**Exhibit 10.1**

** **

**MARKETING AND ADMINISTRATION AGREEMENT**

 

THISMARKETING AND ADMINISTRATION AGREEMENT (“**Agreement**”)is dated as of October 1, 2010 and is by and between Allstate FinanceCompany, LLC (“**Allstate Finance**”)and******AllstateBank**.

 

BACKGROUND

 

Forseveral years, Allstate Bank has been making business-purpose loans (the “**Loans**”) to agents (“**Agents**”) ofAllstate Insurance Company (“**AIC**”) and itsinsurance subsidiaries (collectively, “**Allstate Insurance**”).  Allstate Finance has been formed by AllstateLife Insurance Company (“**ALIC**”) tooriginate, fund and retain Loans (any such Loans, “**AllstateFinance Loans**”) to the extent Allstate Bank is unable to do so.  Pursuant to this Agreement, Allstate Bankwill provide certain administrative functions for Allstate Finance Loans butwill not originate, fund or retain any investment in Allstate FinanceLoans.  The marketing, origination andadministration of Allstate Finance Loans is sometimes hereinafter referred toas the “**Program**.”

 

NOW,THEREFORE, intending to be legally bound, and in consideration of the premises,mutual covenants, promises, agreements and undertakings, and therepresentations and warranties contained herein, the receipt and sufficiency ofwhich are hereby acknowledged, the parties hereby agree as follows:

 

AGREEMENT

 

**ARTICLE I**

** **

**MARKETING,ORIGINATION AND ADMINISTRATION OBLIGATIONS**

 

Section 1.1             LoanMarketing by Allstate Bank. Periodically, Allstate Finance will provide Allstate Bank withspecifications (the “**Specifications**”)for each state concerning the Allstate Finance Loans it is prepared to make(including specifications concerning minimum and maximum dollar amounts andpermitted borrowers) and strategic direction regarding the marketing ofAllstate Finance Loans.  Pursuant to theSpecifications and such direction, on a quarterly or other periodic basis,Allstate Bank will submit to Allstate Finance for its approval a marketingproposal and budget for Allstate Finance Loans (a “**Plan**”) showing, among other things: (a) the proposedmarketing activities that are anticipated to be conducted over the periodcovered by the Plan (the “**Plan Period**”);and (b) the anticipated cost of such marketing. Subject to AllstateFinance’s approval, Allstate Bank may modify any Plan at any time or from timeto time.

 

Section 1.2             LoanFunding.  Allstate Bank shall giveAllstate Finance written or electronic notice (a “**Funding Notice**”) from time to time of the dollar amount ofAllstate Finance Loans for which Allstate Bank anticipates facilitatingorigination on behalf of Allstate Finance during the subsequent three businessdays (the “**Funding Requirement**”).  Within five (5) business days afterreceipt of any Funding Notice consistent with the latest Plan, Allstate Financeshall ensure that it has on deposit with Allstate Bank and maintains on depositwith Allstate Bank at all times up through and including the third business dayfollowing the anticipated origination date of each loan, in anoninterest-bearing checking account established for such purpose (the “**AF Loan Funding Account**”), an amount equalto the Funding Requirement less the dollar amount of Allstate Finance Loansoriginated since the date of the such Funding Notice.  The proceeds of Allstate Finance Loans shallbe disbursed only through checks drawn from the AF Loan Funding Account or wireor ACH transfers from the AF Loan Funding Account.

 

----

 

Section 1.3             LoanOrigination.

 

(a)           Allstate Bank will continue tooriginate and fund Loans on its own behalf (“**AllstateBank Loans**”) that do not meet the Specifications and/or the latestPlan and, pursuant to the Specifications and the latest Plan, will facilitatethe origination and funding by Allstate Finance of Allstate Finance Loans.

 

(b)           Allstate Bank shall at no time haveany direct or indirect variable interest in any Allstate Finance Loan.  All Allstate Finance Loans shall be executedand funded solely and exclusively in the name of Allstate Finance and solelywith the funds from the AF Loan funding Account and all Allstate Bank Loansshall be executed and funded solely and exclusively in the name of AllstateBank.  Allstate Finance hereby appointsAllstate Bank as its true and lawful attorney-in-fact, with full power ofsubstitution, to execute and deliver all Allstate Finance Loan agreements anddocuments in Allstate Finance’s name and stead pursuant to this Agreement.  So long as this Agreement is in force, thispower of attorney is irrevocable.

 

(c)           Allstate Finance shall provide toAllstate Bank the Allstate Finance Agent Loan Underwriting Policy (the “**Underwriting Policy**”).  Allstate Finance may modify the UnderwritingPolicy from time to time. Should the modifications to the Underwriting Policycause a material increase in the time and expense for Allstate Bank tounderwrite Allstate Finance Loans, Allstate Finance, the parties shallnegotiate in good faith to revise the fee schedule.  All Allstate Finance Loans shall satisfy thestandards set forth in the Underwriting Policy under the caption “LoanUnderwriting” and all loan files for Allstate Finance Loans (“**Allstate Finance Loan Files**”) shall includethe documents and materials set forth in the Underwriting Policy under thecaption “Loan Files” (the “**Required LoanDocuments**”), subject to such exceptions as any officer of AllstateFinance not affiliated with Allstate Bank shall approve.  Allstate Bank shall maintain the AllstateFinance Loan Files and shall make the Allstate Finance Loan Files available toAllstate Finance and its accountants, auditors and representatives from time totime during normal business hours, in the format (hard copy or electronic) inwhich such Allstate Finance Loan Files are maintained.  In the event that Allstate Finance identifieswithin ninety (90) days after the origination date of an Allstate Finance Loana material departure from the requirements of this Section 1.3(c),Allstate Finance, in its sole discretion, may within such period 1) give Allstate Bank a demand to cure theproblem or 2) require Allstate Bank to purchase such non-conforming AllstateFinance Loan within sixty (60) days, 3) waive its rights to demand a cure orrepurchase of non-conforming Allstate Finance Loan by Allstate Bank.  The purchase price for any suchnon-conforming Allstate Finance Loan(s) shall be the par value of theLoan, together with accrued interest, and may be paid in cash and/or bydelivery to Allstate Finance of one or more Allstate Bank Loans of comparabledollar amount (with appropriate cash adjustments).  To the extent Allstate Bank purchases AllstateFinance Loans pursuant to this Section 1.3(c) for cash, appropriateadjustment shall be made for any compensation paid by Allstate Finance toAllstate Bank with respect to the origination of the Allstate FinanceLoan.  In the event that Allstate Financedoes not demand purchase of a non-conforming Allstate Finance Loan withinninety (90) days after Loan origination, any defects in the underwriting ordocumentation with respect to such Allstate Finance Loan shall be deemed to bewaived, notwithstanding any language in this Agreement (including Article IV)to the contrary.

 

Section 1.4             NewLoan Report.  Allstate Bank shallelectronically make available to Allstate Finance a report (a “**New Loan Report**”)****showing the new Allstate Finance Loansoriginated and such other reports as are available to Allstate Bank on itsadministration system (“**New AllstateFinance Loans**”).  Among other information, the New Loan Reportshall show for each New Allstate Finance Loan: (a) the name of the agentborrower (“**Agent**”); (b) the principal amount of the New Loan; (c) theinterest rate on the New Loan; (d) the term in months of the New AllstateFinance Loan; (e) the monthly payment on the New Allstate Finance Loan.

 

Section 1.5             Administrationof Loans; Administration Standards. Allstate Bank shall administer Allstate Finance Loans as set forth byAllstate Finance (“**Administration Standards**”)those 

 

2

----

 

AdministrationStandards require Allstate Bank to administer the Allstate Finance Loans inaccordance with applicable statutes, codes, ordinances, laws, regulations,orders, judgments, decrees and agreements, memoranda of understanding,directives, formal and informal guidance and policies of all federal, state andlocal agencies (collectively, “**GovernmentalRequirements**”),the terms of this Agreement, customary and usual standards of practice ofprudent loan administrators and the standards of performance Allstate Bankapplies to Allstate Bank Loans.  Inconnection with such administration and within the terms of this Agreement,Allstate Bank shall have full power and authority, acting alone, to do or causeto be done any and all things that it may deem necessary or desirable inconnection with such administration and that are in the best interest and forthe benefit of Allstate Finance, except that without the express writtenconsent of Allstate Finance, Allstate Bank shall not forgive any interest orprincipal amount of any Loan, release any guarantor or any collateral or extendthe term of any Loan.  Without limitingthe generality of the foregoing, Allstate Bank, in the name of Allstate Financeor any assignee of Allstate Finance, when Allstate Bank believes it appropriatein its reasonable judgment, may execute and deliver any and all instruments ofsatisfaction or cancellation, or of partial or full release or discharge andall other instruments, with respect to Allstate Finance Loans.  Allstate Finance hereby irrevocablydesignates and appoints Allstate Bank as its attorney-in-fact, with full powerof substitution, during the term hereof for purposes of signing the name ofAllstate Finance or any assignee to any and all such instruments.  Notwithstanding such appointment, AllstateBank may prepare and deliver to Allstate Finance or any assignee such documentsrequiring execution and delivery by Allstate Finance or any assignee as arenecessary or appropriate to enable Allstate Bank to administer Allstate FinanceLoans.  Upon receipt of such documents,Allstate Finance or its assignee shall execute such documents and deliver themto Allstate Bank.  Notwithstanding theforegoing, Allstate Bank shall notify Allstate Finance whenever there is amaterial default under any Allstate Finance Loan and obtain Allstate Finance’sprior express consent before initiating any formal legal proceedings to enforceAllstate Finance’s remedies.  As part ofits Allstate Finance Loan administration, Allstate Bank shall provide certainbookkeeping services and financial reports and information, including theinformation necessary for Allstate Finance financial reporting purposes.

 

Section 1.6             RemittingPayments.

 

(a)           Within three business days afterreceiving or collecting any payment on an Allstate Finance Loan,****Allstate Bank shall deposit the amountreceived or collected, net of any related compensation or expense reimbursementto which Allstate Bank is entitled (as described in Article II), in anoninterest-bearing checking account established in Allstate Finance’s name forsuch purpose (the “AFC **Loan RemittanceAccount**”).  In the event thatany payment received on an Allstate Finance Loan is returned or dishonored, orin the event that any such payment must be returned, Allstate Bank shall beentitled to a refund of the related amount remitted to Allstate Finance and maywithhold from future payments to Allstate Finance the amount of the refund towhich it is entitled. Allstate Bank shall not advance or be obligated toadvance its own funds for principal and interest owing under the Loans.

 

(b)           If Allstate Finance receives directlyany payment on any Allstate Finance Loan, Allstate Finance shall promptlyforward such payment to Allstate Bank for application in accordance with theterms of this Agreement.

 

Section 1.7             CustomerService.  Allstate Bank will directlyand/or through third parties provide the staffing necessary to assist Agentsseeking and obtaining Allstate Finance Loans. Such functions will include, but may not be limited to:

 

(a)           Staffing a “help desk” withrepresentatives with the knowledge necessary to assist Agents in completingapplications, overcoming any computer or website problems and answeringassociated questions;

 

(b)           After an Allstate Finance Loan isoriginated and funded by Allstate Finance, providing the Agent with routineaccount information concerning loan terms, outstanding 

 

3

----

 

balance,payments, payment due date and address for sending payments.  Such information may be provided via liveoperators, through an automated telephone system or over the Internet.

 

Section 1.8             Collectionof Loan Payments.  Allstate Bankshall make commercially reasonable efforts in accordance with theAdministration Standards set forth by Allstate Finance to collect all paymentscalled for under the terms and provisions of Allstate Finance Loans.  However, consistent with the Fee Scheduleattached hereto as Exhibit A (the “**FeeSchedule**”), Allstate Bank may waive late payment charges orprepayment charges.  Unless directed byAllstate Finance, Allstate Bank shall not institute or continue any litigationor arbitration proceeding with respect to collection of any payment if itbelieves in good faith that enforcing the provision of the instrument pursuantto which such payment is required is not cost-justified.  If Allstate Bank is directed by AllstateFinance to institute or continue such litigation or arbitration proceeding,Allstate Finance agrees to reimburse Allstate Bank all related fees and costs.

 

Section 1.9             Accessto Certain Documentation and Information Regarding Loans; Allstate Bank RegulatorAuthority.

 

(a)           Allstate Bank shall afford AllstateFinance and any court or governmental agency or body with supervisory authorityor jurisdiction over Allstate Finance (an “**Allstate Finance Regulator**”) reasonable access to all records and documentation regarding AllstateFinance Loans and all accounts and other matters relating to this Agreement,such access being afforded without charge, but only upon reasonable request andduring normal business hours (or as requested by an Allstate Finance Regulator)at the office designated by Allstate Bank. At the request of any court or governmental agency or body withsupervisory authority or jurisdiction over Allstate Bank (an “**Allstate Bank Regulator**”), Allstate Financeshall provide like access to such Allstate Bank Regulator.  Allstate Finance agrees to submit to anyexamination which may be required by any Allstate Bank Regulator, to thefullest extent such regulator may require.

 

(b)           Allstate Finance (either directly orby the use of accountants or other agents or representatives) may audit,inspect and review Allstate Bank and its files, records and books insofar asthey relate to Allstate Finance Loans. Allstate Bank agrees to submit to Allstate Finance such information asAllstate Finance may from time to time reasonably request in order to ascertainAllstate Bank’s compliance with the requirements of this Agreement andcompliance of the Program with Governmental Requirements.

 

Section 1.10           Non-Exclusivity.  Allstate Bank is neither obligated nor expectedto service loans exclusively for Allstate Finance.  No terms or conditions contained herein shallprevent, restrict or preclude Allstate Bank from administering loans (orengaging in other services) for other entities, whether or not affiliated withAllstate Finance, in any jurisdiction with respect to any program.  Allstate Bank agrees that it shall maintainappropriate controls to segregate funds, information and records relating tothe Allstate Finance Loans from those of other entities.

 

Section 1.11           Statusof Parties.  Allstate Bank shallperform its services hereunder as an independent contractor for AllstateFinance.

 

Section 1.12           AdditionalCovenants of Allstate Bank.

 

(a)           Allstate Bank shall, while thisAgreement is in effect, prepare and maintain disaster recovery, businessresumption, and contingency plans appropriate for the nature and scope of theProgram, the activities of Allstate Bank, and the obligations to be performedby Allstate Bank hereunder and also sufficient to enable Allstate Bank topromptly resume the performance of its obligations hereunder in the event of anatural disaster, destruction of Allstate Bank’s facilities or operations,utility or communication failures, or similar interruption in the operations ofAllstate Bank or the operations of a third party which in turn materiallyaffect the operations of Allstate Bank. Allstate Bank shall make available to Allstate Finance copies of all 

 

4

----

 

suchdisaster recovery, business resumption and contingency plans and shall makeavailable to Allstate Finance copies of any changes thereto.  Allstate Bank shall periodically test suchdisaster recovery, business resumption and contingency plans as may beappropriate and prudent in light of the nature and scope of the activities andoperations of Allstate Bank and its obligations hereunder and shall promptlyprovide Allstate Finance with results of any such tests.

 

(b)           Allstate Bank shall promptly providewritten notice to Allstate Finance of the occurrence of any of the following: (i) anychanges or disruptions in the equipment, facilities, systems, staffing or otherarrangements or contracts with third parties which may in any material respecthave the effect of impairing, disrupting or preventing the timely and fullperformance by Allstate Bank of its obligations under this Agreement; and (ii) anymaterial written claim asserted by an Agent or other party alleging thatAllstate Bank, any third party service provider retained by Allstate Bank orAllstate Finance has violated any applicable laws or regulations with respectto the Program.

 

(c)           Allstate Bank shall promptly discloseto Allstate Finance any breaches in security with respect to the services itprovides to Allstate Finance hereunder or databases or information maintainedby Allstate Bank with respect to Allstate Finance Loans that result inunauthorized intrusions that may have a material adverse effect on eitherAllstate Finance or Agents.  AllstateBank shall report to Allstate Finance when any such material intrusion hasoccurred, the estimated effect of the intrusion on Allstate Finance or Agentsreceiving Allstate Finance Loans and the specific corrective actions taken orplanned to be taken.  In addition,Allstate Bank agrees that it will not make material changes to its securityprocedures and the requirements affecting the performance of its obligationshereunder which would materially lessen the security of its operations ormaterially reduce the confidentiality of data bases and information maintainedwith respect to Allstate Finance, Agents, and Loans without the prior writtenconsent of Allstate Finance.

 

**ARTICLE II**

** **

**FEES**

 

Section 2.1             Feesand Expense Reimbursements.  As fullcompensation for its marketing, origination and administration activitieshereunder, Allstate Bank shall be entitled to the fees and expensereimbursements set forth on the Fee Schedule.

 

**ARTICLE III**

** **

**REPRESENTATIONSAND WARRANTIES**

 

Section 3.1             Representationsand Warranties of Allstate Bank. Allstate Bank hereby represents and warrants to Allstate Finance that,during the term of this Agreement:

 

(a)           Allstate Bank is or will be a federalsavings bank or other federally chartered depository institution, validlyexisting and presently subsisting under the laws of the United States.  Allstate Bank is duly qualified to dobusiness in each state where required.

 

(b)           Allstate Bank has full power andauthority to administer the Allstate Finance Loans and to execute, deliver andperform its obligations under this Agreement. The execution, delivery and performance of this Agreement have been dulyauthorized by all necessary action on behalf of Allstate Bank.  Allstate Bank has duly executed and deliveredthis Agreement, and this Agreement constitutes a legal, valid and bindingobligation of Allstate Bank, enforceable against Allstate Bank in accordancewith its terms.  Allstate Bank willadminister the 

 

5

----

 

AllstateFinance Loans in full compliance with, and will otherwise comply with, allGovernmental Requirements.

 

(c)           The execution and delivery of thisAgreement and the fulfillment of its terms do not conflict with any of theterms, conditions or provisions of Allstate Bank’s organizational documents ormaterially conflict with or result in a material breach of any of the terms,conditions or provisions of any legal restriction or any agreement orinstrument to which Allstate Bank is now a party or by which it is bound, orconstitute a default or result in an acceleration under any of the foregoing,or result in the material violation of any law, rule, regulation, order,judgment or decree to which Allstate Bank or its property is subject.

 

(d)           As of the date of this Agreement, nolitigation is pending or, to the best of Allstate Bank’s knowledge, threatened,against Allstate Bank that would materially and adversely affect the execution,delivery or enforceability of this Agreement or the ability of Allstate Bank toadminister Allstate Finance Loans or to perform any of its obligations underthis Agreement in accordance with the terms hereof.

 

(e)           No consent, approval, authorizationor order of any court or governmental agency or body is required for theexecution, delivery and performance by Allstate Bank of, or compliance byAllstate Bank with, this Agreement or the consummation of the transactionscontemplated hereby, or if any such consent, approval, authorization or orderis required, Allstate Bank has obtained the same.

 

(f)            Allstate Bank is not insolvent or indanger of insolvency.

 

Section 3.2             Representationsand Warranties of Allstate Finance. Allstate Finance hereby represents and warrants to Allstate Bank that,during the term of this Agreement:

 

(a)           Allstate Finance is a limitedliability company, duly organized, validly existing and presently subsistingunder the laws of the State of Delaware. Allstate Finance is duly qualified todo business in each state where required.

 

(b)           Allstate Finance has the full powerand authority to engage in its business and to enter into each Allstate FinanceLoan.

 

(c)           Allstate Finance has full power andauthority to execute, deliver and perform its obligations under thisAgreement.  The execution, delivery andperformance of this Agreement have been duly authorized by all necessary actionon behalf of Allstate Finance.  AllstateFinance has duly executed and delivered this Agreement, and this Agreementconstitutes a legal, valid and binding obligation of Allstate Finance,enforceable against Allstate Finance in accordance with its terms.

 

(d)           The execution and delivery of thisAgreement and the fulfillment of its terms do not conflict with any of theterms, conditions or provisions of Allstate Finance’s organizational documents,or materially conflict with or result in a material breach of any of the terms,conditions or provisions of any legal restriction or any agreement orinstrument to which Allstate Finance is a party or by which it is bound, orconstitute a default or result in an acceleration under any of the foregoing,or result in the material violation of any law, rule, regulation, order,memorandum of understanding, directive, judgment or decree to which AllstateFinance or its property is subject.

 

(e)           Allstate Finance is not subject toany order, memorandum of understanding or other regulatory directive that mightimpair its ability to participate in the Program or materially and adverselyaffect its financial condition.

 

6

----

 

(f)            As of the date of this Agreement, nolitigation is pending or, to the best of Allstate Finance’s knowledge,threatened, against Allstate Finance that would materially and adversely affectthe execution, delivery or enforceability of this Agreement or its ability toperform any of its other obligations under this Agreement in accordance withthe terms hereof.

 

(g)           No consent, approval, authorizationor order of any court or governmental agency or body is required by law for theexecution, delivery and performance by Allstate Finance of, or compliance byAllstate Finance with, this Agreement or the consummation of the transactionscontemplated hereby, or if any such consent, approval, authorization or orderis required, Allstate Finance has obtained the same.

 

(h)           Allstate Finance is not insolvent orin danger of insolvency.

 

**ARTICLE IV**

** **

**INDEMNIFICATION**

 

Section 4.1             Indemnificationby Allstate Bank.  Subject to Section 1.3(c),which shall be Allstate Finance’s sole recourse with respect to any failure ofAllstate Bank to comply with its obligations regarding the origination ofAllstate Finance Loans, Allstate Bank hereby indemnifies and agrees to defendand hold harmless Allstate Finance, its agents, servants, directors, officers,employees, successors, assigns and affiliates from and against all claims,damages, losses, liabilities, costs and expenses (excluding loss of profits orother consequential damages (other than any consequential damages recovered ina third-party claim)) and including, without limitation, settlement costs andany reasonable legal, accounting or other expenses for investigating ordefending any actions or threatened actions, including any formal or informalregulatory enforcement action) (collectively, the “**Losses**”) in connection with any breach of anyrepresentation, warranty, covenant, agreement or obligation of Allstate Bankcontained in this Agreement.

 

Section 4.2             Indemnificationby Allstate Finance.  AllstateFinance hereby indemnifies and agrees to defend and hold harmless AllstateBank, its agents, servants, directors, officers, employees, successors, assignsand affiliates from and against all Losses in connection with any breach of anyrepresentation, warranty, covenant, agreement or obligation of Allstate Financecontained in this Agreement.

 

Section 4.3             Claimsfor Indemnification.  Whenever anyclaim shall arise for indemnification under this Article IV, the partyseeking indemnification (the “**IndemnifiedParty**”) shall notifythe party from whom indemnification is sought (the “**Indemnifying Party**”) of the claim and, when known, the factsconstituting the basis for such claim (an “**IndemnificationClaim Notice**”).  In the event of any such claim forindemnification hereunder resulting from or in connection with any claim orlegal proceedings by a third party, the Indemnification Claim Notice shallspecify, if known, the amount or an estimate of the amount of the liabilityarising therefrom.  The Indemnified Partyshall not settle or compromise any claim by a third party for which it isentitled to indemnification hereunder without the prior written consent of theIndemnifying Party, which consent shall not be unreasonably withheld,conditioned or delayed; provided, however, that if a legal proceeding shallhave been instituted against the Indemnified Party and the Indemnifying Partyshall not have taken control of such suit after notification thereof asprovided in Section 4.4 of this Agreement, the Indemnified Party shallhave the right to settle or compromise such claim upon giving notice to theIndemnifying Party, as provided in Section 4.4.

 

Section 4.4             Defenseby the Indemnifying Party.  Inconnection with any claim which may give rise to indemnity hereunder resultingfrom or arising out of any third party claim or legal proceeding, theIndemnifying Party, at its sole cost and expense may, upon written notice tothe Indemnified Party, assume the defense of any such claim or legal proceedingif the Indemnifying Party acknowledges to the Indemnified Party in writing theobligation of the Indemnifying Party to indemnify the Indemnified Party withrespect to all elements of such claim. If the Indemnifying Party assumes the 

 

7

----

 

defenseof any such claim or legal proceeding, the Indemnifying Party shall selectcounsel acceptable to the Indemnified Party in the Indemnified Party’s soledetermination to conduct the defense of such claims or legal proceeding and atthe sole cost and expense of the Indemnifying Party shall take all stepsnecessary in the defense or settlement thereof. The Indemnifying Party shall not consent to a settlement of, or theentry of any judgment arising from, any such claim or legal proceeding, withoutthe prior written consent of the Indemnified Party, which consent shall not beunreasonably withheld, conditioned or delayed. The Indemnified Party shall be entitled to participate in (but notcontrol) the defense of any such action, with its own counsel and at its ownexpense.  If the Indemnifying Party doesnot assume the defense of any such claim or litigation resulting therefromwithin thirty (30) days after the date of the Indemnification Claim Notice,then until the Indemnifying Party assumes the defense of such claim: theIndemnified Party may defend against such claim or litigation in such manner asit may deem appropriate, including, but not limited to, settling such claim orlitigation, after giving notice of the same to the Indemnifying Party, on suchterms as the Indemnified Party may reasonably deem appropriate, and all costsof litigation incurred by the Indemnified Party shall be included in thecalculation of the Indemnified Party’s Loss; and the Indemnifying Party shallbe entitled to participate in (but not control) the defense of such action,with its counsel and at its own expense. If the Indemnifying Party thereafter seeks to question the manner inwhich the Indemnified Party defended such third party claim or the amount ornature of any such settlement, the Indemnifying Party shall have the burden toprove by a preponderance of the evidence that the Indemnified Party did notdefend or settle such third party claim in a reasonably prudent manner.

 

Section 4.5             Paymentof Indemnification Obligation.  Allindemnification by the Indemnifying Party hereunder shall be effected by apayment in the amount of the indemnification liability promptly upon thedetermination thereof.

 

Section 4.6             Survivalof Indemnification.  The rights ofindemnification set forth in this Article IV shall survive the terminationof this Agreement.

 

**ARTICLE V**

** **

**SCOPE; TERMAND TERMINATION**

 

Section 5.1             Scope.  This Agreement shall cover each AllstateFinance Loan originated during the term of this Agreement and, subject to Section 5.3,shall continue to cover each such Allstate Finance Loan after termination ofthis Agreement.

 

Section 5.2             Term.  This Agreement shall commence on the datefirst above written and, unless sooner terminated in accordance with Section 5.3,shall continue for a period of thirty-six (36) months, provided that, at theend of the initial term of this Agreement or any renewal term, the term of thisAgreement shall be automatically renewed for an additional term of twelve (12)months if written notice of non-renewal is not given by either party at leastone hundred eighty (180) days prior to the end of the then-existing term.

 

Section 5.3             EarlyTermination.  Either party mayterminate this Agreement before the then-scheduled expiration date by givingwritten or electronic notice (a “**TerminationNotice**”) at least one hundred eighty (180) days in advance of thedesired termination date.  In the eventthat Allstate Bank is directed by any Allstate Bank Regulator to terminate itsparticipation in the Program, the parties will attempt to comply with suchdirection as soon as reasonably practicable. Either party may terminate the right and obligation of Allstate Bank tofacilitate the origination of Allstate Finance Loans immediately upon deliveryof written or electronic notice to the other party, provided that no suchnotice shall affect Allstate Finance Loans contemplated by the latestpre-termination Funding Notice provided to Allstate Finance.

 

Section 5.4             Consequencesof Termination.  In the event ofnon-renewal of this Agreement or delivery by either party of a TerminationNotice, the parties will use commercially 

 

8

----

 

reasonableefforts to effect the transfer of the administration of Allstate Finance Loansto Allstate Finance or its designee by the expiration or termination date.  Until such date, Allstate Bank shall continueto originate and service Allstate Finance Loans and shall be entitled to thecompensation therefor provided hereunder.

 

**ARTICLE VI**

** **

**CONFIDENTIALITY**

 

Section 6.1             Inconnection with this Agreement, each party will have access to information concerningthe other party.  Each party acknowledgesand agrees that all tangible and intangible proprietary information revealed,obtained from the other party (the “**ProtectedParty**”) in the courseof or in connection with this Agreement (“**ConfidentialInformation**”)shall be considered as confidential and proprietary information of theProtected Party and shall not be disclosed to any third party without the priorwritten consent of the Protected Party.

 

Section 6.2             TheProtected Party’s Confidential Information shall be used by the other party(the “**Obligated Party**”) only for the purpose of participating inthe Program and exercising its rights, duties and remedies under this Agreementor exercising its rights, duties and remedies in connection with an AllstateFinance Loan.  The Obligated Party shallnot accumulate in any way or make use of Confidential Information for any otherpurpose.  The Obligated Party shallensure that only its employees, officers, directors, authorized agents orcontractors who need to know Confidential Information to perform services oroffer or monitor the Program, or parties performing due diligence in connectionwith a potential transaction involving the Obligated Party, will receiveConfidential Information and that such persons agree to be bound by theprovisions of this Article VI.

 

Section 6.3             Theobligations set forth herein with respect to Confidential Information shall notapply to Confidential Information that: (a) an Obligated Party or itspersonnel already know at the time it is disclosed; (b) is publicly knownwithout breach of this Agreement; (c) the Obligated Party received from athird party authorized to disclose it without restriction; or (d) theObligated Party, its agents or contractors developed independently without useof the Confidential Information of the Protected Party.  In addition, an Obligated Party may discloseConfidential Information if and to the extent required by law, regulation orvalid court or governmental agency order, provided that the Obligated Partygives notice to the Protected Party as soon as may be practicable in order togive the Protected Party the opportunity to seek a protective order.  Finally, an Obligated Party may discloseConfidential Information as reasonably necessary in connection with any lawsuitor arbitration proceeding between the Obligated Party and the Protected Party.

 

Section 6.4             Theparties agree that any unauthorized use or disclosure of ConfidentialInformation may cause immediate and irreparable harm to the Protected Party forwhich money damages may not constitute an adequate remedy.  Accordingly, the Obligated Party agrees thatinjunctive relief may be warranted in addition to any other remedies theProtected Party may have.  In addition,each Obligated Party agrees promptly to advise the Protected Party in writingof any unauthorized misappropriation, disclosure or use by any person ofConfidential Information which may come to its attention and to take all stepsat its own expense reasonably requested by the Protected Party to limit, stopor otherwise remedy such misappropriation, disclosure or use.

 

Section 6.5             Eachparty further agrees that, notwithstanding Section 6.3, the existence andterms of this Agreement shall constitute “Confidential Information” of the otherparty.

 

Section 6.6             Theobligations of this Article VI shall survive the termination of thisAgreement.

 

9

----

 

**ARTICLE VII**

** **

**GENERAL**

 

Section 7.1             Notices.  All notices, requests and othercommunications hereunder (“**Notices**”) shall be given in writing or by email andwill be deemed to have been given three days after being sent by registered orcertified mail, postage prepaid, return receipt requested, one day after beingsent by an overnight courier service guaranteeing next day delivery, in eachinstance, addressed as follows or addressed in the manner set forth in asubsequent notice given by the recipient in accordance with this Section 7.1:

 

(a)             if to Allstate Bank:

 

AllstateBank

3100Sanders RoadNorthbrook, IL 60062Attention: President

 

(b)             if to Allstate Finance:

 

AllstateFinance Company, LLC

3100Sanders RoadNorthbrook, IL 60062Attention: Managing Officer

 

Section 7.2             RegulatoryConcerns; Litigation Threats.  Exceptto the extent prohibited by Governmental Requirements (after reasonable effortsto obtain a waiver thereof if practicable), Allstate Finance and Allstate Bankshall each provide prompt notice to the other party upon receipt of: (a) anyverbal or written contact from any regulatory authority regarding the Program;or (b) any legal process or verbal or written communication from anyattorney or individual concerning a threatened legal proceeding regarding theProgram.

 

Section 7.3             GoverningLaw.  This Agreement shall begoverned by federal law and, to the extent state law applies, by thesubstantive law of the State of Illinois, without giving effect to the conflictof law principles thereof.

 

Section 7.4             NoWaiver.  No failure or delay on thepart of either party to exercise any right, power or remedy shall operate as awaiver thereof; nor shall any single or partial exercise of any right, power orremedy preclude any other or further exercise thereof or of any other right,power, or remedy.

 

Section 7.5             EntireAgreement; Amendment; Assignment. This Agreement, including its exhibits, sets forth the entireunderstanding of the parties relating to the subject matter hereof andsupersedes all prior oral or written understandings relating hereto.  This Agreement, including its exhibits, shallonly be modified or supplemented by a written amendment signed by bothparties.  This Agreement shall be bindingupon and inure to the benefit of the parties hereto and their respectivesuccessors and permitted assigns, including without limitation any successor toa party hereto by merger, consolidation or otherwise by operation of law.

 

Section 7.6             Assignmentand Participation of Loans; Third Party Beneficiaries.  Allstate Finance may sell, assign or transferparticipation interests in any Allstate Finance Loan, without prior written orelectronic approval and in its absolute discretion, provided that such sale,assignment or transfer shall not affect Allstate Bank’s administrationhereunder or require Allstate Bank to deal with the purchaser, assignee ortransferee of the participation interests regarding such Allstate Finance Loan.

 

10

----

 

Section 7.7             Counterparts.  This Agreement may be executed incounterparts, each of which shall be deemed to be an original hereof, and allof which, when taken together, shall constitute one and the same instrument.

 

Section 7.8             Headings.  The headings of the several articles andsections of this Agreement are inserted for convenience of reference only andshall not constitute a part of this Agreement.

 

Section 7.9             Severability.  If any portion of this Agreement is construedto be invalid or unenforceable, the remaining portions hereof shall not beaffected thereby and shall be enforceable without regard to the invalid orunenforceable portions.

 

INWITNESS WHEREOF, the parties hereto have caused this Agreement to be dulyexecuted and delivered as of the date first above written.

 
|   | **ALLSTATE FINANCE COMPANY, LLC** |
|--------|-----------------------------------|
|   |                              |
|   |                              |
|   | By:                               | /s/  John C. Pintozzi |
|   |                              | John  C. Pintozzi |
|   | Title:                            | President |
|   |                              |   |
|   | Date:                             | 10/28/2010 |
|   | ** **                        | ** ** |
|   | ** **                        | ** ** |
|   | **ALLSTATE BANK**                 |
|   |                              |   |
|   | By:                               | /s/  Nick Georgakopoulos |
|   |                              | Nick  Georgakopoulos |
|   | Title:                            | President |
|   |                              |   |
|   | Date:                             | 10/27/2010 |

 

11

----