EXHIBIT 10.1


 


November 17, 2008


 


SURPLUS NOTE


 


Allstate Life Insurance
Company, a life stock insurance company duly organized and existing under the
laws of the State of Illinois (the “Company”) for value received hereby
promises to pay to Allstate Insurance Company, or its assigns, the principal
sum of $400,000,000.00 (Four Hundred Million Dollars) in cash on November 17,
2028 and to pay interest thereon semi-annually on the first day of April and
October in each year, commencing April 1, 2009, at the rate of 7.00 %
per annum, until the principal hereof is paid, except that the final payment of
any accrued and unpaid interest shall be concurrent with the payment of
principal.  Interest will be computed on
the basis of a 360-day year of twelve 30-day months.  All principal and interest shall be paid at
the principal corporate office of the Company or such other place, which shall
be acceptable to the Company, as the holder hereof shall designate in writing
to the Company, in collected and immediately available funds in lawful money of
the United States of America.  Principal
and interest shall be payable on the terms and conditions set forth below:


 


1.                                       No
payment of principal or interest shall be permitted on this Surplus Note
without the prior written approval of the Director of Insurance of the State of
Illinois (the “Director”) and shall only be made out of surplus of the Company
in excess of the minimum surplus the company is required to maintain under Section 13
of the Illinois Insurance Code [215 ILCS 5/13]. 
The Company covenants that it shall use its best efforts to obtain such
approvals on or prior to the date on which such principal or interest shall
become due and payable.  In addition to
and not in lieu of the foregoing, the holder of this Surplus Note shall have
the option of seeking such approvals itself and, in such event, the Company
covenants to cooperate fully with the holder of this Surplus Note in seeking
such approvals.


 


2.                                       To
the extent that a payment of all or a portion of the principal of this Surplus
Note or interest hereon is prohibited pursuant to the provisions of Paragraph 1
hereof, such prohibition shall not be considered to be a forgiveness of the
indebtedness hereunder, and interest shall continue to be accrued and paid at
the rate provided herein through the date of payment on any such unpaid
principal (but not on interest the payment of which was prohibited pursuant to
the provisions of Paragraph 1 hereof, during the period of such prohibition),
and promptly (and in no event later than 30 days) after the removal of any such
prohibition the Company shall make payment of all amounts then past due and
owing hereunder.


 


3.                                       The
Company covenants that if:


 


(a)                                  default
is made in the payment of any installment of interest on this Surplus Note when
such interest becomes due and payable and such default continues for a period
of 30 days, other than to the extent such interest payment is prohibited
pursuant to Paragraph 1 hereof, or


 


(b)                                 default
is made in the payment of the principal of this Surplus Note when such
principal becomes due and payable, other than to the extent that such principal



 

















 


payment is prohibited pursuant to Paragraph 1 hereof,


 


the Company will,
upon demand by the holder of this Surplus Note, and subject to the provisions
of Paragraph 1 hereof, pay to it the whole amount of the principal of this
Surplus Note, plus accrued interest, with interest upon the overdue principal
and, to the extent that payment of such interest shall be legally enforceable,
upon overdue installments of interest (excluding interest payments prohibited
pursuant to Paragraph 1 hereof), at the rate borne by this Surplus Note; and,
in addition thereof, such further amount as shall be sufficient to cover the
costs and expenses of collection, including reasonable attorneys’ fees.


 


4.                                       In
the event of the liquidation of the Company, the claims under this Surplus Note
shall be paid out of any assets remaining after the payment of all policy
obligations and all other liabilities but before distribution of assets to
shareholders; provided, however, that the claims of the holder of
this Surplus Note shall not be subordinated to the claims of the holder of any
other such surplus note.


 


5.                                       Subject
to the provisions of Paragraph 1 hereof, payments of principal and interest on
this Surplus Note may be repaid or prepaid, in whole at any time or in part
from time to time, without premium or penalty and with interest to the date of
payment only.


 


6.                                       Except
for the events described in Paragraphs 1 and 4 above, no provision of this
Surplus Note shall alter or impair the obligation of the Company, which is
absolute and unconditional, to pay the principal of and interest on this
Surplus Note at the times, place and rate, and in the coin or currency, herein
prescribed.  No provision of this Surplus
Note shall extinguish ultimate liability for the payment of principal and
interest hereunder.


 


7.                                       The
obligation of the Company to pay this Surplus Note shall not form a part of the
Company’s legal liabilities until authorized for payment by the Director and
shall not be a basis of any set off, but, until authorized for repayment by the
Director, all statements published or filed with the Director by the Company
shall show the amount thereof then remaining unpaid as a special surplus
account.  The obligation of the Company
under this Surplus Note may not be offset or be subject to recoupment with
respect to any liability or obligation owed to the Company.


 


8.                                       Each
payment made hereunder will be credited first to accrued but unpaid interest,
if any, and the balance of such payment will be credited to the principal
amount hereof.


 


9.                                       In
the event that any payment of principal or interest on this surplus note is
scheduled to be made on a day that is not a Business Day, then such payment shall
be made on the next following Business Day and no additional interest shall
accrue as a result of payment on such following Business Day.  For the purpose of this Paragraph 9, “Business
Day” shall mean any day that is not a Saturday, Sunday or any other day on
which banking institutions in the state of Illinois are permitted or required
by any applicable law to close.


 


10.                                 No
agreement or interest securing any obligation of the Company, whether existing
on the date of this Surplus Note or subsequently entered into, shall apply to
or secure the obligation of the Company under this Surplus Note.


 


2

















 


11.                                 In
the event the Company consolidates or merges into another entity or transfers
substantially all of its assets to another entity, the entity into which the
Company consolidates or merges or to which the assets of the Company are
transferred must assume the liability of the Company hereunder.


 


12.                                 This
Surplus Note shall be construed in accordance with, and governed by, the laws
of the State of Illinois, including the provisions of Section 215 ILCS
5/34.1 of the Illinois Insurance Code, and applicable regulations issued
pursuant thereto.


 


IN WITNESS WHEREOF, the Company has caused this Surplus Note to be executed
in its name and attested to by its authorized officer, and its corporate seal
to be hereunto affixed, all as of the date first written above.


 


	
   

  	
  ALLSTATE LIFE INSURANCE
  COMPANY

  
	
   

  	
   

  
	
   

  	
   

  
	
  (CORPORATE SEAL)

  	
   

  
	
   

  	
  By:

  	
    /s/ John C.
  Pintozzi

  
	
   

  	
    Name:  John
  C. Pintozzi

  
	
   

  	
    Title:   Senior
  Vice President

  
	
   

  	
                and
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
  Attest:

  	
    /s/ Susan
  L. Lees

  	
   

  	
   

  
	
    Name: Susan
  L. Lees

  	
   

  	
   

  
	
                Senior
  Vice President, Secretary

  	
   

  	
   

  
	
                and
  General Counsel

  	
   

  	
   

  



 


3