INVESTMENT MANAGEMENT AGREEMENT

Exhibit 10.19

INVESTMENT MANAGEMENT AGREEMENT

This agreement dated this 11th day of March, 1997 but effective as of January 1, 1997, is by and between Stateco Financial Services, Inc. (aka Stateco, Inc.) (“Stateco”), 000 Xxxx Xxxxx Xxxxxx, Xxxxxxxx, Xxxx 00000 and Midwest Security Insurance Company, 0000 Xxxxxxx Xxxxx, Xxxxxxxx, Xxxxxxxxx 00000 (“Midwest”).

Recitals

Midwest, a Wisconsin domiciled property-casualty insurance company receives policyholders’ premiums and holds those premiums for payment of valid claims.

In the ordinary course of its business it is charged with the responsibility of managing and investing said policyholder premiums.

Stateco, an Ohio-domiciled corporation, is engaged in the business of providing financial services pertinent to an insurance business including, without limitation, investment management services.

Midwest desires to retain the services of Stateco as the investment manager for its investable assets, including, without limitation, policyholders’ surplus, and Stateco is willing to serve in such capacity.

Therefore, in consideration of the mutual covenants set forth herein and INTENDING TO BE LEGALLY BOUND HEREBY, the parties hereto agree as follows:

1. Term

a. This agreement shall be for a one year term. It shall automatically renew for additional twelve month terms unless either party hereto gives written notice of its intention to terminate this agreement, which notice must be given at least ninety days prior to the annual anniversary date of the agreement.

2. Authority Granted to Stateco

a. Midwest understands and agrees that as its investment manager, Stateco shall have full discretion as to investment decisions which are consistent with the investment policy set by the Investment Committee of the Board of Directors of Midwest. The Investment Committee agrees to keep Stateco advised of any changes to investment policy adopted by the committee.

b. Stateco agrees to attend all Investment Committee meetings to review with the committee members the investment activities undertaken in the prior quarter, to respond to questions from committee members and to communicate with the Investment Committee with respect to investment plans, strategies and policies to be pursued by Stateco.

c. Midwest understands and agrees the discretion granted to Stateco herein empowers Stateco (within the policy constraints noted) to select investments to purchase, to allocate investable funds between tax free and taxable investments and to make decisions with respect to the sale of investments and the timeing of such sale. Stateco is also authorized to give instructions to Midwest’s custodian(s), with respect to the purchase, sale, exchange and delivery of securities for Midwest’s account and disbursements relating thereto.

d. Stateco is also authorized to place brokerage orders for Midwest’s account through such brokerage firms as Stateco, in its sole discretion, may determine.

3. Stateco’s Obligations

a. Stateco agrees to maintain records of transactions in which it engages on Midwest’s behalf in such form and format as Midwest requires to comply with legal requirements applicable to it.

b. Stateco also agrees to act in good faith and exercise due care in carrying out its responsibilities hereunder. Stateco will not be liable for any error of judgment with respect to its investment decisions providing Stateco has acted in good faith and has exercised due care.

c. Stateco agrees to maintain strict confidence with respect to Midwest’s financial affairs. Midwest will maintain confidentiality of investment advice and investment decisions, except to the extent disclosure is mandated by law or disclosure is made to an affiliate of Midwest.

d. In consideration for the foregoing services provided and responsibilities to be accepted, Midwest agrees to pay Stateco based on the total investable assets of Midwest under its management, as per the Fee Schedule attached as Exhibit A. The fee will be paid quarterly. It will re reviewed annually and may be amended by mutual agreement, which shall be confirmed in a revised Fee Schedule to be executed by the parties.

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4. Arbitration

a. In the event of a dispute arising out of any parties performance under this agreement, the parties hereby understand and agree that if the dispute cannot be amicably resolved by the parties, they will arbitrate the dispute in accordance with the rules and procedures set forth in the Wisconsin Uniform Arbitration Act, which is hereby incorporated by reference.

5. Governing Law

a. This agreement shall be governed by Wisconsin law.

Stateco Financial Services, Inc.
By		/s/ Xxxxx X. Xxxxxx
Midwest Security Insurance Company
By		/s/ Xxxxxx X. Xxxxx

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