GUARANTY AGREEMENT
THIS GUARANTY AGREEMENT (the "Guaranty") is made and given this 29th day of
December, 2005, by SECURITY NATIONAL LIFE INSURANCE COMPANY, a Utah domiciled
insurance company, and its wholly-owned subsidiary, SOUTHERN SECURITY LIFE
INSURANCE COMPANY, a Florida domiciled insurance company (collectively, the
"Guarantors").
WITNESSETH:
WHEREAS, on September 23, 2005, Security National Financial Corporation, a
Utah corporation, through its subsidiaries, Security National Life Insurance
Company and Southern Security Life Insurance Company, entered into a stock
purchase agreement (the "Stock Purchase Agreement") with Memorial Insurance
Company of America, an Arkansas domiciled insurance company ("Memorial Insurance
Company");
WHEREAS, under the terms of the Stock Purchase Agreement, Southern Security
Life Insurance Company and Memorial Insurance Company each agree at the closing
date of the stock purchase transaction to enter into a reinsurance agreement to
reinsure all of the in force business of Memorial Insurance Company to Security
National Life Insurance Company, as insured, except for eleven policies not
included within the reinsured policies, which are to be retained by Memorial
Insurance Company (the "Retained Policies");
WHEREAS, the Retained Policies that are to be retained by Memorial
Insurance Company pursuant to the terms of the stock purchase transaction
consist of the following policies, together with the face amount and amount of
reserves of such policies:
Policy Face
Number Amount SAP Reserve
------ ---------- -----------
40116 $1,400.00 $665.50
37893 1,400.00 665.50
40117 1,200.00 374.72
39303 1,200.00 374.72
34758 700.00 557.46
38161 1,300.00 406.95
39301 2,600.00 1,090.88
32025 3,500.00 1,984.97
36085 1,400.00 744.95
34759 700.00 576.04
44711 1,400.00 1,102.01
---------- ---------
Total $16,800.00 $8,543.70
========== =========
WHEREAS, on October 20, 2005, Security National Life Insurance Company and
Southern Security Life Insurance Company submitted to the Arkansas Insurance
Department for approval a Form A Filing for the Acquisition and Control of
Memorial Insurance Company by Southern Security Life Insurance Company, in which
the filing included a proposed reinsurance agreement (the "Reinsurance
Agreement") that Security National Life Insurance Company intends to enter into
with Memorial Insurance Company at the closing date of the stock purchase
transaction;
WHEREAS, as a condition to the Arkansas Insurance Department approving the
Form A filing, Security National Life Insurance Company has agreed to enter into
a guaranty agreement with Memorial Insurance Company, in a form acceptable to
the department, to guaranty the benefit payments stated in the eleven Retained
Policies as a result of the Reinsurance Agreement to be entered into at the
closing date of the stock purchase transaction; and
WHEREAS, Security National Life Insurance Company desires to enter into a
guaranty agreement to guaranty the benefit payments stated in the Retained
Policies to be retained by Memorial Insurance Company following the completion
of the stock purchase transaction and the execution of the Reinsurance
Agreement;
NOW, THEREFORE, in respect of the foregoing, Security National Life
Insurance Company and Southern Security Life Insurance Company, as guarantors,
represent and warrant as follows:
1. The Guarantors hereby unconditionally and irrevocably guarantee to Memorial
Insurance Company, the Arkansas Insurance Department and to the policyholders of
the Retained Policies the full and prompt payment, when due, of the benefit
payments stated in each of the Retained Policies to be retained by Memorial
Insurance Company following the closing of the stock purchase transaction and
the execution of the Reinsurance Agreement, to the extent that the reserves
relating to such policies are unable to provide for the full and complete
payment of the benefits thereto (the "Obligations").
2. This guarantee of the Obligations is a continuing, absolute, and
unconditional guaranty and shall remain in full force and effect and be binding
in accordance with and to the extent of its terms upon the Guarantors and their
respective successors, transferees and assigns thereof, and inure to the benefit
of the policyholders of the Retained Policies and their heirs, legal
representatives, assigns and successors in interest, until the Obligations shall
have been satisfied in full.
3. The Guarantors further represent and warrant that:
(a) the Guarantors have full power and authority to execute and deliver
this Guaranty and to preform fully and completely all of the obligations and
liabilities under this Guaranty;
(b) the execution, delivery and performance of this Guaranty shall not
violate any law, regulation, order, writ, injunction, decree or judgment of any
court or governmental authority, and will not result in a breach of any
contract, agreement or undertaking to which any Guarantor is a party; and
(c) this Guaranty is a valid and binding obligation, enforceable upon the
Guarantors in accordance with the terms hereof (except as may be limited by
bankruptcy, insolvency or other similar laws affecting the enforcement of
creditors' rights generally and subject to the qualification that the remedy of
specific performance or of injunctive relief is subject to the discretion of the
court before which any proceeding therefore may be brought).
4. If any of the provisions of this Guaranty shall contravene or be held invalid
under the laws of any jurisdiction, this Guaranty shall be construed as if not
containing those provisions and the rights and obligations of the parties
thereto shall be construed and enforced accordingly.
5. This Guaranty may not be changed orally, and this Guaranty and the rights,
obligations and liabilities of the parties and policyholders hereunder shall be
governed by and construed in accordance with the laws of the state of Arkansas,
without giving effect to provisions thereof concerning conflict of laws.
6. The Guarantors' liability hereunder shall not be discharged except by
performance and payment of all the Obligations hereunder, provided that,
Guarantors' liability hereunder shall be reduced to the extent of any benefit
payments made from the reserves relating to the Retained Policies.
7. The Guarantors jointly and severely waive presentment for payment, notice of
protest, notice of dishonor, notice of nonpayment, notice of presentment, demand
for payment, or protest of any of the Obligations.
8. Neither the Guarantors nor their successors in interest (by operation of law
or otherwise) or legal representatives, shall assign or otherwise transfer their
obligations hereunder.
9. This Guaranty shall continue in force and affect until all Obligations of the
Guarantors under said instrument have been fully satisfied and until the benefit
payments have been paid in full to the policyholders of each of the Retained
Policies to be retained by Memorial Insurance Company following the closing of
the stock purchase transaction and the execution of the Reinsurance Agreement.
IN WITNESS WHEREOF, the Guarantors have executed and given this Guaranty as
of the day and year first above written.
GUARANTORS:
SECURITY NATIONAL LIFE INSURANCE COMPANY
By: /s/ Scott M. Quist
------------------
Scott M. Quist, President
and Chief Operating Officer
SOUTHERN SECURITY LIFE INSURANCE COMPANY
By: /s/ Stephen M. Sill
-------------------
Stephen M. Sill, Vice President, Treasurer
and Chief Financial Officer
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
On this 29th day of December, 2005, personally appeared before me Scott M.
Quist, who being by me duly sworn did say that he is the President and Chief
Operating Officer of SECURITY NATIONAL LIFE INSURANCE COMPANY and that said
Scott M. Quist stated that he signed the within and foregoing document on behalf
of said corporations.
/s/ DeAnn Theurer
NOTARY PUBLIC [SEAL]
STATE OF UTAH )
) ss.
COUNTY OF SALT LAKE )
On this 29th day of December, 2005, personally appeared before me Stephen
M. Sill, who being by me duly sworn did say that he is the Vice President,
Treasurer and Chief Financial Officer of SOUTHERN SECURITY LIFE INSURANCE
COMPANY and that said Stephen M. Sill stated that he signed the within and
foregoing document on behalf of said corporations.
/s/ DeAnn Theurer
NOTARY PUBLIC [SEAL]