Document:

Exhibit 10.4

 

FORM OF AMENDMENT

TO

SENIOR SECURED CONVERTIBLE PROMISSORY NOTE

 

THIS
            
AMENDMENT TO SENIOR SECURED CONVERTIBLE PROMISSORY NOTE (this “Amendment”) is made and entered into as of October 28,
2010 by and among TECHNISCAN, INC.,
(the “Maker”) and the undersigned holder of the Maker’s senior secured
convertible promissory note (together with its successors and assigns, “Payee”).

 

R E C I T A L S:

 

WHEREAS,
the Maker and the Payee desire to revise that certain Senior Secured
Convertible Promissory Note dated
            , 2010
entered into by and between the Maker and the Payee, as amended by that certain
First Amendment to Senior Secured Convertible Promissory Note dated as of September 28,
2010, that certain Second Amendment to Senior Secured Convertible Promissory
Note dated as of October 5, 2010, and that certain Third Amendment to
Senior Secured Convertible Promissory Note dated as of October 13, 2010
(collectively, the “Note”).

 

NOW, THEREFORE, in consideration of the foregoing and the mutual benefits
to be derived from this Amendment, including pursuant to Section 2 below,
the parties hereto hereby agree as follows:

 

1.            Amendment
of the Note.  Pursuant to Section 11 of the Note:

 

(a)  Section 3
of the Note is deleted in its entirety and replaced with the following:

 

Any outstanding principal balance
and accrued unpaid interest shall be paid to Payee in full no later than January 31,
2011; provided, however, if at any time prior to January 31,
2011, the holders of the First Lien Notes elect to extend the date on which any
outstanding principal balance of and all accrued and unpaid interest on the
First Lien Notes shall be paid in full to April 15, 2011, then the date on
which any outstanding principal balance of and all accrued and unpaid interest
on this Note shall be paid to Payee in full shall also be extended to April 15,
2011, if the Maker (a) issues and delivers to or as directed by Payee
1,000 shares of Common Stock, as evidenced by a stock certificate(s) in
the name or names specified by Payee representing such shares, having the same
restrictions on sale or transfer as the 1,000 shares of Common Stock issued to
Payee on or about October 28, 2010 and (b) issues and delivers to or
as directed by Payee a Warrant(s) to purchase an aggregate number of
shares of Common Stock equal to the then outstanding principal sum under this
Note divided by the then current Warrant Price (as defined in Warrant #W-012 in
the name of Payee), which Warrant(s) shall be exercisable for five years
from the date of issuance and shall otherwise be in the same form as Warrant
#W-012.  The date on which principal and
interest becomes due in accordance with this Section 3 is referred to
herein as the “Maturity Date”.

 

(b)  Section 4(a) of
the Note is deleted in its entirety and replaced with the following:

 

In connection with the closing of
a Qualified Financing (as defined below), Maker may at its option offer Payee
in writing, at least five business days prior to such closing, the 

 

 

opportunity to elect, by written
notice to Maker within two business days thereafter, to convert all or a
portion of the Note into QF Securities (as defined below) at the same price and
on the same terms as other investors in the Qualified Financing. If for any
reason Payee does not timely elect to convert into QF Securities or if for any
reason Maker fails to timely offer Payee the opportunity to convert, Maker
shall within five business days of the closing of such Qualified Financing
prepay the principal of and all accrued and unpaid interest on this Note (the “Payoff
Amount”). Payee has no right to convert this Note into other securities of
Maker prior to the Maturity Date unless Maker has consummated a Qualified
Financing and failed to pay the Payoff Amount in full within five business days
following the closing of such Qualified Financing.  If the Payoff Amount or any portion thereof
is outstanding on the earlier of the sixth business day following the closing
of a Qualified Financing and the day following the Maturity Date (the earlier
of such dates being referred to herein as the “Convertibility Date “),
Payee may, at its sole option, convert the principal amount of this Note and
accrued and unpaid interest thereon (the “Convertible Amount”) in whole
or in part into (i) if a Qualified Financing has been consummated (whether
before or after the Maturity Date), QF Securities at the same price and on the
same terms as other investors in the Qualified Financing, (ii) whether or
not a Qualified Financing has been consummated, Shares, as provided in
paragraph (b) below, or (iii) whether or not a Qualified Financing
has been consummated, as provided in paragraph (c) below. For purposes
herein, a “Qualified Financing” shall mean the sale by Maker of either
Shares and/or other securities that are convertible into or exercisable for
Shares (collectively, “QF Securities”) for cash for investment purposes,
pursuant to which Maker receives gross proceeds (subject only to customary
selling commissions and transaction expenses) of not less than FIVE MILLION
DOLLARS ($5,000,000) in one or more closings. 
For the avoidance of doubt, if Payee elects to convert any portion of
the Convertible Amount pursuant to clause (i) above, Payee shall be
entitled to receive the number and type of QF Securities as would be received
in exchange for a cash investment in the Qualified Financing equal to the
Convertible Amount and shall be entitled to retain the warrants being acquired
by Payee pursuant to the Purchase Agreement. 
Maker shall deliver to Payee the applicable number and type of QF
Securities within three Trading Days of receipt of Payee’s election to convert
into QF Securities as provided above. No fractional QF Securities will be
issued in connection with any conversion of the Conversion Amount, but instead
will be rounded up to the nearest whole QF Security.  The date notice of conversion of all or any
portion of the Note is given by Payee to Maker (pursuant to this Section 4(a) or
as elsewhere provided in the Note) is referred to as the “Conversion Date”.

 

(d)         Section 4(b) of the Note is hereby amended by
adding the following phrase at the beginning:

 

Beginning on the Convertibility
Date,

 

(d)  Section 4(c) of
the Note is hereby amended by deleting the words “Beginning on
the day following the Maturity Date” in the first line thereof and
substituting therefore the words “Beginning on the
Convertibility Date”.

 

(e) 
Sections 6(b)(iv)(B) and (C) of the Note are hereby amended as
follows:

 

The date October 31, 2010
shall be deleted and replaced with” the Convertibility Date”

 

 

(c)  Section 6(b)(v) of
the Note is deleted in its entirety and replaced with the following:

 

the Registration Statement fails
to become effective for any reason prior to the Convertibility Date;

 

2.             Waiver
of Conversion Price Adjustment.  Payee hereby waives any and all rights Payee
has or may have under Section 5(vi) of the Note based on the issuance
by the Maker of shares of common stock described in Section 3 of the Note
in connection with the extension of the Maturity Date (as defined in the Note)
to January 31, 2011, April 15, 2011, or such later date as agreed
upon by the Maker and Payee.

 

3.             Continued
Effect of the Note.  All provisions of the Note, except as
modified by this Amendment, shall remain in full force and effect and are
reaffirmed.  Other than as stated in this
Amendment, this Amendment shall not operate as a waiver of any condition or
obligation imposed on the parties under the Note.

 

4.            Interpretation
of Amendment.  In the event of any conflict, inconsistency,
or incongruity between any provision of this Amendment and any provision of the
Note, the provisions of this Amendment shall govern and control.

 

5.             Counterparts.  This Amendment may be executed in any number
of counterparts, each of which shall be deemed an original, and all of which
together shall constitute one and the same agreement.  A facsimile or e-mailed “.pdf” data file copy
of an original written signature shall be deemed to have the same effect as an
original written signature.

 

IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the
date first set forth above.

 

 

	
  TECHNISCAN, INC.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ David C. Robinson

  	
   

  	
  By:

  	
   

  
	
   

  	
  David C. Robinson

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Chief Executive Officer

  	
   

  	
  Name:Exhibit 10.1

 

MARKETING AND ADMINISTRATION AGREEMENT

 

THIS
MARKETING AND ADMINISTRATION AGREEMENT (“Agreement”)
is dated as of October 1, 2010 and is by and between Allstate Finance
Company, LLC (“Allstate Finance”)
and  Allstate
Bank.

 

BACKGROUND

 

For
several years, Allstate Bank has been making business-purpose loans (the “Loans”) to agents (“Agents”) of
Allstate Insurance Company (“AIC”) and its
insurance subsidiaries (collectively, “Allstate Insurance”).  Allstate Finance has been formed by Allstate
Life Insurance Company (“ALIC”) to
originate, fund and retain Loans (any such Loans, “Allstate
Finance Loans”) to the extent Allstate Bank is unable to do so.  Pursuant to this Agreement, Allstate Bank
will provide certain administrative functions for Allstate Finance Loans but
will not originate, fund or retain any investment in Allstate Finance
Loans.  The marketing, origination and
administration of Allstate Finance Loans is sometimes hereinafter referred to
as the “Program.”

 

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

 

AGREEMENT

 

ARTICLE I

 

MARKETING,
ORIGINATION AND ADMINISTRATION OBLIGATIONS

 

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

 

Section 1.2             Loan
Funding.  Allstate Bank shall give
Allstate Finance written or electronic notice (a “Funding Notice”) from time to time of the dollar amount of
Allstate Finance Loans for which Allstate Bank anticipates facilitating
origination on behalf of Allstate Finance during the subsequent three business
days (the “Funding Requirement”).  Within five (5) business days after
receipt of any Funding Notice consistent with the latest Plan, Allstate Finance
shall ensure that it has on deposit with Allstate Bank and maintains on deposit
with Allstate Bank at all times up through and including the third business day
following the anticipated origination date of each loan, in a
noninterest-bearing checking account established for such purpose (the “AF Loan Funding Account”), an amount equal
to the Funding Requirement less the dollar amount of Allstate Finance Loans
originated since the date of the such Funding Notice.  The proceeds of Allstate Finance Loans shall
be disbursed only through checks drawn from the AF Loan Funding Account or wire
or ACH transfers from the AF Loan Funding Account.

 

 

Section 1.3             Loan
Origination.

 

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

 

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

 

(c)           Allstate Finance shall provide to
Allstate Bank the Allstate Finance Agent Loan Underwriting Policy (the “Underwriting Policy”).  Allstate Finance may modify the Underwriting
Policy from time to time. Should the modifications to the Underwriting Policy
cause a material increase in the time and expense for Allstate Bank to
underwrite Allstate Finance Loans, Allstate Finance, the parties shall
negotiate in good faith to revise the fee schedule.  All Allstate Finance Loans shall satisfy the
standards set forth in the Underwriting Policy under the caption “Loan
Underwriting” and all loan files for Allstate Finance Loans (“Allstate Finance Loan Files”) shall include
the documents and materials set forth in the Underwriting Policy under the
caption “Loan Files” (the “Required Loan
Documents”), subject to such exceptions as any officer of Allstate
Finance not affiliated with Allstate Bank shall approve.  Allstate Bank shall maintain the Allstate
Finance Loan Files and shall make the Allstate Finance Loan Files available to
Allstate Finance and its accountants, auditors and representatives from time to
time during normal business hours, in the format (hard copy or electronic) in
which such Allstate Finance Loan Files are maintained.  In the event that Allstate Finance identifies
within ninety (90) days after the origination date of an Allstate Finance Loan
a material departure from the requirements of this Section 1.3(c),
Allstate Finance, in its sole discretion, 
may within such period 1) give Allstate Bank a demand to cure the
problem or 2) require Allstate Bank to purchase such non-conforming Allstate
Finance Loan within sixty (60) days, 3) waive its rights to demand a cure or
repurchase of non-conforming Allstate Finance Loan by Allstate Bank.  The purchase price for any such
non-conforming Allstate Finance Loan(s) shall be the par value of the
Loan, together with accrued interest, and may be paid in cash and/or by
delivery to Allstate Finance of one or more Allstate Bank Loans of comparable
dollar amount (with appropriate cash adjustments).  To the extent Allstate Bank purchases Allstate
Finance Loans pursuant to this Section 1.3(c) for cash, appropriate
adjustment shall be made for any compensation paid by Allstate Finance to
Allstate Bank with respect to the origination of the Allstate Finance
Loan.  In the event that Allstate Finance
does not demand purchase of a non-conforming Allstate Finance Loan within
ninety (90) days after Loan origination, any defects in the underwriting or
documentation with respect to such Allstate Finance Loan shall be deemed to be
waived, notwithstanding any language in this Agreement (including Article IV)
to the contrary.

 

Section 1.4             New
Loan Report.  Allstate Bank shall
electronically make available to Allstate Finance a report (a “New Loan Report”)  showing the new Allstate Finance Loans
originated and such other reports as are available to Allstate Bank on its
administration system (“New Allstate
Finance Loans”).  Among other information, the New Loan Report
shall show for each New Allstate Finance Loan: (a) the name of the agent
borrower (“Agent”); (b) the principal amount of the New Loan; (c) the
interest rate on the New Loan; (d) the term in months of the New Allstate
Finance Loan; (e) the monthly payment on the New Allstate Finance Loan.

 

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

 

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Administration
Standards require Allstate Bank to administer the Allstate Finance Loans in
accordance with applicable statutes, codes, ordinances, laws, regulations,
orders, judgments, decrees and agreements, memoranda of understanding,
directives, formal and informal guidance and policies of all federal, state and
local agencies (collectively, “Governmental
Requirements”),
the terms of this Agreement, customary and usual standards of practice of
prudent loan administrators and the standards of performance Allstate Bank
applies to Allstate Bank Loans.  In
connection with such administration and within the terms of this Agreement,
Allstate Bank shall have full power and authority, acting alone, to do or cause
to be done any and all things that it may deem necessary or desirable in
connection with such administration and that are in the best interest and for
the benefit of Allstate Finance, except that without the express written
consent of Allstate Finance, Allstate Bank shall not forgive any interest or
principal amount of any Loan, release any guarantor or any collateral or extend
the term of any Loan.  Without limiting
the generality of the foregoing, Allstate Bank, in the name of Allstate Finance
or any assignee of Allstate Finance, when Allstate Bank believes it appropriate
in its reasonable judgment, may execute and deliver any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge and
all other instruments, with respect to Allstate Finance Loans.  Allstate Finance hereby irrevocably
designates and appoints Allstate Bank as its attorney-in-fact, with full power
of substitution, during the term hereof for purposes of signing the name of
Allstate Finance or any assignee to any and all such instruments.  Notwithstanding such appointment, Allstate
Bank may prepare and deliver to Allstate Finance or any assignee such documents
requiring execution and delivery by Allstate Finance or any assignee as are
necessary or appropriate to enable Allstate Bank to administer Allstate Finance
Loans.  Upon receipt of such documents,
Allstate Finance or its assignee shall execute such documents and deliver them
to Allstate Bank.  Notwithstanding the
foregoing, Allstate Bank shall notify Allstate Finance whenever there is a
material default under any Allstate Finance Loan and obtain Allstate Finance’s
prior express consent before initiating any formal legal proceedings to enforce
Allstate Finance’s remedies.  As part of
its Allstate Finance Loan administration, Allstate Bank shall provide certain
bookkeeping services and financial reports and information, including the
information necessary for Allstate Finance financial reporting purposes.

 

Section 1.6             Remitting
Payments.

 

(a)           Within three business days after
receiving or collecting any payment on an Allstate Finance Loan,  Allstate Bank shall deposit the amount
received or collected, net of any related compensation or expense reimbursement
to which Allstate Bank is entitled (as described in Article II), in a
noninterest-bearing checking account established in Allstate Finance’s name for
such purpose (the “AFC Loan Remittance
Account”).  In the event that
any payment received on an Allstate Finance Loan is returned or dishonored, or
in the event that any such payment must be returned, Allstate Bank shall be
entitled to a refund of the related amount remitted to Allstate Finance and may
withhold from future payments to Allstate Finance the amount of the refund to
which it is entitled. Allstate Bank shall not advance or be obligated to
advance its own funds for principal and interest owing under the Loans.

 

(b)           If Allstate Finance receives directly
any payment on any Allstate Finance Loan, Allstate Finance shall promptly
forward such payment to Allstate Bank for application in accordance with the
terms of this Agreement.

 

Section 1.7             Customer
Service.  Allstate Bank will directly
and/or through third parties provide the staffing necessary to assist Agents
seeking and obtaining Allstate Finance Loans. 
Such functions will include, but may not be limited to:

 

(a)           Staffing a “help desk” with
representatives with the knowledge necessary to assist Agents in completing
applications, overcoming any computer or website problems and answering
associated questions;

 

(b)           After an Allstate Finance Loan is
originated and funded by Allstate Finance, providing the Agent with routine
account information concerning loan terms, outstanding 

 

3

 

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

 

Section 1.8             Collection
of Loan Payments.  Allstate Bank
shall make commercially reasonable efforts in accordance with the
Administration Standards set forth by Allstate Finance to collect all payments
called for under the terms and provisions of Allstate Finance Loans.  However, consistent with the Fee Schedule
attached hereto as Exhibit A (the “Fee
Schedule”), Allstate Bank may waive late payment charges or
prepayment charges.  Unless directed by
Allstate Finance, Allstate Bank shall not institute or continue any litigation
or arbitration proceeding with respect to collection of any payment if it
believes in good faith that enforcing the provision of the instrument pursuant
to which such payment is required is not cost-justified.  If Allstate Bank is directed by Allstate
Finance to institute or continue such litigation or arbitration proceeding,
Allstate Finance agrees to reimburse Allstate Bank all related fees and costs.

 

Section 1.9             Access
to Certain Documentation and Information Regarding Loans; Allstate Bank Regulator
Authority.

 

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

 

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

 

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

 

Section 1.11           Status
of Parties.  Allstate Bank shall
perform its services hereunder as an independent contractor for Allstate
Finance.

 

Section 1.12           Additional
Covenants of Allstate Bank.

 

(a)           Allstate Bank shall, while this
Agreement is in effect, prepare and maintain disaster recovery, business
resumption, and contingency plans appropriate for the nature and scope of the
Program, the activities of Allstate Bank, and the obligations to be performed
by Allstate Bank hereunder and also sufficient to enable Allstate Bank to
promptly resume the performance of its obligations hereunder in the event of a
natural disaster, destruction of Allstate Bank’s facilities or operations,
utility or communication failures, or similar interruption in the operations of
Allstate Bank or the operations of a third party which in turn materially
affect the operations of Allstate Bank. 
Allstate Bank shall make available to Allstate Finance copies of all 

 

4

 

such
disaster recovery, business resumption and contingency plans and shall make
available to Allstate Finance copies of any changes thereto.  Allstate Bank shall periodically test such
disaster recovery, business resumption and contingency plans as may be
appropriate and prudent in light of the nature and scope of the activities and
operations of Allstate Bank and its obligations hereunder and shall promptly
provide Allstate Finance with results of any such tests.

 

(b)           Allstate Bank shall promptly provide
written notice to Allstate Finance of the occurrence of any of the following: (i) any
changes or disruptions in the equipment, facilities, systems, staffing or other
arrangements or contracts with third parties which may in any material respect
have the effect of impairing, disrupting or preventing the timely and full
performance by Allstate Bank of its obligations under this Agreement; and (ii) any
material written claim asserted by an Agent or other party alleging that
Allstate Bank, any third party service provider retained by Allstate Bank or
Allstate Finance has violated any applicable laws or regulations with respect
to the Program.

 

(c)           Allstate Bank shall promptly disclose
to Allstate Finance any breaches in security with respect to the services it
provides to Allstate Finance hereunder or databases or information maintained
by Allstate Bank with respect to Allstate Finance Loans that result in
unauthorized intrusions that may have a material adverse effect on either
Allstate Finance or Agents.  Allstate
Bank shall report to Allstate Finance when any such material intrusion has
occurred, the estimated effect of the intrusion on Allstate Finance or Agents
receiving Allstate Finance Loans and the specific corrective actions taken or
planned to be taken.  In addition,
Allstate Bank agrees that it will not make material changes to its security
procedures and the requirements affecting the performance of its obligations
hereunder which would materially lessen the security of its operations or
materially reduce the confidentiality of data bases and information maintained
with respect to Allstate Finance, Agents, and Loans without the prior written
consent of Allstate Finance.

 

ARTICLE II

 

FEES

 

Section 2.1             Fees
and Expense Reimbursements.  As full
compensation for its marketing, origination and administration activities
hereunder, Allstate Bank shall be entitled to the fees and expense
reimbursements set forth on the Fee Schedule.

 

ARTICLE III

 

REPRESENTATIONS
AND WARRANTIES

 

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

 

(a)           Allstate Bank is or will be a federal
savings bank or other federally chartered depository institution, validly
existing and presently subsisting under the laws of the United States.  Allstate Bank is duly qualified to do
business in each state where required.

 

(b)           Allstate Bank has full power and
authority to administer the Allstate Finance Loans and to execute, deliver and
perform its obligations under this Agreement. 
The execution, delivery and performance of this Agreement have been duly
authorized by all necessary action on behalf of Allstate Bank.  Allstate Bank has duly executed and delivered
this Agreement, and this Agreement constitutes a legal, valid and binding
obligation of Allstate Bank, enforceable against Allstate Bank in accordance
with its terms.  Allstate Bank will
administer the 

 

5

 

Allstate
Finance Loans in full compliance with, and will otherwise comply with, all
Governmental Requirements.

 

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

 

(d)           As of the date of this Agreement, no
litigation is pending or, to the best of Allstate Bank’s knowledge, threatened,
against Allstate Bank that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of Allstate Bank to
administer Allstate Finance Loans or to perform any of its obligations under
this Agreement in accordance with the terms hereof.

 

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

 

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

 

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

 

(a)           Allstate Finance is a limited
liability company, duly organized, validly existing and presently subsisting
under the laws of the State of Delaware. Allstate Finance is duly qualified to
do business in each state where required.

 

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

 

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

 

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

 

(e)           Allstate Finance is not subject to
any order, memorandum of understanding or other regulatory directive that might
impair its ability to participate in the Program or materially and adversely
affect its financial condition.

 

6

 

(f)            As of the date of this Agreement, no
litigation is pending or, to the best of Allstate Finance’s knowledge,
threatened, against Allstate Finance that would materially and adversely affect
the execution, delivery or enforceability of this Agreement or its ability to
perform any of its other obligations under this Agreement in accordance with
the terms hereof.

 

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

 

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

 

ARTICLE IV

 

INDEMNIFICATION

 

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

 

Section 4.2             Indemnification
by Allstate Finance.  Allstate
Finance hereby indemnifies and agrees to defend and hold harmless Allstate
Bank, its agents, servants, directors, officers, employees, successors, assigns
and affiliates from and against all Losses in connection with any breach of any
representation, warranty, covenant, agreement or obligation of Allstate Finance
contained in this Agreement.

 

Section 4.3             Claims
for Indemnification.  Whenever any
claim shall arise for indemnification under this Article IV, the party
seeking indemnification (the “Indemnified
Party”) shall notify
the party from whom indemnification is sought (the “Indemnifying Party”) of the claim and, when known, the facts
constituting the basis for such claim (an “Indemnification
Claim Notice”).  In the event of any such claim for
indemnification hereunder resulting from or in connection with any claim or
legal proceedings by a third party, the Indemnification Claim Notice shall
specify, if known, the amount or an estimate of the amount of the liability
arising therefrom.  The Indemnified Party
shall not settle or compromise any claim by a third party for which it is
entitled to indemnification hereunder without the prior written consent of the
Indemnifying Party, which consent shall not be unreasonably withheld,
conditioned or delayed; provided, however, that if a legal proceeding shall
have been instituted against the Indemnified Party and the Indemnifying Party
shall not have taken control of such suit after notification thereof as
provided in Section 4.4 of this Agreement, the Indemnified Party shall
have the right to settle or compromise such claim upon giving notice to the
Indemnifying Party, as provided in Section 4.4.

 

Section 4.4             Defense
by the Indemnifying Party.  In
connection with any claim which may give rise to indemnity hereunder resulting
from or arising out of any third party claim or legal proceeding, the
Indemnifying Party, at its sole cost and expense may, upon written notice to
the Indemnified Party, assume the defense of any such claim or legal proceeding
if the Indemnifying Party acknowledges to the Indemnified Party in writing the
obligation of the Indemnifying Party to indemnify the Indemnified Party with
respect to all elements of such claim. 
If the Indemnifying Party assumes the 

 

7

 

defense
of any such claim or legal proceeding, the Indemnifying Party shall select
counsel acceptable to the Indemnified Party in the Indemnified Party’s sole
determination to conduct the defense of such claims or legal proceeding and at
the sole cost and expense of the Indemnifying Party shall take all steps
necessary in the defense or settlement thereof. 
The Indemnifying Party shall not consent to a settlement of, or the
entry of any judgment arising from, any such claim or legal proceeding, without
the prior written consent of the Indemnified Party, which consent shall not be
unreasonably withheld, conditioned or delayed. 
The Indemnified Party shall be entitled to participate in (but not
control) the defense of any such action, with its own counsel and at its own
expense.  If the Indemnifying Party does
not assume the defense of any such claim or litigation resulting therefrom
within thirty (30) days after the date of the Indemnification Claim Notice,
then until the Indemnifying Party assumes the defense of such claim: the
Indemnified Party may defend against such claim or litigation in such manner as
it may deem appropriate, including, but not limited to, settling such claim or
litigation, after giving notice of the same to the Indemnifying Party, on such
terms as the Indemnified Party may reasonably deem appropriate, and all costs
of litigation incurred by the Indemnified Party shall be included in the
calculation of the Indemnified Party’s Loss; and the Indemnifying Party shall
be entitled to participate in (but not control) the defense of such action,
with its counsel and at its own expense. 
If the Indemnifying Party thereafter seeks to question the manner in
which the Indemnified Party defended such third party claim or the amount or
nature of any such settlement, the Indemnifying Party shall have the burden to
prove by a preponderance of the evidence that the Indemnified Party did not
defend or settle such third party claim in a reasonably prudent manner.

 

Section 4.5             Payment
of Indemnification Obligation.  All
indemnification by the Indemnifying Party hereunder shall be effected by a
payment in the amount of the indemnification liability promptly upon the
determination thereof.

 

Section 4.6             Survival
of Indemnification.  The rights of
indemnification set forth in this Article IV shall survive the termination
of this Agreement.

 

ARTICLE V

 

SCOPE; TERM
AND TERMINATION

 

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

 

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

 

Section 5.3             Early
Termination.  Either party may
terminate this Agreement before the then-scheduled expiration date by giving
written or electronic notice (a “Termination
Notice”) at least one hundred eighty (180) days in advance of the
desired termination date.  In the event
that Allstate Bank is directed by any Allstate Bank Regulator to terminate its
participation in the Program, the parties will attempt to comply with such
direction as soon as reasonably practicable. 
Either party may terminate the right and obligation of Allstate Bank to
facilitate the origination of Allstate Finance Loans immediately upon delivery
of written or electronic notice to the other party, provided that no such
notice shall affect Allstate Finance Loans contemplated by the latest
pre-termination Funding Notice provided to Allstate Finance.

 

Section 5.4             Consequences
of Termination.  In the event of
non-renewal of this Agreement or delivery by either party of a Termination
Notice, the parties will use commercially 

 

8

 

reasonable
efforts to effect the transfer of the administration of Allstate Finance Loans
to Allstate Finance or its designee by the expiration or termination date.  Until such date, Allstate Bank shall continue
to originate and service Allstate Finance Loans and shall be entitled to the
compensation therefor provided hereunder.

 

ARTICLE VI

 

CONFIDENTIALITY

 

Section 6.1             In
connection with this Agreement, each party will have access to information concerning
the other party.  Each party acknowledges
and agrees that all tangible and intangible proprietary information revealed,
obtained from the other party (the “Protected
Party”) in the course
of or in connection with this Agreement (“Confidential
Information”)
shall be considered as confidential and proprietary information of the
Protected Party and shall not be disclosed to any third party without the prior
written consent of the Protected Party.

 

Section 6.2             The
Protected Party’s Confidential Information shall be used by the other party
(the “Obligated Party”) only for the purpose of participating in
the Program and exercising its rights, duties and remedies under this Agreement
or exercising its rights, duties and remedies in connection with an Allstate
Finance Loan.  The Obligated Party shall
not accumulate in any way or make use of Confidential Information for any other
purpose.  The Obligated Party shall
ensure that only its employees, officers, directors, authorized agents or
contractors who need to know Confidential Information to perform services or
offer or monitor the Program, or parties performing due diligence in connection
with a potential transaction involving the Obligated Party, will receive
Confidential Information and that such persons agree to be bound by the
provisions of this Article VI.

 

Section 6.3             The
obligations set forth herein with respect to Confidential Information shall not
apply to Confidential Information that: (a) an Obligated Party or its
personnel already know at the time it is disclosed; (b) is publicly known
without breach of this Agreement; (c) the Obligated Party received from a
third party authorized to disclose it without restriction; or (d) the
Obligated Party, its agents or contractors developed independently without use
of the Confidential Information of the Protected Party.  In addition, an Obligated Party may disclose
Confidential Information if and to the extent required by law, regulation or
valid court or governmental agency order, provided that the Obligated Party
gives notice to the Protected Party as soon as may be practicable in order to
give the Protected Party the opportunity to seek a protective order.  Finally, an Obligated Party may disclose
Confidential Information as reasonably necessary in connection with any lawsuit
or arbitration proceeding between the Obligated Party and the Protected Party.

 

Section 6.4             The
parties agree that any unauthorized use or disclosure of Confidential
Information may cause immediate and irreparable harm to the Protected Party for
which money damages may not constitute an adequate remedy.  Accordingly, the Obligated Party agrees that
injunctive relief may be warranted in addition to any other remedies the
Protected Party may have.  In addition,
each Obligated Party agrees promptly to advise the Protected Party in writing
of any unauthorized misappropriation, disclosure or use by any person of
Confidential Information which may come to its attention and to take all steps
at its own expense reasonably requested by the Protected Party to limit, stop
or otherwise remedy such misappropriation, disclosure or use.

 

Section 6.5             Each
party further agrees that, notwithstanding Section 6.3, the existence and
terms of this Agreement shall constitute “Confidential Information” of the other
party.

 

Section 6.6             The
obligations of this Article VI shall survive the termination of this
Agreement.

 

9

 

ARTICLE VII

 

GENERAL

 

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

 

(a)             if to Allstate Bank:

 

Allstate
Bank

3100
Sanders Road

Northbrook, IL 60062

Attention: President

 

(b)             if to Allstate Finance:

 

Allstate
Finance Company, LLC

3100
Sanders Road

Northbrook, IL 60062

Attention: Managing Officer

 

Section 7.2             Regulatory
Concerns; Litigation Threats.  Except
to the extent prohibited by Governmental Requirements (after reasonable efforts
to obtain a waiver thereof if practicable), Allstate Finance and Allstate Bank
shall each provide prompt notice to the other party upon receipt of: (a) any
verbal or written contact from any regulatory authority regarding the Program;
or (b) any legal process or verbal or written communication from any
attorney or individual concerning a threatened legal proceeding regarding the
Program.

 

Section 7.3             Governing
Law.  This Agreement shall be
governed by federal law and, to the extent state law applies, by the
substantive law of the State of Illinois, without giving effect to the conflict
of law principles thereof.

 

Section 7.4             No
Waiver.  No failure or delay on the
part of either party to exercise any right, power or remedy shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, power or
remedy preclude any other or further exercise thereof or of any other right,
power, or remedy.

 

Section 7.5             Entire
Agreement; Amendment; Assignment. 
This Agreement, including its exhibits, sets forth the entire
understanding of the parties relating to the subject matter hereof and
supersedes all prior oral or written understandings relating hereto.  This Agreement, including its exhibits, shall
only be modified or supplemented by a written amendment signed by both
parties.  This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, including without limitation any successor to
a party hereto by merger, consolidation or otherwise by operation of law.

 

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

 

10

 

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

 

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

 

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

 

IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.

 

	
   

  	
  ALLSTATE FINANCE COMPANY, LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John C. Pintozzi

  
	
   

  	
   

  	
  John
  C. Pintozzi

  
	
   

  	
  Title:

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  10/28/2010

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  ALLSTATE BANK

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Nick Georgakopoulos

  
	
   

  	
   

  	
  Nick
  Georgakopoulos

  
	
   

  	
  Title:
  

  	
  President

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
  10/27/2010

  

 

11

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