-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CFqFyC8v1rcfmZsde0+IykAkIv4YeKvwHz4P6v9Q5xA+mxIopJG00JaeFMhh/3Me j9Bys4nGgpVjdy12HCOY6g== 0000940397-98-000041.txt : 19980630 0000940397-98-000041.hdr.sgml : 19980630 ACCESSION NUMBER: 0000940397-98-000041 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19980629 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: UNITED TRUST INC /IL/ CENTRAL INDEX KEY: 0000832480 STANDARD INDUSTRIAL CLASSIFICATION: LIFE INSURANCE [6311] IRS NUMBER: 371172848 STATE OF INCORPORATION: IL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-40020 FILM NUMBER: 98656983 BUSINESS ADDRESS: STREET 1: 5250 SOUTH SIXTH STREET STREET 2: PO BOX 5147 CITY: SPRINGFIELD STATE: IL ZIP: 62703 BUSINESS PHONE: 2172416300 MAIL ADDRESS: STREET 1: PO BOX 5147 STREET 2: 5250 SOUTH SIXTH STREET ROAD CITY: SPRINGFIELD STATE: IL ZIP: 62705 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: FIRST SOUTHERN FUNDING INC CENTRAL INDEX KEY: 0001064869 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: KY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 99 LANCASTER STREET STREET 2: P O BOX 328 CITY: STANFORD STATE: KY ZIP: 40484 BUSINESS PHONE: 6063653555 SC 13D 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 SCHEDULE 13D Under the Securities Exchange Act of 1934 (Amendment No. ___) UNITED TRUST, INC. (Name of Issuer) COMMON STOCK, NO PAR VALUE (Title of Class of Securities) 913111209 (CUSIP Number) Jill Martin First Southern Bancorp, Inc. P.O. Box 328, Stanford, KY 40484 (606 365-3555 JUNE 17, 1998 (Date of Event which requires filing of this Statement) If the filing person has previously filed a Statement on Schedule 13G to report the acquisition that is the subject of this Schedule 13D, and is filing this Schedule because of Sections 240.13d-1(e), 240.13d-1(f) or 240.13d-1(g) check the following box [ ] CUSIP No. 913111209 13D Page ___ of ___ Pages - ------------------------------------------------------------------ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Southern Funding, Inc. - ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ----------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------- 4 SOURCE OF FUNDS WC, BK - ----------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) - ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Kentucky - ----------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 16,450* SHARES -------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 0* EACH -------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 16,450* WITH -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0* - ----------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 16,450* - ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) - ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 1.0% - ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON CO - ----------------------------------------------------------------- * See response to Item 5 CUSIP No. 913111209 13D Page ___ of ___ Pages - ------------------------------------------------------------------ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON First Southern Bancorp, Inc. - ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ----------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------- 4 SOURCE OF FUNDS WC, BK - ----------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) [ ] - ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION Kentucky - ----------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 80,241* SHARES -------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY 0* EACH -------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 80,241* WITH -------------------------------------------------- 10 SHARED DISPOSITIVE POWER 0* - ----------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 80,241* - ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) [ ] - ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 4.9% - ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON HC - ----------------------------------------------------------------- * See response to Item 5 CUSIP No. 913111209 13D Page ___ of ___ Pages - ------------------------------------------------------------------ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON Jesse T. Correll - ----------------------------------------------------------------- 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [X] (b) [ ] - ----------------------------------------------------------------- 3 SEC USE ONLY - ----------------------------------------------------------------- 4 SOURCE OF FUNDS AF - ----------------------------------------------------------------- 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) - ----------------------------------------------------------------- 6 CITIZENSHIP OR PLACE OF ORGANIZATION United States - ----------------------------------------------------------------- 7 SOLE VOTING POWER NUMBER OF 0 SHARES -------------------------------------------------- BENEFICIALLY 8 SHARED VOTING POWER OWNED BY See response to Item 5 EACH -------------------------------------------------- REPORTING 9 SOLE DISPOSITIVE POWER PERSON 0 WITH -------------------------------------------------- 10 SHARED DISPOSITIVE POWER See response to Item 5 - ----------------------------------------------------------------- 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON See response to Item 5 - ----------------------------------------------------------------- 12 CHECK IF THE AGGREGATE AMOUNT IN ROW 11 EXCLUDES CERTAIN SHARES (SEE INSTRUCTIONS) - ----------------------------------------------------------------- 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 11 See response to Item 5 - ----------------------------------------------------------------- 14 TYPE OF REPORTING PERSON IN - ----------------------------------------------------------------- ITEM 1. SECURITY AND ISSUER Class of equity security: Common Stock, No Par Value ("Common Stock") Name and address of principal United Trust, Inc. ("UTI") executive offices: 5250 South Sixth Street P.O. Box 5147 Springfield, Illinois 62705 ITEM 2. IDENTITY AND BACKGROUND The name, citizenship or state of organization, principal employment or business, and the address of the principal office of each Reporting Person, are set forth below: JESSE T. CORRELL (a) The name of this Reporting Person is Jesse T. Correll ("Mr. Correll"). (b) The business address of Mr. Correll is P.O. Box 328, 99 Lancaster Street, Stanford, KY 40484 (c) Mr. Correll's present principal occupation or employment and the name, principal business and address of any corporation or other organization in which such employment is carried on are: President and Director of First Southern Bancorp, Inc. (Bank holding company), P.O. Box 328, 99 Lancaster Street, Stanford, Kentucky 40484. (d) During the last five years, Mr. Correll has not been convicted of a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, Mr. Correll was not a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which FSBI was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. (f) Mr. Correll is a citizen of the United States. FIRST SOUTHERN BANCORP INC. (FSBI) (a Kentucky corporation) (a) The name of this Reporting Person is First Southern Bancorp, Inc. (b) The state of organization of FSBI is Kentucky. (c) The principal business of FSBI is a multi-bank holding company. The address of the principal office of FSBI is P.O. Box 328, 99 Lancaster Street, Stanford, Kentucky 40484. (d) During the last five years, FSBI has not been convicted of a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, FSBI was not a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which FSBI was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Directors, Executive Officers and Controlling Persons of FSBI:
Present Principal NAME BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT Jesse T. Correll P.O. Box 328 President and Director 99 Lancaster Street of First Southern Stanford, KY 40484 Bancorp, Inc. (Bank holding company) Randall L. Attkisson P.O. Box 328 Vice President, Treasurer 99 Lancaster Street and Director of First Stanford, KY 40484 Southern Bancorp, Inc. (Bank holding company) Jill M. Martin P.O. Box 328 Secretary 99 Lancaster Street of First Southern Stanford, KY 40484 Bancorp, Inc. (Bank holding company) Ward F. Correll P.O. Box 129 Owner, Cumberland Lake 150 Railroad Drive Shell, Inc. (Gasoline Somerset, KY 42502 wholesaler) David S. Downey P.O. Box 295 President and Director of 102 West Main Street First Southern National Stanford, KY 40484 Bank (Bank) Douglas P. Ditto P.O. Box 295 Senior Vice President 102 West Main Street of First Southern Stanford, KY 40484 National Bank (Bank) John R. Ball P.O. Box 628 CEO and Director of 27 Public Square First Southern National Lancaster, KY 40444 Bank of Garrard County (Bank) Gary Dick P.O. Box 489 CEO and Director of 216 North Main St. First Southern National Monticello, KY 42633 Bank of Wayne County (Bank) James P. Rousey 3060 Harrodsburg Road CEO and Director of Lexington, KY 40503 First Southern National Bank of the Bluegrass (Bank) Joseph E. Hafley P.O. Box 328 Chief Lending Officer of 99 Lancaster Street First Southern Bancorp, Stanford, KY 40484 Inc. (Bank holding co.) Michael W. Taylor P.O. Box 328 Controller, First Southern 99 Lancaster Street Bancorp, Inc. (Bank Stanford, KY 40484 holding co.)
All of the directors and executive officers of FSBI are citizens of the United States and during the last five years, none of these directors or executive officers (i) has been convicted of a criminal proceeding (excluding traffic violations or similar misdemeanors) nor (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. FIRST SOUTHERN FUNDING. INC. (FSF) (a Kentucky corporation) (a) The name of this Reporting Person is First Southern Funding, Inc. (b) The state of organization of FSF is Kentucky. (c) The principal business of FSF is an investment company. The address of the principal office of FSF is P.O. Box 328, 99 Lancaster Street, Stanford, Kentucky 40484. (d) During the last five years, FSF has not been convicted of a criminal proceeding (excluding traffic violations or similar misdemeanors). (e) During the last five years, FSF was not a party to a civil proceeding of a judicial or administrative body of competent jurisdiction as a result of which FSBI was or is subject to a judgment, decree or final order enjoining future violations of, or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. Directors, Executive Officers and Controlling Persons of FSF: Name and Present Principal OFFICES HELD WITH FSF BUSINESS ADDRESS OCCUPATION OR EMPLOYMENT Jesse T. Correll P.O. Box 328 President and Director President, Director[F1] 99 Lancaster Street of First Southern Stanford, KY 40484 Bancorp, Inc. (Bank holding company) Randall L. Attkisson P.O. Box 328 Vice President, Treasurer Treasurer, Director 99 Lancaster Street and Director of First Stanford, KY 40484 Southern Bancorp, Inc. (Bank holding company) Jill M. Martin P.O. Box 328 Secretary Secretary, Director 99 Lancaster Street of First Southern Stanford, KY 40484 Bancorp, Inc. (Bank holding company) Christopher Coldiron P. O. Box 328 Loan Officer and Vice President 99 Lancaster Street Vice President of Stanford, KY 40484 First Southern National Bank (Bank) Ward F. Correll P.O. Box 129 Owner, Cumberland Lake Director 150 Railroad Drive Shell, Inc. (Gasoline Somerset, KY 42502 wholesaler) David S. Downey P.O. Box 295 President and Director of Director 102 West Main Street First Southern National Stanford, KY 40484 Bank (Bank) Douglas P. Ditto P.O. Box 295 Senior Vice President Vice President, Director 102 West Main Street of First Southern Stanford, KY 40484 National Bank (Bank) John R. Ball P.O. Box 628 CEO and Director of Director 27 Public Square First Southern National Lancaster, KY 40444 Bank of Garrard County (Bank) Gary Dick P.O. Box 489 CEO and Director of Director 216 North Main St. First Southern National Monticello, KY 42633 Bank of Wayne County (Bank) James P. Rousey 3060 Harrodsburg Road CEO and Director of Director Lexington, KY 40503 First Southern National Bank of the Bluegrass (Bank) [FN] [F1] Mr. Correll also owns approximately 83% of the outstanding stock of FSF. All of the directors and executive officers of FSF are citizens of the United States and during the last five years, none of these directors or executive officers (i) has been convicted of a criminal proceeding (excluding traffic violations or similar misdemeanors) nor (ii) been a party to a civil proceeding of a judicial or administrative body of competent jurisdiction and, as a result of such proceeding, was or is subject to a judgment, decree or final order enjoining future violations of or prohibiting or mandating activities subject to, federal or state securities laws or finding any violation with respect to such laws. ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION The amount of Funds used in making the purchases of the Common Stock by each Reporting Person is as follows: First Southern Bancorp, Inc. $ 732,922.25 First Southern Funding, Inc. $ 153,190.63 Total $ 886,113.28 FSB and FSF employed working capital to make these purchases of the Common Stock, including funds on hand and amounts drawn under existing lines of credit with Star Bank, NA. FSF borrowed the entire amount and FSB borrowed $495,775 in making the purchases. See the response to Item 4 below with respect to amounts that may be used in the future to purchase shares of Common Stock. The exact amount and source of such funds is not fixed at this time. ITEM 4. PURPOSE OF TRANSACTION The purpose of the acquisition of shares of Common Stock is for investment purposes and also for the purpose of acquiring a controlling interest in UTI by FSF and, indirectly, Mr. Correll. The Reporting Persons presently intend to acquire additional securities of UTI in accordance with and subject to the terms and conditions of (a) the Acquisition Agreement, dated April 30, 1998, between FSF and UTI, as amended May 29, 1998, (b) the Stock Purchase Agreement, dated April 30, 1998, between FSF and Larry E. Ryherd, (c) the Convertible Note Purchase Agreement, dated April 30, 1998, between FSF and James E. Melville, George E. Francis, Brad M. Wilson, Joseph H. Metzger, Theodore C. Miller, Michael K. Borden and Patricia G. Fowler, and (d) the Option Agreement between FSF and UTI, dated April 30, 1998 (collectively, these agreements are referred to as the "Agreements"). These agreements are attached as Exhibit A and are incorporated herein by reference. The number of shares of Common Stock that may be purchased pursuant to these agreements: A. Pursuant to the Acquisition Agreement, FSF has agreed to purchase 389,715 shares of the Common Stock from UTI for a purchase price of $3,897,150 and an additional 473,523 shares of the Common Stock for a purchase price of $7,102,845. The purchase price for these shares will be paid in cash by FSF at closing, and is subject to adjustment as provided in the Acquisition Agreement. FSF may assign its right to purchase some or all of these shares to one or more of its affiliates. The closing of the purchase of Common Stock pursuant to the Acquisition Agreement is subject to a number of conditions including, among other things, the receipt of required insurance regulatory approvals, applications for which are currently pending. Each of UTI and FSF has the right to terminate the Acquisition Agreement upon the occurrence of certain events, including if the closing of the Acquisition Agreement does not occur by July 31, 1998, subject to extension under certain circumstances for delays in obtaining required regulatory approvals. The closing of the Acquisition Agreement is a condition to the closing of the Stock Purchase Agreement and Convertible Note Purchase Agreement. B. Subject to the terms and conditions of the Stock Purchase Agreement (included in Exhibit A hereto as Exhibit 1(c) to the Acquisition Agreement), FSF will purchase 66,667 shares of the Common Stock from Larry Ryherd for a cash purchase price of $1,000,000 concurrently with the closing of the Acquisition Agreement, subject to the accuracy of the parties representations and warranties. FSF may assign its right to purchase some or all of these shares to one or more of its affiliates. C. Subject to the terms and conditions of the Convertible Note Purchase Agreement (included in Exhibit A hereto as Exhibit 1(d) to the Acquisition Agreement), FSF will purchase $2,560,000 of initial face amount of UTI Convertible Notes from certain officers and directors of UTI for a cash purchase price of $3,072,000, on March 1, 1999. The UTI Convertible Notes are convertible into 204,800 shares of Common Stock, and, in the Acquisition Agreement, FSF has agreed to convert the UTI Convertible Notes purchased by it pursuant to the Convertible Note Purchase Agreement to shares of the Common Stock on or before July 31, 2000. FSF may assign its right to purchase some or all of the UTI Convertible Notes to one or more of its affiliates. D. Pursuant to the Option Agreement (included in Exhibit A hereto as Exhibit 1(e) to the Acquisition Agreement), at the closing of the Acquisition Agreement, FSF will have the option to purchase from UTI shares of common stock of UTI for a purchase price in cash equal to $15 per share, such option to expire on July 1, 2001. The number of shares of Common Stock subject to the Option Agreement shall be that number of shares which, following exercise, and when combined with all of the other shares then owned by FSF and its affiliates, will represent a majority of the then outstanding shares of Common Stock, not to exceed 1,450,000 shares. The maximum number of shares subject to such option shall be reduced by two shares for each share that FSF or its affiliates purchase in private or public transactions subsequent to the closing. FSF may assign its right to purchase some or all of the shares subject to the Option Agreement to one or more of its affiliates. Accordingly, subject to the terms and conditions of these agreements, FSF (directly or through one or more of its affiliates), plans to acquire, in successive transactions, an additional 1,134,705 shares of Common Stock, and may acquire additional shares of Common Stock, upon exercise, from time to time, of the Option Agreement giving FSF and its affiliates ownership of up to 51% of the then outstanding Common Stock. In addition, one or more of the Reporting Persons may from time to time purchase shares of Common Stock in the open market or in privately negotiated transactions depending upon, among other things, market conditions, the market value of the Common Stock and the availability of shares for sale, the Reporting Person's liquidity and availability of funds or other similar factors. In any event, FSBI does not presently intend to acquire directly more than 4.9% of the outstanding Common Stock. The Acquisition Agreement contains covenants concerning the operation of UTI pending the closing of the transactions contemplated by that agreement, as well as covenants by UTI and FSF following the closing, including the following: 1. BOARD OF DIRECTORS. UTI has agreed to cause three persons designated by FSF to be appointed to the Board of Directors of UTI effective as of the closing date of the Acquisition Agreement. For each of the three annual elections of the UTI Board of Directors following the closing, UTI will cause three persons designated by FSF to be included in the management slate of directors recommended to the UTI shareholders for election to Board membership. UTI will not and will cause the UTI Board of Directors not to take any action that would increase the size of the Board of Directors for such three year period. 2. NO ADDITIONAL SHARES. For a period of three years following the closing of the Acquisition Agreement, UTI will not and will not permit any UTI affiliate to issue additional shares of capital stock or to issue or agree to issue any option, warrant or other instrument convertible into shares of capital stock without prior written consent of FSF. 3. UII NOTE AGREEMENT. UTI will cause United Income, Inc. to call, as soon as practicable, all of the United Income, Inc. outstanding convertible debt according to its terms. 4. REPURCHASE OF SHARES. UTI agreed to purchase for a cash price of $15 per share, the 28,000 shares of Common Stock owned by Universal Guaranty on or before December 31, 1998. 5. PENDING MERGER. FSF and UTI agreed to proceed with the merger of UTI and United Income, Inc. according to the terms and conditions discussed in the Form S-4 Registration Statement filed by UTI with the Securities and Exchange Commission on January 15, 1998. Following the acquisition of shares pursuant to the Acquisition Agreement, one or more of the Reporting Persons will, directly or through representatives, have a role in the management of UTI through board representation and Mr. Correll will serve as chief investment officer for the life insurance subsidiaries of UTI; as a result, they will have the ability to influence UTI and its strategic plans. Except as described above, the Reporting Persons do not presently have any plans or proposals which relate to or would result in i) the acquisition by any person of additional securities of UTI, or the disposition of securities of UTI, ii) an extraordinary corporate transaction involving UTI or its subsidiaries, iii) the sale or transfer of a material amount of assets of UTI or its subsidiaries, iv) a change in the present board of directors or management of UTI, v) a material change in the present capitalization or dividend policy of UTI, vi) any other material change in UTI's business or corporate structure, vii) a change in UTI's charter or bylaws or other actions which may impede the acquisition of control of UTI by any person, viii) a class of securities of UTI being delisted from a national securities exchange or cease being authorized to be quoted in an inter-dealer quotation system of a registered national securities association, ix) a class of equity securities of UTI becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Act, or x) any action similar to those enumerated above. ITEM 5. INTEREST IN SECURITIES OF THE ISSUER (a) The beneficial ownership of the Common Stock by each Reporting Person is as follows: First Southern Bancorp, Inc. 80,241 shares 4.9% First Southern Funding, Inc. 16,450 SHARES 1.0% Total[F1] 96,691 shares 5.9% [FN] [F1]The Reporting Persons have agreed in principle to act together for the purpose of acquiring or holding equity securities of UTI. Therefore, for purposes of this Schedule 13D, each may be deemed to have acquired beneficial ownership of the equity securities of UTI beneficially owned by each of the other Reporting Persons. In addition, by virtue of his ownership of voting securities of FSF and FSBI, Mr. Correll may be deemed to beneficially own the total number of shares of Common Stock owned by them, and may be deemed to share with them the right to vote and to dispose of such shares. Mr. Correll owns approximately 83% of the outstanding voting stock of FSF; he owns directly approximately 22% and companies he controls owns approximately 33% of the outstanding voting stock of FSBI. Additional shares of Common Stock that may be acquired under the agreements described in Item 4 and incorporated herein by reference: Acquisition Agreement 863,238 Stock Purchase Agreement 66,667 Convertible Note Purchase Agreement 204,800 Option Agreement 1,450,000* * Subject to adjustment. Beneficial ownership of up to 51% of the outstanding Common Stock can be acquired under these agreements. Beneficial ownership of these shares is disclaimed at this time. (b) Each of the following Reporting Persons has sole voting and dispositive power with respect to the following shares: First Southern Bancorp, Inc. 80,241 shares 4.9% First Southern Funding, Inc. 16,450 SHARES 1.0% Total[F1] 96,691 shares 5.9% [FN] [F1]See Note 1 in the response to Item 5(a) above. (c) The following five transactions of the Common Stock of the Issuer were effected during the past sixty days by the Reporting Persons: Transaction 1: (1) Identity of the person who effected the transaction: First Southern Funding, Inc. (2) The date of the transaction: June 17, 1998 (3) The amount of securities involved: 16,450 shares (4) The price per share or unit: $9.31 per share (5) Where and how the transaction was effected: By the Reporting Person's broker, J.J.B. Hilliard, W.L. Lyons, Inc. of Bowling Green, KY Transaction 2: (1) Identity of the person who effected the transaction: First Southern Bancorp, Inc. (2) The date of the transaction: June 16, 1998 (3) The amount of securities involved: 5,000 shares (4) The price per share or unit: $9.75 per share (5) Where and how the transaction was effected: By the Reporting Person's broker, J.J.B. Hilliard, W.L. Lyons, Inc. of Bowling Green, KY Transaction 3: (1) Identity of the person who effected the transaction: First Southern Bancorp, Inc. (2) The date of the transaction: June 2, 1998 (3) The amount of securities involved: 4,000 shares (4) The price per share or unit: $10.50 per share (5) Where and how the transaction was effected: By the Reporting Person's broker, J.J.B. Hilliard, W.L. Lyons, Inc. of Bowling Green, KY Transaction 4: (1) Identity of the person who effected the transaction: First Southern Bancorp, Inc. (2) The date of the transaction: June 2, 1998 (3) The amount of securities involved: 25,000 shares (4) The price per share or unit: $9.55 per share (5) Where and how the transaction was effected: By the Reporting Person's broker, J.J.B. Hilliard, W.L. Lyons, Inc. of Louisville, KY Transaction 5: (1) Identity of the person who effected the transaction: First Southern Bancorp, Inc (2) The date of the transaction: April 24, 1998 (3) The amount of securities involved: 5,500 shares (4) The price per share or unit: $9.69 per share (5) Where and how the transaction was effected: By the Reporting Person's broker, J.J.B. Hilliard, W.L. Lyons, Inc. of Bowling Green, KY (d) To the knowledge of the Reporting Persons, no other person has the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares held by the Reporting Persons. ITEM 6: CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS, OR RELATIONSHIPS WITH RESPECT TO SECURITIES OF THE ISSUER See responses to Items 4 and 5 above. Other than (i) the Acquisition Agreement, the Stock Purchase Agreement, the Convertible Note Purchase Agreement, and the Option Agreement, all four of which are attached hereto as Exhibit A, (ii) as described in the responses to Items 4 and 5 above, and (iii) the Agreement Among Reporting Persons attached hereto as Exhibit B, neither the Reporting Persons nor any of their directors, executive officers or controlling persons is a party to any contract, arrangement, understanding or relationship (legal or otherwise) with respect to any security of the Issuer, including but not limited to transfer or voting of any of the securities, finder's fees, joint ventures, loan or option arrangements, puts or calls, guarantees of profits, division of profits or loss, or the giving or withholding of proxies. ITEM 7: MATERIAL TO BE FILED AS EXHIBITS The following exhibits are filed with this Schedule 13D: Exhibit A - (i) Acquisition Agreement between FSF and UTI dated April 30, 1998, as amended May 29, 1998: (ii) Stock Purchase Agreement between FSF and Larry E. Ryherd dated April 30, 1998; (iii) Convertible Note Purchase Agreement between FSF and James E. Melville, George E. Francis, Brad M. Wilson, Joseph H. Metzger, Theodore C. Miller, Michael K. Borden and Patricia G. Fowler dated April 30, 1998; and (iv) Option Agreement between FSF and UTI dated April 30, 1998 Exhibit B - Agreement among Reporting Persons dated June 25, 1998 for the filing of a single Schedule 13D pursuant to Rule 13d- l(f)(l). Exhibit C - Letter agreements and promissory note relating to the borrowing of funds by FSF referenced in Item 3. Exhibit D - Letter agreements and promissory note relating to the borrowing of funds by FSB referenced in Item 3. SIGNATURE After reasonable inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. June 25, 1998 By: /S/ JESSE T. CORRELL Jesse T. Correll Attorney-in-Fact on behalf of each of the Reporting Persons* * Pursuant to the Agreement among Reporting Persons dated June 25, 1998 for the filing of a single Schedule 13D pursuant to Rule 13d-1-(f)(1), each Reporting Person has authorized Jesse T. Correll to sign on behalf of such Reporting Person any Schedule 13D or amendments thereto that are required to be filed on behalf of the Reporting Persons to this Schedule 13D. EXHIBIT INDEX EXHIBIT NO. DESCRIPTION A Acquisition Agreement between FSF and UTI dated April 30, 1998, as amended May 29, 1998, including the following exhibits thereto: Stock Purchase Agreement between FSF and Larry E. Ryherd dated April 30, 1998; Convertible Note Purchase Agreement between FSF and James E. Melville, George E. Francis, Brad M. Wilson, Joseph H. Metzger, Theodore C. Miller, Michael K. Borden and Patricia G. Fowler dated April 30, 1998; and Option Agreement between FSF and UTI dated April 30, 1998 B Agreement among Reporting Persons dated June 25, 1998 for the filing of a single Schedule 13D pursuant to Rule 13d-l(f)(l). C Letter agreements and promissory note relating to the borrowing of funds by FSF. D Letter agreements and promissory note relating to the borrowing of funds by FSB. EX-99.A 2 EXHIBIT A ACQUISITION AGREEMENT THIS ACQUISITION AGREEMENT made this 30th day of April, 1998 between FIRST SOUTHERN FUNDING, INC., a Kentucky corporation ("Buyer"), and UNITED TRUST, INC., an Illinois corporation ("UTI"). WITNESSETH: WHEREAS, Buyer and UTI have negotiated concerning an acquisition by Buyer of shares of the common stock of UTI; and WHEREAS, the Buyer would acquire the shares of UTI common stock through a series of transactions with UTI and certain UTI shareholders; NOW, THEREFORE, in consideration of the premises, covenants and agreements set forth herein, the sufficiency of which is hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. ACQUISITION OF SHARES OF UTI. Buyer will, at the closing, subject to the terms and conditions set forth herein, acquire shares of the common stock of UTI as follows: (a) Buyer will purchase 389,715 shares of the common stock of UTI from UTI for a purchase price of $3,897,150 to be paid in cash by Buyer at closing; (b) Buyer will purchase an additional 473,523 shares of the common stock of UTI for a purchase price of $7,102,845 to be paid in cash by Buyer at closing; (c) Buyer will purchase 66,667 shares of the common stock of UTI from Larry Ryherd for a cash purchase price of $1,000,000 pursuant to the terms of that Stock Purchase Agreement set forth in Exhibit 1(c) attached hereto; (d) Buyer will purchase $2,560,000 of initial face amount of UTI Convertible Notes from certain officers and directors of UTI for a cash purchase price of $3,072,000 pursuant to the terms of that Convertible Note Purchase Agreement set forth in Exhibit 1(d) attached hereto; and (e) UTI, at the closing, will grant, for nominal consideration, an irrevocable, exclusive option to Buyer to purchase shares of common stock of UTI for a purchase price in cash equal to $15 per share, such option to expire on July 1, 2001 and to be in the form of that Option Agreement attached hereto as Exhibit 1(e). The number of shares subject to such option shall be that number of shares which, following exercise, and when combined with all of the other shares then owned by Buyer and its affiliates, will represent a majority of the then outstanding shares of UTI common stock, not to exceed 1,450,000 shares. The maximum number of shares subject to such option shall be reduced by two shares for each share that Buyer or its affiliates purchase in private or public transactions subsequent to the closing. 2. REPRESENTATIONS AND WARRANTIES OF UTI. UTI warrants and represents to Buyer that: (a) ORGANIZATION AND GOOD STANDING OF UTI AND ITS AFFILIATES. UTI is a corporation duly organized, validly existing and in good standing under the laws of the State of Illinois. United Income, Inc. ("UII") is a corporation duly organized, validly existing and in good standing under the laws of the State of Ohio. United Trust Group Inc. ("UTG") is a corporation duly organized, validly existing and in good standing under the laws of the State of Illinois. First Commonwealth Corporation ("FCC") is a corporation duly organized, validly existing and in good standing under the laws of the State of Virginia. Each of Appalachian Life Insurance Company ("APP"), Abraham Lincoln Insurance Company ("ALI") United Security Assurance Company ("USA"), and Universal Guaranty Life Insurance Company ("UGL") is a legal reserve life insurance company duly organized, validly existing and in good standing under the laws of the State of its domicile and duly licensed to sell life insurance under the laws of each state as set forth in Exhibit 2(a), attached hereto. (APP, ALI, USA and UGL are hereinafter sometimes referred to individually as an "Insurance Company Subsidiary, and collectively as the "Insurance Company Subsidiaries." APP, ALI, USA, UGL, UTG, UII and FCC are hereinafter sometimes referred to individually as a "UTI Subsidiary," and collectively as the "UTI Subsidiaries." Each of UTI, UII, UTG and FCC and each of the Insurance Company Subsidiaries is qualified to do business in each state where the nature of its business activities and ownership of its properties require it to be so qualified, as set forth in Exhibit 2(a). Except as disclosed in the schedule heretofore delivered to Buyer by UTI (referred to hereinafter as UTI's Disclosure Schedule), none of the Insurance Company Subsidiaries is the subject of any supervision, conservation, rehabilitation, liquidation, receivership, insolvency or other similar proceeding, nor is any of the Insurance Company Subsidiaries operating under any formal or informal arrangement or understanding with the licensing authority of any jurisdiction which restricts its authority to do business or requires it to take, or to refrain from taking, any action. (b) CORPORATE POWER. Each of UTI, UII, UTG and FCC and each Insurance Company Subsidiary has full corporate power to own its properties and carry on its business as currently conducted. 2 (c) CERTIFICATE OF INCORPORATION AND BY-LAWS. (i) The certificate of incorporation of each of UTI, UII, UTG and FCC and of each Insurance Company Subsidiary and all amendments thereto, as certified by the applicable state governmental authority, and (ii) the bylaws of each of UTI, UII, UTG, FCC and each of the Insurance Company Subsidiaries, as currently in effect, and as certified by each company's respective corporate Secretary as being complete and correct, which have been delivered to Buyer, are complete and correct. (d) CORPORATE ORGANIZATION STRUCTURE. UTI owns of record and beneficially 565,766 shares (40%) of the issued and outstanding common stock no par value, of UII, free and clear of all liens, restrictions and encumbrances. UTI owns 53 shares (53%) of the issued and outstanding common stock, no par value, of UTG, free and clear of any liens, restrictions and encumbrances. UII owns 47 shares (47%) of the issued and outstanding common stock par value, of UTG, free and clear of all liens, restrictions and encumbrances. UTG owns 43,303 shares (79%) of the issued and outstanding common stock par value $1.00 per share, of FCC, free and clear of any liens, restrictions and encumbrances except for the encumbrances set forth below in this Section. FCC owns 400,000 shares (100%) of the issued and outstanding common stock par value $5.00 par share, of UGL, free and clear of any liens, restrictions and encumbrances except for the encumbrances set forth below in this Section. UGL owns 1,000,000 shares (100%) of the issued and outstanding common stock par value $1.00 per share, of USA, free and clear of all liens, restrictions and encumbrances. USA owns 1,132,764 shares (83.93%) of the issued and outstanding common stock par value $ 1.12 per share, of APP, free and clear of all liens, restrictions and encumbrances. APP owns 600,000 shares (100%) of the issued and outstanding common stock par value $1.00 per share, of ALI, free and clear of all liens, restrictions and encumbrances. All of the outstanding shares of the capital stock of FCC owned by UTG and promissory notes of FCC payable to the order of UTG in the aggregate principal amount of $7,492,761 are pledged as collateral to secure repayment of UTG indebtedness to former shareholders of FCC's former parent Commonwealth Industries Corporation in the aggregate principal amount of $7,492,761, and all of the shares of the capital stock of UGL owned by FCC are pledged as collateral to secure repayment of FCC indebtedness to First of America Bank in the principal amount of $6,900,000. True and complete copies of all instruments and agreements evidencing the terms and conditions of such indebtedness have been provided to Buyer. Except as disclosed in UTI's Disclosure Schedule, neither UTI nor any UTI Subsidiary has any investment in any other entity (other than portfolio investments made in the ordinary course of business). 3 (e) CAPITALIZATION. The authorized, issued and outstanding capital stock of each of UTI and each UTI Subsidiary is as set forth in Exhibit 2(e) hereto. Each issued share of capital stock of each of UTI and each UTI Subsidiary, and each share of capital stock of UTI to be acquired by Buyer or its assignees, as contemplated by this Agreement, is, and when acquired by Buyer or its assignees, will be, duly authorized, validly issued, fully paid and nonassessable. Except as disclosed in UTI's Disclosure Schedule, there is no outstanding option, warrant or other agreement or commitment to which UTI or any UTI Subsidiary is a party or by which it is bound providing for the issuance of any additional shares of its capital stock or any securities convertible into its capital stock. Shareholders of UTI and the UTI Subsidiaries do not have any preemptive rights, and no shares of capital stock of either UTI or any UTI Subsidiary have been issued in violation of any preemptive right. No person has any right to demand, require or otherwise cause UTI or any UTI Subsidiary to file any registration statement under the Securities Act of 1933, as amended, or any state securities laws relating to any debt or equity securities of UTI or any UTI Subsidiary, nor is any such entity prohibited from granting such rights to any person in the future. The offer, sale and repurchase of all capital stock and other securities of UTI and each UTI Subsidiary complied with all applicable federal and state securities and other laws. (f) AUTHORIZATION AND VALIDITY OF AGREEMENT. The execution, delivery and performance of this Agreement have been duly and validly authorized by all necessary corporate action on the part of UTI and the UTI Subsidiaries. This Agreement has been duly executed and delivered by UTI and is the valid and legally binding obligation of UTI, enforceable against UTI in accordance with its terms, except to the extent that enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws affecting the rights of creditors generally and except to the extent that enforcement may be limited by the application of general equitable principles. The execution and delivery of this Agreement and the consummation of the transactions contemplated hereby will not result in the acceleration of any indebtedness or other obligation of UTI or any UTI Subsidiary and are not prohibited by, do not violate any provision of, and do not and will not result in a default (or an event which, with the giving of notice or the lapse of time would constitute a default) under: (i) the certificate of incorporation or bylaws of either UTI or any UTI Subsidiary; 4 (ii) any contract, agreement or other instrument to which UTI or any UTI Subsidiary is a party or by which it or its assets is bound; (iii) any regulation, rule, order, decree or judgment of any court, arbitration tribunal or governmental agency; or (iv) any law applicable to UTI or any UTI Subsidiary; except that (A) the Insurance Holding Company Systems Acts of Ohio, Illinois and West Virginia prohibit any person from acquiring control of a domestic insurance company or a holding company controlling a domestic insurance company unless such acquisition of control has been approved by the Commissioner of Insurance of each such state in the manner prescribed, (B) the Hart-Scott-Rodino Antitrust Improvements Act of 1976 requires certain preacquisition notification of the Federal Trade Commission and the Antitrust Division of the Department of Justice and (C) consummation of the transactions contemplated by this Agreement requires the approval of First of America Bank Illinois ("First of America Bank") the holder of FCC's bank indebtedness totaling $6,900,000. (g) STATE TAKEOVER LAWS. The board of directors of UTI, including all of the disinterested directors of UTI, has approved in advance the transactions pursuant to which Buyer will acquire shares of UTI Common Stock, as contemplated by this Agreement. (h) FINANCIAL STATEMENTS. UTI has delivered to Buyer audited consolidated balance sheets of each of UTI and each UTI Subsidiary at December 31, 1995, 1996 and 1997, and the related consolidated statements of operations, consolidated statements of stockholders' equity and consolidated statements of changes in financial position for each of the three years 1995, 1996 and 1997 with the footnotes and schedules thereto, together with the reports of independent public accountants with respect thereto. The audited consolidated financial statements have been prepared in accordance with generally accepted accounting principles consistently applied throughout the periods indicated, and fairly present the consolidated financial position of each of UTI and each UTI Subsidiary, as of the respective dates thereof and its consolidated results of operations and changes in consolidated financial position and stockholders' equity for the years indicated as stated therein. The annual statements of each of UGL, USA, APP and ALL filed with the state insurance department of its domiciliary state, for each of the years ended December 31, 1996 and 1997, including statutory financial statements covering each said year, which UTI and UII have heretofore delivered to Buyer, present fairly the financial position of each of UGL, USA, APP and ALI, respectively, at the end of each of the years then ended and the results of its operations for each such year, in conformity with accounting 5 practices prescribed or permitted by the applicable state insurance laws and regulations applied on a consistent basis as and to the extent described in such annual statements and related statutory financial statements. Each of UTI, UII and FCC has filed with the Securities and Exchange Commission its annual report on Form 10-K for the year ended December 31, 1997, and all other reports, schedules, forms, statements and other documents required to be filed by it with the Securities and Exchange Commission, and each such report, schedule, form, statement or other document has been timely filed and when filed was in compliance with the requirements of the applicable federal securities law and rules and regulations promulgated thereunder. Other than that disclosed in Section 2(h) of UTI's Disclosure Schedule, none of UTI, UII or FCC has received any written or oral communications from the staff of the Securities and Exchange Commission concerning the filing or content of periodic reports. (i) ABSENCE OF UNDISCLOSED LIABILITIES. Except to the extent disclosed in (i) UTI's, UII's or FCC's annual reports on Form 10-K for the year ended December 31, 1997 as filed with the Securities and Exchange Commission, (ii) UTI's, UII's, or FCC's audited consolidated financial statements for the year 1997, (iii) the 1997 annual report of each of UGL, USA, APP or ALI as filed with the applicable insurance department, or (iv) UTI's Disclosure Schedule: (i) on December 31, 1997, none of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries had any liabilities, which in the aggregate were or could be material to it, of any nature, whether or not of a type that would ordinarily be shown on a balance sheet and whether accrued, absolute, contingent or otherwise, known or unknown, and (ii) since December 31, 1997, none of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries incurred any liabilities other than in the ordinary course of business. For purposes of this Section and as used throughout this Agreement, the term "material" shall be defined to mean any claim, existence or occurrence of a liability or obligation which either individually or when aggregated with similar claims or occurrences is in excess of $200,000. (j) ABSENCE OF CHANGES. Except as reflected in (i) UTI's, UII's or FCC's annual reports on Form 10-K for the year ended December 31, 1997, as filed with the Securities and Exchange Commission, (ii) UTI's, UII's or FCC's audited consolidated financial statements for the year ended December 31, 1997, (iii) 6 the 1997 annual report of each of UGL, USA, APP and ALI as filed with the applicable insurance department, or (iv) UTI's Disclosure Schedule, since December 31, 1997 there has not been: (i) any material adverse change in the financial condition, assets, properties, liabilities, results of operations or prospects of either UTI or any UTI Subsidiary; (ii) any declaration, setting aside or payment of any dividend, or other distribution, in respect of any of the capital stock of either UTI or any UTI Subsidiary or any direct or indirect redemption, purchase or other acquisition by UTI or any UTI Subsidiary of any of its capital stock; (iii) except for agents' contracts entered into in the ordinary course of business, any entry into or amendment of any employment or deferred compensation agreement between either UTI or any UTI Subsidiary and any officer, director, employee, agent or consultant of UTI or any UTI Subsidiary; (iv) any issuance or sale by either UTI or any UTI Subsidiary of any of its authorized capital stock, debentures, bonds, notes or other debt securities, or any modification or amendment of the rights of the holders of any of its outstanding capital stock debentures, bonds, notes or other securities; (v) any creation of any mortgage, lien or other encumbrance or security interest (other than deposits with State Insurance Departments pursuant to state insurance statutes and liens for current taxes which are fully reserved for but not yet due), including, without limitation, any deposit for security made of, created on or in any asset or property of either UTI or any UTI Subsidiary, or assumed by either UTI or any UTI Subsidiary with respect to any such asset or property; (vi) any material indebtedness or other material liability or obligation (whether known or unknown, absolute, accrued, contingent or otherwise) incurred, or other transaction engaged in, by any of UTI or any UTI Subsidiary except in the ordinary course of business; (vii) any material obligation or liability discharged or satisfied, other than the current liabilities reflected in the consolidated balance sheet of UTI, UII, UTG or FCC or any of their Insurance Company 7 Subsidiaries as of December 31, 1997 and current liabilities incurred since the date thereof in the ordinary course of business; (viii) any sale, transfer or other disposition of any assets or properties of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries except in the ordinary course of business; (ix) any amendment, termination or waiver of any material right of UTI or any UTI Subsidiary under any material contract, agreement or governmental license or permit; (x) any material change in the practices and policies customarily followed by UTI or any UTI Subsidiary (including, without limitation, any underwriting, actuarial, pricing, financial or accounting practices or policies); (xi) any material increase or decrease in the percentage of its reinsured business, or any material increase in its lapse ratio, or any material decrease in the amount of its in- force business; (xii) any increase in salaries or other compensation of, or advances to, executive employees or increases to non- executive employees which are not in the ordinary course of business consistent with past practice; (xiii) any loss of key agents or key employees by any Insurance Company Subsidiary which could reasonably be expected to have a material adverse effect on the business of such Insurance Company Subsidiary; or (xiv) any transaction which was not in the ordinary course of business consistent with past practice. (k) ABSENCE OF DEFAULTS. Except as set forth in UTI's Disclosure Schedule, neither UTI nor any UTI Subsidiary is in default under or violation of its certificate of incorporation or bylaws, or under any term or provision of any deed of trust, mortgage, indenture or security agreement or of any contract or instrument to which it is a party or by which it or any of its assets or properties is bound, the result of which default has caused or reasonably might be expected to cause a material adverse effect on its business, operations, properties or assets or its financial condition or prospects. 8 (l) COMPLIANCE WITH LAWS. Except as set forth in UTI's Disclosure Schedule, there has been no failure by UTI or any UTI Subsidiary to comply with any law or regulation of any applicable jurisdiction in the conduct of its business and corporate affairs or otherwise other than such failures which are not, individually or in the aggregate, material and which have not caused and reasonably might not be expected to cause consequences which could materially adversely affect the business, operations, properties or assets or financial condition or prospects of either UTI or any UTI Subsidiary. (m) TAX STATUS. Each of UTI and each UTI Subsidiary has duly filed all federal, state and local tax returns and reports, and all returns and reports of all other governmental units having jurisdiction, with respect to taxes imposed upon it or upon its income, assets, properties, licenses or operations. Each of UTI, UII, UTG and FCC file separate federal income tax returns. The Insurance Company Subsidiaries file consolidated federal income tax returns. Except as disclosed in UTI's Disclosure Schedule, all of such returns or reports reflect the true and correct tax liability of each of UTI, UII, UTG or FCC or the Insurance Company Subsidiaries, as the case may be, and all taxes shown on such returns or reports and all assessments received by each of UTI, UII, UTG or FCC or any of the Insurance Company Subsidiaries have been paid to the extent that such taxes have become due or fully reserved for to the extent not yet due and payable; and except as disclosed in UTI's Disclosure Schedule, there are no waivers or agreements by any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries for the extension of time for the assessment of taxes as above described. Except as set forth in UTI's Disclosure Schedule, none of the federal or other income tax returns of any of UTI, UII, UTG or FCC or any Insurance Company Subsidiary has been audited by the Internal Revenue Service or other government agency. A true, complete and accurate copy of each audit report and other notices and letters issued by the Internal Revenue Service in connection with the audit of any federal income tax return of any of UTI, UII, UTG or FCC or of the Insurance Company Subsidiaries relating to any year or period not barred by the applicable statute of limitations has been or will be made available to Buyer prior to the closing. With respect to the period of time through the date hereof for which tax returns have not yet been filed, or for which taxes are not yet due or owing, each of UTI, UII, UTG and FCC and their Insurance Company Subsidiaries have set up reserves which are adequate to cover all taxes which may become owing by reason of income earned or activities engaged in prior to the date hereof. Except as described in UTI's Disclosure Schedule, there is not now, to the knowledge of UTI, any proposed assessment of additional taxes against any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries. There are no tax liens (other than any lien for current taxes not yet due and payable which have been fully reserved for) on any of the assets or properties of UTI, UII, FCC or any of the Insurance Company Subsidiaries. All deposits required 9 by law to be made with respect to employees' withholding and other employment taxes have been made. (n) TITLE TO PROPERTIES. Except as set forth in UTI's Disclosure Schedule, each of UTI, UII, UTG and FCC and their Insurance Company Subsidiaries has good and marketable title to all of its properties and assets used or provided for use in its business, including those reflected on the consolidated balance sheets of each of UTI, UII or FCC and subsidiaries at September 30, 1997, and on the statutory balance sheets of UGL, USA, APP and ALI at December 31, 1997, (except as since sold or otherwise disposed of in the ordinary course of business), free and clear of all mortgages, pledges, liens, conditional sale agreements, encumbrances or other charges and title objections, except for liens securing specific liabilities set forth on such balance sheets (with respect to which no default exists) and except for minor imperfections of title and encumbrances, if any, which are not substantial in amount, which do not adversely affect the marketability of a property or properties or materially impair the operations of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries and have arisen only in the ordinary course of business. No third party has any right, title or interest in any name or trademark used by UTI, UII, UTG, FCC or any of their Insurance Company Subsidiaries, and none of UTI, UII, UTG, FCC or any of their Insurance Company Subsidiaries has infringed, or is alleged to be infringing, any trademark, service mark, copyright, trade name or corporate name of any third party in connection with its business. (o) LITIGATION. Except as set forth in UTI's Disclosure Schedule, (A) there is no action, suit or proceeding pending or, to the knowledge of UTI after due inquiry, threatened against any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries, before any court, at law or in equity, arbitration tribunal or any federal, state, municipal or other governmental department, commission, board, bureau, agency or instrumentality which individually or in the aggregate could have a material adverse effect on the financial condition of any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries, and (B) none of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries is in default in any material respect under any order, decree, judgment, award, determination, ruling or regulation of any court, arbitration tribunal, governmental department, commission, board, bureau, agency or other instrumentality. (p) EMPLOYEE BENEFIT PLANS. Except as described in UTI's Disclosure Schedule, none of UTI, UII, UTG or FCC or any of their Insurance Company subsidiaries as of the time of closing will have an employee stock option, stock bonus, pension, profit-sharing, retirement or similar employee benefit plan. Each of UTI, UII, UTG and FCC and each of their Insurance Company Subsidiaries has been and, at the closing, will be in compliance in all material respects with the applicable provisions of the 10 Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Neither UTI, UII, UTG or FCC nor any of their Insurance Company Subsidiaries, has any liability, actual or contingent, with respect to any plan that is (i) a defined benefits plan subject to Title IV of ERISA, (ii) a multi-employer pension plan as that term is defined in Section 4001(a)(3) of ERISA, (iii) a plan providing health or medical benefits to retired employees, or (iv) a welfare benefit fund under Section 419 of the Internal Revenue Code. (q) CONTRACTS. Except for contracts or agreements described in UTI's Disclosure Schedule, and except as otherwise set forth herein, there is no material contract (except agents' agreements entered into in the ordinary course of business and insurance policies) (i) imposing a direct or contingent liability on UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries in excess of $200,000, including, but not by way of limitation, any lease or rental agreement covering real or personal property, any consulting or other service agreement, any purchase agreement, any promissory note or other instrument or security evidencing any indebtedness, any mortgage or deed of trust covering real or personal property, any security agreement or financing statement covering personal property, or any employment, deferred compensation or agency contract or other contract or agreement with any employee or (ii) which is otherwise material to the business of UTI, UII, UTG, FCC or any of their Insurance Company Subsidiaries. Except as set forth herein or in UTI's Disclosure Schedule, no party is in default under any such contract, and no third party is required to give its consent to the transactions contemplated by this Agreement. (r) INSURANCE POLICIES. All insurance policies or contracts issued by UGL, USA, APP and ALI are valid policies or contracts, the form of which has been approved, where required, by the applicable state insurance departments. (s) RESERVES. Except as set forth in UTI's Disclosure Schedule the reserves for policy liabilities of each of UGL, USA, APP and ALI as set forth on its December 31, 1997 statutory balance sheet, have been computed in accordance with generally accepted actuarial methods and principles consistently applied and, in all cases, have been properly computed, were based on actuarial assumptions that were in all material respects in accordance with or more conservative than those called for in the related policy or contract, and are adequate under the applicable requirements of the law of the state of its domicile and the law of the states in which it is licensed to do business to enable UGL, USA, APP or ALI to conduct its insurance business in those states. (t) INSURANCE. UTI's Disclosure Schedule contains a description of all property and casualty, liability, group health, 11 group disability, group life and other insurance policies owned by UTI, UII, UTG or FCC or their Insurance Company Subsidiaries. (u) REAL ESTATE. Except as set forth in UTI's Disclosure Schedule, UTI has not received any notice or has any knowledge that any federal, state or local agency or private party has alleged any violation of any environmental, building, zoning, health or safety statue or regulation by any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries, in connection with real estate owned or leased by UTI, UII, UTG, FCC or any of their Insurance Company Subsidiaries. Except as set forth in UTI's Disclosure Schedule, neither the whole nor any portion of the property or leaseholds owned or held by UII,UTI, UTG or FCC or any of their Insurance Company Subsidiaries is subject to any governmental decree or order to be sold or is being condemned, expropriated or otherwise taken by any governmental body or third party with or without payment of compensation therefor, and there are no assessments with respect to any such property which remains unpaid. (v) BOOKS AND RECORDS. The minute books of each of UTI, UII, UTG, FCC and each of their Insurance Company Subsidiaries contain the records of all of the official actions of its board of directors and its shareholders and there are no material omissions therefrom or misstatements therein. The minutes of the meetings of the board of directors fully and correctly describe all official actions taken by the executive committee and other committees of the board of directors except to the extent fully and correctly set forth in minutes of such committees. The books, records and accounts of UTI, UII, FCC and the Insurance Company Subsidiaries accurately and fairly reflect in reasonable detail the transactions and the assets and liabilities of such Companies. None of these Companies has engaged in any transaction, maintained any bank account or used any funds except for transactions, bank accounts and funds which have been and are reflected in the normally maintained books and records of the business. (w) BROKERS. Except as disclosed in UTI's Disclosure Schedule, neither UTI, any UTI Subsidiary nor any of their respective officers, directors, employees, or affiliates has employed any broker or finder or incurred any liability for any financial advisory fees, investment bankers' fees, brokerage fees, commissions, or finders' fees in connection with this Agreement or the transactions contemplated hereby. (x) SEC FILINGS. UTI and each UTI Subsidiary have filed and made available to Buyer all forms, reports, and documents required to be filed by UTI or any UTI Subsidiary with the Securities and Exchange Commission since December 31, 1993 (collectively, the "SEC Reports"). The SEC Reports (i) at the time filed, complied in all material respects with the applicable requirements of the Securities Act of 1933 and the Securities Exchange Act of 1934, as the case may be and (ii) did not at the 12 time they were filed (or if amended or superseded by a filing prior to the date of this Agreement, then on the date of such filing) contain any untrue statement of a material fact or omit to state a material fact required to be stated in such SEC Reports or necessary in order to make the statements in such SEC Reports, in light of the circumstances under which they were made, not misleading. Except for reports and statements required to be filed by UII and FCC pursuant to the Securities Exchange Act of 1934, none of the UTI Subsidiaries is required to file any forms, reports, or other documents with the Securities and Exchange Commission. (y) TRANSACTIONS WITH AFFILIATES. Except as set forth in UTI's Disclosure Schedule, no director or executive officer of UTI or any UTI Subsidiary or shareholder beneficially owning 5% or more of the outstanding shares of capital stock of UTI or any UTI Subsidiary, or any member of the immediate family or any affiliate of any such director, officer or shareholder, owns or controls any party which has any material contract, agreement, understanding, business arrangement or relationship to either UTI or any UTI Subsidiary. All transactions between each Insurance Company Subsidiary and each affiliate have been in compliance with all applicable legal and regulatory requirements. (z) FULL DISCLOSURE. No representation or warranty by UTI in this Agreement or any certificate, schedule, statement, document or instrument furnished to Buyer pursuant to this Agreement, or in connection with the negotiation, execution or performance of this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. (aa) FUTURE EARNINGS OF UTI. The earnings of UTI combined with those of its subsidiaries and affiliates will total at least $30,000,000 for the five year period beginning January 1, 1998. Such earnings will be computed in a manner consistent with UTI's 1997 Annual Plan which has been delivered to Buyer except that items of a nature similar to those which were charged directly to capital and surplus on line 46 of the 1997 Summary of Operations in the statutory annual statements of the Insurance Company Subsidiaries will be charged to income for purposes of this calculation. Such earnings will (i) not include the effects of the cash and other assets obtained by UTI from Buyer in connection with this Agreement; (ii) include the effects of capital gains and losses on all of the investment real estate and real estate acquired in satisfaction of debt owned by UTI, UII, UTG, FCC or their insurance subsidiaries at December 31, 1997 as such real estate was carried on the December 31, 1997 statutory balance sheets; and (iii) include an adjustment at December 31, 2002 equal to the difference between the then market value and the then statutory carrying value of any investment real estate and real 13 estate acquired in satisfaction of debt owned by UTI, UII, UTG, FCC or their insurance subsidiaries at December 31, 1997 and still owned at December 31, 2002. The market value of the assets as of December 31, 2002 will be determined by the parties. If the parties can not agree on a value, the matter shall be submitted to arbitration in accordance with section 19(f), hereof. (bb) VOTING OF SHARES. No provision of the articles of incorporation or bylaws of UTI and, to the best knowledge of UTI, no provision of Illinois law limits the ability of Buyer to elect a majority of the Board of Directors of UTI if Buyer owns or validly holds the right to vote in an election of the Board of Directors a majority of the outstanding shares at such election. (cc) PARTICIPATING POLICIES. No policyholder has any contractual rights to earnings of any Insurance Company Subsidiary, other than claims relating to the divisible surplus pertaining to the particular policy form owned by such policyholder. 3. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to UTI that: (a) VALIDITY OF AGREEMENT. This Agreement has been duly executed and delivered by Buyer, and is the valid and legally binding obligation of Buyer, enforceable by UTI in accordance with its terms, except to the extent that enforcement may be limited by bankruptcy, insolvency, moratorium or similar laws affecting the rights of creditors generally and except to the extent that enforcement may be limited by the application of general equitable principles. (b) CORPORATE STATUS. Buyer is a corporation duly organized, validly existing and in good standing under the laws of the Commonwealth of Kentucky. (c) INSURANCE DEPARTMENT APPROVALS. Buyer is not aware of any facts or circumstances relating to Buyer that might cause any insurance department whose approval may be required to consummate the transactions contemplated by this Agreement to refuse to grant its approval of such transactions. (d) INVESTMENT INTENT. The shares of UTI Common Stock to be acquired by Buyer or its assignees from UTI pursuant to this Agreement will not be acquired with a view to the distribution thereof, and such shares will not be resold or otherwise disposed except in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder and any applicable state securities laws. Buyer acknowledges and further agrees that the certificate(s) to be issued to it or its assignees evidencing shares of UTI Common Stock 14 acquired from UTI pursuant to this Agreement will bear a legend as follows: "These securities have not been registered under the Securities Act of 1933 or applicable state securities laws, and have been acquired for investment, and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of (a) an effective Registration Statement under the Securities Act of 1933, as amended; (b) a right to sell such securities without said Registration Statement by reason of an exemption afforded by the Securities Act of 1933 or the Rules and Regulations promulgated thereunder or any amendment thereof or successor thereto; or (c) an opinion of a recognized qualified securities counsel that such disposition is otherwise permissible under applicable law." (e) BROKERS. Except as disclosed in Exhibit 3(e) attached hereto, neither Buyer nor any of its officers, directors, employees or affiliates has employed any broker or finder or incurred any liability for any financial advisory fees, investment bankers' fees, brokerage fees, commissions or finders' fees in connection with this Agreement or the transactions contemplated hereby. (f) FULL DISCLOSURE. No representation or warranty by Buyer in this Agreement or any certificate, schedule, statement, document or instrument furnished to UTI pursuant to this Agreement or in connection with the negotiation, execution or performance of this Agreement, contains or will contain any untrue statement of a material fact or omits or will omit to state a material fact required to be stated herein or therein or necessary to make any statement herein or therein not misleading. 4. ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS. From and after the date hereof and until the closing Date or termination of this Agreement pursuant to the terms hereof, for the purpose of confirming the representations and warranties of UTI, herein made, UTI will give and cause each of UTI, UII, UTG and FCC and the Insurance Company Subsidiaries to give, Buyer and its counsel, accountants and other representatives, on a confidential basis, full access, during normal business hours, to all of their respective properties, books, contracts, commitments and other records (including computer files, retrieval programs and related documentation) and will furnish Buyer and its representatives during such period with all such information and data concerning the affairs of such companies as Buyer or its representatives reasonably may request. From and after the date hereof and until the closing Date or termination of this Agreement pursuant to the terms hereof, Buyer will afford UTI and its counsel reasonable access to such information as UTI may reasonably request for the purpose of confirming the representations and warranties of Buyer 15 hereunder. Except to the extent that such disclosure, in the opinion of counsel to Buyer, or counsel to UTI, as the case may be, may be required by law, any confidential information obtained under this Agreement shall not be disclosed to persons other than the parties to this Agreement and their representatives in connection with the transactions contemplated hereby. If the transactions contemplated by this Agreement for any reason are not consummated, except for documents filed with the Securities and Exchange Commission, state insurance departments, the Federal Trade Commission, the Justice Department or otherwise already available to the public, all written information and statements supplied by UTI, UII, UTG, FCC or any of their Insurance Company Subsidiaries to Buyer, or by Buyer to UTI and any copies thereof in Buyer's, or UTI's possession promptly shall be returned to UTI or Buyer, as the case may be, and any such confidential information obtained by Buyer or UTI pursuant to this Section 4 shall remain confidential. 5. ACTIONS BY UTI, UII, UTG AND FCC AND SUBSIDIARIES PENDING CLOSING. Between the date hereof and the closing date, UTI, UII, UTG, FCC and their Insurance Company Subsidiaries will comply with the provisions of this Section, except to the extent that Buyer may otherwise consent in writing, which consent will not reasonably be withheld. (a) COMPLIANCE. UTI will, and will cause each UTI Subsidiary to, comply with all laws, regulations and regulatory requirements applicable to it and not take any action, or omit to take any action, which will result in any representation or warranty made by UTI in this Agreement not to be accurate and complete in all material respects as of the closing date. UTI will promptly notify Buyer if UTI or any UTI Subsidiary discovers that any of the representations or warranties of Buyer contained herein was not true and correct as of the date hereof, or by any reason of changed circumstances or otherwise, is no longer true and correct. Between the date hereof and the final purchase of shares of UTI Common Stock contemplated by this Agreement, UTI will keep Buyer fully advised as to any material changes in the assets, business, condition, operations or prospects of UTI or any UTI Subsidiary and any other changes in UTI's warranties and representations herein contained. (b) NO CHANGE IN BUSINESS; EMPLOYEES. Except as set forth in UTI's Disclosure Schedule, UTI will cause each of UTI and each UTI Subsidiary to continue to operate its business in all material respects as such business is currently being operated and will not permit any such company to take any action or omit to take any action other than in the ordinary course of its business as such business is currently being operated. (c) EMPLOYEE BENEFITS . Except as set forth in UTI's Disclosure Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries to grant any 16 salary increase to any officer or other employee or enter into, or amend or alter materially any bonus, savings, retirement, pension, profit-sharing, stock option, group insurance, death benefit or other fringe benefit plan, trust agreement or arrangement or any employment, agency (except routine agents' contracts entered into in the or&nary course of business), brokerage or consulting agreement, except that nothing herein shall prohibit UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries from conducting its normalannual salary and bonus review of non-officer employees and granting normal annual salary increases and bonuses to non-officer employees. (d) INDEBTEDNESS. Except as set forth in UTI's Disclosure Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their Insurance Subsidiaries to create, incur, assume, guarantee or otherwise become liable with respect to any indebtedness, except in the ordinary course of business. (e) RECORDS. UTI will cause each of UTI, UII, UTG and FCC and each of their Insurance Company Subsidiaries to maintain its books, accounts and records in the usual, regular and ordinary manner. (f) CERTIFICATE OF INCORPORATION: BYLAWS. Except as described in UTI's Disclosure Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries to amend its certificate of incorporation or its bylaws, or take any action with respect to any such prohibited amendment, and UTI will cause each of UTI, UII, UTG, and FCC and each of their Insurance Company Subsidiaries to maintain its corporate existence and powers. (g) DISPOSAL OF PROPERTY. Except as set forth in UTI's Disclosure Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries to dispose of or encumber any of its properties or assets, except in the ordinary course of business (h) ACQUISITIONS. Except as set forth in UTI's Disclosure Schedule, UTI will not permit any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries to merge or consolidate with any other corporation or, except for portfolio investments, acquire or agree to acquire any stock or assets of any other person, firm, association, corporation or other business organization (i) AUTHORIZATION OR ISSUANCE OF SHARES. Except for the issuance of common stock upon the exercise of outstanding stock options or the conversion of outstanding convertible debt or as otherwise provided herein, UTI will not permit any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries to authorize or issue any shares of capital stock or debt or equity securities 17 or enter into any contract relating to or granting any option, warrant or right calling for the authorization or issuance of any such shares or securities, or create or issue any securities convertible into any such shares or convertible into securities in turn so convertible, or issue any options, warrants or rights to purchase any such convertible securities. (j) COMMITMENTS. Except as required or permitted herein, UTI will not permit any of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries to enter into, assume or amend any material contract, agreement, obligation, lease, license or commitment, except in the ordinary course of business. (k) APPROVALS. UTI, in good faith, will cooperate with Buyer in seeking any required governmental approvals of the transactions contemplated by this Agreement, and will promptly file any and all documents and information required to be filed with the Federal Trade Commission or the Antitrust Division of the Department of Justice pursuant to the Hart-Scott-Rodino Antitrust Improvements Act of 1976. (l) NOTIFICATION. UTI will promptly notify Buyer if it discovers that any of the representations or warranties of UTI contained herein was not true and correct as of the date hereof, or by reason of changed circumstances or otherwise, is no longer true and correct. (m) TAX RESERVES. Until the closing date, UTI, UII, UTG and FCC and each of the Insurance Company Subsidiaries will, if appropriate, maintain reserves which UTI, after due inquiry, believes to be adequate to cover all taxes which may become owing by reason of income earned or activities engaged in through the closing date. (n) CONSUMMATE TRANSACTION. UTI shall use its best efforts to consummate all transactions contemplated by this Agreement as expeditiously as practicable in accordance with all applicable laws, rules and regulations and the terms hereof Further, UTI shall use its best efforts to assist Buyer in Buyer's efforts to file a full, accurate and complete Form A Acquisition Statement and procure regulatory approvals from the Directors or Commissioners of Insurance of the States of Illinois, Ohio, and West Virginia. (o) LENDERS APPROVAL. UTI will use its best efforts to obtain the consent of First of America Bank to the transactions contemplated by this Agreement. 6. BUYER'S COVENANTS. Buyer covenants and agrees that it will: 18 (a) file as soon as practicable, but in all events within thirty (30) days following the execution of this Agreement, a Form A Acquisition Statement with respect to the acquisition of control of ALI with the Director of Insurance of the State of Illinois; with respect to the acquisition of control of UGL and USA with the Director of Insurance of the State of Ohio; and with respect to the acquisition of control of APP with the Commissioner of Insurance of the State of West Virginia, and to diligently pursue such applications for, and use its best efforts to procure, such regulatory approvals; (b) file, as soon as practicable, but in all events within thirty (30) days following the execution of this Agreement, all information required to be filed with the Federal Trade Commission and the Antitrust Division of the Department of Justice pursuant to the Hart-Scott Rodino Antitrust Improvements Act of 1976; (c) otherwise diligently use its best efforts to obtain the financing commitment referenced in Section 8(g) and to consummate all transactions contemplated by this Agreement as expeditiously as practicable in accordance with all applicable laws, rules and regulations and the terms hereof; (d) promptly notify UTI if Buyer discovers that any of the representations or warranties of Buyer contained herein was not true and correct as of the date hereof, or by any reason of changed circumstances or otherwise, is no longer true and correct; (e) between the date hereof and closing, will keep UTI fully advised as to any changes in its warranties and representations herein contained; (f) following the closing, take no action which would adversely affect any right, existing as of the closing date of any current or former director, officer, or employee, agent or attorney of UTI, UII, UTG or FCC or any of their Insurance Company Subsidiaries, to indemnity for claims and related expenses, including, but not limited to, expenses of investigation, reasonable attorney's fees and amounts paid in settlement, based upon or arising from such person's service as an officer, director, employee, agent or attorney of UTI, UII, UTG or FCC or any of the Insurance Company Subsidiaries (or any predecessor thereof) at any time prior to the closing date; (g) from and after the closing, not sell a majority of the shares of the UTI Common Stock acquired by it pursuant to this Agreement to any person who is not currently an affiliate of Buyer unless within a period of twelve months thereafter, the remaining shareholders of UTI are afforded the opportunity to sell their shares of common stock of UTI at the same price per share which the Buyer receives on the sale by it of UTI shares, provided this 19 section shall not prohibit the sale or transfer of shares of UTI Common Stock to any entity formed and controlled by Buyer or the current shareholders of Buyer subsequent to the date hereof; and (h) from and after the closing, not allow anyone not currently an affiliate of Buyer to obtain control of Buyer, provided this section shall not prevent the transfer of ownership of Buyer to an entity formed and controlled by the current shareholders of Buyer subsequent to the date hereof. 7. CONDITIONS TO OBLIGATIONS OF EACH PARTY. The obligations of Buyer to consummate the acquisition of the shares of UTI Common Stock and the obligation of UTI to consummate the sale of such shares and the obligations of each party to consummate the other transactions to be consummated by it hereunder on the closing date shall be subject to the satisfaction, prior to or concurrently with the closing on the closing date, of each of the conditions set forth in this Section. Each party shall use its best efforts to satisfy such conditions. (a) NO ACTION OR PROCEEDING. No action or proceeding instituted by any public authority or unaffiliated private person shall be pending on the closing date before any court or administrative body to restrain, enjoin or otherwise prevent the consummation of this Agreement or the transactions contemplated herein or to recover any damages or obtain other relief as a result of this Agreement or the transactions contemplated herein or as a result of any agreement entered into in connection with or as a condition precedent to the consummation thereof. (b) GOVERNMENTAL APPROVALS. The Director of Insurance of each of the States of Ohio and Illinois and the Insurance Commissioner of the State of West Virginia shall have approved the acquisition of control by Buyer of UGL, USA, APP and ALI, respectively, pursuant to the Insurance Holding company Systems Act of each such state on terms and conditions satisfactory to Buyer in its sole discretion. Any other required approvals of any regulatory authority and approvals of all other third parties whose approval is necessary shall have been obtained and all required waiting periods shall have expired and no proceeding shall be pending before the Federal Trade Commission or the Antitrust Division of the Department of Justice relating to the transactions contemplated hereby. Buyer shall have been furnished with appropriate evidence, satisfactory to it and its counsel, of the granting of such approvals. (c) LENDER APPROVAL. First of American Bank the holder of FCC's $6,900,000 bank debt, shall have approved the transactions contemplated hereby or, such debt shall have been refinanced on terms and conditions satisfactory to Buyer and UTI. 20 8. ADDITIONAL CONDITIONS TO THE OBLIGATIONS OF BUYER. The Obligations of Buyer to consummate the purchase of the shares of UTI Common Stock and the other transactions to be consummated by Buyer hereunder on the closing date shall be subject to the satisfaction, or waiver as provided herein, prior to or concurrently with the closing on the closing date, of each of the conditions set forth in Section 7 hereof and of this Section 8. (a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF UTI AND RELATED CERTIFICATES. Examination by Buyer and its representatives shall not have disclosed any material inaccuracy in the representations and warranties of UTI set forth herein or otherwise made by UTI in writing in connection with the transactions contemplated hereby; such representations and warranties shall (except where stated to be as of an earlier date) be true and correct on the closing date as though made on and as of such date, and Buyer shall have received from UTI on the closing date a certificate, dated the closing date, signed by Larry Ryherd, Chief Executive Officer of UTI, in such capacity, to such effect. (b) COMPLIANCE WITH CERTAIN COVENANTS, AGREEMENTS AND OBLIGATIONS AND RELATED CERTIFICATE. UTI shall have performed all covenants, agreements and obligations to be performed by it pursuant to this Agreement at or prior to the closing, and Buyer shall have received from UTI on the closing date a certificate dated the closing date, signed by Larry Ryherd, Chief Executive Officer of UTI, in such capacity, to such effect. (c) CORPORATE ACTION BY UTI. All corporate action necessary to authorize the execution, delivery and performance by UTI of this Agreement shall have been duly and validly taken by UTI and Buyer shall have been furnished with copies of all resolutions adopted by the board of directors of UTI in connection therewith, certified by the Secretary or Assistant Secretary of UTI. (d) NO ADVERSE CHANGE. Except as described in UTI's Disclosure Schedule, or as otherwise disclosed herein, there shall have been no material adverse change in the corporate status, business, operations, assets, properties or financial condition of UTI, UII, UTG or FCC or any of the Insurance Company Subsidiaries since September 30, 1997, and Buyer shall have received from UTI at the closing date a certificate, dated the closing date, signed by Larry Ryherd, Chief Executive Officer of UTI in such capacity, to such effect. (e) OPINION OF COUNSEL. If requested, Buyer shall have been furnished an opinion of counsel to UTI, in form and substance satisfactory to Buyer, concerning the due organization and existence of UTI and each UTI Subsidiary and the due authorization, valid issuance and fully paid and nonassessable status of the capital stock of UTI and the UTI Subsidiaries, including the shares of UTI Common Stock to be acquired by Buyer or its assignees 21 pursuant to this Agreement. Buyer agrees that the maximum cost that UTI will be required to bear to obtain such an opinion is $7,500. All cost in excess of $7,500 for such opinion will be borne by Buyer. (f) AGREEMENTS. All parties to the Agreements identified in Exhibits 1(c), 1(d) and 1(e) shall have executed those Agreements. (g) FINANCING. Buyer shall have received a commitment, on terms and conditions reasonably satisfactory to Buyer, for financing in an amount sufficient to satisfy its obligations under this Sections 1(a), 1(b), 1(c), 1(d) and 1(e) of this Agreement and such commitment shall have been funded in accordance with its terms. 9. ADDITIONAL CONDITIONS TO OBLIGATIONS OF UTI. The obligation of UTI to consummate the sale of the shares of UTI Common Stock and the other transactions to be consummated hereunder on the closing date shall be subject to the satisfaction, or waiver as provided herein, prior to or concurrently with the closing on the closing date, of each of the conditions set forth in Section 7 hereof and this Section 9. (a) ACCURACY OF REPRESENTATIONS AND WARRANTIES OF BUYER AND RELATED CERTIFICATE. Examination by UTI and its representatives shall not have disclosed any material inaccuracy in the representations and warranties of Buyer set forth in Section 3 hereof or otherwise made by Buyer in writing in connection with the transactions contemplated herein; such representations and warranties shall (except where stated to be as of an earlier date) be true and correct on the closing date as though made on and as of such date, and UTI shall have received from Buyer on the closing date a certificate, dated the closing date, signed by Buyer, to such effect. (b) COMPLIANCE WITH CERTAIN COVENANTS, AGREEMENTS AND OBLIGATIONS AND RELATED CERTIFICATE. Buyer shall have performed all covenants, agreements and obligations to be performed by it pursuant to this Agreement prior to the closing date, and UTI shall have received from Buyer on the closing date a certificate dated the closing date, signed by Buyer, to such effect. (c) AGREEMENTS. All parties to the Agreements identified in Exhibits 1(c), 1(d) and 1(e) shall have executed those Agreements. 10. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All statements of fact contained in any schedule, certificate or other instrument delivered by or on behalf of UTI or Buyer pursuant hereto, as well as the warranties and representations contained herein, shall be deemed representations and warranties by such 22 party. Except for the representations and warranties set forth in Section 2(aa) hereof, which will survive for a period of five years, the representations and warranties made by the parties shall survive the closing for 36 months following the month in which the closing occurs except for claims for breach of representations and warranties growing out of income tax liabilities as to which the representations and warranties shall survive until the expiration of the applicable statute of limitations. 11. MATERIALITY AND WAIVER OF WARRANTIES, REPRESENTATIONS AND COVENANTS. All covenants, agreements, representations and warranties made herein or pursuant hereto shall be deemed to be material and to have been relied upon by the party which is the beneficiary of such warranty, representation, covenant or agreement, notwithstanding any investigation heretofore or hereafter made by such party or upon its behalf prior to the closing date, provided, however, that no remedy, at law or in equity, shall be available with respect to any loss, liability or breach of agreement, covenant, warranty or representation if the party alleging such loss, liability or breach had actual knowledge of the existence, nature and magnitude thereof on the closing date and, despite such knowledge, proceeded with the closing. "Actual knowledge" shall be conclusively presumed if reference to such matter was contained in this agreement or in any exhibit hereto or document delivered pursuant hereto prior to the closing. 12. INDEMNIFICATION AND REIMBURSEMENT. (a) UTI'S INDEMNIFICATION. Subject to the limits on UTI's obligations to indemnify as set forth in Section 13 herein, UTI agrees to defend, indemnify and hold Buyer and its successors and permitted assigns, harmless of, from and against any loss, claim, damage, liability, penalty, or other cost or expense (including reasonable attorneys' fees and costs) incurred or sustained by Buyer and its assigns, as contemplated by this Agreement, resulting from (1) any misrepresentation by UTI or the breach of any representation or warranty made by UTI contained in this Agreement or in any schedule, certificate, exhibit or other document delivered by UTI in connection with this Agreement; or (2) failure by UTI to perform or otherwise fulfill any agreement, covenant or obligation hereunder; or (3) the presence, suspected presence, release or threatened release by UTI, UII, UTG, FCC or its Insurance Company Subsidiaries or their predecessors prior to the closing of any hazardous substances in or into the air, soil, surface, water, groundwater or soil vapor (at, on, about, under, within or beyond the property owned or leased by UTI, UII, UTG, FCC and its Insurance Company Subsidiaries) or by any other party prior to the closing on any property owned by UTI, UII, UTG, FCC or its Insurance Company Subsidiaries and any actions necessary to achieve compliance with any Federal, State or local environmental law. 23 (b) BUYER'S INDEMNIFICATION. Subject to the limits on Buyer's obligations to indemnify as set forth in Section 13 herein, Buyer agrees to defend, indemnify and hold harmless UTI from and against any loss, claim, damage, liability, penalty, or other cost or expense (including reasonable attorneys' fees and costs) incurred or sustained by UTI resulting from (1) any misrepresentation by Buyer, or the breach of any representation or warranty of Buyer contained in this Agreement or in any schedule, certificate, exhibit or other document delivered by Buyer in connection with this Agreement; or (2) failure of Buyer to perform or otherwise fulfill any covenant, agreement or obligation hereunder. (c) CLAIM PROCEDURE. If UTI or Buyer (each an "Indemnified Party"), receives knowledge of any matter with respect to which the other party (the "Indemnitor") is liable under the indemnification provisions of this Agreement whether through receipt of notice of any third-party action, proceeding, claim, demand, or assessment, or through knowledge of facts giving rise to liability to indemnify, the Indemnified Party shall: (1) within ten days, give the Indemnitor written notice of the assertion of the claim; (2) furnish the Indemnitor relevant information and copies of all pertinent documents relating to the claim within a reasonable period of time after the Indemnified Party s receipt thereof or Indemnified Parties becoming aware of a claim. The failure of the Indemnified Party to give notice of the claim to the Indemnitor within the ten-day period described herein shall not affect the Indemnified Party s rights to indemnification hereunder, except if (and then only to the extent that) the Indemnitor incurs additional expenses or the Indemnitor's defense of such claim is actually prejudiced by reason of such failure to give timely notice. In all events, however, notice of claim for indemnity must be given within the 36 months or other applicable period for the survival of the warranties and representations upon receipt of such notice. The Indemnitor shall thereupon undertake and continuously conduct the defense of any claim with counsel of reputable standing, and the indemnified Party may participate in such defense by counsel of its own choosing at its own expense. If the Indemnitor is required to pay any amount to the Indemnified Party hereunder, such amount shall be paid promptly by the Indemnitor to the Indemnified Party. If the Indemnitor does not timely undertake or continuously defend any such claim, the Indemnified Party shall have the right to defend or dispose of the claim in such manner as it deems advisable, and, for the purposes hereof, as if such defense or disposition had been undertaken or made by the Indemnitor. (d) OBLIGATION TO DEFEND. Subject to the limits on each Indemnitor's obligation to indemnify with respect to matters as set forth herein, each Indemnitor agrees, unless it timely assumes the defense of any claim hereunder, to pay the Indemnified Party s costs of defending any claim, including attorneys' and paralegals' fees, accountants' fees, witness fees, and court costs, promptly after receipt of the Indemnified Party's demand therefor, from time 24 to time, during the pendency of any claim. If the Indemnitor timely undertakes the defense (at his or its sole cost and expense and under his or its direction) of any claim, then so long as the Indemnitor, in good faith, is continuously contesting or defending the claim: (1) the Indemnified Party shall not admit any liability with respect thereto, or settle, compromise, pay or discharge the same without the prior written consent of the Indemnitor; (2) the Indemnified Party shall cooperate with the Indemnitor in the contest or defense thereof; (3) the Indemnified Party shall accept any settlement thereof if, but only if, indemnification in accordance with the terms hereof with respect thereto shall be effected; and (4) the Indemnitor shall provide the Indemnified party with all information regarding the contest or defense of the claim and shall allow counsel for the Indemnified Party to monitor, at the Indemnified Party's sole expense, all proceedings in connection with the claim. Neither the Indemnitor nor the Indemnified Party shall admit any liability with respect to any claim or settle, compromise, pay or discharge any claim without the prior written consent of the other party if such settlement, compromise, payment, or discharge could expose such other party to the payment of funds which are not subject to a claim of reimbursement or indemnification from the settling, compromising or paying party. The Indemnified Party shall use reasonable efforts to preserve the status quo, not incur any penalties, and not prejudice the Indemnitor's defense of any claim prior to the Indemnitor undertaking the defense of such claim. It is understood that Indemnitor's obligation to defend and to pay defense costs is subject to the same limits as are applicable to the Indemnifiable Matters. 13. POST CLOSING ADJUSTMENTS AND PAYMENTS. (a) FORM OF REIMBURSEMENT. Subject to the exception set forth in this subsection (a), all payments due either party under Section 12 shall be satisfied by the return of or the issuance of UTI common stock, as the case may be, in such amounts as determined according to the principles and procedures set forth in this section. All payments due and owing from UTI to Buyer or from Buyer to UTI, as the case may be, in reimbursement for judgments or settlements that must be satisfied by cash shall be made in the form of a cash payment from UTI to Buyer or Buyer to UTI, as the case may be. (b) DATE OF ADJUSTMENT. A final accounting shall be made on April 30, 2003 to determine all sums due either party under this Section 13. (c) FUTURE EARNINGS OF UTI. Any shortfall in the $30,000,000 total earnings as represented by UTI in Section 2(aa) will first be reduced by the actual average tax rate for UTI for the period; then will be further reduced by one-half of the percentage, if any, representing UTG's ownership percentage of the 25 Insurance Company Subsidiaries; and then carried forward to the calculation in Section 13(e) below. Any overage will be ignored. (d) TAX EFFECT. Any amount of reimbursement due and payable pursuant to this Section 13 shall first be reduced by the tax savings thereon to the extent the tax savings have not already been taken into account. The amount of such reimbursement will be further reduced, if applicable, by one-half of the percentage, if any, represented by UTG's then ownership of the outstanding voting shares of Insurance Company Subsidiaries. (e) CALCULATION OF POST CLOSING ADJUSTMENTS. Except for cash payments made pursuant to Section 12(a), amounts owing to Buyer from UTI will be netted against any amounts owed by Buyer to UTI. The net amount will then be reduced by $250,000. The remaining amount will be paid by UTI to Buyer or by Buyer to UTI, as applicable, in the form of UTI common stock valued at $15 per share. In no instance shall the number of shares transferred exceed 500,000 shares. The price and number of shares shall be adjusted for any applicable stock splits, stock dividends, spin offs or other recapitalizations. 14. POST CLOSING COVENANTS. (a) UTI covenants to Buyer as follows: (i) BOARD OF DIRECTORS. UTI will cause three persons designated by Buyer to be appointed to the Board of Directors of UTI effective as of the closing date. For each of the three annual elections of the UTI Board of Directors following the closing, UTI will cause three persons designated by Buyer to be included in the management slate of directors recommended to the UTI shareholders for election to Board membership. UTI will not and will cause the UTI Board of Directors not to take any action that would increase the size of the Board of Directors for such three year period. (ii) NO ADDITIONAL SHARES. For a period of three years following the closing, UTI will not and will not permit any UTI affiliate to issue additional shares of capital stock or to issue or agree to issue any option, warrant or other instrument convertible into shares of capital stock without prior written consent of Buyer. (iii) UII NOTE AGREEMENT. UTI will cause UII to call, as soon as practicable, all of the UII outstanding convertible debt according to its terms. 26 (iv) REPURCHASE OF SHARES. UTI agrees to purchase for a cash price of $15 per share, the 28,000 shares of UTI Common Stock owned by Universal Guaranty on or before December 31, 1998. (b) Buyer covenants to UTI as follows: (i) Buyer agrees to convert the UTI convertible notes purchased by it pursuant to Section 1(d) hereof to shares of the common stock of UTI as set forth in such notes on or before July 31, 2000. (c) Buyer and UTI covenant that they will proceed with the merger of UTI and UII according to the terms and conditions discussed in the Form S-4 Registration Statement filed with the Securities and Exchange Commission on January 15, 1998. 15. CLOSING. The Closing of this Agreement and the transactions provided for herein shall take place at a date, time and place to be agreed on by the parties not later than ten business days following the satisfaction or waiver of all conditions precedent to the closing as set forth herein. 16. TERMINATION. This Agreement may be terminated: (a) by UTI prior to the closing upon notice to Buyer: (i) if, on or prior to May 31, 1998, Buyer has failed to receive the financing commitment referenced in Section 8(g) and has not waived in writing that condition to its obligations under this Agreement; (ii) at any time after July 31, 1998 if all conditions of its obligation to close have not been met by that date, except for a delay in obtaining regulatory approvals which is not in the control of Buyer or UTI, in which case any party may request an extension until the date regulatory approval is reasonably expected to be obtained and the other parties hereto shall not unreasonably withhold their consent to any such extension; (iii) at any time if any representation or warranty of Buyer contained in this Agreement or any certificate or other instrument delivered or furnished to UTI pursuant hereto shall be untrue in any material respect when made or if Buyer breaches any covenant or agreement contained herein and such breaches are not cured 27 within 5 days notice of such breach from UTI to Buyer; or (iv) if, prior to the closing, UTI is offered a transaction by another party that UTI believes is a more favorable transaction for its shareholders and the board of directors of UTI in the exercise of its fiduciary duty, decides to proceed with such other transaction, upon reimbursing Buyer for its expenses in connection with this Agreement and the transactions contemplated hereby and paying Buyer a break-up fee of $2,000,000. (b) by Buyer prior to the closing upon notice to UTI: (i) at any time after July 31, 1998 if all conditions of its obligation to close have not been met by that date; or (ii) at any time if any representation or warranty of UTI contained in this Agreement or any certificate or other instrument delivered or furnished to Buyer pursuant hereto shall be untrue in any material respect when made or if UTI breaches any covenant or agreement contained herein and such breaches are not cured within 5 days notice of such breach from Buyer to UTI. (c) at any time by mutual agreement of Buyer and UTI. Termination of this Agreement shall not release either party of its obligations pursuant to Section 4 which continue in force and effect. 17. EXPENSES. Except as set forth in Section 16(a)(iii) each party hereto shall pay his, her or its own expenses in connection with this Agreement and the transactions contemplated hereby. 18. NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if hand delivered to any individual party or to any corporate officer of any corporate party receiving the notice, or sent by private mail courier, facsimile transmission or mailed, registered or certified or first class, postage prepaid, to the party being notified, in each case at its or their address set forth below (or at such other address for such party as shall have been specified by it or them by like notice to the other party prior thereto): 28 If to UTI, to: United Trust, Inc. 5250 South Sixth Street Springfield, IL 62703 Attention: Larry E. Ryherd If to Buyer, to: First Southern Funding, Inc. 99 Lancaster Street Stanford, Kentucky 40484 Attention: Randall L. Attkisson 19. MISCELLANEOUS. (a) ENTIRE AGREEMENT. This Agreement supersedes all prior discussions and agreements between the parties with respect to the matters contained in this Agreement, and this Agreement, including the exhibits hereto and schedules delivered pursuant hereto, contains the entire agreement between the parties hereto with respect to the transactions contemplated hereby. (b) WAIVER. Any term or condition of this Agreement may be waived at any time by the party which is entitled to the benefit thereof; such waiver shall be in writing and shall be executed by an authorized officer of UTI or by Buyer, as the case may be. A waiver on one occasion shall not be deemed a waiver of the same or any other breach on a future occasion. (c) AMENDMENT. This Agreement may be modified or amended only by a writing duly executed by an authorized officer of UTI or by Buyer. (d) COUNTERPARTS. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. (e) GOVERNING LAW. This Agreement shall be interpreted and construed in accordance with the laws of the Commonwealth of Kentucky. (f) ARBITRATION. Any controversy or claim arising out of or relating to this Agreement shall be settled by arbitration administered by the American Arbitration Association in accordance with its Commercial Arbitration Rules and the procedures set out in this Section. Any award issued as a result of any arbitration shall be final and binding between the parties and judgment upon the award rendered by the arbitrator(s) may be entered in and enforceable by any court having jurisdiction over the party against whom the award is to be enforced. (i) The arbitration panel shall consist of three arbitrators. Within fifteen days after the commencement of arbitration, the Buyer and 29 Larry Ryherd or his representative each shall select one person to act as arbitrator and the two selected shall select a third arbitrator within ten days of their appointment, from a list of arbitrators provided by the American Arbitration Association, . If the arbitrators selected by the parties are unable or fail to agree upon the third arbitrator within the allotted time, the third arbitrator shall be selected by the American Arbitration Association. Any replacement arbitrator shall be selected by the party that initially appointed the arbitrator. Prior to the commencement of hearings, the neutral arbitrator appointed shall take an oath of impartiality. (ii) The fee of the arbitrator(s) shall be paid by the party found liable in the proceeding. Any cash amounts specified in any arbitration award shall bear interest from the date of the award at the rate of ten percent (10%) per annum until paid in full. (g) BINDING EFFECT; ASSIGNMENT. UTI shall not assign this Agreement or any of its obligations hereunder without the prior written consent of Buyer. Buyer may assign its obligation hereunder to any person or entity who controls, is controlled by or is under common control with Buyer. Subject to the limitations set forth in this subsection (f), this Agreement shall be binding upon and inure to the benefit of the parties and the successors and assigns of Buyer and UTI. IN WITNESS WHEREOF, the parties hereto have caused this Acquisition Agreement to be executed on the date first above written. FIRST SOUTHERN FUNDING, INC. Attest: RANDALL L. ATTKINSSON By: /S/ JESSE T. CORRELL Its: PRESIDENT 30 UNITED TRUST, INC. Attest: /S/ GEORGE E. FRANCIS By: /S/ JAMES E. MELVILLE Its: PRESIDENT 31 Exhibit 1(c) STOCK PURCHASE AGREEMENT Stock Purchase Agreement (the "Agreement" made this 30th day of April, 1998, by and between First Southern Funding, Inc. ("Buyer"), and Larry E. Ryherd ("Seller"). WITNESSETH: WHEREAS, Seller directly or beneficially owns at least 66,667 shares of the issued and outstanding common stock no par value, of United Trust, Inc., an Illinois corporation ("UTI"); WHEREAS, Seller wishes to sell to Buyer and Buyer wishes to purchase from Seller 66,667 of such shares ("the Shares") upon the terms and subject to the conditions hereinafter set forth; NOW, THEREFORE, in consideration of the premises, covenants and agreements set forth below, the sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. PURCHASE OF STOCK. Subject to the terms and conditions hereinafter set forth, Seller agrees to sell to Buyer, and Buyer agrees to purchase from Seller the Shares, free and clear of all liens, claims, charges, assessments or encumbrances. 2. PURCHASE PRICE AND PAYMENT. The purchase price for the Shares shall be $1,000,000 (the "Purchase Price"). The Purchase Price shall be paid at the closing in cash by certified bank check. 3. REPRESENTATIONS AND WARRANTIES OF SELLER. Seller warrants and represents to Buyer that: a) OWNERSHIP OF SHARES. Seller beneficially owns the Shares, free and clear of any liens, claims, charges or assessments. 4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller that: a) all negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Seller directly with Buyer, without the intervention of any person in such manner as to give rise to any valid claim by any person against either of the parties hereto for a finder's fee, brokerage commission or similar payment; and b) The shares to be acquired by Buyer pursuant to this Agreement will not be acquired with a view to the distribution thereof, and such Shares will not be resold or otherwise disposed of except in accordance with the provisions of the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder and any applicable state securities laws. Buyer acknowledges and further agrees that the certificate(s) to be issued to it evidencing the Shares acquired to this Agreement will bear a legend as follows: "These securities represented by this certificate have been acquired from an affiliate of the corporation without registration under the Securities Act of 1933 or applicable state securities laws, and have been acquired for investment, and may not be sold, transferred, pledged, hypothecated or otherwise disposed of in the absence of (a) an effective Registration Statement under the Securities Act of 1933, as amended; (b) a right to sell such securities without said Registration Statement by reason of an exemption afforded by the Securities Act of 1933 or the Rules and Regulations promulgated thereunder or any amendment thereof or successor thereto; or (c) 2 an opinion of a recognized qualified securities counsel that such disposition is otherwise permissible under applicable law." 5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. Each and every obligation of Buyer to be performed on the "closing date" (as hereinafter defined) shall be subject to the satisfaction, or waiver as provided herein, on or prior thereto of the following conditions: a) ACCURACY OF SELLER'S REPRESENTATIONS AND WARRANTIES. Representations and warranties made by Seller in this Agreement shall be true and correct in all material respects on and as of the closing date. b) DELIVERY OF SHARES. Seller shall deliver on the closing date all of the Shares, free and clear of any liens, claims, charges or assessments. c) CLOSING OF TRANSACTION BETWEEN BUYER AND UTI. The Acquisition Agreement between First Southern Funding, Inc. and UTI signed of even date herewith ("the UTI Agreement") shall have closed. 6. CONDITIONS PRECEDENT TO SELLER'S OBLIGATIONS. Each and every obligation of Seller to be performed on the closing date shall be subject to the satisfaction, or waiver as provided herein, on or prior thereto of the following conditions: a) ACCURACY OF BUYER'S REPRESENTATIVES AND WARRANTIES. Representations and warranties made by Buyer in this Agreement shall be tue and correct in all material respects on and as of the closing date. 3 b) CLOSING OF THE UTI AGREEMENT. The UTI Agreement shall have closed. 7. CLOSING. The closing of this Agreement and the transactions provided for herein shall take place on the same day and place as the closing of the UTI Agreement. 8. EXPENSES. Each party hereto shall pay his or its own expenses in connection with this Agreement and the transactions contemplated hereby. 9. TERMINATION. This agreement will automatically terminate if the UTI Agreement terminates. 10. MISCELLANEOUS. a) ENTIRE AGREEMENT. This Agreement supersedes all prior discussions and agreements between the parties with respect to the purchase of the Shares and the other matters contained in this Agreement, and this Agreement, contains the entire agreement between the parties hereto with respect to the transactions contemplated hereby. b) WAIVER. Any term or condition of this Agreement may be waived at any time by the party which is entitled to the benefit thereof; such waiver shall be in writing. Waiver on one occasion shall not be deemed to be a waiver of the same or any other breach on a future occasion. c) AMENDMENT. This Agreement may be modified or amended only by a writing duly executed. d) COUNTERPARTS. This Agreement may be executed simultaneously in any number of counterparts, each of which 4 shall be deemed an original, but all of which shall constitute one and the same instrument. e) GOVERNING LAW. This Agreement shall be interpreted and construed in accordance with the laws of Kentucky. f) ASSIGNMENT. Seller may not assign any obligations hereunder. Buyer may assign its obligations hereunder to any person or entity who controls, is controlled by or is under common control with Buyer. g) BINDING EFFECT. This Agreement shall be binding upon and inure to the benefit of the parties and the successors and assigns of Buyer and the heirs, legal representatives, successors, and assigns of Seller. h) HEADING AND CAPTIONS. The headings and captions of the various sections and subsections of this Agreement are for convenience or reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first above written. BUYER: FIRST SOUTHERN FUNDING, INC. By: /S/ JESSE T. CORRELL Its: PRESIDENT /S/ LARRY RYHERD Larry E. Ryherd 5 EXHIBIT 1(D) CONVERTIBLE NOTE PURCHASE AGREEMENT Convertible Note Purchase Agreement (the "Agreement") made this 30th day of April, 1998, by and between First Southern Funding ("Buyer") and James E. Melville, George E. Francis, Brad M. Wilson, Joseph H. Metzger, Theodore C. Miller, Michael K. Borden and Patricia G. Fowler ("Sellers"). WITNESSETH: WHEREAS, Sellers directly and beneficially own $2,560,000 of face amount of convertible notes (the "Notes") of United Trust, Inc.; WHEREAS, Sellers wish to sell to Buyer and Buyer wishes to purchase from Sellers the Notes upon the terms and subject to the conditions hereinafter set forth; NOW THEREFORE, in consideration of the premises, covenants and agreements set forth hereinbelow, the sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, agree as follows: 1. PURCHASE AND SALE OF NOTES. Subject to the terms and conditions hereinafter set forth, Sellers agree to sell to Buyer, and Buyer agrees to purchase from Sellers the Notes, free and clear of all liens, claims, charges, assessments, encumbrances or restrictions. 2. PURCHASE PRICE AND PAYMENT. The purchase price for the Notes shall be $3,072,000 and shall be payable to Sellers in cash at the closing by delivering to Sellers certified bank checks made payable as follows: PAYEE FACE AMOUNTS OF NOTES PURCHASE PRICE James E. Melville $1,250,000 $1,500,000 George E. Francis 350,000 420,000 Brad M. Wilson 350,000 420,000 Joseph H. Metzger 250,000 300,000 Theodore C. Miller 160,000 192,000 Michael K. Borden 150,000 180,000 Patricia G. Fowler 50,000 60,000 $2,560,000 $3,072,000 In addition, to the purchase price shown above Buyer will pay to each Seller an amount equal to the accrued unpaid interest on the applicable Note calculated as of the Closing Date. 3. REPRESENTATIONS AND WARRANTIES OF SELLERS. Sellers warrant and represent to Buyer that: [a] OWNERSHIP OF NOTES. Sellers beneficially own the Notes. [b] BROKERS. All negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Sellers directly with Buyer, without the intervention of any person in such manner as to give rise to any valid claim by any person against either of the parties hereto for a finder's fee, brokerage commission or similar payment. 4. REPRESENTATIONS AND WARRANTIES OF BUYER. Buyer represents and warrants to Seller that all negotiations relative to this Agreement and the transactions contemplated hereby have been carried out by Sellers directly with Buyer, without the intervention of any person in such manner as to give rise to any valid 2 claim by any person against either of the parties hereto for a finder's fee, brokerage commission or similar payment. 5. CONDITIONS PRECEDENT TO BUYER'S OBLIGATIONS. Each and every obligation of Buyer to be performed on the "Closing Date" (as hereinafter defined) shall be subject to the satisfaction, or waiver as provided herein, on or prior thereto of the following conditions: [a] ACCURACY OF SELLERS' REPRESENTATIONS AND WARRANTIES. Representations and warranties made by Sellers in this Agreement shall be true and correct in all material respects on and as of the Closing Date. [b] DELIVERY OF THE NOTES. Sellers shall deliver on the Closing Date all of the Notes, free and clear of any liens, encumbrances, claims, charges, assessments or restrictions. [c] CLOSING OF TRANSACTION BETWEEN BUYER AND UTI. That Certain Agreement between Buyer and UTI signed of even date herewith (the "UTI Agreement") shall have closed. 6. CONDITIONS PRECEDENT TO SELLERS' OBLIGATIONS. Each and every obligation of Sellers to be performed on the Closing Date shall be subject to the satisfaction, or waiver as provided herein, on or prior thereto of the following conditions: [a] ACCURACY OF BUYER'S REPRESENTATIONS AND WARRANTIES. Representations and warranties made 3 by Buyer in this Agreement shall be true and correct in all material respects on and as of the Closing Date. [b] CLOSING OF THE UTI AGREEMENT. The UTI Agreement shall have closed. 7. CLOSING. The Closing of this Agreement and the transactions provided for herein shall take place at the hour of 10:00 a.m. local time, on March 1, 1999, at the offices of UTI. 8. EXPENSES. Each party hereto shall pay his or its own expenses in connection with this Agreement and the transactions contemplated hereby. 9. TERMINATION. This Agreement will automatically terminate if the UTI Agreement terminates. 10. MISCELLANEOUS. [a] ENTIRE AGREEMENT. This Agreement supersedes all prior discussions and agreements between the parties with respect to the purchase of the Notes and the other matters contained in this Agreement, and this Agreement contains the entire agreement between the parties hereto with respect to the transactions contemplated hereby. [b] WAIVER. Any term or condition of this Agreement may be waived at any time by the party which is entitled to the benefit thereof, such waiver shall be in writing. A waiver on one 4 occasion shall not be deemed to be a waiver of the same or any other breach on a future occasion. [c] AMENDMENT. This Agreement may be modified or amended only by a writing duly executed. [d] COUNTERPARTS. This Agreement may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. [e] GOVERNING LAW. This Agreement shall be interpreted and construed in accordance with the laws of Illinois. [f] ASSIGNMENT. None of Sellers may assign any of their obligations hereunder. Buyer may assign its obligations hereunder to any person or entity who controls, is controlled by or is under common control with Buyer. [g] BINDING EFFECT. Subject to [f], this Agreement shall be binding upon and inure to the benefit of the parties and the successors and assigns of Buyer and the heirs, legal representatives, successors, and assigns of Sellers. [h] HEADINGS AND CAPTIONS. The headings and captions of the various sections and subsec- 5 tions of this Agreement are for convenience or reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions of this Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed on the date first written above. FIRST SOUTHERN FUNDING, INC. By /S/ JESSE T. CORRELL "Buyer" /S/ JAMES E. MELVILLE James E. Melville /S/ GEORGE E. FRANCIS George E. Francis /S/ BRAD M. WILSON Brad M. Wilson /S/ JOSEPH H. METZGER Joseph H. Metzger /S/ THEODORE C. MILLER Theodore C. Miller /S/ MICHAEL K. BORDEN Michael K. Borden /S/ PATRICIA G. FOWLER Patricia G. Fowler "Sellers" EXHIBIT 1(E) OPTION AGREEMENT This is an Option Agreement dated as of April 30, 1998, between UNITED TRUST, INC., an Illinois corporation ("Issuer"), and FIRST SOUTHERN FUNDING, INC., a Kentucky corporation ("Optionee"). RECITALS A. The authorized capital stock of Issuer consists of 3,500,000 shares of common stock, without par value ("Issuer Common Stock"), of which 1,662,779 shares are issued and outstanding, and 150,000 shares of preferred stock, none of which are issued and outstanding. B. To induce Optionee to enter into an Acquisition Agreement dated April __, 1998 (the "Acquisition Agreement") providing for the acquisition by Optionee of shares of Common Stock, Issuer has agreed to grant to Optionee an option to purchase up to 1,450,000 authorized but unissued shares of Issuer Common Stock upon the terms and subject to the conditions set forth below, concurrently with the closing of the purchase of shares of Issuer Common Stock pursuant to the Acquisition Agreement. NOW, THEREFORE, in consideration of the foregoing and the respective representations, warranties, covenants and agreements set forth herein and in the Acquisition Agreement, and intending to be legally bound hereby, Issuer and Optionee agree as follows: 1. DEFINED TERMS. Capitalized terms which are used but not defined herein shall have the meanings ascribed to such terms in the Acquisition Agreement. 2. GRANT OF OPTION. Subject to the terms and conditions set forth herein, Issuer hereby grants to Optionee an irrevocable option (the "Option") to purchase up to 1,450,000 shares of Issuer Common Stock (as adjusted as set forth herein, the "Option Shares", but in no event shall the number of Option Shares for which this Option is exercisable, when combined with the shares of Issuer Common Stock then beneficially owned by Optionee and its affiliates, exceed 51% of the issued and outstanding shares of Issuer Common Stock, after giving effect to any shares subject to or issued pursuant to the Option and any other then outstanding option, warrant, conversion right or other right to purchase or acquire shares of Issuer Common Stock) at a purchase price per Option Share (as adjusted as set forth herein, the "Purchase Price") equal to $15.00. The number of Option Shares for which this Option is exercisable shall be reduced by two shares for each share of UTI common stock that Buyer or its affiliates purchases from UTI shareholders in private or public transactions that occur after the execution of this Option Agreement and prior to the termination of this Option Agreement. 3. EXERCISE OF OPTION. (a) The Holder may exercise the Option, in whole or in part, at any time and from time to time on or prior to July 1, 2001. The term "Holder" shall mean the holder or holders of the Option from time to time, and which initially is Optionee. (b) If Holder wishes to exercise the Option, it shall send to Issuer a written notice (the date of which being herein referred to as the "Notice Date") specifying (i) the total number of Option Shares it intends to purchase pursuant to such exercise, and (ii) a place and date not earlier than three (3) business days nor later than fifteen (15) business days from the Notice Date for the closing (the "Closing") of such purchase (the "Closing Date"). If prior notification to or approval of any regulatory authority is required in connection with such purchase, Issuer shall cooperate with the Holder in the filing of the required notice or application for approval and the obtaining of such approval and the Closing shall occur immediately following such regulatory approvals (and any mandatory waiting periods). Any exercise of the Option shall be deemed to occur on the Notice Date relating thereto. 4. PAYMENT AND DELIVERY OF CERTIFICATES. (a) On each Closing Date, Holder shall (i) pay to Issuer, in immediately available funds by wire transfer to a bank account designated by Issuer, an amount equal to the Purchase Price multiplied by the number of Option Shares to be purchased on such Closing Date, and (ii) present and surrender this Agreement to the Issuer at the address of the Issuer specified in Section 18 of the Acquisition Agreement. (b) At each Closing, simultaneously with the delivery of immediately available funds and surrender of this Agreement as provided in Section 4(a), (i) Issuer shall deliver to Holder (A) a certificate or certificates representing the Option Shares to be purchased at such Closing, which Option Shares shall be free and clear Of all liens and subject to no preemptive rights, and (B), if the Option is exercised in part only, an executed new agreement with the same terms as this Agreement evidencing the right to purchase the balance of the shares of Issuer Common Stock purchasable hereunder, and (ii) Holder shall deliver to Issuer a letter agreeing that Holder shall not offer to sell or otherwise dispose of such Option Shares in violation of applicable federal and state law or of the provisions of this Agreement. (c) In addition to any other legend that is required by applicable law, certificates, or the Option Shares delivered at each Closing shall be endorsed with a restrictive legend which shall read substantially as follows: 2 The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended, or the securities laws of any state (the "Securities Laws"). These securities may not be offered, sold, transferred, pledged or hypothecated in the absence of registration under applicable Securities Laws, or the availability of an exemption therefrom. This certificate will not be transferred on the books of the Corporation or any transfer agent acting on behalf of the Corporation except upon the receipt of an opinion of counsel, satisfactory to the Corporation, that the proposed transfer is exempt from the registration requirements of all applicable Securities Laws, or the receipt of evidence, satisfactory to the Corporation, that the proposed transfer is the subject of an effective registration statement under all applicable Securities Laws. It is understood and agreed that: (i) the above legend relating to the Securities Act of 1933, as amended (the "Securities Act") shall be removed by delivery of substitute certificate(s) without such legend if Holder shall have delivered to Issuer a copy of a letter from the staff of the Securities and Exchange Commission ("SEC"), or an opinion of counsel in form and substance reasonably satisfactory to Issuer and its counsel, to the effect that such legend is not required for purposes of the Securities Act; (ii) if the shares have been sold or transferred in compliance with the foregoing clause (i) and otherwise in compliance with the provisions of this Agreement and under circumstances that do not require the retention of such legend, certificate(s) shall be issued to such buyer or transferee that do not bear the above legend. (d) Upon the giving by Holder to Issuer of the written notice of exercise of the Option provided for under Section 4(a), the tender of the applicable purchase price in immediately available funds and the tender of this Agreement to Issuer, Holder shall be deemed to be the holder of record of the shares of Issuer Common Stock issuable upon such exercise, notwithstanding that the stock transfer books of Issuer shall then be closed or that certificates representing such shares of Issuer Common Stock shall not then be actually delivered to Holder. Issuer shall pay all expenses, and any and all federal, state, and local taxes and other charges that may be payable in connection with the preparation, issuance and delivery of stock certificates under this Section in the name of Holder or its assignee, transferee, or designee. (e) Issuer agrees (i) that it shall at all times maintain, free from preemptive rights, sufficient authorized but unissued shares of Issuer Common Stock so that the Option may be exercised without additional authorization of Issuer Common Stock after giving effect to all other options, warrants, convertible securities and other rights to purchase Issuer Common Stock, (ii) that it will not, by charter amendment or through reorganization, 3 consolidation, merger, dissolution or sale of assets, or by any other voluntary act, avoid or seek to avoid the observance or performance of any of the covenants, stipulations or conditions to be observed or performed hereunder by Issuer, (iii) promptly to take all action as may from time to time be required (including (A) complying with all premerger notification, reporting and waiting period requirements, and (B) in the event prior approval of or notice to any regulatory authority is necessary before the Option may be exercised, cooperating fully with Holder in preparing such applications or notices and providing such information to such regulatory authority as it may require) in order to permit Holder to exercise the Option and Issuer duly and effectively to issue shares of the Issuer Common Stock pursuant hereto, and (iv) promptly to take all action provided herein to protect the rights of Holder against dilution. 5. REPRESENTATIONS AND WARRANTIES OF ISSUER. Issuer hereby represents and warrants to Optionee (and Holder, if different than Optionee) as follows: (a) CORPORATE AUTHORITY. Issuer has full corporate power and authority to execute and deliver this Agreement and to consummate the transactions contemplated hereby; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly and validly authorized by the Board of Directors of Issuer and approved in advance by all of the "disinterested directors" of the Issuer (as defined in Section 7.85 of the Illinois Business Corporation Act), and no other corporate proceedings on the part of Issuer are necessary to authorize this Agreement or to consummate the transactions so contemplated; this Agreement has been duly and validly executed and delivered by Issuer. (b) SHARES RESERVED FOR ISSUANCE; CAPITAL STOCK. Issuer has taken all necessary corporate action to authorize and reserve and permit it to issue, and at all times from the date hereof through the termination of this Agreement in accordance with its terms, will have reserved for issuance upon the exercise of the Option, that number of shares of Issuer Common Stock equal to the maximum number of shares of Issuer Common Stock at any time and from time to time purchasable upon exercise of the Option, and all such shares, upon issuance pursuant to the Option, will be duly authorized, validly issued, fully paid and nonassessable, and will be delivered free and clear of all claims, liens, encumbrances, and security interests (other than those created by this Agreement) and not subject to any preemptive rights. (c) NO VIOLATIONS. The execution, delivery and performance of this Agreement does not or will not, and the consummation by Issuer of any of the transactions contemplated hereby will not, constitute or result in (A) a breach or violation of, or a default under, its articles of incorporation or bylaws, or the comparable 4 governing instruments of any of its subsidiaries, or (B) a breach or violation of, or a default under, any agreement, lease, contract, note, mortgage, indenture, arrangement or other obligation of it or any of its subsidiaries (with or without the giving of notice, the lapse of time or both) or under any law, rule, ordinance or regulation or judgment, decree, order, award or governmental or non-governmental permit or license to which it or any of its subsidiaries is subject, that would, in any case give any other person the ability to prevent or enjoin Issuer's performance under this Agreement in any material respect. 6. REPRESENTATIONS AND WARRANTIES OF OPTIONEE. Optionee hereby represents and warrants to Issuer that Optionee has full corporate power and authority to enter into this Agreement and, subject to obtaining any required regulatory approvals, to consummate the transactions contemplated by this Agreement; the execution and delivery of this Agreement and the consummation of the transactions contemplated hereby have been duly authorized by all necessary corporate action on the part of Optionee; and this Agreement has been duly executed and delivered by Optionee. 7. ADJUSTMENT UPON CHANGES IN ISSUER CAPITALIZATION, ETC. In the event of any change in Issuer Common Stock by reason of a stock dividend, stock split, split-up, recapitalization, combination, exchange of shares or similar transaction, the type and number of shares or securities subject to the Option, and the Purchase Price therefor, shall be adjusted appropriately, and proper provision shall be made in the agreements governing such transaction so that Holder shall receive, upon exercise of the Option, the number and class of shares or other securities or property that Holder would have received in respect of Issuer Common Stock if the Option had been exercised immediately prior to such event, or the record date therefor, as applicable. The number of shares of Issuer Common Stock subject to the Option shall also be adjusted (up to a maximum of 1,450,000 shares) so that, after such issuance, it, together with any shares of Issuer Common Stock then owned by Option, equals 51% of the number of shares of Issuer Common Stock then issued and outstanding, after giving effect to any shares subject to or issued pursuant to the Option or upon exercise of any option to purchase Issuer Common Stock or upon conversion into Issuer Common of any convertible security of Issuer. 8. MISCELLANEOUS. (a) EXPENSES. Each of the parties hereto shall bear and pay all costs and expenses incurred by it or on its behalf in connection with the transactions contemplated hereunder, including fees and expenses of its own financial consultants, investment bankers, accountants and counsel. 5 (b) WAIVER AND AMENDMENT. Any provision of this Agreement may be waived at any time by the party that is entitled to the benefits of such provision. This Agreement may not be modified, amended, altered or supplemented except upon the execution and delivery of a written agreement executed by the parties hereto. (c) ENTIRE AGREEMENT; NO THIRD-PARTY BENEFICIARIES; SEVERABILITY. This Agreement, together with the Acquisition Agreement and the other documents and instruments referred to herein and therein, between Optionee and Issuer (i) constitutes the entire agreement and supersedes all prior agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof, and (ii) is not intended to confer upon any person other than the parties hereto and any transferees of the Option Shares or this Agreement pursuant to Section 8(h) any rights or remedies hereunder. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or regulatory authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated. If for any reason such court or regulatory authority determines that the Option does not permit Holder to acquire the full number of shares of Issuer Common Stock as provided in Section 3 (as may be adjusted herein), it is the express intention of Issuer to allow Holder to acquire such lesser number of shares as may be permissible without any amendment or modification hereof. (d) GOVERNING LAW. This Agreement shall be governed and construed in accordance with the laws of the Commonwealth of Kentucky without regard to any applicable conflicts of law rules. (e) DESCRIPTIVE HEADINGS. The descriptive headings contained herein are for convenience of reference only and shall not affect in any way the meaning or interpretation of this Agreement. (f) NOTICES. All notices and other communications hereunder shall be in writing and shall be deemed given if delivered personally, telecopied (with confirmation) or mailed by registered or certified mail (return receipt requested) to the parties at the addresses set forth in the Acquisition Agreement (or at such other address for a party as shall be specified by like notice). (g) COUNTERPARTS. This Agreement and any amendments hereto may be executed in two counterparts, each of which shall be considered one and the same agreement and shall become effective when both counterparts have been signed and delivered, it being understood that both parties need not sign the same counterpart. 6 (h) ASSIGNMENT. Neither this Agreement nor any of the rights, interests or obligations hereunder or under the Option shall be assigned by any of the parties hereto (whether by operation of law or otherwise) without the prior written consent of the other party, except that Holder may assign this Agreement to one or more affiliates of Holder and Holder may assign its rights hereunder in whole or in part. Subject to the preceding sentence, this Agreement shall be binding upon, inure to the benefit of and be enforceable by the parties and their respective successors and assigns. (i) FURTHER ASSURANCES. In the event of any exercise of the Option by the Holder, Issuer and the Holder shall execute and deliver all other documents and instruments and take all other action that may be reasonably necessary in order to consummate the transactions provided for by such exercise. (j) SPECIFIC PERFORMANCE. The parties hereto agree that this Agreement may be enforced by either party through specific performance, injunctive relief and other equitable relief. Both parties further agree to waive any requirement for the securing or posting of any bond in connection with the obtaining of any such equitable relief and that this provision is without prejudice to any other rights that the parties hereto may have for any failure to perform this Agreement. IN WITNESS WHEREOF, Issuer and Optionee have caused this Stock Option Agreement to be signed by their respective officers thereunto duly authorized, all as of the day and year first written above. UNITED TRUST, INC. By: /S/ JAMES E. MELVILLE Title: PRESIDENT FIRST SOUTHERN FUNDING, INC. By: /S/ JESSE T. CORRELL Title: PRESIDENT Exhibit 2(e) *-----------------------------* | UNITED TRUST, INC. "UTI" *----------41%-----------------* | (Illinois) | | | Authorized 3,500,000 shares | *------------*----------------* | common stock, no par value | | UNITED INCOME, INC. "UII" | | Issued and Outstanding - | | (Ohio) | | 1,662,779 shares | |Authorized - 2,310,001 shares| *-*---------------------------* | common stock, no par value | | | Issued and Outstanding - | | | 1,391,919 shares | | *------------*----------------* | *------------------------------------------* | | | UNITED TRUST GROUP "UTG" *--47%---* | | (Illinois) | *-53%--* Authorized - 10,000 shares *--------100%-----* | common stock, no par value | | | Issued and Outstanding - 100 shares | *-------------*------* *-------------------*----------------------* | ROOSEVELT EQUITY | | | CORPORATION "REC" | | 79% | (Delaware) | *-------------------*----------------------* | Authorized - 1,000| | FIRST COMMONWEALTH CORPORATION "FCC" | |shares common stock,| | (Virginia) | | $25.00 par value | | Authorized 62,500 shares | |Issued & Outstanding| | common stock, $1.00 par value | | - 1,000 shares | | Issued and Outstanding - 54,616 shares | *--------------------* *-------------------*----------------------* | 100% *-------------------*----------------------* | UNIVERSAL GUARANTY | | LIFE INSURANCE COMPANY "UGL" | | (Ohio) | | Authorized - 400,000 shares | | common stock, $5.00 par value | | Issued and outstanding - 400,000 shares | *-------------------*----------------------* | 100% *-------------------*----------------------* | UNITED SECURITY ASSURANCE COMPANY "USA" | | (Ohio) | | Authorized - 1,000 shares | | common stock, $1,000 par value | | Issued and Outstanding - 1,000 shares | *-------------------*----------------------* | 84% *-------------------*----------------------* | APPALACHIAN LIFE INSURANCE COMPANY "APP" | | (West Virginia) | | Authorized - 1,500,000 shares | | common stock, $1.12 par value | |Issued and Outstanding - 1,349,641 shares | *-------------------*----------------------* | 100% *-------------------*----------------------* | ABRAHAM LINCOLN INSURANCE COMPANY "ALI" | | (Illinois) | | Authorized - 10,800,000 shares | | common stock, $1.67 par value | | Issued and Outstanding - 600,000 shares | *------------------------------------------* Exhibit 3(e) Buyer has a contract with Doug Jetter and an entity affiliated with him, which requires Buyer to pay Mr. Jetter a brokerage fee of $150,000 in connection with this Agreement. AMENDMENT NO. 1 DATED AS OF MAY 29, 1998 TO ACQUISITION AGREEMENT BETWEEN FIRST SOUTHERN FUNDING, INC. AND UNITED TRUST, INC. DATED APRIL 30, 1998 First Southern Funding, Inc. ("Buyer") and United Trust, Inc. ("UTI") entered into a certain Acquisition Agreement dated April 30, 1998 (the "Agreement"). Buyer and UTI agree to amend the Agreement as of this 29th day of May, 1998, as follows: By deleting Section 6.(b) thereof in its entirety and substituting in lieu thereof the following new Section 6.(b): file, as soon as practicable, but in all events by June 30, 1998 all information required to be filed with the Federal Trade Commission and the Antitrust Division of the Department of Justice pursuant to the Hart-Scott Rodino Antitrust Improvements Act of 1976; This Amendment may be executed simultaneously in any number of counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed on the date first above written. FIRST SOUTHERN FUNDING, INC. Attest: /S/ JILL MARTIN By: /S JESSE T. CORRELL Its: PRESIDENT UNITED TRUST, INC. Attest: /S/ PATRICIA G. FOWLER By: /S/ JAMES E. MELVILLE Its: PRESIDENT EX-99.B 3 EXHIBIT B AGREEMENT THIS AGREEMENT is made and entered into by and between Jesse T. Correll, First Southern Bancorp, Inc. and First Southern Funding, Inc. (collectively, the "Group"). W I T N E S S E T H : WHEREAS, each member of the Group may be deemed to beneficially own shares of the Common Stock of United Trust, Inc. WHEREAS, each member of the Group desires to file a single Schedule 13D indicating the beneficial ownership of each member; and WHEREAS, Rule 13d-1(f)(1)(iii) under the Securities Exchange Act of 1934 (the "Act") requires that, when a Schedule 13D is filed on behalf of more than one person, the Schedule 13D shall include as an exhibit to the Schedule 13D an agreement in writing of such persons that the Schedule 13D is filed on behalf of each of them; NOW, THEREFORE, in consideration of the premises and the mutual promises of the parties thereto, the parties hereto covenant and agree as follows: 1. Jesse T. Correll, First Southern Bancorp, Inc. and First Southern Funding, Inc. agree that a single Schedule 13D and any amendments thereto relating to the shares of Common Stock of United Trust, Inc. shall be filed on behalf of each of them. 2. Jesse T. Correll, First Southern Bancorp, Inc. and First Southern Funding, Inc. each acknowledge and agree that pursuant to Rule 13d-1 (f) (1) under the Act each of them is individually responsible for the timely filing of such Schedule 13D and any amendments thereto and for the completeness and accuracy of the information contained therein. 3. This Agreement shall not be assignable by any party hereto. 4. This Agreement shall be terminated only upon the first to occur of the following: (a) the death of any of the individual parties hereto, (b) the dissolution, termination or settlement of First Southern Bancorp, Inc. or First Southern Funding, Inc. or (c) a written notice of termination given by any party hereto to all of the other parties hereto. 5. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original copy hereof, but all of which together shall constitute a single instrument. 6. Jesse T. Correll, First Southern Bancorp, Inc. and First Southern Funding, Inc. each acknowledge and agree that Jesse T. Correll and the President of First Southern Funding, Inc., then in office, and each of them, shall be authorized as attorney-in-fact to sign, on behalf of each 1 party to this Agreement, any Schedule 13D or amendments thereto that are required to be filed on behalf of the parties thereto. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 25th day of June, 1998. FIRST SOUTHERN BANCORP, INC. By: /S/ JESSE T. CORRELL Jesse T. Correll, President FIRST SOUTHERN FUNDING, INC. By: /S/ JESSE T. CORRELL Jesse T. Correll, President /S/ JESSE T. CORRELL Jesse T. Correll, individually 2 EX-99.C 4 EXHIBIT C [LETTERHEAD OF STAR BANK] May 19, 1995 Mr. Jesse Correll President Mr. Randall Attkisson Treasurer First Southern Funding, Inc. P.O. Box 328 Stanford, KY 40484 Gentlemen: This Loan Agreement shall set out the terms and conditions under which Star Bank, N.A. (hereafter referred to as the "Bank," "Star" or "Star Bank") agrees to lend First Southern Funding, Inc. (hereafter called the "Company" or "the Borrower") Ten Million Dollars ($10,000,000) under this Revolving Credit Agreement (the "Agreement"). The purpose of this Loan is to purchase commercial real estate loans. Initially, proceeds shall be used to pay off an existing revolving Loan at Liberty National Bank, Louisville, Kentucky. THE REVOLVING CREDIT Subject to the terms hereof, there being no event of default (or circumstance which would, with the passage of time or the giving of notice become an event of default) the Bank agrees to make revolving credit loan to the Company (as described below) from the date of this Agreement through May 19, 1996 (the "Maturity Date"). The loan will be evidenced by a revolving promissory note (the "Revolving Note") substantially in the form of Exhibit A attached hereto. Under the Revolving Note, the Company may borrow, repay, and reborrow up to $10,000,000 (the "Available Amount"). Should the total loan amount outstanding at any time exceed the Amount Available, the Company shall, upon notification, reduce the amount outstanding to an amount that is less than or equal to the Amount Available. The Revolving Note shall bear interest at three-eights of one percent (3/8%) over the Bank's prime rate (the "Prime Rate"). The Prime Rate is the rate announced as such from time to time by the Bank. The Prime Rate is determined solely by the Bank pursuant to market factors and its own operating needs, and is not necessarily the Bank's best or most favorable rate for commercial or other loans. The Prime Rate is currently 9%. The interest rate on the Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 2 Revolving Note shall be adjusted on the effective date of any change in the Bank's Prime Rate. Interest shall accrue in arrears and be payable beginning June 30, 1995 and quarterly thereafter and on the Maturity Date. Interest shall be calculated on the basis of a 360 day year. REPRESENTATIONS & WARRANTIES To induce the Bank to enter into this Agreement and to agree to make the Loan described herein, the Company and the Guarantors, joint and severally, represent and warrant that: A. The Company and First Southern Bancorp, Inc., (Bancorp) are duly organized, validly existing and in good standing as a corporation and bank holding company respectively under the laws of the Commonwealth of Kentucky and the United States of America, and the Affiliate Banks of the Bancorp have been granted their charters and are in good standing under the applicable laws and regulations of Kentucky and other governing bodies. B. The Company, the Guarantors and the Bancorp have full power and authority to own their properties and to conduct their business as such business is now being conducted and the Company and the Bancorp have full power and authority to execute, deliver and perform under this Agreement, the Note, the Negative Stock Pledge Agreement and all other documents or instruments executed or delivered in connection herewith and/or with the Loan described herein (collectively, the "Loan Documents"). C. The execution, delivery and performance by the Company and the Guarantors of this Loan Agreement and the other Loan Documents (i) have been fully authorized by all requisite corporate action and been duly authorized by all requisite corporate action and (ii) do not and will not violate (A) any provision of law, (B) any order of any court or other agency of government, affecting the Company, a Guarantor or Bancorp, (C) any organizational or government documents of the Company or Bancorp, or (D) any provision of any agreement to which the Company, a Guarantor or Bancorp is a party, or by which any of their respective properties or assets are bound including, without limitation, any outstanding debentures issued by the Company. Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 3 D. The Bancorp now owns and at all time hereafter will own not less than 100 percent of the issued and outstanding shares of the Affiliate Banks of the Bancorp. E. The Company, the Guarantors and the Bancorp are current on all taxes and assessments applicable to them, and Company and Bancorp agree to pay all taxes and assessments when due, except those Company or Bancorp are contesting in good faith (and then only providing same are properly reserved against in Company's or Bancorp's financial statements). F. There is no action or proceeding pending, or to the best of the Company's or a Guarantor's knowledge threatened, against or affecting the Company, a Guarantor or Bancorp which might result in any material adverse change in any of their businesses or financial conditions. G. The Company, the Guarantors and Bancorp are in compliance in all material respects with all applicable laws, statutes, ordinances, rules, regulations and orders of any federal, state or local governmental entity, and Company and Guarantors agree that Company and the Bancorp and the Guarantors shall continue to be in compliance therewith. H. There has been no material adverse change in the financial condition of the Company or Bancorp since the financial statements received by the Bank for the period ending December 31, 1994. I. If applicable, Company and Bancorp are in compliance with all provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). J. All of the Capital stock of the Affiliate Banks of the Bancorp will be free, clear and unencumbered prior to any disbursement of Loan proceeds, and the Bancorp will not create, incur or permit to exist an encumbrance, pledge or lien against the capital stock of the Affiliate Banks of the Bancorp (except to the Bank) and will not execute any Security Agreement or Stock Pledge Agreement with respect thereto (except to the Bank). K. The Affiliate Banks of the Bancorp deposits are and will at all times be insured by the Federal Deposit Insurance Corporation. L. This Loan Agreement, the Note, the Stock Pledge Agreement and all other Loan Documents are the legal and binding obligations of the Company and the Guarantors enforceable in accordance with their terms, subject to bankruptcy, insolvency, and similar laws as may be enforced from time to time and Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 4 equitable principles whether determined in a court of law or equity. COLLATERAL All obligations of the Company to the Bank under this Agreement and the Note shall be secured by the following (collectively called the "Collateral"): (A) Pledge of 100% of the common stock of the Company. (B) A security interest, pledge, assignment, power of attorney and other documents (as determined by the Bank) as to the notes, mortgages or real estate being purchased by the Company with the loan proceeds. (C) The personal guaranty of Jesse Correll ("Guarantor") evidenced by the Guaranty Agreement attached hereto as Exhibit B. This Guaranty shall be secured by 27,473 shares of the common stock of First Southern Bancorp, Inc. and 484.58 shares of the common stock of First Southern Funding, Inc. (D) The personal guaranty of Randall Attkisson ("Guarantor") evidenced by the Guaranty Agreement attached hereto as Exhibit C. This guaranty is secured by 44.05 shares of the common stock of First Southern Funding, Inc. The Collateral and all documentation with respect thereto shall be in a form satisfactory to the Bank, and the Company and Guarantors agree to execute any and all documents necessary to assure the protection, perfection, and/or enforcement of the Bank's security interest in the Collateral. COVENANTS In consideration of the Bank's promise to make the loans described herein, the Company agrees that, from the date of this Agreement until the Note is paid in full and canceled, it shall: (A) The following Covenants must be complied with by the Company, Bancorp and/or the Guarantors as applicable or there will be an Event of Default under this Agreement: - Any violation of the Negative Pledge of the voting common stock of the Affiliate Banks of the Bancorp. Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 5 - The Bancorp will incur no additional debt without written consent of Star Bank except that the Bancorp may borrow from the Company up to the Bancorp's previous calendar year's post-tax net income. The Bancorp will execute a Promissory Note as evidence of such borrowing and the Note will be assigned to the Bank. - The Bancorp will at all times, during the term of this Agreement, own 100% of the Affiliate Banks of the Bancorp. - The Bancorp will achieve the following minimum performance ratios on a calendar year basis: Return of Assets 1.25% Return of Equity 15% Capital to Assets 8% *Non-Performing Loans/Primary Capital 16% Allowance to Total Loans 1.6% *Allowance to Non-Performing Loans 100% *For purposes of this calculation, purchased loans, which are classified as nonaccrual, but are performing, will be excluded from the total of nonaccrual loans. However, should these loans actually become non-performing, then the allowance to non- performing ratio must be increased to 100%. The allowance to non-performing loans including the purchased loans that are classified as nonaccrual but are performing, must equal or exceed 75%. This exception will apply to any performing purchased loans that are placed on nonaccrual by the Company. - The Bancorp will not pay dividends to the shareholders during the term of this Agreement and so long as the Company has any unsatisfied obligations to the Bank. (B) The Bancorp will not enter into or allow the Affiliate Banks of the Bancorp to enter into or consummate any plan for the creation of any additional subsidiaries or any merger, acquisition, consolidation or reorganization OR sell, transfer, assign, convey or lease any substantial part of its or their property, tangible or intangible (other than transfers in the normal course of banking business), OR contract to do any of the foregoing, OR materially change the nature of its or their business, provided however, that Star Bank shall promptly consider and not unreasonably withhold its Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 6 consent to such transactions as do not, in the reasonable judgment of Star Bank, materially adversely affect the financial or operating condition of the Bancorp or the Affiliate Banks or adversely affect the collateral security given under this Loan Agreement. (C) The maximum advance rate will be $2.5 million per loan. Star will consider increasing this limit but only on a case by case basis as requested by the Company. All loans purchased by First Southern will be located in the Southeast, Midwest or Mid Atlantic regions of the United States. Star is willing to consider purchases outside of these regions on a loan by loan basis. (D) Star Bank will retain as collateral at least 80% of the voting common stock of First Southern Bancorp, Inc. at all times during the life of this Agreement and so long as the Company has any unsatisfied obligations to the Bank. (E) The Company will be allowed to borrow from any affiliated Company on an unsecured basis only. Any borrowings by the Company will be subordinated to the Bank. No other borrowings will be allowed. (F) The Company and the Guarantors will give the Bank prompt notice of any: (i) default of this or any other Agreement or contract under which the Company or a Guarantor or Bancorp is liable; (ii) environmental or labor dispute; (iii) lawsuit filed naming the Company or a Guarantor or Bancorp as a defendant; (iv) reportable event under ERISA; or (v) material change in the Company's, a Guarantor's or Bancorp's business prospects or financial condition. (G) The Company and Bancorp will maintain its corporate existence and remain in good standing under the laws of each jurisdiction where it is duly qualified to conduct its business. (H) Any variance from these covenants shall be permitted only with the prior written consent and/or waiver of the Bank in its discretion. Any such waiver shall not preclude the exercise of any power or right under this Agreement by the Bank. Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 7 CLOSING CONDITIONS The obligation of the Bank to make the loan described by this Agreement is subject to the satisfaction of each of the following conditions: (A) RESOLUTIONS. The Company shall have delivered to the Bank a copy of the resolutions of the Company's Board of Directors authorizing the loans described herein and the execution and delivery of this Agreement, the Note, and other documents the Bank deems necessary for this loan, certified and executed (as applicable) by an appropriate officer of the Company. (B) OPINION. The Company and Bancorp shall have delivered to the Bank an opinion of Counsel acceptable to the Bank, to the effect that: (i) the Company or Bancorp is duly incorporated and validly existing under the laws of the State of Kentucky and is qualified to do business under the laws of the State of Kentucky; (ii) the Company has full power to execute and deliver the Agreement, the Note, and other documents hereunder and to perform its obligations under these documents; (iii) these actions have been authorized by all necessary corporate action, and such actions are not in conflict with any provision of law or of the Articles of Incorporation of the Company, nor in any conflict with any agreement, order or decree binding upon the Company which counsel has knowledge after investigation; and (iv) this Agreement, the Note, and other documents are the legal and binding obligations of the Company, enforceable in accordance with their terms. (C) DEFAULT. Before and after giving effect to the loan described herein, no event of default (as defined below) or event which would with the passage of time or the giving of notice mature into an Event of Default shall have occurred and/or be continuing. (D) WARRANTIES. Before and after giving effect to the loan described herein, the representations and warranties noted above shall be true and correct on the date of this Agreement. (E) FEES AND EXPENSES. The Company agrees to pay the Bank a one-time nonrefundable commitment fee of $2,000. - The Company agrees to pay attorney's fees not to exceed $2,500. Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 8 - The Company agrees to pay for any filing fees incurred with the filing of liens on the notes, mortgages and related loan documents. - The Company agrees to pay the Bank an unused line fee of one quarter of one percent (1/4%) on the daily unused balance of the Loan. This fee will be calculated on a daily basis and is payable quarterly in arrears. (G) OTHER LOANS. The revolving loans at Liberty National Bank will be paid and canceled by the Company and the Bancorp. EVENTS OF DEFAULT If any of the following event (each, an "Event of Default") shall occur, then the Bank may then accelerate the Loan and declare it to be, and thereupon the Loan shall become, immediately due and payable AND the Bank shall have all rights provided herein or in any of the other Loan Documents or otherwise provided by law to realize on the Collateral Security. To the extent the maximum amount available is not being utilized by the Company, the Bank may upon such Declaration of Default terminate any unused balance: a. Failure by Company or the Guarantors to pay or repay any principal or interest on the Loan, or any other amounts due to the Bank hereunder, within 5 (five) business days after the date due in accordance with the payment schedule outlined in both the Note and/or this Loan Agreement; or b. Failure by Company or a Guarantor to comply, or cause compliance with, any other covenant, condition or agreement contained herein or in connection herewith or to cure such failure within 30 (thirty) business days after the occurrence of such failure; or c. Any representation or warranty made herein or in connection herewith shall be untrue or misleading; or d. Company or a Guarantor or Bancorp (i) makes any assignment for the benefit of creditors; (ii) is insolvent or unable to pay its debts as they become due; (iii) applies for the appointment of a receiver or trustee for any part of its assets or commences any proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction (or any Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 9 such application is filed, or any such proceedings are commenced, against Company or a Guarantor or Bancorp and any such party indicates its approval, consent or acquiescence thereto, or any order is entered appointing such trustee or receiver, or adjudicating any such party bankrupt or insolvent, or approving the petition in any such proceedings); or e. Company or a Guarantor or Bancorp shall not have paid when due any other borrowed money obligation or shall be in default under any other material agreement; or f. There shall have been rendered and not discharged any judgment or judgments against Company or a Guarantor or Bancorp which might endanger the solvency or viability of the Company or such Guarantor. g. In the reasonable opinion of the Bank, there has been a material adverse change in the consolidated financial affairs or consolidated operating condition of the Company, a Guarantor or the Bancorp, or in the value of the Collateral Security which, in the reasonable judgment of the Bank, imperils the Company's or such Guarantor's ability to repay its/his obligations to the Bank under this Loan Agreement. The following Financial Reporting will be required by the Company and the Guarantors: (A) The Borrower will provide the Lender an end of the month listing of all loans outstanding. Star's outstanding loan balance at the end of the same month should equal or be less than the total of loan listing. If Star's loan balance exceeds the listing provided by the Borrower, then Star's loan will be paid down appropriately within five (5) business days of Star notifying the Borrower. (B) Star reserves the right to inspect the purchased loan files at anytime upon reasonable notice and at a minimum, files will be inspected at the time of renewal. (C) Star will receive monthly financial statements on the Borrower as well as an annually audited statement. (D) Star will receive quarterly call reports on each Affiliated Bank owned by First Southern Bancorp and on the Bancorp. An annual audited financial statement will be provided on the Bancorp. Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 10 (E) Star reserves the right to inspect the books and records of the Borrower at anytime upon reasonable notice. (F) Star reserves the right to require the Guarantors to provide the books and records of the Bancorp and/or its Affiliate Banks at anytime upon reasonable notice. (G) The Borrower will submit a one page summary, and such other information as Star may request, to the Lender detailing the loan being purchased prior to funding of the loan. The funded loan portfolio must generate sufficient cash flow to service the Lender's loan or the Borrower will summit its cash flow plan to the Lender. LAW/JURISDICTION This Agreement, the Loan, and the Note shall be deemed made in Ohio, and all the rights and obligations of the parties hereunder shall in all respects be governed by and construed in accordance with the laws of the State of Ohio, including all matters of construction, validity, and performance. Without limitation on the ability of the Bank to exercise all its rights as to the Collateral security for any loan or note, or to initiate and prosecute actions for repayment in any applicable jurisdiction, Bank, Company and Guarantors agree that any action or proceeding commenced by or on behalf of the parties relating to this Agreement, the loan, or the Note shall be commenced and maintained exclusively in courts of applicable jurisdiction located in Hamilton County, Ohio. Mr. Jesse Correll Mr. Randall Attkisson First Southern Funding, Inc. Page 11 STAR BANK, N.A. By: /S/ GREGORY A. SPRADLIN Gregory A. Spradlin Vice President Accepted this 25TH day of MAY , 1995. First Southern Funding, Inc. By: /S/ JESSE CORRELL /S/ RANDALL ATTKISSON Jesse Correll Randall Attkisson President Treasurer /S/ JESSE CORRELL Jesse Correll, Guarantor /S/ RANDALL ATTKISSON Randall Attkisson, Guarantor [LETTERHEAD OF STAR BANK] June 5, 1996 Mr. Jesse Correll President Mr. Randall Attkisson Treasurer First Southern Funding, Inc. P O Box 328 Stanford, KY 40484 Dear Gentlemen: This Letter Amendment shall amend the terms and conditions of the Loan Agreement dated May 19, 1995 between Star Bank, N.A. (Star) and First Southern Funding, Inc. (Borrower). The only terms and conditions amended are specified in this letter and are as follows: - The terms of the Agreement will be renewed for the period May 19, 1996 to May 19, 1997. - The Revolving Note shall bear interest at the rate of one quarter of one percent (1/4%) over Star's prime rate. The prime rate is currently 8.25%. - First Southern Bancorp will achieve the following minimum performance rates: Return on Assets 1.25% Return on Equity 15% Tangible Capital to Assets 8.5% *Non-Performing Loans/Primary Capital 10% Allowance to Total Loans 1.4% *Allowance to Non-Performing Loans 100% * For purposes of this calculation, any purchased loans that are current and performing as agreed but are carried as non- performing by the Bancorp will be excluded from this calculation. - The Borrower will be allowed to borrow up to $3 million from the Bancorp. - The Borrower will not be allowed to make loans to First Southern Bancorp, Inc. Mr. Jesse Correll Mr. Randall Attkisson June 4, 1996 Page 2 If you are in agreement with the foregoing, please execute the counterpart of this letter below and return to the undersigned whereupon this letter will become a legally binding amendment to the Loan Agreement dated May 19, 1995. Sincerely, /S/ GREG Gregory A. Spradlin Vice President Agreed and Accepted: First Southern Funding, Inc. By: /S/ JESSE CORRELL Jesse Correll, President /S/ JESSE CORRELL Jesse Correll, Guarantor /S/ RANDALL ATTKISSON Randall Attkisson, Guarantor [LETTERHEAD OF STAR BANK] May 15, 1997 Mr. Jesse Correll President Mr. Randall Attkisson Treasurer First Southern Funding, Inc. P. O. Box 328 Stanford, KY 40484 Dear Jess and Randy: This second letter amendment shall amend the terms and conditions of the Loan Agreement dated May 19, 1995, as amended on May 19, 1996 , between Star Bank, N.A. (Star) and First Southern Funding, Inc. (Borrower). The only terms and conditions amended are specified in this letter and are as follows: 1) The term of the agreement will be renewed for the period May 19, 1997 to May 18, 1998. 2) The unused line fee has been reduced from one quarter of one percent to one eighth of one percent. 3) The annual performance ratios for First Southern Bancorp. Inc. will be as follows: Return on assets .75% Return on equity 8.00% Tangible capital to assets 8.50% Allowance to total loans 1.00% *Non-performing loans to capital 10.00% *Allowance on non-performing loans 100.00% *For purposes of this calculation, any purchased loans that are current and performing as agreed but are carried as non-performing by the Bancorp will be excluded from this calculation. 4) The loan will be secured by 75% of the outstanding voting common stock of First Southern Bancorp, Inc. 5) The Bancorp agrees not to pay any dividends to its shareholders during the term of this agreement. 6) The Borrower agrees to pay Star a renewal fee of $3,000. If you are in agreement with the foregoing, please execute the counterpart of this letter and return it to me, whereupon this letter will become a legally binding amendment to the Loan Agreement dated May 19, 1997. Sincerely, /S/ GREGORY A. SPRADLIN Gregory A. Spradlin Senior Vice President Agreed and Accepted: First Southern Funding, Inc. /S/ JESSE CORRELL Jesse Correll, President /S/ JESSE CORRELL Jesse Correll, Guarantor /S/ RANDALL ATTKISSON Randall Attkisson, Guarantor Enclosure(s) [LETTERHEAD OF STAR BANK] May 19, 1997 Mr. Jesse Correll Chairman Mr. Randall Attkisson Chief Financial Officer First Southern Funding, Inc. P. O. Box 328 Stanford, KY 40484 Dear Jess and Randy: This letter is an addendum to the Third Amendment to the Loan Agreement dated May 19, 1995, as amended on May 19, 1996 and May 19, 1997. The following change is effective as of the date of this letter: 1) Any discrepancies between the Loan Agreement, as amended and the note, shall be governed by the Loan Agreement, as amended. If you are in agreement with the foregoing, please execute the counterpart of this letter and return it to me, whereupon this letter will become a legally binding part of the Third Amendment to the Loan Agreement dated May 19, 1997. Sincerely, /S/ GREGORY A. SPRADLIN Gregory A. Spradlin Senior Vice President Agreed and Accepted: First Southern Funding, Inc. /S/ JESSE CORRELL Jesse Correll, Chairman /S/ RANDALL ATTKISSON Randall Attkisson, CFO [LETTERHEAD OF STAR BANK] June 8, 1998 Mr. Jesse Correll Chairman Mr. Randall Attkisson First Southern Bancorp, Inc. First Southern Funding, Inc. P. O. Box 328 Stanford, KY 40484 Dear Jess and Randy: This letter agreement is to serve as the fourth amendment to the Loan Agreement (hereafter referred to as "Agreements") dated May 19, 1995, as amended on May 19, 1996 and May 19, 1997 between First Southern Funding, Inc. (hereafter referred to as "Funding") and Star Bank, N.A. (hereafter referred to as "Star"). This letter agreement is to also serve as the second amendment to the Loan Agreement (hereafter referred to as "Agreements") dated August 9, 1996 and as amended on May 19, 1997 between First Southern Bancorp, Inc. (hereafter referred to as "Bancorp") and Star Bank, N.A. The only terms and conditions amended are specified in this letter agreement and are as follows: 1. Funding and Bancorp, collectively, will have a revolving line of credit available in the amount of $15 million (Fifteen million dollars). This revolving line of credit shall be evidenced by a $15 million note dated May 19, 1998 with Funding and Bancorp listed as individual borrowers. Funding incurs no liability for draws made by Bancorp and Bancorp incurs no liability for draws made by Funding, and no cross-collateralization exists. Either Funding or Bancorp may borrow, pay and re-borrow under this revolver. Draws made by Funding or Bancorp will be governed based on their Agreements, respectively, and this amendment to those Agreements. Both Funding and Bancorp agree and acknowledge that this combined note for $15 million, dated May 18, 1998 is a renewal of the two existing individual notes, for $10 million and $5 million, and all documentation relative to those notes is now a legal binding document tied to this one note for $15 million. Any discrepancies between the note and the Agreements are governed by the Agreements. 2. The terms of the Agreements will be renewed for the period May 18, 1998 to May 18, 1999. 3. The revolving notes shall bear interest at the interest rate as specified on the note, which will be Star prime minus one percent (1%) floating. 4. Each Limited Liability Company, whose assets are purchased with Star loan proceeds, will assign their interest in the purchased asset to Star, agrees not to incur any additional debt and will execute an amendment to the note which documents the Limited Liability Company as a co-borrower at the time of the purchase for the amount borrowed from Star. The Limited Liability Company's liability to Star will terminate when the amount borrowed for that asset is repaid. 5. Funding agrees to execute a negative stock pledge in reference to any United Trust, Inc. common stock which is purchased. 6. Funding and Bancorp agree to pay renewal fees of $10,000 and $5,000 respectively. If you are in agreement with the foregoing, please execute the counterpart of this letter agreement below and return it to me, whereupon this letter will become a legally binding amendment to the Agreements. Sincerely, /S/ GREGORY A. SPRADLIN Gregory A. Spradlin Senior Vice President Agreed and Accepted: By: /S/ JESSE CORRELL Jesse Correll, Guarantor By: /S/ RANDALL ATTKISSON Randall Attkisson, Guarantor By: /S/ JESSE CORRELL Jesse Correll, Chairman By: /S/ RANDALL ATTKISSON Randal Attkisson, Chief Financial Officer Page 2 PROMISSORY NOTE ===================================================================
Borrower: FIRST SOUTHERN FUNDING, INC.; ET. AL. Lender: STAR BANK, NATIONAL ASSOCIATION 425 Walnut Street, M.L. 8105 c/o Debbie Financial Institutions Division Dorsey 425 Walnut Street Cincinnati, OH 45202 Cincinnati, OH 45202
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Principal Amount: $15,000,000.00 Initial Rate: 7.500% Date of Note: May 18, 1998
PROMISE TO PAY. FIRST SOUTHERN FUNDING, INC. and FIRST SOUTHERN BANCORP, INC. (referred to in this Note individually and collectively as "Borrower") [INDIVIDUAL -- SEE LOAN AGREEMENT] promise to pay to STAR BANK, NATIONAL ASSOCIATION ("Lender"), or order, in lawful money of the United States of America, the principal amount of Fifteen Million & 00/100 Dollars ($15,000,000.00) or so much as may be outstanding together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on May 18, 1999. In addition, Borrower will pay regular quarterly payments of accrued unpaid interest beginning August 18, 1998, and all subsequent interest payments are due on the same day of each quarter after that. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. Unless otherwise agreed or required by applicable law, payments will be applied first to accrued unpaid interest, then to principal, and any remaining amount to any unpaid collection costs and late charges. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is Lender's Prime Rate (the "Index"). This is the rate Lender charges, or would charge, on 90-day unsecured loans to the most creditworthy corporate customers. This rate may or may not be the lowest rate available from Lender at any given time. Lender will tell Borrower the current Index rate upon Borrower's request. Borrower understands that Lender may make loans based on other rates as well. The interest rate changes will not occur more often than each DAY. The Index currently is 8.500% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 1,000 percentage point under the Index, resulting in an initial rate of 7.500% per annum. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge of $50.00. Other than Borrower's obligation to pay any minimum interest charge, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, they will reduce the principal balance due. LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $50.00, whichever is greater. DEFAULT. Borrower will be in default if any of the following happens: (a) Borrower fails to make any payment when due. (b) Borrower breaks any promise Borrower has made to Lender, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Note or any agreement related to this Note, or in any other agreement or loan Borrower has with Lender. (c) Any representation or statement made or furnished to Lender by Borrower or on Borrower's behalf is false or misleading in any material respect either now or at the time made or furnished. (d) Borrower becomes insolvent, a receiver is appointed for any part of Borrower's property. Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any bankruptcy or insolvency laws. (e) Any creditor tries to take any of Borrower's property on or in which Lender has a lien or security interest. This includes a garnishment of any of Borrower's accounts with Lender. (f) Any guarantor dies or any of the other events described in this default section occurs with respect to any guarantor of this Note. (g) A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the indebtedness is impaired. (h) Lender in good faith deems itself insecure. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, without notice, and then Borrower will pay that amount. Upon default, including failure to pay upon final maturity, Lender, at its option, may also, if permitted under applicable law, increase the variable interest rate on this Note 5.000 percentage points. The interest rate will not exceed the maximum rate permitted by applicable law. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. This Note has been delivered to Lender and accepted by Lender in the State of Ohio. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of HAMILTON County, the State of Ohio. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding or counterclaim brought by either Lender or Borrower against the other. This Note shall be governed by and construed in accordance with the laws of the State of Ohio. CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any attorney-at-law, including an attorney hired by Lender, to appear in any court of record and to confess judgment against Borrower for the unpaid amount of this Note as evidenced by an affidavit signed by an officer of Lender setting forth the amount then due, plus attorneys' fees as provided in this Note, plus costs of suit, and to release all errors, and waive all rights of appeal. If a copy of this Note, verified by an affidavit, shall have been filed in the proceeding, it will not be necessary to file the original as a warrant of attorney. Borrower waives the right to any stay of execution and the benefit of all exemption laws nor or hereafter in effect. No single exercise of the foregoing warrant and power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall be held by any court to be invalid, voidable, or void; but the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on this Note have been paid in full. Borrower waives any conflict of interest that an attorney hired by Lender may have in acting on behalf of Borrower in confessing judgment against Borrower while such attorney is retained by Lender. Borrower expressly consents to such attorney acting for Borrower in confessing judgment. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored. RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security interest in, and hereby assigns, conveys, delivers, pledges and transfers to Lender all Borrower's right, title and interest in and to, Borrower's accounts with Lender (whether checking, savings, or some other account), including without limitation all accounts held jointly with someone else and all accounts Borrower may open in the future, excluding however all IRA and Keogh accounts, and all trust accounts for which the grant of a security interest would be prohibited by law. PROMISSORY NOTE Page 2 (Continued) ================================================= Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on this Note against any and all such accounts. COLLATERAL. This Note is secured by various marketable securities. LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested orally by Borrower or as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. Advances under this Note may be requested in amounts of $25,000.00 or greater. Any request for advances of less than $25,000.00 will not be honored. Borrower agrees to be liable for all sums either: (a) advanced in accordance with the instructions of an authorized person or (b) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (a) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (d) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (e) Lender in good faith deems itself insecure under this Note or any other agreement between Lender and Borrower. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. In particular, this section means (among other things) that Borrower does not agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive (collectively referred to herein as "charge or collect"), any amount in the nature of interest or in the nature of a fee for this loan, which would in any way or event (including demand, prepayment, or acceleration) cause Lender to charge or collect more for this loan than the maximum Lender would be permitted to charge or collect by federal law or the law of the State of Ohio (as applicable). Any such excess interest or unauthorized fee shall, instead of anything stated to the contrary, be applied first to reduce the principal balance of this loan and when the principal has been paid in full, be refunded to Borrower. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Each Borrower understands and agrees that, with or without notice to Borrower, Lender may with respect to any other Borrower (a) make one or more additional secured or unsecured loans or otherwise extend additional credit; (b) alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms any indebtedness, including increases and decreases of the rate of interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the substitution of new collateral; (d) apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreements, as Lender in its discretion may determine; (e) release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; and (f) determine how, when and what application of payments and credits shall be made on any other indebtedness owing by such other borrower. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extent (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE. ================================================================= NOTICE: FOR THIS NOTICE "YOU" MEANS THE BORROWER AND "HIS" MEANS LENDER. WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE. ================================================================= BORROWER: FIRST SOUTHERN FUNDING, INC. /S/ RANDALL ATTKISSON Authorized Officer FIRST SOUTHERN BANCORP, INC., Co-Borrower By: /S/ RANDALL ATTKISSON Authorized Officer EX-99.D 5 EXHIBIT D [LETTERHEAD OF STAR BANK] August 9, 1996 Mr. Jesse Correll Chairman/CEO Mr. Randall Attkisson Chief Financial Officer First Southern Bancorp, Inc. P.O. Box 328 Stanford, KY 40484 Gentlemen: This Loan Agreement shall set out the terms and conditions under which Star Bank, N.A. (hereafter referred to as the "Bank," "Star" or "Star Bank") agrees to lend First Southern Bancorp, Inc. (hereafter called the "Company," "the Bancorp" or "the Borrower") Five Million Dollars ($5,000,000) under this Revolving Credit Agreement (the "Agreement"). The purpose of this Loan is to purchase One Hundred Percent of the common stock of Lincoln Financial Bancorp, Inc., Stanford, Kentucky. THE REVOLVING CREDIT Subject to the terms hereof, there being no event of default (or circumstance which would, with the passage of time or the giving of notice become an event of default) the Bank agrees to make revolving credit loan to the Company (as described below) from the date of this Agreement through May 19, 1997 (the "Maturity Date"). The loan will be evidenced by a revolving promissory note (the "Revolving Note") substantially in the form of Exhibit A attached hereto. Under the Revolving Note, the Company may borrow, repay, and reborrow up to $5,000,000 (the "Available Amount"). Should the total loan amount outstanding at any time exceed the Amount Available, the Company shall, upon notification, reduce the amount outstanding to an amount that is less than or equal to the Amount Available. The Revolving Note shall bear interest at the Bank's prime rate (the "Prime Rate"). The Prime Rate is the rate announced as such from time to time by the Bank. The Prime Rate is determined solely by the Bank pursuant to market factors and its own operating needs, and is not necessarily the Bank's best or most favorable rate for commercial or other loans. The Prime Rate is currently 8.25%. The interest rate on the Revolving Note shall be adjusted on the effective date of any change in the Bank's Prime Rate. Interest Mr. Jesse Correll Mr. Randall Attkisson First Southern Bancorp, Inc. Page 2 shall accrue in arrears and be payable beginning September 30, 1996 and quarterly thereafter and on the Maturity Date. Interest shall be calculated on the basis of a 360 day year. REPRESENTATIONS & WARRANTIES To induce the Bank to enter into this Agreement and to agree to make the Loan described herein, the Company represents and warrants that: A) The Borrower is duly organized, validly existing and in good standing as a corporation and bank holding company under the laws of the Commonwealth of Kentucky and the United States of America, and the Subsidiary Banks have been granted their charters and are in good standing under the applicable laws and regulations of Kentucky and other governing bodies. B) The Borrower has full power and authority to own their properties and to conduct their business as such business is now being conducted and the Borrower has full power and authority to execute, deliver and perform under this Agreement, the Note, and all other documents or instruments executed or delivered in connection herewith (collectively, the "Loan Documents"). C) The execution, delivery and performance by the Borrower of this Loan Agreement and the other Loan Documents (i) have been fully authorized by all requisite corporate action and (ii) do not and will not violate (A) any provision of law, (B) any order of any court or other agency of government, affecting the Borrower, (C) any organizational or government documents of the Borrower, or (D) any provision of any agreement to which the Borrower or Bancorp is a party, or by which any of their respective properties or assets are bound including, without limitation, any outstanding debentures issued by the Borrower. D) The Borrower is current on all taxes and assessments applicable to them, and Borrower agrees to pay all taxes and assessments when due, except those Borrower is contesting in good faith (and then only providing same are properly reserved against in Borrower's financial statements). E) Borrower represents to the Bank there is no action or proceeding pending, or to the best of the Borrower's knowledge threatened, against or affecting Borrower which might result in any material adverse change in any of their businesses or financial conditions. F) The Borrower is in compliance in all material respects with all Mr. Jesse Correll Mr. Randall Attkisson First Southern Bancorp, Inc. Page 3 laws, statutes, ordinances, rules, regulations and orders of any federal, state or local governmental entity applicable to them, and Borrower agrees that Borrower shall continue to be in compliance therewith. G) The Borrower represents to the Bank that there has been no material adverse change in the financial condition of the Borrower since the financial statements received by the Bank for the period ending June 30, 1996. H) If applicable, Borrower is in compliance with all provisions of the Employee Retirement Income Security Act of 1974 ("ERISA"). I) This Loan Agreement, the Note, the Stock Pledge Agreement all other loan documents are the legal and binding obligations of the Borrower enforceable in accordance with their terms, subject to bankruptcy, insolvency, and similar laws as may be enforced from time to time and equitable principles whether determined in a court of law or equity. EVENTS OF DEFAULT If any of the following events (each, an "Event of Default") shall occur, then the Bank may, with written notice, accelerate the Loan and declare it to be, and thereupon the Loan shall become, immediately due and payable (except the Loan shall become automatically and immediately due and payable upon the occurrence of an Event of Default under Paragraph D (iii) below) AND the Bank shall have all rights provided herein or in any of the other Loan Documents or otherwise provided by law to realize on the Collateral Security: A) Failure by Borrower to pay or repay any principal or interest on the Loan, or any other amounts due to the Bank hereunder, within 5 (five) business days after the date due in accordance with the payment schedule outlined in both the Note and this Loan Agreement; or B) Failure by Borrower to comply, or cause compliance with, any other covenant, condition or agreement contained herein or in connection herewith or to cure such failure within 30 (thirty) business days after the occurrence of such failure; or C) Any representation or warranty made herein or in connection herewith shall be untrue or misleading; or D) Borrower (i) makes any assignment for the benefit of creditors; (ii) is insolvent or unable to pay its debts as they become due; (iii) applies for the appointment of a receiver or trustee for Mr. Jesse Correll Mr. Randall Attkisson First Southern Bancorp, Inc. Page 4 any part of its assets or commences any proceeding under any bankruptcy, reorganization, arrangement, insolvency, readjustment of debt, dissolution or liquidation law of any jurisdiction (or any such application is filed, or any such proceedings are commenced, against Borrower and any such party indicates its approval, consent or acquiescence thereto, or any order is entered appointing such trustee or receiver, or adjudicating any such party bankrupt or insolvent, or approving the petition in any such proceedings); or D) Borrower shall not have paid when due any other borrowed money obligation or shall be in default under any other material agreement; or F) There shall have been rendered and not discharged any judgment or judgments against Borrower or guarantors which might endanger the solvency or viability of Borrower or guarantor. G) In the reasonable opinion of the Bank, there has been a material adverse change in the consolidated financial affairs or consolidated operating condition of the Borrower, or in the value of the Collateral Security which, in the reasonable judgment of the Bank, imperils the Borrower's ability to repay its obligations to the Bank under this Loan Agreement. Any discrepancies between the loan documents as it relates to the Events of Default shall be governed by this Loan Agreement. COLLATERAL All obligations of the Company to the Bank under this Agreement and the Note shall be secured by the following (collectively called the "Collateral"): (A) Pledge of 100% of the common stock of the subsidiary financial institutions of the Company (see Stock Pledge Agreement). The Collateral and all documentation with respect thereto shall be in a form satisfactory to the Bank, and the Company agrees to execute any and all documents necessary to assure the protection, perfection, and/or enforcement of the Bank's security interest in the Collateral. COVENANTS In consideration of the Bank's promise to make the loans described herein, the Company agrees that, from the date of this Agreement Mr. Jesse Correll Mr. Randall Attkisson First Southern Bancorp, Inc. Page 5 until the Note is paid in full and canceled, it shall: (A) The following Covenants must be complied with by the Company, as applicable or there will be an Event of Default under this Agreement: - The Bancorp will at all times, during the term of this Agreement, own 100% of the Affiliate Banks of the Bancorp. - The Bancorp will achieve the following minimum performance ratios on a calendar year basis: Return of Assets 1.25% Return of Equity 15% Capital to Assets 8% *Non-Performing Loans/Primary Capital 10% Allowance to Total Loans 1.4% *Allowance to Non-Performing Loans 100% * For purposes of this calculation, any purchased loans that are current and performing as agreed but are carried as nonperforming by Bancorp will be excluded from this calculation. - The Bancorp will not pay dividends in excess of 35% of current year earnings to the shareholders during the term of this Agreement and so long as the Company has any unsatisfied obligations to the Bank. (B) The Bancorp will not enter into or allow the Affiliate Banks of the Bancorp to enter into or consummate any plan for the creation of any additional subsidiaries or any merger, acquisition, consolidation or reorganization OR sell, transfer, assign, convey or lease any substantial part of its or their property, tangible or intangible (other than transfers in the normal course of banking business), OR contract to do any of the foregoing, OR materially change the nature of its or their business, provided however, that Star Bank shall promptly consider and not unreasonably withhold its consent to such transactions as do not, in the reasonable judgment of Star Bank, materially adversely affect the financial or operating condition of the Bancorp or the Affiliate Banks or adversely affect the collateral security given under this Loan Agreement. (C) The Company will give the Bank prompt notice of any: Mr. Jesse Correll Mr. Randall Attkisson First Southern Bancorp, Inc. Page 6 (i) default of this or contract under which the Company is liable; (ii) environmental or labor dispute; (iii) lawsuit filed naming the Company as a defendant; (iv) reportable event under ERISA; or (v) material change in the Company's business prospects or financial condition. (D) The Company will maintain its corporate existence and remain in good standing under the laws of each jurisdiction where it is duly qualified to conduct its business. (E) Any variance from these covenants shall be permitted only with the prior written consent and/or waiver of the Bank in its discretion. Any such waiver shall not preclude the exercise of any power or right under this Agreement by the Bank. CLOSING CONDITIONS The obligation of the Bank to make the loan described by this Agreement is subject to the satisfaction of each of the following conditions: (A) RESOLUTIONS. The Company shall have delivered to the Bank a copy of the resolutions of the Company's Board of Directors authorizing the loans described herein and the execution and delivery of this Agreement, the Note, and other documents the Bank deems necessary for this loan, certified and executed (as applicable) by an appropriate officer of the Company. (B) OPINION. The Company shall have delivered to the Bank an opinion of Counsel acceptable to the Bank, to the effect that: (i) the Company is duly incorporated and validly existing under the laws of the State of Kentucky and is qualified to do business under the laws of the State of Kentucky; (ii) the Company has full power to execute and deliver the Agreement, the Note, and other documents hereunder and to perform its obligations under these documents; (iii) these actions have been authorized by all necessary corporate action, and such actions are not in conflict with any provision of law or of the Articles of Incorporation of the Company, nor in any conflict with any agreement, order or decree binding upon the Company which counsel has knowledge after investigation; and (iv) this Agreement, the Note, and other documents are the legal and binding obligations of the Company, enforceable in accordance with their terms. Mr. Jesse Correll Mr. Randall Attkisson First Southern Bancorp, Inc. Page 7 (C) DEFAULT. Before and after giving effect to the loan described herein, no event of default (as defined below) or event which would with the passage of time or the giving of notice mature into an Event of Default shall have occurred and/or be continuing. (D) WARRANTIES. Before and after giving effect to the loan described herein, the representations and warranties noted above shall be true and correct on the date of this Agreement. (E) FEES AND EXPENSES. The Company agrees to pay the Bank a one-time nonrefundable commitment fee of $3,000. - The Company agrees to pay the Bank an unused line fee of one quarter of one percent (1/4%) on the daily unused balance of the Loan. This fee will be calculated on a daily basis and is payable quarterly in arrears. (F) PROPER REGULATORY APPROVAL has been received by all governing bodies for the purchase of Lincoln Financial Bancorp, Inc. The following Financial Reporting will be required by the Company: FINANCIAL REPORTS: (A) Star will receive quarterly call reports on each Affiliated Bank owned by First Southern Bancorp and on the Bancorp. An annual consolidated audited financial statement will be provided on the Bancorp. (B) Star reserves the right to inspect the books and records of the Borrower at anytime upon reasonable notice. LAW/JURISDICTION This Agreement, the Loan, and the Note shall be deemed made in Ohio, and all the rights and obligations of the parties hereunder shall in all respects be governed by and construed in accordance with the laws of the State of Ohio, including all matters of construction, validity, and performance. Without limitation on the ability of the Bank to exercise all its rights as to the Collateral security for any loan or note, or to initiate and prosecute actions for repayment in any applicable jurisdiction, the Company agrees Mr. Jesse Correll Mr. Randall Attkisson First Southern Bancorp, Inc. Page 8 that any action or proceeding commenced by or on behalf of the parties relating to this Agreement, the loan, or the Note shall be commenced and maintained exclusively in courts of applicable jurisdiction located in Hamilton County, Ohio. STAR BANK, N.A. By:/S/ GREGORY A. SPRADLIN, V.P. Gregory A. Spradlin Vice President Accepted this ___ day of _______________, 19__. First Southern Bancorp, Inc. By: /S/ JESSE CORRELL /S/ RANDALL ATTKISSON Jesse Correll Randall Attkisson Chairman Chief Financial Officer [LETTERHEAD OF STAR BANK] May 15, 1997 Mr. Jesse Correll Chairman & CEO Mr. Randall Attkisson Chief Financial Officer First Southern Bancorp, Inc. P. O. Box 328 Stanford, KY 40484 Dear Jess and Randy: This Letter Amendment shall amend the terms and conditions of the Loan Agreement dated May 19, 1996 between Star Bank, N.A. (Star) and First Southern Bancorp, Inc. (Borrower). The only terms and conditions amended are specified in this letter and are as follows: 1) The term of the agreement will be renewed for the period May 19, 1997 to May 18, 1998. 2) The unused line fee will be reduced from one quarter of one percent to one eighth of one percent. 3) The annual performance ratios for First Southern Bancorp, Inc. will be as follows: Return on assets .75% Return on equity 8.00% Tangible capital to assets 8.50% Allowance to total loans 1.00% *Non-performing loans to capital 10.00% *Allowance to non-performing loans 100.00% *For purposes of this calculation, any purchased loans that are current and performing as agreed but are carried as non-performing by the Bancorp will be excluded from this calculation. 4) The borrower will not pay any dividends to its shareholders during the term of this agreement. 5) The Borrower agrees to pay Star a renewal fee of $3,000. If you are in agreement with the foregoing, please execute the counterpart of this letter and return it to me, whereupon this letter will become a legally binding amendment to the Loan Agreement dated May 19, 1995. Sincerely, /S/ GREGORY A. SPRADLIN Gregory A. Spradlin Senior Vice President Enclosure(s) Agreed and Accepted: /S/ JESSE CORRELL Jesse Correll, Chairman /S/ RANDALL ATTKISSON Randall Attkisson Chief Financial Officer May 19, 1997 Mr. Jesse Correll Chairman and CEO Mr. Randall Attkisson Chief Financial Officer First Southern Bancorp, Inc. P. O. Box 328 Stanford, KY 40484 Dear Jess and Randy: This letter is an addendum to the Second Amendment to the Loan Agreement dated May 19, 1995, and amended on May 19, 1996. The following change is effective as of the date of this agreement: 1) Collateral securing this note is 100% of the common stock of the following subsidiaries which is reflective of the recent name changes: - First Southern National Bank, Somerset, Ky. - First Southern National Bank of Madison County, Richmond, Ky. - First Southern National Bank of the Bluegrass, Lexington, Ky. - Lincoln Financial Bancorp, Inc., Liberty, Ky. - First Southern National Bank of Garrard County, Lancaster, Ky. - First Southern National Bank of Wayne County, Monticello, Ky. If you are in agreement with the foregoing, please execute the counterpart of this letter and return it to me, whereupon this letter will become a legally binding part of the Second Amendment to the Loan Agreement dated May 19, 1997. Sincerely, /S/ GREGORY A. SPRADLIN Gregory A. Spradlin Senior Vice President Agreed and accepted: First Southern Bancorp, Inc. /S/ JESSE CORRELL Jesse Correll, Chairman & CEO /S/ RANDALL ATTKISSON Randall Attkisson Chief Financial Officer [LETTERHEAD OF STAR BANK] September 24, 1997 Mr. Jesse Correll President & CEO First Southern Bancorp, Inc. P. O. Box 328 Stanford, KY 40484 Dear Jess: This letter amends the loan agreement between Star Bank, N.A. and First Southern Bancorp, Inc. hereby releasing as collateral the common stock of Lincoln Financial Bancorp, Inc. to facilitate the sale of Lincoln Financial Bancorp, Inc. All other terms and conditions of the loan agreement remain unchanged. Please call if you have any questions. Sincerely, Gregory A. Spradlin Senior Vice President [LETTERHEAD OF STAR BANK] June 8, 1998 Mr. Jesse Correll Chairman Mr. Randall Attkisson First Southern Bancorp, Inc. First Southern Funding, Inc. P. O. Box 328 Stanford, KY 40484 Dear Jess and Randy: This letter agreement is to serve as the fourth amendment to the Loan Agreement (hereafter referred to as "Agreements") dated May 19, 1995, as amended on May 19, 1996 and May 19, 1997 between First Southern Funding, Inc. (hereafter referred to as "Funding") and Star Bank, N.A. (hereafter referred to as "Star"). This letter agreement is to also serve as the second amendment to the Loan Agreement (hereafter referred to as "Agreements") dated August 9, 1996 and as amended on May 19, 1997 between First Southern Bancorp, Inc. (hereafter referred to as "Bancorp") and Star Bank, N.A. The only terms and conditions amended are specified in this letter agreement and are as follows: 1. Funding and Bancorp, collectively, will have a revolving line of credit available in the amount of $15 million (Fifteen million dollars). This revolving line of credit shall be evidenced by a $15 million note dated May 19, 1998 with Funding and Bancorp listed as individual borrowers. Funding incurs no liability for draws made by Bancorp and Bancorp incurs no liability for draws made by Funding, and no cross-collateralization exists. Either Funding or Bancorp may borrow, pay and re-borrow under this revolver. Draws made by Funding or Bancorp will be governed based on their Agreements, respectively, and this amendment to those Agreements. Both Funding and Bancorp agree and acknowledge that this combined note for $15 million, dated May 18, 1998 is a renewal of the two existing individual notes, for $10 million and $5 million, and all documentation relative to those notes is now a legal binding document tied to this one note for $15 million. Any discrepancies between the note and the Agreements are governed by the Agreements. 2. The terms of the Agreements will be renewed for the period May 18, 1998 to May 18, 1999. 3. The revolving notes shall bear interest at the interest rate as specified on the note, which will be Star prime minus one percent (1%) floating. 4. Each Limited Liability Company, whose assets are purchased with Star loan proceeds, will assign their interest in the purchased asset to Star, agrees not to incur any additional debt and will execute an amendment to the note which documents the Limited Liability Company as a co-borrower at the time of the purchase for the amount borrowed from Star. The Limited Liability Company's liability to Star will terminate when the amount borrowed for that asset is repaid. 5. Funding agrees to execute a negative stock pledge in reference to any United Trust, Inc. common stock which is purchased. 6. Funding and Bancorp agree to pay renewal fees of $10,000 and $5,000 respectively. If you are in agreement with the foregoing, please execute the counterpart of this letter agreement below and return it to me, whereupon this letter will become a legally binding amendment to the Agreements. Sincerely, /S/ GREGORY A. SPRADLIN Gregory A. Spradlin Senior Vice President Agreed and Accepted: By: /S/ JESSE CORRELL Jesse Correll, Guarantor By: /S/ RANDALL ATTKISSON Randall Attkisson, Guarantor By: /S/ JESSE CORRELL Jesse Correll, Chairman By: /S/ RANDALL ATTKISSON Randall Attkisson, Chief Financial Officer PROMISSORY NOTE ===================================================================
Borrower: FIRST SOUTHERN FUNDING, INC.; ET. AL. Lender: STAR BANK, NATIONAL ASSOCIATION 425 Walnut Street, M.L. 8105 c/o Debbie Financial Institutions Division Dorsey 425 Walnut Street Cincinnati, OH 45202 Cincinnati, OH 45202
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Principal Amount: $15,000,000.00 Initial Rate: 7.500% Date of Note: May 18, 1998
PROMISE TO PAY. FIRST SOUTHERN FUNDING, INC. and FIRST SOUTHERN BANCORP, INC. (referred to in this Note individually and collectively as "Borrower") [INDIVIDUAL -- SEE LOAN AGREEMENT] promise to pay to STAR BANK, NATIONAL ASSOCIATION ("Lender"), or order, in lawful money of the United States of America, the principal amount of Fifteen Million & 00/100 Dollars ($15,000,000.00) or so much as may be outstanding together with interest on the unpaid outstanding principal balance of each advance. Interest shall be calculated from the date of each advance until repayment of each advance. PAYMENT. Borrower will pay this loan in one payment of all outstanding principal plus all accrued unpaid interest on May 18, 1999. In addition, Borrower will pay regular quarterly payments of accrued unpaid interest beginning August 18, 1998, and all subsequent interest payments are due on the same day of each quarter after that. The annual interest rate for this Note is computed on a 365/360 basis; that is, by applying the ratio of the annual interest rate over a year of 360 days, multiplied by the outstanding principal balance, multiplied by the actual number of days the principal balance is outstanding. Borrower will pay Lender at Lender's address shown above or at such other place as Lender may designate in writing. Unless otherwise agreed or required by applicable law, payments will be applied first to accrued unpaid interest, then to principal, and any remaining amount to any unpaid collection costs and late charges. VARIABLE INTEREST RATE. The interest rate on this Note is subject to change from time to time based on changes in an index which is Lender's Prime Rate (the "Index"). This is the rate Lender charges, or would charge, on 90-day unsecured loans to the most creditworthy corporate customers. This rate may or may not be the lowest rate available from Lender at any given time. Lender will tell Borrower the current Index rate upon Borrower's request. Borrower understands that Lender may make loans based on other rates as well. The interest rate changes will not occur more often than each DAY. The Index currently is 8.500% per annum. The interest rate to be applied to the unpaid principal balance of this Note will be at a rate of 1,000 percentage point under the Index, resulting in an initial rate of 7.500% per annum. NOTICE: Under no circumstances will the interest rate on this Note be more than the maximum rate allowed by applicable law. PREPAYMENT; MINIMUM INTEREST CHARGE. In any event, even upon full prepayment of this Note, Borrower understands that Lender is entitled to a minimum interest charge of $50.00. Other than Borrower's obligation to pay any minimum interest charge, Borrower may pay without penalty all or a portion of the amount owed earlier than it is due. Early payments will not, unless agreed to by Lender in writing, relieve Borrower of Borrower's obligation to continue to make payments of accrued unpaid interest. Rather, they will reduce the principal balance due. LATE CHARGE. If a payment is 10 days or more late, Borrower will be charged 5.000% of the regularly scheduled payment or $50.00, whichever is greater. DEFAULT. Borrower will be in default if any of the following happens: (a) Borrower fails to make any payment when due. (b) Borrower breaks any promise Borrower has made to Lender, or Borrower fails to comply with or to perform when due any other term, obligation, covenant, or condition contained in this Note or any agreement related to this Note, or in any other agreement or loan Borrower has with Lender. (c) Any representation or statement made or furnished to Lender by Borrower or on Borrower's behalf is false or misleading in any material respect either now or at the time made or furnished. (d) Borrower becomes insolvent, a receiver is appointed for any part of Borrower's property. Borrower makes an assignment for the benefit of creditors, or any proceeding is commenced either by Borrower or against Borrower under any bankruptcy or insolvency laws. (e) Any creditor tries to take any of Borrower's property on or in which Lender has a lien or security interest. This includes a garnishment of any of Borrower's accounts with Lender. (f) Any guarantor dies or any of the other events described in this default section occurs with respect to any guarantor of this Note. (g) A material adverse change occurs in Borrower's financial condition, or Lender believes the prospect of payment or performance of the indebtedness is impaired. (h) Lender in good faith deems itself insecure. LENDER'S RIGHTS. Upon default, Lender may declare the entire unpaid principal balance on this Note and all accrued unpaid interest immediately due, without notice, and then Borrower will pay that amount. Upon default, including failure to pay upon final maturity, Lender, at its option, may also, if permitted under applicable law, increase the variable interest rate on this Note 5.000 percentage points. The interest rate will not exceed the maximum rate permitted by applicable law. Lender may hire or pay someone else to help collect this Note if Borrower does not pay. Borrower also will pay Lender that amount. This includes, subject to any limits under applicable law, Lender's attorneys' fees and Lender's legal expenses whether or not there is a lawsuit, including attorneys' fees and legal expenses for bankruptcy proceedings (including efforts to modify or vacate any automatic stay or injunction), appeals, and any anticipated post-judgment collection services. If not prohibited by applicable law, Borrower also will pay any court costs, in addition to all other sums provided by law. This Note has been delivered to Lender and accepted by Lender in the State of Ohio. If there is a lawsuit, Borrower agrees upon Lender's request to submit to the jurisdiction of the courts of HAMILTON County, the State of Ohio. Lender and Borrower hereby waive the right to any jury trial in any action, proceeding or counterclaim brought by either Lender or Borrower against the other. This Note shall be governed by and construed in accordance with the laws of the State of Ohio. CONFESSION OF JUDGMENT. Borrower hereby irrevocably authorizes and empowers any attorney-at-law, including an attorney hired by Lender, to appear in any court of record and to confess judgment against Borrower for the unpaid amount of this Note as evidenced by an affidavit signed by an officer of Lender setting forth the amount then due, plus attorneys' fees as provided in this Note, plus costs of suit, and to release all errors, and waive all rights of appeal. If a copy of this Note, verified by an affidavit, shall have been filed in the proceeding, it will not be necessary to file the original as a warrant of attorney. Borrower waives the right to any stay of execution and the benefit of all exemption laws nor or hereafter in effect. No single exercise of the foregoing warrant and power to confess judgment will be deemed to exhaust the power, whether or not any such exercise shall be held by any court to be invalid, voidable, or void; but the power will continue undiminished and may be exercised from time to time as Lender may elect until all amounts owing on this Note have been paid in full. Borrower waives any conflict of interest that an attorney hired by Lender may have in acting on behalf of Borrower in confessing judgment against Borrower while such attorney is retained by Lender. Borrower expressly consents to such attorney acting for Borrower in confessing judgment. DISHONORED ITEM FEE. Borrower will pay a fee to Lender of $20.00 if Borrower makes a payment on Borrower's loan and the check or preauthorized charge with which Borrower pays is later dishonored. RIGHT OF SETOFF. Borrower grants to Lender a contractual possessory security interest in, and hereby assigns, conveys, delivers, pledges and transfers to Lender all Borrower's right, title and interest in and to, Borrower's accounts with Lender (whether checking, savings, or some other account), including without limitation all accounts held jointly with someone else and all accounts Borrower may open in the future, excluding however all IRA and Keogh accounts, and all trust accounts for which the grant of a security interest would be prohibited by law. PROMISSORY NOTE Page 2 (Continued) ================================================= Borrower authorizes Lender, to the extent permitted by applicable law, to charge or setoff all sums owing on this Note against any and all such accounts. COLLATERAL. This Note is secured by various marketable securities. LINE OF CREDIT. This Note evidences a revolving line of credit. Advances under this Note may be requested orally by Borrower or as provided in this paragraph. Lender may, but need not, require that all oral requests be confirmed in writing. All communications, instructions, or directions by telephone or otherwise to Lender are to be directed to Lender's office shown above. Advances under this Note may be requested in amounts of $25,000.00 or greater. Any request for advances of less than $25,000.00 will not be honored. Borrower agrees to be liable for all sums either: (a) advanced in accordance with the instructions of an authorized person or (b) credited to any of Borrower's accounts with Lender. The unpaid principal balance owing on this Note at any time may be evidenced by endorsements on this Note or by Lender's internal records, including daily computer print-outs. Lender will have no obligation to advance funds under this Note if: (a) Borrower or any guarantor is in default under the terms of this Note or any agreement that Borrower or any guarantor has with Lender, including any agreement made in connection with the signing of this Note; (b) Borrower or any guarantor ceases doing business or is insolvent; (c) any guarantor seeks, claims or otherwise attempts to limit, modify or revoke such guarantor's guarantee of this Note or any other loan with Lender; (d) Borrower has applied funds provided pursuant to this Note for purposes other than those authorized by Lender; or (e) Lender in good faith deems itself insecure under this Note or any other agreement between Lender and Borrower. GENERAL PROVISIONS. If any part of this Note cannot be enforced, this fact will not affect the rest of the Note. In particular, this section means (among other things) that Borrower does not agree or intend to pay, and Lender does not agree or intend to contract for, charge, collect, take, reserve or receive (collectively referred to herein as "charge or collect"), any amount in the nature of interest or in the nature of a fee for this loan, which would in any way or event (including demand, prepayment, or acceleration) cause Lender to charge or collect more for this loan than the maximum Lender would be permitted to charge or collect by federal law or the law of the State of Ohio (as applicable). Any such excess interest or unauthorized fee shall, instead of anything stated to the contrary, be applied first to reduce the principal balance of this loan and when the principal has been paid in full, be refunded to Borrower. Lender may delay or forgo enforcing any of its rights or remedies under this Note without losing them. Each Borrower understands and agrees that, with or without notice to Borrower, Lender may with respect to any other Borrower (a) make one or more additional secured or unsecured loans or otherwise extend additional credit; (b) alter, compromise, renew, extend, accelerate, or otherwise change one or more times the time for payment or other terms any indebtedness, including increases and decreases of the rate of interest on the indebtedness; (c) exchange, enforce, waive, subordinate, fail or decide not to perfect, and release any security, with or without the substitution of new collateral; (d) apply such security and direct the order or manner of sale thereof, including without limitation, any nonjudicial sale permitted by the terms of the controlling security agreements, as Lender in its discretion may determine; (e) release, substitute, agree not to sue, or deal with any one or more of Borrower's sureties, endorsers, or other guarantors on any terms or in any manner Lender may choose; and (f) determine how, when and what application of payments and credits shall be made on any other indebtedness owing by such other borrower. Borrower and any other person who signs, guarantees or endorses this Note, to the extent allowed by law, waive presentment, demand for payment, protest and notice of dishonor. Upon any change in the terms of this Note, and unless otherwise expressly stated in writing, no party who signs this Note, whether as maker, guarantor, accommodation maker or endorser, shall be released from liability. All such parties agree that Lender may renew or extent (repeatedly and for any length of time) this loan or release any party or guarantor or collateral; or impair, fail to realize upon or perfect Lender's security interest in the collateral; and take any other action deemed necessary by Lender without the consent of or notice to anyone. All such parties also agree that Lender may modify this loan without the consent of or notice to anyone other than the party with whom the modification is made. The obligations under this Note are joint and several. PRIOR TO SIGNING THIS NOTE, EACH BORROWER READ AND UNDERSTOOD ALL THE PROVISIONS OF THIS NOTE, INCLUDING THE VARIABLE INTEREST RATE PROVISIONS. EACH BORROWER AGREES TO THE TERMS OF THE NOTE AND ACKNOWLEDGES RECEIPT OF A COMPLETED COPY OF THE NOTE. ================================================================= NOTICE: FOR THIS NOTICE "YOU" MEANS THE BORROWER AND "HIS" MEANS LENDER. WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME, A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT, OR ANY OTHER CAUSE. ================================================================= BORROWER: FIRST SOUTHERN FUNDING, INC. /S/ RANDALL ATTKISSON Authorized Officer FIRST SOUTHERN BANCORP, INC., Co-Borrower By: /S/ RANDALL ATTKISSON Authorized Officer -----END PRIVACY-ENHANCED MESSAGE-----