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Participation Agreement

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Sectors: Insurance
Governing Law: Alabama, View Alabama State Laws
Effective Date: January 11, 2007
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Exhibit 10(c)





AMENDED AND RESTATED



INVESTMENT AND PARTICIPATION AGREEMENT



Dated as of January 11, 2007



Among



PROTECTIVE LIFE INSURANCE COMPANY,



As the Company,







WACHOVIA DEVELOPMENT CORPORATION

(as assignee of Wachovia Capital Investments, Inc.),



as Lessor,



WACHOVIA BANK, NATIONAL ASSOCIATION,



as Administrative Agent,







and







THE LEASE PARTICIPANTS SIGNATORIES HERETO









ATI-2238852v11





ARTICLE I.Defined Terms and Accounting Matters



Section 1.01Terms Defined Above



Section 1.02Certain Defined Terms



Section 1.03Accounting Terms and Determinations



ARTICLE II.Commitments



Section 2.01Lessor Investments; Purchase of Ownership Interests



Section 2.02[Intentionally Omitted]



Section 2.03[Intentionally Omitted]



Section 2.04Certain Supplemental Rent



Section 2.05Ownership Interests; Administrative Agent as Administrative Agent; Record of Payments



Section 2.06Lessor Confirmation Letter



Section 2.07[Intentionally Omitted]



Section 2.08[Intentionally Omitted]



ARTICLE III.Recovery of Lessor Investments; Payment of Yield and Other Amounts



Section 3.01Recovery of Lessor Investments



Section 3.02Redemptions



Section 3.03Yield on Lessor Investments; Overdue Amounts



Section 3.04Payments by Lessor



Section 3.05Applications of Payments and Proceeds



ARTICLE IV.Payments; Computations; Etc



Section 4.01Payments



Section 4.02Pro Rata Treatment



Section 4.03Computations



Section 4.04Non-receipt of Funds by the Lessor



Section 4.05Sharing of Payments



Section 4.06Taxes



ARTICLE V.Yield Protection and Illegality



Section 5.01Basis for Determining Yield Rate Inadequate or Unfair



Section 5.02Illegality



Section 5.03Increased Cost and Reduced Return



Section 5.04Base Rate Substituted for Adjusted LIBO Rate



Section 5.05Compensation



Section 5.06Payments and Computations



ARTICLE VI.Conditions Precedent



Section 6.01Conditions Precedent to Effectiveness of this Agreement



Section 6.02[Intentionally Omitted]



Section 6.03Closing19



ARTICLE VII.Representations and Warranties



Section 7.01Company Representations and Warranties



ARTICLE VIII.Covenants



Section 8.01Information



Section 8.02Maintenance and Inspection of Property, Books and Records



Section 8.03Related Contracts



Section 8.04Consolidations, Mergers and Sales of Assets



Section 8.05Maintenance of Existence



Section 8.06Dissolution



Section 8.07[Intentionally Omitted]



Section 8.08Compliance with Laws; Payment of Taxes



Section 8.09Insurance



Section 8.10Maintenance of Property



Section 8.11Environmental Notices



Section 8.12Environmental Matters



Section 8.13Environmental Release



Section 8.14Transactions with Affiliates



Section 8.15Further Assurances



Section 8.16Compliance with Certain Documents, Permits, Etc



Section 8.17Maintenance; Etc



Section 8.18[Intentionally Omitted]



Section 8.19Liens, Etc



Section 8.20Facility Plan



Section 8.21Change in Fiscal Year



Section 8.22Intentionally Omitted



Section 8.23Restrictions on Ability of Subsidiaries to Pay Dividends



Section 8.24Adjusted Consolidated Net Worth



Section 8.25Ratio of Adjusted Consolidated Indebtedness to Consolidated Capitalization



Section 8.26Ratio of Unconsolidated Cash Inflow Available for Interest Expense to Adjusted Consolidated Interest Expense



Section 8.27Company's Total Adjusted Capital



Section 8.28Restricted Payments



Section 8.29Anti-Terrorism Laws



Section 8.30Company as Agent of Lessor With Respect to the Facility



ARTICLE IX.Events of Default



Section 9.01Events of Default



Section 9.02Remedies



ARTICLE X.The LESSOR as Servicing Agent for the Lease Participants; THE Administrative Agent



Section 10.01Lessor as Servicing Agent



Section 10.02Appointment of the Administrative Agent



ARTICLE XI.Miscellaneous



Section 11.01Amendments, Etc



Section 11.02Notices



Section 11.03Payment of Expenses, Indemnities, Etc



Section 11.04No Waiver; Remedies



Section 11.05Right of Set-Off



Section 11.06Assignments and Participations



Section 11.07Invalidity



Section 11.08Entire Agreement



Section 11.09References



Section 11.10Successors; Survivals



Section 11.11Captions



Section 11.12Counterparts



Section 11.13Confidentiality



Section 11.14Governing Law; Submission to Jurisdiction



Section 11.15Yield



Section 11.16Characterization



Section 11.17Compliance



Section 11.18Facility



Section 11.19Funding Parties



Section 11.20Waiver of Jury Trial



Section 11.21Certain Acknowledgments of the Parties



Section 11.22Amendment and Restatement



EXHIBITS







Exhibit A - Legal Description of Site



Exhibit B - Ownership Certificate



Exhibit C - Form of Assignment and Acceptance



Exhibit D - Form of legal opinion of counsel to the Company and the Guarantor



Exhibit E - Form of Compliance Certificate



Exhibit F - Form of Amended and Restated Guaranty



Exhibit G - Form of Lessor Confirmation Letter



SCHEDULES



Schedule 1.02 - Defined Terms



Schedule 1.02(b) - Pricing Schedule



Schedule 1.02(c) - Limited Recourse Events of Default



Schedule 7.01(e) - Litigation



Schedule 7.01(h) - Subsidiaries



Schedule 7.01(n) - Environmental Matters







ATI-2238852v11






AMENDED AND RESTATED INVESTMENT AND

PARTICIPATION AGREEMENT



AMENDED AND RESTATED INVESTMENT AND PARTICIPATION AGREEMENT (as the same may be amended, modified or supplemented from time to time, this " Agreement " or the " Investment Agreement ") dated as of January 11, 2007, by and among PROTECTIVE LIFE INSURANCE COMPANY, a Tennessee corporation (the " Company "), WACHOVIA DEVELOPMENT CORPORATION, as Lessor (the " Lessor "), WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as administrative agent for the Lessor and the Lease Participants (in such capacity, the " Administrative Agent "), and each of the Lease Participants that is a party hereto or becomes a party hereto as provided in Section 11.06 (individually, together with its successors and assigns, a " Lease Participant ," and collectively, together with their successors and assigns, the " Lease Participants ").



RECITALS



WHEREAS, pursuant to the Original Ground Lease (as this and other terms are used in these Recitals are defined below), WCI acquired a ground lease of certain real property located in Jefferson County, Alabama, described in greater detail on Exhibit A (the " Site "), and has, pursuant to the Original Lease Documents, constructed and installed on the Site an annex office building and a related parking deck and related enhancements and improvements, including furniture, fixtures and equipment; and



WHEREAS, the Company, acting as WCI's agent pursuant to the terms of the Original Agency Agreement, completed the construction and installation of all such enhancements and improvements on the Site and currently provides certain operations, maintenance, and management support in respect of the Facility; and



WHEREAS, pursuant to the Original Lease Agreement, WCI leased the Facility to the Company; and



WHEREAS, to finance the acquisition of the Lessor's ground lease of the Site and the construction and installation of the building, related parking deck and such related enhancements and improvements on the Site for the use and benefit of the Company in accordance with the Original Lease Agreement, WCI, at the Company's request, made Lessor Investments in the Facility in an aggregate principal amount of $75,000,000, and the Lease Participants purchased Ownership Interests from WCI; and



WHEREAS, to induce WCI and the Lease Participants to enter into the Original Investment and Participation Agreement and other Original Lease Documents, the Guarantor executed and delivered the Original Guaranty Agreement in favor of WCI (for the ratable benefit of the Lease Participants);



WHEREAS, the Company has requested to refinance and extend the maturity of the Original Lease Agreement by, among other things, entering into this Agreement, the Amended and Restated Ground Lease, and the Amended and Restated Lease Agreement, and, in anticipation of such refinancing and extension, WCI has assigned 100% of its interest in the Original Lease Documents to Lessor pursuant to the terms of the Lessor Assignment Agreement;



WHEREAS, Guarantor will enter into the Amended and Restated Guaranty Agreement to, among other things but subject to certain limitations, guarantee the obligations of the Company to the Lessor (for the ratable benefit of certain of the Lease Participants);



NOW, THEREFORE, in consideration of the premises and the mutual covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:



ARTICLE I.







DEFINED TERMS AND ACCOUNTING MATTERS



Section 1.01 Terms Defined Above . As used in this Agreement, the terms defined in the preamble and above shall have the meanings indicated above.



Section 1.02 Certain Defined Terms . As used herein, all capitalized terms used but not otherwise defined herein shall have the meaning specified for such term in Schedule 1.02.



Section 1.03 Accounting Terms and Determinations . Unless otherwise specified herein, all terms of an accounting character used herein shall be interpreted, all accounting determinations hereunder shall be made, and all financial statements required to be delivered hereunder shall be prepared, in accordance with GAAP (except that financial statements of the Insurance Subsidiaries shall be prepared in accordance with SAP), applied on a basis consistent (except for changes concurred with by the Guarantor's independent public accountants or otherwise required by a change in GAAP) with the most recent audited consolidated financial statements of the Guarantor and the Consolidated Subsidiaries delivered to the Funding Parties unless with respect to any such change concurred with by the Guarantor's independent public accountants or required by GAAP or SAP, in determining compliance with any of the provisions of this Agreement or any of the other Operative Documents: (a) the Guarantor shall have objected to determining such compliance on such basis at the time of delivery of such financial statements, or (b) the Majority Funding Parties shall so object in writing within 30 days after the delivery of such financial statements, in either of which events such calculations shall be made on a basis consistent with those used in the preparation of the latest financial statements as to which such objection shall not have been made (which, if objection is made in respect of the first financial statements delivered under Section 8.01, shall mean the financial statements referred to in Section 7.01(d)).



ARTICLE II.







COMMITMENTS



Section 2.01 Lessor Investments; Purchase of Ownership Interests .



(a) Lessor Investments . The Company and Lessor acknowledge and agree that all fundings of "Lessor Advances" and "Lease Participant Advances ? (as each of such terms was defined in the Original Investment and Participation Agreement) were duly made pursuant to the Original Investment Agreement and that, before the date hereof, all " Lessor Commitments" and "Lease Participant Commitments" (as each of such terms was defined in the Original Investment and Participation Agreement) expired or were terminated in their entirety. All parties hereto as of the Restatement Closing Date acknowledge and agree that (i) pursuant to the Initial Master Assignment and Acceptance (which is deemed to be effective immediately before the effectiveness of this Agreement), Lessor accepted 100% of the Lessor Investments from all Lease Participants; (ii) pursuant to the terms of this Agreement and the Secondary Master Assignment and Acceptance (which is deemed effective contemporaneously herewith), all such Lessor Investments outstanding immediately before the effectiveness of this Agreement are hereby deemed to be recharacterized such that they constitute A Percentage Lessor Investments and B Percentage Lessor Investments (with a portion of the B Percentage Lessor Investments being in excess of the Non-Recourse Amount and the remainder being attributable to the Non-Recourse Amount); and (iii) pursuant to the Secondary Master Assignment and Acceptance, each of the Lease Participants under this Agreement have accepted from Lessor such A Percentage Lessor Investments and/or B Percentage Lessor Investments (and, consequently, related A Percentage Ownership Interests and B Percentage Ownership Interests) as are indicated in the Secondary Master Assignment and Acceptance and, as of the Restatement Closing Date, the signature pages hereof.



(b) On the Restatement Closing Date, and after giving full effect to the Secondary Master Assignment and Acceptance, the Lessor shall furnish to each Lease Participant, with a copy to the Company, a certificate in the form of Exhibit B (an " Ownership Certificate ") setting forth, as of the date hereof, the information described in Section 2.05(a).



Section 2.02 [Intentionally Omitted] .



Section 2.03 [Intentionally Omitted] .



Section 2.04 Certain Supplemental Rent . In addition to other Supplemental Rent payable pursuant to the Operative Documents, the Company shall pay to the Lessor (for its own account and for the account of any other Person as specified below) the Supplemental Rent described in this Section 2.04 pursuant to the provisions hereof.



(a) [Intentionally Omitted].



(b) The Company shall pay or cause to be paid to the Lessor Supplemental Rent in the amount of 0.05% of the Unrecovered Lessor Investments as of the Restatement Closing Date (the " Upfront Supplemental Rent "). The Upfront Supplemental Rent shall be payable in full on the Restatement Closing Date. Promptly upon receipt by the Lessor of such payment of the Upfront Supplemental Rent, it shall distribute to each Lease Participant its Percentage Share thereof.



(c) On the Restatement Closing Date, the Company shall pay or cause to be paid to the Administrative Agent, for the account of Arranger, Supplemental Rent in the amount set forth in the Engagement and Fee Letter (the " Arranger's Supplemental Rent "), which Arranger's Supplemental Rent shall be deemed fully earned on the Restatement Closing Date and, once paid, shall be non-refundable. The Company shall pay to Administrative Agent, for its own account, an administrative fee in the amount of $25,000.00 per year (the " Administrative Supplemental Rent "), which Administrative Supplemental Rent shall be paid initially on the Restatement Closing Date and on each anniversary thereof until the Lease Termination Date. The Administrative Supplemental Rent shall be deemed fully earned on the Restatement Closing Date and on each anniversary thereof and, once paid, shall be non-refundable.



Section 2.05 Ownership Interests; Administrative Agent as Administrative Agent; Record of Payments .



(a) The Ownership Certificates furnished by the Lessor pursuant to Sections 2.01(b), 3.02 and 11.06 shall evidence, as of the date thereof, the aggregate amount of (i) all Lessor Investments, (ii) the A Percentage Ownership Interests owned by the Lessor and each A Percentage Lease Participant, (iii) the A Percentage Share of the Lessor and each A Percentage Lease Participant, (iv) the percentage which the A Percentage Lessor Investments bears to the total Lessor Investments, (v) the B Percentage Ownership Interests owned by the Lessor and each B Percentage Lease Participant, (vi) the B Percentage Share of the Lessor and each B Percentage Lease Participant, (vii) the percentage which the B Percentage Lessor Investments bears to the total Lessor Investments and (viii) with respect to each B Percentage Lease Participant, the identification of that portion of such B Percentage Lease Participant's B Percentage Lessor Investments which is attributable to the Non-Recourse Amount and that portion which is in excess of the Non-Recourse Amount. Such Ownership Certificates shall be final and conclusive evidence of the amounts set forth therein, in the absence of manifest error. The sale by the Lessor to the Lease Participants of Ownership Interests shall be absolute sales, and the Lease Participants shall have no recourse to the Lessor in the event of failure of the Company to pay any Rent, fees or other amounts payable pursuant to the Lease, this Agreement and the other Operative Documents which are attributable to their Ownership Interests, or right to require the Lessor to repurchase their Ownership Interests in any event.



(b) The Lessor shall serve as the servicing agent for the Lease Participants to collect and receive all payments of Rent and other amounts payable pursuant to the Lease, this Agreement and the other Operative Documents which are attributable to their Ownership Interests, and such amounts, when received by the Lessor and until distributed to the Lease Participants pursuant to the Lease, this Agreement or the other Operative Documents, shall be held by the Lessor in trust for the Lessor and the Lease Participants. In accordance with Section 10.02, the parties hereto acknowledge and agree that the Administrative Agent shall perform certain of the Lessor's obligations and be entitled to certain rights hereunder.



(c) The Administrative Agent, on behalf of the Lessor, shall maintain a record of payments of Rent and all other amounts paid to the Lessor pursuant to the Lease, this Agreement and the other Operative Documents, and the amounts paid by the Lessor to the Lease Participants pursuant to this Agreement, and such record shall be final and conclusive evidence of the amounts recorded therein, absent manifest error. A copy of such record shall be made available to the Company and any Lease Participant upon its request.



Section 2.06 Lessor Confirmation Letter . Upon Lessee's request made in writing, but no more frequently than once per fiscal quarter, Lessor shall provide an update to the letter referred to in Section 6.01(h).



Section 2.07 [Intentionally Omitted] .



Section 2.08 [Intentionally Omitted] .



ARTICLE III.







RECOVERY OF LESSOR INVESTMENTS;



PAYMENT OF YIELD AND OTHER AMOUNTS



Section 3.01 Recovery of Lessor Investments .



(a) The Company will pay or cause to be paid to the Lessor all Rent and other amounts payable to the Lessor, for the account of the Lessor and the Lease Participants, as the case may be, including all Unrecovered Lessor Investments, all accrued and unpaid Yield, Supplemental Rent and other amounts owing under this Agreement and the other Operative Documents, in full on the Maturity Date, subject to Section 3.01(b).



(b) If, on or before the Maturity Date, the Company or the Guarantor (or any of their respective Affiliates) shall exercise the option to purchase the Facility in its entirety, then the purchase price for the Facility shall be equal to the Purchase Price and the proceeds of such sale, when received by the Lessor, shall be applied by the Lessor in the order specified in Section 3.05(a). If, on the Maturity Date, no Cancellation Event shall have occurred and the Company or the Guarantor (or any of their respective Affiliates) shall elect to pay the Final Rent Payment and not to purchase the Facility, and shall pay the Final Rent Payment, all amounts received by the Lessor pursuant to or in connection with the Lease, this Agreement or any other Operative Document or as proceeds of the disposition of the Facility shall be applied by the Lessor to pay the Unrecovered Lessor Investments and all accrued Yield (which shall be distributed ratably to the Funding Parties in accordance with their respective Ownership Interests), and to the Persons entitled thereto pursuant to the Operative Documents all Supplemental Rent and other amounts owing under this Agreement in the order specified in Section 3.05(b).



Section 3.02 Redemptions .



(a) On or after the third anniversary of the Restatement Closing Date, the Company may from time to time, upon at least 2 Business Days' notice to the Lessor which specifies the proposed date (which shall be a Business Day) and aggregate principal amount of the redemption and the Lessor Investments to be redeemed, and if such notice is given the Company shall, as specified in such notice, redeem no later than 12:00 noon, Charlotte, North Carolina, time, on such date, and the amount of such redemption payment, when received by the Lessor, shall be applied to redeem, the outstanding principal amounts of the Lessor Investments constituting A Percentage Lessor Investments, in whole or ratably in part, together with accrued Yield to the date of such redemption on the amount redeemed (and the Lessor shall, on the same Business Day on which received, distribute to the A Percentage Lease Participants as provided below; provided, however, that (i) each partial redemption shall be in an aggregate principal amount not less than $1,000,000 or an integral multiple of $500,000 in excess thereof, and (ii) in the event of any such redemption of Lessor Investments on any day other than the last day of the Yield Period for such Lessor Investments, the Company, as agent for the Lessor, shall be obligated to reimburse the applicable Funding Parties in respect thereof pursuant to, and to the extent required by, Section 5.05. Any redemption pursuant to this Section 3.02 shall be allocated among the A Percentage Lessor Investments in accordance with their respective A Percentage Shares. Within 5 Business Days after its receipt of such redemption amount, the Lessor, at the expense of the Company, shall execute and deliver to each of the Lease Participants a new Ownership Certificate, giving effect to such redemption and dated the date thereof.



(b) [Intentionally Omitted].



Section 3.03 Yield on Lessor Investments; Overdue Amounts .



(a) Yield shall accrue on the Lessor Investments and be payable at a rate per annum equal to the Adjusted LIBO Rate for the applicable Yield Period plus the Applicable Margin, but in no event to exceed the Highest Lawful Rate (the " Yield ").



(b) Notwithstanding the foregoing, the Company, by the payment of additional Rent under the Lease, or otherwise, shall pay or cause to be paid to the Lessor, at the applicable Default Rate on the amount of Lessor Investments, Yield, Supplemental Rent or other amounts owing by the Company under this Agreement or any other Operative Document which shall not be paid in full when due (whether at stated maturity, by acceleration or otherwise), for the period commencing on the due date thereof until the same is paid in full, in each case to the maximum extent permitted by applicable law (and the Lessor shall, on the day of receipt, if received prior to 2:00 p.m., Charlotte, North Carolina, time, or on the next succeeding Business Day, if received at or after 2:00 p.m., Charlotte, North Carolina, time, distribute to the Lease Participants their respective A Percentage Share or B Percentage Share, as applicable, thereof, or to such other Person as shall be entitled thereto pursuant to the Operative Documents).



(c) Accrued Yield on the Lessor Investments shall be payable on the last day of each Yield Period therefor and on the Maturity Date. Yield payable at the Default Rate shall be payable from time to time on demand.



(d) Promptly after the determination of the rate of any Yield provided for herein or any change therein, the Lessor shall notify the Lease Participants which have an Ownership Interest in such Yield and the Company of such determination or change.



Section 3.04 Payments by Lessor . All moneys received by the Lessor pursuant to the Lease including, but not limited to, payments of Basic Rent, Supplemental Rent, the Termination Value or the Final Rent Payment, except for amounts allocable to fees and expenses of the Lessor pursuant to the Operative Documents and amounts comprising Supplemental Rent payable to third Persons, if any, shall be paid to the Funding Parties in accordance with, and to pay amounts owing pursuant to, the terms of this Agreement, including without limitation Section 4.01 and, if applicable, Section 3.05.



Section 3.05 Applications of Payments and Proceeds .



(a) Upon the occurrence of (x) a Cancellation Event or (y) a Termination Event (and the Company elects pursuant to Section 15(a) of the Lease to exercise its option to purchase the Facility for the Purchase Price), or if the Company otherwise elects to acquire the Facility for the Purchase Price, the Purchase Price or the Termination Value, as the case may be, and all other monies received by the Lessor (or the Administrative Agent on the Lessor's behalf) pursuant to or in connection with the Lease, this Agreement or any other Operative Document, including, without limitation, the proceeds of any insurance or condemnation awards received as a result of any Casualty Occurrence or Loss Event, shall be applied in the following order:



(i) first , to pay or reimburse all Supplemental Rent and ot
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