMIUM PAYMENT:
    	
MONTHLY   ANNIVERSARY DAY:
    
	
RATE   CLASS:
    	
DEATH   BENEFIT OPTION:
    
	
 
    	
 
    
	
PLANNED   PREMIUM PAYMENT:
    	
 
    
	
OWNER:
    	
 
    

 

 

	
FORM
   NUMBER
    	
 
    	
SCHEDULE OF ADDITIONAL
   BENEFITS
    	
 
    	
MONTHLY CHARGE
   DURING FIRST YEAR
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    	
 
    	
 
    

 

************************************************************************************************************

THIS POLICY PROVIDES LIFE INSURANCE COVERAGE ON THE INSURED UNTIL TERMINATION, SUBJECT TO THE TERMS OF THIS POLICY. THERE MAY BE LITTLE OR NO SURRENDER VALUE PAYABLE ON CONTRACT TERMINATION.

 

BASIS OF COMPUTATIONS

 

Maximum Cost of Insurance Rates are based on the 2001 Commissioner’s Standard Ordinary (CSO) smoker/non-smoker distinct (composite for issue age less than 16), Male or Female Mortality Table (age nearest birthday) and the rate class of the Insured.

 

GUARANTEED INTEREST RATE FOR FIXED ACCOUNT: 1% ANNUALLY (.0830% MONTHLY) (.0027% DAILY)

 

INITIAL ANNUAL EFFECTIVE INTEREST RATE FOR FIXED ACCOUNT: 3.00%

 

MAXIMUM LOAN INTEREST RATE:  5% YEARS 2-10  -  3.25% YEARS 11+

 

MAXIMUM CARRY OVER LOAN RATE (Applicable to loan balances transferred under Section 1035 of the Code):  5% YEARS 1-10 — 3.25% YEARS 11+

 

MINIMUM FACE AMOUNT: $100,000

 

ICC14-V13S

 

S1

 

DEDUCTION FROM PREMIUM PAYMENTS

 

Premium Expense Charge. A maximum Premium Expense Charge of 8% will be deducted from each premium payment for the first 10 Policy Years and 4% thereafter. The Company reserves the right to charge less than the maximum charge.

 

MONTHLY DEDUCTIONS

 

Beginning as of the Policy Effective Date and continuing on each Monthly Anniversary Day thereafter, the Company will deduct the charges listed below. With the exception of the Mortality and Expense Risk Charge, each charge will reduce the Sub-Account Value(s) and the Fixed Account Value in the proportion that each Sub-Account Value and the Fixed Account Value bears to the Un-loaned Policy Value. The Mortality and Expense Risk Charge will reduce only the Sub-Account Value(s).

 

Administration Charge. The monthly Administration Charge is $8.

 

Administration Charge for Initial Face Amount. The maximum monthly Administration Charge for Initial Face Amount is equal to $.19 per every $1,000 of Initial Face Amount in Policy Years 1 through 5. This charge is not assessed after the 5th Policy Year.

 

The Company reserves the right to charge less than the maximum charge.

 

Administration Charge for Increase in Face Amount. The monthly Administration Charge for Increase in Face Amount is $.71 per every $1,000 of increase in Face Amount.  This monthly charge applies during the twelve-month period following the effective date of each increase in Face Amount.

 

Charge For Benefits Under Riders. The Company will deduct a monthly charge for any riders.

 

Cost of Insurance Charge. The Company will deduct a monthly Cost of Insurance Charge. This charge varies and is calculated in accordance with the policy provisions. See the Cost of Insurance section of this Policy for details. The Maximum Monthly Cost of Insurance Rates are set forth in the table on the following page.

 

Mortality and Expense Risk Charge.  The maximum monthly Mortality and Expense Risk Charge is equal to .075% multiplied by the Variable Account Value, which is equivalent to an annual rate of .90% of such amount. The Company reserves the right to charge less than the maximum charge.

 

OTHER DEDUCTIONS

 

Withdrawal Charge. A Withdrawal Charge equal to the lesser of: (a) 2% of the amount withdrawn; or (b) $25 is deducted from the Fixed Account and Variable Account Value(s) whenever you make a Withdrawal.  See the Surrenders and Withdrawals section of this Policy for additional details.

 

Transfer Fee. A $25 charge may be deducted from the Fixed Account and Variable Account Value(s) being transferred for each transfer request in excess of 12 during a Policy Year.  See the Variable Account section of this Policy for additional details.

 

S2

 

SURRENDER CHARGES

 

If this Policy is surrendered, lapses at the end of a Grace Period or the Owner reduces the Initial Face Amount during the first fifteen Policy Years, the Company will deduct a Surrender Charge from the Fixed Account and Variable Account Value(s). The Maximum Surrender Charge on surrender or lapse of this Policy is shown in the table below.

 

If the Initial Face Amount of this Policy is decreased during the first fifteen Policy Years, the partial Surrender Charge imposed will equal the portion of the Surrender Charge (shown in the table below and reduced by any previous partial Surrender Charge(s)) that corresponds to the percentage by which the Initial Face Amount is reduced. In the event of such a reduction in the Initial Face Amount, the Company will allocate the partial Surrender Charge to each Sub-Account and the Fixed Account based on the proportion that the value of the Fixed Account and the value of the Sub-Account(s) bear to the total un-loaned Policy Value.

 

	
POLICY
   YEARS
    	
 
    	
SURRENDER
   CHARGE
    	
 
    
	
1
    	
 
    	
$
    	
#,###.##
    	
 
    
	
2
    	
 
    	
#,###.##
    	
 
    
	
3
    	
 
    	
#,###.##
    	
 
    
	
4
    	
 
    	
#,###.##
    	
 
    
	
5
    	
 
    	
#,###.##
    	
 
    
	
6
    	
 
    	
#,###.##
    	
 
    
	
7
    	
 
    	
 
    	
#,###.##
    	
 
    
	
8
    	
 
    	
#,###.##
    	
 
    
	
9
    	
 
    	
#,###.##
    	
 
    
	
10
    	
 
    	
#,###.##
    	
 
    
	
11
    	
 
    	
#,###.##
    	
 
    
	
12
    	
 
    	
###.##
    	
 
    
	
13
    	
 
    	
 
    	
###.##
    	
 
    
	
14
    	
 
    	
###.##
    	
 
    
	
15
    	
 
    	
###.##
    	
 
    
	
16+
    	
 
    	
0
    	
 
    

 

GUARANTEED MAXIMUM MONTHLY COST OF INSURANCE RATES

PER $1,000 OF NET AMOUNT AT RISK

 

	
AGE
    	
 
    	
RATE
    	
 
    
	
0
    	
 
    	
 
    	
 
    
	
1
    	
 
    	
 
    	
 
    
	
2
    	
 
    	
 
    	
 
    
	
3
    	
 
    	
 
    	
 
    
	
4
    	
 
    	
 
    	
 
    
	
5
    	
 
    	
 
    	
 
    
	
6
    	
 
    	
 
    	
 
    
	
7
    	
 
    	
 
    	
 
    
	
8
    	
 
    	
 
    	
 
    
	
9
    	
 
    	
 
    	
 
    
	
10
    	
 
    	
 
    	
 
    
	
11
    	
 
    	
 
    	
 
    
	
12
    	
 
    	
 
    	
 
    
	
13
    	
 
    	
 
    	
 
    
	
14
    	
 
    	
 
    	
 
    
	
15
    	
 
    	
 
    	
 
    
	
16
    	
 
    	
 
    	
 
    
	
17
    	
 
    	
 
    	
 
    
	
18
    	
 
    	
 
    	
 
    
	
19
    	
 
    	
 
    	
 
    
	
20
    	
 
    	
 
    	
 
    
	
21
    	
 
    	
 
    	
 
    
	
22
    	
 
    	
 
    	
 
    
	
23
    	
 
    	
 
    	
 
    
	
24
    	
 
    	
 
    	
 
    
	
25
    	
 
    	
 
    	
 
    
	
26
    	
 
    	
 
    	
 
    
	
27
    	
 
    	
 
    	
 
    
	
28
    	
 
    	
 
    	
 
    
	
29
    	
 
    	
 
    	
 
    
	
30
    	
 
    	
 
    	
 
    
	
31
    	
 
    	
 
    	
 
    
	
32
    	
 
    	
 
    	
 
    
	
33
    	
 
    	
 
    	
 
    
	
34
    	
 
    	
 
    	
 
    
	
35
    	
 
    	
#.###
    	
 
    
	
36
    	
 
    	
#.###
    	
 
    
	
37
    	
 
    	
#.###
    	
 
    
	
38
    	
 
    	
#.###
    	
 
    
	
39
    	
 
    	
#.###
    	
 
    
	
40
    	
 
    	
#.###
    	
 
    
	
41
    	
 
    	
#.###
    	
 
    
	
42
    	
 
    	
#.###
    	
 
    
	
43
    	
 
    	
#.###
    	
 
    
	
44
    	
 
    	
#.###
    	
 
    
	
45
    	
 
    	
#.###
    	
 
    
	
46
    	
 
    	
#.###
    	
 
    
	
47
    	
 
    	
#.###
    	
 
    
	
48
    	
 
    	
#.###
    	
 
    
	
49
    	
 
    	
#.###
    	
 
    
	
50
    	
 
    	
#.###
    	
 
    
	
51
    	
 
    	
#.###
    	
 
    
	
52
    	
 
    	
#.###
    	
 
    
	
53
    	
 
    	
#.###
    	
 
    
	
54
    	
 
    	
#.###
    	
 
    
	
55
    	
 
    	
#.###
    	
 
    
	
56
    	
 
    	
#.###
    	
 
    
	
57
    	
 
    	
#.###
    	
 
    
	
58
    	
 
    	
#.###
    	
 
    
	
59
    	
 
    	
#.###
    	
 
    
	
60
    	
 
    	
#.###
    	
 
    
	
61
    	
 
    	
#.###
    	
 
    
	
62
    	
 
    	
#.###
    	
 
    
	
63
    	
 
    	
#.###
    	
 
    
	
64
    	
 
    	
#.###
    	
 
    
	
65
    	
 
    	
#.###
    	
 
    
	
66
    	
 
    	
#.###
    	
 
    
	
67
    	
 
    	
#.###
    	
 
    
	
68
    	
 
    	
#.###
    	
 
    
	
69
    	
 
    	
#.###
    	
 
    
	
70
    	
 
    	
#.###
    	
 
    
	
71
    	
 
    	
#.###
    	
 
    
	
72
    	
 
    	
#.###
    	
 
    
	
73
    	
 
    	
#.###
    	
 
    
	
74
    	
 
    	
#.###
    	
 
    
	
75
    	
 
    	
#.###
    	
 
    
	
76
    	
 
    	
#.###
    	
 
    
	
77
    	
 
    	
#.###
    	
 
    
	
78
    	
 
    	
#.###
    	
 
    
	
79
    	
 
    	
#.###
    	
 
    
	
80
    	
 
    	
#.###
    	
 
    
	
81
    	
 
    	
#.###
    	
 
    
	
82
    	
 
    	
#.###
    	
 
    
	
83
    	
 
    	
#.###
    	
 
    
	
84
    	
 
    	
#.###
    	
 
    
	
85
    	
 
    	
#.###
    	
 
    
	
86
    	
 
    	
##.###
    	
 
    
	
87
    	
 
    	
##.###
    	
 
    
	
88
    	
 
    	
##.###
    	
 
    
	
89
    	
 
    	
##.###
    	
 
    
	
90
    	
 
    	
##.###
    	
 
    
	
91
    	
 
    	
##.###
    	
 
    
	
92
    	
 
    	
##.###
    	
 
    
	
93
    	
 
    	
##.###
    	
 
    
	
94
    	
 
    	
##.###
    	
 
    
	
95
    	
 
    	
##.###
    	
 
    
	
96
    	
 
    	
##.###
    	
 
    
	
97
    	
 
    	
##.###
    	
 
    
	
98
    	
 
    	
##.###
    	
 
    
	
99
    	
 
    	
##.###
    	
 
    
	
100
    	
 
    	
##.###
    	
 
    
	
101
    	
 
    	
##.###
    	
 
    
	
102
    	
 
    	
##.###
    	
 
    
	
103
    	
 
    	
##.###
    	
 
    
	
104
    	
 
    	
##.###
    	
 
    
	
105
    	
 
    	
##.###
    	
 
    
	
106
    	
 
    	
##.###
    	
 
    
	
107
    	
 
    	
##.###
    	
 
    
	
108
    	
 
    	
##.###
    	
 
    
	
109
    	
 
    	
##.###
    	
 
    
	
110
    	
 
    	
##.###
    	
 
    
	
111
    	
 
    	
##.###
    	
 
    
	
112
    	
 
    	
##.###
    	
 
    
	
113
    	
 
    	
##.###
    	
 
    
	
114
    	
 
    	
##.###
    	
 
    
	
115
    	
 
    	
##.###
    	
 
    
	
116
    	
 
    	
##.###
    	
 
    
	
117
    	
 
    	
##.###
    	
 
    
	
118
    	
 
    	
##.###
    	
 
    
	
119
    	
 
    	
##.###
    	
 
    
	
120
    	
 
    	
##.###
    	
 
    
	
121+
    	
 
    	
00.000
    	
 
    

 

S3

 

TABLE OF PERCENTAGES

(Used for determining the Death Benefit)

 

	
Age
    	
 
    	
Percentage
    	
 
    
	
35
    	
 
    	
###.###
    	
 
    
	
36
    	
 
    	
###.###
    	
 
    
	
37
    	
 
    	
###.###
    	
 
    
	
38
    	
 
    	
###.###
    	
 
    
	
39
    	
 
    	
###.###
    	
 
    
	
40
    	
 
    	
###.###
    	
 
    
	
41
    	
 
    	
###.###
    	
 
    
	
42
    	
 
    	
###.###
    	
 
    
	
43
    	
 
    	
###.###
    	
 
    
	
44
    	
 
    	
###.###
    	
 
    
	
45
    	
 
    	
###.###
    	
 
    
	
46
    	
 
    	
###.###
    	
 
    
	
47
    	
 
    	
###.###
    	
 
    
	
48
    	
 
    	
###.###
    	
 
    
	
49
    	
 
    	
###.###
    	
 
    
	
50
    	
 
    	
###.###
    	
 
    
	
51
    	
 
    	
###.###
    	
 
    
	
52
    	
 
    	
###.###
    	
 
    
	
53
    	
 
    	
###.###
    	
 
    
	
54
    	
 
    	
###.###
    	
 
    
	
55
    	
 
    	
###.###
    	
 
    
	
56
    	
 
    	
###.###
    	
 
    
	
57
    	
 
    	
###.###
    	
 
    
	
58
    	
 
    	
###.###
    	
 
    
	
59
    	
 
    	
###.###
    	
 
    
	
60
    	
 
    	
###.###
    	
 
    
	
61
    	
 
    	
###.###
    	
 
    
	
62
    	
 
    	
###.###
    	
 
    
	
63
    	
 
    	
###.###
    	
 
    
	
64
    	
 
    	
###.###
    	
 
    
	
65
    	
 
    	
###.###
    	
 
    
	
66
    	
 
    	
###.###
    	
 
    
	
67
    	
 
    	
###.###
    	
 
    
	
68
    	
 
    	
###.###
    	
 
    
	
69
    	
 
    	
###.###
    	
 
    
	
70
    	
 
    	
###.###
    	
 
    
	
71
    	
 
    	
###.###
    	
 
    
	
72
    	
 
    	
###.###
    	
 
    
	
73
    	
 
    	
###.###
    	
 
    
	
74
    	
 
    	
###.###
    	
 
    
	
75
    	
 
    	
###.###
    	
 
    
	
76
    	
 
    	
###.###
    	
 
    
	
77
    	
 
    	
###.###
    	
 
    
	
78
    	
 
    	
###.###
    	
 
    
	
79
    	
 
    	
###.###
    	
 
    
	
80
    	
 
    	
###.###
    	
 
    
	
81
    	
 
    	
###.###
    	
 
    
	
82
    	
 
    	
###.###
    	
 
    
	
83
    	
 
    	
###.###
    	
 
    
	
84
    	
 
    	
###.###
    	
 
    
	
85
    	
 
    	
###.###
    	
 
    
	
86
    	
 
    	
###.###
    	
 
    
	
87
    	
 
    	
###.###
    	
 
    
	
88
    	
 
    	
###.###
    	
 
    
	
89
    	
 
    	
###.###
    	
 
    
	
90
    	
 
    	
###.###
    	
 
    
	
91
    	
 
    	
###.###
    	
 
    
	
92
    	
 
    	
###.###
    	
 
    
	
93
    	
 
    	
###.###
    	
 
    
	
94
    	
 
    	
###.###
    	
 
    
	
95
    	
 
    	
###.###
    	
 
    
	
96
    	
 
    	
###.###
    	
 
    
	
97
    	
 
    	
###.###
    	
 
    
	
98
    	
 
    	
###.###
    	
 
    
	
99
    	
 
    	
###.###
    	
 
    
	
100+
    	
 
    	
100.000
    	
 
    

 

S4

 

ALLOCATION OF PREMIUM PAYMENTS:

 

Protective Variable Life Separate Account

 

	
Sub-Accounts:
    	
 
    	
 
    	
 
    
	
[Fidelity Investment Grade Bond 
    	
 
    	
##.##
    	
%
    
	
Lord Abbot Bond Debenture
    	
 
    	
##.##
    	
%
    
	
Goldman Sachs Growth Opportunities
    	
 
    	
##.##
    	
%
    
	
MFS Growth
    	
 
    	
##.##
    	
%
    
	
 
    	
 
    	
 
    	
 
    
	
Protective Life General Account:
    	
 
    	
 
    	
 
    
	
Fixed Account
    	
 
    	
##.###
    	
%
    

 

Allocation by Investment Category (AIC) Limitations on the Effective Date:

 

AIC Guidelines are met by satisfying either 1) or 2) where:

 

1.              Policy Value allocation must meet the following AIC guidelines:

 

a.              At least 35% must be allocated to Category 1 (Conservative);

 

b.              Not more than 65% may be allocated to Category 2 (Moderate);

 

c.               Not more than 30% may be allocated to Category 3 (Aggressive); and

 

d.              No Policy Value may be allocated to Category 4 (General Account Not Permitted).

 

2.              Policy Value is allocated to a model portfolio approved by us.

 

Investment Options available in each category as of the Policy Effective Date are shown in the application.]

 

S5

 

TERMS USED IN THIS POLICY

 

The terms below have specific meaning associated with them each time they are used in this Policy.  Other terms may be defined elsewhere in this Policy and will have that meaning each time they are used in this Policy.

 

Administrative Office:  The location where administrative services for this Policy are performed.

 

Attained Age:  The Insured’s age as of the nearest birthday on the Policy Effective Date plus the number of complete Policy Years since the Policy Effective Date.

 

Beneficiary:  The primary Beneficiary(ies) is the person(s) or class of persons designated to receive the proceeds of this Policy upon the death of the Insured.  You may designate a contingent Beneficiary(ies) to receive the proceeds if there is no primary Beneficiary(ies) living at the time of the Insured’s death.

 

There may be one or more than one Beneficiary in a class.  If one or more persons in the class die before the Insured, the living members of the class will share the Policy’s Death Benefit proceeds equally unless you instruct us otherwise. By Written Notice, you may change a Beneficiary and may designate an Irrevocable Beneficiary.  If you designate an Irrevocable Beneficiary it may limit your ability to change that designation in the future or to make other Policy changes.

 

Cash Value:  It is equal to the Policy Value minus any applicable Surrender Charge.

 

Code:  The Internal Revenue Code of 1986, as amended, or its successor.

 

Fund: An investment portfolio of Protective Investment Company or any other open-end management investment company or unit investment trust in which a Sub-Account invests.

 

General Account:  The assets of the Company other than those allocated to the Variable Account or another separate account.

 

Home Office:  2801 Highway 280 South, Birmingham, Alabama, 35223.

 

Insured:  The person shown on the Policy Schedule upon whose life this Policy is issued.

 

Issue Age:  The Insured’s age as of the nearest birthday on the Policy Effective Date.

 

Issue Date:  The date the Policy is issued. The Issue Date may be a later date than the Policy Effective Date if the initial premium payment is received at the Home Office before the Issue Date.

 

Loan Account Value:  The Policy Value in the Loan Account.

 

Monthly Anniversary Day:  The same day of the month as the Policy Effective Date. The Monthly Anniversary Day is shown on the Policy Schedule.

 

Net Asset Value Per Share:  The value per share of any Fund as computed on any Valuation Day as described in the Fund prospectus.

 

ICC14-V13

 

1

 

Net Premium:  The amount remaining of each premium payment after deduction of the Premium Expense Charge.  The Premium Expense Charge is shown in the Policy Schedule.

 

Owner:  The person, persons or entity entitled to all rights in this Policy while the Insured is living.  These rights are subject to any assignment and to the rights of any Irrevocable Beneficiary. You may name a contingent Owner who will own this Policy if you die while this Policy is in force.  If you die before the Insured, any contingent Owner named in the application, or subsequent endorsement, will become the new Owner.  If no contingent Owner is named, your estate becomes the new Owner.  You may change the Owner (including a contingent Owner) by Written Notice.

 

Policy Anniversary:  The same day in each Policy Year as the Policy Effective Date.

 

Policy Debt:  The sum of all outstanding policy loans plus accrued interest.

 

Policy Effective Date:  The date shown on the Policy Schedule and on which coverage takes effect.  For any increase, decrease, additions, or changes to coverage, the Policy Effective Date shall be the first Monthly Anniversary Day on or following the date the supplemental application is approved by the Company. The Policy Effective Date will never be the 29th, 30th or the 31st of a month.

 

Policy Value:  The sum of the Variable Account Value, the Fixed Account Value and the Loan Account Value. The Policy Value on the Policy Effective Date is the initial Net Premium less the Monthly Deduction for the upcoming month.

 

Policy Year:  Each period of 12 months commencing with the Policy Effective Date.

 

Proceeds: The amount payable upon claiming a Death Benefit, requesting a full surrender or a Withdrawal.

 

Sub-Account:  A separate division of the Variable Account. Each Sub-Account invests in a corresponding Fund.

 

Surrender Value:  The Cash Value minus any outstanding Policy Debt.

 

Unit:  A unit of measurement used to calculate the Sub-Account Values.

 

Valuation Day:  Each day the New York Stock Exchange is open for business except Federal and other holidays and days when the Company is not otherwise open for business.

 

Valuation Period:  The period commencing at the close of regular trading on the New York Stock Exchange on any Valuation Day and ending at the close of regular trading on the New York Stock Exchange on the next succeeding Valuation Day.

 

Written Notice and Request: Any information we receive at our Administrative Office which is written, signed and dated by you and is acceptable to us.  No change in this Policy is valid unless it is approved by one of our officers and, unless otherwise specified, will be effective as of the date it is signed.  No agent or other person has the authority to change this Policy.  Instructions, requests and assignments are subject to any payment we made and any action we took prior to receiving the Written Notice.

 

2

 

GENERAL PROVISIONS

 

Commission Standards:  This Policy is approved and issued under the authority and standards of the Interstate Insurance Product Regulation Commission (the “Commission”).  Any provision of this Policy, as of the Policy Effective Date, that is in conflict with the Commission’s standards for this product type is hereby amended to conform to the Commission’s standards as of the Policy Effective Date.

 

Entire Contract:  This Policy is a legal contract between you and us.  We entered into this contract in consideration of a complete application and the payment of premiums.  The Policy, including its applications, both initial and supplemental, all endorsements, amendments, riders and Policy Schedule, both initial and supplemental, are consolidated, attached, and constitute the entire agreement between you and us.

 

Representations and Contestability:  In determining whether to issue this Policy we relied on the statements in the application made by and for the Insured. We acknowledge these statements are representations, not warranties.  We have the right to contest the validity of this Policy or resist any claim based on a material misrepresentation in any application we accept and make part of this Policy. However, we cannot bring any legal action to contest the validity of this Policy or to resist a claim after the Policy has been in force for two years during the life of the Insured, except for the non-payment of premium.

 

If we accept an application, requiring evidence of insurability, to change the Policy, add or change a benefit, or reinstate the Policy after it has Lapsed and make the application part of this Policy, we cannot bring any legal action to contest the change, addition or reinstatement after such change, addition or reinstatement has been in force for two years during the life of the Insured, except for the non-payment of premium.  The contestability period for a reinstated Policy is based only on statements made in the reinstatement application, unless the original contestability period has not yet expired.

 

Error in Age or Gender:  Questions in the application concern the Insured’s date of birth and gender. If the date of birth or gender given in the application or any application for riders is not correct, the Death Benefit and any benefits provided under any riders to this Policy will be adjusted to those which would be purchased by the most recent deduction for the cost of insurance and the cost of any benefits provided by such riders, at the correct age and gender.

 

Assignment:  You may assign your rights under this Policy. However, for this assignment to be binding on the Company, it must be by Written Notice and with the consent of any Irrevocable Beneficiary.  However, this Policy may not be assigned where prohibited by law or regulation in the state in which this Policy is delivered.  We assume no responsibility for the validity of any assignment and any claim under any assignment shall be subject to proof of interest and the extent of assignment. Once we receive a signed copy of the assignment, the Owner’s rights and the interest of any Beneficiary or any other person will be subject to the assignment. An assignment is subject to any Policy Debt.

 

Suicide Exclusion:  If the Insured commits suicide, while sane or insane, within two years from the Policy Effective Date, our total liability shall be limited to the premium payments made before death, less any Policy Debt and less any Withdrawals. If the Insured commits suicide, while sane or insane, within two years from the effective date of any increase in the Face Amount, our total liability with respect to such increase shall be limited to the sum of the monthly Cost of Insurance Charges deducted for such increase.

 

3

 

Termination:  All coverage under this Policy shall terminate when any one of the following events occurs:

 

(1)         The Owner requests a full surrender. Surrender will require a return of this Policy.

 

(2)         The Insured dies and we settle claims for the Death Benefit Proceeds.

 

(3)         The Policy lapses, as described in the sub-section entitled “Grace Period” under “Premiums” and the sub-section entitled “Loan Account” under “Policy Loans”.

 

(4)         The Death Benefit Proceeds are equal to or less than zero.

 

Annual Report:  At least once per year we will send you a report for this Policy showing, as of the end of the report period: (1) the current Death Benefit; (2) the current Policy Value and the Policy Value as of the beginning of the reporting period; (3) the current Fixed Account Value; (4) the current Variable Account Value; (5) the current Loan Account Value; (6) the current Sub-Account Values; (7) premium payments made since the last report; (8) any Withdrawals since the last report; (9) any policy loans and accrued interest; (10) the current Surrender Value; (11) the Owner’s current premium allocations; (12) charges deducted since the last report; and (13) any other information required by law.

 

In addition, we will provide an illustrative Report for this Policy at any time upon the Owner’s Written Request. If you request this information more frequently than annually, we may charge a fee which will not exceed $50.

 

Tax Considerations:  In order to receive the tax treatment afforded to life insurance contracts, this Policy must qualify at all times as a life insurance contract under the Code. We reserve the right if necessary to prevent this Policy from failing to qualify under the Code as a life insurance contract, to:

 

(a)         decline to accept a premium payment; or

 

(b)         decline to process a withdrawal; or

 

(c)          refund a premium payment, including any earnings thereon.

 

We also reserve the right, with the Owner’s written consent, to make changes to this Policy or to any endorsements or to any riders or to make distributions from this Policy to the extent we consider necessary for this Policy to continue to qualify as a life insurance contract. Such changes will apply uniformly to all affected policies, and we will provide you written notification of such changes.

 

4

 

PREMIUMS

 

Premium Payment(s):  Premium payment(s) are payable in advance at the Administrative Office or to any agent of the Company. Premium payment(s) must be made by check payable to Protective Life Insurance Company or by any other method we deem acceptable. The least amount of premium payment(s) that we will accept is $50 if paid by a monthly pre-authorized payment arrangement; or $150 for any other mode of payment accepted by the Company. Upon request, a receipt for premium payment(s) will be sent.

 

We reserve the right to refund a premium payment, including any earnings thereon, which:

 

(a)         in the first Policy Year, causes the Death Benefit to exceed the Initial Face Amount shown on the Policy Schedule; or,

 

(b)         increases the difference between the Death Benefit and the Policy Value.

 

We have the right not to accept any premium payment in the event that we determine that the premium payment will cause this Policy to fail to qualify as a life insurance contract under the Code.

 

No insurance will take effect until the initial premium payment is paid and the health and other conditions of the Insured are determined to be the same as that described in the application on the date this Policy is delivered.

 

Net Premiums will be allocated to the Sub-Accounts and the Fixed Account according to your instructions contained in the application during the Valuation Period in which we receive them. You may change the allocations in effect at any time by Written Notice. Allocations must be made in whole percentages. The minimum amount that can be allocated to any Sub-Account or the Fixed Account is 10% of any Net Premiums, and the sum of allocations must add up to 100%. We reserve the right to establish a limitation on the number of Sub-Accounts to which Net Premiums may be allocated and/or a minimum allocation requirement for the Sub-Accounts and the Fixed Account.

 

If this Policy is issued in a state where, upon cancellation and within the cancellation period, the Company returns the premium payment(s) made, we reserve the right to allocate the initial premium payment and any additional premium payments made during the cancellation period to the Fixed Account or Money Market Sub-Account. After the cancellation period, allocations will be made in accordance with your instructions.

 

Planned Premium Payments:  Planned premium is our understanding of your intention regarding premium payments at any particular time. Your initial planned premium amount and mode was communicated to us on the application and is shown in the Policy Schedule. You may change the amount and/or mode of your planned premium by Written Notice. You may choose periodic reminders for the planned premium on an annual, semiannual or quarterly basis, or may pre-authorize automatic payment of planned premiums from a designated account at your bank or other financial institution.

 

Our acceptance of your planned premium instructions does not in any way imply or guarantee insurance coverage or any other benefit provided by this Policy will continue. If planned premium payments are discontinued and no subsequent premiums are paid, the insurance coverage will continue until the end of the Grace Period.

 

If you stop paying premiums, coverage will continue subject to the Grace Period provision and all other provisions of the policy until the Surrender Value is no longer sufficient to cover the Monthly Deductions.  Subject to the limits described above, while this Policy is in force, we will accept premium payment(s) other than the planned premium payments.

 

5

 

Grace Period:  Unless this Policy is otherwise continued under the Lapse Protection guarantee, if the Surrender Value on a Monthly Anniversary Day is insufficient to cover the Monthly Deductions due on that Monthly Anniversary Day, this Policy will begin a 61 day Grace Period.  The insurance provided by this Policy remains in effect during the Grace Period.

 

If the Owner does not pay sufficient Net Premiums to cover the current and past due Monthly Deductions by the end of the Grace Period, this Policy will terminate without value and all coverage under this Policy will terminate 61 days after the mailing date of the notice of premium due. At the beginning of the Grace Period, we will mail a notice of such premiums due to your last known address and to the address of any assignee of record.  If the Insured dies during a Grace Period, the Death Benefit will be reduced by the amount of the unpaid Monthly Deductions and Policy Debt before we pay or settle the Death Benefit Proceeds.

 

Reinstatement:  If this Policy has terminated at the end of the Grace Period, you may request that it be reinstated during the life of the Insured. We will reinstate this Policy, if we receive:

 

(1)         the Owner’s written request within five years after the end of the Grace Period,

 

(2)         evidence of insurability satisfactory to Us,

 

(3)         payment of Net Premium equal to all Monthly Deductions that were due and unpaid during the Grace Period, and payment of premium payments at least sufficient to keep this Policy in force for three months (we may accept premium payments larger than this amount), and

 

(4)         payment of or reinstatement of any Policy Debt which existed at the end of the Grace Period.

 

The effective date of a reinstated Policy will be the day we approve the reinstatement and all of the above requirements have been met.  The beginning Policy Value, Surrender Charge and Policy Debt, if any, of the reinstated Policy will be determined based on the Policy Value, Surrender Charge and Policy Debt, if any, as of the date the Policy entered the most recent Grace Period.

 

6

 

DETERMINING FIXED ACCOUNT VALUES

 

Fixed Account:  The Fixed Account is part of the Company’s General Account to which Policy Value may be transferred or Net Premiums allocated under a Policy.

 

Fixed Account Value:  The value of the Fixed Account at any time is equal to:

 

(a)         the Net Premiums allocated to the Fixed Account; plus

 

(b)         Policy Value transferred to the Fixed Account; plus

 

(c)          interest credited to the Fixed Account; less

 

(d)         any Withdrawals including any withdrawal charges deducted or transfers from the Fixed Account including any transfer fees deducted from the Fixed Account; less

 

(e)          any Surrender Charges deducted in the event of a decrease of the Face Amount; less

 

(f)           Policy loans; less

 

(g)          Monthly Deductions (if calculated on a Monthly Anniversary Day).

 

Interest Credited:  The Company guarantees that the interest credited during the first Policy Year to the initial Net Premiums allocated to the Fixed Account will be at a rate not less than the Initial Annual Effective Interest Rate for the Fixed Account shown on the Policy Schedule.

 

For subsequent Net Premiums allocated to the Fixed Account or Policy Value transferred to the Fixed Account, the guaranteed interest rate applicable will be the annual effective interest rate in effect on the date we receive the subsequent Net Premium or the date the transfer is made. Such guaranteed interest rate will apply to such amounts for a twelve-month period which begins on the date the Net Premium is allocated or the date the transfer is made.

 

After the guaranteed interest rate expires, we will credit interest on the Fixed Account Value attributable to such Net Premiums and transfers at the current interest rate in effect. New current interest rates are effective for such Fixed Account Value for 12 months from the time they are first applied. The Initial Annual Effective Interest Rate and the current interest rates the Company will credit are annual effective interest rates of not less than the annual Guaranteed Interest Rate for Fixed Account shown on the Policy Schedule. For purposes of crediting interest, amounts deducted, transferred or withdrawn from the Fixed Account will be accounted for on a “first-in, first-out” (FIFO) basis.

 

We reserve the right to apply different interest rate guarantees to certain amounts credited to the Fixed Account. Interest shall be credited to the Fixed Account on a daily basis.

 

7

 

DETERMINING VARIABLE ACCOUNT VALUES

 

Variable Account:  The Protective Variable Life Separate Account, a separate investment account of the Company used to fund variable life insurance benefits to which Policy Value may be transferred or into which Net Premiums may be allocated. The variable benefits under this Policy are provided through the Variable Account. The Variable Account is registered with the Securities and Exchange Commission as a unit investment trust under the Investment Company Act of 1940.

 

The portion of the assets of the Variable Account equal to the reserves and other contract liabilities of the Variable Account are not chargeable with the liabilities arising out of any other business the Company may conduct. We have the right to transfer to our General Account any assets of the Variable Account which are in excess of such reserves and other liabilities. The assets of the Variable Account are available to cover the liabilities of the General Account of the Company only to the extent that the assets of the Variable Account exceed the liabilities of the Variable Account arising under the policies supported by the Variable Account.

 

Variable Account Value:  The sum of all Sub-Account Values.

 

Sub-Accounts of the Variable Account:  The assets of the Variable Account are divided into a series of Sub-Accounts that are listed on the Policy Schedule and in the current prospectus the Owner received. Each Sub-Account invests exclusively in shares of a corresponding Fund. Any amounts of income, dividends, and gains distributed from the shares of a Fund will be reinvested in additional shares of that Fund at its Net Asset Value Per Share.

 

When permitted by law, we may:

 

(1)         create new Variable Accounts;

 

(2)         combine Variable Accounts;

 

(3)         add new Sub-Accounts to or remove existing Sub-Accounts from the Variable Account or combine Sub-Accounts;

 

(4)         make new Sub-Accounts or other Sub-Accounts available to such classes of policies as we may determine;

 

(5)         add new Funds or remove existing Funds;

 

(6)         substitute a different Fund for any existing Fund if shares of a Fund are no longer available for investment or if we determine that investment in a Fund is no longer appropriate in light of the purposes of the Variable Account;

 

(7)         deregister the Variable Account under the Investment Company Act of 1940 if such registration is no longer required;

 

(8)         operate the Variable Account as a management investment company under the Investment Company Act of 1940 or in any other form permitted by law; and

 

(9)         make any changes to the Variable Account or its operations as may be required by the Investment Company Act of 1940 or other applicable law or regulations.

 

The investment policy of the Variable Account will not be changed without approval pursuant to the insurance laws of the Company’s state of domicile. If required, approval of or change of investment policy will be filed with the insurance department of the state where this Policy is delivered.

 

The values and benefits of this Policy provided by the Variable Account depend on the investment performance of the Funds in which your selected Sub-Accounts are invested. The Company does not guarantee the investment performance of the Funds. The Owner bears the full investment risk for Net Premiums allocated or Policy Value transferred to the Sub-Accounts.

 

8

 

Valuation of Assets:  Assets of Funds held by each Sub-Account will be valued at their Net Asset Value Per Share on each Valuation Day. The prospectus the Owners(s) received for the Funds defines the Net Asset Value Per Share of the Funds and describes each Fund.

 

Sub-Account Values:  The Sub-Account Value for any Sub-Account is equal to the number of Units this Policy then has in that Sub-Account, multiplied by the value of such Units at that time. Amounts allocated, transferred or added to a Sub-Account are used to purchase Units of that Sub-Account. Units are redeemed when amounts are deducted, transferred, or withdrawn. The number of Units in a Sub-Account at any time is equal to the number of Units purchased minus the number of Units redeemed up to such time.

 

For each Sub-Account, the Net Premiums allocated to the Sub-Account or Policy Value transferred to the Sub-Account are converted into Units.  The number of Units credited is determined by dividing the dollar amount directed to each Sub-Account by the value of the Unit for that Sub-Account for the Valuation Day on which the Net Premiums allocated to or Policy Value transferred are credited to the Sub-Account. The Unit value at the end of every Valuation Day is the Unit value at the end of the previous Valuation Day times the Net Investment Factor, as described below.

 

For each Sub-Account, amounts deducted, transferred, or withdrawn from the Sub-Account are converted into Units. The number of Units debited is determined by dividing the dollar amount directed from each Sub-Account by the value of the Unit for that Sub-Account for the Valuation Day on which the amount deducted, transferred, or withdrawn is debited from the Sub-Account. The Unit value at the end of every Valuation Day is the Unit value at the end of the previous Valuation Day times the Net Investment Factor, as described below.

 

Net Investment Factor:  The Unit value for each Sub-Account for any Valuation Period is determined by the Net Investment Factor. The Net Investment Factor is an index applied to measure the investment performance of a Sub-Account from one Valuation Period to the next. The Net Investment Factor for a Sub-Account for any Valuation Period is determined by dividing (1) by (2) where

 

(1)         is the result of:

 

a.              the Net Asset Value Per Share of the Fund held in the Sub-Account, determined at the end of the current Valuation Period; plus

 

b.              the per share amount of any dividend or capital gain distributions made by the Fund to the Sub-Account, if the “ex-dividend” date occurs during the current Valuation Period; plus or minus

 

c.               a per share charge or credit for any taxes reserved for, which is determined by the Company to have resulted from the operations of the Sub-Account.

 

(2)         is the Net Asset Value Per Share of the Fund held in the Sub-Account, determined at the end of the last prior Valuation Period.

 

9

 

ADDITIONAL PROVISIONS FOR DETERMINING VALUES

 

Transfers:  On or after the later of thirty days after the Policy Effective Date or six days after the thirty-day cancellation period, or such other period as required by law, you may, by Written Notice, transfer the Fixed Account Value or any Sub-Account Value to other Sub-Accounts and/or the Fixed Account. The transfer will be effected as of the Valuation Period during which we receive your Written Notice.

 

The amount of each transfer must be at least $100, or if the value in an account is less, the entire amount. If, after the transfer, the amount remaining in the Fixed Account or Sub-Account(s) from which the transfer is made is less than $100, we reserve the right to transfer the entire amount instead of the requested amount. We reserve the right to limit the maximum amount which may be transferred from the Fixed Account in any Policy Year.  This maximum is currently the greater of $2500 or 25% of the Fixed Account Value.

 

The Policy Value on the effective date of the transfer will not be affected except to the extent of the transfer fee. We reserve the right to limit transfer requests to no more than 12 per Policy Year.  For each additional transfer request over 12 during each Policy Year, we reserve the right to charge a transfer fee indicated on the Policy Schedule, which will be deducted from the amount being transferred.

 

We reserve the right, at any time and without prior notice, to terminate, suspend or modify the transfer privileges described above.

 

Deductions from the Policy Value:  Monthly Deductions, Other Deductions and Surrender Charges are described on the Policy Schedule.

 

Net Amount at Risk:  The Net Amount at Risk as of any Monthly Anniversary Day is equal to the Death Benefit discounted at one plus the monthly guaranteed interest rate minus the Policy Value (prior to deducting the Cost of Insurance).

 

For Face Amount increases, Net Amount at Risk is apportioned among the Initial Face Amount and the Face Amount increases by calculating the sum of the Policy Value plus the applicable corridor amount from the Death Benefit provision, and allocating Net Amount at Risk to that amount.  Any remaining Net Amount at Risk is then applied to the Face Amount increases, beginning with the most recent and continuing in like manner until all the Net Amount at Risk is allocated to Face Amount increases.  Any remaining Net Amount at Risk is then applied to the Policy’s Initial Face Amount, and is added to the sum determined above.

 

Cost of Insurance Charge:  The monthly Cost of Insurance Charge is computed at the beginning of each policy month by multiplying the Net Amount at Risk (divided by $1,000) by the Cost of Insurance Rate.  The Cost of Insurance Charge is computed separately for the Initial Face Amount and for each increase in Face Amount.

 

Cost of Insurance Rates:  The monthly Cost of Insurance Rate is based on the sex, Issue Age, duration and rate class of the Insured and on the number of years that a Policy has been in force. For each Face Amount increase, we will use the Issue Age, sex, rate class and duration of this Policy at the time of the request.  We will determine monthly cost of insurance rates, based on our expectations as to future investment earnings, mortality, persistency, taxes, expenses and other relevant factors.

 

Any change in the monthly Cost of Insurance Rates will be by class and based on expectations of future investment earnings, mortality, persistency, taxes, expenses and other relevant factors. However, the Cost of Insurance Rates will never be greater than those shown in the Guaranteed Maximum Monthly Cost of Insurance Rates Table on the Policy Schedule.

 

10

 

Changes in Policy Cost Factors:  Changes in non-guaranteed credited rates, Cost of Insurance Charge rates, Mortality and Expense Risk Charge rates, administration charge rates, or expense charge rates, if any, will be by class and will be based upon changes in future expectations of such factors as investment earnings, mortality, persistency, expenses, and taxes.

 

Minimum Values:  The values and benefits of this Policy will not be less than the minimum benefits required by the National Association of Insurance Commissioners Variable Life Insurance Regulation, model #270 using Actuarial Guideline XXIV.  The method of computing minimum required values has been filed with the Interstate Insurance Product Regulation Commission.

 

Continuation of Insurance:  If this Policy is in force on the date that the Insured attains age 121, no additional premium payments will be accepted and the Monthly Deduction will cease.  The Policy will remain in force. Interest will continue to accrue on the Policy Value and on the Policy Debt, if any. Your ability to take partial withdrawals or loans and to repay Policy Debt continue.

 

Upon the death of the Insured, we will calculate and pay the Death Benefit Proceeds as described in the “DEATH BENEFIT” section of this Policy.

 

If the Policy remains in force after the date that the Insured attains the Age 121, this Policy may not qualify as life insurance under the Code.  If you choose to continue the Policy under this provision, you should consult your personal tax advisor, as there may be adverse tax consequences.

 

11

 

ACCESSING POLICY VALUES

 

Right to Make Loans:  After the Policy has Cash Value, while this Policy is in force and during the life of the Insured, loans can be made on this Policy provided it has Surrender Value greater than zero.  Assignment of this Policy to the Company is the only collateral required.  The most you can borrow is an amount that equals 99% of the Cash Value of the Policy minus any Policy Debt on the date the policy loan request is received.  Policy Debt can be repaid, in part or in full, any time during the Insured’s life and while this Policy is in force.  A Written Notice must accompany your payment to distinguish it from a premium payment.  When a loan repayment is made, Policy Value in the Loan Account in an amount equal to that payment will be transferred to the Sub-Account(s) and the Fixed Account.  You may tell us how to allocate this transfer among the Sub-Account(s) and the Fixed Account. If no allocation is specified, we will allocate that amount among the Sub-Account(s) and the Fixed Account in the same proportion that premium payments are allocated.

 

Loan Interest:  The interest charged on any Policy loan is at an effective annual rate, shown on the Policy Schedule, compounded yearly on the Policy Anniversary. Interest payments are payable in arrears on each Policy Anniversary. If loan interest is not paid when due, it is added to the loan principle and will bear interest at the applicable effective annual rate until paid.  Interest, as it accrues from day to day, is considered part of the Policy Debt.

 

Loan Account:  The Loan Account is an account within the Company’s General Account to which the Fixed Account Value and/or Variable Account Value is transferred as collateral for Policy loans.  When a Policy loan is made, an amount sufficient to secure the Policy loan is transferred out of the Sub-Account(s) and the Fixed Account and into the Policy’s Loan Account. You may specify how to allocate the amount to be transferred to the Loan Account as collateral from among the Sub-Account(s) and the Fixed Account. If no allocation is specified, the amount will be allocated in the same proportion that the value of the Owner’s Fixed Account and the value of the Owner’s Sub-Account(s) bear to the total un-loaned Policy Value on the date the policy loan is made. An amount equal to any unpaid policy loan interest will also be transferred on each Policy Anniversary to the Loan Account and it will be allocated based on the proportion that the values of the Owner’s Fixed Account and Sub-Account(s) bear to the total un-loaned Policy Value. The Loan Account Value will be recalculated when Policy interest is added to the amount of the loan, when a loan repayment is made, or when a new Policy loan is made.

 

We will credit the Loan Account with interest at an effective annual rate of not less than the Guaranteed Interest Rate for the Fixed Account shown on the Policy Schedule. We will determine such rate in advance of each calendar year and will apply to the calendar year which follows the date of determination. On each Policy Anniversary, the interest earned on the Loan Account since the preceding Policy Anniversary will be transferred to the Sub-Account(s) and the Fixed Account in the same proportion that premium payments are allocated.

 

If the Loan Account Value exceeds the Cash Value, the Owner must pay the excess. We will send you, and any assignee of record, a notice of the amount you must pay. This amount must be paid within 61 days after the notice is sent, or this Policy will terminate.

 

12

 

Surrenders:  Prior to the Insured’s death, and while this Policy is in force, you may surrender this Policy, by Written Request, for its Surrender Value.  The surrender will be effective as of the Valuation Period during which we receive your Written Notice. If this Policy is surrendered, any applicable Surrender Charge as described on the Policy Schedule will be imposed. Once the surrender is effective, all benefits provided by this Policy cease and this Policy cannot be reinstated.

 

Withdrawals:  After the first Policy Year, you may make a Written Request for a Withdrawal, subject to certain restrictions. The minimum Withdrawal request is $500. The maximum Withdrawal request may be for an amount less than the Surrender Value.  The Sub-Account Value(s) and Fixed Account Value will be reduced by the amount withdrawn (including the withdrawal charge as described on the Policy Schedule) as of the Valuation Period during which we receive your Written Notice.  You may specify how the Withdrawal and withdrawal charge are to be deducted from the Sub-Account Value(s) and Fixed Account Value. If you do not specify an allocation, we will allocate the withdrawal and withdrawal charge based on the proportion that the value in the Fixed Account and the value in the Sub-Accounts bear to the un-loaned Policy Value.

 

We reserve the right to reduce the Face Amount of this Policy by the amount of the Withdrawal (exclusive of the withdrawal charge). Face Amount reductions will be effective at the same time as the Withdrawal. The order of Face Amount reductions will be as provided in the provision “Decreasing the Face Amount”. There will be no Surrender Charge for a Face Amount reduction resulting from a Withdrawal.

 

We may decline a Withdrawal request if the remaining Face Amount would be below the minimum amount for which the Company would then issue the Policy under its rules; or we determine that the Withdrawal would cause this Policy to fail to qualify as a life insurance contract under the Code.

 

Suspension or Delay in Payment:  We have the right to suspend or delay the date of payment of a Withdrawal, Loan, Surrender, or the variable Death Benefit Proceeds for any period:

 

(1)         when the New York Stock Exchange is closed; or

 

(2)         when an emergency exists (as determined by the Securities & Exchange Commission) as a result of which (a) the disposal of securities in the Variable Account is not reasonably practicable; or (b) it is not reasonably practicable to determine fairly the value of the net assets of the Variable Account.

 

Provided, however this provision shall not apply to withdrawals and/or loans requested to make premium payments.  In addition, we may defer payment, provided such payments are based on Policy Values which do not depend on the investment experiences of the Variable Account of any Withdrawal, surrender or the making of a Policy loan for up to six (6) months after a Written Request is received.

 

If we delay payment of surrender benefits under this Policy, we will pay interest at the rate specified under applicable state law as required, if any, at the time of the request.

 

13

 

DEATH BENEFIT

 

Death Benefit:  A Death Benefit is payable when we receive a properly completed claim form and due proof of the death of the Insured while this Policy was in force.  Due proof of death includes a certified copy of the death certificate (or other lawful evidence providing equivalent information) and proof of the interest of the claimant in the Proceeds.

 

The Death Benefit Proceeds will be determined as of the date of the Insured’s death and will be equal to the Death Benefit plus any additional benefits due under riders attached to this Policy.  Policy Debt, and any unpaid Monthly Deductions from a death during a Grace Period, will be deducted from the Death Benefit Proceeds.

 

The Death Benefit will be the greater of:

 

(a)         The Face Amount of insurance on the Insured’s date of death; or

 

(b)         a specified percentage of the Policy Value on the date of the Insured’s death as indicated on the Table of Percentages, shown on the Policy Schedule.

 

Payment of Death Benefit Proceeds:  We will pay the Death Benefit Proceeds to the Beneficiary in a lump sum, unless a Settlement Option has been selected. If the Primary or Contingent Beneficiary is not living, or if no Beneficiary has been designated, we will pay the Owner or Owner’s estate.

 

Interest on Death Benefit Proceeds:  Interest on Death Benefit Proceeds is payable from the date of death at the rate applicable to proceeds of life insurance left on deposit with the Company.  Additional interest at an annual rate of 10% will be paid beginning on the 31st calendar day from the latest of the following, to the date the Proceeds are paid:

 

a)             The date we receive due proof of death;

 

b)             The date we receive sufficient information to determine our liability, the extent of that liability, if any, and to identify the payee legally entitled to the Proceeds; or,

 

c)              The date we are provided with sufficient evidence that all legal impediments to the payment of Proceeds dependant on parties other than the Company have been resolved.

 

Settlement Options:  Depending on the needs of the Beneficiary, a selection of Settlement Options may be available.  Settlement Options are used to distribute Policy Proceeds over a period of time rather than paying them in a lump sum.  Proceeds from the Death Benefit and Full Surrenders may be applied to a Settlement Option.  You may select or change a Settlement Option from those available while this Policy is in force and prior to the death of the Insured.  If you do not select a Settlement Option, the Beneficiary may select a Settlement Option from among those available at that time, or may take the amount due immediately in a lump sum.

 

14

 

CHANGING THIS POLICY

 

You may request, by Written Notice, any one of the following changes subject to certain conditions.  We will send you supplemental Policy Schedule or other acknowledgment that documents the Policy change and shows its effective date.

 

Increasing the Face Amount:  On or after the first Policy Anniversary, you may submit a supplemental application for an increase in Face Amount. We reserve the right to require satisfactory proof of insurability. The Insured’s current Attained Age must be less than the maximum Issue Age. The amount of any increase must be at least $10,000. Any increase approved by the Company will be effective on the effective date shown on the supplemental Policy Schedule which will be issued and attached to the Policy and will be subject to monthly cost of insurance deductions for the increase from the Policy Value of this Policy.

 

Additional premium payments may be required in connection with an increase in Face Amount. We will notify you if additional premium payments are required and specify the premium payments required on the supplemental Policy Schedule.

 

The cancellation provision on the cover of this Policy applies equally to any increase in Face Amount except that where no additional premium payments are required in order to increase the Face Amount, only the first monthly cost of insurance deduction and the administration fee for increases in Face Amount will be credited back to the Sub-Accounts and Fixed Account in the proportion that each Sub-Account Value and the Fixed Account Value bears to the un-loaned Policy Value if the increase is cancelled.

 

Decreasing the Face Amount:  On or after the first Policy Anniversary you may request in writing a decrease in Face Amount subject to the following rules.  Any decrease will go into effect on the Monthly Anniversary Day that falls on or next following the date we approve the Written Request for change. The decrease will first be applied against increases in Face Amount in the reverse order in which they occurred. It will then be applied against the Initial Face Amount. We reserve the right to prohibit any decrease for the three years following an increase in Face Amount; and for one Policy Year following the last decrease in Face Amount.

 

The Face Amount remaining in effect after any decrease cannot be less than the Minimum Face Amount shown on the Policy Schedule. Decreasing the Face Amount may result in lower Monthly Deductions or a refund in premiums and earnings thereon. Decreasing the Initial Face Amount may result in a Surrender Charge, as described in the Policy Schedule. We reserve the right to refuse a decrease in Face Amount if such decrease would cause this Policy to fail to qualify as a life insurance contract under the Code.

 

Change Approval:  All changes must be approved by the Home Office. No agent has the authority to make any changes or waive any of the terms of this Policy.

 

15

 

THIS PAGE INTENTIONALLY LEFT BLANK

 

 

READ THE CONTRACT CAREFULLY

THIS POLICY IS A LEGAL CONTRACT BETWEEN THE OWNER AND THE COMPANY

INDIVIDUAL FLEXIBLE PREMIUM VARIABLE ADJUSTABLE LIFE INSURANCE POLICY

NON-DIVIDEND PAYING

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