EXHIBIT 10.1


 


Investment Management Agreement


 


Between


 


ALLSTATE
INVESTMENTS, LLC


 


And


 


ALIC
REINSURANCE COMPANY


 


This Agreement made and
effective as of July 1, 2005, between ALLSTATE INVESTMENTS, LLC, a
Delaware limited liability company (“ALLSTATE INVESTMENTS”), and ALIC
REINSURANCE COMPANY, a special purpose financial captive insurance company
organized under the laws of the State of South Carolina (“ALIC Re”).


 


WITNESSETH:


 


WHEREAS, ALIC Re desires
that ALLSTATE INVESTMENTS furnish or cause to be furnished certain services and
facilities; and


 


WHEREAS, ALLSTATE
INVESTMENTS desires to furnish or cause to be furnished certain services and
facilities subject to the terms and conditions hereinafter set forth;


 


NOW, THEREFORE, it is
agreed as follows:


 


ARTICLE 1


INVESTMENT
MANAGEMENT SERVICES


 


1.1                                 Appointment.  ALIC Re hereby engages ALLSTATE INVESTMENTS
as the investment manager of the investment assets (the “Trust Assets”)
transferred by ALIC Re to The Bank of New York as Trustee (“Trustee”) under the
Trust Agreement dated as of July 1, 2005 (the “Trust Agreement”) and
grants ALLSTATE INVESTMENTS the power and authority to advise, manage, and
direct the investment and reinvestment of such assets for the period and on the
terms and conditions set forth herein. 
Such activities shall be conducted subject to and in accordance with the
investment objectives, restrictions, and strategies set forth in the Investment
Policy and Plan (the “Policy”) adopted by the Board of Directors of ALIC Re,
and in accordance with such other limitations and guidelines as may be
established from time to time for such assets by such Board (such investment
objectives, restrictions, strategies, limitations, and guidelines herein
referred to collectively as the “Investment Guidelines”); provided, however,
that the Policy and the Investment Guidelines shall in all events be in
accordance with the terms and conditions of the Trust Agreement.  ALLSTATE INVESTMENTS hereby


 





















 


accepts such
responsibility and agrees during such period to render the services and to
assume the obligations herein set forth, all as more fully described in Exhibit A,
attached hereto (the “Services”).  ALIC
Re may from time to time reach agreement with ALLSTATE INVESTMENTS that only
certain of the listed Services will be provided.


 


1.2                                 Charges
and Expenses.  ALIC Re agrees to pay
ALLSTATE INVESTMENTS a fee for the Services equal to ALLSTATE INVESTMENTS’
actual cost of managing the Trust Assets, including the provision of all
administrative, reporting or other services required to manage such assets and
provide the Services.   To the extent any
of ALLSTATE INVESTMENTS’ costs are determined by allocations from ALIC Re, the
allocation shall be made in accordance with the general provisions of the NAIC
expense classification and allocation guidelines applicable to all
inter-company allocations among The Allstate Corporation and its insurance
affiliates.   All brokerage commissions
and other direct transaction charges payable to third parties shall be in
addition to any fees payable to ALLSTATE INVESTMENTS for Services and may be
paid from the Trust Assets or may be paid by ALLSTATE INVESTMENTS and
reimbursed by ALIC Re.


 


1.3                                 Payment.  ALLSTATE INVESTMENTS will charge ALIC Re for the Services via the monthly expense allocation
process, and payments will be through the
monthly intercompany settlement process. The process will be completed by
personnel of ALLSTATE INVESTMENTS and ALIC Re in the most timely and effective
method available.


 


ARTICLE 2


MISCELLANEOUS
PROVISIONS


 


2.1                                 Scope
of Services.  The scope of, and the
manner in which, ALLSTATE INVESTMENTS provides the Services to ALIC Re shall be
reviewed periodically by ALLSTATE INVESTMENTS and ALIC Re.


 


2.2                                 Standard
of Performance.  ALLSTATE INVESTMENTS
shall discharge its duties hereunder at all times in good faith and with that
degree of prudence, diligence, care and skill which a prudent person rendering
services as an institutional investment manager would exercise under similar
circumstances.  The provisions of this
Agreement shall not be interpreted to imply any obligation on the part of
ALLSTATE INVESTMENTS to observe any standard of care other than as set forth in
this Section 2.2.


 


2.3                                 Books
and Records.  Upon reasonable notice,
and during normal business hours, ALIC Re shall be entitled to, at its own
expense, inspect records that pertain to the computation of charges for the
Services.  ALLSTATE INVESTMENTS shall at
all times maintain correct and complete books, records and accounts of all
Services.  ALIC Re shall have unconditional
right of ownership of any records prepared on its behalf under this
Agreement.  ALLSTATE INVESTMENTS shall
maintain and make available for review by any regulator having jurisdiction
over ALIC Re, documentation showing the calculation of all such charges.  ALIC Re may request a review of such charges
for the


 


2





















 


Services and such review
will occur promptly thereafter.


 


2.4                                 Liability
of ALLSTATE INVESTMENTS.  In the
absence of ALLSTATE INVESTMENTS’ willful or negligent misconduct (or the
willful or negligent misconduct of its officers, directors, agents, employees,
controlling persons, shareholders, and any other person or entity affiliated
with ALLSTATE INVESTMENTS or retained by it to perform or assist in the
performance of its obligations under this Agreement), neither ALLSTATE
INVESTMENTS nor any of its officers, directors, employees or agents shall be
subject to liability to ALIC Re for any act or omission in the course of, or
connected with, rendering the Services hereunder.


 


2.5                                 Independent
Contractor.  ALLSTATE INVESTMENTS
shall for all purposes be deemed to be an independent contractor.  All persons performing duties hereunder at
all times during the term of this Agreement shall be under the supervision and
control of ALLSTATE INVESTMENTS and shall not be deemed employees of ALIC Re as
a result of this Agreement and the Services provided hereunder. ALLSTATE
INVESTMENTS shall have no power or authority to bind ALIC Re or to assume or
create an obligation or responsibility, express or implied, on behalf of ALIC
Re, nor shall it represent to anyone that it has such power or authority,
except as expressly provided in this Agreement. 
Nothing in this Agreement shall be deemed to create a partnership
between or among the parties, whether for purposes of taxation or otherwise.


 


2.6                                 Assignment.  ALLSTATE INVESTMENTS shall not assign its
obligations or rights under this Agreement without the written consent of ALIC
Re.   ALLSTATE INVESTMENTS may terminate
this Agreement in its entirety, and ALIC Re may cancel its participation in the
arrangements under this Agreement, each by giving six months written notice to
the other party to this Agreement; provided, however, that in the event that
ALIC Re ceases to be an affiliate of ALLSTATE INVESTMENTS, this Agreement shall
terminate immediately.  Under no
circumstances will the initial term, or any renewal term, of this Agreement
exceed five (5) years.


 


2.7                                 Notices.  All communications provided for hereunder shall
be in writing, and if to ALIC Re, mailed or delivered to ALIC Re at its office
at the address listed in ALIC Re’s Statutory Annual Statement Blank, Attention:
Secretary or addressed to any party at the address such party may hereafter
designate by written notice to the other parties.


 


2.8                                 Counterpart
Signatures. This Agreement may be executed by the parties hereto in any
number of counterparts, and by each of the parties hereto in separate
counterparts, each of which counterparts, when so executed and delivered, shall
be deemed to be an original, but all such counterparts shall together
constitute but one and the same instrument.


 


3





















 


IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be signed as of the day and year
above written.


 


 


	
   

  	
  Allstate Investments, LLC

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Eric A. Simonson

  	
   

  
	
   

  	
  Name:

  	
  Eric A. Simonson

  	
   

  
	
   

  	
  Title:

  	
  Chairman of the Board,

  	
   

  
	
   

  	
   

  	
  President and Chief

  	
   

  
	
   

  	
   

  	
  Investment Officer

  	
   

  
	
   

  	
  Date:

  	
  7/8/05

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALIC Reinsurance Company

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ John C. Pintozzi

  	
   

  
	
   

  	
  Name:

  	
  John C. Pintozzi

  	
   

  
	
   

  	
  Title:

  	
  Chairman of the Board

  	
   

  
	
   

  	
   

  	
  and President

  	
   

  
	
   

  	
  Date:

  	
  7/8/05

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
							



 


4





















 


Exhibit A


INVESTMENT
SERVICES


 


A.                                   Appointment.
 This Exhibit A details the
Services to be provided by ALLSTATE INVESTMENTS pursuant to the Investment
Management Agreement between ALLSTATE INVESTMENTS and ALIC Re to which this Exhibit A
is attached.  For purposes of this Exhibit A,
the trust account created under the Trust Agreement will be referred to as the “Account”.


 


B.                                     ALLSTATE
INVESTMENTS as Agent.  ALLSTATE
INVESTMENTS shall be granted and shall exercise full investment discretion and
authority to direct the Trustee in buying, selling or otherwise disposing of or
managing the Trust Assets and in the performance of the services rendered
hereunder, and shall do so as ALIC Re’s agent only, subject to ALLSTATE
INVESTMENTS’ adherence to the Policies and Investment Guidelines.  ALIC Re hereby authorizes ALLSTATE INVESTMENTS
to exercise all such powers with respect to the Trust Assets as may be
necessary or appropriate for the performance by ALLSTATE INVESTMENTS of its
obligations under this Agreement, subject to the supervision of the Board of
Directors of ALIC Re (the “Board”), and any limitations contained herein.


 


C.                                     Investment
Advisory Services.  In furtherance of
the foregoing, and in carrying out its obligations to manage the investment and
reinvestment of the Trust Assets, ALLSTATE INVESTMENTS shall, as appropriate
and consistent with the Investment Guidelines:


 


(a) perform research
and obtain and evaluate such information relating to the economics, industries,
businesses, markets, new investment structures, techniques, practices, and
financial data as ALLSTATE INVESTMENTS deems appropriate in the discharge of
its duties under this Agreement;  (b) consult
with and furnish to the Board recommendations with respect to overall
investment strategies for the Trust Assets; 
(c) seek out and implement specific investment opportunities,
consistent with such overall investment strategies approved by the Board,
including making and carrying out day-to-day decisions to acquire or dispose of
permissible investments and managing the investment of the Trust Assets; (d) regularly
report to the Board with respect to the implementation of investment strategies
and any other activities in connection with management of the Trust Assets,
including furnishing to the Board, within 45 days after the end of each
quarter, a report concerning investment activity during the quarter; (e) maintain
all required accounts, records, memoranda, instructions or authorizations
relating to the acquisition or disposition the Trust Assets; (f) determine
the securities to be purchased or sold by the Trustee and direct the Trustee to
place orders either directly with the issuer, with any broker-dealer or
underwriter that specializes in the securities for which the order is made, or
with any other broker or dealer that ALLSTATE INVESTMENTS selects; and (g) perform
the services hereunder in a manner consistent with investment objectives and
policies of ALIC Re as detailed in the respective Investment Guidelines, as
amended from time to time, and in compliance, as appropriate,


 


A-1





















 


with the applicable
provisions of the insurance laws and regulations of ALIC Re’s domicile, as
amended, and any other applicable laws.


 


D.                                    Allocation
of Brokerage.  ALLSTATE INVESTMENTS
is authorized in its sole discretion to select the brokers or dealers that will
execute the purchases and sales of securities for the Account.  In making such selection, ALLSTATE
INVESTMENTS shall use its best efforts to obtain for the Account the most
favorable net price and execution available, taking into account all
appropriate factors, including price, dealer spread or commission, if any, and
size and difficulty of the transaction. 
If, in the judgment of ALLSTATE INVESTMENTS, ALIC Re would be benefited
by supplemental investment research, ALLSTATE INVESTMENTS is authorized, but
not obligated, to select brokers or dealers on the basis of research
information, materials, or services they could furnish to ALLSTATE INVESTMENTS
for potential use in supplementing ALLSTATE INVESTMENTS’ own information and in
making investment decisions for the Account. 
The expenses of ALLSTATE INVESTMENTS and the charges to ALIC Re may not
necessarily be reduced as a result of receipt of such supplemental information.  Subject to the above requirements, nothing
shall prohibit ALLSTATE INVESTMENTS from selecting brokers or dealers with
which it or ALIC Re is affiliated.


 


E.                                      Service
to Other Clients.  ALIC Re
acknowledges that ALLSTATE INVESTMENTS may perform services for clients other
than ALIC Re that are similar to the services to be performed pursuant to this
Agreement, and that ALLSTATE INVESTMENTS is free to do so provided that its
services pursuant to this Agreement are not in any way impaired.  ALIC Re agrees that ALLSTATE INVESTMENTS may
provide investment advice to any of its other clients that may differ from
advice given to ALIC Re, or take action with respect to assets owned by it or
its other clients that may differ from the action taken with respect to the
Account, so long as ALLSTATE INVESTMENTS, to the extent reasonable and
practicable, allocates investment opportunities to each account managed by it
on a fair and equitable basis relative to ALLSTATE INVESTMENTS’ other
clients.  It is understood that ALLSTATE
INVESTMENTS shall have no obligation to purchase or sell, or to recommend for
purchase or sale for the Account, any security that ALLSTATE INVESTMENTS, its
affiliates, employees or agents may purchase or sell for its or their own
accounts or for the account of any other client, if, in the opinion of ALLSTATE
INVESTMENTS, such transaction or investment appears unsuitable, impractical or
undesirable for the Account.  It is
agreed that ALLSTATE INVESTMENTS may use any supplemental investment research
obtained for the benefit of ALIC Re in providing investment advice to its other
clients or its own accounts.  Conversely,
such supplemental information obtained by the placement of business for
ALLSTATE INVESTMENTS or other entities advised by ALLSTATE INVESTMENTS will be
considered by and may be useful to ALLSTATE INVESTMENTS in carrying out its
obligations to ALIC Re.


 


F.                                      Allocation
of Trades.  It is acknowledged that
securities held in the Account may also be held by separate investment accounts
or other funds for which


 


A-2





















 


ALLSTATE INVESTMENTS may
act as a manager.  If purchases or sales
of securities for ALIC Re or other entities for which ALLSTATE INVESTMENTS acts
as investment manager arise for consideration at or about the same time, ALIC
Re agrees that ALLSTATE INVESTMENTS may make transactions in such securities,
insofar as feasible, for the respective entities in a manner deemed equitable
to all.  To the extent that transactions
on behalf of more than one client of ALLSTATE INVESTMENTS during the same
period may increase the demand for securities being purchased or the supply of
securities being sold, ALIC Re recognizes that there may be an adverse effect
on price.


 


It is agreed that, on
occasions when ALLSTATE INVESTMENTS deems the purchase or sale of a security to
be in the best interests of an Allstate affiliate as well as other accounts or
companies, it may, to the extent permitted by applicable laws and regulations,
but will not be obligated to, aggregate the securities to be so sold or
purchased for such Allstate affiliate with those to be sold or purchased for
other accounts or companies in order to obtain favorable execution and lower
brokerage commissions.  In that event,
allocation of the securities purchased or sold, as well as the expenses
incurred in the transaction, will be made by ALLSTATE INVESTMENTS in the manner
it considers to be most equitable and consistent with its obligations to such
Allstate affiliate and to such other accounts or companies.  ALIC Re recognizes that in some cases this
procedure may adversely affect the size of the position obtainable for ALIC Re.


 


G.                                     Contracts;
Authorized Signatories.  ALLSTATE
INVESTMENTS shall have the full power, right and authority, as ALIC Re’s agent,
in accordance with this Agreement and the Investment Guidelines, to negotiate
and apply for and direct the Trustee to enter into, execute, deliver, amend,
modify and/or terminate legal documents of every kind and nature relating to or
required by the investment of the Trust Assets. 
All such documents will be entered into in the name of the Trustee and
all such documents shall be legally binding on the Trustee and ALIC Re. Those
certain employees and officers of ALLSTATE INVESTMENTS who are authorized to
execute transactions and sign documentation pursuant to the policies and
procedures adopted pursuant to authorization of the ALLSTATE INVESTMENTS’ Board
of Directors, as they may be amended from time to time, shall also be
authorized to the same extent to direct the Trustee to execute transactions and
sign documentation on behalf of ALIC Re in connection with transactions entered
into on behalf of the Account pursuant to this Agreement.


 


H.                                    Compliance
with Legal Requirements.  ALLSTATE
INVESTMENTS shall make all reasonable efforts to comply with and cause to be
complied with all applicable laws, rules, and regulations of ALIC Re’s
domicile, and any federal, state or municipal authority governing this
Agreement, the services rendered hereunder, the Account and the assets held
therein.  Without limiting the foregoing,
ALLSTATE INVESTMENTS shall comply with all securities laws and other laws
applicable to the services provided under this Agreement.


 


I.                                         Transaction
Procedures.  The Trust Assets are or
will be held in trust by


 


A-3





















 


the Trustee pursuant to
the Trust Agreement.  ALLSTATE
INVESTMENTS shall not act as trustee or custodian of the Trust Assets and shall
not, under any circumstances, have or be deemed to have ownership, custody or
physical control of any of the Trust Assets. 
ALLSTATE INVESTMENTS may, however, issue instructions to, and
communicate with, the Trustee for the Account as may be necessary and
appropriate in connection with provision of its services pursuant to this
Agreement.  At the option of ALLSTATE
INVESTMENTS, instructions by ALLSTATE INVESTMENTS to the Trustee may be made
orally or by computer, electronic instruction systems or telecommunications
terminals.  ALLSTATE INVESTMENTS will
confirm that the Trustee has effected such instructions either by access to the
Trustee’s computerized identification system or by telephonic
confirmation.  The Trustee will confirm
with ALLSTATE INVESTMENTS receipt of trade instructions orally or by computer
for the Account.  ALLSTATE INVESTMENTS
will instruct all brokers, dealers and counterparties executing orders with
respect to the Trust Assets to forward to ALLSTATE INVESTMENTS copies of all
confirmations.


 


J.                                        Recordkeeping.  ALLSTATE INVESTMENTS shall keep and maintain
an accurate and detailed accounting of each transaction concerning the Trust
Assets and of all receipts, disbursements, and other transactions relating to
the purchase and sale transactions arising hereunder.  ALLSTATE INVESTMENTS agrees to preserve such
records for the greater of (i) six years; (ii) the required period
pursuant to the insurance laws of ALIC Re’s domicile and related regulations;
or (iii) such other time period that ALIC Re may from time to time
request.  ALLSTATE INVESTMENTS
acknowledges that all such records shall be the property of ALIC Re and shall
be made available, within five (5) business days of receipt of a written
request, to ALIC Re, its accountants, auditors or other representatives of ALIC
Re for inspection and/or copying (at ALIC Re’s expense) during regular business
hours.  In addition, ALLSTATE INVESTMENTS
shall provide any materials, reasonably related to the investment advisory
services provided hereunder, as may be reasonably requested in writing by the
directors or officers of ALIC Re, or as may be required by any governmental
agency with jurisdiction hereunder.


 


ALLSTATE INVESTMENTS
further agrees to prepare and furnish to ALIC Re and to other persons
designated by ALIC Re, at such regular intervals and other times as may be
specified by ALIC Re from time to time (i) such balance sheets, income and
expense statements and other financial statements and reports, and (ii) such
other statements, reports and information, in each case, regarding the Trust
Assets as ALIC Re shall from time to time reasonably require.


 


In the event of
termination of this Agreement for any reason, all such records or copies
thereof shall be returned promptly to ALIC Re, free from any claim or retention
of rights by ALLSTATE INVESTMENTS.


 


A-4