**EXHIBIT 10.2**

 

**AMENDED AND RESTATED**

 

**INTERCOMPANY LIQUIDITYAGREEMENT**

 

ThisAmended and Restated Intercompany Liquidity Agreement (“Agreement”) amends andrestates the Intercompany Liquidity Agreement between Allstate InsuranceCompany (“AIC”), an Illinois domiciled property and casualty insurance companyand Allstate Life Insurance Company (“ALIC”), an Illinois domiciled lifeinsurance company, dated January 1, 2008, to add The Allstate Corporation(“Allcorp”) as a party and make certain other minor changes.

 

ThisAgreement among Allcorp, AIC and ALIC shall be effective as of May 8,2008.  To the extent and only to theextent, a direct or indirect wholly-owned subsidiary of Allcorp (an “AllstateAffiliate”) is added to this agreement pursuant to the terms of Sections 1 and5 below and a signed Addendum substantially in the form of Exhibit B,such Allstate Affiliate shall become a party to this Agreement (each suchproperly added Allstate Affiliate, together with Allcorp, AIC and ALIC, shalleach be a “Party”).

 

Thepurpose of this Agreement is to provide a mechanism under which short-termadvances of funds may be made between the Parties for liquidity and othergeneral corporate purposes.  ThisAgreement does not establish a commitment to advance funds on the part of anyParty.  In consideration of the followingagreements and covenants and other good and valuable consideration, the receiptand sufficiency of which are acknowledged, the Parties agree as follows:

 

1.               Roles of the Parties andLimits on Outstanding Advances:

 

Subject to the terms and conditions of thisAgreement, from time to time during the term of this Agreement one or moreParties may make and have outstanding advances to one or more of the otherParties to this Agreement.  The term “Lender”shall refer to a Party that is making or has made a currently outstandingadvance.  The term “Borrower” shall referto a Party that is receiving or has received a currently outstandingadvance.  From time to time in itscapacity as a Lender or a Borrower or both, a Party may have multiple advancesoutstanding with one or more other Parties. However, at no time shall a Party, in its role as a Lender, haveadvances outstanding to one or more Parties in an aggregate amount in excess ofits “Lender Maximum.”  In addition, at notime shall a Party, in its role as a Borrower, have advances outstanding fromone or more Parties in an aggregate amount in excess of its “Borrower Maximum.”  In determining the amount of outstandingadvances with respect to a Party, the gross amount of outstanding advances willbe used, with no netting or offsetting permitted.  For Allcorp, AIC and ALIC these maximumsshall be equal to the following amounts:

 

| ** ** | ** ** | **Lender Maximum** | ** **    | **Borrower Maximum** | ** ** |
|------------|------------|--------------------|---------------|----------------------|------------|
|       |       |               |          |                 |       |
| Allcorp    |       | $                  | 1,000,000,000 |                 | $          | 0 |   |
| AIC        |       | $                  | 1,000,000,000 |                 | $          | 1,000,000,000 |   |
| ALIC       |       | $                  | 1,000,000,000 |                 | $          | 1,000,000,000 |   |

 

Allcorp shall serve only as a Lender.  The Lender Maximum and Borrower Maximum forany Allstate Affiliate added as a Party shall be specified in the Addendum thatadds such Allstate Affiliate as a Party, subject to receipt of any requiredregulatory approvals.

 

2.               Terms for Advances:

 

The terms of each advance shall be as agreed uponbetween the Parties to such advance pursuant to an accepted borrowing requestas defined below, provided that the following shall apply to all advances:

 

 

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a)              Each advance shall have aspecified maturity date that is less than or equal to 364 days from the date ofthe advance.

 

b)             Advances shall be payableupon demand prior to their maturity date if a written request is made by theLender and delivered to the Borrower at least ten business days prior to thedate payment is demanded.

 

c)              At any time and from time totime, the Borrower shall have the right to make one or more prepayments of theoutstanding principal balance of an advance without penalty and may designatewhich advance is being prepaid if more than one advance is outstanding,provided that any such repayment includes all accrued interest on the amountprepaid as of the repayment date.

 

3.               Interest:

 

Each advance shall bear interest on the outstandingprincipal amount thereof, for each day from and including the date such advanceis made to but not including the date repaid at a rate equal to the rateestablished in the accepted borrowing request as defined below applicable tosuch advance, provided that such rate shall be equal to or greater than theinterest rate on 30-day commercial paper issued by Allcorp on the date theadvance is made.   The rate on eachadvance shall be adjusted on the first day of each month thereafter, for solong as the advance remains outstanding, to Allcorp’s then 30-day commercialpaper rate plus the spread agreed upon in the accepted borrowing request.  Unless otherwise agreed to in the acceptedborrowing request, such accrued interest shall be payable at the maturity ofeach such advance.  In the event that a30-day commercial paper rate for Allcorp is not available, the Parties to aborrowing request shall agree on a comparable substitute.  If an advance is outstanding and such Partiescannot agree, the advance shall be promptly repaid.

 

4.               Procedure for Requesting anAdvance and Repayment of Advances:

 

Any Party may request an advance from any otherParty.  In no circumstance shall a Partybe obligated to make an advance under the terms of this Agreement.  The decision to make an advance shall be atthe sole discretion of the Party being asked to make the advance.

 

Upon the mutual agreement of any two Parties to theterms of an advance, the proposed Borrower shall submit a written borrowingrequest, substantially in the form of Exhibit A, to the proposedLender.  The borrowing request shallcontain the terms agreed to, be signed by two Authorized Officers, as definedbelow, of the Borrower and signed as accepted by two Authorized Officers of theLender, provided, however, that, if after making such an advance, a Party willhave more than $500,000,000 in outstanding advances either as a Lender or aBorrower, then one of the two authorized officers signing the borrowing requestfor such Party must be that Party’s Chief Financial Officer, President or ChiefExecutive Officer (or officers holding substantially equivalent titles if thatParty does not have a Chief Financial Officer, President or Chief ExecutiveOfficer).  For purposes of thisAgreement, the term “Authorized Officer”, with respect to a Party, shall meanan officer of that Party holding one or more of the following titles, or asubstantially equivalent title if such Party does not have an officer holdingsuch title:  Chairman of the Board, ChiefExecutive Officer, President, Chief Financial Officer, Controller, Treasurer orAssistant Treasurer.

 

No separate promissory note shall be required.  The date of the advance, amount, interestrate and maturity date shall be recorded in the books and records of the Lenderand shall be prima facie evidence of the existence, amount and terms of theadvance, absent manifest error, provided the failure to so record or any errortherein shall not in any manner affect the obligation of a Borrower to repay anadvance in accordance with its terms as stated on the accepted borrowingrequest and the terms of this Agreement.

 

EachParty, to the extent it receives an advance as a Borrower, herebyunconditionally promises to pay to its Lender the then unpaid principal amountof each such advance together with all accrued interest on such advance in theamounts, at the times and in the manner set forth in this Agreement and theaccepted 

 

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borrowingrequest, and, in any event, by no later than its maturity date as specified inthe accepted borrowing request.

 

If the proposed Lender or Borrower is an Illinoisdomiciled insurance company, such entity shall provide the Illinois Division ofInsurance with notice of the proposed advance five business days prior to thedate of the advance.  Such notice may bemade by e-mail and shall include the amount of the advance, the parties to theadvance, the proposed date of the advance and the purpose of or reason for theadvance.

 

5.               Procedure for AddingAdditional Parties:

 

The Parties agree that additional AllstateAffiliates may be added to this Agreement from time to time provided:

 

a)              an Addendum, substantiallyin the form of Exhibit B, is signed by the Allstate Affiliate andAIC on behalf of itself and the other Parties to this agreement after allrequired corporate authorizations and regulatory approvals for such AllstateAffiliate and AIC have been obtained;

 

b)             the Addendum specifies theeffective date of the Agreement for such Allstate Affiliate; and

 

c)              the Addendum specifies theLender Maximum and Borrower Maximum, in accordance with Section 1 above,for such Allstate Affiliate.

 

For informational purposes, each newly addedAllstate Affiliate will be added to the Cumulative List of All Parties on Schedule5.

 

6.               Term and Termination:

 

This Agreement shall remain in effect for one yearfrom the date first specified above and shall be automatically renewed forsubsequent one-year terms unless sooner terminated by the Parties.  Any one Party may cancel its participation inthis Agreement provided it is not a Party to any outstanding advances, eitheras a Lender or a Borrower, by giving written notice to AIC.  This Agreement shall terminate automaticallyas to any Party immediately upon such Party ceasing to be a direct or indirectwholly-owned subsidiary of Allcorp, in which case any outstanding advancesinvolving such Party, shall immediately become due and payable.

 

7.               Miscellaneous Provisions:

 

a)              This Agreement shall begoverned by and construed in accordance with the internal laws of the State ofIllinois.

 

b)             This Agreement may beamended or modified only by written agreement executed by the Parties to bebound by such amendment.  An amendment toincrease or decrease a Party’s Lender Maximum or Borrower Maximum need only besigned by such Party provided all required corporate authorizations andregulatory approvals have been received. In the event that a Party, in its role as a Lender, amends thisAgreement to reduce its Lender Maximum and the aggregate amount of its advancesoutstanding to all other Parties exceeds such reduced Lender Maximum, Lendershall promptly demand payment of such excess from such Borrowers as it selectsand such excess shall be payable within ten business days of the delivery ofsuch written demand. In the event that a Party, in its role as a Borrower,amends this Agreement to reduce its Borrower Maximum and the aggregate amountof its advances outstanding from all other Parties exceeds such reducedBorrower Maximum, Borrower shall repay an amount of advances equal to suchexcess within ten business days of such reduction.  In determining the amount of outstandingadvances with respect to a Party, the gross amount of outstanding advances willbe used, with no netting or offsetting permitted.

 

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c)              No Party hereto shall assignthis Agreement or any rights or obligations hereunder without the prior writtenconsent of the other Parties affected and any such attempted assignment withoutsuch prior written consent shall be void.

 

d)             If any part of thisAgreement shall be held invalid, illegal or unenforceable, the remaining partsof the Agreement shall not be affected and shall continue with full force andeffect.

 

e)              The descriptive headings ofthe various sections or parts of this Agreement are for convenience only andshall not affect the meaning or construction of any of the provision hereof.

 

f)                This Agreement as amended orsupplemented from time to time constitutes the entire agreement between theParties hereto with respect to the subject matter hereof.  There are no understandings between theParties other than as expressed in this Agreement.

 

g)             This Agreement may be executedin one or more counterparts and by different signatories on differentcounterparts, each of which shall be deemed to be an original and all of whichwhen taken together shall be deemed to constitute a single document.

 

h)             This Agreement is solely forthe benefit of the Parties hereto.

 

 

INWITNESS WHEREOF, the Parties hereto have executed this Agreement.

 

 
| THE  ALLSTATE CORPORATION        |                                   |   |   |
|----------------------------------|----------------------------------------|--------|--------|
|                             |                                   |   |   |   |
| By:                              | /s/  Samuel H. Pilch                   |   | By:    | /s/  Steven C. Verney |
| Name:                            | Samuel H. Pilch                        |   | Name:  | Steven C. Verney |
| Title:                           | Controller and Acting  Vice President  |   | Title: | Treasurer |
|                             | and Chief Financial Officer            |   |   |   |
|                             |                                   |   |   |   |
| ALLSTATE  INSURANCE COMPANY      |                                   |   |   |
|                             |                                   |   |   |   |
| By:                              | /s/  Samuel H. Pilch                   |   | By:    | /s/  Steven C. Verney |
| Name:                            | Samuel H. Pilch                        |   | Name:  | Steven  C. Verney |
| Title:                           | Group Vice President  and Controller   |   | Title: | Vice  President and Treasurer |
|                             |                                   |   |   |   |
| ALLSTATE LIFE INSURANCE  COMPANY |                                   |   |   |
|                             |                                   |   |   |   |
| By:                              | /s/  James E. Hohmann                  |   | By:    | /s/  John C. Pintozzi |
| Name:                            | James E. Hohmann                       |   | Name:  | John  C. Pintozzi |
| Title:                           | President and Chief  Executive Officer |   | Title: | Senior  Vice President and |
|                             |                                   |   |   | Chief  Financial Officer |
|                                  |                                        |        |        |  |  |  |

 

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**Exhibit A**

 

**AMENDED AND RESTATED**

**INTERCOMPANY LIQUIDITY AGREEMENT**

 

**BORROWING REQUEST**

 

[RequestDate]

 

[Lender]

Attention:  Treasurer

 

Re:  Request for Advance

 

Referenceis made to the Amended and Restated Intercompany Liquidity Agreement, dated                                ,2008, among The Allstate Corporation, Allstate Insurance Company, Allstate LifeInsurance Company and each such Allstate Affiliate as may have entered into theAgreement pursuant to the terms of the Agreement.

 

Pursuantto the Agreement and subject to the additional terms contained therein,[Borrower] requests an advance of funds from [Lender] with the following terms:

 

Date of advance:

Principal amount:

Maturity date:

Initial interest rate(including spread, if any, of       basis pointsabove the current interest rate on 30-day commercial paper issued by TheAllstate Corporation):

Interest rate paymentschedule if other than as specified in the Agreement:

Additional terms if otherthan as specified in the Agreement:

 

Theadvance of funds will be governed by the terms and conditions of the Agreementand this accepted borrowing request in all respects.

 

***If the proposed Lender or Borrower is an Illinoisdomiciled insurance company, such entity shall provide the Illinois Division ofInsurance with notice of the proposed advance five business days prior to thedate of the advance.  Such notice may bemade by e-mail and shall include the amount of the advance, the parties to theadvance, the proposed date of the advance and the purpose of or reason for theadvance.***

 

[BORROWER]

 
| By:    |   |   | By:    |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   | Name:  |   |
| Title: |   |   | Title: |   |

 

Agreedand Accepted:

 

[LENDER]

 
| By:    |   |   | By:    |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   | Name:  |   |
| Title: |   |   | Title: |   |
|   |   |   |   |   |
| Date:  |   |   |   |   |

 

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**Exhibit B**

 

**AMENDED AND RESTATED**

**INTERCOMPANY LIQUIDITY AGREEMENT**

 

**ADDENDUM TO ADD ALLSTATEAFFILIATES**

 

Referenceis made to the Amended and Restated Intercompany Liquidity Agreement, dated                              ,2008, among The Allstate Corporation, Allstate Insurance Company, Allstate LifeInsurance Company and each such Allstate Affiliate as may have entered into theAgreement pursuant to the terms of the Agreement.

 

Pursuantto its status as an Allstate Affiliate,                                                                        (the “New Party”) has requested that it be added as a Party to theAgreement.  By executing this Addendum,the New Party agrees to be bound by all the terms and conditions of theAgreement.  Its status thereunder shallnot be inconsistent with the status of the other Parties to the Agreement.

 

TheNew Party shall become a Party to the Agreement effective as of     [Date]      with the following Lender Maximum and Borrower Maximum, as such term aredefined in the Agreement:

 

| Lender Maximum   |   | $ |   |   |
|------------------|--------|---|--------|--------|
| Borrower Maximum |   | $ |   |   |

 

 

[NEWPARTY]

 
| By:    |   |   | By:    |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   | Name:  |   |
| Title: |   |   | Title: |   |
|   |   |   |   |   |
| Date:  |   |   |   |   |

 

 

Agreedand Accepted:

 

AllstateInsurance Company agrees that the New Party shall become a Party to theAgreement on the effective date listed above, subject to all of the terms andconditions of the Agreement as if an original Party thereto, and, pursuant to Section 5of the Agreement, Allstate Insurance Company executes this Addendum on itsbehalf and on behalf of all of the other Parties to the Agreement.

 

ALLSTATEINSURANCE COMPANY

 
| By:    |   |   | By:    |   |
|--------|--------|--------|--------|--------|
| Name:  |   |   | Name:  |   |
| Title: |   |   | Title: |   |
|   |   |   |   |   |
| Date:  |   |   |   |   |

 

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**Schedule 5**

 

**AMENDED AND RESTATED**

**INTERCOMPANY LIQUIDITY AGREEMENT**

 

**CUMULATIVE LIST OF ALL PARTIES**

** **

** **

| ** ** | ** ** | ******Party**                    | ** ** | **Date of********Regulatory Approval**    |
|------------|------------|----------------------------------|------------|-------------------------------------------|
|       |       |                             |       |                                      |
| 1.         |       | The  Allstate Corporation        |       | IL — 5.07.08                         |
| 2.         |       | Allstate  Insurance Company      |       | IL — 12.28.07 and  Amendment 5.07.08 |
| 3.         |       | Allstate  Life Insurance Company |       | IL — 12.28.07 and  Amendment 5.07.08 |
|       |       |                             |       |                                      |

 

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