Exhibit No. 10.2





Exhibit 10.2




GUARANTY AGREEMENT




THIS GUARANTY AGREEMENT (as amended, supplemented, restated or otherwise modified from time to
time, this “Guaranty”) is made and entered into effective as of March 12, 2009, by FIRST TRINITY
FINANCIAL CORPORATION, an Oklahoma corporation (“FTFC” and the Person required by the Credit
Agreement to execute a Guaranty Agreement, the “Guarantor”, for the benefit of FIRST NATIONAL BANK
OF MUSKOGEE, as the Lender signatory party to the Credit Agreement described below (“Lender”).



RECITALS




A. FIRST TRINITY CAPITAL CORPORATION, an Oklahoma corporation (the “Borrower”) and the Lender
are parties to that certain Senior Secured Revolving Credit Loan Agreement dated effective as of
even date herewith (as amended, supplemented, restated or otherwise modified from time to time,
collectively the “Credit Agreement”), pursuant to which the Lender has agreed to severally
establish in favor of the Borrower (i) Revolver Commitment(the “Credit Facility”).



B. The Guarantor FTFC as the parent of the Borrower, will receive substantial, sufficient and
valuable consideration and economic benefit from the extension of credit by the Lender to the
Borrower and it is in the Guarantors valid and lawful business and corporate or other legal entity
purpose to execute and deliver this Guaranty to the Lender.



C. It is a condition precedent to the obligations of the Lender under the Credit Agreement
that this Guaranty be executed by the Guarantor and delivered to the Lender.



NOW, THEREFORE, in consideration of the credit to be extended pursuant to the Credit
Agreement, and as a material inducement therefor, and for other good and valuable consideration,
the Guarantor hereby covenants and agrees with the Lender as follows:



1. DEFINITIONS. Capitalized terms used herein (including capitalized terms used in
the recitals hereto) and not otherwise defined have the respective meanings assigned to them in the
Credit Agreement.



2. GUARANTY OF PAYMENT. The Guarantor hereby guarantees to the Lender, jointly and
severally, absolutely, unconditionally and irrevocably, the prompt performance and payment when due
(whether at a stated maturity or earlier by reason of acceleration or otherwise) of the
Indebtedness, including all advances made under the Credit Facilities, all Obligations and all
other direct, indirect, primary or secondary liabilities and obligations now or hereafter owing by
the Borrower to the Lender under the Credit Agreement, the Notes and the other Loan Documents and
Collateral Documents, including, without limitation, principal, interest, commitment fees, agency
fees, non-usage fees, letter of credit issuance and other related letter of credit fees,
Transaction Fees, reasonable attorney’s fees, filing, recording and other perfection costs,
out-of-pocket expenses, court costs and collection expenses and costs (all of the foregoing being
hereinafter collectively referred to as the “Guaranteed Obligations”);
provided, however, that Guarantor shall only be liable under this Guaranty for
the maximum amount of such liability that can be hereby incurred without rendering this Guaranty,
as it relates to such Guarantor, voidable under applicable law relating to fraudulent conveyance or
fraudulent transfer, and not for any greater amount.


 


 









 





3. PRIMARY AND DIRECT OBLIGATIONS. Guarantor agrees that such Guarantors liability
under this Guaranty shall be joint and several and primary and direct, and that the Lender shall
not be required, before enforcing this Guaranty against such Guarantor: (a) to pursue any right or
remedy it may have against the Borrower or other Person liable for any portion of the Guaranteed
Obligations (hereinafter referred to as a “Co-Obligor”), whether under the Credit Agreement or
otherwise; (b) to commence any action or obtain any judgment against the Borrower, Guarantor or any
Co-Obligor; or (c) to foreclose or realize any security interest in, or otherwise to exercise
rights and remedies against, any property of the Borrower, any Guarantor or any other Person in
which the Lender holds a security interest.



4. CONTINUING GUARANTY. This Guaranty is an absolute, unconditional and continuing
joint and several guaranty of payment and performance of the Guaranteed Obligations and shall
continue to be in force and be binding upon each Guarantor until the Guaranteed Obligations have
been paid and performed in full. No notice of the Guaranteed Obligations to which this Guaranty
may apply, or of any renewal or extension thereof, need be given to any Guarantor, and none of the
foregoing acts shall release any Guarantor from liability hereunder. Each Guarantor hereby
expressly waives (a) demand of payment or performance, presentment, protest, notice of dishonor,
nonpayment or nonperformance on any and all forms of the Guaranteed Obligations; (b) notice of
acceptance of this Guaranty and notice of any liability to which it may apply; (c) all other
notices and demands of any kind and description relating to the Guaranteed Obligations now or
hereafter provided for by any statute, law, rule or regulation; and (d) any right such Guarantor
may have, whether under Title 12, Okla. Stat. §686 or otherwise, to set-off of any other collateral
or security given to secure the Guaranteed Obligations, against the Guaranteed Obligations. No
Guarantor shall be exonerated with respect to liability under this Guaranty by any act or thing
except payment of the Guaranteed Obligations.



5. OTHER TRANSACTIONS. The Lender is expressly authorized to (a) exchange, surrender
or release, with or without consideration, any and all collateral or security which may at any time
be placed with it by the Borrower or by any other Person, or to forward or deliver any or all such
collateral or security directly to the Borrower for collection and remittance or for credit, or to
collect the same in any other manner without notice to any Guarantor; and (b) amend, modify, extend
or supplement the Credit Agreement or other agreement with respect to the Guaranteed Obligations in
accordance with the terms thereof, waive compliance by the Borrower with the respective terms
thereof and settle or compromise any of the Guaranteed Obligations without notice to Guarantor and
without in any manner affecting the absolute liability of the Guarantor hereunder.



6. NO IMPAIRMENTS. The liability of the Guarantor hereunder shall not be affected or
impaired by: (a) any delay, failure, neglect or omission on the part of the Lender to collect the
Guaranteed Obligations from the Borrower or any Co-Obligor, or to realize upon any collateral or
security for any or all of the Guaranteed Obligations; (b) the taking by the Lender (or the failure
to take) of any other guaranty to secure the Guaranteed Obligations; (c) the taking by the Lender
of (or the failure to take or the failure to perfect its security in) collateral or security of any
kind; or (d) the granting by the Lender of any release of or extension of time to the Borrower or
any Co-Obligor.


 


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7. SUBORDINATION AND ASSIGNMENT. Upon the occurrence and during the continuation of
any Event of Default, Guarantor hereby subordinates in favor of the Lender any claims of Guarantor
against the Borrower or in or to any property of the Borrower, to the extent that any such claims
arise hereafter by reason of payments made by Guarantor upon any item or items of the Guaranteed
Obligations, and Guarantor hereby assigns to the Lender any such claim hereafter arising and
authorizes the Lender to apply any payments thereon upon such item or items of the Guaranteed
Obligations as the Lender may determine. Upon the termination of this Guaranty as herein provided,
the Lender agrees to reassign to Guarantor any claim which is assigned pursuant to this Section 7.



8. APPLICATION OF PAYMENTS. Any and all payments upon the Guaranteed Obligations made
by the Borrower, Guarantor or any Co-Obligor, and/or the proceeds of any or all collateral or
security for any of the Guaranteed Obligations, may be applied by the Lender on such items of the
Guaranteed Obligations as the Lender may reasonably elect. Any payment made by Guarantor under
this Guaranty shall be effective to reduce or discharge the liability of Guarantor hereunder only
if accompanied by an advice received by the Lender advising the Lender that such payment is made
under this Guaranty for such purpose.



9. APPLICATION OF SET OFFS. To the extent Guarantor is ultimately determined to be
entitled to any statutory set off against liability hereunder, notwithstanding the foregoing
contractual waivers and releases herein fully and voluntarily provided to the Lender, the fair
market value or net sale proceeds of any collateral now or hereafter held by the Lender as security
for the Guaranteed Obligations, the liability of such Guarantor will be computed by first applying
such set off to that portion of the Guaranteed Obligations for which the Guarantor is not liable,
if any, and by then applying the balance of such set off, if any, to that portion of the Guaranteed
Obligations absolutely and unconditionally guaranteed hereby.



10. REPRESENTATIONS AND WARRANTIES. Guarantor represents and warrants to the Lender
that:




10.1. Benefit. Guarantor has a substantial economic interest in the Borrower
and/or expects to derive benefits from transactions resulting in the creation of the
Guaranteed Obligations hereby. The Lender may rely conclusively on a continuing warranty
hereby made, that Guarantor continues to be benefited by the Lender’ extension of credit to
the Borrower, and the Lender shall have no duty to inquire into or confirm the receipt of
any such benefits, and this Guaranty shall be effective and enforceable by the Lender
without regard to the receipt, nature or value of any such benefits.




10.2. Receipt of Credit Agreement. Guarantor has received a full and complete
executed copy of the Credit Agreement.


 


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11. EVENTS OF DEFAULT. The occurrence or existence of any of Event of Default under
the Credit Agreement, unless waived in writing by the Lender, shall constitute an “Event of
Default” under this Guaranty.



12. RECOVERY OF PAYMENT. If any payment received by the Lender from the Borrower and
applied to the Guaranteed Obligations is subsequently set aside, recovered, rescinded or required
to be returned for any reason (including, without limitation, the bankruptcy, insolvency or
reorganization of any Co-Borrower or other Co-Obligor), the Guaranteed Obligations to which such
payment was applied shall for the purposes of this Guaranty be deemed to have continued in
existence, notwithstanding such application, and this Guaranty shall be enforceable against the
Guarantor as to such Guaranteed Obligations as fully as if such application had never been made.



13. DISCHARGE. Until each and every one of the Guaranteed Obligations are paid and
performed in full, the obligations of the Guarantor hereunder shall not be released, in whole or in
part, by any action or thing which might, but for this provision of this Guaranty, be deemed a
legal or equitable discharge of a surety or Guarantor, or by reason of any waiver, extension,
modification, forbearance or delay or other act or omission of the Lender or its failure to proceed
promptly or otherwise, or by reason of any action taken or omitted by the Lender whether or not
such action or failure to act varies or increases the risk of, or affects the rights or remedies of
the Guarantor, nor shall any modification of any of the obligations of the Borrower or the release
of any security therefor by operation of law or by the action of any third party affect in any way
the obligations of the Guarantor hereunder, and Guarantor hereby expressly waives and surrenders
any defense to its liability hereunder based upon any of the foregoing acts, omissions, things,
agreements or waivers or any of them, it being the purpose and intent of the parties hereto that
the Guaranteed Obligations of the Borrower constitute the direct and primary, joint and several,
obligations of the Guarantor and that the covenants, agreements and all obligations of the
Guarantors hereunder be absolute, unconditional and irrevocable.



14. TERMINATION. Upon the occurrence of the expiration or termination of the
Commitments and the payment in full of Obligations and the repayment of all fees due and payable
under the Credit Agreement, this Guaranty and all obligations of Guarantor hereunder shall
terminate, without delivery of any instrument or performance of any act by any party.



15. REMEDIES. All remedies afforded to the Lender by reason of this Guaranty are
separate and cumulative remedies, and it is agreed that not one of such remedies, whether or not
exercised by the Lender, shall be deemed to be in exclusion of any of the other remedies available
to the Lender and shall in no way limit or prejudice any other legal or equitable remedy which the
Lender may have hereunder and with respect to the Guaranteed Obligations. The Guarantors agree that
included within the equitable remedies available to the Lender hereunder is the right of the Lender
to elect to have any and all of the obligations and agreements of the Guarantor hereunder
specifically performed.


 


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16. JUDICIAL ACTIONS. Guarantor hereby waives any and all right to cause a marshaling
of the assets of the Borrower or any other action by any court or other governmental body with
respect thereto, or to cause the Lender to proceed against any security for the Guaranteed
Obligations or any other recourse which the Lender may have with respect thereto or to set off the
value of any such security, and further waives any and all requirements that the Lender institute
any action or proceeding at law or in equity against the Borrower, or any other Guarantor, or any
Co-Obligor with respect to the Credit Agreement or the Notes, or any collateral or security
therefor, as a condition precedent to making demand on or bringing an action or obtaining and/or
enforcing a judgment against, such Guarantor upon this Guaranty. Guarantor further waives any
requirement that the Lender seek performance by the Borrower, or any Co-Obligor of any obligation
under the Credit Agreement or the Notes or any collateral or security therefor as a condition
precedent to making a demand on, or bringing any action or obtaining and/or enforcing a judgment
against, such Guarantor upon this Guaranty, it being agreed that upon the occurrence of an Event of
Default (as such term is defined in the Credit Agreement) and acceleration of the Guaranteed
Obligations, the obligations of Guarantor hereunder shall without further act mature immediately
and automatically, without further notice or demand or any other action by the Lender.



17. BANKRUPTCY OF THE BORROWER. Guarantor expressly agrees that the liability and
obligations of such Guarantor under this Guaranty shall not in any way be affected by the
institution by or against any Co-Borrower, or any Co-Obligor of any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceedings, or any other similar proceedings for relief
under any bankruptcy law or similar law for the relief of debtors, and that any discharge of any of
the Guaranteed Obligations pursuant to any such bankruptcy or similar law or other law shall not
discharge or otherwise affect in any way the obligations of any Guarantor under this Guaranty, and
that upon the institution of any of the above actions, at the sole discretion of the Lender, such
obligations shall be enforceable against the Guarantor.



18. SEVERABILITY. Any remedy or right hereby granted which shall be found to be
unenforceable as to any Person or under any circumstance, for any reason, shall in no way limit or
prevent the enforcement of such remedy or right as to any other Person or circumstances, nor shall
such unenforceability limit or prevent enforcement of any other remedy or right hereby granted.




19. GENERAL.




19.1. Collection Costs. Guarantor agrees to reimburse the Lender upon demand
for all reasonable out-of-pocket expenses (including reasonable attorneys’ fees and legal
expenses) incurred by the Lender arising out of or in connection with the enforcement of the
Guaranteed Obligations or arising out of or in connection with any failure of such Guarantor
to fully and timely perform its obligations hereunder to the fullest extent the Borrower
would be required to do so under the Credit Agreement.




19.2. No Waiver. No delay on the part of the Lender in the exercise of any
power or right shall operate as a waiver thereof, nor shall any single or partial exercise
of any power or right preclude other or further exercise thereof or the exercise of any
other power or right.


 


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19.3. Obligations Absolute. No invalidity, irregularity or unenforceability of
all or any part of the Guaranteed Obligations or of any security therefor or other recourse
with respect thereto shall affect, impair or be a defense to this Guaranty, and this
Guaranty is a primary obligation of Guarantor.




19.4. Notices. Any notice, demand, request or consent required or authorized
hereunder shall be served in Person, delivered by U.S. mail, or sent by telecopier,
addressed as follows:



	 	 	 	 	 
	 

	 	If to Guarantor:
	 	First Trinity Financial Corporation

7633 East 63rd Street, Suite 74133

Tulsa, Oklahoma 74133

Facsimile: 918.249.2478

Attn: Greg Zahn, President and Chief Executive Officer

E-Mail: gzahn@firsttrinityfinancial.com
	 
	 	 	 	 
	 

	 	If to the Lender:
	 	FIRST NATIONAL BANK OF MUSKOGEE

510 N. Main

Muskogee, Oklahoma 74401

Attn: David Wood, President

Facsimile: (918) 681-7126

E-Mail: dwood@fnbmuskogee.com







or at such other address as either party hereto shall designate for such purpose in a
written notice to the other. Notices served in person shall be effective and deemed given
when delivered; notices sent by telecopier shall be effective and deemed given when
transmitted, as evidenced by the sender’s confirmation thereof; and notices sent by mail
shall be effective and deemed given three (3) Business Days after being deposited in the
U.S. mail, postage prepaid.




19.5. Governing Law. THIS GUARANTY WILL BE DEEMED TO BE A CONTRACT MADE UNDER
AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF OKLAHOMA.




19.6. Jurisdiction and Venue. All actions or proceedings with respect to this
Guaranty may be instituted in any state or federal court sitting in Muskogee County,
Oklahoma, and by execution and delivery of this Guaranty, Guarantor irrevocably and
unconditionally (i) submits to the nonexclusive jurisdiction (both subject matter and
Person) of each such court, and (ii) waives (a) any objection that Guarantor may now or
hereafter have to the laying of venue in any of such courts, and (b) any claim that any
action or proceeding brought in any such court has been brought in an inconvenient forum.


 


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19.7. Waiver of Jury Trial. The Guarantor and the Lender (by its acceptance
hereof) hereby voluntarily, knowingly, irrevocably and unconditionally waive any right to
have a jury participate in resolving any dispute (whether based upon contract, tort or
otherwise) between or among the Borrower, Guarantor and the Lender arising out of or in any
way related to this Guaranty. This Subsection is a material inducement to the Lender to
provide the financing described herein or in the other Loan Documents.




19.8. Section Headings. Section headings herein are for convenience only and
shall not be deemed part of this Guaranty.




19.9. Successors and Assigns. This Guaranty shall be binding upon Guarantor
and its successors and assigns and shall inure to the benefit of the Lender and its
successors and assigns.




19.10. Time of the Essence. Guarantor acknowledges that time is of the essence
with respect to its obligations under this Guaranty.




19.11. Additional Guarantor. Upon the execution and delivery by any other
Person of a Guaranty Joinder Agreement, such Person shall become a “Guarantor” hereunder
with the same force and effect as if it were originally a party to this Guaranty and named
as a “Guarantor” hereunder. The execution and delivery of such supplement shall not require
the consent of any other Guarantor hereunder, and the rights and obligations of Guarantor
hereunder shall remain in full force and effect notwithstanding the addition of any new
Guarantor as a party to this Guaranty.



IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be executed as of the date first
above written by the undersigned duly authorized and empowered officer or manager, as applicable.



	 	 	 	 	 
	 	FIRST TRINITY FINANCIAL CORPORATION

 	 
	 	By:  	/s/ Gregg Zahn
 	 
	 	 	Greg Zahn, President and Chief Executive Officer 	 
	 	 	 	 
	 
	 	FIRST TRINITY FINANCIAL CORPORATION

 	 
	 	By:  	/s/ William Lay
 	 
	 	 	W. Sherman Lay, Chief Financial Officer 	 
	 	 	 	 
	 



 


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