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EXHIBIT 4.2    
    

OMNIBUS INSTRUMENT  

        WHEREAS, parties named herein desire to enter into certain Program Documents, each such document dated as of the date specified in this Omnibus Instrument,
relating to the issuance by Protective Life Secured Trust 2004-23 (the "Trust") of Notes to investors under Protective Life Insurance Company's ("Protective Life") secured notes program; 

        WHEREAS,
if the Pricing Supplement (attached to this Omnibus Instrument as Annex A, the "Pricing Supplement") indicates that the Trust is a Delaware statutory trust, the Trust
will be organized under and its activities will be governed by (i) the provisions of the Statutory Trust Agreement (set forth in Section A of this Omnibus Instrument), dated as of the
date of the Pricing Supplement (the "Execution Date"), by and between the parties thereto indicated in Section I herein, and (ii) the certificate of trust of the Trust; 

        WHEREAS,
if the Pricing Supplement indicates that the Trust is a common law trust, the Trust will be organized under and its activities will be governed by the provisions of the Common
Law Trust Agreement (set forth in Section A of this Omnibus Instrument), dated as of the Execution Date, by and between the parties thereto indicated in Section I herein; 

        WHEREAS,
the Trust will be administered pursuant to the provisions of the Administrative Services Agreement (set forth in Section B of this Omnibus Instrument), dated as of the
Execution Date, by and between the parties thereto indicated in Section I herein; 

        WHEREAS,
certain costs and expenses of the Trust and the service providers to the Trust will be paid pursuant to the Expense and Indemnity Agreement (set forth in Section C of
this Omnibus Instrument), dated as of the Execution Date, by and between the parties thereto indicated in Section I herein; 

        WHEREAS,
certain licensing arrangements between the Trust and Protective Life will be governed pursuant to the provisions of the License Agreement (set forth in Section D of this
Omnibus
Instrument), dated as of the Execution Date, by and between the parties thereto indicated in Section I herein; 

        WHEREAS,
the Notes will be issued pursuant to the Indenture (set forth in Section E of this Omnibus Instrument), dated as of the Original Issue Date, by and between the parties
thereto indicated in Section I herein; 

        WHEREAS,
if the Trust is issuing InterNotes® to retail investors, then the sale of the Notes will be governed by the Selling Agent Agreement (set forth in Section F of
this Omnibus Instrument), dated as of the Execution Date, by and between the parties thereto indicated in Section I herein; 

        WHEREAS,
if the Trust is issuing secured medium-term notes to institutional investors, then the sale of the Notes will be governed by the Distribution Agreement (set forth in
Section G of this Omnibus Instrument), dated as of the Execution Date, by and between the parties thereto indicated in Section I herein; and 

        WHEREAS,
certain agreements relating to the Notes and the Funding Agreement are set forth in the Coordination Agreement (set forth in Section H of this Omnibus Instrument), dated
as of the Original Issue Date, by and among the parties thereto indicated in Section I herein. 

        All
capitalized terms used herein and not otherwise defined will have the meanings set forth in the Indenture. 

   SECTION A

Trust Agreement  

        Section A-1. Delaware Statutory Trust

If the Pricing Supplement indicates that the Trust is a Delaware Statutory Trust, the following shall constitute the Trust Agreement.

STATUTORY TRUST AGREEMENT

by and among

AMACAR Pacific Corp., as Trust Beneficial Owner and Administrator

and

Wilmington Trust Company, as Delaware Trustee 

        THIS
STATUTORY TRUST AGREEMENT, dated as of the Execution Date, by and among AMACAR Pacific Corp., a Delaware corporation (the "Trust Beneficial
Owner" and "Administrator") and Wilmington Trust Company, a Delaware banking corporation, as Delaware Trustee (the
"Delaware Trustee"). 

W I T N E S S E T H:  

        WHEREAS, the Trust Beneficial Owner and the Delaware Trustee desire to authorize the issuance of a Trust Beneficial Interest and a Series of Notes in connection
with the entry into this Statutory Trust Agreement; 

        WHEREAS,
all things necessary to make this Statutory Trust Agreement a valid and legally binding agreement of the Delaware Trustee and the Administrator, enforceable in accordance with
its terms, have been done; 

        WHEREAS,
the parties intend to provide for, among other things, (i) the issuance and sale of the Notes (pursuant to the Indenture and the
applicable Program Distribution Agreement) and the Trust Beneficial Interest, (ii) the use of the proceeds of the sale of the Notes and Trust Beneficial
Interest to acquire the Funding Agreements, and (iii) all other actions deemed necessary or desirable in connection with the transactions contemplated
by this Statutory Trust Agreement; and 

        WHEREAS,
the parties hereto desire to incorporate by reference those certain Standard Statutory Trust Terms, dated November 7, 2003, and attached to the Omnibus Instrument as
Exhibit A (the "Standard Statutory Trust Terms") and all capitalized terms not otherwise defined herein (including the recitals hereof) shall
have the meaning set forth in the Standard Statutory Trust Terms (the Standard Statutory Trust Terms and this Statutory Trust Agreement, collectively, the "Trust
Agreement"). 

        NOW,
THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each
party hereby agrees as follows: 

ARTICLE 1  

        Section 1.01 Incorporation by Reference. All terms, provisions and agreements of the Standard Statutory
Trust Terms (except to the extent expressly modified herein) are hereby incorporated herein by reference with the same force and effect as though fully set forth herein. To the extent that the terms
set forth in Article 2 of this Agreement are inconsistent with the terms of the Standard Statutory Trust Terms, the terms set forth in Article 2 herein shall apply. 

        Section 1.02  Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Statutory Trust Agreement is included as
Section A-1. 

2

 

ARTICLE 2  

        Section 2.01 Name. The Trust created and governed by this Trust Agreement shall be the trust specified in
the Omnibus Instrument, as such name may be modified from time to time by the Delaware Trustee following written notice to the Trust Beneficial Owner. 

        Section 2.02
Initial Capital Contribution and Ownership. The Trust Beneficial Owner has paid to, or to an account at the direction
of, the Delaware Trustee, on the date hereof, the sum of $15 (or, if the Trust issues Notes at a discount, the product of $15 and the issue price (expressed as a percentage of the original principal
amount of the Notes)). The Delaware Trustee hereby acknowledges receipt in trust from the Trust Beneficial Owner, as of the date hereof, of the foregoing contribution, which shall be used along with
the proceeds from the sale of the Series of Notes to purchase one or more Funding Agreements. Upon the creation of the Trust and the registration of the Trust Beneficial Interest in the Securities
Register by the Registrar in the name of the Trust Beneficial Owner, the Trust Beneficial Owner shall be the sole beneficial owner of the Trust. 

        Section 2.03
Acknowledgment. The Delaware Trustee, on behalf of the Trust, expressly acknowledges its duties and obligations set
forth in Section 2.07 of the Standard Statutory Trust Terms incorporated herein. 

        Section 2.04
Additional Terms. None 

        Section 2.05  Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Trust Agreement will enter into this
Trust Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, the Delaware Trustee, the Trust Beneficial Owner and the Administrator hereby agree that this Trust Agreement will constitute a legal, valid and
binding agreement between the Delaware Trustee, the Trust Beneficial Owner and the Administrator as of the Execution Date. 

        All
terms relating to the Trust or the Notes not otherwise included in this Trust Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as indicated herein. 

        Section 2.06  Counterparts. This Trust Agreement, through the Omnibus Instrument, may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. 

3

 

        Section A-2.  Delaware Common Law Trust

If the Pricing Supplement indicates that the Trust is a Delaware Common Law Trust, the following shall constitute the Trust Agreement.

COMMON LAW TRUST AGREEMENT

by and among

AMACAR Pacific Corp., as Trust Beneficial Owner and Administrator

and

Wilmington Trust Company, as Trustee 

        THIS
COMMON LAW TRUST AGREEMENT, dated as of the Execution Date, by and among AMACAR Pacific Corp., a Delaware corporation (the "Trust Beneficial
Owner" and "Administrator") and Wilmington Trust Company, a Delaware banking corporation, as Trustee (the
"Trustee"). 

W I T N E S S E T H:  

        WHEREAS, the Trust Beneficial Owner and the Trustee desire to authorize the issuance of a Trust Beneficial Interest and a Series of Notes in connection with the
entry into this Common Law Trust Agreement; 

        WHEREAS,
all things necessary to make this Common Law Trust Agreement a valid and legally binding agreement of the Trustee and the Administrator, enforceable in accordance with its
terms, have been done; 

        WHEREAS,
the parties intend to provide for, among other things, (i) the issuance and sale of the Notes (pursuant to the Indenture and the
applicable Program Distribution Agreement) and the Trust Beneficial Interest, (ii) the use of the proceeds of the sale of the Notes and Trust Beneficial
Interest to acquire the Funding Agreements, and (iii) all other actions deemed necessary or desirable in connection with the transactions contemplated
by this Common Law Trust Agreement; and 

        WHEREAS,
the parties hereto desire to incorporate by reference those certain Standard Common Law Trust Terms, dated November 7, 2003, and attached to the Omnibus Instrument as
Exhibit A (the "Standard Common Law Trust Terms") and all capitalized terms not otherwise defined herein (including the recitals hereof) shall
have the meaning set forth in the Standard Common Law Trust Terms (the Standard Common Law Trust Terms and this Common Law Trust Agreement, collectively, the "Trust
Agreement"). 

        NOW,
THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each
party hereby agrees as follows: 

ARTICLE 1  

        Section 1.01 Incorporation by Reference. All terms, provisions and agreements of the Standard Common Law
Trust Terms (except to the extent expressly modified herein) are hereby incorporated herein by reference with the same force and effect as though fully set forth herein. To the extent that the terms
set forth in Article 2 of this Agreement are inconsistent with the terms of the Standard Common Law Trust Terms Trust Agreement, the terms set forth in Article 2 herein shall apply. 

        Section 1.02  Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Statutory Trust Agreement is included as
Section A-2. 

4

 

ARTICLE 2  

        Section 2.01 Name. The Trust created and governed by this Trust Agreement shall be the trust specified in
the Omnibus Instrument, as such name may be modified from time to time by the Trustee following written notice to the Trust Beneficial Owner. 

        Section 2.02
Initial Capital Contribution and Ownership. The Trust Beneficial Owner has paid to, or to an account at the direction
of, the Trustee, on the date hereof, the sum of $15 (or, if the Trust issues Notes at a discount, the product of $15 and the issue price (expressed as a percentage of the original principal amount of
the Notes)). The Trustee hereby acknowledges receipt in trust from the Trust Beneficial Owner, as of the date hereof, of the foregoing contribution, which shall be used along with the proceeds from
the sale of the Series of Notes to purchase one or more Funding Agreements. Upon the creation of the Trust and the registration of the Trust Beneficial Interest in the Securities Register by the
Registrar in the name of the Trust Beneficial Owner, the Trust Beneficial Owner shall be the sole beneficial owner of the Trust. 

        Section 2.03
Acknowledgment. The Trustee, on behalf of the Trust, expressly acknowledges its duties and obligations set forth in
Section 2.07 of the Standard Common Law Trust Terms incorporated herein. 

        Section 2.04
Additional Terms. None 

        Section 2.05  Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Trust Agreement will enter into this
Trust Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, the Trustee, the Trust Beneficial Owner and the Administrator hereby agree that this Trust Agreement will constitute a legal, valid and binding
agreement between the Trustee, the Trust Beneficial Owner and the Administrator as of the Execution Date. 

        All
terms relating to the Trust or the Series of Notes not otherwise included in this Trust Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as indicated
herein. 

        Section 2.06
Counterparts. This Trust Agreement, through the Omnibus Instrument, may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. 

5

   SECTION B

Administrative Services Agreement  

ADMINISTRATIVE SERVICES AGREEMENT

by and among

The Protective Life Secured Trust

specified in the Omnibus Instrument

and

AMACAR Pacific Corp.,

as Administrator 

        THIS
ADMINISTRATIVE SERVICES AGREEMENT, dated as of the Execution Date, by and among the Protective Life Secured Trust specified in the Omnibus Instrument (the "Trust") and AMACAR
Pacific Corp., a Delaware corporation (the "Administrator"). 

W I T N E S S E T H:  

        WHEREAS, the Trust has requested that the Administrator provide advice and assistance to the Trust and perform various services for the Trust; 

        WHEREAS,
the Trust desires to avail itself of the experience, advice and assistance of the Administrator and to have the Administrator perform various financial, statistical, accounting
and other services for the Trust, and the Administrator is willing to furnish such services on the terms and conditions herein set forth; and 

        WHEREAS,
the parties hereto desire to incorporate by reference those certain Standard Administrative Services Terms, dated November 7, 2003, and attached to the Omnibus Instrument
as Exhibit B (the "Standard Administrative Services Terms") and all capitalized terms not otherwise defined herein (including the recitals
hereof) shall have the meaning set forth in the Standard Administrative
Services Terms (the Standard Administrative Services Terms and this Administrative Services Agreement, collectively, the "Administrative Services
Agreement"). 

        NOW,
THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each
party hereby agrees as follows: 

ARTICLE 1  

        Section 1.01 Incorporation by Reference. All terms, provisions and agreements of the Standard
Administrative Services Terms (except to the extent expressly modified herein) are hereby incorporated herein by reference with the same force and effect as though fully set forth herein. To the
extent that the terms set forth in Article 2 of this Agreement are inconsistent with the terms of the Standard Administrative Services Terms, the terms set forth in Article 2 herein
shall apply. 

        Section 1.02
Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Administrative Services Agreement is
included as Section B. 

ARTICLE 2  

        Section 2.01 Additional Terms. None 

        Section 2.02
Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Administrative Services Agreement will
enter into this Administrative Services Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, Wilmington on behalf of the Trust and the Administrator hereby agree that this Administrative Services Agreement will constitute a legal, valid and
binding agreement between the Trust and the Administrator as of the Execution Date. 

6

 

        All
terms relating to the Trust or the Notes not otherwise included in this Administrative Services Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as
indicated herein. 

        Section 2.03  Counterparts. This Administrative Services Agreement, through the Omnibus Instrument, may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. 

        Section 2.04
Third Party Beneficiary. The parties hereto acknowledge that Wilmington shall be an express third party beneficiary to
this Administrative Services Agreement, entitled in its own name and on its own behalf to enforce the provisions hereof against the Trust and the Administrator with respect to obligations owed to
Wilmington by either the Trust or the Administrator; provided, however, that such right shall be valid only for so long as Wilmington has any outstanding obligations or potential obligations under the
Trust Agreement. 

7

 
SECTION C

Expense and Indemnity Agreement  

EXPENSE AND INDEMNITY AGREEMENT 

        This
Expense and Indemnity Agreement, dated as of the Execution Date, is entered into by and among Protective Life, the Trust, Wilmington Trust Company, The Bank of New York, as
indenture trustee, and AMACAR Pacific Corp., as Administrator. 

        WHEREAS,
in consideration of the Service Providers (as defined in the Standard Expense and Indemnity Agreement Terms, dated November 7, 2003, and attached to the Omnibus
Instrument as Exhibit C (the "Standard Expense and Indemnity Agreement Terms")) providing services to the Trust in connection with the Program
and pursuant to the Program Documents under which the Service Providers will have certain duties and obligations, Protective Life hereby agrees to the following compensation arrangements and terms of
indemnity; and 

        WHEREAS,
the parties hereto desire to incorporate by reference the Standard Expense and Indemnity Agreement Terms and all capitalized terms not otherwise defined herein (including the
recitals hereof) shall have the meaning set forth in the Standard Expense and Indemnity Agreement Terms (the Standard Expense and Indemnity Agreement Terms and this Expense and Indemnity Agreement,
collectively, the "Expense and Indemnity Agreement"). 

        NOW,
THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each
party hereby agrees as follows: 

ARTICLE 1  

        Section 1.01 Incorporation by Reference. All terms, provisions and agreements of the Standard Expense and
Indemnity Terms, dated as of November 7, 2003, and attached to the Omnibus Instrument as Exhibit C (except to the extent expressly modified herein) are hereby incorporated herein by
reference with the same force and effect as though fully set forth herein. To the extent that the terms set forth in Article 2 of this Agreement are inconsistent with the terms of the Standard
Expense and Indemnity Terms, the terms set forth in Article 2 herein shall apply. 

        Section 1.02
Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Expense and Indemnity Agreement is
included as Section C. 

ARTICLE 2  

        Section 2.01 Additional Terms. None 

        Section 2.02  Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Expense and Indemnity Agreement will
enter into this Expense and Indemnity Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, each party hereto agrees that this Expense and Indemnity Agreement will constitute a legal, valid and binding agreement by and among such parties as
of the Execution Date. 

        All
terms relating to the Trust or the Notes not otherwise included in this Expense and Indemnity Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as
indicated herein. 

        Section 2.03  Counterparts. This Expense and Indemnity Agreement, through the Omnibus Instrument, may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. 

8

 
SECTION D

License Agreement  

        LICENSE
AGREEMENT 

        This
LICENSE AGREEMENT, dated as of the Execution Date, is entered into between Protective Life Corporation (the "Licensor"), a Delaware
corporation with its principal place of business at 2801 Highway 280 South, Birmingham, Alabama 35223, and the Protective Life Secured Trust specified in the Omnibus Instrument (the
"Licensee"). 

W I T N E S S E T H:  

        WHEREAS, Licensor is the owner of certain trademarks and service marks and registrations and pending applications therefore, and may acquire additional trademarks
and service marks in the future, all as defined below; 

        WHEREAS,
Licensee desires to use certain of Licensor's trademarks and service marks in connection with Licensee's activities, as described more fully below; 

        WHEREAS,
Licensor and Licensee wish to formalize the agreement between them regarding Licensee's use of Licensor's marks; and 

        WHEREAS,
the parties hereto desire to incorporate by reference those certain Standard License Agreement Terms, dated November 7, 2003, and attached to the Omnibus Instrument as
Exhibit D (the "Standard License Agreement Terms") and all capitalized terms not otherwise defined herein (including the recitals hereof) shall
have the meaning set forth in the Standard License Agreement Terms (the Standard License Agreement Terms and this License Agreement, collectively, the "License
Agreement"). 

        NOW
THEREFORE, in consideration of the mutual promises set forth in this License Agreement and other good and valuable consideration, the sufficiency and receipt of which is hereby
acknowledged, the parties agree as follows: 

ARTICLE 1  

        Section 1.01 Incorporation by Reference. All terms, provisions and agreements set forth in the Standard
License Agreement Terms (except to the extent expressly modified herein) are hereby incorporated herein by reference with the same force and effect as though fully set forth herein. To the extent that
the terms set forth in Article 2 of this Agreement are inconsistent with the terms of the Standard License Agreement Terms, the terms set forth in Article 2 herein shall apply. 

        Section 1.02  Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this License Agreement is included as
Section D. 

ARTICLE 2  

        Section 2.01 Additional Terms. None 

        Section 2.02
Omnibus Instrument; Execution and Incorporation of Terms. The parties to this License Agreement will enter into this
License Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, Licensor and the Licensee hereby agree that this License Agreement will constitute a legal, valid and binding agreement between Licensor and the
Licensee as of the Execution Date. 

        All
terms relating to the Trust or the Notes not otherwise included in this License Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as indicated herein. 

        Section 2.03
Counterparts. This License Agreement, through the Omnibus Instrument, may be executed in any number of counterparts,
each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. 

9

 
SECTION E

Indenture  

        INDENTURE

        This
INDENTURE (the "Indenture") is entered into as of the Original Issue Date specified in the Pricing Supplement, by and between the Protective Life Secured Trust specified in the
Omnibus Instrument (the "Trust"), and The Bank of New York, as indenture trustee (the "Indenture Trustee"). 

        The
Bank of New York in its capacity as Indenture Trustee, hereby accepts its role as Registrar, Paying Agent, Transfer Agent and Calculation Agent hereunder. 

        References
herein to "Indenture Trustee," "Registrar," "Transfer Agent," "Paying Agent" or "Calculation Agent" shall include the permitted successors and assigns of any such entity from
time to time. 

W I T N E S S E T H:  

        WHEREAS, the Trust has duly authorized the execution and delivery of this Indenture to provide for the issuance of secured Notes; and 

        WHEREAS,
all things necessary to make this Indenture a valid and legally binding agreement of the Trust and the other parties to this Indenture, enforceable in accordance with its terms,
have been done,
and the Trust proposes to do all things necessary to make the Notes, when executed by the Trust and authenticated and delivered pursuant hereto, valid and legally binding obligations of the Trust as
hereinafter provided; and 

        WHEREAS,
the parties hereto desire to incorporate by reference those certain Standard Indenture Terms dated as of November 7, 2003, and attached to the Omnibus Instrument as
Exhibit E (the "Standard Indenture Terms") and all capitalized terms not otherwise defined herein (including the recitals hereof) shall have the
meaning set forth in the Standard Indenture Terms (the Standard Indenture Terms and this Indenture, collectively, the "Indenture"); 

        NOW,
THEREFORE, for and in consideration of the premises and the purchase of the Notes by the Holders thereof, it is mutually covenanted and agreed by the parties hereto as follows: 

ARTICLE 1  

        Section 1.01 Incorporation by Reference. All terms, provisions and agreements set forth in the Standard
Indenture Terms (except to the extent expressly modified hereby) are hereby incorporated herein by reference (as if fully set forth herein). Should any portion of the Standard Indenture Terms conflict
with the terms of this Indenture, the terms of this Indenture shall prevail. References herein to Articles, Sections or Exhibits shall refer respectively to the articles, sections or exhibits of the
Standard Indenture Terms, unless otherwise expressly provided. 

        Section 1.02
Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Indenture is included as
Section E. 

ARTICLE 2  

        Section 2.01 Agreement to be Bound. Each of the Trust, the Indenture Trustee, the Registrar, the Transfer
Agent, the Paying Agent and the Calculation Agent hereby agrees to be bound by all of the terms, provisions and agreements set forth herein, with respect to all matters contemplated herein, including,
without limitation, those relating to the issuance of the below referenced Notes. 

        Section 2.02
Designation of the Trust and the Notes. The Trust created by the Trust Agreement and, if such Trust is a statutory
trust, the certificate of trust of the Trust, and referred to in this Indenture is the Protective Life Secured Trust specified in the Omnibus Instrument. The Notes issued by the Trust and governed by
this Indenture shall be the Notes specified in the Pricing Supplement. 

10

 

        Section 2.03
Additional Terms. Notwithstanding any provision of the Standard Indenture Terms to the contrary, "Stated Maturity
Date" means, with respect to any Note, any installment of principal thereof or interest thereon, any premium thereon or any Additional Amounts with respect thereto, the date established by or pursuant
to this Indenture or an applicable Note or supplemental indenture as the date on which the principal of such Note or such installment of principal or interest or such premium is, or such Additional
Amounts are, due and payable; provided that in no event shall the Stated Maturity Date of any Note exceed thirty years after the Issuance Date of such Note. 

        Section 2.04
Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Indenture will enter into this Indenture
by executing the Omnibus Instrument and the date of this Indenture will be the day and year specified therein. 

        By
executing the signature page thereto, the Indenture Trustee and the Trust hereby agree that this Indenture will constitute a legal, valid and binding agreement between the Indenture
Trustee and the Trust as of the Original Issue Date. 

        All
terms relating to the Trust or the Notes not otherwise included in this Indenture will be as specified in the Omnibus Instrument or the Pricing Supplement, as indicated herein. 

        Section 2.05
Counterparts. This Indenture, through the Omnibus Instrument, may be executed in any number of counterparts, each of
which counterparts shall be deemed to be an original, and all of which counterparts shall constitute one and the same instrument. 

11

 
SECTION F

Selling Agent Agreement  

SELLING AGENT AGREEMENT

by and among

The Protective Life Secured Trust

specified in the Omnibus Instrument

and

Protective Life Insurance Company

and

The Agents specified in the Pricing Supplement 

        This
Selling Agent Agreement, dated as of the Execution Date, is entered into by and among each Agent specified in the Pricing Supplement, Protective Life Insurance Company, a Tennessee
stock life insurance company (the "Company") and the Protective Life Secured Trust specified in the Omnibus Instrument. 

        WHEREAS,
the Protective Life Secured Trust specified in the Omnibus Instrument desires to issue and sell the Notes specified in the Pricing Supplement to the Purchasing Agent. 

ARTICLE 1  

        Section 1.01 Incorporation by Reference. All terms, provisions and agreements set forth in the Standard
Selling Agent Agreement Terms, dated as of November 7, 2003 (the "Standard Selling Agent Agreement Terms"), and attached to the Omnibus Instrument as Exhibit F (except to the extent
expressly modified herein) are hereby incorporated herein by reference with the same force and effect as though fully set forth herein and all capitalized terms not otherwise defined herein (including
recitals hereof) shall have the meanings set forth in the Standard Selling Agent Agreement Terms (the Standard Selling Agent Agreement Terms and this Selling Agent Agreement, collectively, the
"Selling Agent Agreement"). To the extent that the terms set forth in Article 2 of this Agreement are inconsistent with the terms of the Standard Selling Agent Agreement Terms, the terms set
forth in Article 2 herein shall apply. 

        Section 1.02
Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Selling Agent Agreement is included as
Section F. 

ARTICLE 2  

        Section 2.01 Purchase of Notes. The Purchasing Agent agrees to purchase the Notes having the terms and in
the amounts specified in the Pricing Supplement. 

        Also,
in connection with the purchase of the Notes from the Trust by the Agents, the items specified in Schedule 1 to the Omnibus Instrument will be delivered on the Original
Issue Date. 

ARTICLE 3  

        Section 3.01 Additional Terms. (a) Notwithstanding Section III(a)(i) of the Standard
Selling Agent Agreement Terms, the parties to this Selling Agent Agreement agree that the Company and the Trust shall file the Pricing Supplement pursuant to the appropriate subsection under
Rule 424(b) under the 1933 Act. 

        (b) The
parties to this Selling Agent Agreement agree that if, at any time after the Settlement Date when the Prospectus is required by the 1933 Act to be delivered in connection
with offers or sales of the Notes, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion of counsel for the Agents, counsel for the Company or counsel for
the Trust, to amend or supplement the Registration Statement in order that the Registration Statement will not contain an untrue statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not misleading or to amend or supplement the Prospectus in 

12

 

order
that the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser, or if it shall be necessary, in the opinion of any such counsel, to amend or supplement the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, as applicable, the Company shall give prompt notice, confirmed in writing, to
the Agents to cease the solicitation of offers for the purchase of Notes and to cease sales of any Notes by the Purchasing Agent, and the Company will promptly prepare and file with the Commission
such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement and Prospectus comply with such requirements, and the Company will furnish
to the Agents, without charge, such number of copies of such amendment or supplement as the Agents may reasonably request. 

        (c) Notwithstanding
Section II(c) of the Standard Selling Agent Agreement Terms, the parties to this Selling Agent Agreement agree that the officer's certificate to be
delivered pursuant to such Section II(c) need only be executed by one officer of the Company who is at least a Senior Vice President of the Company. 

        Section 3.02  Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Selling Agent Agreement will enter into
this Selling Agent Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, each party hereto agrees that this Selling Agent Agreement will constitute a legal, valid and binding agreement by and among the Trust, Protective
Life Insurance Company and the Agents specified in the Pricing Supplement as of the Execution Date. 

        All
terms relating to the Trust or the Notes not otherwise included in this Selling Agent Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as indicated
herein. 

        Section 3.03  Counterparts. This Selling Agent Agreement, through the Omnibus Instrument, may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. 

13

   SECTION G

Distribution Agreement  

DISTRIBUTION AGREEMENT

by and among

The Protective Life Secured Trust

specified in the Omnibus Instrument

and

Protective Life Insurance Company

and

The Dealers specified in the Pricing Supplement 

        This
Distribution Agreement, dated as of the Execution Date, is entered into by and among each dealer specified in the Pricing Supplement (each, a
"Dealer"), Protective Life Insurance Company, a Tennessee stock life insurance company (the "Company")
and the Protective Life Secured Trust specified in the Omnibus Instrument. 

        WHEREAS,
the Trust has entered into the Indenture (the "Indenture"), dated as of the date specified in the Omnibus Instrument, by and
between the Trust and The Bank of New York, as indenture trustee (the "Indenture Trustee") to provide for the issuance by the Trust of the secured
medium-term notes specified in the Pricing Supplement (the "Notes"); and 

        WHEREAS,
all things necessary to make this Distribution Agreement a valid and legally binding agreement of the Trust and the other parties to this Distribution Agreement, enforceable in
accordance with its terms, have been done, and the Trust proposes to do all things necessary to make the Notes, when executed by the Trust and authenticated and delivered pursuant hereto and the
Indenture, valid and legally binding obligations of the Trust as hereinafter provided; and 

        WHEREAS,
the parties hereto desire to incorporate by reference those certain Standard Distribution Agreement Terms dated as of November 7, 2003 (the
"Standard Distribution Agreement Terms") and all capitalized terms not otherwise defined herein (including the recitals hereof) shall have the meaning
set
forth in the Standard Distribution Agreement Terms (the Standard Distribution Agreement Terms and this Distribution Agreement, collectively, the "Distribution
Agreement"). 

        NOW,
THEREFORE, for and in consideration of the premises and the issuance of the Notes by the Trust, it is mutually agreed by the parties hereto as follows: 

ARTICLE 1  

        Section 1.01 Agreement to be Bound. The Trust and each Dealer hereby agrees to be bound by all of the
terms, provisions and agreements set forth herein, with respect to all matters contemplated herein, including, without limitation, those relating to the issuance of the below-referenced Notes. 

        Section 1.02  Incorporation by Reference. All terms, provisions and agreements set forth in the Standard Distribution Agreement
Terms and attached to the Omnibus Instrument as Exhibit G (except to the extent expressly modified hereby) are hereby incorporated herein by reference (as if fully set forth herein). Should any
portion of the Standard Distribution Agreement Terms conflict with the terms of this Distribution Agreement, the terms of this Distribution Agreement shall prevail. References herein to Sections or
Exhibits shall refer respectively to the sections or exhibits of the Standard Distribution Agreement Terms, unless otherwise expressly provided. 

        Section 1.03  Designation of the Trust and the Notes. The Trust created by the Trust Agreement and, if such Trust is a Delaware
statutory trust, the certificate of trust of the Trust, and referred to in this Distribution Agreement is the Protective Life Secured Trust specified in the Omnibus Instrument. The term Trust refers
to the Protective Life Secured Trust specified in this Omnibus Instrument. The Series 

14

 

of
Notes issued by the Trust pursuant to the Distribution Agreement shall be the Series of notes specified in the Pricing Supplement. The term Notes refers to the notes of this Series of Notes. 

        Section 1.04
Additional Terms. Notwithstanding Section 3(a)(i) of the Standard Distribution Agreement Terms, the
parties to this Distribution Agreement agree that the Company and the Trust shall file the Pricing Supplement pursuant to the appropriate subsection under Rule 424(b) under the 1933 Act. 

        The
parties to this Distribution Agreement agree that if, at any time after the Settlement Date when the Prospectus is required by the 1933 Act to be delivered in connection with offers
or sales of the Notes, any event shall occur or condition shall exist as a result of which it is necessary, in the opinion
of counsel for the Dealer(s), counsel for the Company or counsel for the Trust, to amend or supplement the Registration Statement in order that the Registration Statement will not contain an untrue
statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading or to amend or supplement the Prospectus in order
that the Prospectus will not include an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein not misleading in light of the
circumstances existing at the time the Prospectus is delivered to a purchaser, or if it shall be necessary, in the opinion of any such counsel, to amend or supplement the Registration Statement or
amend or supplement the Prospectus in order to comply with the requirements of the 1933 Act or the 1933 Act Regulations, as applicable, the Company shall give prompt notice, confirmed in writing, to
the Dealer(s) to cease the solicitation of offers for the purchase of Notes in their capacity as agent, if applicable, and to cease sales of any Notes they may then own as principal, and the Company
will promptly prepare and file with the Commission such amendment or supplement as may be necessary to correct such statement or omission or to make the Registration Statement and Prospectus comply
with such requirements, and the Company will furnish to the Dealer(s), without charge, such number of copies of such amendment or supplement as the Dealer(s) may reasonably request. 

        Section 1.05  Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Distribution Agreement is included as
Section G. 

ARTICLE 2  

        Section 2.01 Purchase/Solicitation of Purchases of Notes. 

        (a)   If specified in the Pricing Supplement, the Notes are being purchased by the Dealer(s) as principal.

        (1)   If
the Notes are to be purchased by the Dealer(s) as principal, the Dealer(s) specified in the Pricing Supplement [severally] agree to purchase
the Notes having the terms and in the amounts specified in the Pricing Supplement. 

        (2)   Also,
in connection with the purchase of Notes from the Trust by the Dealer(s) as principal, the items specified in Schedule 1 to the Omnibus Instrument will be
delivered on the Original Issue Date. 

        (b)   If specified in the Pricing Supplement, the Dealer(s) will be acting as agent.

        (1)   If
the Dealer(s) are to solicit the purchase of the Notes acting as agents, the Dealer(s) will solicit the purchase of Notes pursuant to Section 1(d) of the
Distribution Agreement. 

        Section 2.02
Funding Agreement. On the Original Issue Date set forth above, the Company will issue to the Trust the Funding
Agreement(s) identified by number in the Pricing Supplement. 

        Section 2.03
Dealer Notice Information. As specified in Schedule 1 to the Omnibus Instrument. 

15

 
ARTICLE 3  

        Section 3.01 Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Distribution
Agreement will enter into this Distribution Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, each party hereto agrees that this Distribution Agreement will constitute a legal, valid and binding agreement by and among the Trust, Protective
Life Insurance Company and the Dealers specified in the Pricing Supplement as of the Execution Date. 

        All
terms relating to the Trust or the Notes not otherwise included in this Distribution Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as indicated
herein. 

        Section 3.02
Counterparts. This Distribution Agreement, through the Omnibus Instrument, may be executed in any number of
counterparts, each of which counterparts shall be deemed to be an original, and all of which counterparts shall constitute but one and the same instrument. 

16

 
SECTION H

COORDINATION AGREEMENT  

        This Coordination Agreement, dated as of the Original Issue Date, is entered into by and among Protective Life, the Trust and the Indenture Trustee. 

W I T N E S S E T H:  

        WHEREAS, the Trust will enter into the Funding Agreement with Protective Life dated as of the Original Issue Date; 

        WHEREAS,
the Dealer(s) have agreed to sell the Notes in accordance with the Registration Statement; and 

        WHEREAS,
the Trust intends to issue the Notes in accordance with the Indenture and to transfer the Funding Agreement to the Indenture Trustee in accordance with the Indenture to secure
payment of the Notes; 

        NOW,
THEREFORE, to give effect to the agreements and arrangements established under the Distribution Agreement or Selling Agent Agreement, as applicable, the Trust Agreement, the
Indenture, and the Notes, and in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, each
party hereby agrees as follows: 

ARTICLE 1  

        Section 1.01 Delivery of the Funding Agreement. The Trust hereby authorizes the Indenture Trustee to
receive the Funding Agreement from Protective Life pursuant to the Assignment of the Funding Agreement, to be entered into on the Original Issue Date, as specified in the Pricing Supplement and
included in the closing instrument dated as of the Original Issue Date set forth in the Pricing Supplement (the "Closing Instrument"). 

        Section 1.02
Issuance and Purchase of the Notes. 

        (a)   Delivery
of the Funding Agreement to the Indenture Trustee pursuant to the Assignment of the Funding Agreement shall be confirmation of payment by the Trust for the
Funding Agreement. 

        (b)   The
Trust hereby directs the Indenture Trustee, upon receipt of the Funding Agreement pursuant to the Assignment of the Funding Agreement, (i) to authenticate the
certificates representing the Notes (the "Notes Certificates") in accordance with the Indenture and (ii) to (A) deliver each relevant
Notes Certificate to the clearing system or systems identified in each such Notes Certificate, or to the nominee of such clearing system, for credit to such accounts as the Dealer(s) may direct, or
(B) deliver each relevant Notes Certificate to the purchasers thereof as identified by the Dealer(s). 

        Section 1.03
Definitions. "Omnibus Instrument" means the Omnibus Instrument in which this Coordination Agreement is included as
Section H. 

ARTICLE 2  

        Section 2.01 Directions Regarding Periodic Payments. As registered owner of the Funding Agreement as
collateral securing payments on the Notes, the Indenture Trustee will receive payments on the Funding Agreement on behalf of the Trust. The Trust hereby directs the Indenture Trustee to use such funds
to make payments on behalf of the Trust pursuant to the Trust Agreement and the Indenture. 

        Section 2.02
Maturity of the Funding Agreement. Upon the maturity of the Funding Agreement and the return of funds thereunder, the
Trust hereby directs the Indenture Trustee to set aside from such funds an amount sufficient for the repayment of the outstanding principal on the Notes when due. 

17

 

ARTICLE 3  

        Section 3.01 No Additional Liability. Nothing in this agreement shall impose any liability or obligation on
the part of any party to this agreement to make any payment or disbursement in addition to any liability or obligation such party has under the Program Documents, except to the extent that a party has
actually received funds which it is obligated to disburse pursuant to this agreement. 

        Section 3.02  No Conflict. This agreement is intended to be in furtherance of the agreements reflected in the documents related to
the Program Documents, and not in conflict. To the extent that a provision of
this agreement conflicts with the provisions of one or more Program Documents, the provisions of such documents shall govern. 

        Section 3.03
Governing Law. This agreement shall be governed by and construed in accordance with the laws of the State of New York
without regard to the principles of conflicts of laws thereof. 

        Section 3.04  Severability. If any provision in this agreement shall be invalid, illegal or unenforceable, such provisions shall be
deemed severable from the remaining provisions of this agreement and shall in no way affect the validity or enforceability of such other provisions of this agreement. 

        Section 3.05
Counterparts. This agreement may be executed in any number of counterparts, each of which shall be deemed to be an
original, and all of which shall constitute but one and the same instrument. 

        Section 3.06  Notices. All demands, notices and communications under this agreement shall be in writing and shall be deemed to have
been duly given upon receipt at the addresses set forth below: 

        if
to the Trust, Indenture Trustee or Protective Life, as specified in the Expense and Indemnity Agreement or at such other address as shall be designated by any such party in a written
notice to the other parties. 

ARTICLE 4  

        Section 4.01 Omnibus Instrument; Execution and Incorporation of Terms. The parties to this Coordination
Agreement will enter into this Coordination Agreement by executing the Omnibus Instrument. 

        By
executing the Omnibus Instrument, each party hereto agrees that this Coordination Agreement will constitute a legal, valid and binding agreement by and among the Trust, Protective
Life Insurance Company and the Indenture Trustee as of the Original Issue Date. 

        All
terms relating to the Trust or the Notes not otherwise included in this Coordination Agreement will be as specified in the Omnibus Instrument or Pricing Supplement as indicated
herein. 

18

   SECTION I

Miscellaneous and Execution Pages  

        Notwithstanding any other provisions of this Omnibus Instrument, no amendment to this Omnibus Instrument may be made if such amendment would cause the Trust not
to be treated as a grantor trust for U.S. federal income tax purposes. 

        This
Omnibus Instrument may be executed by each of the parties hereto in any number of counterparts, and by each of the parties hereto on separate counterparts, each of which
counterparts, when so executed and delivered, shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument. Facsimile signatures shall be
deemed original signatures. 

        It
is expressly understood and agreed by the parties hereto that (a) this Omnibus Instrument is executed and delivered by Wilmington Trust Company, not individually or personally
but solely as trustee of the Trust, in the exercise of the powers and authority conferred and vested in it pursuant to the Trust Agreement, (b) each of the representations, undertakings and
agreements herein made on the part of the Trust is made and intended not as a personal representation, undertaking or agreement by Wilmington Trust Company but is made and intended for the purpose of
binding only the Trust, (c) nothing herein contained shall be construed as creating any liability on Wilmington Trust Company, individually or personally, to perform any covenant either
expressed or implied contained herein, all such liability, if any, being expressly waived by the parties hereto and by any Person claiming by, through or under the parties hereto and (d) under
no circumstances shall Wilmington Trust Company be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under this Omnibus Instrument or any other related documents. 

        Each
signatory, by its execution hereof, does hereby become a party to each of the agreements identified for such party as of the date specified in such agreements. 

19

 

        IN
WITNESS WHEREOF, the undersigned have executed this Omnibus Instrument, dated as of the Execution Date. 

	

 	

PROTECTIVE LIFE CORPORATION (in executing below agrees and becomes a party to the License Agreement set forth in Section D herein).
	

 	

By:	

/s/  JUDY WILSON      

	 	 	Name:  Judy Wilson
	 	 	Title:    Senior Vice President
	
	 	 

Protective Life Secured Trust 2004-23

Omnibus Instrument

Execution Page 1 of 7  

20

 

	

 	

PROTECTIVE LIFE INSURANCE COMPANY (in executing below agrees and becomes a party to (i) the Expense and Indemnity Agreement set forth in Section C herein, (ii) if the Trust is issuing InterNotes® to retail investors, the Selling
Agent Agreement set forth in Section F herein, (iii) if the Trust is issuing secured medium-term notes to institutional investors, the Distribution Agreement set forth in Section G herein and (iv) the Coordination Agreement set
forth in Section H herein).
	

 	

By:	

/s/  JUDY WILSON      

	 	 	Name:  Judy Wilson
	 	 	Title:    Senior Vice President
	
	 	 

Protective Life Secured Trust 2004-23

Omnibus Instrument

Execution Page 2 of 7  

21

 

	

 	

PROTECTIVE LIFE SECURED TRUST specified in the Omnibus Instrument (in executing below agreement and becomes a party to (i) the Administrative Services Agreement set forth in Section B herein, (ii) the Expense and Indemnity Agreement
set forth in Section C herein, (iii) the License Agreement set forth in Section D herein, (iv) the Indenture set forth in Section E herein (v) if the Trust is issuing InterNotes® to retail investors, the Selling
Agent Agreement set forth in Section F herein, (vi) if the Trust is issuing secured medium-term notes to institutional investors, the Distribution Agreement set forth in Section G herein and (vii) the Coordination Agreement set
forth in Section H herein).
	

 	

By: Wilmington Trust Company, solely in its capacity as trustee of the Trust
	

 	

By:	

/s/  JENNIFER A. LUCE      

	 	 	Name:  Jennifer A. Luce
	 	 	Title:    Financial Services Officer
		 	 

Protective Life Secured Trust 2004-23

Omnibus Instrument

Execution Page 3 of 7  

22

 

	

 	

WILMINGTON TRUST COMPANY (in executing below agrees and becomes a party to (i)(a) if the Trust is a Delaware statutory trust, the Statutory Trust Agreement set forth in Section A-1 herein as Delaware Trustee or (b) if the Trust is a
Delaware common law trust, the Common Law Trust Agreement set forth in Section A-2 herein as trustee and (ii) the Expense and Indemnity Agreement set forth in Section C herein).
	

 	

By:	

/s/  JENNIFER A. LUCE      

	 	 	Name:  Jennifer A. Luce
	 	 	Title:    Financial Services Officer
	
	 	 

Protective Life Secured Trust 2004-23

Omnibus Instrument

Execution Page 4 of 7  

23

 

	

 	

AMACAR PACIFIC CORP. (in executing below agrees and becomes a party to (i) the Statutory Trust Agreement or Common Law Trust Agreement set forth in Sections A-1 and A-2, respectively, as the case may be, as Trust Beneficial Owner, (ii) the
Administrative Services Agreement, set forth in Section B herein as Administrator and (iii) the Expense and Indemnity Agreement as set forth in Section C herein).
	

 	

By:	

/s/  EVELYN ECHEVARRIA      

	 	 	Name:  Evelyn Echevarria
	 	 	Title:    Vice President
	
	 	 

Protective Life Secured Trust 2004-23

Omnibus Instrument

Execution Page 5 of 7  

24

 

	

 	

THE BANK OF NEW YORK (in executing below agrees and becomes a party to (i) the Indenture set forth in Section E herein, not in its individual capacity but solely in its capacity as Indenture Trustee, Registrar, Transfer Agent, Paying Agent
and Calculation Agent, (ii) the Expense and Indemnity Agreement set forth in Section C herein, not in its individual capacity but solely in its capacity as Indenture Trustee and (iii) the Coordination Agreement set forth in
Section H herein, not in its individual capacity but solely in its capacity as Indenture Trustee).
	

 	

By:	

/s/  MILLIE CICERO      

	 	 	Name:  Millie Cicero
	 	 	Title:    Assistant Treasurer
	
	 	 

Protective Life Secured Trust 2004-23

Omnibus Instrument

Execution Page 6 of 7  

25

 

	

 	

INCAPITAL LLC (in executing below agrees and becomes a party to the Selling Agent Agreement set forth in Section F herein on behalf of itself and each of the agents named in the Pricing Supplement).
	

 	

By:	

/s/  JOSEPH J. NOVAK      

	 	 	Name:  Joseph J. Novak
	 	 	Title:    General Counsel and Secretary
	
	 	 

Protective Life Secured Trust 2004-23

Omnibus Instrument

Execution Page 7 of 7  

26

 
Index of Exhibits, Schedules and Annexes to Omnibus Instrument  

Exhibits  

	EXHIBIT A	 	 
	

Section A-1	
 	

Standard Statutory Trust Terms—Incorporated herein by reference to Exhibit 4.7 to Protective Life Insurance Company's Registration Statement on Form S-3 (Registration No. 333-100944).
	

Section A-2	
 	

Standard Common Law Trust Terms—Incorporated herein by reference to Exhibit 4.9 to Protective Life Insurance Company's Registration Statement on Form S-3 (Registration No. 333-100944).
	

EXHIBIT B	
 	

Standard Administrative Services Terms—Incorporated herein by reference to Exhibit 4.12 to Protective Life Insurance Company's Registration Statement on Form S-3 (Registration No. 333-100944).
	

EXHIBIT C	
 	

Standard Expense and Indemnity Agreement Terms—Incorporated herein by reference to Exhibit 10.1 to Protective Life Insurance Company's Registration Statement on Form S-3 (Registration No. 333-100944).
	

EXHIBIT D	
 	

Standard License Agreement Terms—Incorporated herein by reference to Exhibit 99.1 to Protective Life Insurance Company's Current Report on Form 8-K, filed on March 3, 2004.
	

EXHIBIT E	
 	

Standard Indenture Terms—Incorporated herein by reference to Exhibit 4.1 to Protective Life Insurance Company's Registration Statement on Form S-3 (Registration No. 333-100944).
	

EXHIBIT F	
 	

Standard Selling Agent Agreement Terms—Incorporated herein by reference to Exhibit 1.1 to Protective Life Insurance Company's Registration Statement on Form S-3 (Registration No. 333-100944).
	

EXHIBIT G	
 	

Standard Distribution Agreement Terms—Incorporated herein by reference to Exhibit 1.3 to Protective Life Insurance Company's Registration Statement on Form S-3 (Registration No. 333-100944).
	

SCHEDULE 1	
 	

Selling Agent Agreement Specifications.
	

ANNEX A	
 	

Pricing Supplement—Incorporated herein by reference to Pricing Supplement No. 23 with respect to Protective Life Secured Trust 2004-23, filed on April 14, 2004, with the Securities and Exchange Commission pursuant to Rule 424(b)(5)
under the Securities Act of 1933, as amended.

27

 
SCHEDULE
1 

Selling Agent Agreement Specifications  

        In connection with Section VI(a)(viii) of the Selling Agent Agreement, the Program under which the Notes are issued, as well as the Notes are rated
Aa3 by Moody's and the Notes are rated AA by S&P. In connection with Section VI(b)(xiv) of the Selling Agent Agreement, the Company's financial strength rating is Aa3 by Moody's and AA
by S&P. 

28

QuickLinks

EXHIBIT 4.2Exhibit 10.7

 

ASSURED
GUARANTY LTD. 2004

LONG-TERM INCENTIVE PLAN

 

SECTION 1

GENERAL

 

1.1.  Purpose.  The Assured Guaranty Ltd. 2004 Long-Term
Incentive Plan (the “Plan”) has been established by Assured Guaranty Ltd. (the
“Company”) to (i) attract and retain persons eligible to participate in the
Plan; (ii) motivate Participants, by means of appropriate incentives, to
achieve long-range goals; (iii) provide incentive compensation opportunities
that are competitive with those of other similar companies; and (iv) further
identify Participants’ interests with those of the Company’s other shareholders
through compensation that is based on the Company’s common shares; and thereby
promote the long-term financial interest of the Company and the Subsidiaries,
including the growth in value of the Company’s equity and enhancement of
long-term shareholder return.

 

1.2.  Participation.  Subject to the terms and conditions of the
Plan, the Committee shall determine and designate, from time to time, from
among the Eligible Individuals, those persons who will be granted one or more
Awards under the Plan, and thereby become “Participants” in the Plan.

 

1.3.  Operation,
Administration, and Definitions. 
The operation and administration of the Plan, including the Awards made
under the Plan, shall be subject to the provisions of Section 5 (relating
to operation and administration). 
Capitalized terms in the Plan shall be defined as set forth in the Plan
(including the definition provisions of Section 9).

 

SECTION 2

OPTIONS AND SARS

 

2.1.  Definitions.

 

(a)                 The
grant of an “Option” entitles the Participant to purchase Shares at an Exercise
Price established by the Committee.  Any
Option granted under this Section 2 may be either an incentive stock
option (an “ISO”) or a non-qualified option (an “NQO”), as determined in the
discretion of the Committee.  An “ISO”
is an Option that is intended to satisfy the requirements applicable to an
“incentive stock option” described in section 422(b) of the Code.  An “NQO” is an Option that is not intended
to be an “incentive stock option” as that term is described in
section 422(b) of the Code.

 

(b)                 A
stock appreciation right (an “SAR”) entitles the Participant to receive, in
cash or Shares (as determined in accordance with subsection 2.5), value
equal to (or otherwise based on) the excess of: (a) the Fair Market Value of a
specified number of Shares at the time of exercise; over (b) an Exercise Price
established by the Committee.

 

2.2.  Exercise
Price.  The “Exercise Price” of each
Option and SAR granted under this Section 2 shall be established by the
Committee or shall be determined by a method established by the Committee at
the time the Option or SAR is granted. 
The Exercise Price shall not be less

 

 

than 100% of the Fair Market Value of a Share on the date of grant (or,
if greater, the par value, if any, of a Share).

 

2.3.  Exercise.  An Option and an SAR shall be exercisable in
accordance with such terms and conditions and during such periods as may be
established by the Committee.  In no
event, however, shall an Option or SAR expire later than ten years after the
date of its grant.

 

2.4.  Payment
of Option Exercise Price.  The
payment of the Exercise Price of an Option granted under this Section 2
shall be subject to the following:

 

(a)                 Subject
to the following provisions of this subsection 2.4, the full Exercise
Price for Shares purchased upon the exercise of any Option shall be paid at the
time of such exercise (except that, in the case of an exercise arrangement
approved by the Committee and described in paragraph 2.4(c), payment may be
made as soon as practicable after the exercise).

 

(b)                 Subject
to applicable law, the full Exercise Price shall be payable in cash, by
promissory note, or by tendering, by either actual delivery of shares or by
attestation, Shares acceptable to the Committee, and valued at Fair Market
Value as of the day of exercise, or in any combination thereof, as determined
by the Committee; provided that, except as otherwise provided by the Committee,
payments made with Shares in accordance with this paragraph (b) shall be
limited to Shares held by the Participant for not less than six months prior to
the payment date.

 

(c)                 Subject
to applicable law, the Committee may permit a Participant to elect to pay the
Exercise Price upon the exercise of an Option by irrevocably authorizing a
third party to sell Shares (or a sufficient portion of the Shares) acquired
upon exercise of the Option and remit to the Company a sufficient portion of
the sale proceeds to pay the entire Exercise Price and any tax withholding
resulting from such exercise.

 

2.5.  Settlement
of Award.  Settlement of Options and
SARs is subject to subsection 5.7.

 

2.6.  No
Repricing.  Except for either
adjustments pursuant to paragraph 5.2(f) (relating to the adjustment of
Shares), or reductions of the Exercise Price approved by the Company’s
shareholders, the Exercise Price for any outstanding Option may not be
decreased after the date of grant nor may an outstanding Option granted under
the Plan be surrendered to the Company as consideration for the grant of a
replacement Option with a lower Exercise Price.

 

2.7.  Grants
of Options and SARs.  An Option may
but need not be in tandem with an SAR, and an SAR may but need not be in tandem
with an Option.  If an Option is in
tandem with an SAR, the Exercise Price of both the Option and SAR shall be the
same, and the exercise of the Option or SAR with respect to a Share shall
cancel the corresponding tandem SAR or Option right with respect to such Share.  If an SAR is in tandem with an Option but is
granted after the grant of the Option, or if an Option is in tandem with an SAR
but is granted after the grant of the SAR, the later granted tandem Award shall
have the same Exercise Price as the earlier granted Award, but the Exercise
Price for the later granted Award may be less than the Fair Market Value of the
Share at the time of such grant.

 

2

 

SECTION 3

FULL VALUE AWARDS

 

3.1.  Definition. 
A “Full Value Award” is a grant of one or more Shares or a right to
receive one or more Shares in the future, with such grant subject to one or
more of the following, as determined by the Committee:

 

(a)                 The
grant shall be in consideration of a Participant’s previously performed services,
or surrender of other compensation that may be due.

 

(b)                 The
grant shall be contingent on the achievement of performance or other objectives
during a specified period.

 

(c)                 The
grant shall be subject to a risk of forfeiture or other restrictions that will
lapse upon the achievement of one or more goals relating to completion of
service by the Participant, or achievement of performance or other objectives.

 

The grant of Full Value
Awards may also be subject to such other conditions, restrictions and contingencies,
as determined by the Committee.

 

3.2.  Restrictions
on Awards.

 

(a)                 The
Committee may designate a Full Value Award granted to any Participant as
“performance-based compensation” as that term is used in section 162(m) of
the Code.  To the extent required by
Code section 162(m), any Full Value Award so designated shall be
conditioned on the achievement of one or more performance objectives.  The performance objectives shall be based on
Performance Measures selected by the Committee.  For Awards under this Section 3 intended to be
“performance-based compensation,” the grant of the Awards and the establishment
of the performance objectives shall be made during the period required under
Code section 162(m).

 

(b)                 If
the right to become vested in a Full Value Award is conditioned on the
completion of a specified period of service with the Company or the
Subsidiaries, without achievement of Performance Measures or other performance
objectives (whether or not related to the Performance Measures) being required
as a condition of vesting, and without it being granted in lieu of other
compensation, then the required period of service for full vesting shall be not
less than three years (subject to acceleration of vesting, to the extent
permitted by the Committee, in the event of the Participant’s death,
disability, retirement, change in control or involuntary termination).

 

SECTION 4

CASH INCENTIVE AWARDS

 

A Cash Incentive Award is
the grant of a right to receive a payment of cash (or in the discretion of the Committee,
Shares having value equivalent to the cash otherwise payable) that is
contingent on achievement of performance or other objectives over a specified
period established by the Committee. 
The grant of Cash Incentive Awards may also be subject to such other
conditions, restrictions and contingencies, as determined by the
Committee.  The

 

3

 

Committee may designate a
Cash Incentive Award granted to any Participant as “performance-based
compensation” as that term is used in section 162(m) of the Code.  To the extent required by Code
section 162(m), any such Award so designated shall be conditioned on the
achievement of one or more performance objectives.  The performance objectives shall be based on Performance Measures
as selected by the Committee.  For
Awards under this Section 4 intended to be “performance-based
compensation,” the grant of the Awards and the establishment of the performance
objectives shall be made during the period required under Code
section 162(m).

 

SECTION 5

OPERATION AND ADMINISTRATION

 

5.1.  Effective
Date.  The Plan shall be effective
date immediately prior to the date of the initial public offering of the shares
of the Company (the “Effective Date”). 
The Plan shall be unlimited in duration and, in the event of Plan
termination, shall remain in effect as long as any Awards under it are
outstanding; provided, however, that no Awards may be granted under the Plan
after the ten-year anniversary of the Effective Date.

 

5.2.  Shares
and Other Amounts Subject to Plan. 
The Shares for which Awards may be granted under the Plan shall be
subject to the following:

 

(a)                 The
Shares with respect to which Awards may be made under the Plan shall be: (i)
shares currently authorized but unissued; (ii) to the extent permitted by
applicable law, currently held or acquired by the Company as treasury shares,
including shares purchased in the open market or in private transactions (it
being recognized that at the time of adoption of the Plan the Company is not
permitted to have treasury shares); or (iii) shares purchased in the open
market by a direct or indirect wholly-owned subsidiary of the Company (as
determined by the Chief Executive Officer or the Chief Financial Officer of the
Company).  The Company may contribute to
the subsidiary or trust an amount sufficient to accomplish the purchase in the
open market of the Shares to be so acquired (as determined by the Chief
Executive Officer or the Chief Financial Officer of the Company).

 

(b)                 Subject
to the following provisions of this subsection 5.2, the maximum number of
Shares that may be delivered to Participants and their beneficiaries under the
Plan shall be 7,500,000 Shares.

 

(c)                 To
the extent provided by the Committee, any Award may be settled in cash rather
than Shares.

 

(d)                 Only
Shares, if any, actually delivered to the Participant or beneficiary on an
unrestricted basis with respect to an Award shall be treated as delivered for
purposes of the determination under paragraph (b) above, regardless of whether
the Award is denominated in Shares or cash. 
Consistent with the foregoing:

 

(i)                   To the extent
any Shares covered by an Award are not delivered to a Participant or
beneficiary because the Award is forfeited or canceled, or the Shares are not
delivered on an unrestricted basis (including, without limitation, by reason of
the Award being settled in cash or used to satisfy the applicable tax
withholding

 

4

 

obligation), such Shares shall not be deemed to have
been delivered for purposes of the determination under paragraph (b) above.

 

(ii)                 If the exercise
price of any Option granted under the Plan or the tax withholding obligation
with respect to any Award granted under the Plan is satisfied by tendering
Shares to the Company (by either actual delivery or by attestation), only the
number of Shares issued net of the Shares tendered shall be deemed delivered
for purposes of determining the number of Shares available for delivery under
the Plan.

 

(e)                 Subject
to paragraph 5.2(f), the following additional maximums are imposed under the
Plan:

 

(i)                   The maximum
number of Shares that may be delivered to Participants and their beneficiaries
with respect to ISOs granted under the Plan shall be 7,500,000 Shares; provided,
however, that to the extent that Shares not delivered must be counted against
this limit as a condition of satisfying the rules applicable to ISOs, such
rules shall apply to the limit on ISOs granted under the Plan.

 

(ii)                 The maximum
number of Shares that may be covered by Awards granted to any one Participant
during any one-calendar-year period pursuant to Section 2 (relating to
Options and SARs) shall be 2,500,000 Shares. 
For purposes of this paragraph (ii), if an Option is in tandem with an
SAR, such that the exercise of the Option or SAR with respect to a Share
cancels the tandem SAR or Option right, respectively, with respect to such
Share, the tandem Option and SAR rights with respect to each Share shall be
counted as covering but one Share for purposes of applying the limitations of
this paragraph (ii).

 

(iii)                The maximum number
of Shares that may be issued in conjunction with Awards granted pursuant to
Section 3 (relating to Full Value Awards) shall be 2,500,000 Shares.

 

(iv)               For Full Value Awards
that are intended to be “performance-based compensation” (as that term is used
for purposes of Code section 162(m)), no more than 1,250,000 Shares ay be
delivered pursuant to such Awards granted to any one Participant during any
one-calendar-year period; provided that Awards described in this paragraph (iv)
that are intended to be performance-based compensation shall be subject to the
following:

 

(A)               If the Awards are
denominated in Shares but an equivalent amount of cash is delivered in lieu of
delivery of Shares, the foregoing limit shall be applied based on the
methodology used by the Committee to convert the number of Shares into cash.

 

(B)                If delivery of
Shares or cash is deferred until after Shares have been earned, any adjustment
in the amount delivered to reflect actual or deemed investment experience after
the date the Shares are earned shall be disregarded.

 

5

 

(v)                 For Cash
Incentive Value Awards that are intended to be “performance-based compensation”
(as that term is used for purposes of Code section 162(m)), the maximum
amount payable to any Participant with respect to any performance period shall
equal $500,000 multiplied by the number of calendar months included in that
performance period; provided that Awards described in this paragraph (v), that
are intended to be performance-based compensation, shall be subject to the
following:

 

(A)               If the Awards are
denominated in cash but an equivalent amount of Shares is delivered in lieu of
delivery of cash, the foregoing limit shall be applied to the cash based on the
methodology used by the Committee to convert the cash into Shares.

 

(B)                If delivery of
Shares or cash is deferred until after cash has been earned, any adjustment in
the amount delivered to reflect actual or deemed investment experience after
the date the cash is earned shall be disregarded.

 

(f)                  In
the event of a corporate transaction involving the Company (including, without
limitation, any share dividend, share split, extraordinary cash dividend,
recapitalization, reorganization, merger, amalgamation, consolidation,
split-up, spin-off, sale of assets or subsidiaries, combination or exchange of
shares), the Committee may adjust Awards to preserve the benefits or potential
benefits of the Awards.  Action by the
Committee may include: (i) adjustment of the number and kind of shares which
may be delivered under the Plan; (ii) adjustment of the number and kind of
shares subject to outstanding Awards; (iii) adjustment of the Exercise Price of
outstanding Options and SARs; and (iv) any other adjustments that the Committee
determines to be equitable (which may include, without limitation, (A)
replacement of Awards with other Awards which the Committee determines have
comparable value and which are based on shares of a company resulting from the
transaction, and (B) cancellation of the Award in return for cash payment of
the current value of the Award, determined as though the Award is fully vested
at the time of payment, provided that in the case of an Option, the amount of
such payment may be the excess of value of the Shares subject to the Option at
the time of the transaction over the exercise price).

 

5.3.  General
Restrictions.  Delivery of Shares or
other amounts under the Plan shall be subject to the following:

 

(a)                 Notwithstanding
any other provision of the Plan, the Company shall have no obligation to
recognize an exercise of an Option or SAR or deliver any Shares or make any
other distribution of benefits under the Plan unless such exercise, delivery or
distribution complies with all applicable laws (including, without limitation,
the requirements of the United States Securities Act of 1933), and the
applicable requirements of any securities exchange or similar entity or other
regulatory authority with respect to the issue of shares and securities by the
Company.

 

6

 

(b)                 To
the extent that the Plan provides for issuance of share certificates to reflect
the issuance of Shares, the issuance may be effected on a non-certificated
basis, to the extent not prohibited by or may be made in compliance with
applicable law, the Bye-laws of the Company, or the applicable rules of any
stock exchange.

 

5.4.  Tax
Withholding.  All distributions
under the Plan are subject to withholding of all applicable taxes, and the
Committee may condition the delivery of any Shares or other benefits under the
Plan on satisfaction of the applicable withholding obligations.  Except as otherwise provided by the
Committee and subject to applicable law, such withholding obligations may be
satisfied (i) through cash payment by the Participant; (ii) through the
surrender of Shares which the Participant already owns (provided, however, that
to the extent Shares described in this clause (ii) are used to satisfy more
than the minimum statutory withholding obligation, as described below, then,
except as otherwise provided by the Committee, payments made with Shares in
accordance with this clause (ii) shall be limited to Shares held by the Participant
for not less than six months prior to the payment date); or (iii) through the
surrender of Shares to which the Participant is otherwise entitled under the
Plan; provided, however, that such Shares under this clause (iii) may be used
to satisfy not more than the Company’s minimum statutory withholding obligation
(based on minimum statutory withholding rates for Federal and state tax
purposes, including payroll taxes, that are applicable to such supplemental
taxable income).

 

5.5.  Grant
and Use of Awards.  In the
discretion of the Committee, a Participant may be granted any Award permitted
under the provisions of the Plan, and more than one Award may be granted to a
Participant.  Awards may be granted as
alternatives to or replacement of awards granted or outstanding under the Plan,
or any other plan or arrangement of the Company or a Subsidiary (including a
plan or arrangement of a business or entity, all or a portion of which is
acquired by the Company or a Subsidiary). 
Subject to the overall limitation on the number of Shares that may be
delivered under the Plan, the Committee may use available Shares as the form of
payment for compensation, grants or rights earned or due under any other
compensation plans or arrangements of the Company or a Subsidiary, including
the plans and arrangements of the Company or a Subsidiary assumed in business
combinations.  Notwithstanding the
provisions of subsection 2.2, Options and SARs granted under the Plan in
replacement for awards under plans and arrangements of the Company or a
Subsidiary assumed in business combinations may provide for Exercise Prices
that are less than the Fair Market Value of the Shares at the time of the
replacement grants, if the Committee determines that such Exercise Price is
appropriate to preserve the economic benefit of the award.

 

5.6.  Dividends
and Dividend Equivalents.  An Award
(including without limitation an Option or SAR Award) may provide the
Participant with the right to receive dividend or dividend equivalent payments
with respect to Shares subject to the Award (both before and after the Shares
subject to the Award is earned, vested, or acquired), which payments may be
either made currently or credited to an account for the Participant, and may be
settled in cash or Shares as determined by the Committee.  Any such settlements, and any such crediting
of dividends or dividend equivalents or reinvestment in Shares, will be subject
to the Company’s Bye-laws as well as applicable law and further may be subject
to such conditions, restrictions and contingencies as the Committee shall
establish, including the reinvestment of such credited amounts in Share
equivalents.

 

7

 

5.7.  Settlement
of Awards.  The obligation to make
payments and distributions with respect to Awards may be satisfied through cash
payments, the delivery of Shares, the granting of replacement Awards, or
combination thereof as the Committee shall determine.  Satisfaction of any such obligations under an Award, which is
sometimes referred to as “settlement” of the Award, may be subject to such
conditions, restrictions and contingencies as the Committee shall
determine.  The Committee may permit or
require the deferral of any Award payment, subject to such rules and procedures
as it may establish, which may include provisions for the payment or crediting
of interest or dividend equivalents, and may include converting such credits
into deferred Share equivalents.  Each
Subsidiary shall be liable for payment of cash due under the Plan with respect
to any Participant to the extent that such benefits are attributable to the
services rendered for that Subsidiary by the Participant.  Any disputes relating to liability of a
Subsidiary for cash payments shall be resolved by the Committee.

 

5.8.  Transferability.  Except as otherwise provided by the
Committee, Awards under the Plan are not transferable except as designated by
the Participant by will or by the laws of descent and distribution.

 

5.9.  Form
and Time of Elections.  Unless
otherwise specified herein, each election required or permitted to be made by
any Participant or other person entitled to benefits under the Plan, and any
permitted modification, or revocation thereof, shall be in writing filed with
the Committee at such times, in such form, and subject to such restrictions and
limitations, not inconsistent with the terms of the Plan, as the Committee
shall require.

 

5.10.  Agreement
With Company.  An Award under the
Plan shall be subject to such terms and conditions, not inconsistent with the
Plan, as the Committee shall, in its sole discretion, prescribe.  The terms and conditions of any Award to any
Participant shall be reflected in such form of written (including electronic) document
as is determined by the Committee.  A
copy of such document shall be provided to the Participant, and the Committee
may, but need not require that the Participant sign a copy of such
document.  Such document is referred to
in the Plan as an “Award Agreement” regardless of whether any Participant
signature is required.

 

5.11.  Action
by Company or Subsidiary.  Any
action required or permitted to be taken by the Company or any Subsidiary shall
be by resolution of its board of directors, or by action of one or more members
of the board (including a committee of the board) who are duly authorized to
act for the board, or (except to the extent prohibited by applicable law or
applicable rules of any stock exchange) by a duly authorized officer of such
company.

 

5.12.  Gender
and Number.  Where the context
admits, words in any gender shall include any other gender, words in the
singular shall include the plural and the plural shall include the singular.

 

5.13.  Limitation
of Implied Rights.

 

(a)                 Neither
a Participant nor any other person shall, by reason of participation in the
Plan, acquire any right in or title to any assets, funds or property of the
Company or any Subsidiary whatsoever, including, without limitation, any
specific funds, assets, or other

 

8

 

property which the Company or any Subsidiary, in its
sole discretion, may set aside in anticipation of a liability under the
Plan.  A Participant shall have only a
contractual right to the Shares or amounts, if any, payable under the Plan,
unsecured by any assets of the Company or any Subsidiary, and nothing contained
in the Plan shall constitute a guarantee that the assets of the Company or any
Subsidiary shall be sufficient to pay any benefits to any person.

 

(b)                 The
Plan does not constitute a contract of employment, and selection as a
Participant will not give any participating employee or other individual the
right to be retained in the employ of the Company or any Subsidiary or the
right to continue to provide services to the Company or any Subsidiary, nor any
right or claim to any benefit under the Plan, unless such right or claim has
specifically accrued under the terms of the Plan.  Except as otherwise provided in the Plan, no Award under the Plan
shall confer upon the holder thereof any rights as a shareholder of the Company
prior to the date on which the individual fulfills all conditions for receipt
of such rights and is registered in the Company’s Register of Shareholders.

 

(c)                 All
Stock and shares issued under any Award or otherwise are to be held subject to
the provisions of the Company’s Bye-laws and each Participant is deemed to
agree to be bound by the terms of the Company’s Bye-laws as they stand at the
time of issue of any Shares under the Plan.

 

5.14.  Evidence.  Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.

 

SECTION 6

CHANGE IN CONTROL

 

Subject to the provisions
of paragraph 5.2(f) (relating to the adjustment of shares), the occurrence of a
Change in Control shall have the effect, if any, with respect to any Award as
set forth in the Award Agreement or, to the extent not prohibited by the Plan
or the Award Agreement, as provided by the Committee.

 

SECTION 7

COMMITTEE

 

7.1.  Administration.  The authority to control and manage the
operation and administration of the Plan shall be vested in a committee (the
“Committee”) in accordance with this Section 7.  The Committee shall be selected by the Board, and shall consist
solely of two or more members of the Board. 
As a committee of the Board, the Committee is subject to the overview of
the Board.  If the Committee does not
exist, or for any other reason determined by the Board, and to the extent not
prohibited by applicable law or the applicable rules of any stock exchange, the
Board may take any action under the Plan that would otherwise be the
responsibility of the Committee.

 

7.2.  Powers
of Committee.  The Committee’s
administration of the Plan shall be subject to the following:

 

9

 

(a)                 Subject
to the provisions of the Plan, the Committee will have the authority and
discretion to select from among the Eligible Individuals those persons who
shall receive Awards, to determine the time or times of receipt, to determine
the types of Awards and the number of Shares covered by the Awards, to
establish the terms, conditions, performance criteria, restrictions, and other
provisions of such Awards, and (subject to the restrictions imposed by
Section 8) to cancel or suspend Awards.

 

(b)                 To
the extent that the Committee determines that the restrictions imposed by the
Plan preclude the achievement of the material purposes of the Awards in
jurisdictions outside the United States and Bermuda, the Committee will have
the authority and discretion to modify those restrictions as the Committee
determines to be necessary or appropriate to conform to applicable requirements
or practices of jurisdictions outside of the United States and Bermuda.

 

(c)                 The
Committee will have the authority and discretion to interpret the Plan, to
establish, amend, and rescind any rules and regulations relating to the Plan,
to determine the terms and provisions of any Award Agreement made pursuant to
the Plan, and to make all other determinations that may be necessary or
advisable for the administration of the Plan.

 

(d)                 Any
interpretation of the Plan by the Committee and any decision made by it under
the Plan is final and binding on all persons.

 

(e)                 In
controlling and managing the operation and administration of the Plan, the
Committee shall take action in a manner that conforms to applicable corporate
law.

 

7.3.  Delegation
by Committee.  Except to the extent
prohibited by applicable law or the applicable rules of a stock exchange, the
Committee may allocate all or any portion of its responsibilities and powers to
any one or more of its members and may delegate all or any part of its
responsibilities and powers to any person or persons selected by it.  Any such allocation or delegation may be
revoked by the Committee at any time.

 

7.4.  Information
to be Furnished to Committee.  The
Company and Subsidiaries shall furnish the Committee with such data and
information as it determines may be required for it to discharge its
duties.  The records of the Company and
Subsidiaries as to an employee’s or Participant’s employment (or other
provision of services), termination of employment (or cessation of the provision
of services), leave of absence, reemployment and compensation shall be
conclusive on all persons unless determined to be incorrect.  Participants and other persons entitled to
benefits under the Plan must furnish the Committee such evidence, data or
information as the Committee considers desirable to carry out the terms of the
Plan.

 

SECTION 8

AMENDMENT AND TERMINATION

 

The Board may, at any
time, amend or terminate the Plan, and may amend any Award Agreement, provided
that no amendment or termination may, in the absence of written consent to the
change by the affected Participant (or, if the Participant is not then living,
the affected beneficiary), adversely affect the rights of any Participant or
beneficiary under any Award granted under the Plan prior to the date such
amendment is adopted by the Board; and further

 

10

 

provided that adjustments
pursuant to paragraph 5.2(f) shall not be subject to the foregoing limitations
of this Section 8; and further provided that the provisions of
subsection 2.6 (relating to Option repricing) cannot be amended unless the
amendment is approved by the Company’s shareholders.

 

SECTION 9

DEFINED TERMS

 

In addition to the other
definitions contained herein, the following definitions shall apply:

 

(a)                 Award.  The term “Award” means any award or benefit
granted under the Plan, including, without limitation, the grant of Options,
SARs, and Full Value Awards.

 

(b)                 Board.  The term “Board” means the Board of
Directors of the Company.

 

(c)                 Change
in Control.  The term “Change in
Control” means the occurrence of the events described in any of paragraphs (i),
(ii), (iii) or (iv) below:

 

(i)                   Acquisition of Securities.  The acquisition (disregarding any Excluded
Acquisitions) by any Person of ownership of any Voting Securities if,
immediately after such acquisition, such Person has ownership of more than
twenty-five percent (25%) of either the Outstanding Company Common Shares, or
the combined voting power of the Outstanding Company Voting Securities.  In no event shall a Change in Control occur
by reason of ownership of Shares, Voting Securities, Outstanding Company Common
Shares, or Outstanding Company Voting Securities by ACE Limited and/or any
successor or Affiliate of ACE Limited.

 

(ii)                 Change in Board. 
Individuals who constitute the Incumbent Board cease for any reason to
represent greater than 50% of the voting power of members of the Board.

 

(iii)                Corporate Transaction.  Consummation of (A) a Corporate Transaction or (B) the sale or
other disposition of more than fifty percent (50%) of the operating assets of
the Company (determined on a consolidated basis), but not including an Internal
Reorganization.

 

(iv)               Liquidation. 
Approval by the shareholders of the Company of a plan of complete
liquidation or dissolution of the Company.

 

(v)                 Definitions. 
The terms used in the definition of “Change in Control” shall have the
following meanings:

 

(A)               An “Affiliate” of a
person or other entity shall mean a person or other entity that directly or
indirectly controls, is controlled by, or is under common control with the
person or other entity specified.

 

11

 

(B)                The term “Company
Plan” means an employee benefit plan (or related trust) sponsored or maintained
by the Company or any Affiliate of the Company.

 

(C)                The term
“Corporate Transaction” means any reorganization, merger, amalgamation,
consolidation, or other business combination involving the Company.

 

(D)                The following
shall constitute “Excluded Acquisitions” of Shares or Voting Securities
(whichever is applicable):

 

(I)                  Any acquisition
of Shares or Voting Securities (whichever is applicable) by a Company Plan.

 

(II)                Any acquisition of
Shares or Voting Securities (whichever is applicable) by an underwriter
temporarily holding securities pursuant to an offering of such securities.

 

(III)              Any acquisition of
Shares or Voting Securities (whichever is applicable) by any Person pursuant to
an Internal Reorganization.

 

(IV)              Any acquisition of
Shares or Voting Securities (whichever is applicable) directly from the Company
(excluding any acquisition resulting from the exercise of an exercise,
conversion or exchange privilege unless the security being so exercised,
converted or exchanged was acquired directly from the Company).

 

(V)                Any acquisition of
Shares or Voting Securities (whichever is applicable) by the Company.

 

(VI)              Any acquisition of
Shares or Voting Securities (whichever is applicable) by ACE Limited and/or any
successor or Affiliate of ACE Limited or any employee benefit plan (or related
trust) maintained by any such entity.

 

(E)                 The members of
the “Incumbent Board” shall mean the members of the Board of Directors as of
the Effective Date and shall also mean any individual becoming a director after
that date whose election, or nomination for election by the Company
shareholders, was approved by a vote of a least a majority of the directors
then comprising the Incumbent Board; provided, however, that
there shall be excluded for this purpose any such individual whose initial
assumption of office occurs as a result of an actual or publicly threatened
election contest (as such terms are used in Rule 14a-11 promulgated under the
Securities Exchange Act of 1934) or other actual or publicly threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board.

 

12

 

(F)                 The term
“Internal Reorganization” means a sale-leaseback or other arrangement resulting
in the continued utilization of the assets being sold or otherwise transferred
(or the operating products of such assets) by the Company.  The term “Internal Reorganization” also
means a Corporate Transaction to which all of paragraphs (I), (II), and (III)
below are applicable:

 

(I)                  All or
substantially all of the individuals and entities who have ownership,
respectively, of the Outstanding Company Common Shares and Outstanding Company
Voting Securities immediately prior to such Corporate Transaction have
ownership of more than fifty percent (50%) of, respectively, the then
outstanding shares of common equity securities and the combined voting power of
the then outstanding Voting Securities entitled to vote generally in the
election of directors, as the case may be, of the ultimate parent entity
resulting from such Corporate Transaction (including, without limitation, an
entity which, as a result of such transaction, has ownership of the Company or
all or substantially all of the assets of the Company either directly or through
one or more subsidiaries) in substantially the same relative proportions as
their ownership, immediately prior to such Corporate Transaction, of the
Outstanding Company Common Shares and Outstanding Company Voting Securities, as
the case may be.

 

(II)                No Person (other
than the Company, any Company Plan or related trust, the corporation resulting
from such Corporate Transaction, and any Person having ownership, immediately
prior to such Corporate Transaction, directly or indirectly, of more than
twenty-five percent (25%) of the Outstanding Company Common Shares or the
Outstanding Company Voting Securities, as the case may be) will have ownership
of more than twenty-five percent (25%) of, respectively, the then outstanding
common shares of the ultimate parent entity resulting from such Corporate
Transaction or the combined voting power of the then outstanding Voting
Securities of such entity.

 

(III)              Individuals who were
members of the Incumbent Board immediately prior to the Corporate Transaction
will constitute at least a majority of the members of the board of directors of
the ultimate parent entity resulting from such Corporate Transaction.

 

(G)                The term
“Outstanding Company Common Shares” as of any date means the then outstanding
common shares, of whatever subclass or series, of the Company.

 

13

 

(H)                The term
“Outstanding Company Voting Securities” as of any date means the then
outstanding Voting Securities (which shall be counted based on the number of votes
that may be cast per share).

 

(I)                  The term
“ownership” means beneficial ownership within the meaning of Rule 13d-3
promulgated under the Securities Exchange Act of 1934.

 

(J)                  The term
“Person” means an individual, entity or group as that term is used in
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934.

 

(K)                The term “Voting
Securities” as of any date means any of the outstanding securities of the
Company entitled to vote generally in the election of the Company’s Board of
Directors.

 

(d)                 Code.  The term “Code” means the United States
Internal Revenue Code of 1986, as amended. 
A reference to any provision of the Code shall include reference to any
successor provision of the Code.

 

(e)                 Dollars.  As used in the Plan, the term “dollars” or
numbers preceded by the symbol “$” means amounts in United States dollars.

 

(f)                  Eligible
Individual.  For purposes of the
Plan, the term “Eligible Individual” means any employee of the Company or a
Subsidiary, and any consultant, director, or other person providing services to
the Company or a Subsidiary; provided, however, that to the extent required by
the Code, an ISO may only be granted to an employee of the Company or a
subsidiary corporation of the Company (as that term is used in section 424(f)
of the Code).  An Award may be granted
to an employee or other individual providing services, in connection with
hiring, retention or otherwise, prior to the date the employee or service
provider first performs services for the Company or the Subsidiaries, provided
that such Awards shall not become vested prior to the date the employee or
service provider first performs such services.

 

(g)                 Fair
Market Value.  Except as otherwise
provided by the Committee, the “Fair Market Value” of a Share as of any date
shall be the closing market composite price for such Share as reported for the
New York Stock Exchange - Composite Transactions on that date or, if the Shares
are not traded on that date, on the next preceding date on which the Shares
were traded.

 

(h)                 Performance Measures.  The “Performance Measures” shall be based on any one or more of
the following Company, Subsidiary, operating unit or division performance
measures: gross premiums written; net premiums written; net premiums earned;
net investment income; losses and loss expenses; underwriting and
administrative expenses; operating expenses; cash flow(s); operating income;
profits, earnings before interest and taxes; net income; stock price;
dividends; strategic business objectives, consisting of one or more objectives
based on meeting specified cost targets, business expansion goals, and goals
relating to acquisitions or divestitures; or any combination thereof.  Each goal may be expressed on an absolute
and/or relative basis, may be based on or otherwise employ

 

14

 

comparisons based on internal targets, the past
performance of the Company and/or the past or current performance of other
companies, and in the case of earnings-based measures, may use or employ comparisons
relating to capital, shareholders’ equity and/or shares outstanding,
investments or to assets or net assets.

 

(i)                   Shares.  The term “Shares” means common shares of the
Company.

 

(j)                   Subsidiaries.  For purposes of the Plan, the term
“Subsidiary” means any corporation, partnership, joint venture or other entity
during any period in which at least a fifty percent voting or profits interest
is owned, directly or indirectly, by the Company (or by any entity that is a
successor to the Company), and any other business venture designated by the
Committee in which the Company (or any entity that is a successor to the
Company) has a significant interest, as determined in the discretion of the
Committee.

 

(k)                 Stock.  The term “Stock” is sometimes used to refer
to common shares of the Company.

 

15

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