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ASFC SHORT-TERM INVESTMENT POOL EXHIBIT 10.15 (4)
PARTICIPATION AGREEMENT
Dated as of September 16, 1996
American States Financial Corporation, an Indiana corporation (herein called
"ASFC") and American States Life Insurance Company (herein called a
"Participant" and together with others signing similar agreements herein called
"Participants") hereby agree as follows:
ARTICLE I
DESCRIPTION OF SHORT-TERM INVESTMENT POOL; INVESTMENTS
Section 1.1 Introduction
ASFC has formed a pool of funds ("Pool") into which ASFC and certain of
its affiliates may deposit certain of their excess funds. Such funds may be
(i) invested by ASFC in short or medium-term investment grade instruments, or
(ii) borrowed from the Pool by a Participant.
Section 1.2 Entry into Agreement
Concurrently with the execution of this Agreement, ASFC and Participant
are herewith entering into this Agreement setting forth the rights and
responsibilities of the respective parties.
ARTICLE II
GENERAL LENDING PROVISIONS
Section 2.1 Short-Term Demand Deposits in Pool
Subject to the terms and conditions of this Agreement, and relying upon
the representations and covenants set forth herein, Participant may make
short-term demand deposits in the Pool from time to time of certain of its
excess funds at a taxable money market rate of interest; provided, however,
that the aggregate amount of such deposits at any time shall not exceed three
percent (3%) of the Insurer's assets as reported in its annual statement filed
with state regulators for the prior year-end.
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Section 2.2 Certificate of Participation
Contemporaneous with Participant's initial deposit of funds in the pool, ASFC
will execute and upon request deliver to Participant a Certificate of
Participation, substantially in the form of Exhibit A attached hereto,
evidencing Participant's participation in the Pool, which Certificate shall
contain ASFC's guaranty of Participant's deposited funds as to principal and
interest (see Section 5.1).
Section 2.3 Register of Certificates of Participation
ASFC shall cause to be maintained at all times within its Treasury
Management Department at its principal office a current register of all holders
of issued Certificates of Participation.
Section 2.4 Effect of Certificate
Either the execution or the delivery to Participant of any Certificate of
Participation shall be conclusive evidence that such Certificate has been duly
issued and that the Certificate holder is entitled to the benefits of this
Agreement.
ARTICLE III
GENERAL BORROWING PROVISIONS
Section 3.1 Loans from Pool
Subject to the terms and conditions of this Agreement, and relying upon
the representations of Participant set forth herein, ASFC agrees to make
short-term demand loans to one or more Participants from funds available in
the Pool at a taxable money market rate of interest.
Section 3.2 Repayment Obligations
The obligation of any Participants to repay any amounts borrowed from the
Pool shall be evidenced by:
(a) A single promissory note in the form of Exhibit B dated the date of
this Agreement and made payable to ASFC, which note shall be held until paid in
the custody of ASFC's Treasury Management Department.
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(b) A loan account for a Participant (a "Participant's Account"), opened
and maintained by ASFC on ASFC's records, showing loans made from the Pool to a
Participant subsequent to the loan evidenced by the aforementioned single
promissory note. A Participant's single promissory note payment obligation
together with Participant's Account payment obligation shall constitute
Participant's aggregate repayment obligation.
Section 3.3 Borrowed Funds Callable
Funds borrowed from the Pool shall be callable by ASFC upon demand.
ARTICLE IV
INVESTMENTS
Pool funds may be invested by ASFC in short or long-term instruments as
follows:
(a) Each investment shall be authorized by the Treasurer or an Assistant
Treasurer of ASFC.
(b) Each investment instrument shall be held in a custody account by
Bankers Trust Company, New York, New York, which custody account shall be a
segregated account used solely for the Pool's investment transactions.
ARTICLE V
GUARANTY
Section 5.1 Deposit Guaranty
ASFC hereby covenants, agrees and guarantees so long as any Participants's
funds deposited in the Pool have not been repaid in full when due, that it
will, upon demand from the Participant, cause to be deposited into the Pool
sufficient monies to meet and repay therefrom all such Participant's deposits
in the Pool, together with interest due thereon at the rate determined in
accordance with Section 2.1 hereof. ASFC hereby further covenants and agrees
that its guaranty herein contained shall be deemed to cover, in addition to
Participant's deposited funds and interest, any amount of indebtedness,
damages, losses or liabilities incurred by Participant in any way relating to
or arising out of enforcement of the guaranty created under this Agreement.
Section 5.2 Guaranty Irrevocable
This guaranty is irrevocable, unconditional and absolute, irrespective of
any circumstances which might otherwise constitute a legal or equitable
discharge or defense to, or by ASFC, and the failure of ASFC to observe or
perform any of the provisions or covenants contained in this Agreement or other
instruments relative to this Agreement shall constitute a default under this
guaranty and under this Agreement.
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ARTICLE VI
POWERS AND DUTIES OF POOL MANAGER
Section 6.1 Requisite Acts and Conditions
The Pool shall be managed and administered by ASFC. In that regard, ASFC
agrees to perform the duties herein expressly required and reasonably implied
of such management. ASFC shall be responsible for the administration of all
matters in respect of monies deposited in, borrowed from, or investments made
in connection with, the Pool. ASFC may contract with one or more other persons
for the performance of functions which ASFC is obligated to perform for the
Pool or the Participants pursuant to this Agreement, provided, however, that no
such contract shall relieve ASFC of the responsibility for the proper
performance of that function.
Section 6.2 Illegal Acts
Irrespective of anything contained herein which could be interpreted to
the contrary, no provision of this Agreement or any amendment or supplement
hereto shall be deemed to impose any duty or obligation on ASFC to perform any
act in the exercise of any right, duty or obligation which under present or
future law shall be unlawful, or which shall be beyond the corporate powers,
authorization or qualifications of ASFC.
Section 6.3 Maintenance of Records
ASFC shall maintain records of the date and amount of each deposit in,
each borrowing from, and all investments of, the Pool and each payment and
receipt of principal and interest, all in accordance with generally accepted
accounting principles and practices consistently applied. Copies of all such
records shall be furnished to any Participants upon request and such records
shall be presumed to be correct and true in all respects. ASFC shall also make
available to insurance regulatory officials those records which they may
request regarding any Participants licensed to do business within the
jurisdiction of such official.
ARTICLE VII
EVENTS OF DEFAULT AND REMEDIES THEREFOR
Section 7.1 Events of Default
An "Event of Default" shall exist in the event any one or more of the
following occurs and is continuing:
(a) if either ASFC or Participant shall default in any payment of
principal or interest on any obligation for funds loaned to or borrowed from
the Pool; or
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(b) if in the performance of any other covenant or condition contained in
this Agreement or any instrument under which an obligation is created a default
occurs and such default is not cured withing a period of seven (7) days (or
such longer period if it is determined the cure is likely and the defaulting
party is diligently attempting to cure).
Section 7.2 Remedies on Default
Upon the occurrence of any Event of Default under Section 7.1, the
aggrieved party may proceed to protect and enforce the rights of such party by
an action at law, suit in equity or other appropriate proceeding, whether for
the specific performance of any covenant, term or condition contained herein or
in any instrument relating hereto, or for an injunction against a violation of
any of the terms hereof or thereof, or in aid of the exercise of any power
granted hereby or thereby or by law. If default shall be made in the payment
of the principal or interest on any note and such default remains uncured as
provided for under Section 7.1 (b) of this Agreement, interest shall be owed to
the holder of such note by the defaulting party during the default period at
the rate of ten percent (10%) per annum or, if lower, at the highest rate of
interest permitted by applicable law, and the defaulting party shall pay to the
note holder such further amount as shall be sufficient to cover the cost and
expenses of collection, including, without limitation, reasonable attorneys'
fees, expenses and disbursements. No course of dealing and no delay on the
part of any holder of any note or any instrument relating to such note or to
this Agreement in exercising any right contained therein shall operate as a
waiver thereof or otherwise prejudice such holder's rights, powers or remedies.
No right, power or remedy conferred by this Agreement or by any instrument
upon any holder thereof shall be exclusive of any right, power or remedy
referred to herein or therein or now or hereafter available at law, in equity,
by statute ro otherwise.
Section 7.3 Notice of Default
With respect to Events of Default or claimed defaults, the aggrieved party
will give the following notices:
(a) the aggrieved party will furnish to the defaulting or claimed
defaulting party timely written notice specifying the nature of such alleged
default and what actions the aggrieved party has taken or is taking or proposes
to take with respect thereto.
(b) if a party to this Agreement gives any notice or takes any other
actions with respect to a claimed default, such party will forthwith give
written notice thereof to all other Participants, describing the notice or
action and the nature of the claimed default.
ARTICLE VIII
RIGHTS OF PARTICIPANTS IN THE EVENT OF TERMINATION
In the event that an enforcement action against ASFC shall result in the
termination of the Pool, or the Pool shall be terminated for any other reason,
the Pool funds shall be distributed to Participants in satisfaction of any
deposit obligation under this Agreement including principal and interest.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Nonwaiver
No delay or failure of ASFC or any Participants in exercising any right,
power or privilege hereunder shall affect such right, power or privilege; nor
shall any single or partial exercise thereof or any abandonment or
discontinuance of steps to enforce such a right, power or privilege preclude
any further exercise thereof or of any other right, power or privilege. The
rights and remedies hereunder are cumulative and not exclusive of any rights or
remedies which any party hereto would otherwise have. Any waiver, permit,
consent or approval of any kind or character on the part of ASFC or Participant
of any breach or default under this Agreement or any such waiver of any
provision or condition of this Agreement must be in writing and shall be
effective only to the extent in such writing specifically set forth.
Section 9.2 Amendments
Amendment of this Agreement, or any supplement thereto, and of any of the
rights and obligations of any of the parties hereto, may be made only with the
consent of the party against whom change is sought.
Section 9.3 Notices
All notices, statements, requests and demands given to or made upon any
party hereto in accordance with the provisions of this Agreement shall be
deemed to have been given or made only when given in writing to any other party
hereto.
Section 9.4 Subsequent Instruments and Acts
The parties hereto covenant and agree that they will execute any further
instruments and perform any acts that are or may become necessary to effectuate
and carry out the intent of this Agreement.
Section 9.5 Successors and Assigns
This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns.
Section 9.6 Law Governing
This Agreement shall be construed in accordance with and governed by the
laws of the State of Indiana.
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Section 9.7 Counterparts
This Agreement may be executed in counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the
same instrument.
AMERICAN STATES FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Treasurer
AMERICAN STATES LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, Secretary
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CERTIFICATE OF PARTICIPATION
IN
AMERICAN STATES FINANCIAL CORPORATION
SHORT-TERM INVESTMENT POOL
Indianapolis, Indiana
Date: September 16, ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Financial Corporation ("ASFC") issues to American States Life
Insurance Company ("Participant") this Certificate of Participation in ASFC's
Short-Term Investment Pool in consideration of the receipt from Participant of
funds deposited by Participant on the dates andin the amounts as shown on
monthly reports to be provided to Participant, which reports shall be
substantially in the form of Schedule A hereto and shall constitute an addendum
to this Certificate. This Certificate may be surrendered for cash in
redemption, in whole or in part, of the balance shown on the addendum upon
notice given by Participant to ASFC by 9:00 a.m. Eastern Standard Time on the
day of redemption. This Certificate is callable and the deposited funds
evidenced hereby are payable by ASFC upon one day's notice to Participant.
Deposited funds evidenced by this Certificate are guaranteed as to both
principal and interest by ASFC.
The rate of interest to be paid on loaned funds evidenced by this Certificate
shall be a taxable money market rate.
Upon the occurrence of an Event of Default as defined in the ASFC Short-Term
Investment Pool Participation Agreement ("Agreement"), the aggrieved party
shall be immediately entitled to the remedies as provided in Section 7.2 of the
Agreement.
AMERICAN STATES FINANCIAL CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Treasurer
Agreed and Accepted:
AMERICAN STATES LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
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▇▇▇▇▇▇ ▇. ▇▇▇▇, Secretary
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PROMISSORY NOTE
Date: September 16, ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇
For value received, the undersigned (the "Maker") promises to pay to the order
of AMERICAN STATES FINANCIAL CORPORATION ("ASFC"), upon demand, the aggregate
unpaid amount of all borrowings made by the Maker pursuant to the ASFC
Short-Term Investment Pool Participation Agreement (the "Agreement") dated as of
September 16, 1996 between the Maker and ASFC and to pay interest on the unpaid
principal amount until maturity at a taxable money market rate of interest.
ASFC is entitled to all the rights and benefits provided by or referred to in
the Agreement to which ASFC and the Maker are parties and reference is made to
that Agreement for a statement thereof, and the nature and extent of the rights
of Payee in respect thereof.
For purposes of this Note an "Event and Default" shall occur upon the failure of
ASFC to receive monies in full payment under this Note upon demand, whereupon
ASFC shall be entitled to exercise any and all rights and remedies available to
it as provided in the Agreement.
AMERICAN STATES LIFE INSURANCE COMPANY
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
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▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Treasurer
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SCHEDULE A
ADDENDUM TO CERTIFICATE OF PARTICIPATION
ISSUED TO AMERICAN STATES LIFE INSURANCE COMPANY
ON SEPTEMBER 16, 1996
DEPOSIT / WITHDRAW
TRANS.
DATE TRANS. AMOUNT BALANCE RATE INTEREST
---- ------ ------ ------- ---- --------
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