Document:

snfca8k20091231ex10-3.htm

    
      

      

    

     

     

     

     

     

     

    EXHIBIT 10.3

     

     

     

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    ASSIGNMENT

    

    

    THIS
ASSIGNMENT (this "Assignment") is made and entered into effective this 31st day
of December, 2009, by and between  SECURITY NATIONAL LIFE INSURANCE
COMPANY OF LOUISIANA, a Louisiana domiciled insurance company ("Security
National Life of Louisiana"), and SECURITY NATIONAL LIFE INSURANCE COMPANY, a
Utah domiciled insurance company  ("Security National Life")
(collectively, the "Parties").

    

    WITNESSETH:

    

    WHEREAS,
on September 18, 2009, Security National Life of Louisiana and Security National
Life entered into an Agreement and Plan of Complete Liquidation (the
"Agreement"), pursuant to which Security National Life of Louisiana is to be
liquidated into Security National Life in essentially the same manner as the
liquidation described in the Internal Revenue Service Private Letter Ruling
9847027 in order to achieve the same tax treatment and consequences under
Section 332 of the Internal Revenue Code of 1986, as amended, and other
applicable provisions described in said Letter Ruling; and

    

    WHEREAS,
in order to complete the liquidation of Security National Life of Louisiana and
the transfer of its business to Security National Life under the terms of the
Agreement, Security National Life and Security National Life of Louisiana
entered into a Reinsurance Agreement (the "Reinsurance Agreement") dated
December 31, 2009, in which Security National Life became primarily liable for
the liabilities of Security National Life of Louisiana on insurance contracts
and annuities issued by Security National Life of Louisiana to its
policyholders, and Security National Life of Louisiana transferred assets to
Security National Life having a fair market value equal to or greater than the
assumed liabilities; and

    

    WHEREAS,
Security National Life of Louisiana and Security National Life desire to enter
into an assignment in which Security National Life of Louisiana would assign and
transfer to Security National Life all of its assets and liabilities, except for
the assets and liabilities transferred pursuant to the Reinsurance
Agreement;

    

    NOW,
THEREFORE, in consideration of the mutual promises, agreements and covenants
contained herein, and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Parties hereto agree as
follows:

    

    1.           Except
for the assets transferred by Security National Life of Louisiana to Security
National Life pursuant to the Reinsurance Agreement, Security National Life of
Louisiana hereby assigns, transfers and conveys to Security National Life, as of
the date of this Assignment, all of Security National Life of Louisiana's
rights, title and interest in and to all of its assets of every kind and nature
whatsoever, including without limitation, the following:  (i) cash
reserved for the payment of certain liabilities and obligations of Security
National Life of Louisiana, including advanced premiums, suspense items on
insurance policies, and escheate obligations; (ii) furniture and equipment,
including computer hardware and software; (iii) prepaid deposits; (iv) accrued
investment income; (v) reinsurance and other receivables; (vi) agent balances;
(vii) business and other operational licenses; (viii) maintenance agreements;
(ix) rights to transact business in the name of Security National Life Insurance
Company of Louisiana; (x) accounting and other records; (xi) leases and contract
rights; (xii) insurance policies; and (xiii) any and all other real and personal
property.

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    2.           Except
for the liabilities of Security National Life of Louisiana assumed by Security
National Life pursuant to the Reinsurance Agreement, Security National Life
hereby assumes any and all liabilities of Security National Life of Louisiana as
of the date of this Assignment;

    

    3.           Security
National Life of Louisiana also hereby assigns, transfers and conveys to
Security National Life all of its rights in and to the name of Security National
Life Insurance Company of Louisiana and permits Security National Life to
immediately assume and use the name of Security National Life Insurance Company
of Louisiana.

    

    4.           This
Assignment may be modified or amended only in writing duly executed by each of
the Parties.

    

    5.           This
Assignment shall be governed and construed and enforced in accordance with the
laws of the State of Utah (without regard to the principles of conflicts of law)
applicable to a contract executed and performable in such state.

    

    6.           This
Assignment is binding upon and will inure to the benefit of the Parties and
their respective successors and permitted assigns.

    

    7.           Neither
this Assignment nor any right or obligation herein or part hereof may be
assigned by any party hereto with the prior written consent of the other party
hereto and the Louisiana Department of Insurance (and any attempt to do so will
be void).

    

    8.           This
Assignment may be executed simultaneously in counterparts, each of which will be
deemed an original, but all of which, when taken together, will constitute one
and the same instrument.

    

    IN
WITNESS WHEREOF, each of the Parties hereto, intending to be legally bound
hereby, has duly executed this Assignment as of the date first above
written.

    

    
      	 
      	
              SECURITY
      NATIONAL LIFE INSURANCE COMPANY

            	 
      
	 
      	
                   OF
      LOUISIANA

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	
                  /s/
      Scott M. Quist

            	 
      
	 
      	
              Its:

            	
                   President

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 	 	 
	 
      	
              SECURITY
      NATIONAL LIFE INSURANCE COMPANY

            	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	 
      	 
      	 
      
	 
      	
              By:

            	
                  /s/
      Scott M. Quist

            	 
      
	 
      	
              Its:

            	
                   President

            	 
      

    

    

     

     

    
      2snfca8k20091231ex10-4.htm

    
      

      

    

     

     

     

     

     

     

    EXHIBIT 10.4

     

     

     

     

     

     

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    AGREEMENT
AND PLAN OF COMPLETE LIQUIDATION OF

    CAPITAL
RESERVE LIFE INSURANCE COMPANY

    INTO
SECURITY NATIONAL LIFE INSURANCE COMPANY

    

    

    THIS
AGREEMENT AND PLAN OF COMPLETE LIQUIDATION (this “Agreement”) is made and
entered into effective this 4th day of December, 2009, by and between CAPITAL
RESERVE LIFE INSURANCE COMPANY, a Missouri domiciled insurance company (“Capital
Reserve”), and SECURITY NATIONAL LIFE INSURANCE COMPANY, a Utah domiciled life
insurance company ("Security National Life").

    

    WITNESSETH:

    

    WHEREAS,
on December 20, 2007, Security National Life completed the purchase of all of
the outstanding shares of Capital Reserve and, as a result, Capital Reserve
became a wholly owned subsidiary of Security National Life;

    

    WHEREAS,
both corporations are involved in the same line of business, and it has been
determined by the Boards of Directors of both Capital Reserve and Security
National Life that it will be more efficient and profitable to have Capital
Reserve liquidated into Security National Life;

    

    WHEREAS,
the Boards of Directors of both Capital Reserve and Security National Life do
for said reasons and for the general welfare of said corporations and their
respective stockholders, deem it advisable that Capital Reserve be liquidated
into Security National Life; and

    

    WHEREAS,
this Agreement has been approved and authorized by resolutions adopted by the
sole shareholder of Capital Reserve and the directors of each
party.

    

    NOW
THEREFORE, in consideration of the premises and for the purposes of setting
forth and prescribing the terms and conditions of such complete liquidation and
the manner of carrying the same into effect, the parties hereto do hereby adopt
the following plan of complete liquidation and agree as follows:

    

    AGREEMENT

    

    Section
1

    

    It is
intended that Capital Reserve be liquidated into Security National Life in
essentially the same manner as the liquidation described in Private Letter
Ruling 9847027 in order to achieve the same tax treatment and consequences under
Section 332 of the Internal Revenue Code of 1986 and other applicable provisions
described in said Letter Ruling.

    

    Section
2

    

    The
liquidation of Capital Reserve and transfer of its business and operations to
Security National Life shall be accomplished as follows:

    

    (1)           Prior
to December 31, 2009, but after the date of adoption of this Agreement, Security
National Life shall exercise its right of recapture pursuant to Article II,
Section 3 of the Reinsurance Agreement dated November 30, 2008, between Security
National Life and Capital Reserve to recapture all of the policies and risks
reinsured under that Reinsurance Agreement and, as a result, Security National
Life will become primarily liable for the liabilities on the insurance contracts
and annuities originally issued by Capital Reserve to its
policyholders.  The assets transferred to Security National Life
pursuant to such right of recapture shall have a fair market value equal to the
assumed liabilities.

    

    

    
      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    (2)           Simultaneously
with the transfer of assets and liabilities made pursuant to the recapture in
paragraph (1) above, all of the other assets of Capital Reserve not transferred
in such recapture, as they exist at that time (except for Capital Reserve’s
corporate charter, insurance licenses, and the minimum capital, if any,
including cash and investments necessary to preserve its corporate existence
(“Retained Assets”)), shall be distributed by Capital Reserve to Security
National Life, and Security National Life shall assume all of the liabilities of
every kind and description of Capital Reserve existing at that
time.  Security National Life has no plan or intention to dispose of
such assets.  The fair market value of Capital Reserve’s assets
transferred to Security National Life pursuant to the recapture will equal its
liabilities (including any amounts owed to Security National Life) immediately
prior to the Final Liquidating Distribution, as defined below.  After
this distribution, Security National Life will continue to own all of the stock
of Capital Reserve, and Capital Reserve will be a corporate shell holding only
the Retained Assets.

    

    (3)           The
simultaneous distributions described in paragraphs (1) and (2) above of this
Section 2 will constitute the “First Liquidating
Distribution.”  Within twelve months of the First Liquidating
Distribution, Security National Life will either (i) sell the Capital Reserve
stock to an unrelated business entity, or (ii) distribute the remaining assets
to Security National Life in complete liquidation of Capital Reserve, which will
constitute the “Second Liquidating Distribution.”  After such
distribution, Capital Reserve will cease to exist.

    

    (4)           Security
National Life will file the statement described in Treasury Regulations, Section
332-6(b) and, if applicable, both Security National Life and Capital Reserve
will file the statement described in Treasury Regulations, Section
381(b)-1(b)(3).

    

    (5)           In
implementing this Agreement, Security National Life and Capital Reserve shall
each be responsible to comply with all regulatory requirements applicable to
it.

    

    Section
3

    

    Capital
Reserve will make all deeds, conveyances, assignments, bills of sale or
assurances as are necessary or desirable to vest in Security National Life the
title to any property or rights of Capital Reserve or to evidence such vesting,
and will do all things as may be necessary, proper or appropriate to accomplish
same.  It is agreed and intended by the parties that all such deeds,
conveyances, assignments, bills of sale and assurances will be executed and
delivered as part of the liquidating distributions described in Section
2.

    

    
      
        
           

        

        
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    Section
4

    

    This
Agreement shall be signed on behalf of each party hereto by its
President.  Each party to this Agreement agrees to comply with laws
applicable to it in connection with this Agreement.

    

    IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day
and year first above written.

     

    

    
      	 
      	
              CAPITAL
      RESERVE LIFE INSURANCE COMPANY,

            
	 
      	
              a
      Missouri corporation

            
	 
      	 
      
	 
      	 
      
	 
      	 
      
	
              Attest:

            	
              By:       /s/
      Scott M.
      Quist                                         

            
	 
      	
                   
        Scott M. Quist, President

            
	 
      	 
      
	
                   /s/
      Jeffrey R.
      Stephens                 

            	 
      
	
              Jeffrey
      R. Stephens, Secretary

            	 
      
	 
      	 
      
	 
      	
              SECURITY
      NATIONAL LIFE INSURANCE COMPANY,

              a
      Utah corporation

            
	 
      	 
      
	 
      	 
      
	
              Attest:

            	
              By:       /s/
      Scott M.
      Quist                                         

            
	 
      	
                   
        Scott M. Quist, President

            
	 
      	 
      
	
                   /s/
      Jeffrey R.
      Stephens                 
      

            	 
      
	
              Jeffrey
      R. Stephens, Secretary

            	 
      

    

    

     

     

    
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