Document:

QuickLinks
 -- Click here to rapidly navigate through this document

 
 

Exhibit 10.22    
    

 
 

FORM OF CONSULTING AGREEMENT    
    

        This CONSULTING AGREEMENT (this "Agreement"), is made and entered into as of August    , 2004, by and between Kite Realty Group, L.P., a Delaware
limited partnership (the "OP"), and Paul W. Kite ("Paul Kite"). 

        WHEREAS,
the OP is the operating partnership of Kite Realty Group Trust, a Maryland real estate investment trust ("KRG", and together with its direct and indirect subsidiaries, including
the OP, the "REIT"); 

        WHEREAS,
Paul Kite is the son of Alvin Kite, the Chairman of KRG, and the brother of John Kite, the Chief Executive Officer and President of KRG; 

        WHEREAS
the REIT is a full service real estate company focused primarily on the development, construction, acquisition, ownership and operation of high quality neighborhood and community
shopping centers in selected growth markets in the United States; 

        WHEREAS,
the OP and KRG are engaging in various related transactions pursuant to which, among other things, (i) the OP is acquiring interests in various entities that own or lease
real estate properties in which certain persons affiliated with KRG have interests, including Paul Kite (the "Property Owning Entities"), (ii) KRG is acquiring interests in certain service
businesses currently owned by persons affiliated with KRG, including Paul Kite (the "Service Companies"; together with the Property Owning Entities, the "Predecessor Business"), and (iii) KRG
will effect an initial public offering of its common shares and contribute the proceeds therefrom for a like number of units of partnership interest in the OP (the "IPO," and together with the other
transactions described above, the "IPO Transactions"); 

        WHEREAS,
upon completion of the IPO Transactions, Paul Kite will own common shares of KRG and units of limited partnership in the OP representing an approximate 8% beneficial interest in
KRG (on a fully diluted basis); 

        WHEREAS,
Paul Kite was actively involved with the Predecessor Business, assisting with the development, construction, acquisition, ownership and operation of real estate properties in
the United States; 

        WHEREAS,
following the IPO Transactions, the OP desires to retain Paul Kite as a consultant to provide to the REIT the services described below, and Paul Kite desires to provide such
services, on the terms and subject to the conditions set forth in this Agreement; and 

        WHEREAS,
the Board of Trustees of KRG, general partner of the OP, has authorized the execution, delivery and performance of this Agreement by the OP. 

        NOW,
THEREFORE, in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereto agree as follows: 

1.     TERM; TERMINATION  

        (a)   Term. The term of this Agreement shall commence effective as of the date of this Agreement (as set forth in the
introductory paragraph hereof) and shall expire on December 31, 2007, unless earlier terminated in accordance with this Section 1. 

        (b)   Automatic Termination. This Agreement shall terminate automatically upon the death of Paul Kite. 

        (c)   Termination by the OP. The OP shall have the right, in its sole and absolute discretion, to terminate this Agreement upon
60 days' notice to Paul Kite. If the OP terminates this Agreement pursuant to this Section 1(c), the OP shall pay to Paul Kite, no later than the effective date of such 

 

termination,
an amount equal to the cash compensation that would otherwise be payable to Paul Kite (and not previously paid) under Section 3(a) of this Agreement through the end of the
then-current term. 

        (d)   Termination as the Result of a Breach. Either party shall have the right to terminate this Agreement upon written notice
to the other party if the breaching party is in material breach of its obligations with respect to this Agreement, and such breach is not resolved to the satisfaction of the non-breaching
party within 30 days after receipt of notice of the breach from the non-breaching party. 

        (e)   Effects of Termination. Upon the termination of this Agreement as provided in this Section 1, this Agreement shall
forthwith become void and have no effect, without any liability or obligation on the part of either party or any of their respective representatives,  exceptwith respect to Sections 1(c) (in the case of
termination of this Agreement by the OP pursuant to Section 1(c) hereof only), 1(e), 3(a),
3(b), 5, 6, 7(a), 7(c) and 7(f), which shall survive any termination or expiration of this Agreement, and except to the extent that such termination results from the willful and material breach by a
party of this Agreement. All other provisions of this Agreement shall survive termination solely for the purpose of establishing the proper interpretation of the surviving provisions hereof. 

        (f)    OP Approval. Notwithstanding anything to the contrary in this Agreement, any determination by the OP to terminate this
Agreement in accordance with this Section 1 shall not be effective unless approved by a majority of the "independent" members of the Board of Trustees of KRG (as defined in the KRG's Amended
and Restated Bylaws), as general partner of the OP. 

2.     CONSULTING SERVICES  

        (a)   Consulting Services. During the term of this Agreement, Paul Kite agrees to serve as a consultant to the OP by assisting
the OP in identifying possible real estate retail or commercial development, construction, acquisition and/or operation projects that are consistent with the written guidelines regarding the type and
nature of development, construction, acquisition and/or operation projects to be pursued by the REIT, as established from time to time by the REIT (the "Guidelines"), and communicated to Paul Kite in
writing by the OP Representative (as defined below) (each, a "Project Proposal"). Paul Kite agrees to perform such consulting services on behalf of the OP at all times using good business ethics and
in a professional manner, it being understood that Paul Kite's services hereunder are not intended to be exclusive or to constitute his full time business. 

        (b)   Written Notice of Project Proposal. During the term of this Agreement, Paul Kite shall notify the OP in writing (each, a
"Written Notification") of any Project Proposal he identifies and determines is potentially worthy of further pursuit, as soon as practicable after making such determination, and provide such
information and data in his possession regarding each such Project Proposal as may be reasonably requested by the OP. Each Written Notification shall be submitted to Thomas K. McGowan (with a copy to
Daniel R. Sink, as Chief Financial Officer of KRG), or such other person as may be designated in writing by the OP to Paul Kite for such purpose (the "OP Representative"). 

        (c)   Evaluation of Project Proposal. Within 10 business days of receipt of a Written Notification (the "Response Period"), the
OP Representative shall notify Paul Kite in writing whether the REIT intends to pursue the Project Proposal specified in such Written Notification (a "Response Notice"); provided, however, that the OP
has the right to extend the Response Period prior to expiration of the initial 10 business-day period for up to an additional 10 business days upon written notice to Paul Kite (and
references to the Response Period herein shall be deemed to include the corresponding additional period extended by the OP, if any) to the extent necessary to permit the REIT to complete its analysis
of the Project Proposal specified in such Written Notification. If the OP Representative delivers a Response Notice prior to the expiration of the Response Period specifying that the OP intends to
pursue the Project Proposal specified in the Written Notification (a "Positive Response Notice"), Paul Kite shall not be permitted to pursue such Project Proposal (except as otherwise provided in 

2

 

Section 2(d)).
If the OP Representative delivers a Response Notice specifying that the OP does not intend to pursue the Project Proposal specified in the Written Notification (a "Negative
Response Notice") or Paul Kite does not receive a Response Notice prior to the expiration of the Response Period, the REIT shall be deemed to have determined not to pursue the Project Proposal
specified in such Written Notification, and Paul Kite shall be permitted to pursue such Project Proposal pursuant to Section 2(d) below. For purposes of this Agreement, a "business day" means
the period from 9:00 am to 5:00 pm on any weekday that is not a banking holiday in Indianapolis, Indiana. 

        (d)   Outside Activities. The OP acknowledges that, during the term of this Agreement, Paul Kite intends to engage in certain
real estate activities and other activities, and have other business interests, outside the scope of the performance of his consulting services pursuant to this Agreement (whether through an entity
controlled by him or otherwise), any of which may be competitive with the business of the REIT and its affiliates (except as otherwise restricted by this Agreement, including the restrictions on the
pursuit of Project Proposals set forth in Section 2(c) hereof and the second sentence of this Section 2(d)). The parties hereby acknowledge and agree that, during the term of this
Agreement, Paul Kite shall not directly or indirectly (whether individually or as a principal, partner, member, director, trustee, officer, employee or consultant of any other Person (as defined
below)) pursue any Project Proposal unless: (i) Paul Kite has submitted a Written Notification with respect to such Project Proposal in accordance with Section 2(b) above and either
(v) the OP Representative has delivered a Negative Response Notice, (w) the OP Representative has delivered a Positive Response Notice but the OP fails to enter into a purchase contract
or other similar agreement with respect to such Project Proposal within 90 days after receipt of such Written Notification (unless, prior to the expiration of such 90-day period,
the OP Representative notifies Paul Kite in writing that the REIT is continuing to pursue such Project Proposal), (x) the OP Representative has delivered a Positive Notice and the OP has
entered into a purchase contract or other similar agreement with respect to such Project Proposal, but such purchase contract or other similar agreement would otherwise expire within 10 business days
and the REIT has determined not to pursue such Project Proposal (and the REIT shall notify Paul Kite on or before such date of its determination not to pursue such Project Proposal and offer Paul Kite
the opportunity to assume all of the contractual rights and obligations of the REIT under such purchase contract or similar agreement and all related agreement(s) subject to reimbursement of the REIT
of any earnest money paid to date), (y) the OP Representative otherwise notifies Paul Kite in writing that it has abandoned the Project Proposal and that Paul Kite is permitted to pursue such
Project Proposal pursuant to this Section 2(d), or (z) Paul Kite does not receive any Response Notice prior to the expiration of the Response Period, or (ii) the OP Representative
has previously established in writing to Paul Kite (expressly referencing this provision) that such Project Proposal is not of a type the REIT intends to pursue (and such writing has not otherwise
been modified or revoked by the OP Representative by written notice to Paul Kite). Notwithstanding anything to the contrary herein, to the extent Paul Kite is permitted to pursue real estate
development, construction, acquisition and/or operation projects pursuant to this Section 2(d), the parties acknowledge and agree that (A) Paul Kite shall be prohibited from using any
resources of the REIT, including, without limitation, office space, equipment or staff assistance with respect to any such projects and (B) neither the REIT nor any of its affiliates shall have
any right, by virtue of this Agreement, to share or participate in such projects or Paul Kite's other activities or business interests outside the scope of the performance of his consulting services
pursuant to this Agreement as referenced in the first sentence of this Section 2(d), or to the income or proceeds derived therefrom. For purposes of this Agreement, "Person" means any
individual, firm, corporation, partnership, company, limited liability company, trust, joint venture, association or other entity. 

3.     COMPENSATION; USE OF RESOURCES  

        (a)   Compensation for Services. During the term of this Agreement, Paul Kite shall receive cash compensation in the form of a
consulting fee of $150,000 per year, payable monthly at the rate of 

3

 

$12,500
per month, on the first day of each month that this Agreement is in effect (with the first such payment payable on the date of this Agreement in the amount of $            , covering the
period from the date of this Agreement through the end of the month in which this Agreement is entered into). 

        (b)   Reimbursement of Expenses. The OP shall reimburse Paul Kite for all necessary and reasonable
"out-of-pocket" business expenses incurred by Paul Kite in connection with the performance of his duties and responsibilities under this Agreement, subject to the travel and
expense policies of the REIT established from time to time (including any pre-approval policies established by the REIT), upon presentation by Paul Kite to the OP Representative of an
itemized accounting of such expenses with reasonable supporting data. 

        (c)   Use of Resources. During the term of this Agreement, the REIT shall provide Paul Kite with reasonable office space at the
OP's headquarters in Indianapolis, Indiana, equipment appropriate to his duties and responsibilities and staff assistance as Paul Kite may reasonably request to carry out his duties and
responsibilities to the OP under this Agreement; provided, however, such request shall be granted or denied by the OP Representative in his sole and absolute discretion. 

4.     INDEPENDENT STATUS; NO AUTHORITY TO ACT AS AGENT  

        (a)   Independent Status. Paul Kite shall be acting hereunder as an independent consultant and not as an employee of the REIT,
and the terms and conditions of this Agreement shall be interpreted and construed accordingly. In no event shall this Agreement be construed as establishing a partnership or joint venture or similar
relationship between the parties hereto. Although the REIT may specify the results it desires Paul Kite to achieve during the term of this Agreement and may control and direct him in that regard, the
REIT shall not exercise or have the power to exercise such level of control over Paul Kite as would indicate or establish that a relationship of employer and employee exists between the REIT and Paul
Kite. Subject to the terms of this Agreement, Paul Kite shall have full and complete control over the manner and method of rendering the consulting services hereunder. As an independent consultant,
Paul Kite is responsible for filing such tax returns and paying such self-employment taxes as may be required by law or regulations. Paul Kite shall be liable for his own debts,
obligations, acts and omissions, including the payment of all self-employment, Social Security and other taxes and benefits applicable to him. Except to the extent expressly set forth in
this Agreement, Paul Kite shall not be subject to any policies solely applicable to employees of the REIT, and shall not be eligible for any employee benefit plan offered by the REIT. In the event
that this independent consultant relationship is determined by tax authorities to constitute an employment relationship, Paul Kite hereby waives, for the period prior to the date such determination
becomes final, any and all claims to coverage under any of the pension, profit-sharing, health, dental, welfare or similar type plans of the REIT which are generally limited to the employees of the
REIT, unless otherwise agreed by the OP Representative in writing and approved by a majority of the "independent" members of the Board of Trustees of KRG (as defined in KRG's Amended and Restated
Bylaws), as general partner of the OP. 

        (b)   No Authority to Act as Agent. Paul Kite shall not have any authority to act as an agent of the REIT, except on authority
specifically so delegated in a prior writing signed by a majority of the "independent" members of the Board of Trustees of KRG (as defined in KRG's Amended and Restated Bylaws), as general partner of
the OP, and Paul Kite shall not represent to the contrary to any Person. Under no circumstances shall Paul Kite have or claim to have power of decision hereunder in any activity on behalf of the REIT,
nor shall Paul Kite have the power or authority hereunder to obligate, bind or commit the REIT in any respect. Paul Kite shall not (i) have the authority to hire, terminate or supervise
personnel on behalf of the REIT or otherwise direct the work of any employee of the REIT, (ii) make any management decisions on behalf of the REIT or (iii) undertake to commit the REIT
to any course of action in relation to third Persons. Paul Kite further agrees that he shall not represent himself as an employee or principal of the REIT. 

4

 

5.     CONFIDENTIAL INFORMATION; RETURN OF DOCUMENTS; NONSOLICITATION  

        (a)   Existing Confidential Information. All information regarding the activities or projects of the Predecessor Business
(including confidential information of others that came into the possession of the REIT) (including, but not limited to, information regarding evaluations of or plans relating to targeted geographic
regions), learned by Paul Kite during his tenure with the Predecessor Business shall be deemed the confidential and proprietary information of the REIT ("Existing Confidential Information"). Subject
to the exceptions set forth below, the Existing Confidential Information shall be used by Paul Kite solely in connection with the performance of his duties and responsibilities hereunder and shall be
kept confidential by Paul Kite. The foregoing restrictions on disclosure and use shall not apply to any portion of the Existing Confidential Information (i) that was or becomes generally
available to the public other than as a result of unauthorized disclosure by Paul Kite, (ii) that is independently developed by or for Paul Kite without reference to or use of the Existing
Confidential Information, (iii) that is disclosed pursuant to a requirement of law, a court or a government agency, (iv) that is information which Paul Kite holds now as personal
knowledge apart from reference to any written documents. Paul Kite hereby assigns to the OP all right, title and interest to trade secrets, copyrights and other intellectual property rights relating
to the Predecessor Business developed by him alone or in conjunction with others at any time while involved with the Predecessor Business. 

        (b)   REIT Confidential Information. All information regarding the REIT or its activities or projects provided to Paul Kite by
or on behalf of the REIT, or any of its employees or representatives, in connection with the performance by Paul Kite of his duties and responsibilities under this Agreement and all confidential
information, knowledge or data relating to the REIT or the REIT's respective businesses and investments (including confidential information of others that has come into the possession of the REIT),
learned by Paul Kite heretofore or hereafter directly or indirectly from the REIT shall be deemed the confidential and proprietary information of the REIT ("REIT Confidential Information"). Subject to
the exceptions set forth below, the REIT Confidential Information shall be used by Paul Kite solely in connection with the performance of his duties and responsibilities hereunder and shall be kept
confidential by Paul Kite. The foregoing restrictions on disclosure and use shall not apply to any portion of the REIT Confidential Information (i) that was or becomes generally available to
the public other than as a result of unauthorized disclosure by Paul Kite, (ii) that was or becomes available to Paul Kite on a nonconfidential basis from a source other than the REIT without
restriction and without breach of an agreement with the REIT, (iii) that is independently developed by or for Paul Kite without reference to or use of the REIT Confidential Information,
(iv) that is disclosed pursuant to a requirement of law, a court or a government agency, (v) that is the subject of prior written approval of use or disclosure thereof by the REIT or
(vi) that specifically relates to any Project Proposal that Paul Kite is permitted to pursue on his own pursuant to Section 2(d) hereof. 

        (c)   Return of Documents; Rights to Trade Secrets. All memoranda, notes, lists, records, property and any other tangible
product and documents (and all copies thereof) made, produced or compiled by Paul Kite or made available to Paul Kite concerning the REIT, including any Project Proposal, shall be the REIT's property
and shall be delivered to the REIT at any time on request; provided, however, that Paul Kite may retain any documents specifically relating to any Project Proposal that he is permitted to pursue on
his own pursuant to Section 2(d) hereof. Paul Kite hereby assigns to the OP all right, title and interest in and to trade secrets, copyrights and other intellectual property rights relating to
the REIT's business developed by him alone or in conjunction with others at any time while retained as a consultant by the OP. 

        (d)   Nonsolicitation. Notwithstanding anything to the contrary herein, during the term of this Agreement and for period of one
year after the termination of this Agreement, except to the extent otherwise expressly permitted in writing by the OP Representative, Paul Kite shall not (i) directly or indirectly solicit,
induce or encourage any employee to terminate his or her employment with the REIT, and Paul Kite shall not initiate discussions with any such individual for any such purpose or authorize 

5

 

or
knowingly cooperate with the taking of any such actions by any other Person, or (ii) hire (on behalf of himself or any other Person) any employee who has voluntarily left the employment of
the REIT (or any predecessor) within one year of the termination of such employee's employment with the REIT. 

6.     REPRESENTATIONS  

        Each party represents and warrants to the other that such party has the capacity and power to enter into this Agreement and to perform its obligations hereunder,
that such party has duly executed and delivered this Agreement and that this Agreement constitutes a valid, binding and enforceable obligation of such party. Further, Paul Kite represents and warrants
to the OP that he is not subject to any other restraints of any kind which would impair or encumber his ability to perform the duties and obligations required of him hereunder. 

7.     MISCELLANEOUS  

        (a)   Notices. All notices, requests, demands, and other communications hereunder shall be in writing and shall be deemed to
have been delivered (i) when physically received by personal delivery (which shall include the confirmed receipt of a telecopied facsimile transmission) as long as receipt occurs during a
business day, otherwise the next business day, (ii) three business days after being deposited in the United States certified or registered mail, return receipt requested, postage prepaid, or
(iii) one business day after being deposited with a nationally known commercial courier service providing next day delivery service (such as Federal Express), to the following addresses: 

To
the OP or the OP Representative: 

Kite
Realty Group, L.P.

c/o Kite Realty Group Trust

30 S. Meridian Street

Suite 1100

Indianapolis, IN 46204

Phone: (317)-577-5600

Fax: (317)-577-5605

Attention: Thomas K. McGowan 

with
a copy (which shall not constitute notice) to: 

Daniel
R. Sink

Chief Financial Officer

c/o Kite Realty Group Trust

30 S. Meridian Street

Suite 1100

Indianapolis, IN 46204

Phone: (317)-577-5600

Fax: (317)-577-5605 

To
Paul Kite: 

Paul
W. Kite

                                         
                               

                                         
                               

Indianapolis, IN                 

Phone:
                                         
       

Fax:
                                         
        

        (b)   Assignment. Neither this Agreement nor any rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other party (other than, in the case of the OP, an assignment to a wholly owned direct or indirect subsidiary of the OP); any 

6

 

purported
assignment by either party in violation hereof shall be null and void. Subject to the foregoing sentence, this Agreement and all of the provisions hereof shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted assigns. 

        (c)   Specific Performance. The parties agree that irreparable damage would occur if any provision of this Agreement was not
performed in accordance with its specific terms or was otherwise breached. It is accordingly agreed that the parties shall be entitled to an injunction or injunctions to prevent breaches of this
Agreement and to enforce specifically the terms and provisions hereof exclusively in any federal or state court located in the State of Indiana (as to which the parties agree to submit to jurisdiction
for the purposes of such action), this being in addition to any other remedy to which they are entitled at law or in equity. 

        (d)   Use of Trade Name. During the term of this Agreement, Paul Kite agrees that he will not retain or use in connection with
any outside business activities in which he is involved (directly or indirectly) (i) any trade name, trademark or other proprietary business designation used or owned in connection with the
business of the REIT or substantially similar to any such name, mark or designation used or owned in connection with the REIT, or (ii) any trade name, trademark or other proprietary business
designation that contains the word "Kite" (with the exception of his activities as a shareholder of the existing Kite, Inc., Indiana corporation and use of "Kite" that is immediately preceded
by "Paul" or "Paul W"; provided that, during and after the term of this Agreement, any use by Paul Kite of any trade name, trademark or other proprietary business designation that contains the word
"Kite" shall not be misleading in any material respect as to the extent to which Paul Kite or any of his business activities are affiliated with the REIT). 

        (e)   Amendment. This Agreement may not be altered, modified or amended except by written instrument signed by the parties
hereto; provided that, in the case of the OP, any such alteration, modification or amendment must be approved by a majority of the "independent" members of the Board of Trustees of KRG (as defined in
KRG's Amended and Restated Bylaws), as general partner of the OP. 

        (f)    Governing Law. This Agreement shall be governed by the laws of the State of Indiana (regardless of the laws that might
otherwise govern under applicable Indiana conflict of laws principles) as to all matters, including but not limited to matters of validity, construction, effect, performance and remedies. 

        (g)   Withholding. The OP shall be entitled to withhold from any payments or deemed payments any amount of withholding required
by law. No other taxes, fees, impositions, duties or other charges or offsets of any kind shall be deducted or withheld from amounts payable hereunder, unless otherwise required by law. 

        (h)   Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties and their respective
successors, permitted assigns, heirs, executors and legal representatives 

        (i)    Counterparts. This Agreement may be executed in the original or by telecopy in two or more counterparts, each of which
shall be deemed an original, but all of which together shall constitute one and the same instrument. 

        (j)    Interpretation. The article and section headings contained in this Agreement are solely for the purpose of reference, are
not part of the agreement of the parties and shall not in any way affect the meaning or interpretation of this Agreement. 

        (k)   Severability. If any term or other provision of this Agreement is invalid, illegal or incapable of being enforced by any
rule or law, or public policy, all other conditions and provisions of this Agreement shall nevertheless remain in full force and effect so long as the economic or legal substance 

7

 

of
the transactions contemplated hereby is not affected in any manner materially adverse to either party. 

        (l)    Waiver. Either party may extend the time for performance of any of the obligations or acts of the other party or waive
compliance with any of the agreements or conditions contained in this Agreement. Any agreement on the part of a party to any such extension or waiver shall be valid only if set forth in an instrument
in writing signed on behalf of such party. The failure of either party to this Agreement to assert any of its rights under this Agreement or otherwise shall not constitute a waiver of such rights. 

        (m)  Entire Agreement. This Agreement embodies the entire agreement and understanding of the parties hereto in respect of the
subject matter hereof, and supersedes all prior agreements and understandings between the parties with respect to the transactions contemplated hereby. 

[Remainder
of page intentionally left blank.] 

8

 

        IN
WITNESS WHEREOF, the parties have executed and delivered this Agreement on the day and year first hereinabove written. 

	 	 	KITE REALTY GROUP, L.P.
	

 	
 	

By:	
 	

KITE REALTY GROUP TRUST,

Its General Partner
	

 	
 	

 	
 	

By:	
 	

 
	 	 	 	 	 	 	

	 	 	 	 	Name:	 	 
	 	 	 	 	 	 	

	 	 	 	 	Title:	 	 
	 	 	 	 	 	 	

	

 	
 	

    
 Paul W. Kite

9

QuickLinks

Exhibit 10.22

FORM OF CONSULTING AGREEMENTEXHIBIT 10.2  

 AUTOMATIC

ANNUITY REINSURANCE AGREEMENT  

between  

ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK

Hauppauge, New York

("CEDANT")  

and  

ALLSTATE LIFE INSURANCE COMPANY

Northbrook, Illinois

("REINSURER")  

Effective: January 2, 2004  

 

Table of Contents  

	ARTICLE I—DEFINITIONS	 	3
	ARTICLE II—BASIS OF REINSURANCE	 	3
	ARTICLE III—PERIOD OF COVERAGE AND TERMINATION	 	3
	ARTICLE IV—CLAIMS	 	4
	ARTICLE V—PREMIUMS	 	4
	ARTICLE VI—SETTLEMENT AND REPORTING	 	4
	ARTICLE VII—DAC TAX REIMBURSEMENT	 	5
	ARTICLE VIII—OVERSIGHTS	 	5
	ARTICLE IX—RECAPTURE	 	5
	ARTICLE X—INSPECTION OF RECORDS	 	5
	ARTICLE XI—INSOLVENCY	 	6
	ARTICLE XII—ARBITRATION	 	6
	ARTICLE XIII—PARTIES TO AGREEMENT	 	6
	ARTICLE XIV—OFFSET	 	7
	ARTICLE XV—DAC Tax—Section 1.848-2(g)(8) Election	 	7
	ARTICLE XVI—ENTIRE AGREEMENT	 	8
	ARTICLE XVII—CONFIDENTIAL INFORMATION	 	8
	ARTICLE XVIII—SEVERABILITY	 	8
	ARTICLE XIX—SURVIVAL	 	8
	ARTICLE XX—CALENDAR DAYS	 	8
	EXHIBIT A	 	10

2

   ARTICLE I—DEFINITIONS  

	1.
	"Effective
Date" shall mean the date and time on which this Agreement takes effect, which shall be January 2, 2004 at 12:01 am.

	2.
	"Policy"
or "Policies" shall mean the annuity contracts described in Exhibit A.

	3.
	"Rider"
or "Riders" shall mean the riders described in Exhibit A covered by this Agreement. 

ARTICLE II—BASIS OF REINSURANCE  

	1.
	CEDANT
will cede and REINSURER will reinsure the obligations under the Riders described in Exhibit A.

	2.
	One
hundred percent (100%) of the covered obligations under the riders described in Exhibit A, will be reinsured with REINSURER.

	3.
	This
reinsurance will be ceded to REINSURER on a 100% automatic coinsurance basis.

	4.
	In
no event will reinsurance under this Agreement be in force unless the corresponding Rider issued by CEDANT is in force. 

ARTICLE III—PERIOD OF COVERAGE AND TERMINATION  

REINSURER's
liability for reinsurance under this Agreement will begin simultaneously with CEDANT's liability under the Riders. REINSURER's liability for reinsurance will terminate when CEDANT's
liability under the Riders terminates. 

This
Agreement shall remain in effect and in force for an indefinite period of time unless and until it is terminated. This Agreement may be terminated with respect to the reinsurance of new business
by either party giving the other party ninety (90) days prior written notification. Non-payment of premium, as defined in Article V of this Agreement, within ninety
(90) days of its due date constitutes a breach of this Agreement and may result in termination of this Agreement with 15 days prior written notice to CEDANT. Termination of new business
includes termination of all covered Riders added to or renewed after the effective date of termination, unless explicitly agreed to in writing by REINSURER. 

3

 
ARTICLE IV—CLAIMS  

All
reinsurance benefit settlements are subject to the terms and conditions of the particular Rider under which CEDANT is liable. 

This
Agreement applies only to that portion of ceded obligations under Riders that CEDANT retains net for its own account. In calculating the claims and premiums, only amounts retained by CEDANT,
excluding this Agreement, shall be included. 

For
each Rider covered under this Agreement, REINSURER will pay CEDANT an amount equal to the excess, if any, of the guaranteed minimum benefit reinsured, as described in Exhibit A, over the
account value for the Policy as determined on the day such guaranteed minimum benefit to be paid to the contract owner is contractually determined. 

ARTICLE V—PREMIUMS  

CEDANT
shall pay REINSURER a premium for the coinsurance coverage provided in this Agreement. This premium will equal the Rider Fee Percentage multiplied by the Benefit Base as described in the Riders
covered in this Agreement. 

CEDANT
will notify REINSURER of any changes to the Rider Fee Percentage or the Benefit Base for Riders covered under this Agreement. If a change occurs, REINSURER shall have the option to terminate
reinsurance for all new business of the affected Rider. 

ARTICLE VI—SETTLEMENT AND REPORTING  

	1.
	While
this Agreement is in effect, CEDANT shall pay to REINSURER, no less frequently than quarterly, with respect to the eligible Riders, a reinsurance premium as calculated in ARTICLE
V of this Agreement.

	2.
	While
this Agreement is in effect, REINSURER shall pay to CEDANT, no less frequently than quarterly, with respect to the eligible Riders, a reinsurance benefit as calculated in ARTICLE
IV of this Agreement.

	3.
	CEDANT
will provide REINSURER with accounting reports within forty-five (45) days following the end of each calendar quarter. These reports will contain sufficient
information about the Policies and Riders to enable REINSURER to prepare its quarterly and annual financial reports.

	4.
	Settlements
as set out in Article VI, Paragraphs 1 and 2 will occur within ninety (90) days following the end of each calendar quarter. 

4

 
ARTICLE VII—DAC TAX REIMBURSEMENT  

On
a basis no less frequent than annual, REINSURER shall reimburse (or be reimbursed by, as the facts may provide) the CEDANT for DAC Taxes incurred on the Riders reinsured hereunder. The DAC Tax
reimbursement shall be computed by multiplying the DAC Tax Factor by (i) 100% of reinsurance premiums as calculated in ARTICLE V of this Agreement, plus (ii) CEDANT's Net Consideration
(as defined in Section 848 of the Internal Revenue Code of 1986, as amended, and the related Treasury Regulations) relating to this Agreement. The "DAC Tax
Factor" shall mean 0.215% for "annuities," as such term is defined in Section 848 of the Internal Revenue Code of 1986, as amended, and the related Treasury Regulations.
CEDANT and REINSURER mutually agree to prospectively adjust the DAC Tax Factor to reflect any changes in the federal income tax rate applicable to the CEDANT or changes to Section 848 of the
Internal Revenue Code of 1986, as amended, or to the related Treasury Regulations. 

ARTICLE VIII—OVERSIGHTS  

REINSURER
shall be bound as CEDANT is bound, and it is expressly understood and agreed that if failure to reinsure or failure to comply with any terms of this Agreement is shown to be unintentional
and the result of misunderstanding or oversight on the part of either CEDANT or REINSURER, both CEDANT and REINSURER shall be restored to the positions they would have occupied had no such error or
oversight occurred. 

ARTICLE IX—RECAPTURE  

CEDANT
shall have the right to recapture the obligations under the Riders covered by this Agreement with 90 days notice. Unless agreed to by REINSURER, recapture must include all obligations
under the Riders ceded hereunder. Upon recapture, REINSURER shall pay (or receive from) CEDANT a mutually agreed upon settlement. Any proposed settlement will be subject to prior review by the New
York Insurance Department. 

ARTICLE X—INSPECTION OF RECORDS  

CEDANT
and REINSURER shall have the right, at any reasonable time, to examine at the office of the other, any books, documents, reports or records which pertain in any way to the Policies and Riders. 

5

 
ARTICLE XI—INSOLVENCY  

	1.
	In
the event of insolvency of and the appointment of a conservator, liquidator or statutory successor of CEDANT, all reinsurance ceded, renewed or otherwise becoming effective under
this Agreement shall be payable by REINSURER directly to CEDANT or to its liquidator, receiver, or statutory successor on the basis of the liability of CEDANT under the contract or contracts reinsured
without diminution because of the insolvency of CEDANT.

	2.
	Further,
in the event of the insolvency of CEDANT, the liquidator, receiver or statutory successor of the insolvent CEDANT shall give written notice to REINSURER of the pendency of an
obligation of the insolvent CEDANT on any Rider, whereupon 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 CEDANT or its liquidator or statutory successor. The expense thus incurred by REINSURER shall be chargeable, subject to court approval, against the insolvent
CEDANT as part of the expenses of liquidation to the extent of a proportionate share of the benefit that may accrue to CEDANT solely as a result of the defense undertaken by REINSURER. 

ARTICLE XII—ARBITRATION  

Any
dispute arising with respect to this Agreement that is not settled by mutual agreement of the parties shall be referred to arbitration. Within thirty (30) days from receipt of written
notice from one party that an arbitrator has been appointed, the other party shall also name an arbitrator. The two arbitrators shall choose a third arbitrator and shall forthwith notify the
contracting parties of such choice. Each arbitrator shall be a present or former officer of a life insurance company and should have no present or past affiliation with this Agreement or with either
party. The arbitrators shall consider this Agreement as a honorable engagement rather than merely as a legal obligation, and shall be relieved of all judicial formalities. The decision of the
arbitrators shall be final and binding upon the parties hereto. Each party shall bear the expenses of its own arbitrator and shall jointly and equally bear the expenses of the third arbitrator and of
the arbitration. Any such arbitration shall take place in the state of New York at a location mutually agreed upon. The decision of the Arbitrators shall be handed down within 45 days of the
date on which the arbitration is concluded. 

ARTICLE XIII—PARTIES TO AGREEMENT  

This
Agreement is solely between CEDANT and REINSURER. The acceptance of reinsurance hereunder shall not create any right or legal relationship whatsoever between REINSURER and any party in interest
under any Rider reinsured hereunder. CEDANT shall be and remain solely liable to any insured, contract owner, or beneficiary under any Rider reinsured hereunder. 

6

 
ARTICLE XIV—OFFSET  

All
monies due CEDANT or REINSURER under this Agreement shall be offset against each other dollar for dollar. 

ARTICLE XV—DAC Tax—Section 1.848-2(g)(8) Election  

The
CEDANT and the REINSURER hereby agree to the following pursuant to Section 1.848-2(g)(8) of the Income Tax Regulations issued December 1992, under Section 848 of
the Internal Revenue Code of 1986, as amended. This election shall be effective for 2003 and for all subsequent taxable years for which this Agreement remains in effect. 

	1.
	The
term "party" will refer to either the CEDANT or the REINSURER as appropriate.

	2.
	The
terms used in this Article are defined by reference to Regulation Section 1.848-2 in effect December 1992.

	3.
	The
party with the net positive consideration for this Agreement for each taxable year will capitalize specified policy acquisition expenses with respect to this Agreement without
regard to the general deductions limitation of Section 848(c)(1).

	4.
	Both
parties agree to exchange information pertaining to the amount of net consideration under this Agreement each year to ensure consistency or as otherwise required by the Internal
Revenue Service.

	5.
	The
CEDANT will submit a schedule to the REINSURER by April 1 of each year 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 CEDANT stating that the CEDANT will report such net consideration in its tax return for the preceding
calendar year.

	6.
	The
REINSURER may contest such calculation by providing an alternative calculation to the CEDANT in writing within 30 days of the REINSURER's receipt of the CEDANT's
calculation. If the REINSURER does not so notify the CEDANT, the REINSURER will report the net consideration as determined by the CEDANT in the REINSURER's tax return for the previous calendar year.

	7.
	If
the REINSURER contests the CEDANT's calculation of the net consideration, the parties will act in good faith to reach an agreement as to the correct amount within 30 days of
the date the REINSURER submits its alternative calculation. If the CEDANT and the REINSURER reach agreement on an amount of net consideration, each party shall report such amount in their respective
tax returns for the previous calendar year. 

7

 
ARTICLE XVI—ENTIRE AGREEMENT  

This
Reinsurance Agreement, together with all amendments thereto, constitutes the entire Agreement between REINSURER and CEDANT with respect to the subject matter hereof, and there are no written or
oral understandings, agreements, conditions, or qualifications to the terms and conditions of this Reinsurance Agreement which are not fully expressed herein. Any change or modification to this
Reinsurance Agreement shall be null and void unless made by amendment to this Reinsurance Agreement and signed by both CEDANT and REINSURER. 

ARTICLE XVII—CONFIDENTIAL INFORMATION  

REINSURER
agrees to treat any consumer personal financial information that it receives from CEDANT in a confidential manner. REINSURER however may disclose such confidential information to its
Retrocessionaires, provided that the agreement between REINSURER and any Retrocessionaire to which such information is disclosed contains a confidentiality provision that protects insured level data.
REINSURER also agrees that it will be bound by the provisions of applicable state and federal laws and regulations with respect to the confidential treatment of such information, and will be subject
to such state and federal courts with respect to the enforcement of such laws and regulations. 

ARTICLE XVIII—SEVERABILITY  

In
the event that any court, arbitrator, or administrative agency determines any provision or term of this Agreement to be invalid, illegal or unenforceable, all of the other terms and provisions of
this Agreement shall remain in full force and effect to the extent that their continuance is practicable and consistent with the original intent of the parties. However, in the event this Article is
exercised and the Agreement no longer reflects the original intent of the parties, the parties agree to attempt to renegotiate this Agreement in good faith to carry out its original intent. 

ARTICLE XIX—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. 

ARTICLE XX—CALENDAR DAYS  

Unless
otherwise specified, all references to "days" in this Agreement shall mean calendar days. 

8

 

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

	ALLSTATE LIFE INSURANCE COMPANY OF NEW YORK
	

By:	

/s/  SAMUEL H. PILCH      

Samuel H. Pilch	

 
	Title	Group Vice President and Controller	 
	Date	2/4/04	 
	

ALLSTATE LIFE INSURANCE COMPANY	

 
	

By:	

/s/  JAMES P. ZILS      

James P. Zils	

 
	Title	Treasurer	 
	Date	2/4/04	 

9

   EXHIBIT A  

COVERED OBLIGATIONS  

This
Agreement covers all obligations under Guaranteed Minimum Accumulation Benefit riders on variable annuity contracts issued directly by CEDANT after the Effective Date. No other obligations under
such variable annuity contracts are covered by this Agreement. 

10

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00070-of-00352.parquet"}]]