Document:

Exhibit

Exhibit 10.5.4

FIRST AMENDED INTER-COMPANY LOAN AGREEMENT
This First Amended Inter-Company Loan Agreement (the “Agreement”) is entered into effective this 1st day of January, 2018 (the “Effective Date”), by and among Employers Mutual Casualty Company (“EMCC”), Union Insurance Company of Providence, EMC Property & Casualty Company (the foregoing two (2) companies are hereinafter collectively referred to as the “EMCC Subsidiaries”), EMCASCO Insurance Company, Illinois EMCASCO Insurance Company, Dakota Fire Insurance Company and EMC Reinsurance Company (the foregoing four (4) companies are hereinafter collectively referred to as the “Group Subsidiaries”) (EMCC and each undersigned company are hereinafter collectively called the “Companies” or, individually, the “Company”).  As of January 1, 2018, this Agreement amends and replaces the Inter-Company Loan Agreement dated January 1, 2012.
WHEREAS, one or more of the Companies may, from time to time, have funds available for short-term investment purposes or have a short-term need for general working capital; and
WHEREAS, the Companies desire to enter into a written agreement, in accordance with the terms and conditions set forth herein, by which the Companies may lend to and borrow from one another; and
WHEREAS, the Companies are authorized by their respective Boards of Directors to lend to and borrow from one another and to enter into this Agreement;
NOW, THEREFORE, in consideration of the mutual promises hereinafter contained, the Companies agree as follows:
I.    AMOUNT AND TERMS OF ADVANCES AND BORROWINGS
		
	A.
	Intercompany Loans.  The Companies agree on the terms and conditions set forth in this Agreement to lend to and borrow monies from one another (each borrowing a “Loan”) from time to time from the date hereof until this Agreement is terminated.

		
	B.
	Limitation on Loans.  No Loans may:

		
	a.
	Exceed, in the aggregate (which shall include both principal and accrued interest), more than five percent (5%) of the lending Company’s admitted assets as of December 31 of the preceding year; or 

		
	b.
	Cause the lending Company, at the time such Loan is made, to violate any applicable law or regulation regarding the solvency of an insurance company.

		
	C.
	Interest on Loans.  

		
	a.
	Subject to the other provisions of this Section I.C., interest shall accrue on each Loan at the rate of 125 basis points over the 1 month LIBOR Ask Rate in effect as of 4:00 p.m. Central Time on the date of the Loan.  Interest shall be calculated on the basis of a 365-day year from the actual number of days elapsed.  The outstanding principal 

1

balance of any Loan, together with all interest accrued thereon, shall be due and payable within ten (10) business days of a demand by the lending Company.  
		
	b.
	Any interest payment due and payable hereunder by any Company is independent of any interest payments required to be made by the other parties to this Agreement.  EMCC shall calculate the amount of interest payable by the borrowing Company to the lending Company and, upon request, shall provide supporting documentation as to the calculation thereof.

		
	D.
	Conditions of Loans.

		
	a.
	Each lending Company, in its sole discretion, shall determine if it will make a Loan to a borrowing Company based on whether it has sufficient funds for its daily operations and whether such Loan will be an appropriate investment under state regulations and its corporate investment policy limitations.  No Company is obligated to make a Loan to another Company.  

		
	b.
	The maximum term of a Loan shall be one hundred eighty (180) days.  Each  borrowing  Company may, from time to time,  prepay  all, or any  part, of any  outstanding  unpaid  principal amount without  penalty or premium.  All Loan payments shall be applied to accrued and outstanding interest first, with the balance, if any, applied to principal.

		
	E.
	Loan Requests.  Each request for a Loan shall be made in writing by the Treasurer of the borrowing Company and approved by the Chief Financial Officer of the lending Company.

		
	F.
	Repayment.  The borrowing Company shall repay to the lending Company, within ten (10) business days of the lending Company’s demand or at the end of the one hundred eighty (180) day maximum lending term, whichever comes first, the outstanding principal of any Loan amount, together with any interest accumulated thereon.

		
	G.
	Default.  

		
	a.
	Any delay in the payment of principal or interest due on a Loan made by a lending Company to a borrowing Company, in accordance with the terms and conditions of this Agreement, which continues for ten (10) or more business days shall constitute an Event of Default under this Agreement.

		
	b.
	If an Event of Default occurs, is continuing, and is not waived by the lending Company; then, in each and every case, all principal outstanding, together with interest accrued thereon, shall become immediately due and payable without further notice to the borrowing Company.  If the borrowing Company fails to cure any Event of Default within ten (10) business days, the lending Company shall have the option to terminate this Agreement with such borrowing Company.  In the event that this Agreement is terminated with respect to such borrowing Company pursuant to this Section I.G., all Loans then outstanding between such borrowing Company and  all other parties to this Agreement shall also become immediately due and payable, 

2

without further notice to the borrowing Company, together with accrued interest thereon. 

		
	H.
	Documentation.  

		
	a.
	The obligations of any Company to repay all Loans made to it pursuant to this Agreement, together with interest thereon, shall be fully binding and enforceable without the execution of any promissory note or other evidence of indebtedness.  Nevertheless, if any lending Company so requests, a borrowing Company hereby agrees to duly execute and deliver to the lending Company a negotiable promissory note satisfactory to the lending Company evidencing the Loan outstanding hereunder.  Expenses incurred and payments received shall be allocated to each applicable Company in conformity with customary accounting practices consistently applied, and the books, accounts and records of each applicable party shall be maintained to clearly and accurately disclose the precise nature and details of the transaction, including such accounting information as is necessary to support the reasonableness of the charges or fees to the respective parties.

		
	b.
	The records of all Loans that are made pursuant to this Agreement shall be kept by EMCC on behalf of all of the parties.

		
	I.
	Intercompany Account.  EMCC shall maintain a ledger in which all Loans and all repayments shall be recorded.  EMCC shall give each Company access to such ledger and other records related to the Loans involving such Company.  All transfers of funds for any Loan will be conducted through the trust accounts of the respective Companies at State Street Bank and Trust, or any successor thereto.

		
	J.
	Covenants.  At all times that there is an outstanding Loan pursuant to this Agreement, each Company shall:

		
	a.
	Maintain its corporate existence in good standing under the laws of the jurisdiction of its incorporation or organization and conduct and operate its business in a lawful manner; and

		
	b.
	Comply, in all material respects, with all applicable laws, rules, regulations and orders, including, but not limited to, the insurance laws, rules, regulations and orders of each jurisdiction in which the Company is licensed to do business.   

II.    MISCELLANEOUS
		
	A.
	Disputes.  Any disputes arising out of (i) the interpretation of this Agreement; or (ii) any Loans shall be submitted for final and binding resolution as follows:

		
	a.
	With respect to disputes (1) between or among EMCC and/or one or more of the EMCC Subsidiaries; or (2) between or among two or more of the Group Subsidiaries, to the Chief Investment Officer, Chief Financial Officer and Chief Legal Officer of such Company(ies) engaged in the dispute; or

3

		
	b.
	With respect to disputes between EMCC and one or more of the Group Subsidiaries, to the Inter-Company Committees of the Boards of Directors of EMCC and EMC Insurance Group Inc., respectively, pursuant to the terms of the joint Charter of the two Inter-Company Committees then in effect.

		
	B.
	Limitation of Liability.  No party shall have any liability under this Agreement, including liability for its own negligence, for damages, losses or expenses suffered by the other party(ies) as a result of the performance or non-performance of such party’s obligations hereunder, unless such damages, losses or expenses are caused by or arise out of the willful misconduct or gross negligence of such party or a breach by such party.  In no event shall any party have any liability to the other parties for indirect, incidental or consequential damages that such other party or any third party may incur or experience on account of the performance or non-performance of such party’s obligations hereunder.  The provisions of this Section II.B. shall survive the termination of this Agreement.

		
	C.
	Term.  This Agreement shall commence on the Effective Date and will continue in effect until terminated as follows; provided, however, that prior to the effective date of the termination of the Agreement, EMCC shall provide notice of such termination to the applicable regulatory authorities in the States of Iowa and/or North Dakota:

		
	a.
	By EMCC, upon ninety (90) days prior written notice to all other Companies;

		
	b.
	By any Company, but only with respect to such party, upon ninety (90) days prior written notice to all other Companies; 

		
	c.
	By any Company, immediately upon notice to a breaching Company, if the breaching Company’s material breach of this Agreement, other than an Event of Default, continues uncured for thirty (30) days after both the nature of that breach and the necessary cure or correction has been agreed upon by the parties or otherwise determined by the dispute resolution procedure set forth in Section II.A., above; provided that if all of the parties to this Agreement agree, or it is determined by the dispute resolution procedure that the material breach is not capable of being cured or corrected, the termination shall be effective immediately upon notice;

		
	d.
	By any party, but only with respect to such party, immediately upon notice to all other parties, if it determines that performance of its rights or obligations under this Agreement is, or becomes, illegal; or

		
	e.
	By any party, but only with respect to such party, if that party determines that its compliance with any law or regulation or any guideline or request from any governmental authority would create a cost or increase the cost of providing a Loan to another party under this Agreement, unless the other party agrees to pay amounts sufficient to indemnify for such cost or increase in total cost.

		
	f.
	If any Company’s participation in this Agreement is terminated, the Companies shall provide notice to the Iowa Insurance Division of such termination.  

4

		
	D.
	Entire Agreement.  This Agreement constitutes the entire agreement of the parties on this subject matter and shall replace and supersede any prior agreement or understanding of the parties, whether written or oral, on this subject not expressed or referred to in this Agreement.

		
	E.
	Amendment.  This Agreement may not be amended except by written instrument signed by all parties hereto.  Any amendments hereto shall be subject to approval by the applicable regulatory authorities in the States of Iowa and/or North Dakota.

		
	F.
	Waivers.  Any party hereto may (a) extend the time for performance of any obligation or other act or (b) waive compliance with any of the agreements contained herein.  No wavier of any term shall be construed as a waiver of the same term in any other situation or a waiver of any other term of this Agreement.  The failure of any party to assert any of its rights hereunder will not constitute a waiver of any such rights.

		
	G.
	Severability.  If any provision of this Agreement is invalid, illegal or incapable of being enforced by any rule of law or public policy, such provision shall be deemed severable and all other provisions of this Agreement shall nevertheless remain in full force and effect.

		
	H.
	Governing Law.  This Agreement shall be governed by and construed with the substantive laws of the State of Iowa, without giving effect to any choice-of-law rules that may require the application of the laws of another jurisdiction.

		
	I.
	Regulatory Approval.  Notwithstanding anything to the contrary contained in this Agreement, this Agreement shall not become effective until approved by the applicable regulatory authorities in the States of Iowa and North Dakota.

Remainder of page intentionally left blank.

5

In WITNESS WHEREOF, the parties hereto, by their respective duly authorized officers, have executed this Agreement on the dates recorded below.
EMPLOYERS MUTUAL CASUALTY         UNION INSURANCE COMPANY OF
COMPANY                        PROVIDENCE

By:    /s/ Bruce G. Kelley                By:    /s/ Mark E. Reese            

Print Name: Bruce G. Kelley                Print Name: Mark E. Reese            

Its: President, CEO & Treasurer            Its: Senior VP & Chief Financial Officer    

Date:    June 4, 2018                    Date:    June 4, 2018                

EMC PROPERTY & CASUALTY              EMCASCO INSURANCE COMPANY
COMPANY                        

By:    /s/ Mark E. Reese                By:    /s/ Mark E. Reese            

Print Name: Mark E. Reese                Print Name: Mark E. Reese            

Its: Senior VP & Chief Financial Officer        Its: Senior VP & Chief Financial Officer    

Date:    June 4, 2018                    Date:    June 4, 2018                

ILLINOIS EMCASCO INSURANCE        DAKOTA FIRE INSURANCE COMPANY
COMPANY                        

By:    /s/ Mark E. Reese                By:    /s/ Mark E. Reese            

Print Name: Mark E. Reese                Print Name: Mark E. Reese            

Its: Senior VP & Chief Financial Officer        Its: Senior VP & Chief Financial Officer    

Date:    June 4, 2018                    Date:    June 4, 2018                

EMC REINSURANCE COMPANY                    

By:    /s/ Mark E. Reese                

Print Name: Mark E. Reese                

Its: Senior VP & Chief Financial Officer            

Date:    June 4, 2018                    

6Exhibit

Exhibit 10.6.1

FIRST AMENDED INVESTMENT MANAGEMENT AGREEMENT

THIS FIRST AMENDED INVESTMENT MANAGEMENT AGREEMENT (the “Agreement”), effective January 1, 2018, is entered into by and between Employers Mutual Casualty Company, an Iowa corporation (hereinafter referred to as “EMCC”), and
EMC Risk Services, LLC, an Iowa limited liability company (“ERS”); and
Union Insurance Company of Providence, an Iowa corporation (“Union”); and
EMC Property & Casualty Company, an Iowa corporation (“EMC P&C”); and
EMC Insurance Group Inc., an Iowa corporation (“Group”); and
EMCASCO Insurance Company, an Iowa corporation (“EMCASCO”); and
Illinois EMCASCO Insurance Company, an Iowa corporation (“Illinois EMCASCO”); and
Dakota Fire Insurance Company, a North Dakota corporation (“Dakota”); and
EMC Reinsurance Company, an Iowa corporation (“EMC Re”); and
EMC Underwriters, LLC, an Iowa limited liability company (“Underwriters”)
(collectively all of the companies listed, with the exception of EMCC, shall be referred to as “the Companies”).
WHEREAS, EMCC maintains an investment department and an accounting department knowledgeable in the regulatory requirements governing insurance company investments; and
WHEREAS, the Companies believe it to be in their best interests to enter into an agreement with EMCC for the provision of investment management services; and
WHEREAS, EMCC and the Companies each desire that the investment management services of EMCC be made available as needed;
NOW, THEREFORE, in consideration of the mutual promises stated in this Agreement and intending to be legally bound, the parties agree as follows:
		
	1.
	SERVICES PERFORMED BY EMCC

Upon request by the Companies and acceptance and approval by EMCC, EMCC shall perform those mutually agreed upon investment management services reasonably required to assist the Companies, which may include, but not be limited to:

1

		
	•
	Serving as a centralized point for handling invested assets such as bonds, stocks,  
short-term investments and certain other invested assets;

		
	•
	Identifying investments to provide for the funding of liabilities, organizing the custody of those assets and transferring funds to meet operational needs; 

		
	•
	Establishing and overseeing the activities of external investment managers;

		
	•
	Establishing and collateralizing lines of credit; 

		
	•
	Preparing data for regulatory and rating agencies;

		
	•
	Preparing reports for various internal committees of each of the Companies; and

		
	•
	Overseeing securities lending activities.

In providing services under this Agreement, EMCC’s standard of care shall be that of a fiduciary when providing such services to the Companies.   
The Companies will maintain oversight for functions provided to the Companies by EMCC and the Companies will monitor services at least annually for quality assurance.
Books and records of the Companies include all books and records developed or maintained under or related to this Agreement.  All books and records of the Companies are and shall remain the property of the Companies and are subject to control of the Companies.
In providing services under this Agreement, EMCC will manage the Companies’ investments in accordance with the applicable state investment statute.  
2.   Compensation.     Each of the companies that comprise the Companies shall reimburse EMCC for the cost of their investment management services which will include actual expenses incurred by each company (paid by EMCC) plus an allocation of other investment expenses incurred by EMCC, which is based on a weighted-average of total invested assets and number of investment transactions of each company.  Payments for all said investment management expenses and/or costs shall be due to EMCC no later than forty-five (45) days after the end of each quarter and shall comply with the requirements in the NAIC Accounting Practices and Procedures Manual.  The Companies shall not advance funds to EMCC under this Agreement except to pay for services defined in this Agreement.  All funds and invested assets of the Companies are the exclusive property of the Companies, held for the benefit of the Companies, and subject to the control of the Companies. 

2

3.Effective Date.   Subject to any necessary regulatory approval, the effective date of this Agreement shall be January 1, 2018, and this Agreement amends and replaces the Investment Management Agreement dated December 31, 2007.

4.Term.   The term of this Agreement shall be for a period of one (1) year, and will automatically extend for additional one (1) year terms unless written notice is given by one of the parties at least ninety (90) days prior to the expiration of the then-current one-year term, in accordance with the requirements set out below.

5.Termination.  Any party may terminate its involvement in this Agreement upon ninety (90) days prior written notice to the other party or parties.  Notwithstanding the foregoing,  
the parties may agree to a shorter termination period by written agreement signed by the terminating parties.  Any of the individual companies that comprise the Companies may terminate its involvement in this Agreement without causing this entire Agreement to terminate, and EMCC may terminate its agreement with any of the individual companies that comprise the Companies without terminating the entire Agreement.  If the Agreement is terminated by the parties, the parties shall provide notice to the Iowa Insurance Division of such termination.  
Any party may terminate this Agreement at any time upon delivery of written notice to  
the other (i) if the other party applies for or consents to the appointment of a trustee or liquidator of all, or a substantial part of, its assets, files a voluntary petition in bankruptcy, admits in writing  its inability to pay its debts as they become due, makes a general assignment for the benefit of creditors, files a petition or an answer seeking reorganization or arrangement with creditors or taking advantage of any insolvency law; or (ii) if an order, judgment, or decree is entered by a court of competent jurisdiction adjudicating the other party bankrupt or insolvent, approving a petition seeking reorganization, or appointing a trustee or liquidator of all or a substantial part of its assets.
EMCC has no automatic right to terminate this Agreement if any of the Companies are placed in receivership pursuant to Iowa Code chapter 507C.  If any of the Companies are placed in receivership or seized by the commissioner under the Iowa Receivership Act, all of the rights of the Companies under this Agreement extend to the receiver or the commissioner and all books and records will immediately be made available to the receiver or the commissioner and shall be turned over to the receiver or the commissioner immediately upon the receiver’s or the commissioner’s request.  EMCC will continue to maintain any systems, programs, or other infrastructure notwithstanding a seizure by the commissioner under Iowa Code chapter 507C, and will make them available to the receiver for so long as EMCC continues to receive timely payment for services rendered.
In the event of termination by any party for any reason, EMCC shall (i) proceed to transfer all of its responsibilities under this Agreement to the terminating company or the Companies, or any management company designated by the terminating company or the Companies, in an 

3

orderly fashion subject to a full and complete accounting, and (ii), if so requested by the terminating company or the Companies, make a good faith effort to find another company to provide the services performed by EMCC for the benefit of the Companies pursuant to this Agreement.
This Agreement shall be binding upon and inure to the benefit of the parties hereto and to the benefit of their respective successors and assigns.  If any party seeks to assign its rights under this Agreement, the parties shall seek prior approval of such assignment from the Iowa Insurance Division.   
6.Independent Contractors.  Nothing in this Agreement shall affect the separate identities of the Companies and EMCC.  Except as specifically agreed herein, no party to this Agreement intends to be the partner or agent of the other.  No party intends to limit any other party in  
any manner in the conduct of its businesses, ventures, or activities not specifically provided for in this Agreement.  

7.Amendments.  This Agreement may be amended at any time by mutual agreement of the parties, provided that any amendment shall be in writing signed by the parties and shall be subject to regulatory approval before it becomes effective.

8.Indemnity.  The Companies shall indemnify and hold harmless EMCC and will reimburse EMCC for any loss, liability, claim, damage, expense, including cost of investigation and defense and reasonable attorney fees and expenses, sustained or incurred by EMCC arising out of or relating to any breach by the Companies of its duties, obligations, or representations under  
this Agreement.  EMCC shall indemnify and hold harmless the Companies and will reimburse the Companies for any loss, liability, claim, damage, expense, including cost of investigation and defense and reasonable attorney fees and expenses, sustained or incurred by the Companies in the event of gross negligence or willful misconduct on the part of EMCC in providing the services in this Agreement.

9.Counterparts.  This Agreement may be executed in several counterparts, each of which will be deemed an original and all of which shall constitute but one and the same instrument, but none of which will be deemed to be binding unless and until all parties have signed this Agreement.

4

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the 4th day of June, 2018, to be effective as of January 1, 2018.

EMPLOYERS MUTUAL CASUALTY COMPANY

By:  /s/ Bruce G. Kelley                  
Bruce G. Kelley
President and Chief Executive Officer

EMC RISK SERVICES, LLC

By:  /s/ Bradley J. Fredericks          
Bradley J. Fredericks
Senior Vice President

UNION INSURANCE COMPANY OF PROVIDENCE

By:  /s/ Bradley J. Fredericks           
Bradley J. Fredericks
Senior Vice President & Chief Investment Officer

EMC PROPERTY & CASUALTY COMPANY

By:  /s/ Bradley J. Fredericks           
Bradley J. Fredericks
Senior Vice President & Chief Investment Officer

EMC INSURANCE GROUP INC.

By:  /s/ Bradley J. Fredericks           
Bradley J. Fredericks
Senior Vice President & Chief Investment Officer

5

EMCASCO INSURANCE COMPANY

By:  /s/ Bradley J. Fredericks            
Bradley J. Fredericks
Senior Vice President & Chief Investment Officer

ILLINOIS EMCASCO INSURANCE COMPANY

By:  /s/ Bradley J. Fredericks             
Bradley J. Fredericks
Senior Vice President & Chief Investment Officer

DAKOTA FIRE INSURANCE COMPANY

By:  /s/ Bradley J. Fredericks             
Bradley J. Fredericks
Senior Vice President & Chief Investment Officer

EMC REINSURANCE COMPANY

By:  /s/ Bradley J. Fredericks             
Bradley J. Fredericks
Senior Vice President & Chief Investment Officer

EMC UNDERWRITERS, LLC

By:  /s/ Bradley J. Fredericks             
Bradley J. Fredericks
Senior Vice President

6

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00286-of-00352.parquet"}]]