EXHIBIT 10(HH)
AMENDMENT NO. 2 TO
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MANAGEMENT AND OPERATIONS AGREEMENT
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This Amendment No. 2 to Management and Operations Agreement (this
"Amendment") is entered into and effective as of October 1, 2001, among State
Automobile Mutual Insurance Company, an Ohio corporation ("Mutual"); State Auto
Financial Corporation, an Ohio corporation ("State Auto Financial"); State Auto
Property and Casualty Insurance Company, a South Carolina corporation ("State
Auto P&C"); State Auto National Insurance Company, an Ohio corporation
("National"); Milbank Insurance Company, a South Dakota corporation ("Milbank");
State Auto Insurance Company, an Ohio corporation ("State Auto IC"); Stateco
Financial Services, Inc., an Ohio corporation ("Stateco"); Strategic Insurance
Software, Inc., an Ohio corporation ("S.I.S."); and 518 Property Management and
Leasing, LLC, an Ohio limited liability company ("518 PML").
RECITALS
A. Effective January 1, 2000, Mutual, State Auto Financial, State Auto P&C,
National, Milbank, State Auto IC, Stateco, S.I.S. and 518 PML entered into a
Management and Operations Agreement and First Amendment thereto dated as of
January 1, 2000 (the "Agreement") providing for, among other things, the
management of the Managed Companies (as defined therein) by State Auto P&C.
B. The parties to the Agreement now desire to amend the Agreement to change
certain of the payment and other obligations of the parties set forth in the
Agreement.
NOW, THEREFORE, intending to be legally bound, the parties to this Amendment
hereby agree as follows:
1. RECITALS; DEFINITIONS. The Background Information contained in the Agreement
and in the Recitals to this Amendment are each hereby incorporated by
reference into the body of this Amendment. Capitalized terms not otherwise
defined in this Amendment shall have the meanings set forth in the Agreement.
All references in the Agreement to "this Agreement" shall be deemed to refer
to the Agreement as amended hereby.
2. AMENDMENT OF THE AGREEMENT. Subject to the satisfaction of the conditions set
forth in Section 5 below, (i) effective as of the date first written above
the Agreement shall be deemed amended and supplemented by this Amendment. To
the extent not expressly amended or supplemented by this Amendment, the terms
and provisions of the Agreement shall remain in full force and effect without
alteration for the remaining term thereof. Until the deemed effective date of
this Amendment as set forth in Section 5 below, the Agreement shall be deemed
to have governed the rights and obligations of the parties thereto in
accordance therewith, without taking into account the amendments contemplated
hereby.
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3. AMENDMENT OF 2000 POOLING AGREEMENT. As of the deemed effective date hereof,
the parties to the 2000 Pooling Agreement (as defined in the Agreement) have
entered into an amendment thereto, and all references in the Agreement to the
2000 Pooling Agreement shall be deemed to refer to the 2000 Pooling Agreement
as amended by the First Amendment thereto dated as of November 17, 2000, the
Second Amendment thereto dated as of June 1, 2001 and the Third Amendment
dated as of October 1, 2001.
4. DELETION OF SECTION 7 OF THE AGREEMENT. Section 7 of the Agreement is hereby
deleted from the Agreement in its entirety.
5. EFFECTIVENESS. This Amendment shall be deemed effective as of October 1, 2001
upon receipt (or deemed receipt) of all necessary regulatory approvals, the
approval of the Special Independent Committee of the Board of Directors of
Mutual and the approval of the Special Independent Committee of the Board of
Directors of State Auto Financial and the effectiveness (including the
receipt or deemed receipt of any required regulatory approvals) of the Third
Amendment to the Pooling Agreement and that certain Stop Loss Reinsurance
Agreement dated effective October 1, 2001 among State Auto Mutual, State Auto
P&C, State Auto IC, and Farmers Casualty Insurance Company. Unless and until
all such regulatory approvals are received or deemed received, this Amendment
shall not bind the parties hereto or amend or supplement the Agreement.
6. REAFFIRMATION OF BALANCE OF THE AGREEMENT. Except as expressly amended
hereby, the Agreement is hereby reaffirmed by the parties hereto. All terms
and provisions of Sections 11 through 17 of the Agreement shall apply to and
be deemed incorporated into this Amendment.
IN WITNESS WHEREOF, each of the parties hereto has subscribed its name below
effective as of the date first above written, subject to the provisions of
Section 5 above.
STATE AUTOMOBILE MUTUAL INSURANCE COMPANY
By: /s/ Robert H. Moone
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Robert H. Moone, President
STATE AUTO FINANCIAL CORPORATION
By: /s/ Robert H. Moone
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Robert H. Moone, President
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STATE AUTO PROPERTY AND CASUALTY INSURANCE COMPANY
By: /s/ Robert H. Moone
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Robert H. Moone, President
STATE AUTO NATIONAL INSURANCE COMPANY
By: /s/ Robert H. Moone
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Robert H. Moone, President
STATE AUTO INSURANCE COMPANY
By: /s/ Robert H. Moone
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Robert H. Moone, President
STATECO FINANCIAL SERVICES, INC.
By: /s/ Robert H. Moone
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Robert H. Moone, President
MILBANK INSURANCE COMPANY
By: /s/ Robert H. Moone
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Robert H. Moone, President
STRATEGIC INSURANCE SOFTWARE, INC.
By: /s/ Robert H. Moone
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Robert H. Moone, President
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518 PROPERTY AND MANAGEMENT LEASING, LLC
By: /s/ Robert H. Moone
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Robert H. Moone, President
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