Document:

Exhibit 10.1 ALIC 3.31.15

         EXHIBIT 10.1

REINSURANCE AGREEMENT

between

ALLSTATE LIFE INSURANCE COMPANY

and

ALLSTATE ASSURANCE COMPANY

RECITALS

This Reinsurance Agreement effective April 1, 2015 (hereinafter “Agreement”) is made and entered into by and between ALLSTATE LIFE INSURANCE COMPANY, a life insurance company domiciled in the State of Illinois (hereinafter the “Ceding Company”) and ALLSTATE ASSURANCE COMPANY, a life insurance company domiciled in the State of Illinois (hereinafter the “Reinsurer”). 

WHEREAS, Ceding Company and the Reinsurer desire to enter this Agreement, whereby the Ceding Company will cede on a coinsurance basis to the Reinsurer a proportionate amount of any and all liabilities of the Ceding Company arising under the Policies as shown in Exhibit A.

NOW THEREFORE, in consideration of the above stated premises and the promises and the mutual agreements set forth below the Ceding Company and the Reinsurer agree as follows.

ARTICLE I
DEFINITIONS

Unless otherwise defined herein, as used in this Agreement the following terms shall have the meanings ascribed to them below: 

		
	A.
	“Affiliate” shall mean, with respect to any person, any other person controlling, controlled by or under common control with such person.  For purposes of the foregoing, “control” including the terms “controlling”, “controlled by”, and “under common control with” shall mean the possession, direct or indirect, of the power to direct or cause direction of the management and policies of a person, whether through the ownership of voting securities, by contract, as trustee or executor or otherwise.

		
	B.
	 “Code” shall mean the Internal Revenue Code of 1986, as amended.

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	C.
	“Effective Date” shall mean the effective date of this Agreement, which shall be 12:01 a.m., Central Time, on April 1, 2015.

		
	D.
	"Extra-Contractual Obligations" shall mean all liabilities and obligations in respect of the Policies for consequential, extra-contractual, exemplary, punitive, special or similar damages or any other amounts due or alleged to be due (other than those arising under the express terms and conditions of the Policies) which arise from any real or alleged act, error or omission, whether or not intentional, in bad faith or otherwise, including without limitation, any act, error or omission relating to: (i) the underwriting, production, issuance, cancellation or administration of the Policies; (ii) the handling of claims or disputes in connection with the Policies; or (iii) the failure to pay or the delay in payment of benefits or claims under or in connection with the Policies. 

		
	E.
	“Interest Maintenance Reserve Adjustment” shall mean the interest maintenance reserve balance arising from the past and present dispositions of the assets associated with the Policies or recapture Policies as well as the balance that would result if the remaining assets associated with the Policies or recapture Policies were to be sold.  The Interest Maintenance Reserve Adjustment shall be zero if the Statutory Reserves are 1% or less of the Ceding Company’s, or in the case of recapture, the Reinsurer’s general account liabilities, Page 3, Line 26 of the NAIC Annual Statement Blank (2014 format; or if the line numbers are changed pursuant to relevant guidance from the NAIC, the successor to such line numbers).

		
	F.
	“Net Benefits” shall mean the actual amounts paid or incurred by the Ceding Company with respect to the Policies.  

		
	G.
	“Net Ceded Liabilities” shall mean the Reinsurance Percentage of any and all liabilities of the Ceding Company arising under or related to the Policies net of other ceded reinsurance to non-Affiliates, but shall not include Extra-Contractual Obligations.

		
	H.
	"Net Statutory Liabilities" shall have the meaning set forth in the Recapture clause, Article XIV C. of this Agreement.

		
	I.
	“Policy or Policies” shall mean the policies and riders defined in Exhibit A.

  
		
	J.
	“Recapture Assets and Liabilities” shall have the meaning set forth in the Recapture clause, Article XIV C. of this Agreement.

		
	K.
	“Statutory Reserves” means the statutory reserves of the Ceding Company with respect to the Policies determined pursuant to accounting practices prescribed by applicable regulatory authorities and in accordance with sound actuarial practices, as such reserves would have been included in lines 1, 2, 3, and 4 of the NAIC Annual Statement Blank Page 3 (2014 format; or if the line numbers are changed pursuant to relevant guidance from the NAIC, the successor to such line numbers).

		
	L.
	“Reinsurance Percentage” means the coinsurance percentage as shown in Exhibit A.

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	M.
	“Transfer Assets and Liabilities” shall have the meaning set forth in Article V of this Agreement.

ARTICLE II
BASIS OF REINSURANCE

The Ceding Company agrees to cede, and the Reinsurer agrees to accept, the Net Ceded Liabilities. The reinsurance provided hereunder shall be on a coinsurance basis at the Reinsurance Percentage.

 
ARTICLE III
LIABILITY OF REINSURER; COINSURANCE PROVISIONS

		
	A.
	All of the Net Ceded Liabilities shall be reinsured pursuant to the terms of this Agreement as of the Effective Date.

		
	B.
	The liability of the Reinsurer with respect to Policies in force on the Effective Date will begin on the Effective Date.  The liability of the Reinsurer with respect to any application received or any Policy issued after the Effective Date and reinsured hereunder will begin simultaneously with that of the Ceding Company.  The Reinsurer's liability with respect to any Policy will terminate on the date the Ceding Company's liability on such contract terminates.  However, termination of this Agreement will not terminate the Reinsurer’s liability for Net Benefits paid or incurred by the Ceding Company on or after the Effective Date and prior to the date of termination. If any of the Policies are reduced or terminated by payment of a death benefit, withdrawal or surrender, the reinsurance will be reduced proportionately or terminated.

		
	C.
	The reinsurance provided under this Agreement is subject to the same limitations and conditions as set forth in the Policies.

		
	D.
	The Ceding Company shall not make any changes after the Effective Date in the provisions and conditions of any Policy except with the Reinsurer's prior written consent, including, but not limited to any changes to comply with any applicable law, rule or regulation.  Such consent shall not be unreasonably withheld. However, such prior approval shall not be required so long as the Ceding Company and the Reinsurer remain Affiliates.

		
	E.
	Some of the Policies ceded under this Agreement provide that the Ceding Company may in its discretion, from time to time, as provided in the policy or contract, declare interest rates, cost of insurance rates, purchase payments or other non-guaranteed elements that are or affect required purchase payments or are used to determine contract values.  The Ceding Company agrees, while this Agreement is in effect, to set such discretionary interest rates, cost of insurance rates, or other non-guaranteed elements to be declared on the Policies and the effective dates thereof only with the Reinsurer’s prior written approval.  However, such prior approval shall not be required so long as the Ceding Company and the Reinsurer remain 

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Affiliates. The Ceding Company and the Reinsurer agree to fully cooperate in obtaining any required regulatory approvals in connection with setting or changing such discretionary interest rates, cost of insurance rates, or other non-guaranteed elements. 

		
	F.
	The Ceding Company shall not make any changes or modifications to any of its underwriting, claims or administrative practices, procedures, or systems for the Policies, nor waive or exercise any of its rights under any of the Policies without the prior written consent of the Reinsurer. However, such prior approval shall not be required so long as the Ceding Company and the Reinsurer remain Affiliates.

		
	G.
	Policies that elect conversion or exchange to or replacement with policies listed in Exhibit A are reinsured under this Agreement.  Policies that elect conversion or exchange to or replacement with policies not listed in Exhibit A are not reinsured under this Agreement, unless agreed to in writing by the Reinsurer.

		
	H.
	In the event of a change in the amount of the Ceding Company’s liability on a Policy due to a misstatement of age or sex, the Reinsurer’s liability will be changed proportionately.

ARTICLE IV
EXTRA-CONTRACTUAL OBLIGATIONS

The Reinsurer shall not be liable to pay the Ceding Company for any Extra-Contractual Obligations except to the extent such liabilities or obligations arise directly from and are proximately caused by the gross negligence or willful acts or omissions of the Reinsurer, its agents, contractors or employees in the performance of the Reinsurer’s duties and obligations under this Agreement.

ARTICLE V
RESERVE TRANSFERS

Within forty-five (45) days of the later of the Effective Date or the date the Ceding Company has received approval from all necessary regulatory authorities to enter into this Agreement (the “Settlement Date”), assets consisting of policy loans (including accrued and unearned policy loan interest), cash and investments at market value, and accrued investment income net of unearned investment income, shall be transferred by the Ceding Company to the Reinsurer with the amount calculated as of the Effective Date equal to the “Net Statutory Liabilities” for the Policies plus the Interest Maintenance Reserve Adjustment.  The Net Statutory Liabilities shall equal the Statutory Reserves (net of reserves for any reinsurance agreements with non-Affiliates) related to the Policies plus “Transfer Assets and Liabilities”.  The Ceding Company shall also pay to the Reinsurer interest on such amount at the rate of four percent (4%) per annum, simple rate, beginning on the Effective Date and ending on the Settlement Date.

The Transfer Assets and Liabilities shall include all account balances (both assets and liabilities) related to the Policies (other than (i) those that are reflected in Statutory Reserves and (ii) the 

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liability for interest maintenance reserve related to the Policies). Transfer Assets and Liabilities shall include, but are not limited to, uncollected premiums, deferred premiums, policyholder dividends and premiums received in advance, in each case to the extent attributable to the Policies.  The Transfer Assets and Liabilities shall also include amounts in respect of the Policies that are paid to or received by the Reinsurer on behalf of the Ceding Company after the Effective Date but prior to the Settlement Date.

ARTICLE VI
SETTLEMENT AND REPORTING

		
	A.
	While this Agreement is in effect, the Ceding Company shall pay to the Reinsurer no less frequently than quarterly, with respect to the Policies, a reinsurance premium equal to the sum of Items (a) and (b) less (c) below, where:

		
	(a)
	equals gross premiums collected by the Ceding Company during the settlement period net of reinsurance premiums paid with respect to the Policies. 

		
	(b)
	equals policy loan repayments collected by the Ceding Company with respect to the Policies.

		
	(c)
	equals gross premiums refunded by the Ceding Company during the settlement period to policyholders of the Policies.

		
	B.
	While this Agreement is in effect, the Reinsurer shall pay to the Ceding Company no less frequently than quarterly, a benefit and expense allowance equal to the sum of Items (a), (b), (c), (d), and (e), as applicable for the period since the last settlement period, where:

		
	(a)
	equals the Net Benefits paid or incurred by the Ceding Company with respect to the Policies.     

		
	(b)
	equals commissions and other sales compensation paid or incurred by the Ceding Company with respect to the Policies.

		
	(c)
	equals insurance taxes, licenses and fees (including allocated taxes, licenses and fees, but excluding income taxes) paid or incurred by the Ceding Company with respect to the Policies.

		
	(d)
	equals policy loan distributions to policyholders paid or incurred by the Ceding Company with respect to the Policies.

		
	(e)
	equals general insurance expenses (including allocated expenses) paid or incurred by the Ceding Company with respect to the Policies.

		
	C.
	The Ceding Company will provide the Reinsurer with accounting reports on a time schedule determined by the Reinsurer, which schedule shall be no less frequently than quarterly within 

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fifteen (15) days following the end of each calendar quarter.  These reports will contain sufficient information about the Policies to enable the Reinsurer to prepare its quarterly and annual financial reports.

		
	D.
	Settlements as set out in Article VI, Paragraphs A and B will occur on a time schedule determined by the Reinsurer, which schedule shall be within sixty (60) days following the end of each calendar quarter.

ARTICLE VII
TAX MATTERS

With respect to this Agreement, the Ceding Company and the Reinsurer hereby make the election as set forth in Exhibit B and as provided for in section 1.848-2(g)(8) of the Treasury Regulations.  Each of the parties hereto agrees to take such further actions as may be necessary to ensure the effectiveness of such election.

ARTICLE VIII
RESERVE CREDIT

The Reinsurer shall agree in good faith to take any other steps necessary, pursuant to the requirements of Illinois, for the Ceding Company to take statutory credit for reinsurance ceded to an unadmitted, unauthorized or unaccredited reinsurer, up to the full amount of the reserve that the Ceding Company would have established for the Policies if it had retained the Policies.  

ARTICLE IX
OVERSIGHTS

Unintentional clerical errors, oversights, omissions or misunderstandings in the administration of this Agreement by either the Ceding Company or the Reinsurer shall not be deemed a breach of this Agreement provided the clerical error, oversight, omission or misunderstanding is corrected promptly after discovery.  Both the Ceding Company and the Reinsurer shall be restored to the positions they would have occupied had such error, oversight, omission, or misunderstanding not occurred.

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ARTICLE X
INSPECTION OF RECORDS

Either party, their respective employees or authorized representatives, may audit, inspect and examine, during regular business hours, at the home office of either party, any and all books, records, statements, correspondence, reports and their related documents or other documents that relate to the Policies covered under this Agreement.  The audited party agrees to provide a reasonable workspace for such audit, inspection or examination and to cooperate fully and to faithfully disclose the existence of and produce any and all necessary and reasonable materials requested by such auditors, investigators, or examiners. The party performing a routine audit shall provide no less than five (5) working days advance notice to the other party. The expense of the respective party's employee(s) or authorized representative(s) engaged in such activities will be borne solely by such party. 

ARTICLE XI
INSOLVENCY

		
	A.
	The portion of any risk or obligation reinsured by the Reinsurer under this Agreement, when such portion is ascertained, shall be payable on demand of the Ceding Company at the same time as the Ceding Company shall pay its net retained portion of such risk or obligation, and the reinsurance shall be payable by the Reinsurer on the basis of the liability of the Ceding Company under the Policies without diminution because of the insolvency of the Ceding Company.  In the event of the insolvency of the Ceding Company and the appointment of a conservator, liquidator or statutory successor of the Ceding Company, such portion shall be payable to such conservator, liquidator or statutory successor immediately upon demand, on the basis of claims allowed against the Ceding Company by any court of competent jurisdiction or, by any conservator, liquidator or statutory successor of the Ceding Company having authority to allow such claims, without diminution because of such insolvency or because such conservator, liquidator or statutory successor has failed to pay all or a portion of any claims.  Payments by the Reinsurer as above set forth shall be made directly to the Ceding Company or its conservator, liquidator or statutory successor.

		
	B.
	Further, in the event of the insolvency of the Ceding Company, the liquidator, receiver or statutory successor of the insolvent Ceding Company shall give written notice to the Reinsurer of the pendency of any obligation of the insolvent Ceding Company on any Net Ceded Liability, whereupon the Reinsurer may investigate such claim and interpose at its own expense, in the proceeding where such claim is to be adjudicated, any defense or defenses which it may deem available to the Ceding Company or its liquidator or statutory successor.  The expense thus incurred by the Reinsurer shall be chargeable, subject to court approval, against the insolvent Ceding Company as part of the expenses of liquidation to the extent of a proportionate share of the benefit which may accrue to the Ceding Company solely as a result of the defense undertaken by the Reinsurer.

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	C.
	In the event of the Reinsurer’s insolvency, any payments due the Reinsurer from the Ceding Company pursuant to the terms of this Agreement will be made directly to the Reinsurer or its conservator, liquidator, receiver or statutory successor.

ARTICLE XII
ARBITRATION

		
	A.
	Prior to initiation of arbitration, the Reinsurer and the Ceding Company agree that they will first negotiate diligently and in good faith to agree on a mutually satisfactory resolution of any dispute.  Provided, however that if any such dispute cannot be resolved within sixty (60) days (or such longer period as the parties may agree) after written notice invoking the negotiation period of this Article is delivered by either party, the Reinsurer and the Ceding Company agree that they will submit this dispute to arbitration as described below.

		
	B.
	The Reinsurer and the Ceding Company intend that any and all disputes between them under or with respect to this Agreement be resolved without resort to any litigation.  Any and all disputes or differences between the Ceding Company and the Reinsurer arising out of this Agreement, including, but not limited to, disputes or differences relating to the interpretation or performance of this Agreement, its formation or validity, or any transaction under this Agreement, whether arising before or after termination, shall be submitted to arbitration.  Arbitration shall be the sole method of dispute resolution, regardless of the insolvency of either party, unless the conservator, receiver, liquidator or statutory successor is specifically exempted from arbitration proceeding by applicable state law of the insolvency. 

		
	C.
	Arbitration shall be initiated by the delivery of written notice of demand for arbitration (“Arbitration Notice”) by one party to another.  Such written notice shall contain a brief statement of the issue(s), remedies sought, and the failure of the parties to reach amicable agreement as provided in Paragraph A above.

		
	D.
	Each party shall appoint an individual as arbitrator and the two so appointed shall then appoint the umpire.  If either party refuses or neglects to appoint an arbitrator within thirty (30) days after delivery of the Arbitration Notice, the other party may appoint the second arbitrator.  If the two arbitrators do not agree on an umpire within thirty (30) days of the appointment of the second appointed arbitrator, each of the two arbitrators shall nominate three individuals.  Each arbitrator shall then decline two of the nominations presented by the other arbitrator.  The umpire shall be chosen from the remaining two nominations by drawing lots. The arbitrators and umpire shall be present or former disinterested officers of life reinsurance or insurance companies other than the two parties to this Agreement or any company owned by, or affiliated with, either party.  

		
	E.
	The arbitration hearings shall be held in the city in which the Reinsurer’s head office is located or any such other place as may be mutually agreed.  Each party shall submit its case 

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to the arbitrators and umpire within one hundred and eighty (180) days of the selection of the umpire or within such longer period as may be agreed.

		
	F.
	The arbitration panel shall make its decision with regard to the custom and usage of the insurance and reinsurance business.  The arbitration panel shall interpret this Agreement as an honorable engagement; they are relieved of all judicial formalities and may abstain from following strict rules of law.  The arbitration panel shall be solely responsible for determining what evidence shall be considered and what procedure they deem appropriate and necessary in the gathering of such facts or data to decide the dispute.

		
	G.
	The decision in writing of the majority of the arbitration panel shall be final and binding upon the parties.  Judgment may be entered upon the final decision of the arbitration panel in any court having jurisdiction.

		
	H.
	The jointly incurred costs of the arbitration are to be borne equally by both parties.  Jointly incurred costs are specifically defined as any costs that are not solely incurred by one of the parties (e.g., attorneys’ fees, expert witness fees, travel to the hearing site, etc.).  Costs incurred solely by one of the parties shall be borne by that party.  Once the panel has been selected, the panel shall agree on one billable rate for each of the arbitrators and umpire and that sole cost shall be disclosed to the parties and become payable as a jointly incurred cost as described above.

ARTICLE XIII
PARTIES TO AGREEMENT

This Agreement is solely between the Ceding Company and the Reinsurer.    Except as otherwise provided herein, the terms and provisions of this Agreement are intended solely for the benefit of the parties hereto, and their respective successors or permitted assigns, and it is not the intention of the parties to confer third-party beneficiary rights upon any other person, and no such rights shall be conferred upon any person or entity not a party to this Agreement.  The Ceding Company shall be and remain directly and solely liable to any insured, contract owner, or beneficiary under any Policy reinsured hereunder.

ARTICLE XIV    
DURATION OF AGREEMENT AND TERMINATION

		
	A.
	Duration.  This agreement will be effective as of the Effective Date, and will be unlimited as to its duration.  

		
	B.
	Termination for New Business.  This agreement may be terminated for new business by either party with sixty (60) days prior written notice to the other party.

		
	C.
	Recapture. The Ceding Company may recapture a proportionate share of up to 100% of the Net Ceded Liabilities by providing the Reinsurer with sixty (60) days prior written notice, 

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such notice to specify the effective date of the recapture (the “Recapture Date”).  Any such recapture shall apply to all Policies reinsured under this Agreement.

The Reinsurer shall be liable for the Net Benefits associated with recapture amounts, as well as for other claims as specified in Article IV, for Extra-Contractual Obligations, each as incurred prior to the effective date of the recapture.

Within forty-five (45) days of the Recapture Date (the “Recapture Settlement Date”), assets consisting of policy loans (including accrued and unearned policy loan interest), cash and investments at market value, and accrued investment income net of unearned investment income, shall be transferred by the Reinsurer to the Ceding Company with the amount as of the Recapture Date equal to the “Net Statutory Liabilities” for the recapture Policies plus the positive or negative Interest Maintenance Reserve Adjustment.  The Net Statutory Liabilities shall equal the Statutory Reserves (net of reserves for any non-affiliate reinsurance agreements) related to the recapture Policies plus ”Recapture Assets and Liabilities”.  The Reinsurer shall also pay to the Ceding Company interest on such amount at the rate of four percent (4%) per annum, simple rate, beginning on the Recapture Date and ending on the Recapture Settlement Date.

The Recapture Assets and Liabilities shall include all account balances (both assets and liabilities) related to the recapture Policies and ceded by the Ceding Company to the Reinsurer (other than (i) those that are reflected in Statutory Reserves and (ii) the liability for interest maintenance reserve related to the recapture Policies). Recapture Assets and Liabilities shall include, but are not limited to, uncollected premiums, deferred premiums, policyholder dividends and premiums received in advance, in each case to the extent attributable to the recapture Policies.  The Recapture Assets and Liabilities shall also include amounts in respect of the recapture Policies that are paid to or received by the Reinsurer on behalf of the Ceding Company after the Recapture Date but prior to the Settlement Date.

ARTICLE XV
GENERAL PROVISIONS

		
	A.
	Entire Agreement.  This Agreement supercedes any and all prior discussions and understandings between the parties and constitutes the entire Agreement between the Reinsurer and the Ceding Company with respect to the Policies.  There are no understandings between the parties other than as expressed in this Agreement. 

		
	B.
	Notices.  Any notice or communication given pursuant to this Agreement must be in writing and (1) delivered personally, (2) sent by facsimile transmission, (3) delivered by overnight express, or (4) sent by registered or certified mail, postage prepaid, to such address or addresses each party may designate from time to time for receipt of notices or communications.  The initial notice addresses are as follows:

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If to the Ceding Company:        Allstate Life Insurance Company
3100 Sanders Rd, Suite J5A
Northbrook, Illinois 60062
Attn:  Chief Financial Officer    
Facsimile No.:     (847) 326-7065

If to the Reinsurer:            Allstate Assurance Company
3100 Sanders Rd, Suite J5A
Northbrook, Illinois 60062
Attn:  Chief Financial Officer
Facsimile No.:     (847) 326-7065
            
All notices and other communications required or permitted under the terms of this Agreement that are addressed as provided in this Article XV shall: (1) if delivered personally or by overnight express, be deemed given upon delivery; (2) if delivered by facsimile transmission, be deemed given when electronically confirmed; and (3) if sent by registered or certified mail, be deemed given when received.  Any party from time to time may change its address for notice purposes by giving a similar notice specifying a new address, but no such notice shall be deemed to have been given until it is actually received by the party sought to be charged with the contents thereof.

		
	C.
	Expenses.  Except as may be otherwise expressly provided in this Agreement, whether or not the transactions contemplated hereby are consummated, each of the parties hereto shall pay its own costs and expenses incident to preparing for, entering into and carrying out this Agreement and the consummation of the transactions contemplated hereby.

		
	D.
	Counterparts.  This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument and shall become effective when one or more counterparts have been signed by each of the parties and delivered to the other parties.

		
	E.
	Amendment.  Any modification or modification to this Agreement shall be null and void unless made by a written instrument executed by both parties hereto.

		
	F.
	Assignment; Binding Effect.  Neither this Agreement nor any of the rights, interests or obligations under this Agreement shall be assigned, in whole or in part, by either of the parties hereto without the prior written consent of the other party, which consent shall not be unreasonably withheld, and any such assignment that is attempted without such consent shall be null and void.  Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of, and be enforceable by the parties and their respective successors and permitted assigns.

		
	G.
	Invalid Provisions.  If any provision of this Agreement is held to be illegal, invalid, or unenforceable under any present or future law, and if the rights or obligations of the parties hereto under this Agreement will not be materially and adversely affected thereby, (1) such 

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provision shall be fully severable; (2) this Agreement shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part hereof; and (3) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance herefrom.

		
	H.
	Waiver.  Any term or condition of this Agreement may be waived in writing at any time by the party that is entitled to the benefit thereof.  A waiver on one occasion shall not be deemed to be a waiver of the same or any other breach or nonfulfillment on a future occasion.  All remedies, either under the terms of this Agreement, or by law or otherwise afforded, shall be cumulative and not alternative, except as otherwise provided by law.

		
	I.
	Headings, etc.  The headings used in this Agreement have been inserted for convenience and do not constitute matter to be construed or interpreted in connection with this Agreement.  Unless the context of this Agreement otherwise requires, (1) words using the singular or plural number also include the plural or singular number, respectively; (2) the terms “hereof,” “herein,” “hereby,” “hereto,” “hereunder,” and derivative or similar words refer to this entire Agreement (including the exhibits hereto); (3) the term “Article” refers to the specified Article of this Agreement; (d) the term “Exhibit” refers to the specified Exhibit attached to this Agreement; and  (e) the term “party” means, on the one hand, the Ceding Company, and on the other hand, the Reinsurer.

		
	J.
	Offset.  Any debits or credits incurred after the Effective Date in favor of or against either the Ceding Company or the Reinsurer with respect to this Agreement are deemed mutual debits or credits, as the case may be, and shall be set off against each other dollar for dollar. 

		
	K.
	Compliance with Laws.  The parties hereto shall at all times comply with all applicable laws in performing their obligations under this Agreement.

		
	L.
	Survival. All provisions of this Agreement shall survive its termination to the extent necessary to carry out the purposes of this Agreement or to ascertain and enforce the parties’ rights or obligations hereunder existing at the time of termination.

		
	M.
	Calendar Days.  Unless otherwise specified, all references to “day” in this Agreement shall mean calendar days. 

N.    Governing Law.  This Agreement shall be governed by the laws of the state of Illinois.

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IN WITNESS HEREOF, the parties to this Agreement have caused it to be duly executed in duplicate by their respective officers on the dates shown below.

ALLSTATE LIFE INSURANCE COMPANY

By     /s/ Samuel H. Pilch                                                                         
Samuel H. Pilch
Title     Senior Group Vice President and Controller                                  

Date     May 5, 2015                                                                                   

 ALLSTATE ASSURANCE COMPANY

By     /s/ Mario Imbarrato                                                                          
Mario Imbarrato
Title     Vice President and Chief Financial Officer                                    

Date     May 5, 2015                                                                                    

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EXHIBIT A

ELIGIBLE POLICIES

Policies reinsured under this Agreement shall be the following two (2) blocks of business as follows:

		
	1.
	Universal life policies that were originally sold through Surety Life Insurance Company (“Surety”, formerly an Allstate affiliate now owned by Government Employees Health Association, Inc., as of March 12, 2012), now ceded to ALIC under an Amended and Restated Coinsurance Agreement originally effective as of December 31, 1987.  As of the Effective Date, these policies can be identified in the accounting system by SAP code 6121F31;

		
	2.
	Universal life policies that were originally sold through Great Southern Life Insurance Company and Security Life of Denver Insurance Company and ceded to American Heritage Life and retroceded to ALIC under a Retrocessional Reinsurance Agreement effective December 31, 2004.

COINSURANCE PERCENTAGE

The coinsurance percentage shall be 100%.

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EXHIBIT B
TAX ELECTION

The Ceding Company and the Reinsurer hereby make an election pursuant to Treasury Regulations Section 1.848-2(g)(8).  This election shall be effective for the tax year during which the Effective Date falls and all subsequent taxable years for which this Agreement remains in effect.  Unless otherwise indicated, the terms used in this Exhibit are defined by reference to Treasury Regulations Section 1.848-2 as in effect on the date hereof.  As used below, the term “party” or “parties” shall refer to the Ceding Company or the Reinsurer, or both, as appropriate.

		
	1.
	The party with the Net Positive Consideration (as defined in Section 848 of the Code and related Treasury Regulations) with respect to the transactions contemplated under this Agreement for any taxable year covered by this election will capitalize specified policy acquisition expenses with respect to such transactions without regard to the general deductions limitation of Section 848(c)(1) of the Code.

		
	2.
	The parties agree to exchange information pertaining to the amount of Net Consideration (as defined in Section 848 of the Code and related Treasury Regulations) under this Agreement each year to ensure consistency or as is otherwise required by the Internal Revenue Service.  The exchange of information each year will follow the procedures set forth below:

(a)    By April 1 of each year, the Ceding Company will submit a schedule to the Reinsurer of its calculation of the Net Consideration for the preceding calendar year.  This schedule of calculations will be accompanied by a statement signed by an authorized representative of the Ceding Company stating the amount of the Net Consideration the Ceding Company will report in its tax return for the preceding calendar year.

(b)    Within thirty (30) days of the Reinsurer’s receipt of the Ceding Company’s calculation, the Reinsurer may contest such calculation by providing an alternative calculation to the Ceding Company in writing.  If the Reinsurer does not notify the Ceding Company that it contests such calculation within said 30-day period, the calculation will be presumed correct and the Reinsurer shall also report the Net Consideration as determined by the Ceding Company in the Reinsurer’s tax return for the preceding calendar year.

(c)    If the Reinsurer provides an alternative calculation of the Net Consideration pursuant to clause (b), the parties will act in good faith to reach an agreement as to the correct amount of Net Consideration within thirty (30) days of the date the Ceding Company receives the alternative calculation from the Reinsurer.  When the Ceding Company and the Reinsurer reach agreement on an amount of Net Consideration, each party shall report the applicable amount in their respective tax returns for the preceding calendar year.

15DFT_Q1_3.31.2015_EX 10.7.1

Exhibit 10.7.1
SEVERANCE AGREEMENT
This Severance Agreement (“Agreement”) is entered into effective March 31, 2009 (“Effective Date”), by and between Scott A. Davis (“Executive”) and Dupont Fabros Technology, Inc. (“Company”).
The Company, either directly or through one of its subsidiaries, desires to continue to employ Executive and, in connection with such employment, to provide Executive specified severance benefits upon the termination of Executive’s employment under certain circumstances and certain adverse changes to his or her employment.
Accordingly, in consideration of the mutual promises and covenants contained herein, the parties agree to the following:
		
	1.
	Term.

The term of this Agreement shall commence on the Effective Date, and shall continue for three (3) years from that date, unless terminated prior thereto by either the Company or Executive as provided in Section 2.  If either the Company or Executive does not wish to renew this Agreement when it expires at the end of the initial or any renewal term hereof, or if either the Company or Executive wishes to renew this Agreement on different terms than those contained herein, the Company or Executive, as applicable, shall give written notice to the other party in accordance with Section 4.1 below of such intent at least sixty (60) days prior to the expiration date.  In the absence of such notice, this Agreement shall be renewed on the same terms and conditions contained herein for a term of one year from the date that the Agreement would expire. The parties agree that designation of a term and renewal provisions in this Agreement does not in any way limit the right of the parties to terminate this Agreement at any time pursuant to Section 2 below.  Reference in this Agreement to the “Term” shall refer both to the initial term and any renewal term, as the context requires.
		
	2.
	Termination Of Employment. The parties acknowledge that either Executive or the Company may terminate Executive’s employment relationship at any time, with or without Cause. The provisions in this Section govern the amount of compensation, if any, to be provided to Executive upon termination of employment, and do not alter this right to terminate.

2.1    Termination by the Company for Cause.
(a)    Subject to Section 2.1(c) below, the Company shall have the right to terminate Executive’s employment with the Company at any time for Cause by giving notice as described in Section 2.7 of this Agreement.
(b)    In the event that Executive’s employment is terminated for Cause, Executive shall not receive a payment under any applicable short-term incentive compensation plan for the year in which termination occurs, and shall not receive any severance payments, or any other severance benefits or compensation, except Executive shall be paid and become eligible for any Accrued Obligations.
(c)    “Accrued Obligations” means (i) any accrued but unpaid salary of Executive through the date of termination, any bonuses or incentive compensation awarded for which payments have been earned but have not yet been paid for years ending prior to the year of termination, and any accrued vacation pay in accordance with the Company’s vacation policies, all of which will be paid to Executive no later than the Company’s first regularly scheduled payroll date after the date of Executive’s termination from employment, and (ii) eligibility for any benefit continuation or conversion rights provided by the provisions of a Company benefit plan or by law.

(d)    “Cause” for termination shall mean Executive’s: (i) material breach of any covenant or condition under this Agreement or any other agreement between the parties; (ii) conviction of a felony (other than a violation of traffic laws) or a crime involving moral turpitude; (iii) commission of any act constituting theft, fraud (including, but not limited to, fraudulent conduct with respect to the Company’s accounting records and financial statements), embezzlement or misappropriation against the Company or one of its subsidiaries or affiliates; (iv) misconduct, immoral or disreputable conduct, or violation of Company policy that materially, adversely impacts the Company; (v) violation of the Company’s Code of Business Conduct and Ethics; (vi) refusal to follow or implement a clear, reasonable and legal directive of Company; (vii) breach of fiduciary duty; (viii) gross negligence or gross incompetence in the performance of Executive’s duties, where such negligence, incompetence or failure is not remedied within 30 calendar days after written demand for substantial performance is delivered by the Company which specifically identifies the manner in which the Company believes that Executive has been grossly negligent or grossly incompetent.
2.2    Resignation by Executive.
(a)    Executive may resign from Executive’s employment with the Company at any time by giving notice as described in Section 2.7.
(b)    In the event that Executive resigns from Executive’s employment with the Company, other than for Good Reason, Executive shall not receive a payment under any applicable short-term incentive compensation plan for the year in which termination occurs, and shall not receive any severance payments, or any other severance benefits or compensation, except Executive shall be paid and become eligible for any Accrued Obligations.
(c)    “Good Reason” for resignation shall mean the occurrence of any of the following without Executive’s prior written consent:  (i) a material diminution in Executive’s authority, duties or responsibilities; (ii) a change in the location of the principal place where Executive is required to perform services under this Agreement to a location that is more than fifty (50) miles from the location where Executive is required to perform services hereunder on the Effective Date; (iii) other than for across-the-board reductions generally applicable to the Company’s senior executives, a greater than 5% reduction by the Company in either (A) Executive’s then-current annualized base salary (“Base Salary”) or (B) Executive’s then-current target bonus opportunity in effect on the last day of the applicable period under the Company’s then-current short-term incentive compensation plan (“Target Bonus”); (iv) the failure of the Company to obtain a written agreement from any successor to the Company to fully assume the Company’s obligations and to perform under this Agreement which, for purposes of this provision shall be a material breach of this Agreement; or (v) any other failure by the Company to perform any material obligation under, or breach by the Company of any material provision of, this Agreement.  Notwithstanding the foregoing, any actions taken by the Company to accommodate a disability of Executive (including a reduction in duties, functions or responsibilities, or the reassignment to a new position), pursuant to the Family and Medical Leave Act shall not be a Good Reason for purposes of this Agreement.
2.3    Termination by the Company Without Cause.
(a)    The Company shall have the right to terminate Executive’s employment with the Company pursuant to this Section 2.3 at any time without Cause by giving notice as described in Section 2.7. A termination pursuant to Sections 2.5 or 2.6 below is not a termination without Cause for purposes of this Section 2.3.
(b)    If Executive’s employment is terminated without Cause, then Executive shall be paid and become eligible for any Accrued Obligations.

(c)    If Executive’s employment is terminated without Cause, then, subject to Sections 2.12 and 2.13:
(i)    the Company shall pay to Executive an amount equal to twelve (12) months of his/her then current Base Salary, plus an additional amount equal to one hundred percent (100%) of Executive’s Target Bonus for the year in which the termination occurs, less applicable withholdings and deductions, paid in a lump sum on the Company’s first regular payroll date after the Release Date (as defined below);
(ii)    if Executive timely elects and if he/she remains eligible for continued coverage under COBRA, the Company will reimburse insurance premiums paid by Executive under the Company’s group health plan for the continuation of health care coverage under COBRA during the twelve- (12-) month period after the date of termination, provided that the Company shall be required to reimburse only up to the amount of the premiums it was paying on behalf of Executive and his eligible dependents immediately prior to the date of termination (and provided that such reimbursements shall cease if Executive becomes eligible for benefits under a group health plan of another employer); and
(iii) all stock options, common stock subject to forfeiture, restricted stock units and other equity awards held by Executive at the time of his/her termination of employment that would have become vested and exercisable or free from repurchase restrictions, as applicable, during the twelve (12) month period commencing on the date of termination if Executive had remained employed during such period shall become vested and exercisable or free from such repurchase restrictions as of the Release Date; provided, however, that, in the case of equity awards subject to vesting based on criteria other than service (i.e., performance-based vesting), no additional vesting shall be credited unless specifically authorized by the Board or Compensation Committee. All other terms of such awards shall be governed by the plans, programs, agreements and other documents pursuant to which such equity awards were granted.
(d)    Executive shall not be entitled to receive a payment under any applicable short-term incentive compensation plan for the year in which his or her termination from employment occurs. If a termination without Cause occurs within three (3) months before or twelve (12) months follow a Change in Control, as defined in Section 2.10 below, then the enhanced benefits described in Section 2.10 will supersede the benefits described in this section.
(e)    Any damages caused by the termination of Executive’s employment without Cause would be difficult to ascertain, and, therefore, the severance for which Executive is eligible pursuant to Section 2.3 in exchange for the Release is agreed to by the parties as liquidated damages, to serve as full compensation, and not a penalty.

2.4    Resignation by Executive for Good Reason. 
(a)    Provided that Executive has not previously been notified of the Company’s intention to terminate Executive’s employment, Executive may resign from employment with the Company for Good Reason by giving notice to the Company no later than sixty (60) days after the initial occurrence of one of the events specified in the definition of Good Reason that Executive intends to terminate his/her employment for Good Reason on the thirtieth (30th) day following the Company’s receipt of Executive’s notice, if the Company has not cured the event that gives rise to Good Reason before the end of such 30-day period.  If Executive does not resign within that 30-day period, then Good Reason shall no longer exist based on the applicable event.
(b)    In the event that Executive resigns from employment for Good Reason other than pursuant to Section 2.10, and subject to Sections 2.12 and 2.13, Executive shall be eligible for the same payments and benefits as Executive would receive under Section 2.3 and on the same conditions as if Executive had been terminated by the Company without Cause, provided, however, that, if (i) a reduction in Base Salary or Target Bonus was the basis for Executive’s resignation for Good Reason, then the Base Salary or Target Bonus in effect before such reduction, as applicable, shall be used to calculate the severance payment.
2.5    Termination by Virtue of Death or Disability of Executive. 
(a)    In the event of Executive’s death while employed pursuant to this Agreement, all obligations of the parties hereunder shall terminate immediately, and Executive’s estate or beneficiaries shall not receive a payment under any applicable short-term incentive compensation plan for the year in which his or her termination from employment occurs, and shall not receive any severance payments or any other severance benefits or compensation.  The Company shall, pursuant to its standard payroll policies, pay to Executive’s legal representatives any Accrued Obligations.
(b)    Subject to applicable state and federal law, the Company shall have the right, upon written notice to Executive, to terminate this Agreement based on Executive’s Disability.  Termination by the Company of Executive’s employment based on “Disability” shall mean termination because Executive is unable due to a physical or mental condition to perform the essential functions of his/her position with or without reasonable accommodation for six (6) months in the aggregate during any twelve (12) month period or based on the written certification by two licensed physicians of the likely continuation of such condition for such period.  This definition shall be interpreted and applied consistent with the Americans with Disabilities Act, the Family and Medical Leave Act, and other applicable law. In the event that Executive’s employment is terminated based on Executive’s Disability, and subject to Sections 2.12 and 2.13 below, Executive will not receive severance payments, or any other severance compensation or benefit, except that: (i) if Executive timely elects (or his eligible dependents in the event that Executive dies following such termination) and if he/she remains eligible for continued coverage under COBRA, the Company will reimburse insurance premiums paid by Executive or his dependents under the Company’s group health plan for the continuation of health care coverage under COBRA during the twelve- (12-) month period after the date of termination, provided that the Company shall be required to reimburse only up to the amount of premiums it was paying on behalf of Executive and his eligible dependents immediately prior to the date of termination (and provided that such reimbursements shall cease if Executive becomes eligible for benefits under a group health plan of another employer); and (ii) Executive shall receive payment in a lump-sum on the first regular payroll date after the Release Date, subject to applicable withholding and deductions, of a payment under any applicable short-term incentive compensation plan for the year in which his or her termination from employment occurs, calculated by multiplying Executive’s 

Target Bonus for the year of termination by a fraction, the numerator of which is the number of days Executive was employed in the year of termination (disregarding any period of Disability prior to being terminated during that year) and the denominator of which is the total number of days in the year of termination.
(c)    In the event that Executive’s employment is terminated based on Executive’s Disability, then Executive shall be paid or become eligible for any Accrued Obligations.
2.6    Termination for Non-Renewal of the Agreement.  In the event that Executive’s employment is terminated in connection with an election not to renew this Agreement at the end of the initial term or any renewal period by either the Company or Executive, Executive shall not receive any payments, or any other severance benefits or compensation, except Executive shall be paid or become eligible for any Accrued Obligations.
2.7    Notice; Effective Date of Termination.
(a)    Termination of Executive’s employment pursuant to this Agreement shall be effective on the earliest of:
(i)    immediately after the Company gives notice to Executive of Executive’s termination, with or without Cause, unless the Company specifies a later date, in which case, termination shall be effective as of such later date; 
(ii)    immediately upon Executive’s death; 
(i)ten (10) days after the Company gives notice to Executive of Executive’s termination on account of Executive’s Disability, unless the Company specifies a later date, in which case termination shall be effective as of such later date provided that Executive has not returned to the full time performance of Executive’s duties prior to such date; or
(ii)thirty (30) days after Executive gives written notice to the Company of Executive’s resignation or immediately after the cure period set forth in Section 2.4(a) expires in the case of a resignation for Good Reason, provided that the Company may set a termination date at any time between the date of notice and the date of resignation, in which case Executive’s resignation shall be effective as of such other date.  Executive will receive Base Salary through any required notice period.
(b)    In the event that notice of a termination under subsections (a)(i), (iii) and (iv) is given orally, at the other party’s request, the party giving notice must provide written confirmation of such notice within five (5) business days of the request in compliance with the requirement of Section 4.1 below.  In the event of a termination for Cause, written confirmation shall specify the subsection(s) of the definition of Cause relied on to support the decision to terminate.
2.8    Cooperation With Company After Termination of Employment. Following termination of Executive’s employment for any reason, Executive shall cooperate fully with the Company in all matters relating to the winding up of Executive’s pending work including, but not limited to, any litigation in which the Company is involved, and the orderly transfer of any such pending work to such other employees as may be designated by the Company. The Company agrees to reimburse Executive, on an after-tax basis, for all reasonable expenses actually incurred in connection with his provision of testimony or assistance and to pay Executive for any assistance provided after termination of Executive’s employment that does not occur during a Severance Period an hourly fee calculated by dividing Executive’s Base Salary at the time of termination by 2,080.  The term “Severance Period” refers to the number of months with respect to which he/she is paid Base Salary as part of his/her severance payments (e.g., 12 months for termination without Cause pursuant to Section 2.3 or for Good Reason pursuant to Section 2.4, and 24 months if Section 2.10 applies).

2.9    Limitations Under Code Section 409A. Anything in this Agreement to the contrary notwithstanding, if (A) on the date of termination of Executive’s employment with the Company, any of the Company’s stock is publicly traded on an established securities market or otherwise (within the meaning of Section 409A(a)(2)(B)(i) of the Internal Revenue Code, as amended (the “Code”)), (B) Executive is determined to be a “specified employee” within the meaning of Section 409A(a)(2)(B) of the Code, (C) the payments made hereunder upon termination from employment exceed the amounts permitted to be paid pursuant to Treasury Regulations section 1.409A-1(b)(9)(iii), and (D) Executive would receive any payment that, absent the application of this Section 2.9, would be subject to interest and additional tax imposed pursuant to Section 409A(a) of the Code as a result of the application of Section 409A(2)(B)(i) of the Code (such additional tax, together with any such interest and penalties, are hereinafter referred to as the “Additional Tax”), then (if such delay is required to avoid the imposition of the tax set forth in Section 409A(a)(1) of the Code as a result of termination) no such payment shall be payable prior to the date that is the earliest of (1) six (6) months after Executive's termination date, (2) Executive’s death, or (3) such other date as will cause such payment not to be subject to such Additional Tax (with a catch-up payment equal to the sum of all amounts that have been delayed to be made as of the date of the initial payment plus interest equal to the rate provided in Section 1274(b)(2)(B) of the Code). It is the intention of the parties that payments or benefits payable under this Agreement not be subject to Additional Tax.  To the extent such potential payments or benefits could become subject to Additional Tax, the parties shall cooperate to amend this Agreement with the goal of giving the Executive the economic benefits described herein in a manner that does not result in such tax being imposed.
2.10    Effect of a Change in Control.
(a)    In the event that, within three months before or 12 months following a Change in Control, either (1) Executive’s employment with the Company is terminated by the Company without Cause, and not for death or Disability, or (2) Executive terminates his/her employment for Good Reason, and provided that Executive complies with Sections 2.12 and 2.13 below, then in lieu of the severance described in Section 2.3 or 2.4, as applicable, and subject to applicable withholding and deductions, the Company shall pay to Executive, in a lump-sum payment on the Release Date:
(i)    an amount equal to twenty-four (24) months of Executive’s then current Base Salary;
(ii)    an amount equal to two (2) times the average of the three (3) most recent payments to Executive (including any payment approved but not yet paid) under the Company’s short-term incentive compensation plan after the Effective Date, if any, or, if fewer than three such payments have been paid or approved for payment to Executive, the highest payment, if any, paid or approved for payment to Executive during the Term (and if no such payments have been made or approved since the Effective Date, then this additional amount shall be the Target Bonus for the year in which the termination occurs multiplied by two (2));
(iii)    a short-term incentive compensation plan payment for the year in which termination occurs in the amount approved by the Board, or, if no amount has yet been approved, an amount calculated by multiplying Executive’s Target Bonus for the year of termination by a fraction, the numerator of which is the number of days Executive was employed in the year of termination (disregarding any period of disability during that year) and the denominator of which is the total number of days in the year of termination; and
(iv)    if Executive timely elects (or his eligible dependents in the event that Executive dies following such termination) and if Executive or his dependents remain 

eligible for continued coverage under COBRA, the Company will reimburse insurance premiums paid by Executive or his dependents under the Company’s group health plan for the continuation of health care coverage under COBRA during the twelve- (12-) month period after the date of termination, provided that the Company shall be required to reimburse only up to the amount of premiums it was paying on behalf of Executive and his eligible dependents immediately prior to the date of termination (and provided that such reimbursements shall cease if Executive becomes eligible for benefits under a group health plan of another employer).
(b)    In the event that, within three months before a Change in Control, either (1) Executive’s employment with the Company is terminated by the Company without Cause, and not for death or Disability, or (2) Executive terminates his/her employment for Good Reason, and provided that Executive executes a new Release under Section 2.12 after the Change in Control as a condition to the receipt of these amounts, the Company shall pay to Executive, in a lump-sum payment on the Release Date:
(i)    an amount equal to any difference between those payments already provided to him/her under Section 2.3 or 2.4, if any, and those payments required under this Section 2.10; and
(ii)    an amount equal to the value of any stock options or other equity-based awards held by Executive at the time of his termination from employment (and which were forfeited or otherwise terminated at the time of Executive’s termination from employment because those awards were unvested) that would have been subject to accelerated vesting under the Company’s 2007 Equity Compensation Plan (the “Equity Compensation Plan”), or any plan that replaces that plan, or the award agreement under which the stock options or other equity-based award was granted (the “Vesting Shares”) had Executive remained in employment with the Company through the effective time of the Change of Control.
For this purpose, “value,” shall mean the fair market value of the Company’s common stock, based on the per share price reported on the exchange or quotation system that such stock trades on the trading day immediately prior to the closing date of the transaction that results in a Change in Control; provided, however, that, if the Company’s common stock is not traded on an exchange or on a quotation system on the trading day immediately prior to such closing date, fair market value shall be determined by the Board in good faith. In the case of a stock option or similar equity-based award, “value” shall be the difference between the aggregate exercise price and the fair market value of the applicable Vesting Shares, and, in the case of other equity-based awards, “value” shall be reduced by any amounts paid to Executive by the Company in connection with the forfeiture of such award, other than dividends or other distributions paid to all holders of the same class of security, and taking into consideration any holdbacks, escrows, milestones or other contingencies.
(c)    Definition of Change in Control.  For purposes of this Agreement, a “Change in Control” shall have the same meaning as in the Equity Compensation Plan. For purposes of this Agreement, the term “Related Person” in the definition of “Person” in the Equity Compensation Plan shall mean Lammot J. du Pont and/or Hossein Fateh, or an entity controlled by Lammot J. du Pont and/or Hossein Fateh.
(d)    Excise Tax-Related Provisions.  The terms of Section 14.04 of the Equity Compensation Plan are incorporated herein by this reference.

2.11    No Mitigation.  Executive shall not be required to seek other employment or otherwise to mitigate Executive’s damages upon any termination of employment.  
2.12    Requirement to Execute a Valid Waiver and Release.  Executive shall not receive any of the benefits pursuant to Sections 2.3, 2.4, 2.5 or 2.10 (other than Accrued Obligations) unless and until Executive (a) executes a general release and waiver of all legal claims against the Company, its affiliates and representatives, existing as of the date he/she executes the release and waiver, in a form reasonably acceptable to the Company (“Release”) within the consideration period specified therein (which shall not exceed 60 days after the date of termination of employment) and until the Release becomes effective and can no longer be revoked by Executive under its terms (“Release Date”); and (b) returns all Company property immediately upon termination; complying with the Release including without limitation any non-disparagement and confidentiality provisions contained therein; and complying with his/her post-termination obligations under this Agreement and the Non-Disclosure, Assignment and Non-Solicitation Agreement between the Company and Executive, as amended, modified or superseded (“Non-Disclosure Agreement”).
2.13    Election to Forego General Severance Policies.  The benefits provided to Executive pursuant to Sections 2.3, 2.4, 2.5 and 2.10 are in lieu of, and not in addition to, any benefits to which Executive may otherwise be entitled under any Company severance plan, policy or program; provided however, that if the benefits to which Executive would otherwise be entitled under any Company severance plan, policy or program are more favorable in the aggregate to Executive than the benefits provided under this Agreement, he/she may elect to receive those benefits in lieu of the benefits provided by this Agreement by giving notice in compliance with Section 4.1 within ten (10) business days of his receipt of notice of termination.
3.    Other Agreements.
3.1    Position.  Subject to the terms set forth herein, the Company, either directly or through one of its subsidiaries, agrees to employ Executive, initially in the position of Senior Vice President of Operations, and Executive hereby accepts such employment.  During the term of Executive’s employment with the Company, or one of its subsidiaries, Executive will devote Executive’s best efforts and substantially all of Executive’s business time and attention to the business of the Company and its subsidiaries. References in this Agreement to Executive’s employment with the Company also refer to Executive’s employment with one of the Company subsidiaries, if applicable. In no event shall the prior sentence prohibit Executive from (i) performing charitable activities; (ii) delivering lectures at educational institutions or professional or corporate associations, or (iii) any other activity approved in advance by the Company’s Chief Executive Officer (“CEO”), so long as such activities do not contravene the prior sentence. Without the prior approval of the Board, Executive shall not serve in any executive capacity or as a member of the governing board of any private or public for-profit company.
3.2    Duties.  Executive will report to the CEO and/or such other officer designated by the CEO, performing such duties as are normally associated with Executive’s then current position and such duties as are assigned to him/her from time to time, subject to the oversight and direction of the Executive’s supervisor (including the performance of services for, and serving on the board of directors of, any subsidiary or affiliate of the Company without any additional compensation).  Executive shall perform his/her duties under this Agreement principally out of the Company’s corporate headquarters, or such other location as assigned.  In addition, Executive shall make such business trips to such places as may be necessary or advisable for the efficient operations of the Company.
3.3    Company Policies and Benefits.  The employment relationship between the parties also shall be subject to the Company’s personnel policies and procedures as they may be interpreted, adopted, revised or deleted from time to time in the Company’s sole discretion.  Executive will be eligible to 

participate, on the same basis as similarly situated employees, in the Company’s benefit plans in effect from time to time during his/her employment.  All matters of eligibility for coverage or benefits under any benefit plan shall be determined in accordance with the provisions of the such plan.  The Company reserves the right to change, alter, or terminate any benefit plan in its sole discretion. Notwithstanding the foregoing, in the event that the terms of this Agreement differ from or are in conflict with the Company’s general employment policies or practices, this Agreement shall control. During the Term, Executive shall be entitled to paid vacations governed by and administered in accordance with the regular policy of the Company, but in any event, no less than twenty (20) working days per annum. The Company will reimburse Executive for reasonable business expenses in accordance with the Company’s standard expense reimbursement policy.
3.4    Incentive Compensation. Executive will be eligible to participate in any short-term and long-term incentive compensation plans, annual bonus plans and such other management incentive programs or arrangements of the Company approved by the Board or Compensation Committee that are generally available to the Company’s senior executives. Any such incentive compensation shall be subject to, and earned and paid in accordance with, the terms and conditions of the applicable plans, programs and arrangements. Executive agrees to execute any award agreements required by the Company, and the awards shall be subject to the terms of those agreements, as such terms are determined by the Board or Compensation Committee. Upon the termination of Executive’s employment for any reason, any eligibility for incentive compensation will be governed by the terms of the applicable plans, programs and arrangements, subject to any additional benefits pursuant to Section 2 above.
3.5    Other Agreements. The parties hereto have entered into the Non-Disclosure Agreement and an Indemnification Agreement (“Indemnification Agreement”). Each of these agreements may be amended by the parties from time to time without regard to this Agreement, and contain provisions that are intended by the parties to survive and do survive termination or expiration of this Agreement.
3.6    No Conflict with Existing Obligation. Executive represents that Executive’s performance of all the terms of this Agreement, and as a member of the senior management team of the Company, do not and will not breach any agreement or obligation of any kind made prior to Executive’s employment by the Company, including agreements or obligations Executive may have with prior employers or entities for which Executive has provided services.  Executive has not entered into, and Executive agrees that Executive will not enter into, any agreement or obligation, either written or oral, in conflict herewith.
3.7    Non-Disparagement. Executive shall not, at any time during the Term and thereafter make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally, or otherwise, or take any action which may, directly or indirectly, disparage or be damaging to the Company, or its subsidiaries, or their respective officers, directors, employees, advisors, businesses or reputations.  The members of the Board, executive officers of the Company and any personnel who are generally responsible for communications with investors and the public (including, without limitation, the Company’s public relations and investor relations personnel) shall not, at any time during the Term and thereafter, make statements or representations, or otherwise communicate, directly or indirectly, in writing, orally or otherwise, or take any action which may, directly or indirectly, disparage or be damaging to Executive or his reputation.  The Company shall be liable for any such statement, representation, communication or action by any such member of the Board, executive officer or personnel.  Notwithstanding the foregoing, nothing in this Agreement shall preclude Executive or such members of the Board, executive officers or personnel from making truthful statements that are required by applicable law, regulation or legal process, including truthful statements in connection with an action, suit or other proceeding to enforce Executive’s or the Company’s respective rights under this Agreement.  

4.    General Provisions.
4.1    Notices.  Any notices required hereunder to be in writing shall be deemed effectively given: (a) upon personal delivery to the party to be notified, (b) when sent by electronic mail, telex or confirmed facsimile if sent during normal business hours of the recipient, and if not, then on the next business day, (c) five (5) days after having been sent by registered or certified mail, return receipt requested, postage prepaid, or (d) one (1) day after deposit with a nationally recognized overnight courier, specifying next day delivery, with written verification of receipt.  All communications shall be sent to the Company at its primary office location and to Executive at Executive’s address as listed on the Company payroll, or at such other address as the Company or Executive may designate by ten (10) days advance written notice to the other.
4.2    Severability.  Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provisions had never been contained herein.
4.3    Waiver.  If either party should waive any breach of any provisions of this Agreement, Executive or it shall not thereby be deemed to have waived any preceding or succeeding breach of the same or any other provision of this Agreement.
4.4    Complete Agreement.  This Agreement constitutes the entire agreement between Executive and the Company with regard to the subject matter hereof.  This Agreement is the complete, final, and exclusive embodiment of their agreement with regard to this subject matter and supersedes any prior oral discussions or written communications and agreements.  This Agreement is entered into without reliance on any promise or representation other than those expressly contained herein, and it cannot be modified or amended except in writing signed by Executive and an authorized officer of the Company.  The parties have entered into a separate Non-Disclosure Agreement and Indemnification Agreement, and have or may enter into separate agreement related to stock awards.  These separate agreements govern other aspects of the relationship between the parties, have or may have provisions that survive termination of Executive’s employment under this Agreement, may be amended or superseded by the parties without regard to this agreement and are enforceable according to their terms without regard to the enforcement provision of this Agreement.
4.5    Counterparts.  This Agreement may be executed in separate counterparts, any one of which need not contain signatures of more than one party, but all of which taken together will constitute one and the same Agreement.
4.6    Headings.  The headings of the sections hereof are inserted for convenience only and shall not be deemed to constitute a part hereof nor to affect the meaning thereof.
4.7    Successors and Assigns.  The Company shall assign this Agreement and its rights and obligations hereunder in whole, but not in part, to any company or other entity with or into which the Company may hereafter merge or consolidate, or its parent or affiliated entities, or to which the Company may transfer all or substantially all of its assets, if in any such case said Company or other entity shall by operation of law or expressly in writing assume all obligations of the Company hereunder as fully as if it had been originally made a party hereto (and Executive shall not be deemed to experience a termination of employment under this Agreement as a result of any such assignment, and such assignment shall not by itself constitute Good Reason for Executive’s voluntary resignation), but may not otherwise assign this Agreement or its rights and obligations hereunder.  The term Company shall refer to the assignee of this 

agreement under this clause.  Executive may not assign or transfer this Agreement or any rights or obligations hereunder, other than to his/her estate upon his/her death. 
4.8    Choice of Law.  All questions concerning the construction, validity and interpretation of this Agreement will be governed by the law of the District of Columbia.
4.9    Resolution of Disputes.
(a)    The parties recognize that litigation in federal or state courts or before federal or state administrative agencies of disputes arising out of Executive’s employment with the Company or out of this Agreement, or Executive’s termination of employment or termination of this Agreement, may not be in the best interests of either Executive or the Company, and may result in unnecessary costs, delays, complexities, and uncertainty.  The parties agree that any dispute between the parties arising out of or relating to the negotiation, execution, performance or termination of this Agreement or Executive’s employment, including, but not limited to, any claim arising out of this Agreement, claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, the Age Discrimination in Employment Act of 1967, the Americans with Disabilities Act of 1990, Section 1981 of the Civil Rights Act of 1966, as amended, the Family Medical Leave Act, the Employee Retirement Income Security Act, and any similar federal, state or local law, statute, regulation, or any common law doctrine, whether that dispute arises during or after employment, shall be settled by binding arbitration in accordance with the National Rules for the Resolution of Employment Disputes of the American Arbitration Association; provided however, that this dispute resolution provision shall not apply to any separate agreements between the parties that do not themselves specify arbitration as an exclusive remedy, and provided further that either the Company or Executive shall be entitled to seek from a court of competent jurisdiction in the District of Columbia an immediate injunction and restraining order pending final resolution in Arbitration for a breach and/or threatened breach and/or continued breach of this Agreement by the other party. The location for the arbitration shall be the Washington, D.C. metropolitan area.  Any award made by such panel shall be final, binding and conclusive on the parties for all purposes, and judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. 
(b)    The arbitrators’ fees and expenses and all administrative fees and expenses associated with the filing of the arbitration shall be borne by the Company; provided however, that at Executive’s option, Executive may voluntarily pay up to one-half the costs and fees. The parties acknowledge and agree that their obligations to arbitrate under this Section survive the termination of this Agreement and continue after the termination of the employment relationship between Executive and the Company. 
(c)    The parties each further agree that the arbitration provisions of this Agreement shall provide each party with its exclusive remedy, and each party expressly waives any right it might have to seek redress in any other forum, except as otherwise expressly provided in this Agreement.  By electing arbitration as the means for final settlement of all claims, the parties hereby waive their respective rights to, and agree not to, sue each other in any action in a Federal, State or local court with respect to such claims, but may seek to enforce in court an arbitration award rendered pursuant to this Agreement.  The parties specifically agree to waive their respective rights to a trial by jury, and further agree that no demand, request or motion will be made for trial by jury.
(d)    Executive hereby further agrees that, if it is ever determined, in an arbitration brought in accordance with this Agreement, that willful actions by Executive have constituted wrongdoing that results in an accounting restatement due to the material noncompliance of the Company with financial reporting requirements in any report or statement filed by the Company 

with the U.S. Securities and Exchange Commission, then the Company, or its successor, as appropriate, may recover all of any severance compensation and benefits and any bonus or other incentive-based or equity based compensation received by Executive during the 12-month period following the first public issuance or filing with the U.S. Securities and Exchange Commission, whichever first occurs, of the financial document embodying such financial reporting requirement, less the amount of any net tax owed by Executive with respect to such award or payment over the tax benefit to Executive from the repayment or return of the award or payment. The Company or its successor may, in its sole discretion, affect any such recovery by (i) obtaining repayment directly from Executive; (ii) setting off the amount owed to it against any amount or award that would otherwise be payable by the Company to Executive; or (iii) any combination of (i) and (ii) above. 
(e)    If either Executive or the Company is awarded any damages as compensation for any breach or action related to this Agreement, a breach of any covenant contained in this Agreement (whether express or implied by either law or fact), or any other cause of action based in whole or in part on any breach of any provision of this Agreement, such damages shall be limited to contractual damages plus interest on any delayed payment at the lower of (i) interest at the prime rate in effect at the time such amount first becomes payable, as quoted by the Company’s principal bank or (ii) the maximum rate per annum allowable by applicable law from and after the date(s) that such payments were due and shall exclude consequential damages and punitive damages even if otherwise allowed by law.
4.10    Survival.  Provisions of this Agreement which by their terms must survive the termination of this Agreement in order to effectuate the intent of the parties will survive any such termination, whether by expiration of the Term, termination of Executive’s employment or otherwise, for such period as may be appropriate under the circumstances.  Such provisions includes, without limitation, Section 2.

In witness whereof, the parties have executed this Severance Agreement on the day and year first written above.
Dupont Fabros Technology, Inc.

By:     /s/ Lammot J. du Pont        
Lammot J. du Pont
Executive Chairman

Executive:

/s/ Scott A. Davis        
Scott A. Davis

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